UTi Worldwide posts lower 2Q revenues, income

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UTi Worldwide Inc. today, Sept. 3, reported financial results for its fiscal 2010 second quarter ended July 31 vs. 2009 results:

  • Revenues decreased 33 percent to $840.5 million from $1,255.1 million;
  • Net revenues (revenues minus purchased transportation costs) decreased 18 percent to $339.4 million from $416.0 million;
  • Operating income decreased 49 percent to $22.4 million from $43.6 million;
  • Income from continuing operations attributable to UTi Worldwide Inc. was $11.8 million compared to $28.5 million. Severance and related charges, as well as currency translation, had a negative impact in the current period; and
  • Cash flow from operations increased 44 percent to $51.5 million from $35.7 million.
  • “While I am not satisfied with the quarter’s results, we are on track with our sales initiatives and transformation efforts, and they are expected to drive improvement in the future,” said Eric W. Kirchner, chief executive officer of Long Beach, Calif.-based UTi Worldwide. “Results in the quarter continued to be impacted by weak economic and industry conditions.”

    Kirchner said the pace of volume declines moderated throughout the quarter, primarily due to seasonal factors. “It is too early to say that conditions have begun to improve, but the environment appears to be more stable than we have seen in some time, albeit at levels that are lower than the prior year,” he said. “Lower purchased transportation costs mitigated the impact of declining volumes, but more recently these costs have begun to increase, consistent with the seasonal build.”

    Kirchner said the company anticipated the weak volume environment and proactively took steps to reduce annualized operating expenses, excluding purchased transportation costs, in fiscal 2010 by $50 million compared to the company’s fiscal 2009 fourth quarter adjusted operating expense level.