UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): May
8, 2008
WORLD FUEL SERVICES CORPORATION
(Exact
name of registrant as specified in its charter)
|
Florida |
1-9533 |
59-2459427 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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9800 N.W. 41st Street, Suite 400 Miami, Florida |
33178 |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (305) 428-8000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
Item 7.01. Regulation FD Disclosure
The following information is provided pursuant to Item 7.01 of Form 8-K, “Regulation FD Disclosure” and Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.”
On May 8, 2008, World Fuel Services Corporation issued a press release reporting its financial results for the first quarter of 2008. A copy of the press release is attached hereto as Exhibit 99.1.
This information and the information contained in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933 as amended, or the Exchange Act, except as may be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit No. |
Description |
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| 99.1 | Press Release dated May 8, 2008. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Date: |
May 8, 2008 |
World Fuel Services Corporation |
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/s/ Ira M. Birns |
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Ira M. Birns |
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Executive Vice President and Chief Financial Officer |
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Exhibit 99.1
World Fuel Services Corporation Reports Results for the First Quarter of 2008
Marine Segment Delivers Record Income from Operations
MIAMI--(BUSINESS WIRE)--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 first quarter GAAP net income of $15.8 million, ($0.56 and $0.55 per share on a basic and diluted basis, respectively), compared to $14.8 million, ($0.53 and $0.51 per share on a basic and diluted basis, respectively), in the first quarter of 2007. Non-GAAP net income for the first quarter, which excludes share-based compensation and amortization of acquired intangible assets, was $17.4 million, ($0.62 and $0.61 per share on a basic and diluted basis, respectively), compared to $16.4 million, ($0.58 and $0.56 per share on a basic and diluted basis, respectively), in the first quarter of 2007. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
The company’s aviation segment generated gross profit of $35.1 million, a decrease of 10% from the prior quarter and an increase of 78% year-over-year. “Despite the difficult operating environment during the first quarter, our aviation segment delivered good results,” said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation.
The company’s marine segment generated record gross profit of $36.9 million, an increase of 13% from the prior quarter and 25% year-over-year. “Our marine segment has now generated year-over-year increases in gross profit for thirteen out of the last fourteen quarters and again experienced a year-over-year increase in volume. Our land segment experienced its sixth consecutive quarterly year-over-year increase in volume; however, gross profit was down 10% from the prior quarter and relatively flat year-over-year in the seasonally weak first quarter,” stated Michael J. Kasbar, president and chief operating officer.
Non-GAAP Financial Measures
This press release includes selected financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP net income and non-GAAP basic and diluted earnings per share. The non-GAAP financial measures exclude costs associated with share-based compensation and amortization of acquired intangible assets, primarily because they are non-cash expenses that we do not believe are reflective of ongoing operating results. We believe that these non-GAAP financial measures allow for greater transparency in the review of our financial and operational performance and are useful for investors to evaluate our ongoing 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. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. As previously mentioned, 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 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.
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 in 190 countries around the world. 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.
| WORLD FUEL SERVICES CORPORATION | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) | ||||||||
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
| Revenue | $ | 4,491,486 | $ | 2,702,209 | ||||
| Cost of sales | 4,417,677 | 2,651,041 | ||||||
| Gross profit | 73,809 | 51,168 | ||||||
| Operating expenses: | ||||||||
| Compensation and employee benefits | 29,498 | 22,685 | ||||||
| Provision for bad debt | 1,910 | (387 | ) | |||||
| General and administrative | 20,080 | 11,919 | ||||||
| 51,488 | 34,217 | |||||||
| Income from operations | 22,321 | 16,951 | ||||||
| Interest and other expense, net | (2,224 | ) | 773 | |||||
| Income before income taxes | 20,097 | 17,724 | ||||||
| Provision for income taxes | 4,202 | 2,839 | ||||||
| 15,895 | 14,885 | |||||||
| Minority interest in income of | ||||||||
| consolidated subsidiaries | 142 | 56 | ||||||
| Net income | $ | 15,753 | $ | 14,829 | ||||
| Basic earnings per share | $ | 0.56 | $ | 0.53 | ||||
| Basic weighted average shares | 28,287 | 28,003 | ||||||
| Diluted earnings per share | $ | 0.55 | $ | 0.51 | ||||
| Diluted weighted average shares | 28,790 | 29,118 | ||||||
| WORLD FUEL SERVICES CORPORATION | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (UNAUDITED - IN THOUSANDS) | ||||||
| As of | ||||||
| March 31, | December 31, | |||||
| 2008 | 2007 | |||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 76,016 | $ | 36,151 | ||
| Restricted cash | - | 10,000 | ||||
| Short-term investments | 8,100 | 8,100 | ||||
| Accounts and notes receivable, net | 1,633,346 | 1,370,656 | ||||
| Inventories | 118,140 | 103,029 | ||||
| Short-term derivative instruments | 87,355 | 86,531 | ||||
| Prepaid expenses and other current assets | 63,114 | 50,841 | ||||
| Total current assets | 1,986,071 | 1,665,308 | ||||
| PROPERTY AND EQUIPMENT, NET | 37,708 | 36,870 | ||||
| OTHER ASSETS | 98,427 | 95,868 | ||||
| $ | 2,122,206 | $ | 1,798,046 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Short-term debt | $ | 114 | $ | 53 | ||
| Accounts payable | 1,328,795 | 1,066,971 | ||||
| Short-term derivative instruments | 79,282 | 88,302 | ||||
| Customer deposits | 47,205 | 38,452 | ||||
| Accrued expenses and other current liabilities | 40,242 | 37,333 | ||||
| Total current liabilities | 1,495,638 | 1,231,111 | ||||
| LONG-TERM LIABILITIES | 123,364 | 83,058 | ||||
| SHAREHOLDERS' EQUITY | 503,204 | 483,877 | ||||
| $ | 2,122,206 | $ | 1,798,046 | |||
| WORLD FUEL SERVICES CORPORATION | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (UNAUDITED - IN THOUSANDS) | |||||||
| For the Three Months ended | |||||||
| March 31, | |||||||
| 2008 | 2007 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 15,753 | $ | 14,829 | |||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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| Provision for bad debts | 1,910 | (387 | ) | ||||
| Depreciation and amortization | 2,870 | 1,332 | |||||
| Deferred income tax provision | (500 | ) | (124 | ) | |||
|
Share-based payment compensation costs for employees and non-employee directors |
1,673 | 1,829 | |||||
| Unrealized (gains) losses from derivatives and related hedged items, net | (1,412 | ) | 337 | ||||
| Other non-cash operating charges | 236 | (49 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (266,487 | ) | (25,789 | ) | |||
| Inventories | (15,121 | ) | 11,157 | ||||
| Other current assets | (10,478 | ) | (16,320 | ) | |||
| Other assets | (937 | ) | (473 | ) | |||
| Accounts payable | 261,824 | 11,117 | |||||
| Accrued expenses and other current liabilities | (5,176 | ) | 7,638 | ||||
| Other non-current liabilities | 10,530 | 1,476 | |||||
| Total adjustments | (21,068 | ) | (8,256 | ) | |||
| Net cash (used in) provided by operating activities | (5,315 | ) | 6,573 | ||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (3,988 | ) | (2,604 | ) | |||
| Purchases of short-term investments | - | (15,058 | ) | ||||
| Proceeds from the sale of short-term investments | - | 50 | |||||
| Acquisition of business, net of cash acquired | (100 | ) | - | ||||
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Net cash used in investing activities |
(4,088 | ) | (17,612 | ) | |||
| Cash flows from financing activities: | |||||||
| Dividends paid on common stock | (1,085 | ) | (1,063 | ) | |||
|
Borrowings under senior revolving credit facility |
654,000 | - | |||||
| Repayments under senior revolving credit facility | (614,000 | ) | - | ||||
| Other | 10,353 | (9,848 | ) | ||||
| Net cash provided by (used in) financing activities | 49,268 | (10,911 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 39,865 | (21,950 | ) | ||||
| Cash and cash equivalents, at beginning of period | 36,151 | 176,495 | |||||
| Cash and cash equivalents, at end of period | $ | 76,016 | $ | 154,545 | |||
| WORLD FUEL SERVICES CORPORATION | |||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||
| (UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||
| For the Three Months Ended | |||||
| March 31, | |||||
| 2008 | 2007 | ||||
| Non-GAAP financial measures and reconciliation: | |||||
| GAAP net income | $ | 15,753 | $ | 14,829 | |
| Stock-based compensation expense, net of taxes | 1,126 | 1,242 | |||
| Intangible asset amortization expense, net of taxes | 568 | 298 | |||
| Non-GAAP net income | $ | 17,447 | $ | 16,369 | |
| GAAP basic earnings per share | $ | 0.56 | $ | 0.53 | |
| Stock-based compensation expense, net of taxes | 0.04 | 0.04 | |||
| Intangible asset amortization expense, net of taxes | 0.02 | 0.01 | |||
| Non-GAAP basic earnings per share | $ | 0.62 | $ | 0.58 | |
| GAAP diluted earnings per share | $ | 0.55 | $ | 0.51 | |
| Stock-based compensation expense, net of taxes | 0.04 | 0.04 | |||
| Intangible asset amortization expense, net of taxes | 0.02 | 0.01 | |||
| Non-GAAP diluted earnings per share | $ | 0.61 | $ | 0.56 | |
CONTACT:
World Fuel Services Corporation
Ira M. Birns, Executive
Vice President &
Chief Financial Officer
or
Francis X.
Shea, Executive Vice President &
Chief Risk and Administrative
Officer
305-428-8000