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): August 3, 2010
WORLD
FUEL SERVICES CORPORATION
(Exact
name of registrant as specified in its charter)
|
Florida |
1-9533 |
59-2459427 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number)
|
(I.R.S. Employer Identification No.) |
|
9800 N.W. 41st Street, Suite 400 Miami, Florida |
33178 |
|
(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 August 3, 2010, World Fuel Services Corporation issued a press release reporting its financial results for the second quarter of 2010. 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
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(d) |
Exhibits |
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Exhibit No. |
Description |
|||
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99.1 |
Press Release, dated August 3, 2010. |
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.
|
Date: |
August 3, 2010 |
World Fuel Services Corporation |
||
|
/s/ Ira M. Birns |
||||
|
|
|
Ira M. Birns |
||
|
Executive Vice President and Chief Financial |
||||
|
Officer |
EXHIBIT INDEX
|
Exhibit |
Description |
|
|
99.1 |
Press Release, dated August 3, 2010. |
Exhibit 99.1
World Fuel Services Corporation Reports Strong Second Quarter Results
Volume and Gross Profit Increase Sequentially in All Three Segments
MIAMI--(BUSINESS WIRE)--August 3, 2010--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 second quarter net income of $37.0 million or $0.61 diluted earnings per share compared to $27.7 million or $0.46 diluted earnings per share in the second quarter of 2009. Non-GAAP net income for the second quarter, which excludes share-based compensation and amortization of acquired intangible assets, was $40.2 million or $0.66 non-GAAP diluted earnings per share compared to $30.7 million or $0.51 non-GAAP diluted earnings per share in the second quarter of 2009. Our second quarter GAAP and non-GAAP results were favorably affected by a gain of $1.9 million relating to a commercial paper investment for which a $1.9 million impairment charge was taken in the third quarter of 2007. The after-tax effect of the gain was $1.4 million, or $0.02 per share.
The company’s aviation segment generated record gross profit of $52.9 million in the second quarter of 2010, an increase of $4.5 million or 9% sequentially, and an increase of $13.1 million or 33% year over year. The marine segment generated gross profit of $43.2 million, increases of $3.8 million or 10% sequentially, and $2.9 million or 7% from last year’s results. The company’s land segment posted gross profit of $11.5 million in the second quarter, an increase of 4% sequentially, and flat year over year.
“We posted strong results in the second quarter with record aviation volume as well as sequential and year over year volume increases in both the marine and land segments,” said Paul H. Stebbins, chairman and chief executive officer of World Fuel Services Corporation. “We continue to focus on driving profitable growth while maintaining our risk management discipline, which positions us well as end markets begin to recover.”
“We saw improvements in the marine segment, which achieved the highest level of quarterly gross profit since the first quarter of 2009,” stated Michael J. Kasbar, president and chief operating officer. “Furthermore, as evidenced by the recent Lakeside Oil acquisition, we remain committed to growth, both organically and through strategic acquisitions.”
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 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 and settle derivatives contracts, 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 World Fuel Services Corporation
Headquartered in Miami, Florida, World Fuel Services is a global leader in the marketing and sale of marine, aviation and land fuel products, as well as related services. World Fuel Services sells fuel and delivers services to its clients at more than 6,000 locations in 200 countries, including airports, seaports, tanker truck loading terminals and other customer storage locations. With 44 strategically located global offices, World Fuel Services offers its clients 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 include petroleum distributors, retail petroleum operators, and industrial, commercial and government accounts. For more information, call (305) 428-8000 or visit http://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, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| Revenue | $ | 4,397,275 | $ | 2,533,340 | $ | 8,315,296 | $ | 4,547,283 | ||||
| Cost of revenue | 4,289,706 | 2,441,772 | 8,108,909 | 4,368,380 | ||||||||
| Gross profit | 107,569 | 91,568 | 206,387 | 178,903 | ||||||||
| Operating expenses: | ||||||||||||
| Compensation and employee benefits | 38,900 | 35,079 | 73,701 | 68,872 | ||||||||
| Provision for bad debt | 1,696 | 464 | 2,065 | 922 | ||||||||
| General and administrative | 21,909 | 19,898 | 43,432 | 39,877 | ||||||||
| Total operating expenses | 62,505 | 55,441 | 119,198 | 109,671 | ||||||||
| Income from operations | 45,064 | 36,127 | 87,189 | 69,232 | ||||||||
| Non-operating expenses, net | 248 | 561 | 852 | 1,917 | ||||||||
| Income before income taxes | 44,816 | 35,566 | 86,337 | 67,315 | ||||||||
| Provision for income taxes | 7,765 | 7,623 | 15,446 | 13,553 | ||||||||
| Net income including noncontrolling interest | 37,051 | 27,943 | 70,891 | 53,762 | ||||||||
| Less: net income attributable to noncontrolling interest | 74 | 201 | 211 | 190 | ||||||||
| Net income attributable to World Fuel | $ | 36,977 | $ | 27,742 | $ | 70,680 | $ | 53,572 | ||||
| Basic earnings per share | $ | 0.62 | $ | 0.47 | $ | 1.19 | $ | 0.91 | ||||
| Basic weighted average common shares | 59,418 | 58,864 | 59,371 | 58,586 | ||||||||
| Diluted earnings per share | $ | 0.61 | $ | 0.46 | $ | 1.17 | $ | 0.91 | ||||
| Diluted weighted average common shares | 60,685 | 59,846 | 60,646 | 59,132 | ||||||||
| WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (UNAUDITED - IN THOUSANDS) | ||||||
| As of | ||||||
| June 30, | December 31, | |||||
| 2010 | 2009 | |||||
| Assets: | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 297,386 | $ | 298,843 | ||
| Short-term investments | 10,000 | 8,100 | ||||
| Accounts receivable, net | 1,115,878 | 951,398 | ||||
| Inventories | 140,693 | 126,793 | ||||
| Short-term derivative assets, net | 10,171 | 11,853 | ||||
| Prepaid expenses and other current assets | 81,082 | 66,991 | ||||
| Total current assets | 1,655,210 | 1,463,978 | ||||
| Property and equipment, net | 47,840 | 38,777 | ||||
| Goodwill, identifiable intangible and other assets | 240,393 | 238,473 | ||||
| Total assets | $ | 1,943,443 | $ | 1,741,228 | ||
| Liabilities and equity: | ||||||
| Liabilities: | ||||||
| Current liabilities: | ||||||
| Short-term debt | $ | 6,259 | $ | 6,684 | ||
| Accounts payable | 947,214 | 796,978 | ||||
| Short-term derivative liabilities, net | 10,970 | 9,133 | ||||
| Customer deposits | 52,582 | 63,967 | ||||
| Accrued expenses and other current liabilities | 71,106 | 70,980 | ||||
| Total current liabilities | 1,088,131 | 947,742 | ||||
| Long-term debt | 4,728 | 9,925 | ||||
| Other long-term liabilities | 49,607 | 50,312 | ||||
| Total liabilities | 1,142,466 | 1,007,979 | ||||
| Equity: | ||||||
| World Fuel shareholders' equity | 800,538 | 733,021 | ||||
| Noncontrolling interest equity | 439 | 228 | ||||
| Total equity | 800,977 | 733,249 | ||||
| Total liabilities and equity | $ | 1,943,443 | $ | 1,741,228 | ||
| 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, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income including noncontrolling interest | $ | 37,051 | $ | 27,943 | $ | 70,891 | $ | 53,762 | ||||||||
|
Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization | 4,205 | 4,302 | 8,624 | 8,140 | ||||||||||||
| Provision for bad debt | 1,696 | 464 | 2,065 | 922 | ||||||||||||
| Gain on short-term investments | (1,900 | ) | - | (1,900 | ) | - | ||||||||||
| Deferred income tax provision (benefit) | 183 | 5,657 | (1,272 | ) | 3,184 | |||||||||||
| Share-based payment award compensation costs | 2,411 | 2,094 | 3,717 | 3,885 | ||||||||||||
| Foreign currency losses (gains), net | 68 | (405 | ) | 428 | (192 | ) | ||||||||||
| Other | (6 | ) | 289 | (96 | ) | 525 | ||||||||||
| Changes in assets and liabilities, net of acquisitions | (36,502 | ) | (8,965 | ) | (58,685 | ) | 50,759 | |||||||||
| Total adjustments | (29,845 | ) | 3,436 | (47,119 | ) | 67,223 | ||||||||||
| Net cash provided by operating activities | 7,206 | 31,379 | 23,772 | 120,985 | ||||||||||||
| Cash flows used in investing activities, net | (3,262 | ) | (59,169 | ) | (12,468 | ) | (60,472 | ) | ||||||||
| Cash flows used in financing activities, net | (9,314 | ) | (6,595 | ) | (11,411 | ) | (22,883 | ) | ||||||||
|
Effect of exchange rate changes on cash and cash equivalents |
(324 | ) | 868 | (1,350 | ) | 829 | ||||||||||
| Net (decrease) increase in cash and cash equivalents | (5,694 | ) | (33,517 | ) | (1,457 | ) | 38,459 | |||||||||
| Cash and cash equivalents, beginning of period | 303,080 | 386,328 | 298,843 | 314,352 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 297,386 | $ | 352,811 | $ | 297,386 | $ | 352,811 | ||||||||
| 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, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| Non-GAAP financial measures and reconciliation: | ||||||||||||
| GAAP net income attributable to World Fuel | $ | 36,977 | $ | 27,742 | $ | 70,680 | $ | 53,572 | ||||
| Share-based compensation expense, net of taxes | 1,741 | 1,325 | 2,744 | 2,526 | ||||||||
| Intangible asset amortization expense, net of taxes | 1,447 | 1,592 | 2,941 | 2,857 | ||||||||
| Non-GAAP net income attributable to World Fuel | $ | 40,165 | $ | 30,659 | $ | 76,365 | $ | 58,955 | ||||
| GAAP diluted earnings per share | $ | 0.61 | $ | 0.46 | $ | 1.17 | $ | 0.91 | ||||
| Share-based compensation expense, net of taxes | 0.03 | 0.02 | 0.05 | 0.04 | ||||||||
| Intangible asset amortization expense, net of taxes | 0.02 | 0.03 | 0.05 | 0.05 | ||||||||
| Non-GAAP diluted earnings per share | $ | 0.66 | $ | 0.51 | $ | 1.27 | $ | 1.00 | ||||
| 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, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| Revenue: | ||||||||||||||||
| Marine segment | $ | 2,276,651 | $ | 1,381,496 | $ | 4,375,263 | $ | 2,484,358 | ||||||||
| Aviation segment | 1,691,042 | 832,166 | 3,150,766 | 1,542,581 | ||||||||||||
| Land segment | 429,582 | 319,678 | 789,267 | 520,344 | ||||||||||||
| $ | 4,397,275 | $ | 2,533,340 | $ | 8,315,296 | $ | 4,547,283 | |||||||||
| Gross profit: | ||||||||||||||||
| Marine segment | $ | 43,204 | $ | 40,347 | $ | 82,593 | $ | 87,439 | ||||||||
| Aviation segment | 52,887 | 39,744 | 101,262 | 71,765 | ||||||||||||
| Land segment | 11,478 | 11,477 | 22,532 | 19,699 | ||||||||||||
| $ | 107,569 | $ | 91,568 | $ | 206,387 | $ | 178,903 | |||||||||
| Income from operations: | ||||||||||||||||
| Marine segment | $ | 23,972 | $ | 22,639 | $ | 43,980 | $ | 51,981 | ||||||||
| Aviation segment | 28,701 | 17,727 | 55,395 | 29,399 | ||||||||||||
| Land segment | 1,780 | 3,882 | 4,128 | 4,971 | ||||||||||||
| 54,453 | 44,248 | 103,503 | 86,351 | |||||||||||||
| Corporate overhead | (9,389 | ) | (8,121 | ) | (16,314 | ) | (17,119 | ) | ||||||||
| $ | 45,064 | $ | 36,127 | $ | 87,189 | $ | 69,232 | |||||||||
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