March 31, 2014: UTi Worldwide Inc. 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.
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.