UTi Worldwide Reports Fiscal 2014 Fourth Quarter Results

-- Annual Report on Form 10-K Filed with the Company's Consolidated Financial Statements for Fiscal Years 2014, 2013 and 2012 – No Going Concern Qualification --

LONG BEACH, Calif., March 31, 2014 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2014 fourth quarter ended January 31, 2014. In addition, UTi filed its Annual Report on Form 10-K this morning, which includes the company's audited financial statements for the fiscal year ended January 31, 2014. The company's audited financial statements were issued with no going concern qualification for all periods presented.

Fiscal Fourth Quarter 2014 vs. 2013 Results:
  • Revenues were $1,076.4 million, a decrease of 2.1 percent from $1,099.3 million.
  • Net revenues (revenues minus purchased transportation costs) were $370.0 million, a decrease of 0.3 percent from $371.1 million.
  • On an organic basis, revenues increased 1.7 percent and net revenues increased 4.5 percent versus the comparable prior year period.
  • Net loss attributable to UTi Worldwide Inc. was $50.7 million, or $0.48 per diluted share, compared to a net loss of $142.8 million, or $1.38 per diluted share.
  • The GAAP net loss in the fiscal 2014 fourth quarter includes after-tax severance and other costs of $7.3 million, or $0.07 per diluted share. UTi also recorded an after-tax write-off of $4.5 million, or $0.04 per diluted share, in bad debt related to customer bankruptcies. In addition, despite incurring a net loss, the company recorded additional tax expense exceeding its normalized tax rate by $22.9 million, or $0.22 per diluted share.
  • Excluding the after-tax severance and other costs, bad debt write-off and the additional tax expense described above, non-GAAP net loss attributable to UTi Worldwide Inc. was $16.1 million, or $0.15 per diluted share.
  • Earnings before interest expense, income taxes, depreciation and amortization (EBITDA), as adjusted for the items above and stock compensation expense, totaled $14.1 million compared to $17.1 million.
  • All references to adjusted items and organic items in this release refer to non-GAAP results. A reconciliation of GAAP to these non-GAAP results is provided in the supplemental financial information attached to this release.

Eric W. Kirchner, chief executive officer, said, "During the last several weeks, the company has completed a number of key milestones. First, we executed a $725 million refinancing, which strengthened the company's balance sheet. Second, we filed our fiscal 2014 Annual Report on Form 10-K this morning, which includes the company's audited financial statements for the three fiscal years ended January 31, 2014. The company's audited financial statements were issued with no going concern qualification for all periods presented. Finally, we launched in early March our 1View freight forwarding operating system in South Africa and China, two of our largest markets. This brings to 32 the total number of countries on the system, representing approximately 72 percent of freight forwarding transactions. The deployment in China and South Africa also allows us to pair origin and destination shipments in most of our major markets.

"As we add more countries on 1View, we enable the company to generate greater efficiencies from operations. We continue to target completion of the system deployment in the third quarter of fiscal 2015 and still expect $75-95 million in annualized gross pre-tax cost savings by the end of fiscal 2015, approximately $50 million of which were in place at the end of fiscal 2014. As the transformation nears an end, we expect to have the ability to deploy additional resources on growth opportunities."

Kirchner continued, "Results in the fiscal 2014 fourth quarter continued to reflect a lackluster global economy and difficult operating conditions. While we experienced increased activity in both business segments during the fourth quarter, pricing pressure continued to weigh on margins. Operating expenses were higher in the fourth quarter primarily because of increased amortization, severance expenses and temporary deployment costs related to the roll-out of the new systems. We were able to partially offset these higher costs through expense reduction measures."

Operating expenses less purchased transportation costs were $401.5 million in the fourth quarter of fiscal 2014. The company recorded $10.6 million on a pre-tax basis in severance and other costs in the fiscal 2014 fourth quarter. UTi also recorded $6.5 million in pre-tax bad debt expense related to customer bankruptcies. In the fiscal 2013 fourth quarter, the company reported goodwill and intangible asset impairment charges of $94.7 million as well as severance costs of $5.1 million.

Excluding these items, adjusted operating expenses less purchased transportation costs were $384.4 million, compared to $378.9 million in the same period last year. On an organic basis, adjusted operating expenses less purchased transportation costs increased 5.7 percent, compared to the same period last year. The increase primarily reflects costs associated with transformation related activities.

The company recorded a tax provision of $11.0 million in the fiscal 2014 fourth quarter on a pretax loss of $38.2 million, due to valuation allowances and the mix of taxable income across the company's tax jurisdictions.

Investor Conference Call:

UTi management will host an investor conference call today, March 31, 2014, at 5:00 a.m. PDT (8:00 a.m. EDT) to review the company's financial results for the fiscal 2014 fourth quarter. Investment professionals are invited to participate in the live call by dialing 888-561-1721 (domestic) or 480-629-9723 (international) using conference ID 4673964. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com. The slides that will be referenced during the call will be available on the company's website at www.go2uti.com (click on "Investor Relations" and then click on "Webcasts & Presentations"). The slides will contain disclosures of certain non-GAAP financial measures, which will be identified in the slides. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures will be included in the slides. For those who are not available to listen to the live broadcast, the call will be archived for one year at both Web sites. A telephonic playback of the conference call also will be available from approximately 8:00 a.m. PDT, today, through April 2, 2014, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4673964 .

About UTi Worldwide:

UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions company providing air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services. The company serves a large and diverse base of global and local companies, including clients operating in industries with unique supply chain requirements such as the pharmaceutical, retail, apparel, chemical, automotive and technology industries. The company seeks to use its global network, proprietary information technology systems, relationships with transportation providers, and expertise in outsourced logistics services to deliver competitive advantage to each of its clients' supply chains.

Use of Non-GAAP Financial Information:

This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. UTi believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and the company's judgments about the likelihood that particular factors will repeat. Short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the company has included information in this press release relating to organic revenue and organic net revenue changes, which are adjusted to exclude the impact of currency fluctuations between comparable periods. The company also has referred to operating expenses less purchased transportation costs, and to adjusted operating expenses less purchased transportation costs, which are operating expenses less purchased transportation costs that are further adjusted to exclude severance and other costs and a bad debt write-off. The company has also included information relating to organic adjusted operating expenses less purchased transportation costs, which are adjusted operating expenses less purchased transportation costs that are further adjusted to exclude the impact of currency fluctuations between comparable periods. The company has further referred to non-GAAP net loss attributable to UTi Worldwide Inc., which is adjusted to exclude severance and other costs, a bad debt write-off, and valuation allowances on deferred tax assets, as described above, and non-GAAP loss per diluted share. Finally, the company has referred to adjusted earnings before interest expense, income taxes, depreciation and amortization (EBITDA), which is adjusted to exclude stock-based compensation, as well as severance and other costs and the bad debt write-off referred to above. This information is among the information the company uses as a basis for evaluating company performance on a comparable basis over time, allocating resources and planning and forecasting of future periods. The company has also provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company's performance. In addition, the company's management believes that presenting adjusted EBITDA provides useful information to investors regarding underlying business trends and performance of the company's ongoing operations. This information is not intended to be considered in isolation or as a substitute for, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP. Further, adjusted EBITDA does not represent cash flow from operations as defined by GAAP, is not derived in accordance with GAAP, and should not be considered as an alternative to net income. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release which address activities, events or developments that UTi expects or anticipates will or may occur in the future, including such things as substantially completing deployment during the third quarter of fiscal 2015; the fact that as the company adds more countries on 1View it enables the company to generate greater efficiencies from operations; the expected benefits of the refinancing, including strengthening UTi's balance sheet; expectations for $75-95 million in annualized gross pre-tax cost savings by the end of fiscal 2015, including approximately $50 million of which were in place at the end of fiscal 2014; the ability to deploy additional resources on growth opportunities as the transformation nears an end; and other such matters, are forward-looking statements. These statements are based on certain assumptions and analyses made by UTi in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue" and other similar expressions or the negative of these terms or other comparable terms. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, the risks in UTi's filings with the SEC, including those listed in Item 1A "Risk Factors" in its annual report on Form 10-K filed with the SEC today, and the following: UTi's ability to maintain sufficient liquidity and capital resources to fund its business; UTi's ability to complete its business transformation initiatives in the timeframe and for the costs anticipated or at all and achieve the expected benefits; UTi's ability to generate sufficient cash to service its debts and other obligations; delays or inability to pay by UTi's customers; dilution in connection with the private placement of convertible preference shares and dilution in connection with the convertible notes; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and EMENA (which is comprised of Europe, Middle East and North Africa); risks associated with UTi's ongoing business transformation initiative, which include unanticipated difficulties, delays, additional costs and expenses as well as potential billing delays; volatile fuel costs; transportation capacity, pricing dynamics and the ability of UTi to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in interest and foreign exchange rates, particularly with respect to the South African rand; material interruptions in transportation services; risks of international operations; risks associated with, and the potential for penalties, fines, costs and expenses the company may incur as a result of investigations by the governments of Brazil and Singapore into the international air freight and air cargo transportation industry; risks of adverse legal judgments or other liabilities not limited by contract or covered by insurance; UTi's ability to retain clients while facing increased competition; the financial condition of UTi's clients; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in UTi's effective tax rates; the other risks and uncertainties described herein and in UTi's other filings with the SEC; and other factors outside UTi's control. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on UTi or its business or operations. Forward-looking statements set forth in this press release speak only as of the date hereof and UTi does not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except as required by law.

(Tables Follow)

UTi Worldwide Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
     
  Three months ended Fiscal years ended
  January 31, January 31,
  2014 2013 2014 2013
  (Unaudited) (Unaudited)
         
Revenues:        
Airfreight forwarding  $ 324,066 $ 347,449 $ 1,345,462 $ 1,443,740
Ocean freight forwarding  296,132  306,765  1,253,219  1,267,134
Customs brokerage  46,425  29,294  146,499  117,629
Contract logistics  184,021  176,915  741,779  785,733
Distribution   137,864  140,625  588,121  588,794
Other  87,895  98,207  365,800  404,491
Total revenues  1,076,403  1,099,255  4,440,880  4,607,521
         
Other operating expenses:        
Purchased transportation costs:        
Airfreight forwarding  260,067  274,257  1,048,627  1,128,043
Ocean freight forwarding  244,902  257,246  1,046,613  1,064,081
Customs brokerage  9,753  1,135  22,444  5,289
Contract logistics  44,048  42,780  179,320  200,578
Distribution   95,356  93,807  409,664  397,872
Other  52,248  58,937  209,307  225,125
         
Staff costs  220,143  218,930  885,710  894,503
Depreciation  14,133  13,938  53,899  48,917
Amortization of intangible assets  7,226  2,886  18,502  12,262
Severance and other  10,585  5,118  29,618  18,039
Goodwill impairment  -   93,008  -   93,008
Intangible assets impairment  -   1,643  -   1,643
Other operating expenses  149,408  143,115  547,344  546,456
Total other operating expenses  1,107,869  1,206,800  4,451,048  4,635,816
Operating loss  (31,466)  (107,545)  (10,168)  (28,295)
Interest expense, net  (5,322)  (5,888)  (16,985)  (13,415)
Other (expense)/income, net  (1,437)  69  (2,693)  (439)
Pretax loss  (38,225)  (113,364)  (29,846)  (42,149)
Provision for income taxes  11,022  27,992  41,076  51,891
Net loss  (49,247)  (141,356)  (70,922)  (94,040)
Net income attributable to non-controlling interests  1,474  1,467  5,736  6,466
         
Net loss attributable to UTi Worldwide Inc. $ (50,721) $ (142,823) $ (76,658) $ (100,506)
         
Basic loss per common share attributable to         
UTi Worldwide Inc. common shareholders $ (0.48) $ (1.38) $ (0.73) $ (0.97)
         
Diluted loss per common share attributable to         
UTi Worldwide Inc. common shareholders $ (0.48) $ (1.38) $ (0.73) $ (0.97)
         
Number of weighted average common shares outstanding used for per share calculations        
Basic shares  104,779,228  103,778,688  104,527,949  103,544,171
Diluted shares  104,779,228  103,778,688  104,527,949  103,544,171
 
 
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
 
  January 31, 2014 January 31, 2013
  (Unaudited)
     
ASSETS    
Cash and cash equivalents $ 204,384 $ 237,276
Trade receivables, net  977,885  898,809
Deferred income taxes  8,889  19,595
Other current assets  154,465  156,385
Total current assets  1,345,623  1,312,065
     
Property, plant and equipment, net  222,036  242,898
Goodwill and other intangible assets, net  464,867  457,635
Investments  1,075  969
Deferred income taxes  11,693  25,802
Other non-current assets  36,768  34,688
Total assets $ 2,082,062 $ 2,074,057
     
LIABILITIES & EQUITY    
Bank lines of credit $ 260,700 $ 79,213
Short-term borrowings  7,551  1,129
Current portion of long-term borrowings  3,488  5,663
Current portion of capital lease obligations  12,374  11,377
Trade payables and other accrued liabilities  754,965  786,444
Income taxes payable  17,877  8,470
Deferred income taxes  3,236  2,775
Total current liabilities  1,060,191  895,071
     
Long-term borrowings, excluding current portion  205,862  204,434
Capital lease obligations, excluding current portion  60,784  73,538
Deferred income taxes  14,390  29,654
Other non-current liabilities  38,098  47,178
     
Commitments and contingencies    
     
UTi Worldwide Inc. shareholders' equity:  
Common stock  517,762  505,237
Retained earnings  313,974  396,946
Accumulated other comprehensive loss  (143,317)  (92,348)
Total UTi Worldwide Inc. shareholders' equity  688,419  809,835
Non-controlling interests  14,318  14,347
Total equity  702,737  824,182
Total liabilities and equity $ 2,082,062 $ 2,074,057
 
 
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)  
   
  Fiscal years ended January 31, 
  2014 2013
  (Unaudited)
     
OPERATING ACTIVITIES:    
Net loss $ (70,922) $ (94,040)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:    
Share-based compensation costs  13,869  14,556
Depreciation  53,899  48,917
Amortization of intangible assets  18,502  12,262
Amortization of debt issuance costs  702  1,556
Goodwill and intangible assets impairment   -   94,651
Deferred income taxes  5,490  16,957
Uncertain tax positions  (1,532)  469
Excess tax benefits from share-based compensation  -   (19)
Gain on disposal of property, plant and equipment  (367)  (682)
Provision for doubtful accounts  16,559  4,507
Net proceeds from the sales of trade receivables  3,405  - 
Other  3,388  1,771
Net changes in operating assets and liabilities  (141,076)  (60,131)
Net cash (used in)/provided by operating activities  (98,083)  40,774
     
INVESTING ACTIVITIES:    
Purchases of property, plant and equipment, excluding software  (47,140)  (49,728)
Proceeds from disposals of property, plant and equipment  3,832  3,475
Purchases of software and other intangible assets  (34,013)  (36,692)
Net (increase)/decrease in other non-current assets  (4,612)  847
Acquisitions and related payments  -   (888)
Other  -   134
Net cash used in investing activities  (81,933)  (82,852)
     
FINANCING ACTIVITIES:    
Net borrowings under bank lines of credit  188,732  14,491
Net increase in short-term borrowings  6,701  174
Proceeds from issuances of long-term borrowings  4,575  200,869
Repayments of long-term borrowings  (5,342)  (205,000)
Debt issuance costs  -   (1,745)
Repayments of capital lease obligations  (12,682)  (17,384)
Acquisitions of non-controlling interests  -   (1,920)
Distributions to non-controlling interests and other  (3,038)  (2,837)
Ordinary shares settled under share-based compensation plans  (2,500)  (3,130)
Proceeds from issuance of ordinary shares  4,241  2,502
Excess tax benefits from share-based compensation  -   19
Dividends paid  (6,314)  (6,223)
Net cash provided by/(used in) financing activities  174,373  (20,184)
     
Effect of foreign exchange rate changes on cash and cash equivalents  (27,249)  (22,223)
Net decrease in cash and cash equivalents  (32,892)  (84,485)
     
Cash and cash equivalents at beginning of period  237,276  321,761
     
Cash and cash equivalents at end of period $ 204,384 $ 237,276
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
 (Unaudited)
 
  Three months ended January 31, 2014
  Freight Forwarding Contract Logistics and Distribution Corporate Total
         
Revenues $ 730,010 $ 346,393 $ -   $ 1,076,403
         
Purchased transportation costs  558,077  148,297  -   706,374
Staff costs  109,418  102,187  8,538  220,143
Depreciation  4,497  8,155  1,481  14,133
Amortization of intangible assets  6,043  1,061  122  7,226
Severance and other  5,382  3,931  1,272  10,585
Other operating expenses  57,491  78,828  13,089  149,408
Total operating expenses  740,908  342,459  24,502  1,107,869
Operating (loss)/income $ (10,898) $ 3,934 $ (24,502)  (31,466)
Interest expense, net        (5,322)
Other expense, net        (1,437)
Pretax loss        (38,225)
Provision for income taxes        11,022
Net loss        (49,247)
Net income attributable to non-controlling interests      1,474
Net loss attributable to UTi Worldwide Inc.       $ (50,721)
         
         
UTi Worldwide Inc.  
Segment Reporting  
(in thousands)  
(Unaudited)  
   
  Three months ended January 31, 2013
  Freight Forwarding Contract Logistics and Distribution Corporate Total
         
Revenues $ 749,162  $ 350,093 $ -  $ 1,099,255
         
Purchased transportation costs  582,087  146,075  -   728,162
Staff costs  103,630  106,601  8,699  218,930
Depreciation  4,261  8,554  1,123  13,938
Amortization of intangible assets  1,039  1,307  540  2,886
Severance and other  3,020  2,024  74  5,118
Goodwill impairment  -   93,008  -   93,008
Intangible assets impairment  -   1,643  -   1,643
Other operating expenses  52,926  83,788  6,401  143,115
Total operating expenses  746,963  443,000  16,837  1,206,800
Operating income/(loss) $ 2,199 $ (92,907) $ (16,837)  (107,545)
Interest expense, net        (5,888)
Other income, net        69
Pretax loss        (113,364)
Provision for income taxes        27,992
Net loss        (141,356)
Net income attributable to non-controlling interests      1,467
Net loss attributable to UTi Worldwide Inc.       $ (142,823)
 
   
UTi Worldwide Inc.  
Segment Reporting  
(in thousands)  
(Unaudited)  
   
  Fiscal year ended January 31, 2014
  Freight Forwarding Contract Logistics and Distribution Corporate Total
         
Revenues $ 2,996,775 $ 1,444,105 $ -  $ 4,440,880
         
Purchased transportation costs  2,290,077  625,898  -   2,915,975
Staff costs  432,274  417,186  36,250  885,710
Depreciation  16,988  31,511  5,400  53,899
Amortization of intangible assets  12,688  4,709  1,105  18,502
Severance and other  13,894  12,244  3,480  29,618
Other operating expenses  194,460  316,033  36,851  547,344
Total operating expenses  2,960,381  1,407,581  83,086  4,451,048
Operating income/(loss) $ 36,394 $ 36,524 $ (83,086)  (10,168)
Interest expense, net        (16,985)
Other expense, net        (2,693)
Pretax loss        (29,846)
Provision for income taxes        41,076
Net loss        (70,922)
Net income attributable to non-controlling interests    5,736
Net loss attributable to UTi Worldwide Inc.     $ (76,658)
         
         
UTi Worldwide Inc.  
Segment Reporting  
(in thousands)  
(Unaudited)  
   
  Fiscal year ended January 31, 2013
  Freight Forwarding Contract Logistics and Distribution Corporate Total
         
Revenues $ 3,094,408 $ 1,513,113 $ -   $ 4,607,521
         
Purchased transportation costs  2,384,697  636,291  -   3,020,988
Staff costs  420,140  440,459  33,904  894,503
Depreciation  16,369  29,417  3,131  48,917
Amortization of intangible assets  4,116  5,986  2,160  12,262
Severance and other  6,029  9,680  2,330  18,039
Goodwill impairment  -   93,008  -   93,008
Intangible assets impairment  -   1,643  -   1,643
Other operating expenses  190,253  336,144  20,059  546,456
Total operating expenses  3,021,604  1,552,628  61,584  4,635,816
Operating income/(loss) $ 72,804 $ (39,515) $ (61,584)  (28,295)
Interest expense, net        (13,415)
Other expense, net        (439)
Pretax loss        (42,149)
Provision for income taxes        51,891
Net loss        (94,040)
Net income attributable to non-controlling interests    6,466
Net loss attributable to UTi Worldwide Inc.     $ (100,506)
 
       
UTi Worldwide Inc.    
Geographic Reporting    
(in thousands)    
(Unaudited)      
       
  Three months ended January 31, 2014    
  Freight Forwarding Revenues Contract Logistics and Distribution Revenues Freight Forwarding Net Revenues Contract Logistics and Distribution Net Revenues Operating (Loss)/Income Severance and Other    
EMENA $ 212,391 $ 57,003 $ 63,246 $ 33,252 $ (6,530) $ 5,569    
Americas  145,151  190,742  37,750  88,440  (20,408)  861    
Asia Pacific  255,148  18,623  48,456  11,929  7,359  1,816    
Africa  117,320  80,025  22,481  64,475  12,615  1,067    
Corporate  -   -   -   -   (24,502)  1,272    
Total $ 730,010 $ 346,393 $ 171,933 $ 198,096 $ (31,466) $ 10,585    
                 
                 
                 
  Three months ended January 31, 2013
  Freight Forwarding Revenues Contract Logistics and Distribution Revenues Freight Forwarding Net Revenues Contract Logistics and Distribution Net Revenues Operating (Loss)/Income Severance and Other Intangible Assets Impairment Goodwill Impairment
EMENA $ 213,870 $ 53,434 $ 53,466 $ 31,972 $ (16,192) $ 3,670 $ -  $ 4,168
Americas  179,332  185,160  43,338  84,623  (93,162)  993  -   88,840
Asia Pacific  240,546  17,563  46,006  11,467  8,473  31  -   - 
Africa   115,414  93,936  24,265  75,956  10,173  350  1,643  - 
Corporate  -   -   -   -   (16,837)  74  -   - 
Total $ 749,162 $ 350,093 $ 167,075 $ 204,018 $ (107,545) $ 5,118 $ 1,643 $ 93,008
     
     
UTi Worldwide Inc.    
Geographic Reporting    
(in thousands)    
(Unaudited)      
       
  Fiscal year ended January 31, 2014    
  Freight Forwarding Revenues Contract Logistics and Distribution Revenues Freight Forwarding Net Revenues Contract Logistics and Distribution Net Revenues Operating (Loss)/Income Severance and Other    
EMENA $ 861,331 $ 224,901 $ 237,967 $ 131,893 $ (16,618) $ 12,343    
Americas  664,803  790,876  178,154  353,108  (11,571)  4,381    
Asia Pacific  1,000,697  80,036  194,984  53,201  46,375  3,851    
Africa  469,944  348,292  95,593  280,005  54,732  5,563    
Corporate  -   -   -   -   (83,086)  3,480    
Total $ 2,996,775 $ 1,444,105 $ 706,698 $ 818,207 $ (10,168) $ 29,618    
                 
                 
                 
  Fiscal year ended January 31, 2013 
  Freight Forwarding Revenues Contract Logistics and Distribution Revenues Freight Forwarding Net Revenues Contract Logistics and Distribution Net Revenues Operating (Loss)/Income Severance and Other Intangible Assets Impairment Goodwill Impairment
EMENA $ 909,436 $ 231,937 $ 229,951 $ 135,467 $ (15,625) $ 6,882 $ -   $ 4,168
Americas  750,324  800,522  184,608  359,102  (66,458)  3,000  -   88,840
Asia Pacific  970,084  71,999  189,092  47,185  39,831  5,344  -   - 
Africa   464,564  408,655  106,060  335,068  75,541  483  1,643  - 
Corporate  -   -   -   -   (61,584)  2,330  -   - 
Total $ 3,094,408 $ 1,513,113 $ 709,711 $ 876,822 $ (28,295) $ 18,039 $ 1,643  $ 93,008
 
 
UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
 
  Three months ended January 31, 2014 Three months ended January 31, 2013
GAAP Revenues $ 1,076,403 $ 1,099,255
Less: Purchased transportation costs  (706,374)  (728,162)
Net revenues $ 370,029 $ 371,093
     
GAAP Operating expenses $ 1,107,869 $ 1,206,800
Less: Purchased transportation costs  (706,374)  (728,162)
Operating expenses less purchased transportation costs  401,495  478,638
Less: Adjustment for severance and other(1)(2)  (10,585)  (5,118)
Less: Adjustment for bad debt related to customer bankruptcies(3)  (6,500)  - 
Less: Adjustment for goodwill impairment(4)  -   (93,008)
Less: Adjustment for intangible assets impairment(5)  -   (1,643)
Non-GAAP Operating expenses $ 384,410 $ 378,869
     
GAAP Operating loss $ (31,466) $ (107,545)
Add: Adjustment for severance and other(1)(2)  10,585  5,118
Add: Adjustment for bad debt related to customer bankruptcies(3)  6,500  - 
Add: Adjustment for goodwill impairment(4)  -   93,008
Add: Adjustment for intangible assets impairment(5)  -   1,643
Non-GAAP Operating loss $ (14,381) $ (7,776)
     
Non-GAAP operating loss as a percentage of net revenues -3.9% -2.1%
     
GAAP Pretax loss $ (38,225) $ (113,364)
Add: Adjustment for severance and other(1)(2)  10,585  5,118
Add: Adjustment for bad debt related to customer bankruptcies(3)  6,500  - 
Add: Adjustment for goodwill impairment(4)  -   93,008
Add: Adjustment for intangible assets impairment(5)  -   1,643
Non-GAAP Pretax loss $ (21,140) $ (13,595)
     
GAAP Provision for income taxes $ 11,022 $ 27,992
Add: Adjustment for severance and other(6)  3,281  1,587
Add: Adjustment for bad debt related to customer bankruptcies(6)  2,015  - 
Add: Adjustment for goodwill impairment(6)  -   2,717
Add: Adjustment for intangible assets impairment(6)  -   460
Less: Adjustment for deferred tax asset valuation allowance and other(6)  (22,871)  (34,458)
Non-GAAP Provision for income taxes $ (6,553) $ (1,702)
     
GAAP Net loss attributable to UTi Worldwide Inc. $ (50,721) $ (142,823)
Adjustment for:    
Severance and other(1)(2)  10,585  5,118
Bad debt related to customer bankruptcies(3)  6,500  - 
Goodwill impairment(4)  -   93,008
Intangible assets impairment(5)  -   1,643
Income tax effect severance and other(6)  (3,281)  (1,587)
Income tax effect bad debt related to customer bankruptcies(6)  (2,015)  - 
Income tax effect goodwill impairment(6)  -   (2,717)
Income tax effect intangible asset impairment(6)  -   (460)
Adjustment for deferred tax asset valuation allowance and other(6)  22,871  34,458
Non-GAAP Net loss attributable to UTi Worldwide Inc. $ (16,061) $ (13,360)
     
GAAP Diluted loss per common share $ (0.48) $ (1.38)
Adjustment for:    
Severance and other(1)(2)  0.10  0.05
Bad debt related to customer bankruptcies(3)  0.06  -
Goodwill impairment(4)  -   0.90
Intangible assets impairment(5)  -   0.02
Income tax effect severance and other(6)  (0.03)  (0.02)
Income tax effect bad debt related to customer bankruptcies(6)  (0.02)  - 
Income tax effect goodwill impairment(6)  -   (0.03)
Income tax effect intangible asset impairment(6)  -   - 
Adjustment for deferred tax asset valuation allowance and other(6)  0.22  0.33
Non-GAAP Diluted loss per common share $ (0.15) $ (0.13)
 
(1) During the three months ended January 31, 2014 the company recorded pre-tax severance of $8,402 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for certain legal matters, including the final settlement relating to a 2006 warehouse fire, and facility exit costs and other of $664. 
(2) During the three months ended January 31, 2013, the company recorded pre-tax severance of $5,118 primarily related to transformation activities. 
(3) During the three months ended January 31, 2014, the company recorded a pre-tax bad debt write off of $6,500 related to customer bankruptcies.
(4) During the three months ended January 31, 2013, the company recorded a pre-tax goodwill impairment charge of $93,008, as a result of continued economic weakness in certain of the regions in which we operate.
(5) During the three months ended January 31, 2013, the company recorded a pre-tax intangible asset impairment charge of $1,643, which relates to the recoverability of value assigned to certain client relationships within one of the company's pharmaceutical distribution business in South Africa.
(6) The provision for income tax adjustment related to the severance and other costs and intangible asset impairments and were calculated based on the prevailing tax rate in each jurisdiction. In addition, the adjustment for deferred tax asset valuation allowances includes changes in deferred tax assets associated with amalgamations. 
 
 
UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
 
  Fiscal year ended January 31, 2014 Fiscal year ended January 31, 2013
GAAP Revenues $ 4,440,880 $ 4,607,521
Less: Purchased transportation costs  (2,915,975)  (3,020,988)
Net revenues $ 1,524,905 $ 1,586,533
     
GAAP Operating expenses $ 4,451,048 $ 4,635,816
Less: Purchased transportation costs  (2,915,975)  (3,020,988)
Operating expenses less purchased transportation costs  1,535,073  1,614,828
Less: Adjustment for severance and other(7)(8)  (29,618)  (18,039)
Less: Adjustment for bad debt related to customer bankruptcies(9)  (6,500)  - 
Less: Adjustment for goodwill impairment(10)  -   (93,008)
Less: Adjustment for intangible assets impairment(11)  -   (1,643)
Non-GAAP Operating expenses $ 1,498,955 $ 1,502,138
     
GAAP Operating loss $ (10,168) $ (28,295)
Add: Adjustment for severance and other(7)(8)  29,618  18,039
Add: Adjustment for bad debt related to customer bankruptcies(9)  6,500  - 
Add: Adjustment for goodwill impairment(10)  -   93,008
Add: Adjustment for intangible assets impairment(11)  -   1,643
Non-GAAP Operating income $ 25,950 $ 84,395
     
Non-GAAP operating income as a percentage of net revenues 1.7% 5.3%
     
GAAP Pretax loss $ (29,846) $ (42,149)
Add: Adjustment for severance and other(7)(8)  29,618  18,039
Add: Adjustment for bad debt related to customer bankruptcies(9)  6,500  - 
Add: Adjustment for goodwill impairment(10)  -   93,008
Add: Adjustment for intangible assets impairment(11)  -   1,643
Non-GAAP Pretax income $ 6,272 $ 70,541
     
GAAP Provision for income taxes $ 41,076 $ 51,891
Add: Adjustment for severance and other(12)  9,182  5,538
Add: Adjustment for bad debt related to customer bankruptcies(12)  2,015  -
Add: Adjustment for goodwill impairment(12)  -   2,717
Add: Adjustment for intangible assets impairment(12)  -   460
Less: Adjustment for deferred tax asset valuation allowance and other(12)  (50,329)  (37,068)
Non-GAAP Provision for income taxes $ 1,944 $ 23,538
     
GAAP Net loss attributable to UTi Worldwide Inc. $ (76,658) $ (100,506)
Adjustment for:    
Severance and other(7)(8)  29,618  18,039
Bad debt related to customer bankruptcies(9)  6,500  - 
Goodwill impairment(10)  -   93,008
Intangible assets impairment(11)  -   1,643
Income tax effect severance and other(12)  (9,182)  (5,538)
Income tax effect bad debt related to customer bankruptcies(12)  (2,015)  - 
Income tax effect goodwill impairment(12)  -   (2,717)
Income tax effect intangible asset impairment(12)  -   (460)
Adjustment for deferred tax asset valuation allowance and other(12)  50,329  37,068
Non-GAAP Net (loss)/income attributable to UTi Worldwide Inc. $ (1,408) $ 40,537
     
GAAP Diluted loss per common share $ (0.73) $ (0.97)
Adjustment for:    
Severance and other(7)(8)  0.28  0.17
Bad debt related to customer bankruptcies(9)  0.06  - 
Goodwill impairment(10)  -   0.89
Intangible assets impairment(11)  -   0.02
Income tax effect severance and other(12)  (0.09)  (0.05)
Income tax effect bad debt related to customer bankruptcies(12)  (0.02)
Income tax effect goodwill impairment(12)  -   (0.03)
Income tax effect intangible asset impairment(12)  -   - 
Adjustment for deferred tax asset valuation allowance and other(12)  0.49  0.36
Non-GAAP Diluted (loss)/earnings per common share $ (0.01) $ 0.39
 
(7) During the fiscal year ended January 31, 2014 the company recorded pre-tax severance of $24,791 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for certain legal matters, including the final settlement relating to a 2006 warehouse fire, and facility exit costs and other of $3,308. 
(8) During the fiscal year ended January 31, 2013, the company recorded pre-tax severance of $12,826 primarily related to transformation activities and accrued pre-tax expenses of $5,213 relating to a legal judgment. 
(9) During the fiscal year ended January 31, 2014, the company recorded a pre-tax bad debt write off of $6,500 related to customer bankruptcies.
(10) During the fiscal year ended January 31, 2013, the company recorded a pre-tax goodwill impairment charge of $93,008, as a result of continued economic weakness in certain of the regions in which we operate.
(11) During the fiscal year ended January 31, 2013, the company recorded a pre-tax intangible asset impairment charge of $1,643, which relates to the recoverability of value assigned to certain client relationships within one of the company's pharmaceutical distribution business in South Africa.
(12) The provision for income tax adjustment related to the severance and other costs and intangible asset impairments and were calculated based on the prevailing tax rate in each jurisdiction. In addition, the adjustment for deferred tax asset valuation allowances includes changes in deferred tax assets associated with amalgamations. 
 
 
UTi Worldwide Inc.
Organic Growth Reconciliation
(Unaudited)
 
Set forth below is a reconciliation of the company's organic growth rates and the growth rates based on the company's GAAP reported results in the company's revenues, net revenues and operating expenses less purchased transportation costs for the three months and fiscal year ended January 31, 2014. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation.
 
  Three months ended January 31, 2014
  Total Net Change +/(-) Currency Impact Organic Growth +/(-) Non-GAAP Items(13) Adjusted Organic Growth
Revenues  (2)%  4%  2%  -%   2%
Net revenues  -%   5%  5%  -%   5%
Operating expenses less purchased transportation costs  (16)%  4%  (12)%  18%  6%
           
  Fiscal year ended January 31, 2014
  Total Net Change +/(-) Currency Impact Organic Growth +/(-) Non-GAAP Items(14) Adjusted Organic Growth
Revenues  (4)%  3%  (1)%  -%   (1)%
Net revenues  (4)%  3%  (1)%  -%   (1)%
Operating expenses less purchased transportation costs  (5)%  4%  (1)%  5%  4%
 
(13) During the three months ended January 31, 2014 the company recorded pre-tax severance of $8,402 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for a legal judgment relating to a 2006 warehouse fire, facility exit costs and other of $664 and pre-tax bad debt write off of $6,500 related to customer bankruptcies. 
(14) During the fiscal year ended January 31, 2014 the company recorded pre-tax severance of $24,791 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for a legal judgment relating to a 2006 warehouse fire, facility exit costs and other of $3,308, and pre-tax bad debt write off of $6,500 related to customer bankruptcies.
 
 
UTi Worldwide Inc.  
Adjusted EBITDA Calculation  
(in thousands)  
(Unaudited)  
   
  Three months ended
  January 31,
  2014 2013
EBITDA:    
Pretax loss  (38,225)  (113,364)
Interest expense  9,819  11,024
Depreciation  14,133  13,938
Amortization of intangible assets  7,226  2,886
Total   (7,047)  (85,516)
     
Adjusting items    
Stock compensation  4,087  2,867
Goodwill impairment  -   93,008
Intangible assets impairment  -   1,643
Severance and other(15)  10,585  5,118
Bad debt related to customer bankruptcies(16)  6,500  - 
Adjusted EBITDA  14,125  17,120
 
(15) During the three months ended January 31, 2014 the company recorded pre-tax severance of $8,402 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for a legal judgment relating to a 2006 warehouse fire, and facility exit costs and other of $664. 
(16) During the three months ended January 31, 2014, the company recorded a pre-tax bad debt write off of $6,500 related to customer bankruptcies.
CONTACT: Jeff Misakian         Global Vice President, Investor Relations         (562) 552-9417         jmisakian@go2uti.com

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