World Fuel Services 2002 Annual Report Download - page 33

During the nine months ended December 31, 2002, net cash used in investing activities was $2.7 million, a decrease of
$1.0 million as compared to the same period of the prior year. Included in net cash used for the nine months ended
December 31, 2001 were payment for acquisition of a business of $3.1 million and proceeds of $296 thousand from the sale
of a leasehold property. Partially offsetting was an increase in capital expenditures of $1.8 million, primarily related to the
move of our corporate offices.
For the nine months ended December 31, 2002, net cash used by financing activities was $3.9 million, a decrease of
$280 thousand as compared to the same period a year ago. The decrease was attributable to purchases of treasury stock of
$1.3 million during the nine months ended December 31, 2001 and a decrease in dividends paid on common stock of $770
thousand. The decrease in dividends was primarily related to the July 2001 payment of the special cash dividend declared in
May 2001. Largely offsetting these decreases in usage of net cash was an increase in the repayment of debt of $2.9 million.
In addition, an increase in the proceeds from exercise of stock options contributed to lower net cash used by financing
activities during the nine months ended December 31, 2002.
Working capital at December 31, 2002 was $82.2 million, representing an increase of $2.3 million from working capital
at March 31, 2002. Our accounts and notes receivable, at December 31, 2002, excluding the allowance for bad debts,
amounted to $188.5 million, an increase of $44.9 million, as compared to the balance at March 31, 2002. This increase was
mostly related to increased sales volume for both our marine and aviation segments. At December 31, 2002, the allowance
for bad debts of $11.1 million increased by $100 thousand from the balance at March 31, 2002. During the nine months
ended December 31, 2002, we charged $2.2 million to the provision for bad debts, as compared to $3.2 million for the same
period of the prior year. We had charge-offs in excess of recoveries of $2.1 million for the nine months ended December 31,
2002, as compared to $3.4 million for the corresponding period of the prior year. The decreases in our provision for bad
debts and charge-offs primarily reflect the refinement in our credit practices that resulted in an overall improvement in Days
Sales Outstanding (DSO) to 30 days for the nine months ended December 31, 2002 versus 34 days for the same period a year
ago.
As of December 31, 2002, prepaid expenses and other current assets of $22.3 million increased $2.1 million from March
31, 2002. This increase was due to increases in prepaid fuel, prepaid insurance, and the fair market value of our outstanding
derivatives. The increase was partially offset by a reduction in the amount due from PAFCO, a decrease in deferred income
tax assets, and the receipt of the final payment to settle the remaining balance due on the Moorehead judgment.
At December 31, 2002, in the aggregate, net goodwill, identifiable intangible asset, and investment goodwill decreased
$276 thousand, to $38.3 million, due to the amortization of the identifiable intangible asset. Other asset, excluding
investment goodwill, increased $3.9 million, to $4.5 million, due to reclassification of a portion of the current deferred
income tax assets to non-current.
Our current liabilities, excluding short-tem debt, increased $49.7 million primarily due to increased business activity in
both our marine and aviation segments. Long-term debt and short-term debt, in the aggregate, decreased by $6.6 million due
to repayment of our debt and deferred compensation payments.
Stockholders’ equity amounted to $127.7 million at December 31, 2002, as compared to $116.4 million at March 31,
2002. The increase in stockholders’ equity was primarily due to $9.9 million in earnings, $3.4 million from the exercise of
stock options, and $363 thousand in amortization of unearned deferred compensation. The increase was partially offset by
the declaration of dividends of $2.4 million during the nine months ended December 31, 2002.
We believe that available funds from existing cash and cash equivalents, our credit facility, and cash flows generated by
operations will be sufficient to fund our working capital and capital expenditure requirements for the next twelve months.
Our opinions concerning liquidity and our ability to obtain financing are based on currently available information. To the
extent this information proves to be inaccurate, or if circumstances change, future availability of trade credit or other sources
of financing may be reduced and our liquidity would be adversely affected. Factors that may affect the availability of trade
credit, or other financing, include our performance (as measured by various factors including cash provided from operating
activities), the state of worldwide credit markets, and our levels of outstanding debt. In addition, we may decide to raise
additional funds to respond to competitive pressures or to acquire complementary businesses. Accordingly, we cannot
guarantee that financing will be available when needed or desired on terms favorable to us.
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