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UTi Worldwide Reports Second Quarter Fiscal 2016 Results

LONG BEACH, Calif., Sept. 3, 2015 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (NASDAQ:UTIW) today reported financial results for its fiscal 2016 second quarter ended July 31, 2015.

Edward G. Feitzinger, chief executive officer, said, "We continued to make progress against our four strategic priorities to achieve our long-term goals and improve performance, in spite of unseasonably weak demand in key air and ocean markets this quarter. I am very pleased that we were able to deliver a second consecutive quarter of solid CL&D performance, with year-to-date CL&D results slightly ahead of our internal expectations. We managed our cost structure and pushed productivity improvements throughout the company, especially in freight forwarding. We had one of the strongest working capital performances in the company's history for a second fiscal quarter and continued to drive improvements in days sales outstanding. We delivered gains in our freight forwarding yields on a sequential basis. Freight forwarding volumes have stabilized sequentially as we have demonstrated improved client retention; however, normal seasonal volume growth did not occur in the second fiscal quarter due to the global macroeconomic slowdown. We do not expect macroeconomic headwinds to abate during the second half of the year, but we do anticipate that our second half volumes and net revenues will benefit from the new client wins we recorded in the first half of the year."

Financial Results for Second Quarter Fiscal Year 2016

For the second quarter of fiscal year 2016, revenues decreased 16.5% to $913.9 million, compared to $1,094.1 million for the prior year period, while net revenues decreased 14.0% to $338.5 million, compared to $393.7 million for the prior year period. The decrease in net revenues was primarily related to lower air and ocean volumes in freight forwarding as well as the strengthening of the U.S. dollar against the Euro and South African Rand compared to the prior year comparable period. On a constant currency basis, revenues and net revenues were down 8.8% and 5.4%, respectively. As we do every year in the second quarter, we performed an analysis on the value of our goodwill as of July 31, 2015. As a result we determined that an impairment of goodwill had occurred in our freight forwarding segment. Accordingly, we recorded a charge for this impairment of $50.0 million. The operating loss for the second quarter of fiscal 2016, inclusive of the goodwill impairment, was $61.2 million compared to operating income of $1.0 million for the prior year comparable period, primarily due to the goodwill impairment and lower freight forwarding net revenues. Earnings before interest, taxes, depreciation and amortization, excluding goodwill impairment and severance and other items, as set out in the reconciliation included with this press release (Adjusted EBITDA), for the second quarter of fiscal 2016 was $11.2 million compared to $23.8 million for the prior year period. Free cash flow (defined as cash flow from operations less capital expenditures) was $60.0 million for the second quarter compared to negative $10.3 million for the prior year period.

Contract Logistics and Distribution

Net revenues for Contract Logistics and Distribution decreased 7.4% to $197.7 million in the second quarter of fiscal 2016 compared to $213.6 million in the prior year period. On a constant currency basis, net revenues for Contract Logistics and Distribution increased 1.0%. Operating income was $15.5 million for the second quarter of fiscal 2016 compared to $15.6 million for the same period last year. On a constant currency basis, operating income increased 8.8%.

Freight Forwarding

Net revenues for Freight Forwarding decreased 21.8% to $140.8 million in the second quarter of fiscal 2016 compared to $180.1 million in the prior year period. On a constant currency basis, net revenues for Freight Forwarding decreased 13.1%. The decrease in net revenues was primarily related to lower air and ocean volumes, which offset significant yield improvement. The operating loss, inclusive of the $50.0 million goodwill impairment, was $59.9 million for the second quarter of fiscal 2016 compared to operating income of $6.3 million for the same period last year. The decrease in operating income was primarily related to the goodwill impairment and lower air and ocean volumes.

Richard G. Rodick, chief financial officer, said, "Working capital management and free cash flow improvement were key priorities for us this quarter. Our disciplined actions drove one of the best second quarter free cash flow results in the history of our company. We continue to believe our efficiency initiatives will enable us to achieve our working capital targets for the full fiscal year."

Fiscal Year 2016 Outlook

The Company is updating its guidance for full fiscal year 2016 as follows:

  • The Company continues to anticipate a year-over-year reduction in working capital in the range of $175 million to $200 million for full year fiscal 2016.
  • The Company is committed to its original full year adjusted EBITDA guidance of $125 million to $150 million, but now believes that this will be achieved in the 12 months beginning August 1, 2015 rather than for the full fiscal year 2016 due to macro-economic headwinds and the timing of when we expect to see benefits from new business wins.
  • The Company expects full year fiscal 2016 adjusted EBITDA in the range of $75 million to $100 million.

Edward G. Feitzinger, chief executive officer, commented, "We have made significant progress in a short period of time since our reorganization was announced in late January. We are executing against our working capital and profit improvement initiatives while delivering solid results in our CL&D business. Our team is energized by the momentum we are seeing as well as the shift in our culture instilled by the four strategic priorities of our new playbook. We have narrowed the problem to a volume equation in our freight forwarding business. Although we cannot control the macroeconomic environment, we believe that our forwarding sales efforts have reached an inflection point, and we should start to see the impact in our reported results in the second half of the year."

Investor Conference Call

UTi management will host an investor conference call today, September 3, 2015, at 2:00 P.M. PDT (5:00 P.M. EDT) to review the Company's financial results for the fiscal 2016 second quarter. Investment professionals are invited to participate in the live call by dialing 877-328-5514 (domestic) or 412-317-5420 (international) and asking to be connected to the UTi Worldwide, Inc. conference call. The call will be open to all other interested parties 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 on the Company's website. A telephonic playback of the conference call also will be available from approximately 5:00 P.M. PDT, today, through September 8, 2015, by calling 877-344-7529 (domestic), 855-669-9658 (Canada) or 412-317-0088 (international) and using replay access code 10071459.

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 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 regarding net revenues (revenues minus purchased transportation costs) and regarding constant currency revenue, net revenue and operating income changes, which are adjusted to exclude the impact of currency fluctuations between comparable periods. In addition, the Company has referred to earnings before interest, taxes, depreciation and amortization (EBITDA), and to adjusted EBITDA, which is EBITDA adjusted to exclude goodwill impairment and severance and other items set out in the reconciliation included with this press release. The Company has also referred to free cash flow, which is cash flow from operations less purchases of property, plant and equipment (net of proceeds from disposals), as well as purchases of software and other intangible assets. 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 non-GAAP financial 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 generally accepted accounting principles in the U.S. (GAAP). Further, neither free cash flow, EBITDA nor adjusted EBITDA represent net income or cash flow from operations as defined by GAAP, are not derived in accordance with GAAP, and should not be considered as an alternative to net income or cash flow from operations. 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, but not limited to statements about such matters as the Company not expecting macroeconomic headwinds to abate during the second half of the year, but anticipating that the Company's second half volumes and net revenues will benefit from the new client wins recorded in the first half of the year; the Company continuing to believe its efficiency initiatives will enable it to achieve its working capital targets for the full fiscal year; the fact that the Company is targeting adjusted EBITDA in fiscal 2016 in the range of $75 million to $100 million and anticipates year over year working capital improvement of $175 million to $200 million; the fact that the Company is anticipating adjusted EBITDA of $125 million to $150 million for the 12 month period beginning August 1, 2015; and any other statements about the Company's expected, estimated or anticipated future results or strategies, 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 relating to the fiscal year ended January 31, 2015 filed with the SEC, and the following: the Company has incurred losses for each of the last three fiscal years and during the three and six months ended July 31, 2015 and such losses are expected to continue; the Company's ability to achieve its adjusted EBITDA target for the 2016 fiscal year and for the 12 month period beginning August 1, 2015 is dependent on incremental net revenue growth in its freight forwarding business, which growth may not occur; the Company's ability to maintain sufficient liquidity and capital resources to fund its business and to generate sufficient cash to service its debts and other obligations; the Company's ability to refinance its indebtedness when it comes due, including near term maturities; the Company's ability to accurately predict its future business results and liquidity; risks associated with the Company's clients, including delays or the inability by such clients to pay the Company; the risk that the Company may not be able to achieve its expected working capital improvements; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and Europe; volatile fuel costs; transportation capacity, pricing dynamics and the Company's ability 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 and the Euro; material interruptions in transportation services; risks of international operations; risks that the carrying values of the Company's assets might be impaired; risks associated with, and the potential for penalties, fines, costs and expenses the Company may incur as a result of an investigation by the government of Brazil 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; risks associated with the pending securities class action lawsuit and pending investigation by the SEC; the Company's ability to retain clients while facing increased competition; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in the Company's effective tax rates; the Company's ability to maintain effective disclosure controls and procedures and effective internal control over financial reporting; the other risks and uncertainties described herein and in the Company's other filings with the SEC; and other factors outside the Company'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 the Company or its business or results of operations. Forward-looking statements set forth in this press release speak only as of the date hereof and the Company 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 Six months ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
Revenues:
Airfreight forwarding $252,315 $316,949 $547,093 $638,350
Ocean freight forwarding 230,178 282,361 472,476 545,493
Customs brokerage 43,802 62,499 88,325 106,826
Contract logistics 185,796 197,526 369,803 384,690
Distribution 146,686 156,899 291,574 303,757
Other 55,151 77,911 117,974 158,917
Total revenues 913,928 1,094,145 1,887,245 2,138,033
Other operating expenses:
Purchased transportation costs:
Airfreight forwarding 193,573 245,874 424,666 491,287
Ocean freight forwarding 192,885 239,824 406,246 458,872
Customs brokerage 13,041 11,939 25,495 22,947
Contract logistics 45,979 47,792 95,457 92,062
Distribution 103,264 110,651 205,013 214,435
Other 26,637 44,345 62,367 95,356
Staff costs 207,609 227,968 406,740 445,145
Depreciation 12,847 14,222 25,925 28,028
Amortization of intangible assets 7,439 7,020 14,851 14,019
Severance and other 469 1,644 5,483 2,291
Goodwill impairment 50,000 -- 50,000 --
Other operating expenses 121,426 141,907 245,075 275,902
Total other operating expenses 975,169 1,093,186 1,967,318 2,140,344
Operating (loss)/income (61,241) 959 (80,073) (2,311)
Interest expense, net (11,399) (10,066) (22,136) (18,663)
Loss on debt extinguishment -- -- -- (21,820)
Other income/(expense), net 67 (877) (4) (997)
Pretax loss (72,573) (9,984) (102,213) (43,791)
(Benefit)/provision for income taxes (1,945) 9,172 3,797 18,734
Net loss (70,628) (19,156) (106,010) (62,525)
Net income/(loss) attributable to non-controlling interests 101 2,772 (1,990) 3,126
Net loss attributable to UTi Worldwide Inc. $(70,729) $(21,928) $(104,020) $(65,651)
Basic and diluted loss per common share attributable to
UTi Worldwide Inc. common shareholders $(0.70) $(0.24) $(1.05) $(0.67)
Number of weighted average common shares outstanding used for per share calculations
Basic and diluted shares 106,024,595 105,402,541 105,825,063 105,164,180
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, 2015 January 31, 2015
(Unaudited)
ASSETS
Cash and cash equivalents $215,505 $211,832
Cash held as collateral 34,610 29,068
Trade receivables, net 798,205 887,084
Deferred income taxes 12,227 12,596
Other current assets 155,490 154,756
Total current assets 1,216,037 1,295,336
Property, plant and equipment, net 177,351 195,523
Goodwill and other intangible assets, net 362,382 429,590
Investments 1,095 1,023
Deferred income taxes 11,450 11,175
Other non-current assets 38,650 41,305
Total assets $1,806,965 $1,973,952
LIABILITIES & EQUITY
Bank lines of credit $62,208 $31,306
Short-term borrowings 70,417 52,825
Current portion of long-term borrowings 891 1,429
Current portion of capital lease obligations 12,442 11,429
Trade payables and other accrued liabilities 624,661 698,450
Income taxes payable 4,236 8,995
Deferred income taxes 12,146 12,177
Total current liabilities 787,001 816,611
Long-term borrowings, excluding current portion 368,344 366,846
Capital lease obligations, excluding current portion 53,131 56,455
Deferred income taxes 14,897 14,204
Other non-current liabilities 34,875 36,892
Convertible preference shares 188,579 181,957
Commitments and contingencies
UTi Worldwide Inc. shareholders' equity:
Common stock 578,801 575,164
(Accumulated deficit)/retained earnings (17,978) 92,664
Accumulated other comprehensive loss (209,573) (179,423)
Total UTi Worldwide Inc. shareholders' equity 351,250 488,405
Non-controlling interests 8,888 12,582
Total equity 360,138 500,987
Total liabilities and equity $1,806,965 $1,973,952
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six months ended July 31,
2015 2014
(Unaudited)
OPERATING ACTIVITIES:
Net loss $(106,010) $(62,525)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation costs 4,459 6,927
Depreciation 25,925 28,028
Amortization of intangible assets 14,851 14,019
Amortization of debt issuance costs 1,951 1,829
Make-whole payment -- 20,830
Accretion of convertible senior notes 4,260 3,220
Goodwill impairment 50,000 --
Deferred income taxes 146 1,312
Uncertain tax positions 411 343
Gain on disposal of property, plant and equipment (1,134) (225)
Provision for doubtful accounts (97) 3,245
Other 2,194 856
Net changes in operating assets and liabilities (4,024) (142,946)
Net cash used in operating activities (7,068) (125,087)
INVESTING ACTIVITIES:
Net increase in cash held as collateral (5,542) (44,378)
Purchases of property, plant and equipment, excluding software (8,575) (12,241)
Proceeds from disposals of property, plant and equipment 2,456 2,388
Purchases of software and other intangible assets (6,355) (5,928)
Net decrease/(increase) in other non-current assets and other 267 (310)
Net cash used in investing activities (17,749) (60,469)
FINANCING ACTIVITIES:
Proceeds from issuances of long-term borrowings -- 404,427
Proceeds from the issuance of preference shares -- 175,000
Net borrowings/(repayments) under bank lines of credit 32,055 (167,431)
Net issuance of financing agreements 17,000 --
Net increase/(decrease) in short-term borrowings 541 (728)
Repayments of long-term borrowings (3,300) (203,162)
Make-whole payment -- (20,830)
Debt and preferred shares issuance costs -- (25,789)
Repayments of capital lease obligations (6,470) (7,915)
Distributions to non-controlling interests and other (920) (44)
Ordinary shares settled under share-based compensation plans (1,151) (1,807)
Proceeds from issuance of ordinary shares 130 89
Net cash provided by financing activities 37,885 151,810
Effect of foreign exchange rate changes on cash and cash equivalents (9,395) 8,304
Net increase/(decrease) in cash and cash equivalents 3,673 (25,442)
Cash and cash equivalents at beginning of period 211,832 204,384
Cash and cash equivalents at end of period $215,505 $178,942
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Three months ended July 31, 2015

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $564,841 $349,087 $-- $913,928
Purchased transportation costs 424,032 151,347 -- 575,379
Staff costs 96,886 102,078 8,645 207,609
Depreciation 3,851 7,600 1,396 12,847
Amortization of intangible assets 6,656 783 -- 7,439
Severance and other 469 -- -- 469
Goodwill impairment 50,000 -- -- 50,000
Other operating expenses 42,855 71,803 6,768 121,426
Total operating expenses 624,749 333,611 16,809 975,169
Operating (loss)/income $(59,908) $15,476 $(16,809) (61,241)
Interest expense, net (11,399)
Other income, net 67
Pretax loss (72,573)
Benefit for income taxes (1,945)
Net loss (70,628)
Net income attributable to non-controlling interests 101
Net loss attributable to UTi Worldwide Inc. $(70,729)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Three months ended July 31, 2014

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $712,042 $382,103 $-- $1,094,145
Purchased transportation costs 531,915 168,510 -- 700,425
Staff costs 113,070 106,216 8,682 227,968
Depreciation 4,397 8,418 1,407 14,222
Amortization of intangible assets 6,063 957 -- 7,020
Severance and other 943 181 520 1,644
Other operating expenses 49,331 82,230 10,346 141,907
Total operating expenses 705,719 366,512 20,955 1,093,186
Operating income/(loss) $6,323 $15,591 $(20,955) 959
Interest expense, net (10,066)
Other expense, net (877)
Pretax loss (9,984)
Provision for income taxes 9,172
Net loss (19,156)
Net income attributable to non-controlling interests 2,772
Net loss attributable to UTi Worldwide Inc. $(21,928)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Six months ended July 31, 2015

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $1,187,598 $699,647 $-- $1,887,245
Purchased transportation costs 909,503 309,741 -- 1,219,244
Staff costs 188,492 202,366 15,882 406,740
Depreciation 7,823 15,318 2,784 25,925
Amortization of intangible assets 13,287 1,564 -- 14,851
Severance and other 2,897 2,296 290 5,483
Goodwill impairment 50,000 -- -- 50,000
Other operating expenses 86,591 142,916 15,568 245,075
Total operating expenses 1,258,593 674,201 34,524 1,967,318
Operating (loss)/income $(70,995) $25,446 $(34,524) (80,073)
Interest expense, net (22,136)
Other expense, net (4)
Pretax loss (102,213)
Provision for income taxes 3,797
Net loss (106,010)
Net loss attributable to non-controlling interests (1,990)
Net loss attributable to UTi Worldwide Inc. $(104,020)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Six months ended July 31, 2014

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $1,395,912 $742,121 $-- $2,138,033
Purchased transportation costs 1,048,176 326,783 -- 1,374,959
Staff costs 221,190 205,962 17,993 445,145
Depreciation 8,826 16,344 2,858 28,028
Amortization of intangible assets 12,114 1,905 -- 14,019
Severance and other 1,511 260 520 2,291
Other operating expenses 96,577 161,601 17,724 275,902
Total operating expenses 1,388,394 712,855 39,095 2,140,344
Operating income/(loss) $7,518 $29,266 $(39,095) (2,311)
Interest expense, net (18,663)
Loss on debt extinguishment (21,820)
Other expense, net (997)
Pretax loss (43,791)
Provision for income taxes 18,734
Net loss (62,525)
Net income attributable to non-controlling interests 3,126
Net loss attributable to UTi Worldwide Inc. $(65,651)
UTi Worldwide Inc. Supplemental Financial Information
(in thousands, except per share amounts)
(Unaudited)
Three months ended Six months ended
July 31, 2015 July 31, 2014 July 31, 2015 July 31, 2014
Revenues $913,928 $1,094,145 $1,887,245 $2,138,033
Purchased transportation costs (575,379) (700,425) (1,219,244) (1,374,959)
Net revenues $338,549 $393,720 $668,001 $763,074
Three months ended Six months ended
Freight Forwarding July 31, 2015 July 31, 2014 July 31, 2015 July 31, 2014
Revenues $564,841 $712,042 $1,187,598 $1,395,912
Purchased transportation costs (424,032) (531,915) (909,503) (1,048,176)
Net revenues $140,809 $180,127 $278,095 $347,736
Three months ended Six months ended
Contract Logistics and Distribution July 31, 2015 July 31, 2014 July 31, 2015 July 31, 2014
Revenues $349,087 $382,103 $699,647 $742,121
Purchased transportation costs (151,347) (168,510) (309,741) (326,783)
Net revenues $197,740 $213,593 $389,906 $415,338
UTi Worldwide Inc.
Constant Currency Growth Reconciliation
(Unaudited)
Set forth below is a reconciliation of the Company's constant currency growth rates and the growth rates based on the Company's US GAAP reported results in the Company's revenues and net revenues for the three and six months ended July 31, 2015. Constant currency growth is a non-GAAP measure that excludes the impact of foreign currency translation.
Three months ended July 31, 2015 Six months ended July 31, 2015
Total Total Net
Change
+/(-)
Currency Impact

Organic Growth
Total Net
Change
+/(-)
Currency Impact

Organic Growth
Revenues (16)% 7% (9)% (12)% 8 % (4)%
Net revenues (14)% 9% (5)% (12)% 8 % (4)%
Freight Forwarding Three months ended July 31, 2015 Six months ended July 31, 2015
Total Net
Change
+/(-)
Currency Impact

Organic Growth
Total Net
Change
+/(-)
Currency Impact

Organic Growth
Revenues (21)% 9% (12)% (15)% 9% (6)%
Net revenues (22)% 9% (13)% (20)% 8% (12)%
Contract Logistics and Distribution
Three months ended July 31, 2015

Six months ended July 31, 2015
Total Net
Change
+/(-)
Currency Impact

Organic Growth
Total Net
Change
+/(-)
Currency Impact

Organic Growth
Revenues (9)% 7% (2)% (6)% 6% -%
Net revenues (7)% 8% 1% (6)% 8% 2%
Operating income (1)% 10% 9% (13)% 8% (5)%
UTi Worldwide Inc.
EBITDA and Adjusted EBITDA Calculations
(in thousands)
(Unaudited)
Three months ended Six months ended
July 31, July 31,
2015 2014 2015 2014
EBITDA:
Net loss $(70,628) $(19,156) $(106,010) $(62,525)
(Benefit)/provision for income taxes (1,945) 9,172 3,797 18,734
Interest expense, net 11,399 10,066 22,136 18,663
Depreciation 12,847 14,222 25,925 28,028
Amortization of intangible assets 7,439 7,020 14,851 14,019
Total EBITDA before adjusting items (40,888) 21,324 (39,301) 16,919
Adjusting items:
Other (income)/expense, net (67) 877 4 997
Goodwill impairment(1) 50,000 -- 50,000 --
Loss on debt extinguishment(2) -- -- -- 21,820
Legal fees(3) 1,730 -- 3,019 --
Severance and other(4)(5) 469 1,644 5,483 2,291
Adjusted EBITDA $11,244 $23,845 $19,205 $42,027
(1) During the three months ended July 31, 2015, the Company recorded a goodwill impairment charge of $50,000 before a related deferred tax benefit of $9,000.
(2) Loss on debt extinguishment for the three months ended April 30, 2014 includes a make-whole payment of $20,830 with respect to the prepayment of the Company's $200,000 aggregate principal amount of private placement notes issued on January 25, 2013, as well as a charge of $990 related to unamortized debt issuance costs.
(3) During the three and six months ended July 31, 2015, the Company incurred legal fees of $1,730 and $3,019, respectively, associated with the Company's pending Securities and Exchange Commission investigation and securities class action lawsuit.
(4) During the three and six months ended July 31, 2015, the Company recorded pre-tax severance of $469 and $3,453, respectively, primarily related to the Company's January 2015 Reorganization. In addition during the six months ended July 31, 2015, the Company incurred facility exit costs and other expenses of $2,030, associated with the expected exit of a joint venture.
(5) During the three and six months ended July 31, 2014 the Company recorded pre-tax severance of $1,644 and $2,291, primarily related to organizational realignment activities.
UTi Worldwide Inc.
Free Cash Flow Calculation
(in thousands)
(Unaudited)
Three months ended Six months ended
July 31, July 31,
2015 2014 2015 2014
Net cash provided by/(used in) operating activities $68,289 $(2,950) $(7,068) $(125,087)
Purchases of property, plant and equipment, excluding software (5,659) (6,354) (8,575) (12,241)
Proceeds from disposals of property, plant and equipment 1,290 647 2,456 2,388
Purchases of software and other intangible assets (4,042) (1,728) (6,355) (5,928)
Free cash flow $ 59,878 $(10,385) $(19,542) $(140,868)
UTi Worldwide Inc.
Basic and Diluted Earnings Per Share Calculation
(in thousands)
(Unaudited)
Three months ended Six months ended
July 31, July 31,
2015 2014 2015 2014
Basic and Diluted Earnings Per Share Calculation
Net loss attributable to UTi Worldwide Inc. $(70,729) $(21,928) $(104,020) $(65,651)
Less: Dividends paid-in kind on Convertible Preference Shares (3,340) (3,114) (6,622) (5,060)
Loss attributable to UTi Worldwide Inc. common shareholders for calculation of basic and diluted earnings per share (74,069) (25,042) (110,642) (70,711)
Number of weighted average common shares outstanding used for per share calculations
Basic and diluted shares 106,024,595 105,402,541 105,825,063 105,164,180
Basic and diluted loss per common share attributable to UTi Worldwide Inc. common shareholders $(0.70) $(0.24) $(1.05) $(0.67)

CONTACT: Rick Rodick Chief Financial Officer (562) 552-9400 rrodick@go2uti.comSource:UTi Worldwide