World Fuel Services Corporation reports that its second quarter net income was $30.0 million, or $0.43 diluted earnings per share, compared with $30.5 million or $0.43 diluted earnings per share in the second quarter of 2015.
Excluding the impact of certain non-recurring expenses, adjusted second quarter net income was $34.8 million, or $0.50 adjusted diluted earnings per share. Non-GAAP net income and diluted earnings per share for the second quarter, excluding share-based compensation and amortization of acquired intangible assets, were $44.0 million and $0.63, respectively, compared with $38.5 million and $0.54 in 2015.
"During the quarter, our aviation segment posted strong results in their core resale operations and our land segment generated solid growth in retail and wholesale distribution," stated
Michael J. Kasbar, chairman and chief executive officer of World Fuel Services Corporation. "The recent acquisitions of PAPCO on the east coast and Associated Petroleum Products on the west coast have significantly expanded our U.S. commercial and industrial distribution platform. We are poised to execute on numerous development opportunities as our organic initiatives and strategic investments should emerge as meaningful growth drivers in 2017."
The company's marine segment achieved a gross profit of $39.7 million, which was a decrease of $2.1 million, or 5 percent year-on-year.
World Fuel Services' aviation segment generated a gross profit of $98.6 million, representing an increase of $13.6 million, or 16 percent year-on-year.
The land segment posted a gross profit of $80.2 million - an increase of $16.6 million, or 26 percent year-on-year.
"Consistent cash flow generation and prudent balance sheet management has enabled us to aggregate $1.2 billion of operating cash flow over the past four years," said
Ira M. Birns, executive vice president and chief financial officer. "The two strategic acquisitions we completed to start the third quarter and the ExxonMobil transaction expected to be fully completed by early next year, will be almost entirely funded with cash flow generated over the past twelve months, preserving our strong and liquid balance sheet."
Correction of previously issued financial statements
"Commenting on an issue related to the correction of previous financial statements, World Fuel Services said: "During the second quarter of 2016, we identified a correction to our provision for income taxes for certain prior periods, due to the accounting for the tax effects of foreign currency translation changes on intercompany loans that are considered to be of a long-term investment nature. The Company determined that it had incorrectly recorded a deferred tax asset related to foreign currency translation losses in the provision for income taxes, resulting in the Company reporting a lower provision for income taxes in the affected periods.
"Management evaluated the materiality of the error from qualitative and quantitative perspectives, and concluded the error was not material to its previously issued annual and interim financial statements. The cumulative amounts of the corrections were approximately $20.0 million, of which approximately $12.5 million was attributable to the year ended December 31, 2015. The cumulative amount of the prior period adjustments would have been material to our current Statements of Income and Comprehensive Income had we made the correction in the current period and, accordingly we will revise our previously issued financial statements prospectively to correct these errors. Please refer to Item 8.01 of the Company's Current Report on Form 8-K and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 to be filed with the Securities and Exchange Commission for further information and details on the affected periods."
