“Our financial performance this quarter again demonstrates the value of our diversified business model, where challenges in our aviation business were counterbalanced by strong results in our marine and land businesses,” stated Michael J. Kasbar, chairman and chief executive officer. “We remain focused on delivering best in class products and services to our customers worldwide, satisfying their current energy requirements and their growing need for sustainability-related products and services.”
For the first quarter, our aviation segment generated gross profit of $64.2 million, a decrease of 16% year-over-year, principally attributable to inventory losses driven by unprecedented market dynamics during the quarter and the reduction in our government-related activity in Afghanistan as a result of the military withdrawal which concluded during the third quarter of 2021, partially offset by increased volumes from the continued recovery in demand for air travel. Our marine segment generated gross profit of $47.0 million, an increase of 85% year-over-year, principally related to the impact of the rise in global oil prices and the resulting constrained credit environment. Our land segment generated gross profit of $119.8 million, an increase of 34% year-over-year, principally related to the recent acquisition of Flyers Energy, partially offset by the reduction in our government-related activity in Afghanistan as well as a decline in our natural gas activities relative to the exceptional results during the first quarter of 2021, which benefited from extreme weather conditions.
“The Flyers Energy business delivered very strong results in the first quarter since we closed the transaction contributing to a record level of quarterly gross profit in our Land segment and a strong overall result,” said Ira M. Birns, executive vice president and chief financial officer. “While higher fuel prices have driven increased working capital requirements across the business in the short-term, our balance sheet remains strong and we stand committed to disciplined capital allocation in support of organic growth and strategic opportunities that drive long-term value creation.”
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures (collectively, the “Non-GAAP Measures”), including adjusted net income attributable to World Fuel Services, adjusted diluted earnings per common share, and adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Non-GAAP Measures exclude acquisition and divestiture related expenses, restructuring costs, impairments, gains or losses on the extinguishment of debt and gains or losses on business dispositions primarily because we do not believe they are reflective of our core operating results. In addition, beginning with the period ending March 31, 2022, the Non-GAAP Measures also exclude integration costs associated with our acquisitions. No changes to the comparable period were made as we did not incur integration costs in 2021.
We believe that the Non-GAAP Measures, when considered in conjunction with our financial information prepared in accordance with GAAP, are useful to investors to further aid in evaluating the ongoing financial performance of the Company and to provide greater transparency as supplemental information to our GAAP results.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In addition, our presentation of the Non-GAAP Measures may not be comparable to the presentation of such metrics by other companies. Adjusted diluted earnings per common share is computed by dividing adjusted net income attributable to World Fuel Services and available to common shareholders by the sum of the weighted average number of shares of common stock, stock units, restricted stock entitled to dividends not subject to forfeiture and vested restricted stock units outstanding during the period and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued. Investors are encouraged to review the reconciliation of these Non-GAAP Measures to their most directly comparable GAAP financial measures in this press release and on our website.
Source: World Fuel Services