UTi Worldwide Q1 Loss Widens, Results Miss Estimates

(RTTNews) - Supply chain services company UTi Worldwide, Inc. (UTIW) reported Thursday a loss for the first quarter of fiscal 2015 that sharply widened from last year, hurt by significant loss on debt extinguishment and a revenue decline. Adjusted loss per share came in wider than analysts' expectations, and quarterly revenues also missed their estimates.

"First quarter results were in line with our expectations. Adjusting for negative currency effects, net revenue rose 3.8 percent in the first quarter, primarily due to increased activity in both business segments and an improvement in freight forwarding yields," CEO Eric Kirchner said in a statement.

The Road Town, the British Virgin Islands-based company reported a net loss of $43.18 million or $0.43 per share for the first quarter, sharply wider than $12.42 million or $0.12 per share in the prior-year quarter.

Results for the latest quarter primarily include a loss on debt extinguishment of $0.21 per share related to the company's refinancing activities completed earlier in the year, and additional tax expense, exceeding its normalized tax rate, of $0.12 per share.

Excluding items, adjusted net loss for the quarter was $7.79 million or $0.09 per share, compared to adjusted loss of $2.44 million or $0.02 per share in the year-ago quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report a loss of $0.04 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter declined 3.3 percent to $1.04 billion from $1.08 billion in the same quarter last year, and missed seven Wall Street analysts' consensus estimate of $1.10 billion.

Net revenues, excluding purchased transportation costs, edged down 0.8 percent to $372.9 million from last year's $375.7 million.

On an organic basis, revenues edged down 0.3 percent, while net revenues grew 3.8 percent from last year.

Airfreight forwarding revenues edged down to $321 million from $324 million, and ocean freight forwarding revenues decreased to $263 million from $304 million in the year-ago quarter.

Contract logistics revenues increased to $187 million from $181 million, while distribution revenues remained flat with last year at $147 million. Customs brokerage revenues were $44 million, up from $30 million last year.

The company noted that freight forwarding volumes grew slightly and net revenue per unit of cargo increased as buy rates improved. Contract logistics and distribution also recorded solid revenue growth on a constant-currency basis, due to gains in new and existing accounts in all regions.

Operating loss for the quarter was $3.24 million, compared to operating income of $3.98 million in the prior-year quarter, and total operating expenses were $1.05 billion, down from $1.08 billion in the year-ago quarter.

The company noted that it made further progress in its transformation activities, and now expects to realize annualized cost savings of $95 million by the end of fiscal 2015, which represents the high end of the range of its prior estimates between about $75 million and $95 million.

"We continued to win new business in both business segments in the first quarter, which we expect will lead to revenue growth in the second half of this year," Kirchner added.

The company also said it continues to expect free cash flow to be positive for the full fiscal year, which implies an improvement of more than $130 million during the rest of fiscal 2015.

UTIW closed Wednesday's regular trading session at $10.28, up $0.57 on a volume of 2.08 million shares.