SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM ______________ to _____________________

                          COMMISSION FILE NUMBER 1-9533

                         WORLD FUEL SERVICES CORPORATION
                     (formerly International Recovery Corp.)
             (Exact name of registrant as specified in its charter)

           Florida                                          59-2459427
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                          Identification No.)

700 South Royal Poinciana Blvd., Suite 800, Miami Springs, Florida    33166
(Address of Principal Executive Offices)                            (Zip Code)

         Registrant's Telephone Number, including area code: (305) 884-2001

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         As of September 30, 1995, the Registrant had a total of 7,922,518
shares of Common Stock, par value $0.01 per share, issued and outstanding.

                                  Page 1 of 19







                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The following unaudited, condensed consolidated financial statements of World
Fuel Services Corporation (the "Company") have been prepared in accordance with
the instructions to Form 10-Q and, therefore, omit or condense certain footnotes
and other information normally included in financial statements prepared in
accordance with generally accepted accounting principles. In the opinion of
management, all adjustments necessary for a fair presentation of the financial
information for the interim periods reported have been made. Results of
operations for the six months ended September 30, 1995 will not be necessarily
indicative of the results for the entire fiscal year ending March 31, 1996.

                                  Page 2 of 19




WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) ASSETS SEPTEMBER 30, MARCH 31, 1995 1995 ------------ ----------- CURRENT ASSETS: Cash and cash equivalents $ 17,042,000 $10,907,000 Accounts receivable, net of allowance for bad debts of $5,000,000 and $4,566,000 at September 30, 1995 and March 31, 1995, respectively 45,504,000 38,800,000 Inventories 3,772,000 3,714,000 Prepaid expenses and other current assets 3,695,000 4,585,000 ------------ ----------- Total current assets 70,013,000 58,006,000 ------------ ----------- PROPERTY, PLANT AND EQUIPMENT, at cost: Land 601,000 705,000 Buildings and improvements 2,818,000 2,929,000 Office equipment and furniture 2,572,000 2,394,000 Plant, machinery and equipment 14,143,000 15,052,000 Construction in progress 8,000 184,000 ------------ ----------- 20,142,000 21,264,000 Less accumulated depreciation and amortization 5,799,000 5,680,000 ------------ ----------- 14,343,000 15,584,000 ------------ ----------- OTHER ASSETS: Unamortized cost in excess of net assets of acquired companies, net of accumulated amortization 12,303,000 12,391,000 Other 3,581,000 3,555,000 ------------ ----------- $100,240,000 $89,536,000 ============ ===========
(Continued) Page 3 of 19
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued) LIABILITIES AND STOCKHOLDERS' EQUITY SEPTEMBER 30, MARCH 31, 1995 1995 ------------ ----------- CURRENT LIABILITIES: Current maturities of long-term debt $ 1,957,000 $ 2,128,000 Accounts payable and accrued expenses 30,946,000 24,334,000 Customer deposits 1,358,000 1,559,000 Accrued salaries and wages 1,511,000 747,000 Income taxes payable 953,000 1,718,000 ------------ ----------- Total current liabilities 36,725,000 30,486,000 ------------ ----------- LONG-TERM LIABILITIES: Long-term debt, net of current maturities 4,104,000 4,447,000 Accrued litigation settlement expense - 1,300,000 Deferred compensation 1,184,000 1,237,000 Deferred income taxes 294,000 - ------------ ----------- 5,582,000 6,984,000 ------------ ----------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred stock, $1.00 par value; 100,000 shares authorized, none issued - - Common stock, $.01 par value; 10,000,000 shares authorized, 7,923,000 and 7,805,000 shares issued and outstanding at September 30, 1995 and March 31, 1995, respectively, net of treasury shares 79,000 78,000 Capital in excess of par value 21,740,000 20,414,000 Retained earnings 36,171,000 31,631,000 Less treasury stock, at cost 57,000 57,000 ------------ ----------- 57,933,000 52,066,000 ------------ ----------- $100,240,000 $89,536,000 ============ ===========
The accompanying notes to the consolidated financial statements are an integral part of these consolidated balance sheets (unaudited). Page 4 of 19
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) SIX MONTHS ENDED SEPTEMBER 30, ---------------------------- 1995 1994 ------------ ------------ Revenue $284,618,000 $149,184,000 Cost of sales 265,533,000 136,211,000 ------------ ------------ Gross profit 19,085,000 12,973,000 ------------ ------------ Operating expenses: Salaries and wages 6,195,000 3,371,000 Provision for bad debts 836,000 1,288,000 Other 4,648,000 2,766,000 ------------ ------------ 11,679,000 7,425,000 ------------ ------------ Income from operations 7,406,000 5,548,000 Other income, net 824,000 372,000 ------------ ------------ Income before income taxes 8,230,000 5,920,000 Provision for income taxes 3,030,000 2,216,000 ------------ ------------ Net income $ 5,200,000 $ 3,704,000 ============ ============ Net income per share $ .65 $ .52 ============ ============ Weighted average shares outstanding 8,050,000 7,191,000 ============ ============
The accompanying notes to the consolidated financial statements are an integral part of these consolidated statements (unaudited). Page 5 of 19
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) THREE MONTHS ENDED SEPTEMBER 30, -------------------------- 1995 1994 ------------ ----------- Revenue $145,658,000 $76,660,000 Cost of sales 135,747,000 70,929,000 ------------ ----------- Gross profit 9,911,000 5,731,000 ------------ ----------- Operating expenses: Salaries and wages 3,189,000 1,753,000 Provision for bad debts 686,000 77,000 Other 2,292,000 1,322,000 ------------ ----------- 6,167,000 3,152,000 ------------ ----------- Income from operations 3,744,000 2,579,000 Other income, net 438,000 242,000 ------------ ----------- Income before income taxes 4,182,000 2,821,000 Provision for income taxes 1,527,000 1,061,000 ------------ ----------- Net income $ 2,655,000 $ 1,760,000 ============ =========== Net income per share $ .33 $ .24 ============ =========== Weighted average shares outstanding 8,076,000 7,200,000 ============ ===========
The accompanying notes to the consolidated financial statements are an integral part of these consolidated statements (unaudited). Page 6 of 19
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED SEPTEMBER 30, ----------------------- 1995 1994 ---------- ----------- Cash flows from operating activities: Net income $5,200,000 $3,704,000 ---------- ---------- Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 816,000 610,000 Provision for bad debts 836,000 1,288,000 Deferred income taxes 559,000 573,000 Equity in earnings of joint venture (856,000) - Other non-cash operating charges 30,000 - Changes in assets and liabilities, net of assets sold and liabilities transferred: (Increase) decrease in- Accounts receivable (7,590,000) 243,000 Inventories (133,000) (182,000) Prepaid expenses and other current assets 569,000 (101,000) Other assets (164,000) (33,000) Increase (decrease) in- Accounts payable, accrued expenses and customer deposits 5,829,000 613,000 Accrued salaries and wages 764,000 352,000 Income taxes payable (764,000) 490,000 ---------- ---------- Total adjustments (104,000) 3,853,000 ---------- ---------- Net cash provided by operating activities 5,096,000 7,557,000 ---------- ----------
(Continued) Page 7 of 19
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued) SIX MONTHS ENDED SEPTEMBER 30, ----------------------------------- 1995 1994 -------------- ----------- Cash flows from investing activities: Short-term investments $ - $(3,500,000) Repayments from joint venture 338,000 - Dividends received from joint venture 708,000 - Additions to property, plant and equipment (611,000) (786,000) Proceeds from sale of assets 207,000 27,000 Proceeds from notes receivable 793,000 569,000 Additional expenditures for acquisition of business (40,000) - ---------- ----------- Net cash provided by (used in) investing activities 1,395,000 (3,690,000) ---------- ----------- Cash flows from financing activities: Dividends paid on common stock (264,000) (239,000) Proceeds from exercise of warrants - 464,000 Repayment of long-term debt (92,000) (120,000) ---------- ----------- Net cash (used in) provided by financing activities (356,000) 105,000 ---------- ----------- Net increase in cash and cash equivalents 6,135,000 3,972,000 Cash and cash equivalents, at beginning of period 10,907,000 7,699,000 ---------- ----------- Cash and cash equivalents, at end of period $17,042,000 $11,671,000 =========== ===========
(Continued) Page 8 of 19
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued) SIX MONTHS ENDED SEPTEMBER 30, ----------------------- 1995 1994 ---------- ---------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 38,000 $ 44,000 ========== ========== Income taxes $3,276,000 $1,115,000 ========== ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: On July 28, 1995, in accordance with the Acquisition Agreement relating to the Trans-Tec acquisition, the Company reduced the principal outstanding under the promissory notes issued in connection with the acquisition by $229,000, because the Company was unable to collect or realize certain of the acquired assets. Of this amount, $207,000 reduced Goodwill and $22,000 reduced Prepaid expenses and other current assets. In April 1995, the Company paid $1,300,000, representing its share of the stockholders' class action settlement, by issuing 117,825 shares of the Company's common stock at an agreed upon price of $11.03 per share (restated to reflect the 3 for 2 stock split). Accordingly, as of March 31, 1995, the Company classified the accrued litigation settlement expense as a long-term liability. As partial consideration for the sale of certain assets on June 1, 1995, the Company received $979,000 in notes receivable. Cash dividends declared, but not yet paid, totaling $396,000 and $238,000, were included in the accounts payable balances as of September 30, 1995 and 1994, respectively. The Company had $378,000 in assets held for sale, previously included in property, plant and equipment, which were reclassified to prepaid expenses and other current assets as of September 30, 1994. During the six months ended September 30, 1994, notes receivable totaling $267,000 were recorded in connection with the recovery of previously written-off accounts receivable. The accompanying notes to the consolidated financial statements are an integral part of these consolidated statements (unaudited). Page 9 of 19 WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) SIGNIFICANT ACCOUNTING POLICIES The accounting policies followed for quarterly financial reporting are the same as those disclosed in Note 1 of the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended March 31, 1995. ORGANIZATION AND NATURE OF ACQUISITIONS On August 21, 1995, the shareholders of International Recovery Corp. approved a change in the Company's name to World Fuel Services Corporation. In January 1995, the Company entered the marine fuel business through the acquisition of the Trans-Tec group of companies. The acquisition was accounted for as a purchase. Accordingly, the results of operations of Trans-Tec are not reflected in the accompanying consolidated statements of income for the three and six months ended September 30, 1994. The following unaudited pro-forma consolidated results of operations for the three and six months ended September 30, 1994, assume that the Company acquired the Trans-Tec group of companies as of April 1, 1994. PRO-FORMA PRO-FORMA THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, 1994 SEPTEMBER 30, 1994 ------------------ ------------------ Revenue $147,564,000 $258,255,000 ============ ============ Net Income $ 2,135,000 $ 4,285,000 ============ ============ Net Income Per Share $ .27 $ .55 ============ ============ The pro-forma consolidated results shown above are not necessarily indicative of those that would have occurred had the acquisition taken place on April 1, 1994. Page 10 of 19 (2) DISPOSITION OF ASSETS Effective June 1, 1995, the Company sold substantially all of the operating assets and liabilities of International Petroleum Corporation of Georgia ("IPC-GA"), a subsidiary of the Company engaged in the used oil recycling business, to Universal Refining, LLC ("URL") and Mr. Barry Paul. URL's president is Mr. Barry Paul, the former president of IPC-GA and of the entity from which IPC-GA initially purchased these assets in August 1990. Mr. Paul is the cousin of the Company's President. The sales price was $1,179,000, which closely approximated the Company's carrying values of the net assets sold. A cash payment of $200,000 was received at closing, and a promissory note for $979,000 was obtained for the balance. The promissory note bears interest at 10% per annum, has a term of 12 years commencing June 1, 1995, and is payable in equal monthly installments of principal and interest. The promissory note is collateralized by the property, plant and equipment sold. (3) STOCKHOLDERS' EQUITY On June 5, 1995, the Board of Directors approved a three for two stock split for all shares of common stock outstanding as of June 19, 1995. The shares were distributed on June 27, 1995. Accordingly, all share and per share data, as appropriate, have been retroactively adjusted to reflect the effects of this split. Page 11 of 19 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS In January 1995, the Company entered the marine fuel business through the acquisition of the Trans-Tec group of companies. The Company acquired substantially all of the assets and assumed certain liabilities of Trans-Tec Services, Inc., a New York corporation, and Trans-Tec Servicios, S.A., a Costa Rica corporation, and acquired all of the outstanding stock of Trans-Tec Services (UK), Ltd., a United Kingdom corporation ("UK"). The UK company owns Trans-Tec Services (Singapore) Pte., Ltd. As the acquisition was accounted for as a purchase, the results of operations of Trans-Tec are not reflected in the accompanying consolidated statements of income for the three and six months ended September 30, 1994. See Note 1 of notes to the consolidated financial statements. THE SIX MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THE SIX MONTHS ENDED SEPTEMBER 30, 1994 The Company's revenue for the six months ended September 30, 1995 was $284,618,000, an increase of $135,434,000, or 90.8%, as compared to revenue of $149,184,000 for the corresponding period the prior year. The Company's revenue during these periods was attributable to the following segments: PERCENT SIX MONTHS ENDED SEPTEMBER 30, INCREASE 1995 1994 (DECREASE) ------------ ------------ ---------- Aviation Fueling $136,398,000 $140,055,000 (2.6%) Marine Fueling 139,936,000 - * Oil Recycling 8,284,000 9,135,000 (9.3) Intersegment Eliminations - (6,000) * ------------ ------------ Total Revenue $284,618,000 $149,184,000 90.8% ============ ============ ===== * Percent not meaningful The aviation fueling segment contributed $136,398,000 in revenue for the six months ended September 30, 1995. This represented a decrease in revenue of $3,657,000, or 2.6%, as compared to the same period last year. This decrease in revenue was due to a volume decrease in narrow margin bulk transactions and the termination of the fuel terminaling operations conducted at Miami International Airport, which contract was not renewed effective June 30, 1994. Partially offsetting was a price related revenue increase which reflects general market conditions. The marine fueling segment contributed $139,936,000 in revenue. The oil recycling segment contributed $8,284,000 in revenue for the six months ended September 30, 1995. This was a decrease in revenue of $851,000, or 9.3%, as compared to the same period last year. The revenue decrease was due to the sale of its Georgia operations (see Note 2) and lower sales volume. Partially offsetting were higher used oil and waste water collection revenues, and a price related increase on recycled product. Page 12 of 19 The Company's gross profit of $19,085,000 increased by $6,112,000, or 47.1%, as compared to the same period last year. The Company's gross margin decreased from 8.7% for the six months ended September 30, 1994 to 6.7% for the six months ended September 30, 1995. The Company's aviation fueling business achieved a 7.5% gross margin for the six months ended September 30, 1995, as compared to 7.2% achieved for the same period during the prior fiscal year. The increase in the gross margin was largely attributed to a reduction in narrow margin bulk transactions. The Company's marine fueling segment achieved a 4.4% gross margin for the six months ended September 30, 1995. The gross margin in the Company's oil recycling segment increased from 31.0% for the six months ended September 30, 1994, to 32.7% for the six months ended September 30, 1995. Total operating expenses for the six months ended September 30, 1995 were $11,679,000, an increase of $4,254,000, or 57.3%, as compared to the same period a year ago. This increase resulted primarily from operating expenses of the marine fueling segment, which totalled $4,708,000 and higher corporate overhead salaries and payroll related costs totalling $526,000. Partially offsetting were a $747,000 decrease in the aviation segment provision for bad debts and $317,000 due to the termination of the Company's fuel terminaling activities. In relation to revenue, total operating expenses decreased from 5.0% to 4.1%. The Company's income from operations for the six months ended September 30, 1995 was $ 7,406,000, an increase of $1,858,000, or 33.5%, as compared to the same period a year ago. Income from operations during these periods was attributable to the following segments: SIX MONTHS ENDED SEPTEMBER 30, PERCENT 1995 1994 INCREASE ---------- ---------- -------- Aviation Fueling $6,978,000 $5,898,000 18.3% Marine Fueling 1,453,000 - * Oil Recycling 1,472,000 1,469,000 * Corporate Overhead (2,497,000) (1,819,000) 37.3 ---------- ---------- Total Income from Operations $7,406,000 $5,548,000 33.5% ========== ========== ===== * Percent not meaningful. Income from operations of the aviation fueling segment increased $1,080,000, or 18.3%, for the six months ended September 30, 1995, as compared to the six months ended September 30, 1994. This improvement resulted from a price related revenue increase and a decrease in the provision for bad debts. Partially offsetting were a volume decrease in narrow margin bulk transactions and lower operating income due to the termination of the Company's fuel terminaling activities. The marine fueling segment earned $1,453,000 in income from operations for the six months ended September 30, 1995. The gross profit of this segment was $6,161,000, reduced by $4,708,000 in operating expenses. Income from operations of the oil recycling segment increased by $3,000, for the six months ended September 30, 1995, as compared to the same period last year. Page 13 of 19 Corporate overhead costs not charged to the business segments totalled $2,497,000 for the six months ended September 30, 1995, an increase of $678,000, or 37.3%, as compared to the same period last year. This increase was due largely to higher salaries and payroll related costs. In relation to revenue, total corporate overhead decreased to .9% for the six months ended September 30, 1995, as compared to 1.2% for the same period a year prior. In the six months ended September 30, 1995, the Company had net other income of $824,000, an increase of $452,000 over the same period a year ago. This improvement was due primarily to $856,000 in equity earnings of a joint venture. Partially offsetting this increase was $213,000 related to foreign currency transactions. Net income for the six months ended September 30, 1995 was $5,200,000, an increase of $1,496,000, as compared to net income for the six months ended September 30, 1994. Earnings per share of $.65 for the six months ended September 30, 1995 exhibited a $.13 increase over the $.52 achieved during the same period last year. THE THREE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 1994 The Company's revenue for the three months ended September 30, 1995 was $145,658,000, an increase of $68,998,000, or 90.0%, as compared to revenue of $76,660,000 for the corresponding period the prior year. The Company's revenue during these periods was attributable to the following segments: PERCENT THREE MONTHS ENDED SEPTEMBER 30, INCREASE 1995 1994 (DECREASE) ----------- ----------- ---------- Aviation Fueling $73,539,000 $72,052,000 2.1% Marine Fueling 67,849,000 - * Oil Recycling 4,270,000 4,614,000 (7.5) Intersegment Eliminations - (6,000) * ----------- ----------- Total Revenue $145,658,000 $76,660,000 90.0% ============ =========== ====== * Percent not meaningful The aviation fueling segment contributed $73,539,000 of revenue for the three months ended September 30, 1995. This represented an increase in revenue of $1,487,000, or 2.1%, as compared to the same period last year. This increase in revenue was due to an overall price related revenue increase and higher sales volume. The marine fueling segment contributed $67,849,000 in revenues. The oil recycling segment contributed $4,270,000 of revenue for the three months ended September 30, 1995. This was a decrease in revenue of $344,000, or 7.5% as compared to the same period last year. The revenue decrease was due to the sale of its Georgia operations and a price related decrease on recycled product. Partially offsetting were higher used oil and waste water collection revenues. Page 14 of 19 The Company's gross profit of $9,911,000 increased by $4,180,000, or 72.9%, as compared to the same period last year. The Company's gross margin decreased from 7.5% for the three months ended September 30, 1994 to 6.8% for the three months ended September 30, 1995. The Company's aviation fueling business achieved a 7.3% gross margin for the three months ended September 30, 1995, as compared to 5.9% achieved for the same period during the prior fiscal year. The Company's marine fueling segment achieved a 4.6% gross margin for the three months ended September 30, 1995. The gross margin in the Company's oil recycling segment increased from 32.8% for the three months ended September 30, 1994, to 33.9% for the three months ended September 30, 1995. Total operating expenses for the three months ended September 30, 1995 were $6,167,000, an increase of $3,015,000, or 95.7%, as compared to the same period a year ago. This increase resulted primarily from operating expenses of the marine segment, which totalled $2,350,000, and a $488,000 increase in the aviation segment provision for bad debts. In relation to revenue, total operating expenses increased from 4.1% to 4.2%. The Company's income from operations for the three months ended September 30, 1995 was $3,744,000, an increase of $1,165,000, or 45.2%, as compared to the same period a year ago. Income from operations during these periods was attributable to the following segments: THREE MONTHS ENDED SEPTEMBER 30, PERCENT 1995 1994 INCREASE ---------- ---------- -------- Aviation Fueling $3,479,000 $2,733,000 27.3% Marine Fueling 775,000 - * Oil Recycling 910,000 902,000 * Corporate Overhead (1,420,000) (1,056,000) 34.5 ---------- ---------- Total Income From Operations $3,744,000 $2,579,000 45.2% ========== ========== ===== * Percent not meaningful. Income from operations of the aviation fueling segment increased $746,000, or 27.3%, for the three months ended September 30, 1995, as compared to the three months ended September 30, 1994. This improvement resulted from product volume and price related revenue increases. Partially offsetting was an increase in the provision for bad debts. The marine fueling segment earned $775,000 in income from operations for the three months ended September 30, 1995. The gross profit of this segment was $3,125,000, reduced by $2,350,000 in operating expenses. Income from operations of the oil recycling segment increased by $8,000 for the three months ended September 30, 1995, as compared to the same period last year. Corporate overhead costs not charged to the business segments totalled $1,420,000 for the three months ended September 30, 1995, an increase of $364,000, or 34.5%, as compared to the same period last year. This increase was due to higher salaries and payroll related costs. In relation to revenue, total corporate overhead decreased to 1.0% for the three months ended September 30, 1995, as compared to 1.4% for the same period a year prior. Page 15 of 19 In the three months ended September 30, 1995, the Company had net other income of $438,000, an increase of $196,000 over the same period a year ago. This improvement was due to $479,000 in equity earnings of a joint venture. Partially offsetting this increase was $102,000 in foreign currency transaction losses. Net income for the three months ended September 30, 1995 was $2,655,000, an increase of $895,000, as compared to net income for the three months ended September 30, 1994. Earnings per share of $.33 for the three months ended September 30, 1995 exhibited a $ .09 increase over the $.24 achieved during the same period last year. LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents amounted to $17,042,000 at September 30, 1995 as compared to $10,907,000 at March 31, 1995. The principal sources of cash during the first half of fiscal year 1996 were $5,096,000 in net cash provided by operating activities, $1,046,000 in dividends and repayments of advances from the joint venture, $793,000 from collections on notes receivable and $207,000 from proceeds on the sale of assets. Partially offsetting the increase in cash and cash equivalents was $611,000 used for the purchase and construction of plant, equipment and other capital expenditures, and $264,000 in a dividend paid on common stock. Other components of changes in cash and cash equivalents are detailed in the Consolidated Statements of Cash Flows. Working capital as of September 30, 1995 was $33,288,000, exhibiting a $5,768,000 increase from working capital as of March 31, 1995. As of September 30, 1995, the Company's accounts receivable, excluding the allowance for bad debts, amounted to $50,504,000, an increase of $7,138,000 as compared to the March 31, 1995 balance. This increase in accounts receivable resulted from a $5,283,000 and $2,406,000 increase in the marine and aviation segments' accounts receivable, respectively. Partially offsetting was a decrease of $551,000 in the oil recycling segment. The allowance for bad debts as of September 30, 1995 amounted to $5,000,000, an increase of $434,000 when compared to the March 31, 1995 balance. During the first half of fiscal year 1996, the Company charged $836,000 to the provision for bad debts and had charge-offs in excess of recoveries of $402,000. Capital expenditures, which amounted to $611,000 for the first half of fiscal year 1996, consisted primarily of $231,000 in office equipment and furniture, $209,000 in delivery equipment as well as $115,000 in plant construction costs. Effective June 1, 1995, the Company sold property, plant and equipment, with a net book value of $1,294,000, of its Georgia oil recycling operations. During fiscal year 1996, the Company anticipates spending approximately $1,000,000 to upgrade plant, machinery and equipment. The Company also anticipates spending an estimated $1,000,000 over the next several years to clean up contamination which was present at one of the Company's sites when it was acquired by the Company. Clean up will be capitalized as part of the cost of the site, up to the fair market value of the site. Page 16 of 19 In the aggregate, accounts payable, accrued expenses and customer deposits increased $6,411,000. This increase is attributed to the marine and aviation segments. Accrued salaries and wages increased $764,000, principally as the result of sales and management performance bonuses. Long-term liabilities as of September 30, 1995, were $5,582,000 exhibiting a $1,402,000 decrease as compared to March 31, 1995. This decrease was primarily the result of the issuance of the Company's common stock in settlement of the $1,300,000 accrued litigation settlement expense. Stockholders' equity amounted to $57,933,000, or $7.31 per share, at September 30, 1995 compared to $52,066,000, or $6.67 per share, at March 31, 1995. The Company's working capital requirements are not expected to vary substantially during fiscal year 1996. The Company expects to meet its cash requirements for fiscal year 1996 from existing cash, operations and additional borrowings, as necessary, under its existing line of credit. The Company's business has not been significantly affected by inflation during the periods discussed in this report. Page 17 of 19 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Except for the proceedings described in the Company's Form 10-K for the fiscal year ended March 31, 1995, there are no material legal proceedings to which the Company or any of its subsidiaries is a party. ITEM 2. CHANGES IN SECURITIES - None ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company's annual meeting of stockholders was held on August 21, 1995. The matters voted on at the meeting were the election of directors, a proposal to change the Company's name to World Fuel Services Corporation and a proposal to increase the number of shares issuable under the 1986 Employee Stock Option Plan. All of the Company's director nominees were elected and the proposals were approved. ELECTION OF DIRECTORS NAME OF DIRECTOR VOTES FOR VOTES AGAINST ---------------- --------- ------------- 1. Ralph R. Weiser 6,624,387 11,495 2. Jerrold Blair 6,624,387 11,495 3. Celestin Durand, III 6,623,637 12,245 4. Ralph R. Feuerring 6,624,387 11,495 5. John R. Benbow 6,624,387 11,495 6. Phillip S. Bradley 6,624,363 11,519 7. Myles Klein 6,622,337 13,545 8. Michael Kasbar 6,624,387 11,495 9. Paul Stebbins 6,624,387 11,495 PROPOSAL TO CHANGE NAME OF COMPANY FOR AGAINST ABSTAIN 6,596,406 16,468 23,008 PROPOSAL TO INCREASE EMPLOYEE STOCK OPTION PLAN SHARES FOR AGAINST ABSTAIN 5,499,282 1,079,530 57,070 ITEM 5. OTHER INFORMATION - None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) During the three months ended September 30, 1995, the Company did not file any reports on Form 8-K. Page 18 0f 19 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: NOVEMBER 1, 1995 WORLD FUEL SERVICES CORPORATION /S/ JERROLD BLAIR -------------------------------- JERROLD BLAIR PRESIDENT /S/ CARLOS A. ABAUNZA -------------------------------- CARLOS A. ABAUNZA CHIEF FINANCIAL OFFICER Page 19 of 19
 

5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ITS SEPTEMBER 30, 1995 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS MAR-31-1995 APR-01-1995 SEP-30-1995 17,042,000 0 45,504,000 5,000,000 3,772,000 70,013,000 20,142,000 5,799,000 100,240,000 36,725,000 0 79,000 0 0 57,933,000 100,240,000 284,618,000 284,618,000 265,533,000 265,533,000 0 836,000 153,000 8,230,000 3,030,000 5,200,000 0 0 0 5,200,000 .65 .65