×

UTi Worldwide Reports Fiscal 2014 Second Quarter Results

LONG BEACH, Calif., Sept. 6, 2013 (GLOBE NEWSWIRE) -- UTi Worldwide Inc. (Nasdaq:UTIW) today reported financial results for its fiscal 2014 second quarter ended July 31, 2013.

Fiscal Second Quarter 2014 vs. 2013 Results:

  • Revenues were $1,129.4 million, a decrease of 4.5 percent from $1,182.9 million.
  • Net revenues (revenues minus purchased transportation costs) were $385.6 million, a decrease of 5.0 percent from $406.1 million.
  • Net loss attributable to UTi Worldwide Inc. was $4.4 million, or $0.04 per diluted share, compared to net income of $18.9 million, or $0.18 per diluted share.
  • Adjustments to GAAP net loss in the fiscal 2014 second quarter included after-tax severance costs of $2.4 million, or $0.02 per diluted share. In addition, the company increased its valuation allowance on deferred tax assets by $7.5 million, or $0.07 per diluted share.
  • Excluding adjustments described above, non-GAAP net income attributable to UTi Worldwide Inc. was $5.5 million, or $0.05 per diluted share
  • 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, "Our results in the fiscal 2014 second quarter continue to reflect a lackluster global economy, challenging trading conditions and costs associated with our comprehensive business process transformation. The results underscore the importance of completing our transformation, and we have continued to make significant progress in that area. Since July 1, we have deployed our new freight forwarding operating system in seven countries – including the United States, United Kingdom and Hong Kong. There are currently 22 countries on the system to-date. In particular, the U.S. launch is a notable milestone in our deployment process. The implementation of our proprietary system in our largest market demonstrates that the platform works and is scalable. The 22 countries on the new system represent approximately 35 percent of total freight forwarding shipments. We continue to expect that more than 70 percent of shipments will be on the new system by the end of fiscal 2014."

Kirchner continued, "Revenues in the second quarter of fiscal 2014 were lower than the same period last year, with declines seen in both segments. Freight forwarding was impacted by lower pricing, which was partially offset by a modest increase in volumes. Airfreight tonnage was slightly higher in the second quarter for the first time in more than two years. Ocean freight continued to show steady volume growth in the second quarter. Net revenue per kilo and TEU declined in the fiscal 2014 second quarter compared to the same period last year, but improved modestly on a sequential basis as carrier rates declined. Contract logistics was affected by currency translation, as well as the previously reported exit of underperforming business in Europe and conclusion of certain high-margin accounts."

Revenues and net revenues decreased 4.5 percent and 5.0 percent, respectively, in the fiscal 2014 second quarter compared to the same period last year. On an organic basis, revenues decreased 2.2 percent, while net revenues declined 1.6 percent in the fiscal 2014 second quarter, compared to the same period last year.

Operating expenses less purchased transportation costs were $375.6 million in the second quarter of fiscal 2014. Severance costs in the fiscal 2014 second quarter were $3.2 million on a pre-tax basis, compared to $2.1 million in the same period last year. Excluding the impact of severance, adjusted operating expenses less purchased transportation costs were $372.4 million, compared to $370.9 million in the same period last year. The increase reflects costs associated with transformation related activities and investments in sales and facilities that were previously reported. On an organic basis, adjusted operating expenses less purchased transportation costs increased 3.6 percent, compared to the same period last year.

The company recorded a tax provision of $9.4 million in the fiscal 2014 second quarter on pretax income of $5.9 million. This is primarily due to a $7.5 million addition to valuation allowances on deferred tax assets as a result of the unprofitability of certain operations.

Investor Conference Call:

UTi management will host an investor conference call today, September 6, 2013, at 8:00 a.m. PDT (11:00 a.m. EDT) to review the company's financial results for the fiscal 2014 second quarter. Investment professionals are invited to participate in the live call by dialing 877-941-0844 (domestic) or 480-629-9692 (international) using conference ID 4636573. The call will be open to all interested investors through a live, listen-only audio Internet broadcast at www.go2uti.com. 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 11:00 a.m. PDT, today, through September 10, 2013, by calling 800-406-7325 (domestic) or 303-590-3030 (international) and using replay passcode 4636573.

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 costs. 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 income attributable to UTi Worldwide Inc., which is adjusted to exclude severance costs and valuation allowances on deferred tax assets, as described above, and non-GAAP earnings per diluted share. 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. 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. For more information on these non-GAAP financial measures, please see the tables at the end of this press release.

Safe Harbor Statement:

Certain statements in this news release may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The company intends that all such statements be subject to the "safe-harbor" provisions contained in those sections. Such forward-looking statements may include, but are not limited to, statements about the status and timing of the company's freight forwarding operating system, including plans to have more than 70 percent of shipments on the new system by the end of fiscal 2014 and any other statements not of an historical nature. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements, including but not limited to: volatility with respect to global trade, particularly as it relates to the global airfreight, ocean freight and contract logistics and distribution markets; global economic, political and market conditions, including those in Africa, Asia and EMENA; risks associated with the company's business transformation initiative, which include unanticipated difficulties, delays, additional costs and expenses; changes in interest and foreign exchange rates; risks that the company might be required to record impairment charges to goodwill or additional increases in its valuation allowance on deferred tax assets; risks associated with the company's ability to satisfy financial covenants in connection with its credit facilities and note purchase agreement in the future and its ability to amend, refinance, renew or replace its credit facilities, note purchase agreement and other indebtedness on commercially reasonable terms or at all; risks associated with the profitability of certain operations and changes in statutory tax rates worldwide, changes in the geographic composition of the company's worldwide taxable income, changes in the company's unrecognized tax positions, and the impact of audit settlements with local tax authorities; volatile fuel costs; transportation capacity, pricing dynamics and the ability of the company to secure space on third party aircraft, ocean vessels and other modes of transportation; 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 the ongoing publicly announced governmental investigations into the international air freight and air cargo transportation industry and other related investigations and lawsuits; risks of adverse legal judgments and other liabilities not limited by contract or covered by insurance; the financial condition of the company's customers; disruptions caused by epidemics, natural disasters, conflicts, wars and terrorism; and the other risks and uncertainties described in "Risk Factors" and "Forward-looking Statements" in the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2013, any subsequently filed Quarterly Reports on Form 10-Q and as described in the company's other filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by UTi or any other person that UTi's objectives or plans will be achieved in the timeframe anticipated or at all. Investors are cautioned not to place undue reliance on the company's forward-looking statements. UTi undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, 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,
2013 2012 2013 2012
(Unaudited) (Unaudited)
Revenues:
Airfreight forwarding $ 355,120 $ 370,394 $ 678,949 $ 751,534
Ocean freight forwarding 318,687 332,041 622,465 637,122
Customs brokerage 32,308 30,414 62,126 58,680
Contract logistics 186,377 203,818 367,059 405,471
Distribution 145,246 146,514 292,956 295,402
Other 91,680 99,749 186,516 203,378
Total revenues 1,129,418 1,182,930 2,210,071 2,351,587
Other operating expenses:
Purchased transportation costs:
Airfreight forwarding 274,926 286,684 525,398 588,506
Ocean freight forwarding 265,348 280,352 522,323 535,231
Customs brokerage 4,032 1,336 5,374 2,779
Contract logistics 45,956 54,370 90,414 104,353
Distribution 103,004 102,225 204,212 199,232
Other 50,504 51,892 100,967 109,648
Staff costs 224,280 225,330 444,492 456,518
Depreciation 12,956 11,229 26,138 22,725
Amortization of intangible assets 2,754 3,160 5,546 6,402
Severance and other 3,180 2,124 5,849 3,824
Other operating expenses 132,403 131,198 265,306 265,799
Total other operating expenses 1,119,343 1,149,900 2,196,019 2,295,017
Operating income 10,075 33,030 14,052 56,570
Interest expense, net (3,447) (2,494) (6,740) (5,302)
Other expense, net (720) (272) (962) (300)
Pretax income 5,908 30,264 6,350 50,968
Provision for income taxes 9,414 10,047 20,720 16,521
Net (loss)/income (3,506) 20,217 (14,370) 34,447
Net income attributable to non-controlling interests 938 1,334 2,492 2,678
Net (loss)/income attributable to UTi Worldwide Inc. $ (4,444) $ 18,883 $ (16,862) $ 31,769
Basic (loss)/earnings per common share attributable to UTi Worldwide Inc. common shareholders $ (0.04) $ 0.18 $ (0.16) $ 0.31
Diluted (loss)/earnings per common share attributable to UTi Worldwide Inc. common shareholders $ (0.04) $ 0.18 $ (0.16) $ 0.31
Number of weighted average common shares outstanding used for per share calculations
Basic shares 104,608,931 103,609,889 104,310,510 103,323,012
Diluted shares 104,608,931 103,893,040 104,310,510 103,920,826
UTi Worldwide Inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, 2013 January 31, 2013
(Unaudited)
ASSETS
Cash and cash equivalents $ 178,125 $ 237,276
Trade receivables, net 1,012,598 898,809
Deferred income taxes 15,854 19,595
Other current assets 158,390 156,385
Total current assets 1,364,967 1,312,065
Property, plant and equipment, net 238,749 242,898
Goodwill and other intangible assets, net 462,674 457,635
Investments 1,057 969
Deferred income taxes 20,916 25,802
Other non-current assets 36,520 34,688
Total assets $ 2,124,883 $ 2,074,057
LIABILITIES & EQUITY
Bank lines of credit $ 133,738 $ 79,213
Short-term borrowings 1,514 1,129
Current portion of long-term borrowings 2,417 5,663
Current portion of capital lease obligations 11,448 11,377
Trade payables and other accrued liabilities 835,251 786,444
Income taxes payable 9,822 8,470
Deferred income taxes 1,946 2,775
Total current liabilities 996,136 895,071
Long-term borrowings, excluding current portion 203,630 204,434
Capital lease obligations, excluding current portion 65,218 73,538
Deferred income taxes 30,238 29,654
Other non-current liabilities 44,290 47,178
Commitments and contingencies
UTi Worldwide Inc. shareholders' equity:
Common stock 510,934 505,237
Retained earnings 373,802 396,946
Accumulated other comprehensive loss (112,949) (92,348)
Total UTi Worldwide Inc. shareholders' equity 771,787 809,835
Non-controlling interests 13,584 14,347
Total equity 785,371 824,182
Total liabilities and equity $ 2,124,883 $ 2,074,057
UTi Worldwide Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six months ended July 31,
2013 2012
(Unaudited)
OPERATING ACTIVITIES:
Net (loss)/income $ (14,370) $ 34,447
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Share-based compensation costs 6,869 7,050
Depreciation 26,138 22,725
Amortization of intangible assets 5,546 6,402
Amortization of debt issuance costs 346 658
Deferred income taxes 4,516 3,274
Uncertain tax positions (148) (250)
Excess tax benefits from share-based compensation (73) (132)
(Gain)/loss on disposal of property, plant and equipment (696) 37
Provision for doubtful accounts 2,814 449
Other 2,859 1,146
Net changes in operating assets and liabilities (80,464) (90,180)
Net cash used in operating activities (46,663) (14,374)
INVESTING ACTIVITIES:
Purchases of property, plant and equipment, excluding software (26,332) (19,561)
Proceeds from disposals of property, plant and equipment 1,884 2,332
Purchases of software and other intangible assets (18,387) (15,576)
Net increase in other non-current assets (2,869) (1,016)
Other (99) 116
Net cash used in investing activities (45,803) (33,705)
FINANCING ACTIVITIES:
Net borrowings under bank lines of credit 59,687 29,677
Net increase in short-term borrowings 441 --
Proceeds from issuances of long-term borrowings 550 1,986
Repayments of long-term borrowings (4,617) (11,045)
Debt issuance costs -- (1,098)
Repayments of capital lease obligations (7,882) (9,759)
Distributions to non-controlling interests and other (2,152) (2,433)
Ordinary shares settled under share-based compensation plans (2,487) (2,450)
Proceeds from issuance of ordinary shares 2,461 1,592
Excess tax benefits from share-based compensation 73 132
Dividends paid -- (6,223)
Net cash provided by financing activities 46,074 379
Effect of foreign exchange rate changes on cash and cash equivalents (12,759) (11,300)
Net decrease in cash and cash equivalents (59,151) (59,000)
Cash and cash equivalents at beginning of period 237,276 321,761
Cash and cash equivalents at end of period $ 178,125 $ 262,761
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Three months ended July 31, 2013

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $ 768,803 $ 360,615 $ -- $ 1,129,418
Purchased transportation costs 585,374 158,396 -- 743,770
Staff costs 108,803 105,140 10,337 224,280
Depreciation 3,939 7,566 1,451 12,956
Amortization of intangible assets 1,121 1,207 426 2,754
Severance and other 2,193 317 670 3,180
Other operating expenses 46,531 78,148 7,724 132,403
Total operating expenses 747,961 350,774 20,608 1,119,343
Operating income/(loss) $ 20,842 $ 9,841 $ (20,608) 10,075
Interest expense, net (3,447)
Other expense, net (720)
Pretax income 5,908
Provision for income taxes 9,414
Net loss (3,506)
Net income attributable to non-controlling interests 938
Net loss attributable to UTi Worldwide Inc. $ (4,444)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Three months ended July 31, 2012

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $ 797,375 $ 385,555 $ -- $ 1,182,930
Purchased transportation costs 610,646 166,213 -- 776,859
Staff costs 107,602 108,863 8,865 225,330
Depreciation 4,043 6,647 539 11,229
Amortization of intangible assets 1,017 1,603 540 3,160
Severance and other 1,509 283 332 2,124
Other operating expenses 44,421 82,292 4,485 131,198
Total operating expenses 769,238 365,901 14,761 1,149,900
Operating income/(loss) $ 28,137 $ 19,654 $ (14,761) 33,030
Interest expense, net (2,494)
Other expense, net (272)
Pretax income 30,264
Provision for income taxes 10,047
Net income 20,217
Net income attributable to non-controlling interests 1,334
Net income attributable to UTi Worldwide Inc. $ 18,883
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Six months ended July 31, 2013

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $ 1,488,319 $ 721,752 $ -- $ 2,210,071
Purchased transportation costs 1,135,337 313,351 -- 1,448,688
Staff costs 213,871 211,417 19,204 444,492
Depreciation 8,222 15,362 2,554 26,138
Amortization of intangible assets 2,241 2,443 862 5,546
Severance and other 2,429 1,309 2,111 5,849
Other operating expenses 92,579 157,720 15,007 265,306
Total operating expenses 1,454,679 701,602 39,738 2,196,019
Operating income/(loss) $ 33,640 $ 20,150 $ (39,738) 14,052
Interest expense, net (6,740)
Other expense, net (962)
Pretax income 6,350
Provision for income taxes 20,720
Net loss (14,370)
Net income attributable to non-controlling interests 2,492
Net loss attributable to UTi Worldwide Inc. $ (16,862)
UTi Worldwide Inc.
Segment Reporting
(in thousands)
(Unaudited)
Six months ended July 31, 2012

Freight
Forwarding
Contract
Logistics and
Distribution


Corporate


Total
Revenues $ 1,579,297 $ 772,290 $ -- $ 2,351,587
Purchased transportation costs 1,216,254 323,495 -- 1,539,749
Staff costs 214,034 224,692 17,792 456,518
Depreciation 8,250 13,400 1,075 22,725
Amortization of intangible assets 2,071 3,251 1,080 6,402
Severance and other 2,176 1,109 539 3,824
Other operating expenses 91,025 166,035 8,739 265,799
Total operating expenses 1,533,810 731,982 29,225 2,295,017
Operating income/(loss) $ 45,487 $ 40,308 $ (29,225) 56,570
Interest expense, net (5,302)
Other expense, net (300)
Pretax income 50,968
Provision for income taxes 16,521
Net income 34,447
Net income attributable to non-controlling interests 2,678
Net income attributable to UTi Worldwide Inc. $ 31,769
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
Three months ended July 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
EMENA $ 215,932 $ 55,598 $ 59,805 $ 32,661 $ (246) $ 932
Americas 181,118 198,677 48,185 88,131 3,769 652
Asia Pacific 263,749 20,964 51,336 13,708 14,457 604
Africa 108,004 85,376 24,103 67,719 12,703 322
Corporate -- -- -- -- (20,608) 670
Total $ 768,803 $ 360,615 $ 183,429 $ 202,219 $ 10,075 $ 3,180
Three months ended July 31, 2012

Freight
Forwarding
Revenues
Contract
Logistics and
Distribution
Revenues

Freight
Forwarding
Net Revenues
Contract
Logistics and
Distribution
Net Revenues


Operating
Income/(Loss)


Severance and
Other
EMENA $ 236,506 $ 60,048 $ 61,021 $ 33,524 $ 2,470 $ 1,199
Americas 195,208 205,008 48,648 90,263 9,809 499
Asia Pacific 251,389 18,533 49,197 12,008 13,353 50
Africa 114,272 101,966 27,863 83,547 22,159 44
Corporate -- -- -- -- (14,761) 332
Total $ 797,375 $ 385,555 $ 186,729 $ 219,342 $ 33,030 $ 2,124
UTi Worldwide Inc.
Geographic Reporting
(in thousands)
(Unaudited)
Six months ended July 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
EMENA $ 428,623 $ 109,867 $ 117,023 $ 64,758 $ (3,406) $ 1,919
Americas 355,539 393,441 92,466 173,865 4,983 893
Asia Pacific 483,268 38,846 95,571 25,481 23,642 604
Africa 220,889 179,598 47,922 144,297 28,571 322
Corporate -- -- -- -- (39,738) 2,111
Total $ 1,488,319 $ 721,752 $ 352,982 $ 408,401 $ 14,052 $ 5,849
Six months ended July 31, 2012

Freight
Forwarding
Revenues
Contract
Logistics and
Distribution
Revenues

Freight
Forwarding
Net Revenues
Contract
Logistics and
Distribution
Net Revenues


Operating
Income/(Loss)


Severance and
Other
EMENA $ 480,851 $ 123,036 $ 119,185 $ 71,677 $ 1,930 $ 2,229
Americas 381,873 401,731 95,031 178,874 16,269 924
Asia Pacific 484,627 35,508 95,736 23,154 24,158 75
Africa 231,946 212,015 53,091 175,090 43,438 57
Corporate -- -- -- -- (29,225) 539
Total $ 1,579,297 $ 772,290 $ 363,043 $ 448,795 $ 56,570 $ 3,824
UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
Three months ended
July 31, 2013
Three months ended
July 31, 2012
GAAP Revenues $ 1,129,418 $ 1,182,930
Less: Purchased transportation costs (743,770) (776,859)
Net revenues $ 385,648 $ 406,071
GAAP Operating expenses $ 1,119,343 $ 1,149,900
Less: Purchased transportation costs (743,770) (776,859)
Operating expenses less purchased transportation costs 375,573 373,041
Less: Adjustment for severance and other(1) (3,180) (2,124)
Non-GAAP Operating expenses $ 372,393 $ 370,917
GAAP Operating income $ 10,075 $ 33,030
Add: Adjustment for severance and other(1) 3,180 2,124
Non-GAAP Operating income $ 13,255 $ 35,154
Non-GAAP operating income as a percentage of net revenues 3.4% 8.7%
GAAP Pretax income $ 5,908 $ 30,264
Add: Adjustment for severance and other(1) 3,180 2,124
Non-GAAP Pretax income $ 9,088 $ 32,388
GAAP Provision for income taxes $ 9,414 $ 10,047
Add: Adjustment for severance and other(2) 808 705
Less: Adjustment for deferred tax asset valuation allowance(3) (7,540) (786)
Non-GAAP Provision for income taxes $ 2,682 $ 9,966
GAAP Net (loss)/income attributable to UTi Worldwide Inc. $ (4,444) $ 18,883
Adjustment for:
Severance and other(1) 3,180 2,124
Income tax effect severance and other(2) (808) (705)
Adjustment for deferred tax asset valuation allowance(3) 7,540 786
Non-GAAP Net income attributable to UTi Worldwide Inc. $ 5,468 $ 21,088
GAAP Diluted (loss)/earnings per common share $ (0.04) $ 0.18
Adjustment for:
Severance and other(1) 0.03 0.03
Income tax effect severance and other(2) (0.01) (0.01)
Adjustment for deferred tax asset valuation allowance(3) 0.07 0.01
Non-GAAP Diluted earnings per common share $ 0.05 $ 0.21
(1) During the three months ended July 31, 2013 and 2012, the company recorded pre-tax severance of $3,180 and $2,124, respectively, primarily related to transformation activities.
(2) The provisions for income tax adjustment related to the severance and other costs were calculated based on the prevailing tax rate in each jurisdiction.
(3) Adjustments for deferred tax asset valuation allowances include the effects of current period valuation allowances. For the three months ended July 31, 2013, the adjustment also includes an out of period adjustment to income tax expense of $1,098 to increase the valuation allowances for certain of its deferred tax assets.
UTi Worldwide Inc.
Supplemental Financial Information – Reconciliation to US GAAP
(in thousands, except per share amounts)
(Unaudited)
Six months ended
July 31, 2013
Six months ended
July 31, 2012
GAAP Revenues $ 2,210,071 $ 2,351,587
Less: Purchased transportation costs (1,448,688) (1,539,749)
Net revenues $ 761,383 $ 811,838
GAAP Operating expenses $ 2,196,019 $ 2,295,017
Less: Purchased transportation costs (1,448,688) (1,539,749)
Operating expenses less purchased transportation costs 747,331 755,268
Less: Adjustment for severance and other(4) (5,849) (3,824)
Non-GAAP Operating expenses $ 741,482 $ 751,444
GAAP Operating income $ 14,052 $ 56,570
Add: Adjustment for severance and other(4) 5,849 3,824
Non-GAAP Operating income $ 19,901 $ 60,394
Non-GAAP operating income as a percentage of net revenues 2.6% 7.4%
GAAP Pretax income $ 6,350 $ 50,968
Add: Adjustment for severance and other(4) 5,849 3,824
Non-GAAP Pretax income $ 12,199 $ 54,792
GAAP Provision for income taxes $ 20,720 $ 16,521
Add: Adjustment for severance and other(5) 1,723 1,240
Less: Adjustment for deferred tax asset valuation allowance(6) (15,848) (2,082)
Non-GAAP Provision for income taxes $ 6,595 $ 15,679
GAAP Net (loss)/income attributable to UTi Worldwide Inc. $ (16,862) $ 31,769
Adjustment for:
Severance and other(4) 5,849 3,824
Income tax effect severance and other(5) (1,723) (1,240)
Adjustment for deferred tax asset valuation allowance(6) 15,848 2,082
Non-GAAP Net income attributable to UTi Worldwide Inc. $ 3,112 $ 36,435
GAAP Diluted (loss)/earnings per common share $ (0.16) $ 0.31
Adjustment for:
Severance and other(4) 0.06 0.03
Income tax effect severance and other(5) (0.02) (0.01)
Adjustment for deferred tax asset valuation allowance(6) 0.15 0.02
Non-GAAP Diluted earnings per common share $ 0.03 $ 0.35
(4) During the six months ended July 31, 2013 and 2012, the company recorded pre-tax severance of $5,849 and $3,824, respectively, primarily related to transformation activities.
(5) The provisions for income tax adjustment related to the severance and other costs were calculated based on the prevailing tax rate in each jurisdiction.
(6) Adjustments for deferred tax asset valuation allowances include the effects of current period valuation allowances. For the six months ended July 31, 2013, the adjustment also includes an out of period adjustment to income tax expense of $6,098 to increase the valuation allowances for certain of its deferred tax assets.
UTi Worldwide Inc.
Organic Growth Reconciliation
(Unaudited)
Three months ended July 31, 2013

Total Net
Change

+/(-)
Currency Impact


Organic Growth
+/(-)
Non-GAAP
Items

Adjusted
Organic Growth
Revenues (5)% 3% (2)% --% (2)%
Net revenues (5)% 3% (2)% --% (2)%
Operating expenses less purchased transportation costs 1% 3% 4% --% 4%
Six months ended July 31, 2013

Total Net
Change

+/(-)
Currency Impact


Organic Growth
+/(-)
Non-GAAP
Items

Adjusted
Organic Growth
Revenues (6)% 1% (5)% --% (5)%
Net revenues (7)% 2% (5)% --% (5)%
Operating expenses less purchased transportation costs (1)% 4% 3% --% 3%

Set forth above 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 and six months ended July 31, 2013. Organic growth is a non-GAAP measure that excludes the impact of foreign currency translation.

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