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): February 21, 2013
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 February 21, 2013, World Fuel Services Corporation issued a press release reporting its financial results for the quarter and fiscal year ended December 31, 2012. 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
Exhibit No. |
Description |
||
99.1 |
Press Release, dated February 21, 2013. |
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: |
February 21, 2013 |
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 February 21, 2013. |
Exhibit 99.1
World Fuel Services Corporation Reports Fourth Quarter and Full Year Earnings
Generated Operating Cash Flow of $98 Million in the Fourth Quarter and $146 Million for the Full Year
MIAMI--(BUSINESS WIRE)--February 21, 2013--World Fuel Services Corporation (NYSE:INT), a leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services, today reported full year net income of $189.3 million or $2.64 diluted earnings per share. Excluding one-time expenses of $4.5 million related to the acquisition of select assets of Multi Service Corporation (“Multi Service”), net income was $192.3 million or $2.68 diluted earnings per share. This compares to $194.0 million or $2.71 diluted earnings per share for the same period in 2011. Non-GAAP net income and diluted earnings per share for the full year, excluding share-based compensation, amortization of acquired intangible assets and expenses related to the Multi Service acquisition, were $215.9 million and $3.01, respectively, compared to $221.1 million and $3.09 in 2011.
For the fourth quarter, net income was $42.8 million or $0.60 diluted earnings per share. Excluding expenses related to the Multi Service acquisition, net income was $45.8 million or $0.64 diluted earnings per share. This compares to $50.1 million or $0.70 diluted earnings per share in the fourth quarter of 2011. Non-GAAP net income and diluted earnings per share for the fourth quarter, excluding share-based compensation, amortization of acquired intangible assets and expenses related to the Multi Service acquisition, were $52.3 million and $0.73, respectively, compared to $57.4 million and $0.81 in the fourth quarter of 2011.
“In 2012, despite a stagnant market, we posted record revenue, gross profit, and volume while completing two strategic acquisitions,” stated Michael J. Kasbar, president and chief executive officer of World Fuel Services Corporation. “Multi Service enhances our comprehensive solutions offering and opens up new opportunities for growth and value creation.”
For the full year, the company’s marine segment generated gross profit of $208.0 million, an increase of approximately $12.9 million or 7 percent year-over-year. The company’s aviation segment generated gross profit of $294.6 million, a decrease of $11.5 million or 4 percent year-over-year. The company’s land segment posted gross profit of $170.8 million, an increase of $37.0 million or 28 percent year-over-year.
“The two accretive and strategic acquisitions we completed this past year will further expand the value proposition we offer to our customers and suppliers and provide new avenues for growth,” said Ira M. Birns, executive vice president and chief financial officer. “Our operating cash flow contributed to our very strong and liquid balance sheet enabling us to further fuel organic growth as well as make additional 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, amortization of acquired intangible assets and one-time expenses related to the acquisition of select assets of Multi Service, 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 diluted 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 within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations of opportunities for growth and value creation, as well as our expectation about our value proposition. 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 filings, including the company’s Annual Report on Form 10-K. 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, 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 Securities and Exchange Commission 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 leading global fuel logistics company, principally engaged in the marketing, sale and distribution of aviation, marine and land fuel products and related services on a worldwide basis. 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, 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 STATEMENTS OF INCOME | |||||||||||||||||||
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE DATA) | |||||||||||||||||||
For the Three Months ended | For the Year ended | ||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||
Revenue | $ | 9,935,813 | $ | 9,323,947 | $ | 38,945,338 | $ | 34,622,854 | |||||||||||
Cost of revenue | 9,772,476 | 9,161,661 | 38,271,891 | 33,987,851 | |||||||||||||||
Gross profit | 163,337 | 162,286 | 673,447 | 635,003 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
Compensation and employee benefits | 60,809 | 56,114 | 237,362 | 215,275 | |||||||||||||||
Provision for bad debt | 377 | 1,424 | 4,790 | 8,173 | |||||||||||||||
General and administrative | 47,790 | 40,329 | 174,272 | 154,583 | |||||||||||||||
Total operating expenses | 108,976 | 97,867 | 416,424 | 378,031 | |||||||||||||||
Income from operations | 54,361 | 64,419 | 257,023 | 256,972 | |||||||||||||||
Non-operating expenses, net | (4,341 | ) | (4,501 | ) | (17,428 | ) | (18,769 | ) | |||||||||||
Income before income taxes | 50,020 | 59,918 | 239,595 | 238,203 | |||||||||||||||
Provision for income taxes | 4,995 | 6,888 | 38,244 | 39,001 | |||||||||||||||
Net income including noncontrolling interest | 45,025 | 53,030 | 201,351 | 199,202 | |||||||||||||||
Net income attributable to noncontrolling interest | 2,189 | 2,968 | 12,006 | 5,173 | |||||||||||||||
Net income attributable to World Fuel | $ | 42,836 | $ | 50,062 | $ | 189,345 | $ | 194,029 | |||||||||||
Basic earnings per common share | $ | 0.60 | $ | 0.70 | $ | 2.66 | $ | 2.74 | |||||||||||
Basic weighted average common shares | 71,232 | 71,036 | 71,154 | 70,687 | |||||||||||||||
Diluted earnings per common share | $ | 0.60 | $ | 0.70 | $ | 2.64 | $ | 2.71 | |||||||||||
Diluted weighted average common shares | 71,906 | 71,772 | 71,817 | 71,510 | |||||||||||||||
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(UNAUDITED - IN THOUSANDS) | |||||||||
As of | |||||||||
December 31, | December 31, | ||||||||
2012 | 2011 | ||||||||
Assets: | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 172,740 | $ | 205,415 | |||||
Accounts receivable, net | 2,193,866 | 2,160,561 | |||||||
Inventories | 572,313 | 472,584 | |||||||
Prepaid expenses and other current assets | 342,458 | 283,667 | |||||||
Total current assets | 3,281,377 | 3,122,227 | |||||||
Property and equipment, net | 112,525 | 90,710 | |||||||
Goodwill, identifiable intangible and non-current other assets | 713,849 | 484,309 | |||||||
Total assets | $ | 4,107,751 | $ | 3,697,246 | |||||
Liabilities and equity: | |||||||||
Liabilities: | |||||||||
Current liabilities: | |||||||||
Short-term debt | $ | 26,065 | $ | 17,800 | |||||
Accounts payable | 1,814,794 | 1,739,678 | |||||||
Accrued expenses and other current liabilities | 308,439 | 268,664 | |||||||
Total current liabilities | 2,149,298 | 2,026,142 | |||||||
Long-term debt | 354,253 | 269,348 | |||||||
Other long-term liabilities | 62,576 | 55,038 | |||||||
Total liabilities | 2,566,127 | 2,350,528 | |||||||
Equity: | |||||||||
World Fuel shareholders' equity | 1,517,174 | 1,332,961 | |||||||
Noncontrolling interest equity | 24,450 | 13,757 | |||||||
Total equity | 1,541,624 | 1,346,718 | |||||||
Total liabilities and equity | $ | 4,107,751 | $ | 3,697,246 | |||||
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, | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||
Net income including noncontrolling interest | $ | 45,025 | $ | 53,030 | $ | 201,351 | $ | 199,202 | ||||||||||||||
Adjustments to reconcile net income including | ||||||||||||||||||||||
noncontrolling interest to net cash provided by (used in) | ||||||||||||||||||||||
operating activities: | ||||||||||||||||||||||
Depreciation and amortization | 9,914 | 11,419 | 36,714 | 40,530 | ||||||||||||||||||
Provision for bad debt | 377 | 1,424 | 4,790 | 8,173 | ||||||||||||||||||
Share-based payment award compensation costs | 3,738 | 2,842 | 14,079 | 11,041 | ||||||||||||||||||
Other | 292 | (501 | ) | (7,193 | ) | (3,276 | ) | |||||||||||||||
Change in cash collateral deposits held by financial counterparties | (18,000 | ) | 5,252 | (11,059 | ) | 4,957 | ||||||||||||||||
Changes in assets and liabilities, net of acquisitions | 56,174 | 861 | (92,891 | ) | (403,163 | ) | ||||||||||||||||
Total adjustments | 52,495 | 21,297 | (55,560 | ) | (341,738 | ) | ||||||||||||||||
Net cash provided by (used in) operating activities | 97,520 | 74,327 | 145,791 | (142,536 | ) | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||
Acquisition of businesses, net of cash acquired | (146,445 | ) | (10,387 | ) | (217,782 | ) | (122,702 | ) | ||||||||||||||
Capital expenditures | (9,717 | ) | (3,685 | ) | (28,454 | ) | (19,492 | ) | ||||||||||||||
Other | - | 268 | (386 | ) | (2,438 | ) | ||||||||||||||||
Net cash used in investing activities | (156,162 | ) | (13,804 | ) | (246,622 | ) | (144,632 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||
Borrowings (repayments) of debt, net | 93,096 | (4,794 | ) | 80,236 | 234,641 | |||||||||||||||||
Dividends paid on common stock | (2,666 | ) | (2,654 | ) | (10,685 | ) | (10,603 | ) | ||||||||||||||
Other | 1,919 | (362 | ) | (2,693 | ) | (1,472 | ) | |||||||||||||||
Net cash provided by (used in) financing activities | 92,349 | (7,810 | ) | 66,858 | 222,566 | |||||||||||||||||
Effect of exchange rate changes on cash and | ||||||||||||||||||||||
cash equivalents | (368 | ) | 848 | 1,298 | (2,876 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 33,339 | 53,561 | (32,675 | ) | (67,478 | ) | ||||||||||||||||
Cash and cash equivalents, at beginning of period | 139,401 | 151,854 | 205,415 | 272,893 | ||||||||||||||||||
Cash and cash equivalents, at end of period | $ | 172,740 | $ | 205,415 | $ | 172,740 | $ | 205,415 | ||||||||||||||
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 Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Non-GAAP financial measures and reconciliation: | ||||||||||||||||
GAAP net income attributable to World Fuel | $ | 42,836 | $ | 50,062 | $ | 189,345 | $ | 194,029 | ||||||||
Share-based compensation expense, net of taxes (1) | 3,054 | 1,932 | 9,637 | 7,558 | ||||||||||||
Intangible asset amortization expense, net of taxes (2) | 3,500 | 5,443 | 14,037 | 19,546 | ||||||||||||
Expenses related to the Multi Service acquisition, | ||||||||||||||||
net of taxes (3) | 2,924 | - | 2,924 | - | ||||||||||||
Non-GAAP net income attributable to World Fuel | $ | 52,314 | $ | 57,437 | $ | 215,943 | $ | 221,133 | ||||||||
GAAP diluted earnings per common share | $ | 0.60 | $ | 0.70 | $ | 2.64 | $ | 2.71 | ||||||||
Share-based compensation expense, net of taxes | 0.04 | 0.03 | 0.13 | 0.11 | ||||||||||||
Intangible asset amortization expense, net of taxes | 0.05 | 0.08 | 0.20 | 0.27 | ||||||||||||
Expenses related to the Multi Service acquisition, | ||||||||||||||||
net of taxes |
0.04 | - | 0.04 | - | ||||||||||||
Non-GAAP diluted earnings per common share | $ | 0.73 | $ | 0.81 | $ | 3.01 | $ | 3.09 | ||||||||
(1 |
) |
The pre-tax amount of share-based compensation expense was $4,529 and $2,840 for the three months ended December 31, 2012 and 2011, respectively, and $14,079 and $11,038 for the year ended December 31, 2012 and 2011, respectively. | ||||||||||||||
(2 |
) |
The pre-tax amount of intangible asset amortization expense was $4,950 and $6,895 for the three months ended December 31, 2012 and 2011, respectively, and $18,127 and $25,011 for the year ended December 31, 2012 and 2011, respectively. | ||||||||||||||
(3 |
) |
The pre-tax amount of expenses related to the Multi Service acquisition was $4,498 for the three and twelve months ended December 31, 2012. |
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES | |||||||||||||||
BUSINESS SEGMENT INFORMATION | |||||||||||||||
(UNAUDITED - IN THOUSANDS) | |||||||||||||||
For the Three Months ended | For the Year ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenue: | |||||||||||||||
Aviation segment | $ | 3,909,286 | $ | 3,314,095 | $ | 14,692,042 | $ | 12,866,019 | |||||||
Marine segment | 3,448,996 | 3,987,508 | 14,750,425 | 14,565,086 | |||||||||||
Land segment | 2,577,531 | 2,022,344 | 9,502,871 | 7,191,749 | |||||||||||
$ | 9,935,813 | $ | 9,323,947 | $ | 38,945,338 | $ | 34,622,854 | ||||||||
Gross profit: | |||||||||||||||
Aviation segment | $ | 76,319 | $ | 69,991 | $ | 294,601 | $ | 306,112 | |||||||
Marine segment | 47,243 | 54,151 | 208,028 | 195,109 | |||||||||||
Land segment | 39,775 | 38,144 | 170,818 | 133,782 | |||||||||||
$ | 163,337 | $ | 162,286 | $ | 673,447 | $ | 635,003 | ||||||||
Income from operations: | |||||||||||||||
Aviation segment | $ | 35,552 | $ | 29,389 | $ | 128,153 | $ | 146,411 | |||||||
Marine segment | 20,557 | 27,965 | 103,229 | 95,982 | |||||||||||
Land segment | 12,554 | 18,707 | 75,291 | 62,049 | |||||||||||
68,663 | 76,061 | 306,673 | 304,442 | ||||||||||||
Corporate overhead - unallocated | 14,302 | 11,642 | 49,650 | 47,470 | |||||||||||
$ | 54,361 | $ | 64,419 | $ | 257,023 | $ | 256,972 | ||||||||
CONTACT:
World Fuel Services Corporation
Ira M. Birns
Executive
Vice President & Chief Financial Officer
or
Jason Bewley
Vice
President Corporate Finance
305-428-8000