UNITED STATES
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, 1998
[ ] 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 October 20, 1998, the registrant had a total of 12,361,231 shares
of common stock, par value $0.01 per share, issued and outstanding.
Page 1 of 17
<PAGE>
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, 1998, will not be necessarily
indicative of the results for the entire fiscal year ending March 31, 1999.
Page 2 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
SEPTEMBER 30, MARCH 31,
1998 1998
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 11,125,000 $ 14,459,000
Accounts receivable, net of allowance for
bad debts of $4,665,000 and $4,594,000
at September 30 and March 31, 1998, respectively 90,047,000 81,648,000
Inventories 5,468,000 5,504,000
Prepaid expenses and other current assets 11,869,000 5,937,000
------------ ------------
Total current assets 118,509,000 107,548,000
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 1,054,000 1,054,000
Buildings and improvements 3,124,000 3,098,000
Office equipment and furniture 5,918,000 5,286,000
Plant, machinery and equipment 18,578,000 17,458,000
Construction in progress 1,262,000 230,000
------------ ------------
29,936,000 27,126,000
Less accumulated depreciation
and amortization 10,166,000 9,065,000
------------ ------------
19,770,000 18,061,000
------------ ------------
OTHER ASSETS:
Unamortized cost in excess of net
assets of acquired companies, net of
accumulated amortization 15,162,000 15,402,000
Other 1,708,000 2,248,000
------------ ------------
$155,149,000 $143,259,000
============ ============
(Continued)
Page 3 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, MARCH 31,
1998 1998
------------ ------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 113,000 $ 119,000
Accounts payable and accrued expenses 43,886,000 40,560,000
Customer deposits 2,492,000 2,536,000
Accrued salaries and wages 2,543,000 1,851,000
Income taxes payable 2,937,000 2,381,000
------------ ------------
Total current liabilities 51,971,000 47,447,000
------------ ------------
LONG-TERM LIABILITIES 5,839,000 3,901,000
------------ ------------
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 shares authorized; 12,423,000 and
12,481,000 shares issued and outstanding at
September 30 and March 31, 1998, respectively 125,000 125,000
Capital in excess of par value 26,793,000 26,479,000
Retained earnings 71,716,000 65,364,000
Less treasury stock, at cost 1,295,000 57,000
------------ ------------
97,339,000 91,911,000
------------ ------------
$155,149,000 $143,259,000
============ ============
Page 4 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1998 1997
------------ ------------
Revenue $373,351,000 $392,099,000
Cost of sales 343,692,000 368,792,000
------------ ------------
Gross profit 29,659,000 23,307,000
------------ ------------
Operating expenses:
Salaries and wages 10,549,000 7,899,000
Provision for bad debts 2,072,000 14,000
Other 7,928,000 5,829,000
------------ ------------
20,549,000 13,742,000
------------ ------------
Income from operations 9,110,000 9,565,000
Other income, net 540,000 1,129,000
------------ ------------
Income before income taxes 9,650,000 10,694,000
Provision for income taxes 2,049,000 2,766,000
------------ ------------
Net income $ 7,601,000 $ 7,928,000
============ ============
Basic earnings per common share $ 0.61 $ 0.65
============ ============
Weighted average shares 12,496,000 12,163,000
============ ============
Diluted earnings per common share $ 0.60 $ 0.64
============ ============
Weighted average shares -- diluted 12,708,000 12,411,000
============ ============
Page 5 of 17
<PAGE>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1998 1997
------------- -------------
Revenue $ 180,320,000 $ 205,792,000
Cost of sales 165,517,000 193,559,000
------------- -------------
Gross profit 14,803,000 12,233,000
------------- -------------
Operating expenses:
Salaries and wages 5,592,000 4,202,000
Provision for bad debts 834,000 (28,000)
Other 4,156,000 2,888,000
------------- -------------
10,582,000 7,062,000
------------- -------------
Income from operations 4,221,000 5,171,000
Other income, net 287,000 410,000
------------- -------------
Income before income taxes 4,508,000 5,581,000
Provision for income taxes 988,000 1,456,000
------------- -------------
Net income $ 3,520,000 $ 4,125,000
============= =============
Basic earnings per common share $ 0.28 $ 0.34
============= =============
Weighted average shares 12,497,000 12,163,000
============= =============
Diluted earnings per common share $ 0.28 $ 0.33
============= =============
Weighted average shares -- diluted 12,653,000 12,445,000
============= =============
Page 6 of 17
<PAGE>
<TABLE>
<CAPTION>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED SEPTEMBER 30,
----------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,601,000 $ 7,928,000
------------ ------------
Adjustments to reconcile net income
to net cash (used in) provided by operating activities--
Depreciation and amortization 1,394,000 1,200,000
Provision for bad debts 2,072,000 14,000
Deferred income tax provision 170,000 510,000
Other non-cash operating credits (69,000) (100,000)
Changes in assets and liabilities:
(Increase) decrease in--
Accounts receivable (14,146,000) (8,766,000)
Inventories 36,000 962,000
Prepaid expenses and other current assets (1,941,000) (1,259,000)
Other assets 510,000 (746,000)
Increase (decrease) in--
Accounts payable and accrued expenses 3,327,000 5,667,000
Customer deposits (44,000) (410,000)
Accrued salaries and wages 692,000 (214,000)
Income taxes payable 556,000 1,952,000
Deferred compensation (282,000) (71,000)
------------ ------------
Total adjustments (7,725,000) (1,261,000)
------------ ------------
Net cash (used in) provided by operating activities (124,000) 6,667,000
------------ ------------
Cash flows from investing activities:
Additions to property, plant and equipment (2,829,000) (1,832,000)
(Advances to) repayments from aviation
joint venture (200,000) 106,000
Issuance of notes receivable (300,000) --
Proceeds from notes receivable 267,000 504,000
------------ ------------
Net cash used in investing activities $ (3,062,000) $ (1,222,000)
------------ ------------
</TABLE>
(Continued)
Page 7 of 17
<PAGE>
<TABLE>
<CAPTION>
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Continued)
SIX MONTHS ENDED SEPTEMBER 30,
------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from financing activities:
Dividends paid on common stock $ (1,250,000) $ (1,216,000)
Borrowings under revolving credit facility 862,000 --
Repayment of long-term debt (56,000) (70,000)
Proceeds from issuance of common stock 296,000 --
------------ ------------
Net cash used in financing activities (148,000) (1,286,000)
------------ ------------
Net (decrease) increase in cash and cash equivalents (3,334,000) 4,159,000
Cash and cash equivalents, at beginning of period 14,459,000 11,035,000
------------ ------------
Cash and cash equivalents, at end of period $ 11,125,000 $ 15,194,000
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 74,000 $ 27,000
============ ============
Income taxes $ 1,488,000 $ 345,000
============ ============
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Cash dividends declared, but not yet paid, totaling $623,000 and $608,000 are
included in accounts payable and accrued expenses as of September 30, 1998 and
1997, respectively.
During the six months ended September 30, 1998, the Company borrowed $1,238,000
for the repurchase of the Company's common stock. The repurchased common stock
is shown in the treasury stock section of the balance sheet. The stock purchases
were made pursuant to an August 1998 Board of Directors authorization to
repurchase up to $6,000,000 of the Company's common stock.
During the six months ended September 30, 1998, the Company reclassified
approximately $3,675,000 from accounts receivable to notes receivable. The notes
receivable are shown in the Prepaid and other current assets section of the
balance sheet.
Page 8 of 17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
THE SIX MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO THE
SIX MONTHS ENDED SEPTEMBER 30, 1997
The Company's revenue for the six months ended September 30, 1998 was
$373,351,000, a decrease of $18,748,000, or 4.8%, as compared to revenue of
$392,099,000 for the corresponding period of the prior year, the result of a
substantial decline in world oil prices. The Company's revenue during these
periods was attributable to the following segments:
SIX MONTHS ENDED SEPTEMBER 30,
1998 1997
------------ ------------
Aviation Fueling $162,577,000 $195,454,000
Marine Fueling 198,514,000 183,711,000
Oil Recycling 12,260,000 12,934,000
------------ ------------
Total Revenue $373,351,000 $392,099,000
============ ============
The aviation fueling segment contributed $162,577,000 in revenue for
the six months ended September 30, 1998. This represented a decrease in revenue
of $32,877,000, or 16.8%, as compared to the same period of the prior year. The
decrease in revenue was due to decreases in the average price per gallon and the
volume of gallons sold. The marine fueling segment contributed $198,514,000 in
revenue for the six months ended September 30, 1998, an increase of $14,803,000,
or 8.1%, over the corresponding period of the prior year. The increase in
revenue was related primarily to an increase in the volume of metric tons sold,
partially offset by a decrease in the average sales price per metric ton sold.
The oil recycling segment contributed $12,260,000 in revenue for the six months
ended September 30, 1998, a decrease of $674,000, or 5.2%, as compared to the
same period of the prior year. The decrease in revenue was due to a decrease in
the average sales price per gallon of recycled oil sold, partially offset by an
increase in volume of recycled oil sold and higher used oil and waste water
collection revenue.
The Company's gross profit of $29,659,000 for the six months ended
September 30, 1998 increased $6,352,000, or 27.3%, as compared to the same
period of the prior year. The Company's gross margin increased from 5.9% for the
six months ended September 30, 1997, to 7.9% for the six months ended September
30, 1998. The Company's aviation fueling business achieved a 9.1% gross margin
for the six months ended September 30, 1998, as compared to 5.5% achieved for
the same period during the prior year. This resulted principally from a decline
in the average price per gallon sold, as well as an increase in the average
gross profit per gallon and the addition of Baseops, an aviation services
company which the Company acquired effective January 1998. The Company's marine
fueling segment achieved a 5.9% gross margin for the six months ended September
30, 1998, as compared to a 4.5% gross margin for the same period of the prior
year. This was the result of lower world oil prices and a higher average gross
profit per metric ton sold. The gross margin in the Company's oil recycling
segment decreased from 32.5% for the six months ended September 30, 1997, to
25.3% for the six months ended September 30, 1998. This decrease
Page 9 of 17
<PAGE>
resulted from a lower gross profit per gallon of recycled oil sold, due
primarily to lower fuel prices and the fixed costs of this segment.
Total operating expenses for the six months ended September 30, 1998
were $20,549,000, an increase of $6,807,000, or 49.5%, as compared to the same
period of the prior year. The increase resulted primarily from higher salaries
and wages relating principally to staff additions and performance bonuses,
higher operating expenses in the aviation and marine segments related to
business expansion, and a $2,058,000 higher provision for bad debts over the
corresponding period during the prior year.
The Company's income from operations for the six months ended September 30, 1998
was $9,110,000, a decrease of $455,000, or 4.8%, 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,
1998 1997
------------ ------------
Aviation Fueling $ 6,282,000 $ 6,868,000
Marine Fueling 4,065,000 2,557,000
Oil Recycling 1,413,000 2,769,000
Corporate Overhead (2,650,000) (2,629,000)
----------- -----------
Total Income from
Operations $ 9,110,000 $ 9,565,000
=========== ===========
The aviation fueling segment's income from operations was $6,282,000
for the six months ended September 30, 1998, a decrease of $586,000, or 8.5%, as
compared to the six months ended September 30, 1997. This resulted from a
decrease in the volume of gallons sold and an increase in operating expenses due
to a higher provision for bad debts and expenses related to business expansion.
Partially offsetting was a higher average gross profit per gallon sold and an
increase in service revenue. The marine fueling segment earned $4,065,000 in
income from operations for the six months ended September 30, 1998, an increase
of $1,508,000, or 59.0%, over the corresponding period of the prior year. This
increase was primarily the result of a higher volume and average gross profit
per metric ton, partially offset by higher operating expenses due to business
expansion and a higher provision for bad debts. Income from operations of the
oil recycling segment decreased by $1,356,000, or 49.0%, for the six months
ended September 30, 1998, as compared to the same period of the prior year. This
resulted from a decrease in gross profit, partially offset by an increase in
gallons of recycled oil sold.
Other income for the six months ended September 30, 1998 decreased
$589,000, or 52.2% over the corresponding period of the prior year, as a result
of lower earnings from the Company's aviation joint venture and lower interest
income. The Company's effective income tax rate for the six months ended
September 30, 1998 was 21.2%, as compared to 25.9% for the same period of the
prior year. This decrease is the result of a true-up of U.S. income taxes for
overaccruals in prior periods and an overall decline in foreign taxes.
Page 10 of 17
<PAGE>
Net income for the six months ended September 30, 1998 was $7,601,000,
a decrease of $327,000, or 4.1%, as compared to net income of $7,928,000 for the
six months ended September 30, 1997. Diluted earnings per share of $0.60 for the
six months ended September 30, 1998 exhibited a $0.04, or 6.3% decrease over the
$0.64 achieved during the same period of the prior year.
THE THREE MONTHS ENDED SEPTEMBER 30, 1998
COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 1997
The Company's revenue for the three months ended September 30, 1998 was
$180,320,000, a decrease of $25,472,000, or 12.4%, as compared to revenue of
$205,792,000 for the corresponding period of the prior year, the result of a
substantial decline in world oil prices. The Company's revenue during these
periods was attributable to the following segments:
THREE MONTHS ENDED SEPTEMBER 30,
1998 1997
------------ ------------
Aviation Fueling $ 77,301,000 $ 99,337,000
Marine Fueling 96,973,000 99,429,000
Oil Recycling 6,046,000 7,026,000
------------ ------------
Total Revenue $180,320,000 $205,792,000
============ ============
The aviation fueling segment contributed $77,301,000 in revenue for the
three months ended September 30, 1998. This represented a decrease in revenue of
$22,036,000, or 22.2%, as compared to the same period of the prior year. The
decrease in revenue was due to decreases in the average price per gallon and the
volume of gallons sold. The marine fueling segment contributed $96,973,000 in
revenue for the three months ended September 30, 1998, a decrease of $2,456,000,
or 2.5%, over the corresponding period of the prior year. The decrease in
revenue was related primarily to a decrease in the average sales price per
metric ton sold, partially offset by an increase in the volume of metric tons
sold. The oil recycling segment contributed $6,046,000 in revenue for the three
months ended September 30, 1998, a decrease of $980,000, or 13.9%, as compared
to the same period of the prior year. The decrease in revenue was due to a
decrease in the average sales price per gallon of recycled oil sold and a
decrease in the volume of recycled oil sold, partially offset by higher used oil
and waste water collection revenue.
The Company's gross profit of $14,803,000 for the three months ended
September 30, 1998, increased $2,570,000, or 21.0%, as compared to the same
period of the prior year. The Company's gross margin increased from 5.9% for the
three months ended September 30, 1997, to 8.2% for the three months ended
September 30, 1998. The Company's aviation fueling business achieved a 9.0%
gross margin for the three months ended September 30, 1998, as compared to 5.7%
achieved for the same period during the prior year. This resulted principally
from the decline in the average price per gallon sold, as well as from an
increase in the average gross profit per gallon sold and the addition of
Baseops. The Company's marine fueling segment achieved a 6.8% gross margin for
the three months ended September 30, 1998, as compared to a 4.5% gross margin
for the same period of the prior year. This resulted from a decrease in the
average price of metric ton sold and a higher average gross profit per metric
ton sold. The gross margin in
Page 11 of 17
<PAGE>
the Company's oil recycling segment decreased from 30.0% for the three months
ended September 30, 1997, to 21.3%, for the three months ended September 30,
1998. This decrease resulted from a lower gross profit per gallon of recycled
oil sold, due to lower fuel prices and the fixed costs of this segment.
Total operating expenses for the three months ended September 30, 1998
were $10,582,000, an increase of $3,520,000, or 49.8%, as compared to the same
period of the prior year. The increase resulted primarily from higher salaries
and wages relating principally to staff additions and performance bonuses,
higher operating expenses in the aviation and marine segments, and a $862,000
higher provision for bad debts over the corresponding period during the prior
year.
The Company's income from operations for the three months ended
September 30, 1998 was $4,221,000, a decrease of $950,000, or 18.4%, 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,
1998 1997
------------ ------------
Aviation Fueling $ 2,751,000 $ 3,694,000
Marine Fueling 2,538,000 1,534,000
Oil Recycling 400,000 1,402,000
Corporate Overhead (1,468,000) (1,459,000)
----------- -----------
Total Income from
Operations $ 4,221,000 $ 5,171,000
=========== ===========
The aviation fueling segment's income from operations was $2,751,000
for the three months ended September 30, 1998, a decrease of $943,000, or 25.5%,
as compared to the three months ended September 30, 1997. This resulted from a
decrease in volume and an increase in operating expenses due to a higher
provision for bad debts and expenses related to Baseops. Partially offsetting
was a higher average gross profit per gallon sold and an increase in service
revenue. The marine fueling segment earned $2,538,000 in income from operations
for the three months ended September 30, 1998, an increase of $1,004,000, or
65.4%, over the corresponding period of the prior year. This increase was
primarily the result of a higher volume and average gross profit per metric ton
sold, partially offset by higher operating expenses due to an increase in the
provision for bad debts and performance based bonuses. Income from operations of
the oil recycling segment decreased by $1,002,000, or 71.5%, for the three
months ended September 30, 1998, as compared to the same period of the prior
year. This resulted from a decrease in the gallons of recycled oil sold as well
as a decrease in gross profit due to lower world oil prices and the fixed costs
of this segment.
Other income decreased $123,000, or 30.0%, over the same period a year
ago, primarily as a result of lower earnings from the aviation joint venture and
lower interest income. The Company's effective income tax rate for the three
months ended September 30, 1997 was 21.9%, as compared to 26.1% for the same
period of the prior year. The decrease is the result of an overall decline in
foreign taxes.
Page 12 of 17
<PAGE>
Net income for the three months ended September 30, 1998 was
$3,520,000, a decrease of $605,000, or 14.7%, as compared to net income of
$4,125,000 for the three months ended September 30, 1997. Diluted earnings per
share of $0.28 for the three months ended September 30, 1998 exhibited a $0.05,
or 15.2% decrease over the $0.33 achieved during the same period of the prior
year.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents amounted to $11,125,000 at September 30,
1998, as compared to $14,459,000 at March 31, 1998. The principal uses of cash
and cash equivalents during the first six months of fiscal year 1999 were
$2,829,000 for capital expenditures and $1,250,000 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 September 30, 1998 was $66,538,000 exhibiting a
$6,437,000 increase from working capital as of March 31, 1998. As of September
30, 1998, the Company's accounts receivable, excluding the allowance for bad
debts, amounted to $94,712,000, an increase of $8,470,000, as compared to the
March 31, 1998 balance. In the aggregate, accounts payable, accrued expenses and
customer deposits increased $3,282,000. The net increase in trade credit of
$5,188,000 was primarily attributable to the marine segment. The allowance for
bad debts as of September 30, 1998 amounted to $4,665,000, an increase of
$71,000 compared to the March 31, 1998 balance. During the first six months of
fiscal year 1999, the Company charged $2,072,000 to the provision for bad debts
and had charge-offs in excess of recoveries of $2,001,000.
Prepaid and other current assets as of September 30, 1998 were
$11,869,000, exhibiting an increase of $5,932,000 from the March 31, 1998
balance. The increase was largely related to the reclassification of accounts
receivable to notes receivable. Accrued salaries and wages increased $692,000
during the first six months of the 1999 fiscal year, resulting from higher
performance bonuses, primarily in the Company's marine segment.
Capital expenditures for the first six months of fiscal year 1999
consisted primarily of $966,000 for the implementation of a new financial and
sales information system and $1,196,000 in plant, machinery and equipment
related to the oil recycling segment. During the balance of fiscal year 1999,
the Company anticipates spending approximately $1,500,000 for the implementation
of the financial and sales system and $2,000,000 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 $97,339,000, or $7.84 per share at
September 30, 1998, compared to $91,911,000, or $7.36 per share at March 31,
1998. This increase of $5,428,000 was due to $7,601,000 in earnings for the six
months ended September 30, 1998, partially offset by $1,249,000 in declared
dividends and $1,238,000 for the purchase of treasury stock.
The Company's working capital requirements are not expected to vary
substantially for the balance of fiscal year 1999. The Company expects to meet
its cash requirements for the balance of fiscal year 1999
Page 13 of 17
<PAGE>
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.
YEAR 2000 ISSUE
The Company has been evaluating date-sensitive software and equipment
for Year 2000 compliance. The financial and sales system upgrade that the
Company is currently implementing is expected to be completed before the end of
fiscal year 1999, and is Year 2000 compliant. There can be no assurance that
there will not be an adverse effect on the Company if third parties do not
convert their systems in a timely manner and in a way that is compatible with
the Company's systems.
Page 14 of 17
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
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 17,
1998.
The matters voted on at the annual meeting were: to elect the Directors
of the Company and to increase the number of shares of Common Stock
authorized under the Company's 1996 Employee Stock Option Plan from
750,000 shares to 1,250,000 shares. All of the Company's director
nominees were elected and the increase in the 1996 Employee Stock
Option Plan was adopted.
ELECTION OF DIRECTORS
NAME OF DIRECTOR VOTES FOR VOTES AGAINST
---------------- --------- -------------
1. Ralph R. Weiser 10,099,583 402,269
2. Jerrold Blair 10,099,734 402,118
3. Ralph R. Feuerring 10,099,134 402,718
4. John R. Benbow 10,099,734 402,118
5. Phillip S. Bradley 10,097,559 402,293
6. Myles Klein 10,099,734 402,118
7. Michael J. Kasbar 10,099,734 402,118
8. Paul H. Stebbins 10,099,734 402,118
9. Luis R. Tinoco 10,098,609 403,243
Page 15 of 17
<PAGE>
PART II. OTHER INFORMATION (CONTINUED)
INCREASE IN NUMBER OF SHARES OF COMMON STOCK RESERVED
UNDER THE 1996 EMPLOYEE STOCK OPTION PLAN
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- ------------- ---------------
7,987,100 660,740 59,617
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) During the three months ended September 30, 1998, the Company
did not file any reports on Form 8-K.
Page 16 of 17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 28, 1998 WORLD FUEL SERVICES CORPORATION
By: /S/ JERROLD BLAIR
-----------------------------------
JERROLD BLAIR
PRESIDENT
By: /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, 1998 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-31-1999
<PERIOD-END> SEP-30-1998
<CASH> 11,125,000
<SECURITIES> 0
<RECEIVABLES> 94,712,000
<ALLOWANCES> 4,665,000
<INVENTORY> 5,468,000
<CURRENT-ASSETS> 118,509,000
<PP&E> 29,936,000
<DEPRECIATION> 10,166,000
<TOTAL-ASSETS> 155,149,000
<CURRENT-LIABILITIES> 51,971,000
<BONDS> 0
0
0
<COMMON> 125,000
<OTHER-SE> 97,214,000
<TOTAL-LIABILITY-AND-EQUITY> 155,149,000
<SALES> 373,351,000
<TOTAL-REVENUES> 373,351,000
<CGS> 343,692,000
<TOTAL-COSTS> 343,692,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,072,000
<INTEREST-EXPENSE> 123,000
<INCOME-PRETAX> 9,650,000
<INCOME-TAX> 2,049,000
<INCOME-CONTINUING> 7,601,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,601,000
<EPS-PRIMARY> 0.61
<EPS-DILUTED> 0.60
</TABLE>
