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UTi Worldwide Reports Fiscal 2014 Fourth Quarter Results

-- Annual Report on Form 10-K Filed with the Company's Consolidated Financial
Statements for Fiscal Years 2014, 2013 and 2012 – No Going Concern Qualification --

LONG BEACH, Calif., March 31, 2014 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2014 fourth quarter ended January 31, 2014. In addition, UTi filed its Annual Report on Form 10-K this morning, which includes the company's audited financial statements for the fiscal year ended January 31, 2014. The company's audited financial statements were issued with no going concern qualification for all periods presented.

Fiscal Fourth Quarter 2014 vs. 2013 Results:

  • Revenues were $1,076.4 million, a decrease of 2.1 percent from $1,099.3 million.
  • Net revenues (revenues minus purchased transportation costs) were $370.0 million, a decrease of 0.3 percent from $371.1 million.
  • On an organic basis, revenues increased 1.7 percent and net revenues increased 4.5 percent versus the comparable prior year period.
  • Net loss attributable to UTi Worldwide Inc. was $50.7 million, or $0.48 per diluted share, compared to a net loss of $142.8 million, or $1.38 per diluted share.
  • The GAAP net loss in the fiscal 2014 fourth quarter includes after-tax severance and other costs of $7.3 million, or $0.07 per diluted share. UTi also recorded an after-tax write-off of $4.5 million, or $0.04 per diluted share, in bad debt related to customer bankruptcies. In addition, despite incurring a net loss, the company recorded additional tax expense exceeding its normalized tax rate by $22.9 million, or $0.22 per diluted share.
  • Excluding the after-tax severance and other costs, bad debt write-off and the additional tax expense described above, non-GAAP net loss attributable to UTi Worldwide Inc. was $16.1 million, or $0.15 per diluted share.
  • Earnings before interest expense, income taxes, depreciation and amortization (EBITDA), as adjusted for the items above and stock compensation expense, totaled $14.1 million compared to $17.1 million.
  • All references to adjusted items and organic items in this release refer to non-GAAP results. A reconciliation of GAAP to these non-GAAP results is provided in the supplemental financial information attached to this release.

Eric W. Kirchner, chief executive officer, said, "During the last several weeks, the company has completed a number of key milestones. First, we executed a $725 million refinancing, which strengthened the company's balance sheet. Second, we filed our fiscal 2014 Annual Report on Form 10-K this morning, which includes the company's audited financial statements for the three fiscal years ended January 31, 2014. The company's audited financial statements were issued with no going concern qualification for all periods presented. Finally, we launched in early March our 1View freight forwarding operating system in South Africa and China, two of our largest markets. This brings to 32 the total number of countries on the system, representing approximately 72 percent of freight forwarding transactions. The deployment in China and South Africa also allows us to pair origin and destination shipments in most of our major markets.

"As we add more countries on 1View, we enable the company to generate greater efficiencies from operations. We continue to target completion of the system deployment in the third quarter of fiscal 2015 and still expect $75-95 million in annualized gross pre-tax cost savings by the end of fiscal 2015, approximately $50 million of which were in place at the end of fiscal 2014. As the transformation nears an end, we expect to have the ability to deploy additional resources on growth opportunities."

Kirchner continued, "Results in the fiscal 2014 fourth quarter continued to reflect a lackluster global economy and difficult operating conditions. While we experienced increased activity in both business segments during the fourth quarter, pricing pressure continued to weigh on margins. Operating expenses were higher in the fourth quarter primarily because of increased amortization, severance expenses and temporary deployment costs related to the roll-out of the new systems. We were able to partially offset these higher costs through expense reduction measures."

Operating expenses less purchased transportation costs were $401.5 million in the fourth quarter of fiscal 2014. The company recorded $10.6 million on a pre-tax basis in severance and other costs in the fiscal 2014 fourth quarter. UTi also recorded $6.5 million in pre-tax bad debt expense related to customer bankruptcies. In the fiscal 2013 fourth quarter, the company reported goodwill and intangible asset impairment charges of $94.7 million as well as severance costs of $5.1 million.

Excluding these items, adjusted operating expenses less purchased transportation costs were $384.4 million, compared to $378.9 million in the same period last year. On an organic basis, adjusted operating expenses less purchased transportation costs increased 5.7 percent, compared to the same period last year. The increase primarily reflects costs associated with transformation related activities.

The company recorded a tax provision of $11.0 million in the fiscal 2014 fourth quarter on a pretax loss of $38.2 million, due to valuation allowances and the mix of taxable income across the company's tax jurisdictions.

Investor Conference Call:

UTi management will host an investor conference call today, March 31, 2014, at 5:00 a.m. PDT (8:00 a.m. EDT) to review the company's financial results for the fiscal 2014 fourth quarter. Investment professionals are invited to participate in the live call by dialing 888-561-1721 (domestic) or 480-629-9723 (international) using conference ID 4673964. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com. The slides that will be referenced during the call will be available on the company's website at www.go2uti.com (click on "Investor Relations" and then click on "Webcasts & Presentations"). The slides will contain disclosures of certain non-GAAP financial measures, which will be identified in the slides. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures will be included in the slides. For those who are not available to listen to the live broadcast, the call will be archived for one year at both Web sites. A telephonic playback of the conference call also will be available from approximately 8:00 a.m. PDT, today, through April 2, 2014, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4673964.

About UTi Worldwide:

UTi Worldwide Inc. is an international, non-asset-based supply chain services and solutions company providing air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services. The company serves a large and diverse base of global and local companies, including clients operating in industries with unique supply chain requirements such as the pharmaceutical, retail, apparel, chemical, automotive and technology industries. The company seeks to use its global network, proprietary information technology systems, relationships with transportation providers, and expertise in outsourced logistics services to deliver competitive advantage to each of its clients' supply chains.

Use of Non-GAAP Financial Information:

This press release includes "non-GAAP financial measures" within the meaning of the Securities and Exchange Commission rules. UTi believes that meaningful analysis of its financial performance requires an understanding of the factors underlying that performance and the company's judgments about the likelihood that particular factors will repeat. Short-term patterns and long-term trends may be obscured by the impact of certain items. For this reason, the company has included information in this press release relating to organic revenue and organic net revenue changes, which are adjusted to exclude the impact of currency fluctuations between comparable periods. The company also has referred to operating expenses less purchased transportation costs, and to adjusted operating expenses less purchased transportation costs, which are operating expenses less purchased transportation costs that are further adjusted to exclude severance and other costs and a bad debt write-off. The company has also included information relating to organic adjusted operating expenses less purchased transportation costs, which are adjusted operating expenses less purchased transportation costs that are further adjusted to exclude the impact of currency fluctuations between comparable periods. The company has further referred to non-GAAP net loss attributable to UTi Worldwide Inc., which is adjusted to exclude severance and other costs, a bad debt write-off, and valuation allowances on deferred tax assets, as described above, and non-GAAP loss per diluted share. Finally, the company has referred to adjusted earnings before interest expense, income taxes, depreciation and amortization (EBITDA), which is adjusted to exclude stock-based compensation, as well as severance and other costs and the bad debt write-off referred to above. This information is among the information the company uses as a basis for evaluating company performance on a comparable basis over time, allocating resources and planning and forecasting of future periods. The company has also provided this information because such adjustments make performance information more comparable to prior disclosures for investors, and may enhance the ability of investors to analyze the company's performance. In addition, the company's management believes that presenting adjusted EBITDA provides useful information to investors regarding underlying business trends and performance of the company's ongoing operations. This information is not intended to be considered in isolation or as a substitute for, or superior to, the relevant measures prepared and presented in accordance with U.S. GAAP. Further, adjusted EBITDA does not represent cash flow from operations as defined by GAAP, is not derived in accordance with GAAP, and should not be considered as an alternative to net income. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release which address activities, events or developments that UTi expects or anticipates will or may occur in the future, including such things as substantially completing deployment during the third quarter of fiscal 2015; the fact that as the company adds more countries on 1View it enables the company to generate greater efficiencies from operations; the expected benefits of the refinancing, including strengthening UTi's balance sheet; expectations for $75-95 million in annualized gross pre-tax cost savings by the end of fiscal 2015, including approximately $50 million of which were in place at the end of fiscal 2014; the ability to deploy additional resources on growth opportunities as the transformation nears an end; and other such matters, are forward-looking statements. These statements are based on certain assumptions and analyses made by UTi in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue" and other similar expressions or the negative of these terms or other comparable terms. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, the risks in UTi's filings with the SEC, including those listed in Item 1A "Risk Factors" in its annual report on Form 10-K filed with the SEC today, and the following: UTi's ability to maintain sufficient liquidity and capital resources to fund its business; UTi's ability to complete its business transformation initiatives in the timeframe and for the costs anticipated or at all and achieve the expected benefits; UTi's ability to generate sufficient cash to service its debts and other obligations; delays or inability to pay by UTi's customers; dilution in connection with the private placement of convertible preference shares and dilution in connection with the convertible notes; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and EMENA (which is comprised of Europe, Middle East and North Africa); risks associated with UTi's ongoing business transformation initiative, which include unanticipated difficulties, delays, additional costs and expenses as well as potential billing delays; volatile fuel costs; transportation capacity, pricing dynamics and the ability of UTi to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in interest and foreign exchange rates, particularly with respect to the South African rand; material interruptions in transportation services; risks of international operations; risks associated with, and the potential for penalties, fines, costs and expenses the company may incur as a result of investigations by the governments of Brazil and Singapore into the international air freight and air cargo transportation industry; risks of adverse legal judgments or other liabilities not limited by contract or covered by insurance; UTi's ability to retain clients while facing increased competition; the financial condition of UTi's clients; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in UTi's effective tax rates; the other risks and uncertainties described herein and in UTi's other filings with the SEC; and other factors outside UTi's control. All forward-looking statements set forth in this press release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on UTi or its business or operations. Forward-looking statements set forth in this press release speak only as of the date hereof and UTi does not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except as required by law.

(Tables Follow)

UTi Worldwide Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Three months ended Fiscal years ended
January 31, January 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Revenues:
Airfreight forwarding $ 324,066 $ 347,449 $ 1,345,462 $ 1,443,740
Ocean freight forwarding 296,132 306,765 1,253,219 1,267,134
Customs brokerage 46,425 29,294 146,499 117,629
Contract logistics 184,021 176,915 741,779 785,733
Distribution 137,864 140,625 588,121 588,794
Other 87,895 98,207 365,800 404,491
Total revenues 1,076,403 1,099,255 4,440,880 4,607,521
Other operating expenses:
Purchased transportation costs:
Airfreight forwarding 260,067 274,257 1,048,627 1,128,043
Ocean freight forwarding 244,902 257,246 1,046,613 1,064,081
Customs brokerage 9,753 1,135 22,444 5,289
Contract logistics 44,048 42,780 179,320 200,578
Distribution 95,356 93,807 409,664 397,872
Other 52,248 58,937 209,307 225,125
Staff costs 220,143 218,930 885,710 894,503
Depreciation 14,133 13,938 53,899 48,917
Amortization of intangible assets 7,226 2,886 18,502 12,262
Severance and other 10,585 5,118 29,618 18,039
Goodwill impairment - 93,008 - 93,008
Intangible assets impairment - 1,643 - 1,643
Other operating expenses 149,408 143,115 547,344 546,456
Total other operating expenses 1,107,869 1,206,800 4,451,048 4,635,816
Operating loss (31,466) (107,545) (10,168) (28,295)
Interest expense, net (5,322) (5,888) (16,985) (13,415)
Other (expense)/income, net (1,437) 69 (2,693) (439)
Pretax loss (38,225) (113,364) (29,846) (42,149)
Provision for income taxes 11,022 27,992 41,076 51,891
Net loss (49,247) (141,356) (70,922) (94,040)
Net income attributable to non-controlling interests 1,474 1,467 5,736 6,466
Net loss attributable to UTi Worldwide Inc. $ (50,721) $ (142,823) $ (76,658) $ (100,506)
Basic loss per common share attributable to
UTi Worldwide Inc. common shareholders $ (0.48) $ (1.38) $ (0.73) $ (0.97)
Diluted loss per common share attributable to
UTi Worldwide Inc. common shareholders $ (0.48) $ (1.38) $ (0.73) $ (0.97)
Number of weighted average common shares outstanding used for per share calculations
Basic shares 104,779,228 103,778,688 104,527,949 103,544,171
Diluted shares 104,779,228 103,778,688 104,527,949 103,544,171
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
January 31, 2014 January 31, 2013
(Unaudited)
ASSETS
Cash and cash equivalents $ 204,384 $ 237,276
Trade receivables, net 977,885 898,809
Deferred income taxes 8,889 19,595
Other current assets 154,465 156,385
Total current assets 1,345,623 1,312,065
Property, plant and equipment, net 222,036 242,898
Goodwill and other intangible assets, net 464,867 457,635
Investments 1,075 969
Deferred income taxes 11,693 25,802
Other non-current assets 36,768 34,688
Total assets $ 2,082,062 $ 2,074,057
LIABILITIES & EQUITY
Bank lines of credit $ 260,700 $ 79,213
Short-term borrowings 7,551 1,129
Current portion of long-term borrowings 3,488 5,663
Current portion of capital lease obligations 12,374 11,377
Trade payables and other accrued liabilities 754,965 786,444
Income taxes payable 17,877 8,470
Deferred income taxes 3,236 2,775
Total current liabilities 1,060,191 895,071
Long-term borrowings, excluding current portion 205,862 204,434
Capital lease obligations, excluding current portion 60,784 73,538
Deferred income taxes 14,390 29,654
Other non-current liabilities 38,098 47,178
Commitments and contingencies
UTi Worldwide Inc. shareholders' equity:
Common stock 517,762 505,237
Retained earnings 313,974 396,946
Accumulated other comprehensive loss (143,317) (92,348)
Total UTi Worldwide Inc. shareholders' equity 688,419 809,835
Non-controlling interests 14,318 14,347
Total equity 702,737 824,182
Total liabilities and equity $ 2,082,062 $ 2,074,057
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Fiscal years ended January 31,
2014 2013
(Unaudited)
OPERATING ACTIVITIES:
Net loss $ (70,922) $ (94,040)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Share-based compensation costs 13,869 14,556
Depreciation 53,899 48,917
Amortization of intangible assets 18,502 12,262
Amortization of debt issuance costs 702 1,556
Goodwill and intangible assets impairment - 94,651
Deferred income taxes 5,490 16,957
Uncertain tax positions (1,532) 469
Excess tax benefits from share-based compensation - (19)
Gain on disposal of property, plant and equipment (367) (682)
Provision for doubtful accounts 16,559 4,507
Net proceeds from the sales of trade receivables 3,405 -
Other 3,388 1,771
Net changes in operating assets and liabilities (141,076) (60,131)
Net cash (used in)/provided by operating activities (98,083) 40,774
INVESTING ACTIVITIES:
Purchases of property, plant and equipment, excluding software (47,140) (49,728)
Proceeds from disposals of property, plant and equipment 3,832 3,475
Purchases of software and other intangible assets (34,013) (36,692)
Net (increase)/decrease in other non-current assets (4,612) 847
Acquisitions and related payments - (888)
Other - 134
Net cash used in investing activities (81,933) (82,852)
FINANCING ACTIVITIES:
Net borrowings under bank lines of credit 188,732 14,491
Net increase in short-term borrowings 6,701 174
Proceeds from issuances of long-term borrowings 4,575 200,869
Repayments of long-term borrowings (5,342) (205,000)
Debt issuance costs - (1,745)
Repayments of capital lease obligations (12,682) (17,384)
Acquisitions of non-controlling interests - (1,920)
Distributions to non-controlling interests and other (3,038) (2,837)
Ordinary shares settled under share-based compensation plans (2,500) (3,130)
Proceeds from issuance of ordinary shares 4,241 2,502
Excess tax benefits from share-based compensation - 19
Dividends paid (6,314) (6,223)
Net cash provided by/(used in) financing activities 174,373 (20,184)
Effect of foreign exchange rate changes on cash and cash equivalents (27,249) (22,223)
Net decrease in cash and cash equivalents (32,892) (84,485)
Cash and cash equivalents at beginning of period 237,276 321,761
Cash and cash equivalents at end of period $ 204,384 $ 237,276
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Three months ended January 31, 2014
Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
Revenues $ 730,010 $ 346,393 $ - $ 1,076,403
Purchased transportation costs 558,077 148,297 - 706,374
Staff costs 109,418 102,187 8,538 220,143
Depreciation 4,497 8,155 1,481 14,133
Amortization of intangible assets 6,043 1,061 122 7,226
Severance and other 5,382 3,931 1,272 10,585
Other operating expenses 57,491 78,828 13,089 149,408
Total operating expenses 740,908 342,459 24,502 1,107,869
Operating (loss)/income $ (10,898) $ 3,934 $ (24,502) (31,466)
Interest expense, net (5,322)
Other expense, net (1,437)
Pretax loss (38,225)
Provision for income taxes 11,022
Net loss (49,247)
Net income attributable to non-controlling interests 1,474
Net loss attributable to UTi Worldwide Inc. $ (50,721)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Three months ended January 31, 2013
Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
Revenues $ 749,162 $ 350,093 $ - $ 1,099,255
Purchased transportation costs 582,087 146,075 - 728,162
Staff costs 103,630 106,601 8,699 218,930
Depreciation 4,261 8,554 1,123 13,938
Amortization of intangible assets 1,039 1,307 540 2,886
Severance and other 3,020 2,024 74 5,118
Goodwill impairment - 93,008 - 93,008
Intangible assets impairment - 1,643 - 1,643
Other operating expenses 52,926 83,788 6,401 143,115
Total operating expenses 746,963 443,000 16,837 1,206,800
Operating income/(loss) $ 2,199 $ (92,907) $ (16,837) (107,545)
Interest expense, net (5,888)
Other income, net 69
Pretax loss (113,364)
Provision for income taxes 27,992
Net loss (141,356)
Net income attributable to non-controlling interests 1,467
Net loss attributable to UTi Worldwide Inc. $ (142,823)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Fiscal year ended January 31, 2014
Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
Revenues $ 2,996,775 $ 1,444,105 $ - $ 4,440,880
Purchased transportation costs 2,290,077 625,898 - 2,915,975
Staff costs 432,274 417,186 36,250 885,710
Depreciation 16,988 31,511 5,400 53,899
Amortization of intangible assets 12,688 4,709 1,105 18,502
Severance and other 13,894 12,244 3,480 29,618
Other operating expenses 194,460 316,033 36,851 547,344
Total operating expenses 2,960,381 1,407,581 83,086 4,451,048
Operating income/(loss) $ 36,394 $ 36,524 $ (83,086) (10,168)
Interest expense, net (16,985)
Other expense, net (2,693)
Pretax loss (29,846)
Provision for income taxes 41,076
Net loss (70,922)
Net income attributable to non-controlling interests 5,736
Net loss attributable to UTi Worldwide Inc. $ (76,658)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Fiscal year ended January 31, 2013
Freight
Forwarding
Contract Logistics
and Distribution

Corporate

Total
Revenues $ 3,094,408 $ 1,513,113 $ - $ 4,607,521
Purchased transportation costs 2,384,697 636,291 - 3,020,988
Staff costs 420,140 440,459 33,904 894,503
Depreciation 16,369 29,417 3,131 48,917
Amortization of intangible assets 4,116 5,986 2,160 12,262
Severance and other 6,029 9,680 2,330 18,039
Goodwill impairment - 93,008 - 93,008
Intangible assets impairment - 1,643 - 1,643
Other operating expenses 190,253 336,144 20,059 546,456
Total operating expenses 3,021,604 1,552,628 61,584 4,635,816
Operating income/(loss) $ 72,804 $ (39,515) $ (61,584) (28,295)
Interest expense, net (13,415)
Other expense, net (439)
Pretax loss (42,149)
Provision for income taxes 51,891
Net loss (94,040)
Net income attributable to non-controlling interests 6,466
Net loss attributable to UTi Worldwide Inc. $ (100,506)
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
Three months ended January 31, 2014
Freight
Forwarding Revenues

Contract Logistics and Distribution Revenues
Freight Forwarding
Net Revenues
Contract Logistics and Distribution
Net Revenues

Operating (Loss)/Income

Severance and Other
EMENA $ 212,391 $ 57,003 $ 63,246 $ 33,252 $ (6,530) $ 5,569
Americas 145,151 190,742 37,750 88,440 (20,408) 861
Asia Pacific 255,148 18,623 48,456 11,929 7,359 1,816
Africa 117,320 80,025 22,481 64,475 12,615 1,067
Corporate - - - - (24,502) 1,272
Total $ 730,010 $ 346,393 $ 171,933 $ 198,096 $ (31,466) $ 10,585
Three months ended January 31, 2013
Freight
Forwarding Revenues

Contract Logistics and Distribution Revenues
Freight Forwarding
Net Revenues
Contract Logistics and Distribution
Net Revenues

Operating (Loss)/Income

Severance and Other

Intangible Assets Impairment

Goodwill Impairment
EMENA $ 213,870 $ 53,434 $ 53,466 $ 31,972 $ (16,192) $ 3,670 $ - $ 4,168
Americas 179,332 185,160 43,338 84,623 (93,162) 993 - 88,840
Asia Pacific 240,546 17,563 46,006 11,467 8,473 31 - -
Africa 115,414 93,936 24,265 75,956 10,173 350 1,643 -
Corporate - - - - (16,837) 74 - -
Total $ 749,162 $ 350,093 $ 167,075 $ 204,018 $ (107,545) $ 5,118 $ 1,643 $ 93,008
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
Fiscal year ended January 31, 2014
Freight
Forwarding Revenues

Contract Logistics and Distribution Revenues
Freight Forwarding
Net Revenues
Contract Logistics and Distribution
Net Revenues

Operating (Loss)/Income

Severance and Other
EMENA $ 861,331 $ 224,901 $ 237,967 $ 131,893 $ (16,618) $ 12,343
Americas 664,803 790,876 178,154 353,108 (11,571) 4,381
Asia Pacific 1,000,697 80,036 194,984 53,201 46,375 3,851
Africa 469,944 348,292 95,593 280,005 54,732 5,563
Corporate - - - - (83,086) 3,480
Total $ 2,996,775 $ 1,444,105 $ 706,698 $ 818,207 $ (10,168) $ 29,618
Fiscal year ended January 31, 2013
Freight
Forwarding Revenues

Contract Logistics and Distribution Revenues
Freight Forwarding
Net Revenues
Contract Logistics and Distribution
Net Revenues

Operating (Loss)/Income

Severance and Other

Intangible Assets Impairment

Goodwill Impairment
EMENA $ 909,436 $ 231,937 $ 229,951 $ 135,467 $ (15,625) $ 6,882 $ - $ 4,168
Americas 750,324 800,522 184,608 359,102 (66,458) 3,000 - 88,840
Asia Pacific 970,084 71,999 189,092 47,185 39,831 5,344 - -
Africa 464,564 408,655 106,060 335,068 75,541 483 1,643 -
Corporate - - - - (61,584) 2,330 - -
Total $ 3,094,408 $ 1,513,113 $ 709,711 $ 876,822 $ (28,295) $ 18,039 $ 1,643 $ 93,008
UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
Three months ended
January 31, 2014
Three months ended
January 31, 2013
GAAP Revenues $ 1,076,403 $ 1,099,255
Less: Purchased transportation costs (706,374) (728,162)
Net revenues $ 370,029 $ 371,093
GAAP Operating expenses $ 1,107,869 $ 1,206,800
Less: Purchased transportation costs (706,374) (728,162)
Operating expenses less purchased transportation costs 401,495 478,638
Less: Adjustment for severance and other(1)(2) (10,585) (5,118)
Less: Adjustment for bad debt related to customer bankruptcies(3) (6,500) -
Less: Adjustment for goodwill impairment(4) - (93,008)
Less: Adjustment for intangible assets impairment(5) - (1,643)
Non-GAAP Operating expenses $ 384,410 $ 378,869
GAAP Operating loss $ (31,466) $ (107,545)
Add: Adjustment for severance and other(1)(2) 10,585 5,118
Add: Adjustment for bad debt related to customer bankruptcies(3) 6,500 -
Add: Adjustment for goodwill impairment(4) - 93,008
Add: Adjustment for intangible assets impairment(5) - 1,643
Non-GAAP Operating loss $ (14,381) $ (7,776)
Non-GAAP operating loss as a percentage of net revenues -3.9% -2.1%
GAAP Pretax loss $ (38,225) $ (113,364)
Add: Adjustment for severance and other(1)(2) 10,585 5,118
Add: Adjustment for bad debt related to customer bankruptcies(3) 6,500 -
Add: Adjustment for goodwill impairment(4) - 93,008
Add: Adjustment for intangible assets impairment(5) - 1,643
Non-GAAP Pretax loss $ (21,140) $ (13,595)
GAAP Provision for income taxes $ 11,022 $ 27,992
Add: Adjustment for severance and other(6) 3,281 1,587
Add: Adjustment for bad debt related to customer bankruptcies(6) 2,015 -
Add: Adjustment for goodwill impairment(6) - 2,717
Add: Adjustment for intangible assets impairment(6) - 460
Less: Adjustment for deferred tax asset valuation allowance and other(6) (22,871) (34,458)
Non-GAAP Provision for income taxes $ (6,553) $ (1,702)
GAAP Net loss attributable to UTi Worldwide Inc. $ (50,721) $ (142,823)
Adjustment for:
Severance and other(1)(2) 10,585 5,118
Bad debt related to customer bankruptcies(3) 6,500 -
Goodwill impairment(4) - 93,008
Intangible assets impairment(5) - 1,643
Income tax effect severance and other(6) (3,281) (1,587)
Income tax effect bad debt related to customer bankruptcies(6) (2,015) -
Income tax effect goodwill impairment(6) - (2,717)
Income tax effect intangible asset impairment(6) - (460)
Adjustment for deferred tax asset valuation allowance and other(6) 22,871 34,458
Non-GAAP Net loss attributable to UTi Worldwide Inc. $ (16,061) $ (13,360)
GAAP Diluted loss per common share $ (0.48) $ (1.38)
Adjustment for:
Severance and other(1)(2) 0.10 0.05
Bad debt related to customer bankruptcies(3) 0.06 -
Goodwill impairment(4) - 0.90
Intangible assets impairment(5) - 0.02
Income tax effect severance and other(6) (0.03) (0.02)
Income tax effect bad debt related to customer bankruptcies(6) (0.02) -
Income tax effect goodwill impairment(6) - (0.03)
Income tax effect intangible asset impairment(6) - -
Adjustment for deferred tax asset valuation allowance and other(6) 0.22 0.33
Non-GAAP Diluted loss per common share $ (0.15) $ (0.13)
(1) During the three months ended January 31, 2014 the company recorded pre-tax severance of $8,402 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for certain legal matters, including the final settlement relating to a 2006 warehouse fire, and facility exit costs and other of $664.
(2) During the three months ended January 31, 2013, the company recorded pre-tax severance of $5,118 primarily related to transformation activities.
(3) During the three months ended January 31, 2014, the company recorded a pre-tax bad debt write off of $6,500 related to customer bankruptcies.
(4) During the three months ended January 31, 2013, the company recorded a pre-tax goodwill impairment charge of $93,008, as a result of continued economic weakness in certain of the regions in which we operate.
(5) During the three months ended January 31, 2013, the company recorded a pre-tax intangible asset impairment charge of $1,643, which relates to the recoverability of value assigned to certain client relationships within one of the company's pharmaceutical distribution business in South Africa.
(6) The provision for income tax adjustment related to the severance and other costs and intangible asset impairments and were calculated based on the prevailing tax rate in each jurisdiction. In addition, the adjustment for deferred tax asset valuation allowances includes changes in deferred tax assets associated with amalgamations.
UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
Fiscal year ended
January 31, 2014
Fiscal year ended
January 31, 2013
GAAP Revenues $ 4,440,880 $ 4,607,521
Less: Purchased transportation costs (2,915,975) (3,020,988)
Net revenues $ 1,524,905 $ 1,586,533
GAAP Operating expenses $ 4,451,048 $ 4,635,816
Less: Purchased transportation costs (2,915,975) (3,020,988)
Operating expenses less purchased transportation costs 1,535,073 1,614,828
Less: Adjustment for severance and other(7)(8) (29,618) (18,039)
Less: Adjustment for bad debt related to customer bankruptcies(9) (6,500) -
Less: Adjustment for goodwill impairment(10) - (93,008)
Less: Adjustment for intangible assets impairment(11) - (1,643)
Non-GAAP Operating expenses $ 1,498,955 $ 1,502,138
GAAP Operating loss $ (10,168) $ (28,295)
Add: Adjustment for severance and other(7)(8) 29,618 18,039
Add: Adjustment for bad debt related to customer bankruptcies(9) 6,500 -
Add: Adjustment for goodwill impairment(10) - 93,008
Add: Adjustment for intangible assets impairment(11) - 1,643
Non-GAAP Operating income $ 25,950 $ 84,395
Non-GAAP operating income as a percentage of net revenues 1.7% 5.3%
GAAP Pretax loss $ (29,846) $ (42,149)
Add: Adjustment for severance and other(7)(8) 29,618 18,039
Add: Adjustment for bad debt related to customer bankruptcies(9) 6,500 -
Add: Adjustment for goodwill impairment(10) - 93,008
Add: Adjustment for intangible assets impairment(11) - 1,643
Non-GAAP Pretax income $ 6,272 $ 70,541
GAAP Provision for income taxes $ 41,076 $ 51,891
Add: Adjustment for severance and other(12) 9,182 5,538
Add: Adjustment for bad debt related to customer bankruptcies(12) 2,015 -
Add: Adjustment for goodwill impairment(12) - 2,717
Add: Adjustment for intangible assets impairment(12) - 460
Less: Adjustment for deferred tax asset valuation allowance and other(12) (50,329) (37,068)
Non-GAAP Provision for income taxes $ 1,944 $ 23,538
GAAP Net loss attributable to UTi Worldwide Inc. $ (76,658) $ (100,506)
Adjustment for:
Severance and other(7)(8) 29,618 18,039
Bad debt related to customer bankruptcies(9) 6,500 -
Goodwill impairment(10) - 93,008
Intangible assets impairment(11) - 1,643
Income tax effect severance and other(12) (9,182) (5,538)
Income tax effect bad debt related to customer bankruptcies(12) (2,015) -
Income tax effect goodwill impairment(12) - (2,717)
Income tax effect intangible asset impairment(12) - (460)
Adjustment for deferred tax asset valuation allowance and other(12) 50,329 37,068
Non-GAAP Net (loss)/income attributable to UTi Worldwide Inc. $ (1,408) $ 40,537
GAAP Diluted loss per common share $ (0.73) $ (0.97)
Adjustment for:
Severance and other(7)(8) 0.28 0.17
Bad debt related to customer bankruptcies(9) 0.06 -
Goodwill impairment(10) - 0.89
Intangible assets impairment(11) - 0.02
Income tax effect severance and other(12) (0.09) (0.05)
Income tax effect bad debt related to customer bankruptcies(12) (0.02) -
Income tax effect goodwill impairment(12) - (0.03)
Income tax effect intangible asset impairment(12) - -
Adjustment for deferred tax asset valuation allowance and other(12) 0.49 0.36
Non-GAAP Diluted (loss)/earnings per common share $ (0.01) $ 0.39
(7) During the fiscal year ended January 31, 2014 the company recorded pre-tax severance of $24,791 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for certain legal matters, including the final settlement relating to a 2006 warehouse fire, and facility exit costs and other of $3,308.
(8) During the fiscal year ended January 31, 2013, the company recorded pre-tax severance of $12,826 primarily related to transformation activities and accrued pre-tax expenses of $5,213 relating to a legal judgment.
(9) During the fiscal year ended January 31, 2014, the company recorded a pre-tax bad debt write off of $6,500 related to customer bankruptcies.
(10) During the fiscal year ended January 31, 2013, the company recorded a pre-tax goodwill impairment charge of $93,008, as a result of continued economic weakness in certain of the regions in which we operate.
(11) During the fiscal year ended January 31, 2013, the company recorded a pre-tax intangible asset impairment charge of $1,643, which relates to the recoverability of value assigned to certain client relationships within one of the company's pharmaceutical distribution business in South Africa.
(12) The provision for income tax adjustment related to the severance and other costs and intangible asset impairments and were calculated based on the prevailing tax rate in each jurisdiction. In addition, the adjustment for deferred tax asset valuation allowances includes changes in deferred tax assets associated with amalgamations.
UTi Worldwide Inc.
Organic Growth Reconciliation
(Unaudited)
Set forth below is a reconciliation of the company's organic growth rates and the growth rates based on the company's GAAP reported results in the company's revenues, net revenues and operating expenses less purchased transportation costs for the three months and fiscal year ended January 31, 2014. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation.
Three months ended January 31, 2014

Total Net Change
+/(-)
Currency Impact

Organic Growth
+/(-)
Non-GAAP Items(13)

Adjusted Organic Growth
Revenues (2)% 4% 2% -% 2%
Net revenues -% 5% 5% -% 5%
Operating expenses less purchased transportation costs (16)% 4% (12)% 18% 6%
Fiscal year ended January 31, 2014

Total Net Change
+/(-)
Currency Impact

Organic Growth
+/(-)
Non-GAAP Items(14)

Adjusted Organic Growth
Revenues (4)% 3% (1)% -% (1)%
Net revenues (4)% 3% (1)% -% (1)%
Operating expenses less purchased transportation costs (5)% 4% (1)% 5% 4%
(13) During the three months ended January 31, 2014 the company recorded pre-tax severance of $8,402 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for a legal judgment relating to a 2006 warehouse fire, facility exit costs and other of $664 and pre-tax bad debt write off of $6,500 related to customer bankruptcies.
(14) During the fiscal year ended January 31, 2014 the company recorded pre-tax severance of $24,791 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for a legal judgment relating to a 2006 warehouse fire, facility exit costs and other of $3,308, and pre-tax bad debt write off of $6,500 related to customer bankruptcies.
UTi Worldwide Inc.
Adjusted EBITDA Calculation
(in thousands)
(Unaudited)
Three months ended
January 31,
2014 2013
EBITDA:
Pretax loss (38,225) (113,364)
Interest expense 9,819 11,024
Depreciation 14,133 13,938
Amortization of intangible assets 7,226 2,886
Total (7,047) (85,516)
Adjusting items
Stock compensation 4,087 2,867
Goodwill impairment - 93,008
Intangible assets impairment - 1,643
Severance and other(15) 10,585 5,118
Bad debt related to customer bankruptcies(16) 6,500 -
Adjusted EBITDA 14,125 17,120
(15) During the three months ended January 31, 2014 the company recorded pre-tax severance of $8,402 primarily related to transformation activities, accrued pre-tax expenses of $1,519 for a legal judgment relating to a 2006 warehouse fire, and facility exit costs and other of $664.
(16) During the three months ended January 31, 2014, the company recorded a pre-tax bad debt write off of $6,500 related to customer bankruptcies.

CONTACT: Jeff Misakian Global Vice President, Investor Relations (562) 552-9417 jmisakian@go2uti.comSource:UTi Worldwide