UTi Worldwide posts 4Q net loss

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UTi Worldwide Inc. on Thursday, March 26, reported financial results for its fiscal 2009 fourth quarter ended Jan. 31. The company reported a loss in the fiscal quarter due to goodwill impairment and other charges, and that results also were adversely impacted by the significant and rapid decline in freight and logistics volumes and by the considerable weakening of most currencies against the U.S. dollar:

  • Revenues decreased 26 percent to $894.1 million from $1,202.2 million;
  • Net revenues decreased 17 percent to $332.7 million from $400.8 million;
  • Net loss was $89.8 million compared to net income of $18.0 million;
  • Excluding goodwill impairment and other charges, adjusted net income was $15.3 million; and
  • Excluding after-tax restructuring charges of $6.2 million, adjusted net income in last year’s fourth quarter was $24.2 million.
  • The company also reported that net cash provided by operating activities was $150.5 million in fiscal 2009 compared to $106.7 million in fiscal 2008. Net cash provided by operating activities in the fiscal quarter was $77.6 million compared to $69.3 million.

    “Our fourth-quarter results were clearly impacted by the weakening economic environment and the slowing in global trade, which reduced volumes in forwarding and logistics — particularly in the month of January,” said Eric W. Kirchner, chief executive officer of Long Beach, Calif.-based UTi Worldwide. “Total operating costs, including purchased transportation costs, also decreased significantly in the quarter, demonstrating the flexibility of our business model and the impact of our earlier cost-reduction measures. These mitigating factors did not fully offset the decrease in revenues, however, because of the speed of the volume contraction and the significant strengthening of the U.S. dollar against most currencies.”

    Kirchner said that while UTi Worldwide’s operating expenses are at their lowest level in nearly two years, the company has taken further steps since the beginning of the quarter to reduce costs in the current environment, including a salary freeze and a revision to its incentive structure for fiscal 2010, a reduction in headcount where necessary in accordance with volume declines, and a further controlling of discretionary expenses such as travel.

    “These actions are expected to reduce operating costs for fiscal 2010 by approximately $50 million from our fourth-quarter run rate,” he said. “We continue to focus on our clients, deepening our existing relationships and winning new business, while remaining disciplined on cost control.”