08/01/2012 | Press release

World Fuel Services Corporation Reports Second Quarter Results

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MIAMI--(BUSINESS WIRE)--Aug. 1, 2012-- (NYSE:INT), a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services, today reported second quarter net income of $48.6 million or $0.68 diluted earnings per share compared to $50.2 million or $0.70 diluted earnings per share in the second quarter of 2011. Non-GAAP net income and diluted earnings per share for the second quarter, which exclude share-based compensation and amortization of acquired intangible assets, were $52.8 million and $0.74, respectively, compared to $57.7 million or $0.81 in 2011.

"We are pleased with our second quarter performance, which demonstrates the effectiveness of our multi-faceted business model," stated Michael J. Kasbar, president and chief executive officer of . "We remain optimistic about our ability to deliver on our long-term growth strategy."

The company's marine segment generated gross profit of $51.7 million, a decrease of approximately $3.3 million or 6% sequentially, but an increase of $1.1 million or 2% year-over-year. Our aviation segment generated gross profit of $69.2 million in the second quarter of 2012, an increase of $4.3 million or 7% sequentially, but a decrease of $12.9 million or 16% year-over-year. The company's land segment posted gross profit of $51.2 million, an increase of $14 million or 38% sequentially and $18.8 million or 58% year-over-year.

"The strength of our balance sheet remains a key differentiator for us in the current market environment," said Ira M. Birns, executive vice president and chief financial officer. "Our solid liquidity profile should enable us to continue investing in organic and external growth opportunities, while we continue to maintain strong operating expense disciplines."

Non-GAAP Financial Measures

This press release includes selected financial information that has not been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). This information includes non-GAAP net income and non-GAAP diluted earnings per share. The non-GAAP financial measures exclude costs associated with share-based compensation and amortization of acquired intangible assets, primarily because we do not believe they are reflective of the company's core operating results. We believe that these non-GAAP financial measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful for investors to evaluate our core operating results and trends.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, our presentation of non-GAAP net income and non-GAAP diluted earnings per share may not be comparable to the presentation of such metrics by other companies. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release.

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 creditworthiness of customers and counterparties and our ability to collect accounts receivable, fluctuations in world oil prices or foreign currency, changes in political, economic, regulatory, or environmental conditions, adverse conditions in the markets or industries in which we or our customers operate, our failure to effectively hedge certain financial risks associated with the use of derivatives, non-performance by counterparties or customers on derivatives contracts, the integration of acquired businesses, uninsured losses, our ability to retain and attract senior management and other key employees 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.

About

Headquartered in Miami, Florida, is a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services on a worldwide basis. sells fuel and delivers services to its clients at 6,000 locations in more than 200 countries and territories worldwide.

The company's global team of market makers provides deep domain expertise in all aspects of aviation, marine and land fuel management. Aviation customers include commercial airlines, cargo carriers, private aircraft and fixed base operators (FBO's), as well as the United States and foreign governments. marine customers include international container and tanker fleets, cruise lines and time-charter operators, as well as the United States and foreign governments. Land customers include petroleum distributors, retail petroleum operators, and industrial, commercial and government accounts. For more information, call 305-428-8000 or visit www.wfscorp.com.

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)
					For the Three Months ended								For the Six Months ended
					June 30,								June 30,
					2012				2011				2012				2011
Revenue					$	9,618,797			$	8,708,709			$	19,097,852			$	15,788,115
Cost of revenue						9,446,674				8,543,607				18,768,494				15,486,245
		Gross profit				172,123				165,102				329,358				301,870
Operating expenses:
	Compensation and employee benefits					56,183				54,877				110,710				101,946
	Provision for bad debt					641				3,531				782				4,327
	General and administrative					42,941				40,591				86,252				73,969
		Total operating expenses				99,765				98,999				197,744				180,242
		Income from operations				72,358				66,103				131,614				121,628
Non-operating expenses, net						(5,525	)			(4,381	)			(9,620	)			(7,834	)
Income before income taxes						66,833				61,722				121,994				113,794
Provision for income taxes						11,951				11,049				18,566				21,464
Net income including noncontrolling interest						54,882				50,673				103,428				92,330
Net income attributable to noncontrolling interest						6,282				470				8,413				1,018
Net income attributable to World Fuel					$	48,600			$	50,203			$	95,015			$	91,312
Basic earnings per common share					$	0.68			$	0.71			$	1.34			$	1.30
Basic weighted average common shares						71,173				70,856				71,083				70,400
Diluted earnings per common share					$	0.68			$	0.70			$	1.32			$	1.28
Diluted weighted average common shares						71,767				71,558				71,773				71,299

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS)
					As of
					June 30,			December 31,
					2012			2011
Assets:
Current assets:
	Cash and cash equivalents				$	136,676		$	205,415
	Accounts receivable, net					2,124,645			2,160,561
	Inventories					557,390			472,584
	Prepaid expenses and other current assets					478,134			283,667
			Total current assets			3,296,845			3,122,227
Property and equipment, net						92,597			90,710
Goodwill, identifiable intangible and non-current other assets						498,452			484,309
			Total assets		$	3,887,894		$	3,697,246
Liabilities and equity:
Liabilities:
Current liabilities:
	Short-term debt				$	23,780		$	17,800
	Accounts payable					1,774,508			1,739,678
	Accrued expenses and other current liabilities					289,456			268,664
			Total current liabilities			2,087,744			2,026,142
Long-term debt						308,212			269,348
Other long-term liabilities						52,870			55,038
			Total liabilities			2,448,826			2,350,528
Equity:
	World Fuel shareholders' equity					1,418,218			1,332,961
	Noncontrolling interest equity					20,850			13,757
			Total equity			1,439,068			1,346,718
			Total liabilities and equity		$	3,887,894		$	3,697,246

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
	For the Three Months ended								For the Six Months ended
	June 30,								June 30,
	2012				2011				2012				2011
Cash flows from operating activities:
Net income including noncontrolling interest		54,882			$	50,673				103,428			$	92,330
Adjustments to reconcile net income including
noncontrolling interest to net cash (used in) provided by
operating activities:
Depreciation and amortization		8,009				10,573				17,668				18,740
Provision for bad debt		641				3,531				782				4,327
Share-based payment award compensation costs		3,053				2,793				5,957				5,658
Other		(9,794	)			4,948				(1,023	)			3,880
Change in cash collateral deposits held by financial counterparties		(139,637	)			1,449				(128,058	)			(650	)
Changes in other assets and liabilities, net of acquisitions		(22,869	)			(67,180	)			(55,677	)			(261,984	)
Total adjustments		(160,597	)			(43,886	)			(160,351	)			(230,029	)
Net cash (used in) provided by operating activities		(105,715	)			6,787				(56,923	)			(137,699	)
Cash flows from investing activities:
Acquisitions and other investments, net of cash acquired		(28,948	)			(39,013	)			(29,038	)			(106,013	)
Capital expenditures		(5,619	)			(4,766	)			(9,567	)			(7,394	)
Other		115				-				-				-
Net cash used in investing activities		(34,452	)			(43,779	)			(38,605	)			(113,407	)
Cash flows from financing activities:
Borrowings of debt, net		39,085				92,340				37,593				131,877
Dividends paid on common stock		(2,686	)			(2,696	)			(5,350	)			(5,294	)
Other		(952	)			3,236				(5,947	)			(265	)
Net cash provided by financing activities		35,447				92,880				26,296				126,318
Effect of exchange rate changes on cash and
cash equivalents		(1,197	)			473				493				1,630
Net (decrease) increase in cash and cash equivalents		(105,917	)			56,361				(68,739	)			(123,158	)
Cash and cash equivalents, as of beginning of period		242,593				93,374				205,415				272,893
Cash and cash equivalents, as of end of period	$	136,676			$	149,735			$	136,676			$	149,735

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA)
					For the Three Months ended						For the Six Months ended
					June 30,						June 30,
					2012			2011			2012			2011
Non-GAAP financial measures and reconciliation:
GAAP net income attributable to World Fuel					$	48,600		$	50,203		$	95,015		$	91,312
	Share-based compensation expense, net of taxes					2,107			1,879			4,108			3,888
	Intangible asset amortization expense, net of taxes					2,118			5,571			6,584			9,233
Non-GAAP net income attributable to World Fuel					$	52,825		$	57,653		$	105,707		$	104,433
GAAP diluted earnings per common share					$	0.68		$	0.70		$	1.32		$	1.28
	Share-based compensation expense, net of taxes					0.03			0.03			0.06			0.05
	Intangible asset amortization expense, net of taxes					0.03			0.08			0.09			0.13
Non-GAAP diluted earnings per common share					$	0.74		$	0.81		$	1.47		$	1.46

WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(UNAUDITED - IN THOUSANDS)
					For the Three Months ended						For the Six Months ended
					June 30,						June 30,
						2012			2011			2012			2011
Revenue:
	Aviation segment				$	3,547,871		$	3,364,829		$	6,959,418		$	6,011,421
	Marine segment					3,767,144			3,532,983			7,671,335			6,532,402
	Land segment					2,303,782			1,810,897			4,467,099			3,244,292
					$	9,618,797		$	8,708,709		$	19,097,852		$	15,788,115
Gross profit:
	Aviation segment				$	69,171		$	82,027		$	134,085		$	152,155
	Marine segment					51,748			50,674			106,825			90,889
	Land segment					51,204			32,401			88,448			58,826
					$	172,123		$	165,102		$	329,358		$	301,870
Income from operations:
	Aviation segment				$	25,960		$	37,624		$	52,793		$	75,794
	Marine segment					27,931			25,763			55,376			43,118
	Land segment					28,352			14,026			44,552			24,689
						82,243			77,413			152,721			143,601
	Corporate overhead - unallocated					9,885			11,310			21,107			21,973
					$	72,358		$	66,103		$	131,614		$	121,628

Source:

World Fuel Services Corporation
Ira M. Birns, 305-428-8000
Executive Vice President & Chief Financial Officer

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