World Fuel Services 2002 Annual Report Download - page 30

gross margin for the year ended March 31, 2002, as compared to 6.6% achieved for the prior year. This increase resulted
from an overall increase in the gross profit per gallon sold and the decline in the average price per gallon sold. The
improvement in gross profit resulted from a revision in our pricing strategy in the quarter ended December 31, 2001, as well
as the recovery of certain business taxes previously expensed and the favorable resolution of certain outstanding items with
suppliers.
For the year ended March 31, 2002, our operating expenses were $54.9 million, a decrease of $2.7 million or 4.7%, as
compared to the prior year. This decrease resulted from a $4.0 million reduction in the provision for bad debts, a $3.5 million
executive severance charge for the year ended March 31, 2001 related to the termination of the employment agreement with our
former Chairman of the Board, and the early adoption of SFAS No. 142, “Goodwill and Other Intangible Assets,” which
eliminated the amortization of goodwill effective April 1, 2001. Partially offsetting these improvements were operating expenses
of the newly acquired companies, staff additions, and various business initiatives implemented over the past year.
Our income from operations for the year ended March 31, 2002 was $21.3 million, an increase of $7.1 million, or
50.4%, as compared to the prior year. Income from operations during these periods was attributable to the following
segments (in thousands):
For the Year Ended March 31,
2002 2001
Marine fuel services 14,964$ 13,161$
Aviation fuel services 13,709 11,790
Corporate overhead (7,384) (10,799)
Total 21,289$ 14,152$
The marine fuel segment earned $15.0 million in income from operations for the year ended March 31, 2002, an increase
of $1.8 million, or 13.7%, as compared to the prior year. This increase resulted from a $2.8 million lower provision for bad
debts and a higher gross profit, partially offset by operating expenses of the newly acquired companies and staff additions.
The aviation fuel segment’s income from operations was $13.7 million for the year ended March 31, 2002, an increase of
$1.9 million, or 16.3%, as compared to the prior year. This improvement was due to a higher gross profit and a $1.2 million
lower provision for bad debts, partially offset by increased operating expenses related to staff additions and various business
initiatives, which were implemented over the past year. Corporate overhead costs not charged to the business segments totaled
$7.4 million during the year ended March 31, 2002, a decrease of $3.4 million, or 31.6%, as compared to the prior year. The
improvement in corporate overhead was due to the $3.5 million executive severance charge in the prior year and lower
consulting and telecommunications expenses, partially offset by staff additions and higher compensation.
During the year ended March 31 2002, we reported $1.9 million in other income, net, compared to $2.2 million for the
year ended March 31, 2001. This decrease was mainly due to foreign exchange losses for the year ended March 31, 2002 as
opposed to foreign exchange gains in the prior year, a $339 thousand decrease in net interest income, and a $365 thousand non-
recurring credit recorded for the year ended March 31, 2001 related to a partial recovery of a previously written-down aviation
joint venture investment. Largely offsetting these decreases were the equity in earnings of our PAFCO aviation joint venture, a
gain on the sale of a leasehold property, and a $1.0 million insurance settlement recovery related to a product theft off the coast
of Nigeria in 1999.
For the year ended March 31, 2002, our effective tax rate was 25.8%, for an income tax provision of $6.0 million, as
compared to an effective tax rate of 27.9% and an income tax provision of $4.6 million for the year ended March 31, 2001.
The decrease in our effective tax rate reflects the non-taxable insurance settlement recovery of $1.0 million during the year
ended March 31, 2002 related to theft of product off the coast of Nigeria during the year ended March 31, 2000.
Net income from continuing operations for the year ended March 31, 2002 was $17.2 million, an increase of $5.4 million, as
compared to $11.8 million for the year ended March 31, 2001. Diluted earnings per share on income from continuing operations
was $1.62, an increase of $0.51, or 45.9%, as compared to $1.11 per diluted share for the year ended March 31, 2001.
During the year ended March 31, 2001, we recorded a net loss from discontinued operations of $1.2 million, or $0.11 per
diluted share. The net loss resulted from additional income taxes of $496 thousand relating to the gain on the sale of our oil-
recycling segment and a $656 thousand after-tax write-off against the assets we ultimately realized in connection with the
discontinuance of our used oil-recycling business. No discontinued operations activities were recorded for the year ended
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