QUOTE AND NEWS
SeekingAlpha  Jun 5  Comment 
UTi Worldwide Inc. (UTIW) Q1 2015 Earnings Conference Call June 05, 2014 11:00 AM ET Executives Jeff Misakian – Vice President-Investor Relations Eric Kirchner – Chief Executive Officer Richard Rodick – Executive Vice...
TheStreet.com  Jun 5  Comment 
NEW YORK (TheStreet) -- UTi Worldwide  stock is lower Thursday after reporting falling revenue and a wider-than-expected net loss in its first quarter.  By midafternoon, shares had dropped 4% to $9.86.  Over the three months to April, the...
DailyFinance  Apr 16  Comment 
Brower Piven, A Professional Corporation announces that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of purchasers of UTi Worldwide Inc....
SeekingAlpha  Apr 9  Comment 
By Zacks Investment Research: Earnings estimates have fallen sharply for UTi Worldwide (UTIW) following disappointing Q4 results on March 31. It is a Zacks Rank #5 (Strong Sell) stock. Since I last wrote about UTi Worldwide as the Bear of the...
Benzinga  Apr 1  Comment 
In a report published Tuesday, Morgan Stanley analyst William J. Greene reiterated an Equal-Weight rating on UTi Worldwide (NASDAQ: UTIW). In the report, Morgan Stanley noted, “UTIW delivered a F4Q adjusted operating loss of $14M, below...
SeekingAlpha  Mar 31  Comment 
Start Time: 08:00 End Time: 08:59 UTi Worldwide Inc. (UTIW) F4Q2014 Earnings Conference Call March 31, 2014, 08:00 AM ET Executives Eric Kirchner - CEO Richard Rodick – EVP, Finance and CFO Edward Feitzinger - EVP of Global...
TheStreet.com  Mar 31  Comment 
NEW YORK (TheStreet) -- UTi Worldwide  fell 9.68% to $10.17 at 10:56 a.m. on Monday after the logistics company posted a greater-than-expected loss in its fourth-quarter results. The company posted an adjusted loss of 15 cents a share, while...
SeekingAlpha  Mar 31  Comment 
Complete Story »
Benzinga  Mar 31  Comment 
UTi Worldwide (NASDAQ: UTIW) reported a wider-than-expected fourth-quarter loss. UTi Worldwide posted a quarterly net loss of $50.7 million, or $0.48 per share, versus a year-ago loss of $142.8 million, or $1.38 per share. Excluding items, UTi...
DailyFinance  Mar 20  Comment 
NEW YORK, NY -- (Marketwired) -- 03/20/14 -- Levi & Korsinsky announces that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of investors who purchased UTi Worldwide...




 

UTi Worldwide (NASDAQ: UTIW) is a shipping company that helps companies move goods between international manufacturers and markets. Outsourcing to a third-party logistics firm like UTi allows a company to focus on their core business rather than devoting personnel and resources to supply chain management. When companies expand into international markets and outsource production, their operations become more complicated, and UTi handles details like language translation, tariff variations, and custom clearing operations.

As the need for third-party logistics firms has grown, so has the number of competitors in UTi's space. Shipping goods internationally creates potential government and global economic risks, as the changing of tariff or trade regulations (possibly resulting from terrorist acts) could impact UTi Worldwide's business. Also, volatility in exchange rates can impact the significant revenue and assets produced from foreign operations.[1]

Business Overview

UTi Worldwide makes money when companies outsource their supply-chain management to the firm. UTi uses an expansive global network, company-designed software, relationships with transportation carriers, and general expertise to provide supply-chain management services to customers at an expense less than the firms can achieve on their own[2]. UTi Worldwide uses a sales team to target companies in the pharmaceutical, retail, apparel, chemical, automotive, and high technology electronics industries[3].

UTi Worldwide typically provides services to a customer with complex international shipping needs[4]. For instance, an American retailer obtains raw materials from Australia and outsources manufacturing services to China. UTi Worldwide can manage the supply-chain needs of this firm by facilitating movement of materials from Australia to China and finally to the United States. By doing so, the American firm can have lower cost of sales and satisfy time schedules. UTi Worldwide charges its customers based on the complexity of services and the size and distance of goods being transported.

Business & Financial Metrics[5]

In 2009, UTi earned $41.1 million in net income on $3.57 billion in revenue. This represents a turnaround from 2008, when the company incurred a net loss of $4.6 million on $4.54 billion in total revenues.

Business Segments[6]

UTi has two operating segments and one corporate expense segment.

  • Freight Forwarding (69.5% of total revenue): This segment helps companies coordinate their freight shipments. UTi does not own its own aircraft or ships so it acts as a middleman for other companies.
  • Contract Logistics and Distribution (30.5% of total revenue): This segment helps companies with their distributional and warehousing needs - it packages, stores, loads, and unloads products for distributors.

Key Trends & Forces

  • UTi faces increased competition from full-service transportation services: Transportation companies like YRC Worldwide (YRCW) and Conway Inc (CNW) have formed new logistics branches to complement their existing transportation of goods business. UTi does not own its own shipping vehicles, and so it depends on buying available cargo space from third-party carriers. These carriers are increasingly funneling business to themselves through their own logistic branches and cutting out the middle man (UTi Worldwide). UTi must find other vendors for cargo space while also vying with additional competitors for its logistics service.
  • UTi's Margins are sensitive to global economic conditions: A slowing U.S. or world economy would result in lower total shipping tonnage, impacting UTi's revenues. UTi ships products for the retail, apparel, chemical, automotive, and high technology electronics industries[7]. A decline in consumer demand of goods in the United States could adversely effect shipping volume and UTi's revenue. UTi Worldwide also moves raw materials and finished products from manufacturing sites. If the global economy were to slow, less products would be shipped internationally, and UTi's growth may stall.
  • Vulnerability to government trade policy and regulations: UTi Worldwide moves shipments internationally. Political and economic instability in a variety of countries could increase tariffs, prevent trade, or add regulations (i.e. required documents/inspections). These factors, which UTIW cannot control for but must mitigate, could decrease international shipping volumes and/or increase the cost of shipping between nations. This could potentially hurt UTi's balance sheet.[8]
  • UTi benefits from increased dependency on third-party logistics firms: More businesses today have international operations, and each day new companies decide to expand to additional markets. Globalization drives demand for international shipping and for UTi's services. The current trend in business moves beyond geographic boundaries to a truly global economy, and this is promising for UTi's long-term outlook.[9].
  • UTi benefits from increased global outsourcing of production: Many companies manufacture products in locations far from the markets where they intend to sell. As global outsourcing booms, the volume of international shipping increases. This rise in volume enhances the value of the market in which UTi Worldwide competes, and continued increases in the international movement of goods will boost UTi's balance sheet[10].
  • Foreign Currency Risks: UTi Worldwide generates over 50% of revenue outside the Americas[11]. The company also holds many assets and liabilities in foreign local currencies, but reports in terms of dollars. If a foreign currency depreciates, this could adversely affect the value of those assets held abroad. In addition, fluctuating exchange rates can shift shipping movement, which could disrupt UTi Worldwide's operations[12].

Competition

UTi Worldwide competes with a variety of asset-based and non-asset based logistic and brokerage service companies. Asset based logistic companies, which do own transportation vehicles, include YRC Worldwide (YRCW) and Conway Inc (CNW). Non-asset logistics, like UTi Worldwide, do not own ships, planes, or trucks, and include C.H. Robinson Worldwide (CHRW), Expeditors International of Washington (EXPD) and Pacer International (PACR). These firms compete for shipping orders and logistic management from customers primarily based on price, reliability, technological solutions, and breadth of services available. Due to UTi Worldwide's size and focus on clients with multiple shipping locations, smaller, regional competitors cannot easily compete for UTi Worldwide's customers[13].

Competitive Strengths

Management sees a greater number customers shifting to logistic companies that have global and comprehensive technological solutions. UTi Worldwide's existing global network, self-produced software, relationship with transportation carriers, and logistics expertise are its competitive advantages. UTi Worldwide has made several acquisitions to increase services available, and is developing software to link all operations[14].

References

  1. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Risk Factors", Page 11-23
  2. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Industry", Page 1-2
  3. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Sales and Marketing", Page 5
  4. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Sales & Marketing", Page 5
  5. UTIW 2009 10-K pg. F-5  
  6. UTIW 2009 10-K pg. F-55  
  7. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Sales and Marketing", Page 5
  8. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Risk Factors", Page 11-23
  9. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Risk Factors", Page 11-23
  10. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Industry", Page 1-2
  11. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Risk Factors", Page 11-23
  12. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Risk Factors", Page 11-23
  13. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Sales & Marketing", Page 5
  14. UTi Worldwide (UTIW) Form 10-K, Fiscal Year 2007, "Industry", Page 2
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