UTi Worldwide Inc. Reports Operating Results (10-Q)

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Dec 03, 2010
UTi Worldwide Inc. (UTIW, Financial) filed Quarterly Report for the period ended 2010-10-31.

Uti Worldwide Inc. has a market cap of $1.91 billion; its shares were traded at around $18.78 with a P/E ratio of 32.3 and P/S ratio of 0.6. The dividend yield of Uti Worldwide Inc. stocks is 0.3%. Uti Worldwide Inc. had an annual average earning growth of 17.1% over the past 10 years. GuruFocus rated Uti Worldwide Inc. the business predictability rank of 2-star.UTIW is in the portfolios of Private Capital of Private Capital Management, Richard Aster Jr of Meridian Fund, Chuck Royce of Royce& Associates, Columbia Wanger of Columbia Wanger Asset Management, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

On October 16, 2009, the company acquired all of the issued and outstanding shares of Tacisa Transitaria, S.L., a Spanish freight forwarder, for $5.5 million, net of cash acquired of $0.8 million, and included contingent consideration of $4.7 million, which was paid in August 2010 based on the fiscal 2010 operating results of the acquired business.

Airfreight forwarding revenues increased $99.1 million, or 30%, for the third quarter of fiscal 2011, compared to the corresponding prior year period. The increase in airfreight forwarding revenues was primarily the result of increased volumes and rates over the corresponding prior year period as well as an increase in fuel surcharges. Airfreight volumes increased approximately 19% for the third quarter of fiscal 2011 when compared to the corresponding prior year period. Airfreight volumes remained robust during the third quarter of fiscal 2011 primarily because of tight inventory levels. While volumes in the third quarter of fiscal 2011 were still ahead of the corresponding prior year period on an absolute basis, volume growth in airfreight forwarding revenues moderated in the third quarter of fiscal 2011 compared to the rate of growth in the second quarter of fiscal 2011. A modest peak season, a slower pace of inventory restocking activities, and uncertain global economic conditions contributed to the declining rate of growth. We currently anticipate these factors to continue into the fourth quarter of fiscal 2011 and, as a result, we are currently anticipating airfreight tonnage in the fourth quarter to be at levels similar to the fourth quarter of fiscal 2010. Fuel surcharges increased approximately $21.2 million for the third quarter of fiscal 2011 when compared to the prior year comparable period as a result of an increase in aviation fuel prices. Movements in fuel surcharges impact revenues but generally do not have a material impact on net revenues. Foreign currency fluctuations did not have a material impact on our airfreight forwarding revenues during the quarter.

Customs brokerage revenues increased $3.8 million, or 15%, for the third quarter of fiscal 2011, compared to the corresponding prior year period, primarily due to a 10% increase in the number of clearances. Other freight forwarding related revenues increased $15.9 million, or 32%, for the third quarter of fiscal 2011, compared to the corresponding prior year period, primarily due to increases in international road freight and distribution volumes. Foreign currency fluctuations did not have a material impact on our customs brokerage and other freight forwarding related revenues during the third quarter of fiscal 2011.

Staff costs at corporate were $6.7 million for the third quarter of fiscal 2011, compared to $3.5 million during the corresponding prior year period. Other operating expenses at corporate were $4.2 million for the third quarter of fiscal 2011, compared to $6.9 million during the corresponding prior year period.

Interest income relates primarily to interest earned on our cash deposits, while interest expense consists primarily of interest on our credit facilities, our senior unsecured guaranteed notes, of which $121.7 million of principle was outstanding as of October 31, 2010, and capital lease obligations. Interest income increased $2.1 million, or 87%, and interest expense increased $2.4 million, or 37%, for the third quarter of fiscal 2011, compared to the corresponding prior year period. The movements in interest income and interest expense are primarily due to a change in the mix of total net deposits and borrowings outstanding during the comparative periods, as well as interest rate movements.

Net income attributable to noncontrolling interests was $1.3 million for the third quarter of fiscal 2011, compared to $2.5 million for the corresponding prior year period.

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