World Fuel Services Corporation Reports First Quarter Results; Net Income Increases 13 percent Year-over-Year

May 3, 2012
The aviation segment generated gross profit of $64.9 million in the first quarter of 2012, a decrease of $5.1 million or 7 percent sequentially and $5.2 million or 7 percent year-over-year

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 first quarter net income of $46.4 million or $0.65 diluted earnings per share compared to $41.1 million or $0.58 diluted earnings per share in the first quarter of 2011. Non-GAAP net income and diluted earnings per share for the first quarter, which exclude share-based compensation and amortization of acquired intangible assets, were $52.9 million and $0.74, respectively, compared to $46.8 million or $0.66 in 2011.

"We continue to serve an important role in worldwide commerce to provide value, convenience and confidence between users and providers of energy products and services," stated Michael J. Kasbar, president and chief executive officer of World Fuel Services Corporation. "By delivering on our strategy, we continue to validate our growing importance to the energy and transportation marketplaces."

The company's marine segment generated gross profit of $55.1 million, an increase of approximately $0.9 million or 2% sequentially and $14.9 million or 37% year-over-year. Our aviation segment generated gross profit of $64.9 million in the first quarter of 2012, a decrease of $5.1 million or 7% sequentially and $5.2 million or 7% year-over-year. The company's land segment posted gross profit of $37.2 million, a decrease of $0.9 million or 2% sequentially, but an increase of $10.8 million or 41% year-over-year.

"Despite challenging market dynamics, we reduced our net trade cycle this quarter, contributing to the generation of $49 million of operating cash flow, our second consecutive quarter of positive operating cash flow, further contributing to our solid liquidity profile" said Ira M. Birns, executive vice president and chief financial officer.

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 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 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, 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 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 6,000 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 (FBO's), 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. 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 March 31, 2012 2011 Revenue $ 9,479,055 $ 7,079,406 Cost of revenue 9,321,820 6,942,638 Gross profit 157,235 136,768 Operating expenses: Compensation and employee benefits 54,527 47,069 Provision for bad debt 141 796 General and administrative 43,311 33,378 Total operating expenses 97,979 81,243 Income from operations 59,256 55,525 Non-operating expenses, net (4,095 ) (3,453 ) Income before income taxes 55,161 52,072 Provision for income taxes 6,615 10,415 Net income including noncontrolling interest 48,546 41,657 Net income attributable to noncontrolling interest 2,131 548 Net income attributable to World Fuel $ 46,415 $ 41,109 Basic earnings per common share $ 0.65 $ 0.59 Basic weighted average common shares 70,998 69,970 Diluted earnings per common share $ 0.65 $ 0.58 Diluted weighted average common shares 71,774 70,982 WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED - IN THOUSANDS) As of March 31, December 31, 2012 2011 Assets: Current assets: Cash and cash equivalents $ 242,593 $ 205,415 Accounts receivable, net 2,290,085 2,160,561 Inventories 450,285 472,584 Prepaid expenses and other current assets 373,670 283,667 Total current assets 3,356,633 3,122,227 Property and equipment, net 89,509 90,710 Goodwill, identifiable intangible and non-current other assets 479,662 484,309 Total assets $ 3,925,804 $ 3,697,246 Liabilities and equity: Liabilities: Current liabilities: Short-term debt $ 20,516 $ 17,800 Accounts payable 1,880,861 1,739,678 Accrued expenses and other current liabilities 309,357 268,664 Total current liabilities 2,210,734 2,026,142 Long-term debt 265,147 269,348 Other long-term liabilities 54,347 55,038 Total liabilities 2,530,228 2,350,528 Equity: World Fuel shareholders' equity 1,380,611 1,332,961 Noncontrolling interest equity 14,965 13,757 Total equity 1,395,576 1,346,718 Total liabilities and equity $ 3,925,804 $ 3,697,246 WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED - IN THOUSANDS) For the Three Months ended March 31, 2012 2011 Cash flows from operating activities: Net income including noncontrolling interest $ 48,546 $ 41,657 Adjustments to reconcile net income including noncontrolling interest to net cash provided by (used in) operating activities: Depreciation and amortization 9,659 8,167 Provision for bad debt 141 796 Share-based payment award compensation costs 2,904 2,865 Other 8,771 (1,068 ) Changes in assets and liabilities, net of acquisitions (21,229 ) (196,903 ) Total adjustments 246 (186,143 ) Net cash provided by (used in) operating activities 48,792 (144,486 ) Cash flows from investing activities: Acquisition of businesses, net of cash acquired (90 ) (67,000 ) Capital expenditures (3,948 ) (2,628 ) Other (115 ) - Net cash used in investing activities (4,153 ) (69,628 ) Cash flows from financing activities: (Repayments) borrowings of debt, net (1,492 ) 39,537 Dividends paid on common stock (2,664 ) (2,598 ) Other (4,995 ) (3,501 ) Net cash (used in) provided by financing activities (9,151 ) 33,438 Effect of exchange rate changes on cash and cash equivalents 1,690 1,157 Net increase (decrease) in cash and cash equivalents 37,178 (179,519 ) Cash and cash equivalents, as of beginning of period 205,415 272,893 Cash and cash equivalents, as of end of period $ 242,593 $ 93,374 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 March 31, 2012 2011 Non-GAAP financial measures and reconciliation: GAAP net income attributable to World Fuel $ 46,415 $ 41,109 Share-based compensation expense, net of taxes 2,001 2,009 Intangible asset amortization expense, net of taxes 4,466 3,662 Non-GAAP net income attributable to World Fuel $ 52,882 $ 46,780 GAAP diluted earnings per common share $ 0.65 $ 0.58 Share-based compensation expense, net of taxes 0.03 0.03 Intangible asset amortization expense, net of taxes 0.06 0.05 Non-GAAP diluted earnings per common share $ 0.74 $ 0.66 WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (UNAUDITED - IN THOUSANDS) For the Three Months ended March 31, 2012 2011 Revenue: Aviation segment $ 3,411,547 $ 2,646,592 Marine segment 3,904,191 2,999,419 Land segment 2,163,317 1,433,395 $ 9,479,055 $ 7,079,406 Gross profit: Aviation segment $ 64,914 $ 70,128 Marine segment 55,077 40,215 Land segment 37,244 26,425 $ 157,235 $ 136,768 Income from operations: Aviation segment $ 26,833 $ 38,170 Marine segment 27,445 17,355 Land segment 16,200 10,663 70,478 66,188 Corporate overhead - unallocated 11,222 10,663 $ 59,256 $ 55,525 Copyright 2012 Business Wire, Inc.