WORLD FUEL SERVICES CORPORATION REPORTS
RESULTS FOR THE THIRD QUARTER OF 2007
GROSS PROFIT AND VOLUMES INCREASED ACROSS ALL SEGMENTS
MIAMI, FL -- November 8, 2007-- World Fuel Services Corporation (NYSE: INT), a global leader in the marketing and sale of marine, aviation and land fuel products and related services, today reported third quarter net income of $14.8 million ($0.53 and $0.51 per share on a basic and diluted basis, respectively) compared to $17.2 million ($0.62 and $0.59 per share on a basic and diluted basis, respectively), in the third quarter of 2006. Our third quarter results were adversely affected by the recording of an impairment charge of $1.9 million relating to a commercial paper investment. The after-tax effect of the impairment charge was $1.3 million, or $0.05 per share.
Our aviation segment generated record gross profit of $33.2 million, an increase of 8% sequentially and 20% year-over-year. “The company delivered solid year-over-year growth in volume and profitability in our aviation segment,” said Paul H. Stebbins, Chairman and Chief Executive Officer of World Fuel Services Corporation. “Our aviation results benefited, in part, by continued increases in jet fuel prices during the quarter,” added Mr. Stebbins.
Our marine segment generated gross profit of $26.9 million, an increase of 6% from the second quarter and 4% year-over-year. “Our marine segment has now generated year-over-year increases in gross profit for eleven out of the last twelve quarters and again experienced a sequential and year-over-year increase in volume,” stated Michael J. Kasbar, President and Chief Operating Officer. “Our gross profit in our land segment increased 7% sequentially and 29% year-over-year, our fifth consecutive quarter of year-over-year increases in gross profit,” added Mr. Kasbar.
“Despite increases in gross profit in each of our three business segments, our operating results were negatively impacted, principally, by further increases in compensation and general and administrative expenses as we continue to strategically invest in our business to accelerate future growth,” stated Ira M. Birns, Executive Vice President & Chief Financial Officer.
WORLD FUEL SERVICES CORPORATION REPORTS
RESULTS FOR THE THIRD QUARTER OF 2007
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THIRD QUARTER FINANCIAL HIGHLIGHTS
($ in thousands, except per share data)
| | | Quarter Ended September 30, | |
| | | 2007 | | | 2006 | |
| Revenue | | $ | 3,608,465 | | | $ | 2,775,545 | |
| Income from operations | | $ | 22,317 | | | $ | 20,820 | |
| Net income | | $ | 14,826 | | | $ | 17,199 | |
| Basic earnings per share | | $ | 0.53 | | | $ | 0.62 | |
| Diluted earnings per share | | $ | 0.51 | | | $ | 0.59 | |
About World Fuel Services Corporation
Headquartered in Miami, Florida, World Fuel Services Corporation is a global leader in the marketing and sale of marine, aviation and land fuel products and related services. World Fuel Services provides fuel and related services at more than 2,500 airports, seaports and tanker truck loading terminals worldwide. With 43 offices (including satellite offices) strategically located throughout the world, World Fuel Services offers its customers a value-added outsource service for the supply, quality control, logistical support and price risk management of marine, aviation and land fuel.
The Company’s global team of market makers provides deep domain expertise in all aspects of marine, aviation and land fuel management. World Fuel Services’ marine customers include international container and tanker fleets and time-charter operators, as well as the United States and foreign governments. Aviation customers include commercial airlines, cargo carriers and corporate clientele, as well as the United States and foreign governments. Land customers are primarily petroleum distributors. For more information, call (305) 428-8000 or visit http://www.wfscorp.com.
Information Relating to Forward-Looking Statements
With the exception of historical information in this news release, this document includes forward-looking statements that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the management of growth, fluctuations in world oil prices or foreign currency, major changes in political, economic, regulatory, or environmental conditions, the loss of key customers, suppliers or key members of senior management, uninsured losses, competition, credit risk associated with accounts and notes receivable, and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Actual results may differ materially from any forward-looking statements set forth herein.
- TABLES FOLLOW -
WORLD FUEL SERVICES CORPORATION REPORTS
RESULTS FOR THE THIRD QUARTER OF 2007
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WORLD FUEL SERVICES CORPORATION | |
CONSOLIDATED STATEMENTS OF INCOME | |
| (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) | |
| | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Revenue | | $ | 3,608,465 | | | $ | 2,775,545 | | | $ | 9,584,033 | | | $ | 8,166,403 | |
| Cost of sales | | | 3,546,190 | | | | 2,720,384 | | | | 9,412,602 | | | | 8,010,055 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 62,275 | | | | 55,161 | | | | 171,431 | | | | 156,348 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Compensation and employee benefits | | | 23,743 | | | | 21,939 | | | | 68,705 | | | | 61,159 | |
| Executive severance costs | | | - | | | | - | | | | - | | | | 1,545 | |
| Provision for bad debts | | | 1,294 | | | | 429 | | | | 594 | | | | 1,577 | |
| General and administrative | | | 14,921 | | | | 11,973 | | | | 40,798 | | | | 34,258 | |
| | | | | | | | | | | | | | | | | |
| | | | 39,958 | | | | 34,341 | | | | 110,097 | | | | 98,539 | |
| | | | | | | | | | | | | | | | | |
| Income from operations | | | 22,317 | | | | 20,820 | | | | 61,334 | | | | 57,809 | |
| | | | | | | | | | | | | | | | | |
| Interest and other income, net | | | (2,209 | ) | | | 1,671 | | | | 116 | | | | 2,475 | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes | | | 20,108 | | | | 22,491 | | | | 61,450 | | | | 60,284 | |
| Provision for income taxes | | | 5,014 | | | | 5,252 | | | | 14,359 | | | | 13,655 | |
| | | | | | | | | | | | | | | | | |
| | | | 15,094 | | | | 17,239 | | | | 47,091 | | | | 46,629 | |
| Minority interest in (income) loss of | | | | | | | | | | | | | | | | |
| consolidated subsidiaries | | | (268 | ) | | | (40 | ) | | | (448 | ) | | | 50 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 14,826 | | | $ | 17,199 | | | $ | 46,643 | | | $ | 46,679 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.53 | | | $ | 0.62 | | | $ | 1.66 | | | $ | 1.71 | |
| | | | | | | | | | | | | | | | | |
| Basic weighted average shares | | | 28,153 | | | | 27,777 | | | | 28,067 | | | | 27,304 | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.51 | | | $ | 0.59 | | | $ | 1.60 | | | $ | 1.62 | |
| | | | | | | | | | | | | | | | | |
| Diluted weighted average shares | | | 29,077 | | | | 29,010 | | | | 29,090 | | | | 28,891 | |
- Continued –
WORLD FUEL SERVICES CORPORATION REPORTS
RESULTS FOR THE THIRD QUARTER OF 2007
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WORLD FUEL SERVICES CORPORATION | |
CONSOLIDATED BALANCE SHEETS | |
| (UNAUDITED - IN THOUSANDS) | |
| | | As of | |
| | | September 30, | | | December 31, | |
| | | 2007 | | | 2006 | |
| | | | | | | |
ASSETS | | | | | | |
| CURRENT ASSETS: | | | | | | |
| Cash and cash equivalents | | $ | 134,453 | | | $ | 176,495 | |
| Short-term investments | | | 8,100 | | | | 12,500 | |
| Accounts and notes receivable, net | | | 1,138,372 | | | | 860,084 | |
| Inventories | | | 113,938 | | | | 74,519 | |
| Receivables related to derivative contracts | | | 40,251 | | | | 37,070 | |
| Prepaid expenses and other current assets | | | 47,053 | | | | 35,423 | |
| | | | | | | | | |
| Total current assets | | | 1,482,167 | | | | 1,196,091 | |
| | | | | | | | | |
| PROPERTY AND EQUIPMENT, NET | | | 34,738 | | | | 26,730 | |
| | | | | | | | | |
| OTHER ASSETS | | | 58,361 | | | | 54,579 | |
| | | | | | | | | |
| | | $ | 1,575,266 | | | $ | 1,277,400 | |
| | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Short-term debt | | $ | 34 | | | $ | 10 | |
| Accounts payable | | | 948,087 | | | | 720,790 | |
| Payables related to derivative contracts | | | 40,683 | | | | 34,209 | |
| Accrued expenses and other current liabilities | | | 77,217 | | | | 71,752 | |
| | | | | | | | | |
| Total current liabilities | | | 1,066,021 | | | | 826,761 | |
| | | | | | | | | |
| LONG-TERM LIABILITIES | | | 47,988 | | | | 24,670 | |
| | | | | | | | | |
| SHAREHOLDERS' EQUITY | | | 461,257 | | | | 425,969 | |
| | | | | | | | | |
| | | $ | 1,575,266 | | | $ | 1,277,400 | |
- Continued -
WORLD FUEL SERVICES CORPORATION REPORTS
RESULTS FOR THE THIRD QUARTER OF 2007
Page 5
WORLD FUEL SERVICES CORPORATION | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
| (UNAUDITED - IN THOUSANDS) | |
| | | | | | | | | | | | | |
| | | For the Three Months ended | | | For the Nine Months ended | |
| | | September 30, | | | September 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Cash flows from operating activities: | | | | | | | | | | | | |
| Net income | | $ | 14,826 | | | $ | 17,199 | | | $ | 46,643 | | | $ | 46,679 | |
| Adjustments to reconcile net income to net cash (used in) | | | | | | | | | | | | | | | | |
| by operating activities: | | | | | | | | | | | | | | | | |
| Provision for bad debts | | | 1,294 | | | | 429 | | | | 594 | | | | 1,577 | |
| Depreciation and amortization | | | 1,429 | | | | 1,332 | | | | 4,191 | | | | 3,435 | |
| Deferred income tax provision (benefit) | | | 770 | | | | 753 | | | | (647 | ) | | | 3,373 | |
| Impairment on short-term investments | | | 1,900 | | | | - | | | | 1,900 | | | | - | |
| Share based payment compensation costs for employees and | | | - | | | | - | | | | | | | | | |
| non-employee directors | | | 1,778 | | | | 2,393 | | | | 5,435 | | | | 4,883 | |
| Unrealized gains from derivatives and related hedged items, net | | | (649 | ) | | | (1,682 | ) | | | (608 | ) | | | (1,417 | ) |
| Other non-cash operating charges | | | (52 | ) | | | (28 | ) | | | (239 | ) | | | (60 | ) |
| Changes in operating assets and liabilities: | | | - | | | | - | | | | - | | | | - | |
| Accounts receivable | | | (134,363 | ) | | | (53,139 | ) | | | (278,882 | ) | | | (142,517 | ) |
| Inventories | | | (28,113 | ) | | | (10,850 | ) | | | (38,261 | ) | | | (29,959 | ) |
| Receivables related to derivative contracts | | | 3,737 | | | | 18,480 | | | | (3,300 | ) | | | (6,519 | ) |
| Prepaid expenses and other current assets | | | 5,310 | | | | 6,711 | | | | (9,178 | ) | | | 13,281 | |
| Non-current income tax receivable and other assets | | | (82 | ) | | | 63 | | | | (1,471 | ) | | | (55 | ) |
| Accounts payable | | | 61,159 | | | | 19,722 | | | | 227,297 | | | | 125,236 | |
| Payables related to derivative contracts | | | (3,736 | ) | | | (10,282 | ) | | | 5,924 | | | | 4,750 | |
| Accrued expenses and other current liabilities | | | 5,847 | | | | (4,325 | ) | | | 12,662 | | | | (8,519 | ) |
| Non-current income tax payable, deferred compensation | | | | | | | | | | | - | | | | - | |
| and other long-term liabilities | | | 812 | | | | 690 | | | | 1,107 | | | | 525 | |
| Total adjustments | | | (82,959 | ) | | | (29,733 | ) | | | (73,476 | ) | | | (31,986 | ) |
| Net cash (used in) provided by operating activities | | | (68,133 | ) | | | (12,534 | ) | | | (26,833 | ) | | | 14,693 | |
| Cash flows from investing activities: | | | | | | | | | | | | | | | | |
| Capital expenditures | | | (5,539 | ) | | | (5,287 | ) | | | (12,669 | ) | | | (15,333 | ) |
| Purchases of short-term investments | | | (10,000 | ) | | | (10,000 | ) | | | (30,060 | ) | | | (31,055 | ) |
| Proceeds from the sale of short-term investments | | | - | | | | - | | | | 32,560 | | | | 31,055 | |
| Acquisition of minority interests | | | - | | | | - | | | | - | | | | (2,646 | ) |
| Net cash used in investing activities | | | (15,539 | ) | | | (15,287 | ) | | | (10,169 | ) | | | (17,979 | ) |
| Cash flows from financing activities: | | | | | | | | | | | | | | | | |
| Dividends paid on common stock | | | (1,063 | ) | | | (1,026 | ) | | | (3,189 | ) | | | (3,094 | ) |
| Minority interest distribution | | | - | | | | - | | | | (426 | ) | | | (410 | ) |
| Borrowings under revolving credit facility | | | - | | | | 25,000 | | | | - | | | | 25,000 | |
| Repayments under revolving credit facility | | | - | | | | (25,000 | ) | | | - | | | | (25,000 | ) |
| Repayment of promissory notes | | | - | | | | - | | | | - | | | | (500 | ) |
| Proceeds from exercise of stock options | | | 104 | | | | 628 | | | | 730 | | | | 5,298 | |
| Purchases of stock tendered by employees to satisfy the required | | | | | | | | | | | | | | | | |
| withholding taxes related to share-based awards | | | (1,644 | ) | | | (941 | ) | | | (2,583 | ) | | | (1,050 | ) |
| Other | | | 141 | | | | 204 | | | | 428 | | | | (44 | ) |
| Net cash (used in) provided by financing activities | | | (2,462 | ) | | | (1,135 | ) | | | (5,040 | ) | | | 200 | |
| Net decrease in cash and cash equivalents | | | (86,134 | ) | | | (28,956 | ) | | | (42,042 | ) | | | (3,086 | ) |
| Cash and cash equivalents, at beginning of period | | | 220,587 | | | | 159,154 | | | | 176,495 | | | | 133,284 | |
| Cash and cash equivalents, at end of period | | $ | 134,453 | | | $ | 130,198 | | | $ | 134,453 | | | $ | 130,198 | |
