World Fuel Services Corp. (NYSE:INT) Q2 2019 Earnings Conference Call - Final Transcript

Jul 25, 2019 • 05:00 pm ET


World Fuel Services Corp. (NYSE:INT) Q2 2019 Earnings Conference Call - Final Transcript


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Ira M. Birns

week, we have further strengthened our liquidity profile and have extended the maturity of our revolving credit facility and term loans to July 2024. We increased the overall size of the facility from $1.6 billion to $1.8 billion, lowered our borrowing spread and commission fee and favorably renegotiated other terms, which further increases the available capacity under the facility today, while at the same time, reducing funding costs. The transaction was nearly 50% oversubscribed by our bank group, which is a true testament to the banking community's continued confidence in our long-term strategy. We remain very appreciative for all of their support.

Additionally, we have taken actions to further drive shareholder value. As I mentioned earlier, we repurchased $65 million of common stock during the quarter, which was the largest quarterly repurchase program we've ever had, and we increased our dividend by 66%.

In closing, I thought it would be valuable to make some comparisons back to the second quarter of 2017, as shortly afterwards we get more seriously focusing on restructuring activities and cost savings. So for starters, trailing 12-month EBITDA has increased from $295 million to $388 million or 32%, while at the same time, our overall working capital investment has actually declined by $32 million. This is all contributing to $373 million of operating cash flow over this past two years. And again, this excludes the impact of a recently adopted accounting standard, which impacted 2018 cash flow, which is no longer impacting our cash flow going forward. And our trailing 12-month operating expense ratio over that same two-year period has declined 640 basis points from 77.7% to 71.3%, driven principally by our heightened focus on cost management.

Back to the second quarter of 2019, our business, again, performed well, with significant increases in year-over-year adjusted EBITDA, net income and earnings per share, and we, again, managed working capital well, driving $125 million of operating cash flow.

Strong cash flow performance, increasing EBITDA and this week's amendment and extension of our credit facility and term loan further strengthened our balance sheet, facilitating our ability to repurchase $65 million of common stock and increase our dividend by 66% during the quarter, while also providing greater financial flexibility to reinvest in our core business and more actively pursue strategic investment opportunities.

Thank you. I will now turn the call back over to our operator to begin the Q&A session.