Weighing the Value of UTi Worldwide: Is the Stock a Buy?

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Source: Thinkstock

Source: Thinkstock

UTi Worldwide Inc. (NASDAQ:UTIW) is a unique company. Essentially, it provides non-asset-based supply chain services and solutions worldwide. It operates in two main segments, Freight Forwarding, and Contract Logistics and Distribution. The Freight Forwarding segment offers airfreight forwarding, ocean freight forwarding, customs brokerage, and other related services. The Contract Logistics and Distribution segment provides contract logistics services, such as receiving, deconsolidation and decontainerization, sorting, put away, consolidation, assembly, cargo loading and unloading, assembly of freight and protective packaging, warehousing services, order management, and customized distribution and inventory management services. This segment also offers outsourced services, including inspection services, quality centers, and manufacturing support services; and inventory management services comprising materials sourcing services pursuant to contractual, formalized repackaging programs, and materials sourcing agreements.

In addition, this segment provides a range of distribution, consultation, outsourced management services, planning and optimization services, and other supply chain management services. The company markets its services through a network of freight forwarding offices and contract logistics and distribution centers to the pharmaceutical, retail, apparel, chemical, automotive, and high technology electronics industries. The company’s stock has been crushed this year, down about 39 percent. This is because the company has been delivering less than stellar results.

Compared to last year’s comparable quarter, quarterly revenues were $1.045 billion, a decrease of 3.3 percent from $1.081 billion. Net revenues (revenues minus purchased transportation costs) were $372.9 million, a decrease of 0.8 percent from $375.7 million. On an organic basis, revenues decreased 0.3 percent and net revenues increased 3.8 percent versus the comparable prior year period. Net loss attributable to UTi Worldwide Inc. was $43.2 million in the fiscal 2015 first-quarter. Net loss attributable to common shareholders after dividends on preferred stock was $0.43 per diluted common share. Net loss attributable to UTi Worldwide Inc. in the fiscal 2014 first-quarter was $12.4 million, or $0.12 per diluted common share.

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