UTi Worldwide Post Wider Q3 Loss, Results Miss Estimates

(RTTNews) - Supply chain services company UTi Worldwide, Inc. (UTIW) reported Tuesday a loss for the third quarter that sharply widened from last year, reflecting higher severance costs, lower operating margins and a revenue decline. Adjusted loss per share and quarterly revenues missed analysts' expectations.

Following the announcement, the company's stock in plunging 11.46 percent in pre-market trading.

"The third quarter marked a turning point in a number of areas. Airfreight kilos improved on a year over year basis for the month of October and adjusted EBITDA improved each month during the quarter. Free cash flow also turned positive in a quarter where we have historically had negative cash flow," CEO Eric Kirchner said in a statement.

The Road Town, the British Virgin Islands-based company reported a net loss of $34.0 million or $0.35 per share for the third quarter, sharply wider than $9.08 million or $0.09 per share in the prior-year quarter.

Results for the latest quarter primarily include severance and other costs of $0.22 per share, while the year-ago quarter included $0.13 per share of the same costs.

Excluding items, adjusted net loss for the quarter was $4.77 million or $0.08 per share, compared to adjusted net income of $8.12 million or $0.08 per share in the year-ago quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter declined 6.6 percent to $1.08 billion from $1.15 billion in the same quarter last, and missed seven Wall Street analysts' consensus estimate of $1.17 billion.

Net revenues, excluding purchased transportation costs, decreased 3.1 percent to $381.02 million from last year's $393.49 million.

On a constant currency basis, revenues decreased 4.3 percent and net revenues edged up 0.1 percent.

Freight forwarding revenues declined to $689.81 million from $778.45 million, while contract logistics and distribution revenues increased to $388.47 million from $375.96 million last year.

Operating loss for the quarter was $22.21 million, compared to operating income of $7.25 million in the prior-year quarter, and total operating expenses were $1.10 billion, down from $1.15 billion in the year-ago quarter.

Adjusted operating margin for the quarter contracted 480 basis points to 0.4 percent from last year's 5.2 percent.

"In addition, by the end of Q3 we had completed approximately half of our previously announced incremental $45 million annualized cost savings target for fiscal year 2015. These actions, together with growth initiatives and other improvements, give us confidence in our previously-stated fiscal 2016 adjusted EBITDA target of $190 million to $210 million," Kirchner added.

UTIW closed Monday's regular trading session at $13.00, up $0.09 on a volume of 1.34 million shares.