UTi Worldwide Q3 net income rises 21% to US$22.9M as revenues climb 13% to US$1.3B primarily on higher ocean volumes, pass-through of higher fuel surcharges, greater contract logistics and distribution activity, currency effects

LONG BEACH, California , September 1, 2011 (press release) – UTi Worldwide Inc. (Nasdaq:UTIW - News) today reported financial results for its fiscal 2012 second quarter ended July 31, 2011.

Fiscal Second Quarter 2012 vs. 2011 Results:

Revenues were $1,297.4 million, an increase of 13 percent from $1,151.1 million.
Net revenues (revenues minus purchased transportation costs) were $443.4 million, an increase of 17 percent from $379.1 million.
Net income attributable to UTi Worldwide Inc. was $22.9 million, or $0.22 per diluted share, in the second quarter of fiscal 2012.
Severance costs totaled $3.5 million, or $2.4 million after taxes, in the second quarter of fiscal 2012.
Excluding these costs, adjusted net income attributable to UTi Worldwide Inc. was $25.3 million, or $0.24 per diluted share, compared to $18.9 million, or $0.19 per diluted share.

Eric W. Kirchner, chief executive officer, said, "We are pleased to report solid results for the second quarter, despite the macroeconomic headwinds and slowing freight environment. Net revenues in the fiscal 2012 second quarter were higher primarily due to currency effects, greater net revenue per unit of cargo in freight forwarding and increased activity in contract logistics and distribution. Ocean freight volumes increased in the second quarter while airfreight volumes declined when compared to very high levels last year. We were pleased to see continued growth in many of our contract logistics operations with new business wins in our Africa and Asia Pacific regions, as well as an improvement in our U.S. distribution business. Operating expenses grew less than net revenues in the second quarter, and our efforts to control costs have helped productivity. As a result, our operating income increased over last year. These results reflect the efforts of a UTi team that has worked tirelessly toward greater efficiency as we continue to develop and execute supply chain solutions for clients. The strength of any organization resides principally with its employees, and UTi is certainly no exception. We will continue to focus on growing the business and improving margins while we transform for the future."

Revenues increased 12.7 percent in the 2012 fiscal second quarter compared to the prior-year second quarter primarily due to currency effects, increased ocean volumes, higher fuel surcharges, which the company passes through to clients, and greater contract logistics and distribution activity. These factors were partially offset by slightly lower volumes in airfreight. Net revenues increased 17.0 percent in the second quarter due to currency, higher net revenue per unit of cargo in freight forwarding and the increased contract logistics and distribution activity. Organic net revenue, which excludes the impact of currency, increased 8.4 percent compared to the second quarter last year.

Operating expenses less purchased transportation costs were $403.7 million in the second quarter of fiscal 2012. Excluding severance costs of $3.5 million, adjusted operating expenses less purchased transportation costs in the fiscal 2012 second quarter were $400.2 million, an increase of 15.9 percent compared to the same period last year. Currency trends also impacted expenses. Organic growth in adjusted operating expenses less purchased transportation costs in the fiscal 2012 second quarter was 7.4 percent compared to the same period last year.

The company reported operating income in the fiscal 2012 second quarter of $39.7 million. Excluding severance costs, adjusted operating income was $43.2 million, which represented 9.7 percent of net revenues. This compares to operating income in the year-ago second quarter of $33.9 million, or 8.9 percent of net revenues. The adjusted operating income and margin increases primarily reflect the higher net revenue per unit of cargo in freight forwarding and increased activity in contract logistics compared to the same period last year.

Investor Conference Call:

UTi management will host an investor conference call today, September 1, 2011, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financial results for the fiscal 2012 second quarter. Investment professionals are invited to participate in the live call by dialing 877-941-8609 (domestic) or 480-629-9692 (international) using conference ID 4466939. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com and www.earnings.com. 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 11:00 a.m. PDT, today, through September 4, 2011, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4466939.

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 referred to operating expenses less purchased transportation costs and adjusted operating expenses less purchased transportation costs, which are adjusted to exclude severance and exit costs, and to adjusted net income and adjusted operating income, which are adjusted to exclude severance and exit costs. The company also has referred to organic revenue and net revenue growth, which are adjusted to exclude the impact of currency fluctuations and, where applicable, acquisitions between comparable periods; and to organic, adjusted operating expenses less purchased transportation costs, which are adjusted to exclude severance and exit costs and the impact of currency fluctuations and, where applicable, acquisitions between comparable periods. 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. 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. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

Safe Harbor Statement:

Certain statements in this news release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The company intends that all such statements be subject to the "safe-harbor" provisions contained in those sections. Such forward-looking statements may include, but are not limited to, the statements about growing the business, improving margins and transforming operations, the outlook for the future and other statements not of an historical nature. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including but not limited to the economic volatility that has materially impacted trade volumes, transportation capacity, pricing dynamics and overall margins; the financial condition of many of the company's customers; planned or unplanned consequences of the company's sales initiatives, procurement initiatives and business transformation efforts; the demand for the company's services; the impact and related costs associated with reorganization efforts and/or cost reduction measures undertaken by the company; increased competition; the impact of volatile fuel costs and changes in foreign exchange rates; changes in the company's effective tax rates; industry consolidation making it more difficult to compete against larger companies; general economic, political and market conditions, including those in Africa, Asia and EMENA; work stoppages or slowdowns or other material interruptions in transportation services; risks of international operations; risks associated with, and costs and expenses the company will incur as a result of, the ongoing publicly announced U.S. Department of Justice and other governmental investigations into the pricing practices of the air cargo transportation industry and other similar or related investigations and lawsuits; disruptions caused by epidemics, natural disasters, conflicts, wars and terrorism; and the other risks and uncertainties described in "Risk Factors" and "Forward-looking Statements" in the company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and described in the company's other filings with the Securities and Exchange Commission. Although UTi believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, the company cannot assure the reader that the results contemplated in forward-looking statements will be realized in the timeframe anticipated or at all. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi's objectives or plans will be achieved. Accordingly, investors are cautioned not to place undue reliance on the company's forward-looking statements. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

(Tables Follow)

UTi Worldwide Inc.
Condensed Consolidated Statements of Income
(in thousands, except share and per share amounts)
 
  Three months ended July 31, Six months ended July 31,  
  2011 2010 2011 2010  
           
Revenues: (Unaudited) (Unaudited) (Unaudited) (Unaudited)  
Airfreight forwarding $ 465,672 $ 419,439 $ 904,701 $ 787,131  
Ocean freight forwarding 320,696 304,626 602,274 576,458  
Customs brokerage 33,082 26,611 63,335 52,046  
Contract logistics 212,845 179,299 411,824 356,309  
Distribution 139,741 121,219 269,094 238,593  
Other 125,322 99,896 244,835 195,709  
Total revenues 1,297,358 1,151,090 2,496,063 2,206,246  
           
Operating expenses:          
Purchased transportation costs:          
Airfreight forwarding 365,880 336,119 716,057 629,661  
Ocean freight forwarding 266,618 257,782 500,853 484,968  
Customs brokerage 1,206 2,248 2,760 3,818  
Contract logistics 53,055 41,563 98,208 77,286  
Distribution 95,391 83,921 183,250 163,038  
Other 71,812 50,387 140,962 102,657  
           
Staff costs 243,135 204,519 476,480 411,520  
Depreciation 11,792 11,263 24,233 22,675  
Amortization of intangible assets 4,773 3,163 8,228 6,507  
Severance and exit costs 3,483 -- 8,332 --  
Other operating expenses 140,472 126,224 278,166 251,263  
Total operating expenses 1,257,617 1,117,189 2,437,529 2,153,393  
Operating income 39,741 33,901 58,534 52,853  
Interest expense, net (3,867) (3,926) (8,091) (8,045)  
Other income, net 223 171 399 1,015  
Pretax income 36,097 30,146 50,842 45,823  
Provision for income taxes 11,259 9,319 15,494 14,255  
Net income 24,838 20,827 35,348 31,568  
Net income attributable to noncontrolling interests 1,965 1,958 3,732 2,625  
Net income attributable to UTi Worldwide Inc. $ 22,873 $ 18,869 $ 31,616 $ 28,943  
           
Basic earnings per common share attributable to
UTi Worldwide Inc. common shareholders

$ 0.22

$ 0.19

$ 0.31

$ 0.29
 
           
Diluted earnings per common share attributable to
UTi Worldwide Inc. common shareholders

$ 0.22

$ 0.19

$ 0.31

$ 0.28
 
           
Number of weighted-average common shares
outstanding used for per share calculations
         
Basic shares 102,660,019 100,631,550 102,389,521 100,360,009  
Diluted shares 103,580,890 101,707,067 103,462,353 101,702,457  

 

UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
 
  July 31,
2011
January 31,
2011
  (Unaudited)  
Assets    
     
Cash and cash equivalents $ 315,778 $ 326,795
Trade receivables, net 1,049,586 879,842
Deferred income taxes 16,066 20,400
Other current assets 147,633 131,295
Total current assets 1,529,063 1,358,332
     
Property, plant and equipment, net 208,944 175,700
Goodwill and other intangible assets, net 546,468 515,578
Investments 1,165 1,102
Deferred income taxes 32,753 29,526
Other non-current assets 40,560 32,467
     
Total assets $ 2,358,953 $ 2,112,705
     
Liabilities & Equity    
     
Bank lines of credit $ 103,893 $ 170,732
Short-term borrowings 5,298 7,238
Current portion of long-term borrowings 12,142 34,232
Current portion of capital lease obligations 16,647 16,232
Trade payables and other accrued liabilities 928,041 822,887
Income taxes payable 6,902 8,521
Deferred income taxes 3,949 3,881
Total current liabilities 1,076,872 1,063,723
     
Long-term borrowings, excluding current portion 225,420 61,230
Capital lease obligations, excluding current portion 17,811 19,158
Deferred income taxes 30,259 30,487
Other non-current liabilities 38,327 37,943
     
Commitments and contingencies    
     
UTi Worldwide Inc. shareholders' equity:    
Common stock 491,490 484,884
Retained earnings 462,758 437,307
Accumulated other comprehensive loss (1,490) (35,116)
Total UTi Worldwide Inc. shareholders' equity 952,758 887,075
Noncontrolling interests 17,506 13,089
Total equity 970,264 900,164
     
Total liabilities and equity $ 2,358,953 $ 2,112,705

 

UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
   
  Six months ended
July 31,
  2011 2010
  (Unaudited)
     
Operating Activities:    
Net income $ 35,348 $ 31,568
Adjustments to reconcile net income to net cash
used in operating activities:
   
Share-based compensation costs, net 7,368 4,062
Depreciation 24,233 22,675
Amortization of intangible assets 8,228 6,507
Amortization of debt issuance costs 1,531 1,448
Deferred income taxes 1,650 (1,464)
Uncertain tax positions 337 135
Excess tax benefit from share-based compensation (483) (61)
Gain on disposal of property, plant and equipment (220) (123)
Provision for doubtful accounts 2,736 2,451
Other 1,022 290
Net changes in operating assets and liabilities (87,748) (116,017)
Net cash used in operating activities (5,998) (48,529)
     
Investing Activities:    
Purchases of property, plant and equipment (26,768) (15,118)
Proceeds from disposal of property, plant and equipment 2,685 797
Purchases of software and other intangible assets (15,085) (4,600)
Net increase in other non-current assets (4,786) (2,435)
Acquisitions and related payments -- (3,449)
Other (26) (160)
Net cash used in investing activities (43,980) (24,965)
     
Financing Activities:    
Net (repayments)/borrowings under bank lines of credit (72,520) 163,248
Net (decrease)/increase in short-term borrowings (2,333) 548
Proceeds from issuance of long-term borrowings 150,213 79
Repayment of long-term borrowings (34,595) (37,891)
Debt issuance cost (2,153) --
Repayment of capital lease obligations (10,099) (10,389)
Contingent consideration paid (26) --
Acquisition of noncontrolling interest (1,168) --
Dividends paid to noncontrolling interests (157) (1,719)
Ordinary shares settled under share-based compensation plans (1,800) --
Proceeds from issuance of ordinary shares 1,675 3,388
Excess tax benefit from share-based compensation 483 61
Dividends paid (6,165) (6,106)
Net cash provided by financing activities 21,355 111,219
     
Effect of foreign exchange rate changes on cash and cash
equivalents

17,606

3,516
Net (decrease)/increase in cash and cash equivalents (11,017) 41,241
Cash and cash equivalents at beginning of period 326,795 350,784
     
Cash and cash equivalents at end of period $ 315,778 $ 392,025
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)  
  Three months ended July 31, 2011
 


Freight Forwarding

Contract
Logistics and
Distribution



Corporate



Total
 
           
Revenues
$ 901,752

$ 395,606

$ --

$ 1,297,358
 
           
Purchased transportation costs 694,662 159,300 -- 853,962  
Staff costs 114,600 122,237 6,298 243,135  
Depreciation 4,440 6,652 700 11,792  
Amortization of intangible assets 1,125 2,958 690 4,773  
Severance and exit costs 2,124 612 747 3,483  
Other operating expense 50,986 85,066 4,420 140,472  
Total operating expenses 867,937 376,825 12,855 1,257,617  
           
Operating income/(loss) $ 33,815 $ 18,781 $ (12,855) 39,741  
Interest expense, net       (3,867)  
Other income, net       223  
Pretax income       36,097  
Provision for income taxes       11,259  
Net income       24,838  
Net income attributable to noncontrolling interests       1,965  
Net income attributable to UTi Worldwide Inc.       $ 22,873  
 
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
  Three months ended July 31, 2010
 


Freight
Forwarding


Contract
Logistics and
Distribution




Corporate




Total
 
           
Revenues
$ 808,990

$ 342,100

$ --

$ 1,151,090
 
           
Purchased transportation costs 635,147 136,873 -- 772,020  
Staff costs 94,363 104,664 5,492 204,519  
Depreciation 3,965 7,277 21 11,263  
Amortization of intangible assets 1,000 2,163 -- 3,163  
Other operating expenses 46,513 74,047 5,664 126,224  
Total operating expenses 780,988 325,024 11,177 1,117,189  
           
Operating income/(loss) $ 28,002 $ 17,076 $ (11,177) 33,901  
Interest expense, net       (3,926)  
Other income, net       171  
Pretax income       30,146  
Provision for income taxes       9,319  
Net income       20,827  
Net income attributable to noncontrolling interests       1,958  
Net income attributable to UTi Worldwide Inc.       $ 18,869  
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
   
  Six months ended July 31, 2011
 


Freight
Forwarding


Contract
Logistics and
Distribution




Corporate




Total
 
           
Revenues
$ 1,731,505

$ 764,558

$ --

$ 2,496,063
 
           
Purchased transportation costs 1,339,912 302,178 -- 1,642,090  
Staff costs 224,267 238,950 13,263 476,480  
Depreciation 8,828 14,046 1,359 24,233  
Amortization of intangible assets 2,211 4,677 1,340 8,228  
Severance and exit costs 4,097 3,488 747 8,332  
Other operating expense 99,650 168,822 9,694 278,166  
Total operating expenses 1,678,965 732,161 26,403 2,437,529  
           
Operating income/(loss) $ 52,540 $ 32,397 $ (26,403) 58,534  
Interest expense, net       (8,091)  
Other income, net       399  
Pretax income       50,842  
Provision for income taxes       15,494  
Net income       35,348  
Net income attributable to noncontrolling interests       3,732  
Net income attributable to UTi Worldwide Inc.       $ 31,616  
 
 
 
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
 
  Six months ended July 31, 2010
 


Freight
Forwarding


Contract
Logistics and
Distribution




Corporate




Total
 
           
Revenues
$ 1,530,764

$ 675,482

$ --

$ 2,206,246
 
           
Purchased transportation costs 1,197,482 263,946 -- 1,461,428  
Staff costs 188,753 211,641 11,126 411,520  
Depreciation 7,797 14,505 373 22,675  
Amortization of intangible assets 2,030 4,477 -- 6,507  
Other operating expenses 92,883 147,071 11,309 251,263  
Total operating expenses 1,488,945 641,640 22,808 2,153,393  
           
Operating income/(loss) $ 41,819 $ 33,842 $ (22,808) 52,853  
Interest expense, net       (8,045)  
Other income, net       1,015  
Pretax income       45,823  
Provision for income taxes       14,255  
Net income       31,568  
Net income attributable to noncontrolling interests       2,625  
Net income attributable to UTi Worldwide Inc.       $ 28,943  
 
 
 
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)      
       
  Three months ended July 31, 2011
 



Freight
Forwarding
Revenue


Contract
Logistics
and
Distribution
Revenue



Freight
Forwarding
Net
Revenue

Contract
Logistics
and
Distribution
Net
Revenue





Operating
Income/(Loss)





Severance and
Exit Costs
 
               
EMENA $ 278,059 $ 58,595 $ 70,098 $ 38,810 $ 2,726 $ 2,189  
Americas 203,413 217,147 50,778 101,979 11,950 299  
Asia Pacific 290,524 16,544 57,517 10,062 18,900 248  
Africa 129,756 103,320 28,697 85,455 19,020 --  
Corporate -- -- -- -- (12,855) 747  
Total $ 901,752 $ 395,606 $ 207,090 $ 236,306 $ 39,741 $ 3,483  
       
       
       
  Three months ended July 31, 2010
 


Freight
Forwarding
Revenue

Contract
Logistics
and
Distribution
Revenue


Freight
Forwarding
Net
Revenue
Contract
Logistics
and
Distribution
Net
Revenue




Operating
Income/(Loss)
 
             
EMENA $ 229,934 $ 62,889 $ 58,572 $ 35,289 $ 2,416  
Americas 165,538 182,852 44,319 94,454 10,353  
Asia Pacific 316,969 11,132 47,868 7,308 16,236  
Africa 96,549 85,227 23,084 68,176 16,073  
Corporate -- -- -- -- (11,177)  
Total $ 808,990 $ 342,100 $ 173,843 $ 205,227 $ 33,901  
 
 
 
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
 
  Six months ended July 31, 2011
             
 


Freight
Forwarding
Revenue

Contract
Logistics
and
Distribution
Revenue


Freight
Forwarding
Net
Revenue
Contract
Logistics
and
Distribution
Net
Revenue




Operating
(Loss)/Income




Severance and
Exit Costs
EMENA $ 551,890 $ 115,066 $ 135,068 $ 76,835 $ (845) $ 5,987
Americas 379,470 419,872 96,387 201,352 15,676 1,350
Asia Pacific 548,112 29,590 105,688 18,912 32,704 248
Africa 252,033 200,030 54,450 165,281 37,402 --
Corporate -- -- -- -- (26,403) 747
Total $ 1,731,505 $ 764,558 $ 391,593 $ 462,380 $ 58,534 $ 8,332
       
       
       
  Six months ended July 31, 2010
       
 


Freight
Forwarding
Revenue

Contract
Logistics
and
Distribution
Revenue


Freight
Forwarding
Net
Revenue
Contract
Logistics
and
Distribution
Net
Revenue




Operating
Income/(Loss)
 
             
EMENA $ 460,328 $ 128,083 $ 117,385 $ 74,938 $ 5,203  
Americas 315,638 356,156 85,091 184,985 15,241  
Asia Pacific 572,031 20,319 86,605 13,928 25,121  
Africa 182,767 170,924 44,201 137,685 30,096  
Corporate -- -- -- -- (22,808)  
Total $ 1,530,764 $ 675,482 $ 333,282 $ 411,536 $ 52,853  

 

UTi Worldwide Inc.
Supplemental Financial Information -- Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
  Three months ended July 31, 2011
       
 
US GAAP

Adjustment
Non
US GAAP
       
       
Revenue $ 1,297,358 $ -- $ 1,297,358
       
Purchased transportation costs 853,962 -- 853,962
Staff costs 243,135 -- 243,135
Depreciation and amortization 11,792 -- 11,792
Amortization of intangible assets 4,773 -- 4,773
Severance and exit costs (1) 3,483 (3,483) --
Other operating expenses 140,472 -- 140,472
Operating income 39,741 3,483 43,224
Interest expense, net (3,867) -- (3,867)
Other income, net 223 -- 223
Pretax income 36,097 3,483 39,580
Provision for income taxes 11,259 1,086 12,345
Net income
24,838

2,397

27,235
Net income attributable to noncontrolling interests 1,965 -- 1,965
Net income attributable to UTi Worldwide Inc. $ 22,873 $ 2,397 $ 25,270
       
Basic earnings per share $ 0.22   $ 0.25
Diluted earnings per share $ 0.22   $ 0.24
       
(1) During the three months ended July 31, 2011, the company recorded severance costs totaling $3,483, which were primarily related to transformation activities.

 

 
UTi Worldwide Inc.
Supplemental Financial Information -- Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
  Six months ended July 31, 2011
       
 
US GAAP

Adjustment
Non
US GAAP
       
       
Revenue $ 2,496,063 $ -- $ 2,496,063
       
Purchased transportation costs 1,642,090 -- 1,642,090
Staff costs 476,480 -- 476,480
Depreciation and amortization 24,233 -- 24,233
Amortization of intangible assets 8,228 -- 8,228
Severance and exit costs (2) 8,332 (8,332) --
Other operating expenses 278,166 -- 278,166
Operating income 58,534 8,332 66,866
Interest expense, net (8,091) -- (8,091)
Other income, net 399 -- 399
Pretax income 50,842 8,332 59,174
Provision for income taxes 15,494 2,539 18,033
Net income
35,348

5,793

41,141
Net income attributable to noncontrolling interests 3,732 -- 3,732
Net income attributable to UTi Worldwide Inc. $ 31,616 $ 5,793 $ 37,409
       
Basic earnings per share $ 0.31   $ 0.37
Diluted earnings per share $ 0.31   $ 0.36
 
(2) During the six months ended July 31, 2011, the company recorded severance of $6,418 primarily related to transformation activities and facility exit costs of $1,914 associated with the closure of certain underutilized contract logistics facilities in Europe.
 
 
UTi Worldwide Inc.
Revenue Growth Reconciliation
(in thousands)
(Unaudited)
 
Set forth below is a reconciliation of our organic growth and growth rates in our revenues and net revenues over the corresponding prior-year period. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation and acquisitions.
         
  Revenues   Net Revenues  
         
   
Three months ended July 31, 2010 $1,151,090   $379,070  
Add: Currency impact (3) 89,496 8% 32,319 9%
Organic growth 56,772 5% 32,007 8%
         
Three months ended July 31, 2011 $1,297,358   $443,396  
 
(3) Represents the fluctuations in foreign currency exchange rates when balances are translated on constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period.
 
 
UTi Worldwide Inc.
Revenue Growth Reconciliation
(in thousands)
(Unaudited)
 
Set forth below is a reconciliation of our organic growth and growth rates in our revenues and net revenues over the corresponding prior-year period. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation and acquisitions.
         
  Revenues   Net Revenues  
         
 
Six months ended July 31, 2010 $2,206,246   $744,818  
Add: Acquisitions impact (4) 2,634 --% 192 --%
Add: Currency impact (5) 131,916 6% 47,932 6%
Organic growth 155,267 7% 61,031 8%
         
Six months ended July 31, 2011 $2,496,063   $853,973  
         
         
(4) Relates to revenues and net revenues in the current period for businesses acquired from August 2010.
(5) Represents the fluctuations in foreign currency exchange rates when balances are translated on constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period.
 
 
UTi Worldwide Inc.
Total Operating Expense Reconciliation
(in thousands)
(Unaudited)
 
Set forth below is a reconciliation of our organic growth and growth rates in our operating expenses over the corresponding prior-year period. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation and acquisitions.
     
  Three months ended  
  July 31, 2011 July 31, 2010  
       
         
Total operating expenses $1,257,617 $1,117,189  
Less: Purchased transportation costs 853,962 772,020  
Operating expenses less purchased transportation costs $403,655 345,169  
       
Reconciliation to adjusted operating expenses less purchased transportation costs      
Add: Currency impact (6)   29,469 9%
Add: Organic growth   29,017 8%
Operating expense less purchased transportation costs for the      
three months ended July 31, 2011   403,655
Less: Severance and exit costs (7)   (3,483) 1%
Adjusted operating expenses less purchased transportation costs      
for the three months ended July 31, 2011   $400,172
 
 
(6) Represents the fluctuations in foreign currency exchange rates when balances are translated on a constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period.
(7) Includes $3,483 in severance costs primarily related to transformation activities.
 
 
UTi Worldwide Inc.
Total Operating Expense Reconciliation
(in thousands)
(Unaudited)
 
Set forth below is a reconciliation of our organic growth and growth rates in our operating expenses over the corresponding prior-year period. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation and acquisitions.
 
  Six months ended  
  July 31, 2011 July 31, 2010  
       
   
Total operating expenses $ 2,437,529 $ 2,153,393  
Less: Purchased transportation costs 1,642,090 1,461,428  
Operating expenses less purchased transportation costs $ 795,439 691,965  
       
Reconciliation to adjusted operating expenses less purchased transportation costs      
Add: Acquisition impact (8)   300 --%
Add: Currency impact (9)   44,056 6%
Add: Organic growth   59,118 9%
Operating expense less purchased transportation costs for the
six months ended July 31, 2011
 
795,439
 
Less: Severance and exit costs (10)   (8,332) 1%
Adjusted operating expenses less purchased transportation costs
for the six months ended July 31, 2011
 
$ 787,107
 
 
(8) Relates to operating expenses in the current period for businesses acquired from August 2010.
(9) Represents the fluctuations in foreign currency exchange rates when balances are translated on a constant currency basis into U.S. dollars. The company makes constant currency computations using actual results computed at the foreign currency exchange rates for the comparative prior period.
(10) Includes $6,418 in severance costs primarily related to transformation activities and $1,914 in severance and other costs associated with the exit of certain underutilized contract logistics facilities in Europe.

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