World Fuel Services Corporation Reports Fourth Quarter And Full Year Earnings


The following excerpt is from the company's SEC filing.

MIAMI--(BUSINESS WIRE)--February 12, 2014--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 and related products and services, today reported full year net income of $203.1 million or $2.83 diluted earnings per share. This compares to $189.3 million or $2.64 diluted earnings per share for the same period in 2012. 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 certain acquisitions were $230.5 million and $3.22, respectively, compared to $215.9 million and $3.01 in 2012.

For the fourth quarter, net income was $51.9 million or $0.73 diluted earnings per share. This compares to $42.8 million or $0.60 diluted earnings per share in the fourth quarter of 2012. 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 certain acquisitions were $60.1 million and $0.85, respectively, compared to $52.3 million and $0.73 in the fourth quarter of 2012.

“Considering continued macro-economic headwinds, we are pleased with our strong results in the fourth quarter,” stated Michael J. Kasbar, president and chief executive officer of World Fuel Services Corporation. “We continue to expand the breadth of our fuel and service offerings, further enhancing our value proposition and enabling us to continue to grow faster than the markets in which we participate.”

For the full year, the company’s aviation segment generated gross profit of $327.2 million, an increase of approximately $32.6 million or 11.1% year-over-year. The company’s marine segment generated gross profit of $177.1 million, a decrease of $31.0 million or 14.9% year-over-year. The company’s land segment posted gross profit of $248.5 million, an increase of $77.7 million or 45.5% year-over-year.

“We posted strong operating cash flow in 2013 and have now generated more than $410 million of operating cash flow during the past two years,” said Ira M. Birns, executive vice president and chief financial officer. “Our solid cash flow profile has enabled us to invest organically and through strategic acquisitions and more recently, repurchase company stock as we did again during the fourth quarter, all while maintaining a strong and liquid balance sheet.”

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 expenses related to certain acquisitions primarily because we do not believe they are reflective of the Company's core operating results. We believe the exclusion of share-based compensation from operating expenses is useful given the variation in expense that can result from changes in the fair value of our common stock, the effect of which is unrelated to the operational conditions that give rise to variations in the components of our operating costs. Also, we believe the exclusion of the amortization of acquired intangible assets, as well as the expenses related to the anticipated acquisition of Watson Petroleum Limited and the acquisition of select assets of the Multi Service business, are useful for purposes of evaluating operating performance of our core operating results and comparing them period-over-period. We believe that these non-GAAP financial measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful to investors to further aid in evaluating the ongoing financial performance of the Company and to provide greater transparency as supplemental information to our GAAP results.

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 common share may not be comparable to the presentation of such metrics by other companies. Non-GAAP diluted earnings per common share is computed by dividing non-GAAP net income attributable to World Fuel and available to common shareholders by the sum of the weighted average number of shares of common stock, stock units, restricted stock entitled to dividends not subject to forfeiture and vested restricted stock units outstanding during the period and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

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 and related products and 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 BALANCE SHEETS (UNAUDITED - IN THOUSANDS)     As of December 31, December 31, 2013 2012   Assets: Current assets: Cash and cash equivalents $ 292,061 $ 172,740 Accounts receivable, net 2,538,642 2,193,866 Inventories 655,046 572,313 Prepaid expenses and other current assets   329,752   342,458   Total current assets 3,815,501 3,281,377   Property and equipment, net 129,685 112,525   Goodwill, identifiable intangible and other non-current assets   794,091   713,849   Total assets $ 4,739,277 $ 4,107,751   Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 14,647 $ 26,065 Accounts payable 2,210,427 1,814,794 Accrued expenses and other current liabilities   289,441   308,439   Total current liabilities 2,514,515 2,149,298   Long-term debt 449,064 354,253 Other long-term liabilities   96,804   62,576 Total liabilities   3,060,383   2,566,127   Equity: World Fuel shareholders' equity 1,673,898 1,517,174 Noncontrolling interest equity   4,996   24,450 Total equity   1,678,894   1,541,624   Total liabilities and equity $ 4,739,277 $ 4,107,751  

  WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED - IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)         For the Three Months ended For the Year ended December 31, December 31, 2013 2012 2013 2012     Revenue $ 10,404,653 $ 9,935,813 $ 41,561,947 $ 38,945,338 Cost of revenue   10,209,073     9,772,476     40,809,189     38,271,891     Gross profit   195,580     163,337     752,758     673,447     Operating expenses: Compensation and employee benefits 73,663 60,809 288,021 237,362 Provision for bad debt 6,070 377 11,745 4,790 General and administrative   51,369     47,790     188,634     174,272     Total operating expenses   131,102     108,976     488,400     416,424     Income from operations 64,478 54,361 264,358 257,023 Non-operating expenses, net   (3,668 )   (4,341 )   (17,693 )   (17,428 )   Income before income taxes 60,810 50,020 246,665 239,595 Provision for income taxes   7,415     4,995     39,505     38,244     Net income including noncontrolling interest 53,395 45,025 207,160 201,351 Net income attributable to noncontrolling interest   1,533     2,189     4,085     12,006     Net income attributable to World Fuel $ 51,862   $ 42,836   $ 203,075   $ 189,345     Basic earnings per common share $ 0.73   $ 0.60   $ 2.85   $ 2.66     Basic weighted average common shares   70,870     71,232     71,224     71,154     Diluted earnings per common share $ 0.73   $ 0.60   $ 2.83   $ 2.64     Diluted weighted average common shares   71,459     71,906     71,800     71,817    

  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, 2013 2012 2013 2012   Cash flows from operating activities: Net income including noncontrolling interest $ 53,395   $ 45,025   $ 207,160   $ 201,351   Adjustments to reconcile net income including noncontrolling interest to net cash provided by operating activities: Depreciation and amortization 11,898 9,914 44,710 36,714 Provision for bad debt 6,070 377 11,745 4,790 Share-based payment award compensation costs 4,138 3,738 16,716 14,079 Other (11,935 ) 292 (12,397 ) (7,193 ) Changes in cash collateral with financial counterparties (9,873 ) (18,000 ) 9,920 (11,059 ) Changes in assets and liabilities, net of acquisitions   (3,138 )   56,174     (13,552 )   (92,891 ) Total adjustments   (2,840 )   52,495     57,142     (55,560 ) Net cash provided by operating activities   50,555     97,520     264,302     145,791     Cash flows from investing activities: Acquisitions and other investments, net of cash acquired (36,542 ) (146,445 ) (76,954 ) (217,782 ) Capital expenditures (32,430 ) (9,717 ) (82,716 ) (28,454 ) Purchase of short-term investments - - (21,588 ) - Proceeds from the sale of short-term investments - - 21,588 - Other   (14,421 )   -     (14,890 )   (386 ) Net cash used in investing activities   (83,393 )   (156,162 )   (174,560 )   (246,622 )   Cash flows from financing activities: Borrowings of debt, net 5,134 93,096 80,314 80,236 Dividends paid on common stock (2,659 ) (2,666 ) (10,679 ) (10,685 ) Other   (11,695 )   1,919     (40,126 )   (2,693 ) Net cash (used in) provided by financing activities   (9,220 )   92,349     29,509     66,858     Effect of exchange rate changes on cash and cash equivalents   896     (368 )   70     1,298     Net (decrease) increase in cash and cash equivalents (41,162 ) 33,339 119,321 (32,675 )   Cash and cash equivalents, as of beginning of period   333,223     139,401     172,740     205,415     Cash and cash equivalents, as of end of period $ 292,061   $ 172,740   $ 292,061   $ 172,740    

  WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED - IN THOUSANDS, EXCEPT EARNINGS PER SHARE DATA)           For the Three Months ended For the Year ended December 31, December 31, 2013 2012 2013 2012   Non-GAAP financial measures and reconciliation:   GAAP net income attributable to World Fuel $ 51,862 $ 42,836 $   203,075 $   189,345 Share-based compensation expense, net of income taxes (1) 2,812 3,054 11,182 9,637 Intangible asset amortization expense, net of income taxes (2) 3,639 3,500 14,448 14,037 Expenses related to certain acquisitions, net of income taxes of $1,574 for 2012 (3)   1,822   2,924     1,822     2,924 Non-GAAP net income attributable to World Fuel $ 60,135 $ 52,314 $   230,527 $   215,943   GAAP diluted earnings per common share $ 0.73 $ 0.60 $ 2.83 $ 2.64 Share-based compensation expense, net of income taxes (1) 0.04 0.04 0.16 0.13 Intangible asset amortization expense, net of income taxes (2) 0.05 0.05 0.20 0.20 Expenses related to certain acquisitions, net of income taxes (3)   0.03   0.04     0.03     0.04 Non-GAAP diluted earnings per common share $ 0.85 $ 0.73 $   3.22 $   3.01     (1) The pre-tax amount of share-based compensation expense was $4,137 and $4,529 for the three months endedDecember 31, 2013 and 2012, respectively, and $16,716 and $14,079 for the year ended December 31, 2013and 2012, respectively.   (2) The pre-tax amount of intangible asset amortization expense was $5,666 and $4,950 for the three monthsended December 31, 2013 and 2012, respectively, and $22,576 and $18,127 for the year ended December 31,2013 and 2012, respectively.   (3) The expenses incurred in 2013 relate to the anticipated 2014 acquisition of Watson Petroleum Limited. The2012 expenses relate to the acquisition of the Multi Service business.  

  WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENTS INFORMATION (UNAUDITED - IN THOUSANDS)           For the Three Months ended For the Year ended December 31, December 31, 2013 2012 2013 2012 Revenue: Aviation segment $ 4,232,935 $ 3,909,286 $ 16,087,611 $ 14,692,042 Marine segment 3,530,317 3,448,996 14,790,342 14,750,425 Land segment   2,641,401   2,577,531   10,683,994   9,502,871 $ 10,404,653 $ 9,935,813 $ 41,561,947 $ 38,945,338   Gross profit: Aviation segment $ 84,395 $ 76,319 $ 327,178 $ 294,601 Marine segment 42,815 47,243 177,052 208,028 Land segment   68,370   39,775   248,528   170,818 $ 195,580 $ 163,337 $ 752,758 $ 673,447   Income from operations: Aviation segment $ 41,131 $ 35,552 $ 150,886 $ 128,153 Marine segment 17,430 20,557 73,770 103,229 Land segment   21,159   12,554   84,767   75,291 79,720 68,663 309,423 306,673 Corporate overhead - unallocated   15,242   14,302   45,065   49,650 $ 64,478 $ 54,361 $ 264,358 $ 257,023  

CONTACT:World Fuel Services CorporationIra M. Birns, 305-428-8000Executive Vice President & Chief Financial Officer

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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