World Fuel Services Corporation (NYSE: INT) today reported full
year net income of $221.7 million or $3.11 diluted earnings per
share. Excluding the impact of the previously announced sale of
interests in the company’s crude oil joint ventures and certain
one-time expenses, adjusted full year net income was $216.8 million
or $3.04 diluted earnings per share. For 2013, net income as
adjusted for one-time expenses was $204.9 million or $2.86 diluted
earnings per share. Non-GAAP net income and diluted earnings per
share for the full year, excluding share-based compensation,
amortization of acquired intangible assets, gain from the sale of
interests in the crude oil joint ventures and certain one-time
expenses were $249.1 million and $3.49, respectively, compared to
$230.5 million and $3.22 in 2013.
For the fourth quarter, net income was $67.1 million or $0.94
diluted earnings per share. Excluding the impact of the previously
announced sale of interests in the company’s crude oil joint
ventures and certain one-time expenses, adjusted net income was
$57.6 million or $0.81 adjusted diluted earnings per share. In the
fourth quarter of 2013, net income as adjusted for one-time
expenses was $53.7 million or $0.76 diluted earnings per share.
Non-GAAP net income and diluted earnings per share for the fourth
quarter, excluding share-based compensation, amortization of
acquired intangible assets, gain from the sale of interests in the
crude oil joint ventures and certain one-time expenses were $68.1
million and $0.96, respectively, compared to $60.1 million and
$0.85 in the fourth quarter of 2013.
“2014 was a strong year for World Fuel, as we delivered solid
financial results while continuing to make strategic investments to
grow our diverse intermodal platform of products and services,”
stated Michael J. Kasbar, chairman and chief executive officer of
World Fuel Services Corporation. “We remain focused on further
strengthening our global competitive position in the coming year
and taking advantage of a growing suite of opportunities that will
enhance our growth strategy.”
For the full year, the company’s aviation segment generated
gross profit of $321.6 million, a decrease of $5.6 million or 1.7%
year-over-year. The company’s marine segment generated gross profit
of $205.6 million, an increase of $28.6 million or 16.1%
year-over-year. The company’s land segment posted gross profit of
$286.4 million, an increase of $37.9 million or 15.2%
year-over-year.
“Our solid execution and discipline contributed to a strong
finish to 2014,” said Ira M. Birns, executive vice president and
chief financial officer. “As we enter 2015, we are focused on
aligning our resources to drive strategic priorities and deliver
long-term shareholder value.”
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 both non-GAAP and adjusted net income and non-GAAP and
adjusted diluted earnings per share. The non-GAAP financial
measures exclude costs associated with share-based compensation,
amortization of acquired intangible assets, expenses related to
acquisitions, the gain on the sale of the crude oil joint venture
interests (net of certain related operating expenses) and the
executive non-renewal charge primarily because we do not believe
they are reflective of the Company’s core operating results. We
believe the exclusion of share-based compensation from operating
expenses is useful given the variation in expense that can result
from changes in the fair value of our common stock, the effect of
which is unrelated to the operational conditions that give rise to
variations in the components of our operating costs. Also, we
believe the exclusion of the amortization of acquired intangible
assets, the expenses related to acquisitions, the gain on the sale
of the crude oil joint venture interests (net of certain related
operating) expenses and the executive non-renewal charge are useful
for purposes of evaluating operating performance of our core
operating results and comparing them period over period. We believe
that these non-GAAP financial measures, when considered in
conjunction with our financial information prepared in accordance
with GAAP, are useful to investors to further aid in evaluating the
ongoing financial performance of the Company and to provide greater
transparency as supplemental information to our GAAP results.
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
adjusted and non-GAAP net income and adjusted and non-GAAP diluted
earnings per common share may not be comparable to the presentation
of such metrics by other companies. Adjusted and Non-GAAP diluted
earnings per common share is computed by dividing adjusted and
non-GAAP net income attributable to World Fuel and available to
common shareholders by the sum of the weighted average number of
shares of common stock, stock units, restricted stock entitled to
dividends not subject to forfeiture and vested RSUs outstanding
during the period and the number of additional shares of common
stock that would have been outstanding if our outstanding
potentially dilutive securities had been issued. Investors are
encouraged to review the reconciliation of these non-GAAP measures
to their most directly comparable GAAP financial measures.
Information Relating to Forward-Looking
Statements
This release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding our expectations about our global
competitive position and growth strategy. These forward-looking
statements are qualified in their entirety by cautionary statements
and risk factor disclosures contained in the company’s Securities
and Exchange Commission (“SEC”) filings, including the company’s
Annual Report on Form 10-K filed with the SEC on February 12, 2015.
Actual results may differ materially from any forward-looking
statements due to risks and uncertainties, including, but not
limited to: our ability to effectively integrate and derive
benefits from acquired businesses, our ability to capitalize on new
market opportunities, potential liabilities and the extent of any
insurance coverage, the outcome of pending litigation and other
proceedings, the impact of quarterly fluctuations in results, the
creditworthiness of our 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 and suppliers
operate, our failure to effectively hedge certain financial risks
associated with the use of derivatives, non-performance by
counterparties or customers on derivatives contracts, loss of, or
reduced sales, to a significant government customer, uninsured
losses, the impact of natural disasters, adverse results in legal
disputes, unanticipated tax liabilities, our ability to retain and
attract senior management and other key employees and other risks
detailed from time to time in the company’s SEC filings. New risks
emerge from time to time and it is not possible for management to
predict all such risk factors or to assess the impact of such risks
on our business. Accordingly, we undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, changes in expectations, future
events, or otherwise.
About World Fuel Services
Corporation
Headquartered in Miami, Florida, World Fuel Services is a global
fuel logistics, transaction management and payment processing
company, principally engaged in the distribution of fuel and
related products and services in the aviation, marine and land
transportation industries. World Fuel Services sells fuel and
delivers services to its clients at more than 8,000 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 (FBOs), as well
as the United States and foreign governments. World Fuel Services'
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, residential and government accounts. The company also
offers transaction management services which consist of card
payment solutions and merchant processing services to customers in
the aviation, marine and land transportation industries. For more
information, call 305-428-8000 or visit www.wfscorp.com.
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS)
As of December 31, December 31, 2014 2013
Assets: Current assets: Cash and cash equivalents $ 302,264 $
292,061 Accounts receivable, net 2,307,852 2,538,642 Inventories
437,566 655,046 Prepaid expenses and other current assets
627,161 329,752 Total
current assets 3,674,843 3,815,501 Property and equipment,
net 202,716 129,685 Goodwill, identifiable intangible and
other non-current assets
1,002,421
794,091 Total assets
$
4,879,980 $ 4,739,277
Liabilities and equity: Liabilities: Current liabilities:
Short-term debt $ 17,914 $ 14,647 Accounts payable 1,850,134
2,210,427 Accrued expenses and other current liabilities
373,306 289,441 Total
current liabilities 2,241,354 2,514,515 Long-term debt
671,954 449,064 Other long-term liabilities
101,791 96,804 Total liabilities
3,015,099 3,060,383
Equity: World Fuel shareholders' equity 1,855,358 1,673,898
Noncontrolling interest equity
9,523
4,996 Total equity
1,864,881
1,678,894 Total liabilities and equity
$ 4,879,980 $
4,739,277 WORLD FUEL SERVICES
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED - IN THOUSANDS, EXCEPT EARNINGS PER SHARE
DATA) For the Three Months ended For
the Year ended December 31, December 31, 2014 2013 2014 2013
Revenue $ 9,779,555 $ 10,404,653 $ 43,386,389 $ 41,561,947
Cost of revenue
9,560,089
10,209,073 42,572,767
40,809,189 Gross profit
219,466 195,580
813,622
752,758 Operating expenses: Compensation
and employee benefits 86,233 73,663 319,842 288,021 Provision for
bad debt 224 6,070 3,757 11,745 General and administrative
62,080 51,369
220,875 188,634
Total operating expenses
148,537
131,102 544,474
488,400 Income from
operations 70,929 64,478 269,148 264,358 Non-operating income
(expenses), net
12,308
(3,668 ) 403
(17,693 ) Income before
income taxes 83,237 60,810 269,551 246,665 Provision for income
taxes
16,180 7,415
51,144 39,505
Net income including noncontrolling interest 67,057
53,395 218,407 207,160 Net (loss) income attributable to
noncontrolling interest
(77 )
1,533 (3,340
) 4,085 Net income
attributable to World Fuel
$ 67,134
$ 51,862 $
221,747 $ 203,075
Basic earnings per common share
$
0.95 $ 0.73
$ 3.13 $
2.85 Basic weighted average common
shares
70,708 70,870
70,750 71,224
Diluted earnings per common share
$
0.94 $ 0.73
$ 3.11 $
2.83 Diluted weighted average common
shares
71,297 71,459
71,323 71,800
WORLD FUEL SERVICES CORPORATION AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS) For the
Three Months ended For the Year ended December 31, December 31,
2014 2013 2014 2013 Cash flows from operating activities:
Net income including noncontrolling interest
$
67,057 $ 53,395
$ 218,407 $
207,160 Adjustments to reconcile net income
including noncontrolling interest to net cash provided by operating
activities: Depreciation and amortization 17,534 11,898 59,399
44,710 Provision for bad debt 224 6,070 3,757 11,745 Share-based
payment award compensation costs 4,474 4,138 15,755 16,716 Other
(15,093 ) (14,254 ) (12,322 ) (14,716 ) Change in cash collateral
with financial counterparties (257,134 ) (9,873 ) (288,049 ) 9,920
Changes in assets and liabilities, net of acquisitions
195,033 (819 )
144,213 (11,233 ) Total adjustments
(54,962 ) (2,840
) (77,247 )
57,142 Net cash provided by operating
activities
12,095
50,555 141,160
264,302 Cash flows from investing
activities: Acquisition of businesses, net of cash acquired and
other investments (42,934 ) (36,542 ) (273,649 ) (76,954 ) Capital
expenditures (13,051 ) (32,430 ) (50,153 ) (82,716 ) Escrow payment
related to an assumed obligation of an acquired business - -
(21,724 ) - Proceeds from the sale of crude oil joint venture
interests 43,000 - 43,000 - Other
6,079
(14,421 )
5,439 (14,890
) Net cash used in investing activities
(6,906 ) (83,393
) (297,087 )
(174,560 ) Cash flows from
financing activities: Borrowings of debt, net (76,832 ) 5,134
205,745 80,314 Dividends paid on common stock (2,647 ) (2,659 )
(10,595 ) (10,679 ) Other
(10,936
) (11,695 )
(25,635 )
(40,126 ) Net cash (used
in) provided by financing activities
(90,415
) (9,220 )
169,515 29,509
Effect of exchange rate changes on cash and cash equivalents
(1,054 ) 896
(3,385 )
70 Net (decrease) increase in cash and
cash equivalents (86,280 ) (41,162 ) 10,203 119,321 Cash and
cash equivalents, as of beginning of period
388,544 333,223
292,061 172,740
Cash and cash equivalents, as of end of period
$ 302,264 $
292,061 $ 302,264
$ 292,061
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED - IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)
For the Three Months ended For the Year ended December 31,
December 31, 2014 2013 2014 2013 Non-GAAP financial measures
and reconciliation: GAAP net income attributable to World
Fuel $ 67,134 $ 51,862 $ 221,747 $ 203,075 Share-based compensation
expense, net of income taxes (1) 2,965 2,812 9,942 11,182
Intangible asset amortization expense, net of income taxes (2)
7,564 3,639 22,401 14,448 Expenses related to acquisitions, net of
income taxes (3) 358 1,822 1,894 1,822 Gain on the sale of the
crude oil joint venture interests, net of certain related operating
expenses and income taxes (4) (9,879 ) - (9,879 ) - Executive
non-renewal charge, net of income taxes (5) -
- 2,994 - Non-GAAP net income attributable to
World Fuel $ 68,142 $ 60,135 $ 249,099 $ 230,527
GAAP diluted earnings per common share $ 0.94 $ 0.73 $ 3.11
$ 2.83 Share-based compensation expense, net of income taxes (1)
0.04 0.04 0.14 0.16 Intangible asset amortization expense, net of
income taxes (2) 0.11 0.05 0.31 0.20
Expenses related to acquisitions, net of
income taxes (3)
0.01 0.03 0.03 0.03 Gain on the sale of the crude oil joint venture
interests, net of certain related operating expenses and income
taxes (4) (0.14 ) - (0.14 ) - Executive non-renewal charge, net of
income taxes (5) - - 0.04
- Non-GAAP diluted earnings per common share $ 0.96 $ 0.85 $
3.49 $ 3.22
(1)
The pre-tax amount of share-based compensation expense was $4,443
and $4,137 for the three months ended December 31, 2014 and 2013,
respectively, and $14,603 and $16,716 for the year ended December
31, 2014 and 2013, respectively.
(2)
The pre-tax amount of intangible asset amortization expense was
$9,269 and $5,666 for the three months ended December 31, 2014 and
2013, respectively, and $29,095 and $22,576 for the year ended
December 31, 2014 and 2013, respectively.
(3)
The pre-tax amount of the expenses related to acquisitions was $358
and $1,822 for the three months ended December 31, 2014 and 2013,
respectively, and $2,126 and $1,822 for the year ended December 31,
2014 and 2013, respectively.
(4)
The pre-tax amount of gain on the sale of the crude oil joint
venture interests, net of certain related operating expenses, was
$16,064 for the year ended December 31, 2014.
(5)
The pre-tax amount of the executive non-renewal charge was $4,751
for the year ended December 31, 2014.
WORLD FUEL SERVICES
CORPORATION AND SUBSIDIARIES BUSINESS SEGMENTS
INFORMATION (UNAUDITED - IN THOUSANDS)
For the Three Months ended For the Year ended December 31,
December 31, 2014 2013 2014 2013 Revenue: Aviation segment $
3,906,996 $ 4,232,935 $ 17,268,834 $ 16,087,611 Marine segment
3,104,661 3,530,317 13,843,307 14,790,342 Land segment
2,767,898 2,641,401
12,274,248 10,683,994
$ 9,779,555 $
10,404,653 $ 43,386,389
$ 41,561,947 Gross profit:
Aviation segment $ 74,616 $ 84,395 $ 321,596 $ 327,178 Marine
segment 59,525 42,815 205,612 177,052 Land segment
85,325 68,370
286,414 248,528 $
219,466 $ 195,580
$ 813,622 $
752,758 Income from operations: Aviation
segment $ 27,750 $ 41,131 $ 142,303 $ 150,886 Marine segment 27,126
17,430 90,029 73,770 Land segment
30,315
21,159
90,335 84,767 85,191
79,720 322,667 309,423 Corporate overhead - unallocated
14,262 15,242
53,519 45,065 $
70,929 $ 64,478
$ 269,148 $
264,358
World Fuel Services CorporationIra M. Birns, Executive Vice
President &Chief Financial OfficerorGlenn KlevitzVice
President, Assistant Treasurer305-428-8000
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