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 DECEMBER 31, 1996
[ ] 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 December 31, 1996, the registrant had a total of 8,042,518 shares
of common stock, par value $0.01 per share, issued and outstanding.
<PAGE>
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 nine months ended December 31, 1996, will not be necessarily
indicative of the results for the entire fiscal year ending March 31, 1997.
Page 2 of 15
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
DECEMBER 31, MARCH 31,
1996 1996
------------ ------------
CURRENT ASSETS:
Cash and cash equivalents $ 15,990,000 $ 12,856,000
Accounts receivable, net of allowance
for bad debts of $4,397,000 and
$4,363,000 at December 31 and
March 31, 1996, respectively 73,889,000 62,745,000
Inventories 6,077,000 4,592,000
Prepaid expenses and other assets 6,647,000 3,059,000
------------ ------------
Total current assets 102,603,000 83,252,000
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 601,000 601,000
Buildings and improvements 2,977,000 2,890,000
Office equipment and furniture 3,181,000 2,645,000
Plant, machinery and equipment 14,781,000 14,171,000
Construction in progress 880,000 67,000
------------ ------------
22,420,000 20,374,000
Less accumulated depreciation
and amortization 6,801,000 5,856,000
------------ ------------
15,619,000 14,518,000
------------ ------------
OTHER ASSETS:
Unamortized cost in excess of net
assets of acquired companies, net of
accumulated amortization 11,876,000 12,123,000
Other 1,520,000 2,081,000
------------ ------------
$131,618,000 $111,974,000
============ ============
(Continued)
Page 3 of 15
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(CONTINUED)
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, MARCH 31,
1996 1996
------------ -------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 1,937,000 $ 1,944,000
Accounts payable and accrued expenses 40,774,000 37,808,000
Customer deposits 2,634,000 1,467,000
Accrued salaries and wages 1,905,000 2,055,000
Income taxes payable 1,545,000 432,000
------------ ------------
Total current liabilities 48,795,000 43,706,000
------------ ------------
LONG-TERM LIABILITIES:
Long-term debt, net of current maturities 9,075,000 2,103,000
Deferred compensation 1,666,000 1,572,000
Deferred income taxes 351,000 843,000
------------ ------------
11,092,000 4,518,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value;
100,000 shares authorized, none issued -- --
Common stock, $0.01 par value;
10,000,000 shares authorized, 8,043,000 and
8,039,000 shares issued and outstanding
at December 31 and March 31, 1996, respectively 81,000 80,000
Capital in excess of par 22,652,000 22,615,000
Retained earnings 49,055,000 41,112,000
Less treasury stock, at cost 57,000 57,000
------------ ------------
71,731,000 63,750,000
------------ ------------
$131,618,000 $111,974,000
============ ============
Page 4 of 15
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
NINE MONTHS ENDED DECEMBER 31,
1996 1995
------------- ------------
Revenue $558,708,000 $451,289,000
Cost of sales 523,734,000 421,876,000
------------ ------------
Gross profit 34,974,000 29,413,000
------------ ------------
Operating expenses:
Salaries and wages 10,859,000 9,662,000
Provision for bad debts 3,636,000 1,185,000
Other 8,238,000 7,124,000
------------ ------------
22,733,000 17,971,000
------------ ------------
Income from operations 12,241,000 11,442,000
------------ ------------
Other income, net:
Equity in earnings of aviation joint venture 1,436,000 1,236,000
Other, net 237,000 43,000
------------ ------------
1,673,000 1,279,000
------------ ------------
Income before income taxes 13,914,000 12,721,000
Provision for income taxes 4,162,000 4,660,000
------------ ------------
Net income $ 9,752,000 $ 8,061,000
============ ============
Net income per share $ 1.19 $ 1.00
============ ============
Weighted average shares outstanding 8,189,000 8,072,000
============ ============
Page 5 of 15
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31,
1996 1995
------------- -------------
Revenue $207,665,000 $166,671,000
Cost of sales 195,949,000 156,343,000
------------ ------------
Gross profit 11,716,000 10,328,000
------------ ------------
Operating expenses:
Salaries and wages 3,987,000 3,467,000
Provision for bad debts 1,102,000 349,000
Other 2,653,000 2,476,000
------------ ------------
7,742,000 6,292,000
------------ ------------
Income from operations 3,974,000 4,036,000
------------ ------------
Other income, net:
Equity in earnings of aviation joint venture 556,000 380,000
Other, net 39,000 75,000
------------ ------------
595,000 455,000
------------ ------------
Income before income taxes 4,569,000 4,491,000
Provision for income taxes 1,174,000 1,630,000
------------ ------------
Net income $ 3,395,000 $ 2,861,000
============ ============
Net income per share $ 0.41 $ 0.35
============ ============
Weighted average shares outstanding 8,209,000 8,111,000
============ ============
Page 6 of 15
<PAGE>
<TABLE>
<CAPTION>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,752,000 $ 8,061,000
------------ ------------
Adjustments to reconcile net income to net cash
(used in) provided by operating activities -
Depreciation and amortization 1,401,000 1,231,000
Provision for bad debts 3,636,000 1,185,000
Deferred income taxes (492,000) 641,000
Equity in earnings of aviation joint venture, net (416,000) (74,000)
Other non-cash operating charges (credits) 5,000 (54,000)
Changes in assets and liabilities, net of dispositions:
(Increase) decrease in -
Accounts receivable (14,780,000) (25,242,000)
Inventories (1,485,000) (755,000)
Prepaid expenses and other current assets (3,545,000) 778,000
Other assets 410,000 (213,000)
Increase (decrease) in -
Accounts payable and accrued expenses 2,765,000 16,195,000
Customer deposits 1,167,000 (695,000)
Accrued salaries and wages (150,000) 1,125,000
Income taxes payable 1,113,000 (704,000)
Deferred compensation 94,000 20,000
------------ ------------
Total adjustments (10,277,000) (6,562,000)
------------ ------------
Net cash (used in) provided by operating activities
(525,000) 1,499,000
------------ ------------
Cash flows from investing activities:
Additions to property, plant and equipment (2,120,000) (1,062,000)
Advances to aviation joint venture (288,000) --
Repayments from aviation joint venture 288,000 338,000
Proceeds from disposition of assets 29,000 325,000
Proceeds from notes receivable 380,000 1,940,000
Additional expenditures for acquisition of business (8,000) (40,000)
------------ ------------
Net cash (used in) provided by investing activities $ (1,719,000) $ 1,501,000
------------ ------------
</TABLE>
(Continued)
Page 7 of 15
<PAGE>
<TABLE>
<CAPTION>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(CONTINUED)
NINE MONTHS ENDED DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from financing activities:
Borrowings under revolving credit facility $ 7,000,000 $ 2,000,000
Dividends paid on common stock (1,608,000) (1,452,000)
Repayment of long-term debt (52,000) (241,000)
Proceeds from issuance of common stock 38,000 863,000
------------ ------------
Net cash provided by financing activities 5,378,000 1,170,000
------------ ------------
Net increase in cash and cash equivalents 3,134,000 4,170,000
Cash and cash equivalents, at beginning of period 12,856,000 10,907,000
------------ ------------
Cash and cash equivalents, at end of period $ 15,990,000 $ 15,077,000
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 52,000 $ 52,000
============ ============
Income taxes $ 3,617,000 $ 4,996,000
============ ============
</TABLE>
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
As partial consideration for the sale of certain assets on June 1, 1995, the
Company received a $979,000 note receivable, with an original maturity date
of July 1, 2007. In October 1995, the entire outstanding principal balance
was collected in cash, net of a $98,000 pre-payment discount.
Cash dividends declared, but not yet paid, totaling $603,000 and $402,000,
are included in accounts payable and accrued expenses as of December 31, 1996
and 1995, respectively.
Page 8 of 15
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THE NINE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO THE NINE MONTHS ENDED
DECEMBER 31, 1995
The Company's revenue for the nine months ended December 31, 1996 was
$558,708,000, an increase of $107,419,000 or 23.8%, as compared to revenue of
$451,289,000 for the corresponding period of the prior year. The Company's
revenue during these periods was attributable to the following segments:
NINE MONTHS ENDED DECEMBER 31,
1996 1995
------------- --------------
Aviation Fueling $ 276,228,000 $ 214,180,000
Marine Fueling 264,887,000 223,641,000
Oil Recycling 17,593,000 13,468,000
-------------- --------------
Total Revenue $ 558,708,000 $ 451,289,000
============== ==============
The aviation fueling segment contributed $276,228,000 in revenue for the nine
months ended December 31, 1996. This represented an increase in revenue of
$62,048,000, or 29.0%, as compared to the same period of the prior year. The
increase in revenue was due to an increase in volume and the average price per
gallon sold. The marine fueling segment contributed $264,887,000 in revenue for
the nine months ended December 31, 1996, an increase of $41,246,000, or 18.4%,
over the corresponding period of the prior year. The increase in revenue was
related to an increase in the average sales price per metric ton, partially
offset by a slight decrease in the volume of metric tons brokered. The oil
recycling segment contributed $17,593,000 in revenue for the nine months ended
December 31, 1996, an increase of $4,125,000, or 30.6%, as compared to the same
period of the prior year. The increase in revenue was due to an increase in
volume and the average sales price per gallon of recycled oil sold, and higher
used oil and waste water collection revenue.
The Company's gross profit of $34,974,000 for the nine months ended December 31,
1996, increased $5,561,000, or 18.9%, as compared to the same period of the
prior year. The Company's gross margin decreased slightly from 6.5% for the nine
months ended December 31, 1995, to 6.3% for the nine months ended December 31,
1996. The decrease resulted from an overall increase in sales prices across all
three segments, despite increases in the average gross profit per gallon and
metric ton sold.
The Company's aviation fueling business achieved a 6.3% gross margin for the
nine months ended December 31, 1996, as compared to 7.1% achieved for the same
period during the prior year. The Company's marine fueling segment achieved a
4.3% gross margin for the nine months ended December 31, 1996, as compared to a
4.4% gross margin for the same period of the prior year. The gross margin in the
Company's oil recycling segment increased from 33.2% for the nine months ended
December 31, 1995, to 34.8% for the nine months ended December 31, 1996.
Page 9 of 15
<PAGE>
Total operating expenses for the nine months ended December 31, 1996 were
$22,733,000, an increase of $4,762,000, or 26.5%, as compared to the same period
of the prior year. Operating expenses increased partly as a result of the
Company's international expansion. During this period, the Company devoted
substantial resources to the expansion of its international infrastructure. The
Company added professional staff, implemented telecommunications, sales,
operational and accounting systems, and established an international
headquarters office in Costa Rica. The increase in operating expenses also
resulted from a $2,402,000 higher provision for bad debts in the aviation
fueling segment.
The Company's income from operations for the nine months ended December 31, 1996
was $12,241,000, an increase of $799,000, or 7.0%, as compared to the same
period of the prior year. Income from operations during these periods was
attributable to the following segments:
NINE MONTHS ENDED DECEMBER 31,
1996 1995
-------------- --------------
Aviation Fueling $ 8,146,000 $ 10,403,000
Marine Fueling 3,558,000 2,332,000
Oil Recycling 4,159,000 2,699,000
Corporate Overhead (3,622,000) (3,992,000)
-------------- --------------
Total Income from Operations $ 12,241,000 $ 11,442,000
============== ==============
The aviation fueling segment's income from operations was $8,146,000 for the
nine months ended December 31, 1996, a decrease of $2,257,000, or 21.7%, as
compared to the nine months ended December 31, 1995. This resulted from an
increase in operating expenses, due to expenses incurred in international
expansion, as discussed above, and a higher provision for bad debts in the
aviation segment. The increase in operating expenses was partially offset by an
increase in the volume and gross profit of product sold. The Company's aviation
fueling segment also earned $1,436,000 from its joint venture during the nine
months ended December 31, 1996, as compared to $1,236,000 during the same period
of the prior year. The results of the joint venture are shown in other income.
The marine fueling segment earned $3,558,000 in income from operations for the
nine months ended December 31, 1996, an increase of $1,226,000, or 52.6% over
the corresponding period of the prior year. This increase was related primarily
to an increase in the average gross profit per metric ton, partially offset by a
decrease in the volume of metric tons brokered and higher operating expenses.
Income from operations of the oil recycling segment increased by $1,460,000, or
54.1%, for the nine months ended December 31, 1996, as compared to the same
period of the prior year. This improvement resulted from an increase in the
volume and average gross profit per gallon of recycled oil sold. Corporate
overhead costs not charged to the business segments totaled $3,622,000 for the
nine months ended December 31, 1996, a decrease of $370,000, or 9.3%, as
compared to the same period of the prior year.
The Company's effective income tax rate for the nine months ended December 31,
1996 was 29.9%, as compared to 36.6% for the same period of the prior year. The
decrease is the result of an overall decline in foreign income taxes.
Net income for the nine months ended December 31, 1996 was $9,752,000, an
increase of $1,691,000, or 21.0%, as compared to net income for the nine months
ended December 31, 1995. Earnings per share
Page 10 of 15
<PAGE>
of $1.19 for the nine months ended December 31, 1996 exhibited a $0.19, or 19.0%
increase, over the $1.00 achieved during the same period of the prior year.
THE THREE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO THE THREE MONTHS ENDED
DECEMBER 31, 1995
The Company's revenue for the three months ended December 31, 1996 was
$207,665,000, an increase of $40,994,000, or 24.6%, as compared to revenue of
$166,671,000 for the corresponding period of the prior year. The Company's
revenue during these periods was attributable to the following segments:
THREE MONTHS ENDED DECEMBER 31,
1996 1995
-------------- --------------
Aviation Fueling $ 97,743,000 $ 77,782,000
Marine Fueling 103,965,000 83,705,000
Oil Recycling 5,957,000 5,184,000
-------------- --------------
Total Revenue $ 207,665,000 $ 166,671,000
============== ==============
The aviation fueling segment contributed $97,743,000 in revenue for the three
months ended December 31, 1996. This represented an increase in revenue of
$19,961,000, or 25.7%, as compared to the same period of the prior year. The
increase in revenue was due to an increase in the average price per gallon sold,
which was partially offset by a slight decrease in volume. The marine fueling
segment contributed $103,965,000 in revenue for the three months ended December
31, 1996, an increase of $20,260,000, or 24.2%, over the corresponding period of
the prior year. The increase in revenue was related to an increase in the
average price per metric ton, partially offset by a decrease in volume traded
and brokered. The oil recycling segment contributed $5,957,000 in revenue for
the three months ended December 31, 1996, an increase of $773,000, or 14.9%, as
compared to the same period of the prior year. The increase in revenue was due
to an increase in the average sales price per gallon of recycled oil sold, and
higher used oil and waste water collection revenue, partially offset by a
decrease in volume of recycled oil sales.
The Company's gross profit of $11,716,000 for the three months ended December
31, 1996, increased $1,388,000, or 13.4%, as compared to the same period of the
prior year. The Company's gross margin decreased from 6.2% for the three months
ended December 31, 1995, to 5.6% for the three months ended December 31, 1996.
The decrease resulted from an overall increase in sales prices across all three
segments, despite increases in the average gross profit per gallon and metric
ton sold.
The Company's aviation fueling business achieved a 5.7% gross margin for the
three months ended December 31, 1996, as compared to 6.4% achieved for the same
period during the prior year. The Company's marine fueling segment achieved a
3.9% gross margin for the three months ended December 31, 1996, as compared to a
4.3% gross margin for the same period of the prior year. The gross margin in the
Company's oil recycling segment increased from 34.0% for the three months ended
December 31, 1995, to 35.1%, for the three months ended December 31, 1996.
Page 11 of 15
<PAGE>
Total operating expenses for the three months ended December 31, 1996 were
$7,742,000, an increase of $1,450,000, or 23.0%, as compared to the same period
of the prior year. Operating expenses increased partly as a result of the
Company's international expansion, as previously discussed. The increase also
resulted from a higher provision for bad debts in the aviation fueling segment.
The Company's income from operations for the three months ended December 31,
1996 was $3,974,000, a decrease of $62,000, or 1.5%, 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 DECEMBER 31,
1996 1995
------------- --------------
Aviation Fueling $ 2,437,000 $ 3,425,000
Marine Fueling 1,346,000 879,000
Oil Recycling 1,352,000 1,227,000
Corporate Overhead (1,161,000) (1,495,000)
-------------- --------------
Total Income from Operations $ 3,974,000 $ 4,036,000
============== ==============
The aviation fueling segment's income from operations was $2,437,000 for the
three months ended December 31, 1996, a decrease of $988,000, or 28.8%, as
compared to the three months ended December 31, 1995. This resulted from an
increase in operating expenses,as previously discussed, partially offset by an
increase in the average gross profit per gallon. The Company's aviation fueling
segment also earned $556,000 from its joint venture during the three months
ended December 31, 1996, as compared to $380,000 during the same period of the
prior year. The results of the joint venture are shown in other income. The
marine fueling segment earned $1,346,000 in income from operations for the three
months ended December 31, 1996, an increase of $467,000, or 53.1% over the
corresponding period of the prior year. This increase was related primarily to
an increase in the average gross profit per metric ton, partially offset by a
decrease in volume. Income from operations of the oil recycling segment
increased by $125,000, or 10.2%, for the three months ended December 31, 1996,
as compared to the same period of the prior year. This improvement resulted from
an increase in the average gross profit per recycled oil gallon sold, partially
offset by an increase in operating expenses and a decrease in volume. Corporate
overhead costs not charged to the business segments totaled $1,161,000 for the
three months ended December 31, 1996, a decrease of $334,000, or 22.3%, as
compared to the same period of the prior year.
The Company's effective income tax rate for the three months ended December 31,
1996 was 25.7%, as compared to 36.3% for the same period of the prior year. The
decrease is the result of an overall decline in foreign income taxes.
Net income for the three months ended December 31, 1996, was $3,395,000, an
increase of $534,000, or 18.7%, as compared to net income for the three months
ended December 31, 1995. Earnings per share of
Page 12 of 15
<PAGE>
$0.41 for the three months ended December 31, 1996 exhibited a $0.06, or 17.1%
increase over the $0.35 achieved during the same period of the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents amounted to $15,990,000 at December 31, 1996, as
compared to $12,856,000 at March 31, 1996. The principal sources of cash for the
first nine months of fiscal year 1997 were $7,000,000 in net borrowings under
the Company's revolving credit facility and $380,000 from collections on notes
receivable. Partially offsetting the increase in cash and cash equivalents was
$525,000 in net cash used in operating activities, $2,120,000 for capital
expenditures and $1,608,000 in dividends paid on common stock. Other components
of changes in cash and cash equivalents are detailed in the Consolidated
Statements of Cash Flows.
Working capital as of December 31, 1996 was $53,808,000, exhibiting a
$14,262,000 increase from working capital as of March 31, 1996. As of December
31, 1996, the Company's accounts receivable, excluding the allowance for bad
debts, amounted to $78,286,000, an increase of $11,178,000, as compared to the
March 31, 1996 balance. In the aggregate, accounts payable, accrued expenses,
and customer deposits increased $4,133,000. The net increase in trade credit of
$7,046,000 was primarily attributable to rising fuel prices in the aviation and
marine segments. The allowance for bad debts as of December 31, 1996 amounted to
$4,397,000, an increase of $34,000 compared to the March 31, 1996 balance.
During the first nine months of fiscal year 1997, the Company recorded a
$3,636,000 provision for bad debts and had charge-offs in excess of recoveries
of $3,602,000. The provision and charge-offs are primarily related to the
Company's aviation segment.
Prepaid and other current assets as of December 31, 1996, were $6,647,000,
exhibiting an increase of $3,588,000 over the March 31, 1996 balance. This is
partially related to increases in prepaid fuel and prepaid insurance totaling
$1,659,000. In addition, during fiscal year 1997, accounts receivable totaling
$898,000 were converted to short-term notes receivable and the Company
reclassified $1,312,000 related to its aviation joint venture investment, which
was previously classified as non-current, to other current assets.
Capital expenditures, which amounted to $2,120,000 for the first nine months of
fiscal year 1997, consisted primarily of $570,000 in computer and office
equipment, $555,000 in plant, machinery and equipment, and $930,000 in
construction in progress to increase the storage capacity at the Company's
Louisiana used oil facility. During the balance of fiscal year 1997 and
throughout 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.
The Company's working capital requirements are not expected to vary
substantially for the balance of fiscal year 1997 and throughout fiscal year
1998. The Company expects to meet its cash requirements for the balance of
fiscal year 1997 and throughout 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 13 of 15
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In December 1996, the South Carolina Department of Health and
Environmental Control ("DHEC") sued the Company, along with other
defendants (or potentially responsible persons), in the U.S. District
Court of South Carolina, to recover response or cleanup costs for the
Aqua-Tech Waste Disposal site near Greer, South Carolina under the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. Sec. 9601, et. seq. (CERCLA or Superfund) and state law. The
suit relates to disposal activities conducted from 1983 to 1986 by an
unrelated third party. DHEC seeks to hold the Company responsible for
the disposal activities of this third party because an indirect
subsidiary of the Company, Resource Recovery Atlantic, Inc., acquired
selected assets from this third party in May 1988. The Company believes
it has valid defenses to this suit and intends to vigorously defend
this action. There can be no assurance the Company will prevail in this
legal proceeding, and management cannot estimate at this time the
exposure of the Company if it does not prevail in the proceeding.
Except for the foregoing, there are no material legal proceedings to
which the Company or any of its subsidiaries is a party.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) During the three months ended December 31, 1996, the Company did
not file any reports on Form 8-K.
(b) Exhibit 27 Financial Data Schedule (for SEC use only).
Page 14 of 15
<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: JANUARY 30, 1997 WORLD FUEL SERVICES CORPORATION
-------------------------------
/s/ JERROLD BLAIR
-------------------------------
Jerrold Blair
President
/s/ CARLOS A. ABAUNZA
-------------------------------
Carlos A. Abaunza
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S DECEMBER 31, 1996 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> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 15,990,000
<SECURITIES> 0
<RECEIVABLES> 78,286,000
<ALLOWANCES> 4,397,000
<INVENTORY> 6,077,000
<CURRENT-ASSETS> 102,603,000
<PP&E> 22,420,000
<DEPRECIATION> 6,801,000
<TOTAL-ASSETS> 131,618,000
<CURRENT-LIABILITIES> 48,795,000
<BONDS> 0
0
0
<COMMON> 81,000
<OTHER-SE> 71,650,000
<TOTAL-LIABILITY-AND-EQUITY> 131,618,000
<SALES> 558,708,000
<TOTAL-REVENUES> 558,708,000
<CGS> 523,734,000
<TOTAL-COSTS> 523,734,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 3,636,000
<INTEREST-EXPENSE> 328,000
<INCOME-PRETAX> 13,914,000
<INCOME-TAX> 4,162,000
<INCOME-CONTINUING> 9,752,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,752,000
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.19
</TABLE>
