SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM___________TO__________
COMMISSION FILE NUMBER 1-9533
WORLD FUEL SERVICES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2459427
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 SOUTH ROYAL POINCIANA BLVD., SUITE 800
MIAMI SPRINGS, FLORIDA 33166
------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (305) 884-2001
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of September 30, 1997, the registrant had a total of 8,108,768
shares of common stock, par value $0.01 per share, issued and outstanding.
Page 1 of 17
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited, condensed consolidated financial statements of World
Fuel Services Corporation (the "Company") have been prepared in accordance with
the instructions to Form 10-Q and, therefore, omit or condense certain footnotes
and other information normally included in financial statements prepared in
accordance with generally accepted accounting principles. In the opinion of
management, all adjustments necessary for a fair presentation of the financial
information for the interim periods reported have been made. Results of
operations for the six months ended September 30, 1997, will not be necessarily
indicative of the results for the entire fiscal year ending March 31, 1998.
Page 2 of 17
<PAGE>
<TABLE>
<CAPTION>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
SEPTEMBER 30, 1997 MARCH 31, 1997
------------------ --------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 15,194,000 $ 11,035,000
Accounts receivable, net of allowance for
bad debts of $4,431,000 and $4,360,000 at
September 30 and March 31, 1997, respectively 80,371,000 70,819,000
Inventories 5,487,000 6,449,000
Prepaid expenses and other current assets 5,464,000 5,133,000
------------ ------------
Total current assets 106,516,000 93,436,000
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 601,000 601,000
Buildings and improvements 3,102,000 2,998,000
Office equipment and furniture 4,233,000 3,331,000
Plant, machinery and equipment 17,210,000 16,310,000
Construction in progress 33,000 135,000
------------ ------------
25,179,000 23,375,000
Less accumulated depreciation
and amortization 8,009,000 7,094,000
------------ ------------
17,170,000 16,281,000
------------ ------------
OTHER ASSETS:
Unamortized cost in excess of net
assets of acquired companies, net of
accumulated amortization 11,604,000 11,785,000
Other 1,925,000 1,637,000
------------ ------------
$137,215,000 $123,139,000
============ ============
</TABLE>
(Continued)
Page 3 of 17
<PAGE>
<TABLE>
<CAPTION>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, 1997 MARCH 31, 1997
------------------ --------------
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt $ 2,173,000 $ 2,191,000
Accounts payable and accrued expenses 43,617,000 37,950,000
Customer deposits 1,831,000 2,241,000
Accrued salaries and wages 1,973,000 2,187,000
Income taxes payable 2,234,000 282,000
------------ ------------
Total current liabilities 51,828,000 44,851,000
------------ ------------
LONG-TERM LIABILITIES;
Long-term debt, net of current maturities 344,000 396,000
Deferred compensation 2,095,000 2,166,000
Deferred income taxes 978,000 468,000
------------ ------------
3,417,000 3,030,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value;
100,000 shares authorized, none issued -- --
Common stock, $0.01 par value;
25,000,000 and 10,000,000 shares
authorized at Septmeber 30 and
March 31, 1997, respectively;
12,163,000 shares issued and outstanding at
September 30 and March 31, 1997 (see Note 2) 122,000 122,000
Capital in excess of par value 23,234,000 23,234,000
Retained earnings 58,671,000 51,959,000
Less treasury stock, at cost 57,000 57,000
------------ ------------
81,970,000 75,258,000
------------ ------------
$137,215,000 $123,139,000
============ ============
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these consolidated balance sheets (unaudited).
Page 4 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1997 1996
------------ ------------
Revenue $392,099,000 $351,043,000
Cost of sales 368,792,000 327,785,000
------------ ------------
Gross profit 23,307,000 23,258,000
------------ ------------
Operating expenses:
Salaries and wages 7,899,000 6,872,000
Provision for bad debts 14,000 2,534,000
Other 5,829,000 5,585,000
------------ ------------
13,742,000 14,991,000
------------ ------------
Income from operations 9,565,000 8,267,000
------------ ------------
Other income, net:
Equity in earnings of aviation
joint venture 536,000 880,000
Other, net 593,000 198,000
------------ ------------
1,129,000 1,078,000
------------ ------------
Income before income taxes 10,694,000 9,345,000
Provision for income taxes 2,766,000 2,988,000
------------ ------------
Net income $ 7,928,000 $ 6,357,000
============ ============
Net income per share $ 0.64 $ 0.52
============ ============
Weighted average shares outstanding 12,411,000 12,267,000
============ ============
The accompanying notes to the consolidated financial statements
are an integral part of these consolidated financial statements (unaudited).
Page 5 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1997 1996
------------ ------------
Revenue $205,792,000 $180,349,000
Cost of sales 193,559,000 168,723,000
------------ ------------
Gross profit 12,233,000 11,626,000
------------ ------------
Operating expenses:
Salaries and wages 4,202,000 3,666,000
Provision for bad debts (28,000) 1,216,000
Other 2,888,000 2,814,000
------------ ------------
7,062,000 7,696,000
------------ ------------
Income from operations 5,171,000 3,930,000
------------ ------------
Other income, net:
Equity in earnings of aviation
joint venture 83,000 471,000
Other, net 327,000 211,000
------------ ------------
410,000 682,000
------------ ------------
Income before income taxes 5,581,000 4,612,000
Provision for income taxes 1,456,000 1,359,000
------------ ------------
Net income $ 4,125,000 $ 3,253,000
============ ============
Net income per share $ 0.33 $ 0.27
============ ============
Weighted average shares outstanding 12,445,000 12,260,000
============ ============
The accompanying notes to the consolidated financial statements
are an integral part of these consolidated financial statements (unaudited).
Page 6 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1997 1996
------------- ------------
Cash flows from operating activities:
Net income $ 7,928,000 $ 6,357,000
----------- -----------
Adjustments to reconcile net income
to net cash provided by operating activities -
Depreciation and amortization 1,200,000 923,000
Provision for bad debts 14,000 2,534,000
Deferred income tax provision 510,000 235,000
Equity in earnings of aviation joint venture,
net (100,000) (562,000)
Changes in assets and liabilities:
(Increase) decrease in -
Accounts receivable (8,766,000) (1,474,000)
Inventories 962,000 (459,000)
Prepaid expenses and other current assets (1,259,000) (4,025,000)
Other assets (746,000) 773,000
Increase (decrease) in -
Accounts payable and accrued expenses 5,667,000 1,102,000
Customer deposits (410,000) (118,000)
Accrued salaries and wages (214,000) (422,000)
Income taxes payable 1,952,000 430,000
Deferred compensation (71,000) (43,000)
----------- -----------
Total adjustments (1,261,000) (1,106,000)
----------- -----------
Net cash provided by operating activities 6,667,000 5,251,000
----------- -----------
Cash flows from investing activities:
Additions to property, plant and equipment (1,832,000) (1,513,000)
Repayments from (advances to) aviation
joint venture 106,000 (288,000)
Proceeds from notes receivable 504,000 278,000
----------- -----------
Net cash used in investing activities $(1,222,000) $(1,523,000)
----------- -----------
(Continued)
Page 7 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Continued)
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1997 1996
------------- ------------
Cash flows from financing activities:
Dividends paid on common stock $ (1,216,000) $ (1,005,000)
Repayment of long-term debt (70,000) (40,000)
Proceeds from issuance of common stock -- 38,000
------------ ------------
Net cash used in financing activities (1,286,000) (1,007,000)
------------ ------------
Net increase in cash and cash equivalents 4,159,000 2,721,000
Cash and cash equivalents, at beginning
of period 11,035,000 12,856,000
------------ ------------
Cash and cash equivalents, at end of
period $ 15,194,000 $ 15,577,000
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 27,000 $ 50,000
============ ============
Income taxes $ 345,000 $ 2,343,000
============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Cash dividends declared, but not yet paid, totaling $608,000 and $603,000
are included in accounts payable and accrued expenses as of September 30, 1997
and 1996, respectively.
The accompanying notes to the consolidated financial statements
are an integral part of these consolidated financial statements (unaudited).
Page 8 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed for quarterly financial reporting are
the same as those disclosed in Note 1 of the Notes to Consolidated
Financial Statements included in the Company's Annual Report on Form
10-K for the year ended March 31, 1997.
(2) SUBSEQUENT EVENTS
Effective October 30, 1997, the Board of Directors approved a
three-for-two stock split for all shares of common stock held by
shareholders of record as of November 17, 1997. The shares will be
distributed on December 1, 1997. Accordingly, all share and per share
data, as appropriate, have been retroactively adjusted to reflect the
effect of this split.
Page 9 of 17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THE SIX MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE SIX MONTHS ENDED
SEPTEMBER 30, 1996
The Company's revenue for the six months ended September 30, 1997 was
$392,099,000, an increase of $41,056,000, or 11.7%, as compared to revenue of
$351,043,000 for the corresponding period of the prior year. The Company's
revenue during these periods was attributable to the following segments:
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1997 1996
------------- ------------
Aviation Fueling $195,454,000 $178,485,000
Marine Fueling 183,711,000 160,922,000
Oil Recycling 12,934,000 11,636,000
------------ ------------
Total Revenue $392,099,000 $351,043,000
============ ============
The aviation fueling segment contributed $195,454,000 in revenue for
the six months ended September 30, 1997. This represented an increase in revenue
of $16,969,000, or 9.5%, as compared to the same period of the prior year. The
increase in revenue was due to a higher volume of gallons sold, partially offset
by a decrease in the average price per gallon sold. The marine fueling segment
contributed $183,711,000 in revenue for the six months ended September 30, 1997,
an increase of $22,789,000, or 14.2%, over the corresponding period of the prior
year. The increase in revenue was related primarily to increases in the volume
and the average sales price of metric tons traded, partially offset by a
decrease in the volume and the average commission earned on metric tons
brokered. The oil recycling segment contributed $12,934,000 in revenue for the
six months ended September 30, 1997, an increase of $1,298,000, or 11.2%, as
compared to the same period of the prior year. The increase in revenue was due
to an increase in volume of recycled oil sold and higher used oil and waste
water collection revenue, partially offset by a decrease in the average sales
price per gallon of recycled oil sold.
The Company's gross profit of $23,307,000 for the six months ended
September 30, 1997 increased $49,000, or 0.2%, as compared to the same period of
the prior year. The Company's gross margin decreased from 6.6% for the six
months ended September 30, 1996, to 5.9% for the six months ended September 30,
1997. The Company's aviation fueling business achieved a 5.5% gross margin for
the six months ended September 30, 1997, as compared to 6.6% achieved for the
same period during the prior year. This resulted from a decrease in the average
gross profit per gallon sold. The Company's marine fueling segment achieved a
4.5% gross margin for the six months ended September 30, 1997, relatively
unchanged as compared to the same period of the prior year. The gross margin in
the Company's oil recycling segment decreased from 34.7% for the six months
ended September 30, 1996, to 32.5% for the six months ended September 30, 1997.
This decrease resulted from a lower gross profit per gallon of recycled oil
sold.
Total operating expenses for the six months ended September 30, 1997
were $13,742,000, a decrease of $1,249,000, or 8.3%, as compared to the same
period of the prior year. The decrease resulted from a $2,520,000 lower
provision for bad debts over the corresponding period during the prior year,
partially offset
Page 10 of 17
<PAGE>
by higher salaries and wages related principally to staff additions and
performance bonuses. In relation to revenue, total operating expenses decreased
from 4.3% to 3.5%.
The Company's income from operations for the six months ended September
30, 1997 was $9,565,000, an increase of $1,298,000, or 15.7%, as compared to the
same period of the prior year. Income from operations during these periods was
attributable to the following segments:
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1997 1996
------------- ------------
Aviation Fueling $ 6,868,000 $ 5,709,000
Marine Fueling 2,557,000 2,212,000
Oil Recycling 2,769,000 2,807,000
Corporate Overhead (2,629,000) (2,461,000)
----------- -----------
Total Income from
Operations $ 9,565,000 $ 8,267,000
=========== ===========
The aviation fueling segment's income from operations was $6,868,000
for the six months ended September 30, 1997, an increase of $1,159,000, or
20.3%, as compared to the six months ended September 30, 1996. This resulted
from a decrease in operating expenses, principally in the provision for bad
debts, partially offset by a decrease in gross profit. The marine fueling
segment earned $2,557,000 in income from operations for the six months ended
September 30, 1997, an increase of $345,000, or 15.6%, over the corresponding
period of the prior year. This increase was due to a higher gross profit,
partially offset by an increase in operating expenses. Income from operations of
the oil recycling segment decreased by $38,000, or 1.4%, for the six months
ended September 30, 1997, as compared to the same period of the prior year.
Corporate overhead costs not charged to the business segments totaled $2,629,000
for the six months ended September 30, 1997, an increase of $168,000, or 6.8%,
as compared to the same period of the prior year.
Other income for the six months ended September 30, 1997 increased
$51,000, or 4.7% over the corresponding period of the prior year, as a result of
higher interest income from improved liquidity and interest earned on
receivables, largely offset by lower equity in earnings from the Company's
aviation joint venture. The Company's effective income tax rate for the six
months ended September 30, 1997 was 25.9%, as compared to 32.0% for the same
period of the prior year. This decrease is the result of an overall decline in
foreign taxes.
Net income for the six months ended September 30, 1997 was $7,928,000,
an increase of $1,571,000, or 24.7%, as compared to net income of $6,357,000 for
the six months ended September 30, 1996. Earnings per share of $0.64 for the six
months ended September 30, 1997 exhibited a $0.12, or 23.1% increase over the
$0.52 achieved during the same period of the prior year. Per share amounts
reflect a three-for-two stock split declared October 30, 1997, with a record
date of November 17, 1997.
Page 11 of 17
<PAGE>
THE THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1996
The Company's revenue for the three months ended September 30, 1997 was
$205,792,000, an increase of $25,443,000, or 14.1%, as compared to revenue of
$180,349,000 for the corresponding period of the prior year. The Company's
revenue during these periods was attributable to the following segments:
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1997 1996
------------- ------------
Aviation Fueling $ 99,337,000 $ 90,501,000
Marine Fueling 99,429,000 83,790,000
Oil Recycling 7,026,000 6,058,000
------------ ------------
Total Revenue $205,792,000 $180,349,000
============ ============
The aviation fueling segment contributed $99,337,000 in revenue for the
three months ended September 30, 1997. This represented an increase in revenue
of $8,836,000, or 9.8%, as compared to the same period of the prior year. The
increase in revenue was due to a higher volume of gallons sold, partially offset
by a decrease in the average price per gallon sold. The marine fueling segment
contributed $99,429,000 in revenue for the three months ended September 30,
1997, an increase of $15,639,000, or 18.7%, over the corresponding period of the
prior year. The increase in revenue was related primarily to increases in the
volume of metric tons traded and brokered and a higher average sales price per
metric ton traded, partially offset by a decrease in the average commission
earned per metric ton brokered. The oil recycling segment contributed $7,026,000
in revenue for the three months ended September 30, 1997, an increase of
$968,000, or 16.0%, as compared to the same period of the prior year. The
increase in revenue was due to an increase in volume of recycled oil sold and
higher used oil and waste water collection revenue, partially offset by a
decrease in the average sales price per gallon of recycled oil sold.
The Company's gross profit of $12,233,000 for the three months ended
September 30, 1997, increased $607,000, or 5.2%, as compared to the same period
of the prior year. The Company's gross margin decreased from 6.4% for the three
months ended September 30, 1996, to 5.9% for the three months ended September
30, 1997. The Company's aviation fueling business achieved a 5.7% gross margin
for the three months ended September 30, 1997, as compared to 6.4% achieved for
the same period during the prior year. This resulted from a decrease in the
average gross profit per gallon sold. The Company's marine fueling segment
achieved a 4.5% gross margin for the three months ended September 30, 1997,
unchanged as compared to the same period of the prior year. The gross margin in
the Company's oil recycling segment decreased from 34.6% for the three months
ended September 30, 1996, to 30.0%, for the three months ended September 30,
1997. This decrease resulted from a lower gross profit per gallon of recycled
oil sold.
Total operating expenses for the three months ended September 30, 1997
were $7,062,000, a decrease of $634,000, or 8.2%, as compared to the same period
of the prior year. The decrease resulted from a $1,244,000 lower provision for
bad debts over the corresponding period during the prior year, partially offset
by higher salaries and wages. In relation to revenue, total operating expenses
decreased from 4.3% to 3.4%.
Page 12 of 17
<PAGE>
The Company's income from operations for the three months ended
September 30, 1997 was $5,171,000, an increase of $1,241,000, or 31.6%, as
compared to the same period of the prior year. Income from operations during
these periods was attributable to the following segments:
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1997 1996
------------- ------------
Aviation Fueling $ 3,694,000 $ 2,616,000
Marine Fueling 1,534,000 1,194,000
Oil Recycling 1,402,000 1,459,000
Corporate Overhead (1,459,000) (1,339,000)
----------- -----------
Total Income from
Operations $ 5,171,000 $ 3,930,000
=========== ===========
The aviation fueling segment's income from operations was $3,694,000
for the three months ended September 30, 1997, an increase of $1,078,000, or
41.2%, as compared to the three months ended September 30, 1996. This resulted
from a decrease in operating expenses, principally in the provision for bad
debts, partially offset by a decrease in gross profit which resulted from a
lower average gross profit per gallon sold. The marine fueling segment earned
$1,534,000 in income from operations for the three months ended September 30,
1997, an increase of $340,000, or 28.5%, over the corresponding period of the
prior year. This increase is attributed to a higher gross profit, which was
partially offset by higher operating expenses. Income from operations of the oil
recycling segment decreased by $57,000, or 3.9%, for the three months ended
September 30, 1997, as compared to the same period of the prior year. Corporate
overhead costs not charged to the business segments totaled $1,459,000 for the
three months ended September 30, 1997, an increase of $120,000, or 9.0%, as
compared to the same period of the prior year.
Other income decreased $272,000 over the same period a year ago,
primarily as a result of lower earnings from the aviation joint venture. The
Company's effective income tax rate for the three months ended September 30,
1997 was 26.1%, as compared to 29.5% for the same period of the prior year. The
decrease is the result of an overall decline in foreign taxes.
Net income for the three months ended September 30, 1997 was
$4,125,000, an increase of $872,000, or 26.8%, as compared to net income of
$3,253,000 for the three months ended September 30, 1996. Earnings per share of
$0.33 for the three months ended September 30, 1997 exhibited a $0.06, or 22.2%
increase over the $0.27 achieved during the same period of the prior year (per
share amounts have been restated to reflect the stock split).
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents amounted to $15,194,000 at September 30,
1997, as compared to $11,035,000 at March 31, 1997. The principal sources of
cash and cash equivalents during the first six months of fiscal year 1998 were
$6,667,000 provided by operating activities, partially offset by $1,832,000 for
capital expenditures and $1,216,000 in dividends paid on common stock. Other
components of changes in cash and cash equivalents are detailed in the
Consolidated Statements of Cash Flows.
Page 13 of 17
<PAGE>
Working capital as of September 30, 1997 was $54,688,000, exhibiting a
$6,103,000 increase from working capital as of March 31, 1997. As of September
30, 1997, the Company's accounts receivable, excluding the allowance for bad
debts, amounted to $84,802,000, an increase of $9,623,000, as compared to the
March 31, 1997 balance. In the aggregate, accounts payable, accrued expenses and
customer deposits increased $5,257,000. The net increase in trade credit of
$4,366,000 was primarily attributable to the marine segment. The allowance for
bad debts as of September 30, 1997 amounted to $4,431,000, an increase of
$71,000 compared to the March 31, 1997 balance. During the first six months of
fiscal year 1998, the Company charged $14,000 to the provision for bad debts and
had recoveries in excess of charge-offs of $57,000. Inventories at September 30,
1997 were $962,000 lower when compared to March 31, 1997, related primarily to
the aviation segment.
Income taxes payable at September 30, 1997 increased $1,952,000, when
compared to March 31, 1997. This increase resulted from foreign income taxes for
the six months ended September 30, 1997, which are not currently payable, and
U.S. tax overpayments as of March 31, 1997 applied to the current fiscal year
taxes payable.
Capital expenditures for the first six months of fiscal year 1998,
consisted primarily of $898,000 in office and computer equipment and $906,000 in
plant, machinery and equipment related to the recycled oil segment. During the
balance of fiscal year 1998, the Company anticipates spending approximately
$1,500,000 to upgrade plant, machinery and equipment. The Company also
anticipates spending an estimated $1,000,000 over the next several years to
clean up contamination which was present at one of the Company's sites when it
was acquired by the Company. The clean up costs will be capitalized as part of
the cost of the site, up to the fair market value of the site.
Stockholders' equity amounted to $81,970,000, or $6.74 per share at
September 30, 1997, compared to $75,258,000, or $6.19 per share at March 31,
1997. This increase of $6,712,000 was due to $7,928,000 in earnings for the six
months ended September 30, 1997, reduced by $1,216,000 in declared dividends.
The Company's working capital requirements are not expected to vary
substantially for the balance of fiscal year 1998. The Company expects to meet
its cash requirements for the balance of fiscal year 1998 from existing cash,
operations and additional borrowings, as necessary, under its existing credit
facility. The Company's business has not been significantly affected by
inflation during the periods discussed in this report.
Page 14 of 17
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
Effective October 30, 1997, the Board of Directors approved a
three-for-two stock split for all shares of common stock held by
shareholders of record as of November 17, 1997. The shares will be
distributed on December 1, 1997.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of stockholders was held on August 18,
1997.
The matters voted on at the annual meeting were: to elect the Directors
of the Company, to amend the Certificate of Incorporation to increase
the number of authorized shares of Common Stock from 10 million shares
to 25 million shares, to increase the number of shares of Common Stock
authorized under the 1993 Non-Employee Directors Stock Option Plan from
50,000 shares to 100,000 shares, and to adopt the Company's 1996
Employee Stock Option Plan. All of the Company's director nominees were
elected and all proposals were adopted.
ELECTION OF DIRECTORS
NAME OF DIRECTOR VOTES FOR VOTES AGAINST
---------------- --------- -------------
1. Ralph R. Weiser 6,201,594 484,391
2. Jerrold Blair 6,203,264 482,721
3. Ralph R. Feuerring 6,202,364 483,621
4. John R. Benbow 6,201,214 484,771
5. Phillip S. Bradley 6,201,914 484,071
6. Myles Klein 6,203,164 484,821
7. Michael J. Kasbar 6,203,264 482,721
8. Paul H. Stebbins 6,203,264 482,721
9. Luis R. Tinoco 6,202,114 483,871
Page 15 of 17
<PAGE>
PART II. OTHER INFORMATION (CONTINUED)
INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- ------------- ---------------
5,615,879 1,027,419 42,685
INCREASE IN NUMBER OF SHARES OF COMMON STOCK RESERVED
UNDER THE 1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- ------------- ---------------
5,103,723 144,908 58,373
ADOPTION OF THE 1996 EMPLOYEE STOCK OPTION PLAN
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- ------------- ---------------
5,161,279 86,079 59,645
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
27 Financial Data Schedule.
(a) During the three months ended September 30, 1997, the Company did
not file any reports on Form 8-K.
Page 16 of 17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: OCTOBER 31, 1997 WORLD FUEL SERVICES CORPORATION
/s/ JERROLD BLAIR
-----------------
JERROLD BLAIR
PRESIDENT
/s/ CARLOS A. ABAUNZA
---------------------
CARLOS A. ABAUNZA
CHIEF FINANCIAL OFFICER
(Principal Financial and Accounting Officer)
Page 17 of 17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S SEPTEMBER 30, 1997 UNAUDITED FINANCIAL STATEMENTS FILED ON FORM 10-Q
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 15,194,000
<SECURITIES> 0
<RECEIVABLES> 84,802,000
<ALLOWANCES> 4,431,000
<INVENTORY> 5,487,000
<CURRENT-ASSETS> 106,516,000
<PP&E> 25,179,000
<DEPRECIATION> 8,009,000
<TOTAL-ASSETS> 137,215,000
<CURRENT-LIABILITIES> 51,828,000
<BONDS> 0
0
0
<COMMON> 122,000
<OTHER-SE> 81,848,000
<TOTAL-LIABILITY-AND-EQUITY> 137,215,000
<SALES> 392,099,000
<TOTAL-REVENUES> 392,099,000
<CGS> 368,792,000
<TOTAL-COSTS> 368,792,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 14,000
<INTEREST-EXPENSE> 140,000
<INCOME-PRETAX> 10,694,000
<INCOME-TAX> 2,766,000
<INCOME-CONTINUING> 7,928,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,928,000
<EPS-PRIMARY> 0.64
<EPS-DILUTED> 0.64
</TABLE>
