Earnings Performance - World Kinect (WKC) reported quarterly earnings of $0.48 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and showing a slight increase from $0.47 per share a year ago, resulting in an earnings surprise of 6.67% [1] - The company posted revenues of $9.45 billion for the quarter ended March 2025, which fell short of the Zacks Consensus Estimate by 7.99%, and represented a decline from $10.95 billion in the same quarter last year [2] Stock Performance - World Kinect shares have declined approximately 12.8% since the beginning of the year, compared to a decline of 8.6% for the S&P 500 [3] - The current Zacks Rank for World Kinect is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.66, with projected revenues of $10.8 billion, while the estimate for the current fiscal year is $2.59 on revenues of $43.3 billion [7] - The Oil and Gas - Refining and Marketing industry, to which World Kinect belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

First Quarter 2025 Earnings Call Copyright © 2025 World Kinect Corporation. All rights reserved. Disclaimer and Cautionary Note Regarding Forward-Looking Statements Certain statements, including comments about World Kinect Corporation's expectations regarding future plans, performance and acquisitions are forward-looking statements that are subject to a range of uncertainties and risks that could cause World Kinect's actual results to materially differ from the forward-looking information. The forward-looki ...

Financial Data and Key Metrics Changes - In the first quarter, consolidated volume was 4.2 billion gallons, down 5% year over year, and consolidated gross profit declined 9% to $230 million [14][20] - Adjusted operating expenses were $178 million, down 6% year over year, and interest expense was $23 million, down over 20% year over year [20][21] - Operating cash flow generated was $114 million and free cash flow was $99 million, demonstrating strong cash flow capabilities [21][24] Business Line Data and Key Metrics Changes - Aviation segment volume was 1.7 billion gallons, up 2% year over year, with gross profit increasing 7% to $116 million, driven by strong performance in airport operations and general aviation [16][22] - Land segment adjusted gross profit was $79 million, a 19% decline year over year, primarily due to weakness in the North American fuel business [17][23] - Marine segment volumes were down 14% year over year, with gross profit declining about 26% due to lower bunker fuel prices and reduced market volatility [18][19] Market Data and Key Metrics Changes - The marine market faced significant uncertainty, with Singapore's bunker fuel volume dropping to its lowest level in nearly two years [19] - Economic uncertainty affected customer dynamics, particularly in the East Coast and California, impacting both volume and margins in the land segment [43][44] Company Strategy and Development Direction - The company is focused on streamlining its portfolio and reducing fixed costs to enhance profitability and resilience [6][8] - Recent divestitures of the Brazilian and UK land businesses are part of a strategy to concentrate on core activities that align with long-term goals [12][13] - The company aims to leverage its geographic diversification to adapt to changes in trade and tariff policies [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds but expressed confidence in achieving strategic objectives and improving profitability in the second half of 2025 [7][8] - The company remains committed to enhancing operational efficiencies and driving growth in the North American land business [23][24] Other Important Information - Non-GAAP adjustments for the first quarter totaled approximately $60 million, primarily related to the sale of the UK land business [11][12] - The company expects land gross profit to improve year over year in the second quarter despite recent divestitures [18] Q&A Session Summary Question: Discussion on the UK Sale and its impact on land volumes - Management indicated that the UK business generated an operating loss and its sale would improve land operating margins and reduce capital expenditures [27][28][29] Question: Clarification on aviation segment performance - The aviation segment's strong performance was attributed to increased demand and improved margins, particularly in European airport operations [36][37] Question: Insights on land segment volume decline and future expectations - Management explained that the decline was due to economic uncertainty and evolving market dynamics, but they expect to outperform last year's weak second quarter [42][44] Question: Details on restructuring actions and cost savings - The restructuring actions resulted in a $15 million charge, expected to yield about $30 million in annualized cost savings, with full recognition anticipated by the third quarter [53][54] Question: M&A opportunities in the current environment - The company sees a stable pipeline for acquisitions, with some opportunities arising from more reasonable seller expectations, despite some deals being paused due to deteriorating seller conditions [56][57]

[First Quarter 2025 Results Overview](index=1&type=section&id=First%20Quarter%202025%20Results%20Overview) [Key Financial and Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) World Kinect Corporation reported a GAAP net loss of $21 million and diluted EPS of $(0.37) for Q1 2025, a significant decrease year-over-year, while adjusted net income was $27 million, or $0.48 per diluted share, showing a slight increase in adjusted EPS, with gross profit decreasing by 9% to $230 million and strong operating cash flow of $114 million - **GAAP net loss of $21 million**, or **$0.37 per diluted share**, a significant decrease of **178%** and **182%** respectively year-over-year[4](index=4&type=chunk)[5](index=5&type=chunk) - **Adjusted net income of $27 million**, or **$0.48 per diluted share**, with adjusted diluted EPS increasing by **2%** year-over-year[4](index=4&type=chunk)[5](index=5&type=chunk) - **Gross profit decreased by 9% to $230 million**[4](index=4&type=chunk)[5](index=5&type=chunk) - Generated **$114 million of operating cash flow**[4](index=4&type=chunk) - Repurchased **$10 million of common stock**[4](index=4&type=chunk) - **Adjusted EBITDA of $80 million**, a decrease of **6%** year-over-year[4](index=4&type=chunk)[5](index=5&type=chunk) [Strategic Actions: Divestiture and Restructuring](index=1&type=section&id=First%20Quarter%202025%20%E2%80%93%20U.K.%20Land%20Divestiture%20and%20Restructuring%20Activities) The company completed the sale of its U.K. land fuels business on April 9, 2025, resulting in a $44.5 million asset impairment charge and an expected additional pre-tax loss of $65 million in Q2 2025, while concurrently launching a restructuring initiative that incurred $15.0 million in charges, primarily for severance costs, to streamline operations and enhance efficiency - Completed the sale of **U.K. land fuels business on April 9, 2025**[4](index=4&type=chunk) - Recognized an **asset impairment charge of $44.5 million** related to the U.K. land fuels business sale[4](index=4&type=chunk) - Expected additional estimated **pre-tax loss of $65 million** from the U.K. land fuels business sale in Q2 2025, including reclassification of **$55 million cumulative translation losses**[4](index=4&type=chunk) - Recognized **restructuring charges of $15.0 million** during Q1 2025, primarily related to severance costs, as part of an initiative to streamline the operating model[4](index=4&type=chunk) [Financial Summary (Table)](index=2&type=section&id=Financial%20Summary) The financial summary table for Q1 2025 shows a 14% decrease in revenue and a 9% decrease in gross profit year-over-year, with operating expenses increasing by 24%, leading to a significant shift from operating income to an operating loss, though adjusted operating expenses decreased by 6% Q1 2025 Financial Summary (YoY Comparison) | | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Volume (Millions of Gallons) | 4,177 | 4,414 | (5)% | | Revenue (Millions of Dollars) | $9,453 | $10,951 | (14)% | | Gross profit (Millions of Dollars) | $230 | $254 | (9)% | | Operating expenses (Millions of Dollars) | $237 | $191 | 24% | | Adjusted operating expenses (Millions of Dollars) | $178 | $190 | (6)% | | Income (loss) from operations (Millions of Dollars) | $(7) | $63 | (110)% | | Operating margin (%) | (3)% | 25% | | | Adjusted income from operations (Millions of Dollars) | $53 | $64 | (18)% | | Adjusted operating margin (%) | 23% | 25% | | | Net income (loss) including noncontrolling interest (Millions of Dollars) | $(21) | $27 | (178)% | | Adjusted EBITDA (Millions of Dollars) | $80 | $86 | (6)% | | Diluted earnings per common share ($) | $(0.37) | $0.45 | (182)% | | Adjusted diluted earnings per common share ($) | $0.48 | $0.47 | 2% | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlighted the Aviation business's outperformance and the Land business's challenges due to market conditions, emphasizing the U.K. Land divestiture as progress in streamlining the portfolio and commitment to financial goals, while also noting strong operating and free cash flow and a robust balance sheet for future investments - **Aviation business outperformed expectations**, while **Land business faced headwinds** due to challenging market conditions[5](index=5&type=chunk) - **Divestiture of U.K. Land business** marks continued progress in streamlining the Land portfolio and reinforces commitment to broader financial goals[5](index=5&type=chunk) - Continued to streamline the land business and right-size the cost structure, while delivering **strong operating and free cash flow**[5](index=5&type=chunk) - Company remains well-positioned with a **strong balance sheet** to navigate market dynamics and invest in core capabilities[5](index=5&type=chunk) [Company Information and Non-GAAP Definitions](index=2&type=section&id=Company%20Information%20and%20Non-GAAP%20Definitions) [About World Kinect Corporation](index=2&type=section&id=About%20World%20Kinect%20Corporation) World Kinect Corporation is a global energy management company based in Miami, Florida, providing fulfillment and related services to over 150,000 customers across aviation, marine, and land transportation sectors, also supplying natural gas and power in the U.S. and Europe, along with sustainability-related products and services - **Global energy management company** headquartered in Miami, Florida[7](index=7&type=chunk) - Serves over **150,000 customers** in aviation, marine, and land-based transportation sectors[7](index=7&type=chunk) - Supplies natural gas and power in the U.S. and Europe, and offers **sustainability-related products and services**[7](index=7&type=chunk) [Investor Relations and Contacts](index=2&type=section&id=Earnings%20Conference%20Call) An investor conference call was scheduled for April 24, 2025, to discuss Q1 results, with a webcast replay available, and investor relations contacts are Ira M. Birns (EVP & CFO) and Braulio Medrano (Senior Director FP&A and Investor Relations) - **Q1 2025 earnings conference call** held on April 24, 2025, with webcast replay available[6](index=6&type=chunk) - Key investor contacts are **Ira M. Birns (EVP & CFO)** and **Braulio Medrano (Senior Director FP&A and Investor Relations)**[8](index=8&type=chunk) [Non-GAAP Financial Measures Definitions](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures to provide investors with supplemental information for evaluating ongoing financial performance, emphasizing that these should not be considered in isolation from GAAP results, and these measures exclude specific items like acquisition/divestiture expenses, restructuring charges, impairments, and certain gains/losses to reflect core operating results [General Principles and Exclusions](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20General%20Principles) Non-GAAP measures offer transparency for ongoing financial performance but should not be isolated from GAAP results, excluding specific non-recurring items - **Non-GAAP measures** are useful for evaluating ongoing financial performance and providing greater transparency, but should not be considered in isolation from GAAP[8](index=8&type=chunk)[9](index=9&type=chunk) - **Non-GAAP measures exclude** acquisition/divestiture related expenses, restructuring activities, impairments, gains/losses on debt extinguishment or business sales, integration costs, non-operating legal settlements, and costs from the Finnish bid error[10](index=10&type=chunk) [Specific Non-GAAP Metric Definitions](index=3&type=section&id=Specific%20Non-GAAP%20Metric%20Definitions) This section defines key non-GAAP metrics such as Adjusted net income, Adjusted diluted EPS, Adjusted EBITDA, Adjusted income from operations, and Free cash flow, detailing their specific exclusions and calculation methodologies - **Adjusted net income**: Net income excluding acquisition/divestiture expenses, restructuring, impairments, gains/losses on debt/sales, integration costs, non-operating legal settlements, and Finnish bid error costs[12](index=12&type=chunk) - **Adjusted diluted earnings per common share (Adjusted EPS)**: Computed by dividing adjusted net income by adjusted weighted average shares, including convertible note hedges[12](index=12&type=chunk) - **Adjusted EBITDA**: Net income including noncontrolling interest, excluding interest, taxes, depreciation, amortization, and the same adjustments as adjusted net income[12](index=12&type=chunk) - **Adjusted income from operations**: Income (loss) from operations excluding acquisition/divestiture expenses, restructuring, impairments, integration costs, and Finnish bid error costs[15](index=15&type=chunk) - **Free cash flow**: Operating cash flow minus total capital expenditures[15](index=15&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=Information%20Relating%20to%20Forward-Looking%20Statements) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section highlights that the release contains forward-looking statements regarding future results, performance, and achievements, specifically mentioning expected financial impacts from the U.K. land fuels business sale, cost management initiatives, and developments in the Land business, all subject to cautionary statements and risk factor disclosures in SEC filings - Release includes **forward-looking statements** about future results, performance, or achievements[14](index=14&type=chunk) - Specifically, forward-looking statements cover expected financial impacts from the **U.K. land fuels business sale**, **cost management initiatives**, and developments in the Land business[14](index=14&type=chunk) - Forward-looking statements are qualified by cautionary statements and **risk factor disclosures in SEC filings**, including the most recent Form 10-K[14](index=14&type=chunk) [Risk Factors](index=4&type=section&id=Risk%20Factors) Important factors that could cause actual results to differ materially from forward-looking statements include tariffs, trade restrictions, customer creditworthiness, changes in energy/commodity prices, adverse industry conditions, inability to mitigate financial risks, achieving benefits from restructuring, labor disputes, compliance with debt covenants, cyber incidents, political/economic/regulatory changes, environmental legislation, supplier/customer non-performance, integration of acquired businesses, cash flow, currency fluctuations, inflation, technology leverage, product specifications, environmental risks, reputational harm, high-risk locations, uninsured losses, seasonal variability, investment value, employee retention, tax law changes, litigation, and other risks detailed in SEC filings - Risks include effects of **tariffs and trade restrictions**, customer and counterparty creditworthiness, and changes in market prices of energy or commodities[14](index=14&type=chunk) - **Operational risks** involve inability to effectively mitigate financial risks, achieving expected benefits from restructuring, labor disputes, and compliance with debt covenants[14](index=14&type=chunk) - **External factors** include cyber incidents, changes in political, economic, or regulatory environments, greenhouse gas reduction programs, and other environmental/climate change legislation[14](index=14&type=chunk) - Other risks encompass **supplier/customer non-performance**, integration of acquired businesses, lower than expected cash flows, currency exchange fluctuations, inflationary pressures, and the ability to retain key employees[14](index=14&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were $6,589.1 million, a decrease from $6,731.8 million at December 31, 2024, primarily due to lower accounts receivable, while total liabilities also decreased from $4,775.8 million to $4,660.9 million, mainly driven by a reduction in accounts payable, and total equity slightly decreased to $1,928.3 million Condensed Consolidated Balance Sheets (Selected Items) | | March 31, 2025 (Millions of Dollars) | December 31, 2024 (Millions of Dollars) | | :--- | :--- | :--- | | **Assets:** | | | | Cash and cash equivalents | $456.4 | $382.9 | | Accounts receivable, net | $2,245.8 | $2,432.6 | | Inventories | $503.7 | $513.5 | | Total current assets | $3,829.9 | $3,959.2 | | Total assets | $6,589.1 | $6,731.8 | | **Liabilities:** | | | | Accounts payable | $2,529.7 | $2,726.5 | | Total current liabilities | $3,342.3 | $3,437.8 | | Total liabilities | $4,660.9 | $4,775.8 | | **Equity:** | | | | Total equity | $1,928.3 | $1,955.9 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20AND%20COMPREHENSIVE%20INCOME) For Q1 2025, the company reported a net loss attributable to World Kinect of $(21.1) million, a significant decline from a net income of $27.4 million in Q1 2024, with revenue decreasing by 14% to $9,452.5 million and gross profit falling by 9% to $230.4 million, while operating expenses increased substantially due to asset impairments and restructuring charges, leading to an operating loss of $(6.6) million compared to an income of $63.3 million in the prior year Condensed Consolidated Statements of Income (Q1 2025 vs Q1 2024) | | 2025 (Millions of Dollars) | 2024 (Millions of Dollars) | | :--- | :--- | :--- | | Revenue | $9,452.5 | $10,951.4 | | Cost of revenue | $9,222.1 | $10,697.3 | | Gross profit | $230.4 | $254.1 | | Operating expenses | $237.0 | $190.8 | | Income (loss) from operations | $(6.6) | $63.3 | | Net income (loss) attributable to World Kinect | $(21.1) | $27.4 | | Diluted earnings (loss) per common share ($) | $(0.37) | $0.45 | - **Asset impairments of $44.5 million** and **restructuring charges of $15.0 million** significantly impacted operating expenses in Q1 2025[22](index=22&type=chunk) - **Total other comprehensive income (loss) improved from $(12.9) million in Q1 2024 to $10.0 million in Q1 2025**, primarily due to foreign currency translation adjustments[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash provided by operating activities increased slightly to $114.4 million in Q1 2025 from $110.2 million in Q1 2024, despite a net loss, driven by changes in working capital, particularly a significant decrease in accounts receivable, while net cash used in investing and financing activities also decreased, leading to a $73.5 million increase in cash and cash equivalents during the quarter Condensed Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | | 2025 (Millions of Dollars) | 2024 (Millions of Dollars) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $114.4 | $110.2 | | Net cash provided by (used in) investing activities | $(5.8) | $(16.9) | | Net cash provided by (used in) financing activities | $(32.4) | $(64.3) | | Net increase (decrease) in cash and cash equivalents | $73.5 | $17.1 | | Cash and cash equivalents, as of the end of the period | $456.4 | $321.3 | - **Operating cash flow benefited from a $204.3 million decrease in accounts receivable, net**, in Q1 2025[24](index=24&type=chunk) - Repurchased **$10.0 million of common stock in Q1 2025**, compared to none in Q1 2024[24](index=24&type=chunk) [Business Segments and Sales Volume Information](index=9&type=section&id=BUSINESS%20SEGMENTS%20INFORMATION) [Business Segments Performance](index=9&type=section&id=Business%20Segments%20Performance) In Q1 2025, the Aviation segment showed strong performance with a 7% increase in gross profit and a 27.7% increase in income from operations, driven by improved airport locations and physical inventory business, while the Land segment experienced a 19% decrease in gross profit and shifted to an operating loss of $(45.3) million due to lower liquid fuel profit contribution, and the Marine segment also saw a 26% decrease in gross profit and a 44.8% decrease in operating income, impacted by lower bunker fuel prices and reduced demand Q1 2025 Segment Gross Profit and Income from Operations (YoY Comparison) | Segment | Gross Profit 2025 (Millions of Dollars) | Gross Profit 2024 (Millions of Dollars) | Gross Profit Change (%) | Income (Loss) from Operations 2025 (Millions of Dollars) | Income (Loss) from Operations 2024 (Millions of Dollars) | Income (Loss) from Operations Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Aviation | $115.7 | $108.4 | 7% | $56.2 | $44.0 | 27.7% | | Land | $79.0 | $97.3 | (19)% | $(45.3) | $18.5 | (344.9)% | | Marine | $35.7 | $48.4 | (26)% | $14.8 | $26.8 | (44.8)% | | Total Gross Profit | $230.4 | $254.1 | (9)% | | | | - **Aviation segment's improved performance** was primarily attributable to operated airport locations in Europe, physical inventory business, and business and general aviation activities[4](index=4&type=chunk) - **Land segment's decline** was due to lower profit contribution from liquid fuel business in North America, influenced by industry trends and reduced demand[4](index=4&type=chunk) - **Marine segment's decrease** was principally due to lower bunker fuel prices, reduced volatility, and lower demand/margins in resale and physical businesses[4](index=4&type=chunk) [Sales Volume Supplemental Information](index=9&type=section&id=SALES%20VOLUME%20SUPPLEMENTAL%20INFORMATION) Consolidated total sales volume decreased by 5% to 4,176.8 million gallons in Q1 2025 compared to Q1 2024, with the Aviation segment seeing a slight increase in volume, while both Land and Marine segments experienced decreases, and Marine had the largest percentage drop Q1 2025 Sales Volume by Segment (YoY Comparison) | Segment | Volume 2025 (Millions of Gallons) | Volume 2024 (Millions of Gallons) | Change (%) | | :--- | :--- | :--- | :--- | | Aviation Segment | 1,700.2 | 1,673.1 | 1.6% | | Land Segment | 1,494.3 | 1,598.1 | (6.5)% | | Marine Segment | 982.3 | 1,143.2 | (14.0)% | | Consolidated Total | 4,176.8 | 4,414.5 | (5.4)% | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20FINANCIAL%20MEASURES) [Net Income (Loss) and Diluted Earnings Per Share Reconciliation](index=10&type=section&id=Net%20Income%20(Loss)%20and%20Diluted%20Earnings%20Per%20Share%20Reconciliation) The reconciliation shows a GAAP net loss of $(21.1) million and diluted EPS of $(0.37) for Q1 2025, which, after adjusting for asset impairments ($44.5 million), restructuring charges ($15.0 million), and income tax impacts ($(11.5) million), results in an adjusted net income of $27.3 million and adjusted diluted EPS of $0.48, contrasting with Q1 2024 where GAAP and adjusted figures were closer Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income | | 2025 Net Income (Loss) (Millions of Dollars) | 2025 Diluted EPS ($) | 2024 Net Income (Loss) (Millions of Dollars) | 2024 Diluted EPS ($) | | :--- | :--- | :--- | :--- | :--- | | GAAP measure | $(21.1) | $(0.37) | $27.4 | $0.45 | | (Gain) loss on sale of business | $0.4 | $0.01 | — | — | | Asset impairments | $44.5 | $0.78 | — | — | | Finnish bid error | — | — | $0.9 | $0.02 | | Restructuring charges | $15.0 | $0.26 | $0.2 | — | | Income tax impacts | $(11.5) | $(0.20) | $(0.2) | — | | Adjusted non-GAAP measure | $27.3 | $0.48 | $28.2 | $0.47 | - For Q1 2025, **Adjusted diluted EPS calculation considers 0.5 million dilutive shares** not included in GAAP due to the net loss position, resulting in a non-GAAP weighted average of **57.3 million shares**[31](index=31&type=chunk) [Adjusted EBITDA Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q1 2025 was $80.3 million, a decrease from $85.9 million in Q1 2024, with the reconciliation from GAAP net income (loss) including adjustments for interest, taxes, depreciation, amortization, and significant non-recurring items such as asset impairments ($44.5 million) and restructuring charges ($15.0 million) in 2025 Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA | | 2025 (Millions of Dollars) | 2024 (Millions of Dollars) | | :--- | :--- | :--- | | Net income (loss) including noncontrolling interest | $(21.3) | $27.2 | | Interest expense and other financing costs, net | $22.9 | $28.9 | | Provision (benefit) for income taxes | $(6.8) | $3.3 | | Depreciation and amortization | $25.6 | $25.3 | | EBITDA | $20.4 | $84.8 | | (Gain) loss on sale of business | $0.4 | — | | Asset impairments | $44.5 | — | | Finnish bid error | — | $0.9 | | Restructuring charges | $15.0 | $0.2 | | Adjusted EBITDA | $80.3 | $85.9 | [Operating Expenses and Income (Loss) from Operations Reconciliation](index=10&type=section&id=Operating%20Expenses%20and%20Income%20(Loss)%20from%20Operations%20Reconciliation) GAAP operating expenses for Q1 2025 were $237.0 million, leading to an operating loss of $(6.6) million, but after adjusting for asset impairments ($(44.5) million) and restructuring charges ($(15.0) million), adjusted operating expenses decreased to $177.5 million, resulting in an adjusted income from operations of $52.9 million, highlighting the impact of one-time charges on GAAP operating results Reconciliation of GAAP Operating Expenses and Income (Loss) from Operations to Adjusted Measures | | 2025 Operating Expenses (Millions of Dollars) | 2025 Operating Income (Loss) (Millions of Dollars) | 2024 Operating Expenses (Millions of Dollars) | 2024 Operating Income (Loss) (Millions of Dollars) | | :--- | :--- | :--- | :--- | :--- | | GAAP measure | $237.0 | $(6.6) | $190.8 | $63.3 | | Asset impairments | $(44.5) | $44.5 | — | — | | Finnish bid error | — | — | $(0.9) | $0.9 | | Restructuring charges | $(15.0) | $15.0 | $(0.2) | $0.2 | | Adjusted non-GAAP measure | $177.5 | $52.9 | $189.7 | $64.4 | [Free Cash Flow Reconciliation](index=10&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free cash flow for Q1 2025 increased to $99.2 million from $92.8 million in Q1 2024, an improvement driven by a slight increase in net cash provided by operating activities and a decrease in capital expenditures Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | | 2025 (Millions of Dollars) | 2024 (Millions of Dollars) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $114.4 | $110.2 | | Capital expenditures | $(15.2) | $(17.5) | | Free cash flow | $99.2 | $92.8 |

Economic and Market Conditions - Significant inflation in the U.S. and other jurisdictions has increased costs, potentially impacting financial results if costs rise faster than revenue[104] - The company faces intense competition from large multinational corporations and specialized firms, which may lead to a loss of market share or reduced prices[105] - The company relies on a limited number of suppliers for fuel and related products, which may affect its business if suppliers do not provide favorable terms[106] Regulatory and Compliance Risks - Climate change regulations and GHG emissions monitoring could significantly impact business operations and financial results[109] - The Inflation Reduction Act (IRA) imposes a fee on GHG emissions and provides funding for renewable energy, potentially affecting the use of petroleum-based fuels[111] - Increasing focus on ESG issues may lead to higher operational costs and compliance requirements, impacting the company's reputation and financial performance[121] - The company is subject to extensive environmental laws and regulations, which can result in significant liabilities and increased operating costs[124] - Compliance with evolving data privacy and protection laws may increase operational costs and expose the company to regulatory penalties[126] - The evolving nature of privacy laws in the U.S., E.U., and other jurisdictions may require costly changes to IT systems for data handling[127] - Non-compliance with data privacy regulations could lead to substantial fines, penalties, and adverse effects on business reputation and financial condition[128] - International operations are subject to anti-corruption laws, which may impose significant compliance costs and expose the company to civil and criminal penalties[129] - The company operates in countries with high corruption risks, increasing the likelihood of improper payments and enforcement actions[130] - Economic sanctions and international trade controls restrict business dealings with certain countries, impacting operations and compliance costs[131] - The company has established policies to comply with laws and regulations, but violations could lead to severe penalties and affect financial stability[134] Operational Risks - The company faces risks related to pandemics and infectious diseases, which could adversely impact operations and financial condition[135] Financial Instruments and Valuation - The notional and fair market values of commodity-based derivative instruments as of December 31, 2024, were $88.9 million and $122.7 million, respectively[238] - The total fair value of foreign currency exchange derivative contracts was a net asset of $6.2 million as of December 31, 2024[241] - A hypothetical 10% change in exchange rates is not expected to materially impact income from operations[239] - As of December 31, 2024, the company had a $455.3 million Term Loan with applicable margins of 0.875% for base rate loans and 1.875% for Eurodollar rate loans[242] - The aggregate outstanding balance of finance lease obligations was $29.9 million, with interest rates ranging from 2.6% to 7.2%[242] - The company entered into a $300 million Eurodollar floating-for-fixed interest rate swap, locking in a pay rate of 0.435%[243] - A fluctuation of 100 basis points in the interest rate would result in a $10.4 million change in interest expense over the next twelve months[244] - The fair value of the interest rate swap contract was $2.9 million as of December 31, 2024[244] - The fair value of outstanding Convertible Notes is influenced by the company's common stock price, which can increase or decrease their value[245] - Upon conversion of Convertible Notes, the company can settle in cash, shares, or a combination, potentially affecting market prices of its common stock[246] - The company entered into convertible note hedge transactions to reduce potential dilution upon conversion of the notes[247] - Warrant transactions related to the Convertible Notes could have a dilutive effect if the market price exceeds the strike price[247]

Group 1 - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] - Identifying the right entry point for trending stocks can be challenging, as they may lose momentum if future growth does not justify their high valuations [1] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, with tools like the Zacks Momentum Style Score aiding in identifying such stocks [2] Group 2 - World Kinect (WKC) has shown a four-week price change of 6.8%, indicating growing investor interest and positioning it as a strong candidate for momentum investing [3] - WKC has gained 6.2% over the past 12 weeks and has a beta of 1.27, suggesting it moves 27% more than the market, indicating strong momentum [4] - WKC holds a Momentum Score of A, suggesting it is an opportune time to invest in the stock for potential gains [5] Group 3 - WKC has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors and drive prices higher [6] - The stock is trading at a Price-to-Sales ratio of 0.04, indicating it is undervalued, as investors pay only 4 cents for each dollar of sales [6] - WKC appears to have significant growth potential while maintaining a reasonable valuation, making it an attractive investment option [7] Group 4 - In addition to WKC, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [7] - Various Zacks Premium Screens are available to help investors find winning stock picks based on different investing styles [8]

Financial Data and Key Metrics Changes - The company reported a consolidated fourth quarter total volume of 4.5 billion gallons, down 1% year-over-year, and a full year volume of 17.7 billion gallons, down approximately 2% [22] - Consolidated adjusted gross profit for the fourth quarter was $259 million, an 8% decline from the previous year, while the full year adjusted gross profit was $1.03 billion, down 7% from 2023 [22][23] - Adjusted consolidated operating expenses were $197 million in the fourth quarter, down 5% year-over-year, and for the full year, adjusted operating expenses were $773 million, a 6% decrease from 2023 [31][32] Business Line Data and Key Metrics Changes - **Aviation**: Fourth quarter aviation volume was 1.8 billion gallons, up 4% year-over-year, while full year aviation volume was 7.3 billion gallons, down 1% [24] - **Land**: Fourth quarter land volumes decreased 5% year-over-year, with adjusted gross profit of $104 million, effectively flat compared to 2023. Full year land adjusted gross profit was $384 million, down 14% year-over-year [27][28] - **Marine**: Fourth quarter marine volumes were down 4% year-over-year, with gross profit decreasing approximately 22%. For the full year, marine gross profit was down 9% year-over-year [29] Market Data and Key Metrics Changes - Natural gas and power volumes represented 40% of total volume in the fourth quarter, up from 37% in the same period of 2023 [27] - The company experienced unfavorable market conditions in Brazil and the UK, contributing to lower profit contributions from natural gas and power businesses [28] Company Strategy and Development Direction - The company is focused on efficient capital allocation and operational efficiencies, with a commitment to enhancing shareholder returns through share repurchases and dividends [10][14] - A key strategic move was the divestiture of the Brazilian business, which was underperforming and subject to significant earnings volatility [12][18] - The company aims to streamline its land operations and is committed to shedding underperforming activities while reallocating capital to improve financial returns [13][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving medium-term financial targets, particularly in operating margin and free cash flow, despite challenges in certain segments [9][14] - The company anticipates further improvements in land gross profit as the year progresses, driven by core business activities in North America [28][80] - Management highlighted the importance of focusing on the U.S. market, which is seen as a significant growth opportunity [60] Other Important Information - The company generated operating cash flow of $120 million in the fourth quarter and $260 million for the full year, aligning with long-term cash flow targets [36] - Total capital allocated to share repurchases and dividends was $139 million for the full year, representing a 47% increase year-over-year [38] Q&A Session Summary Question: Can you describe the Brazil sale and the North American businesses that were shed? - Management indicated that the Brazilian business was small but volatile, generating close to zero gross profit. The U.S. business included a poorly performing heating oil segment that was restructured to improve profitability [47][49][56] Question: What is the scale of the revenue shed from Brazil and the U.S.? - The revenue from Brazil was negligible, with net revenue close to zero. The U.S. business also had minimal revenue, focusing more on shedding expenses [56][57] Question: Are there further opportunities to refine the business? - Management noted that there are still one or two opportunities to eliminate underperforming activities that do not contribute significantly to profitability [58][59] Question: What are the drivers of gross profit growth in the land segment for Q1? - Expected improvements in the core cardlock and retail businesses in North America, along with a slight improvement in natural gas profitability, were highlighted as key drivers [80]

Core Insights - World Kinect (WKC) reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.52 per share, and showing an increase from $0.54 per share a year ago, resulting in an earnings surprise of 19.23% [1] - The company posted revenues of $9.76 billion for the quarter ended December 2024, which fell short of the Zacks Consensus Estimate by 5.38% and decreased from $12 billion year-over-year [2] - World Kinect has underperformed the market, with shares down about 0.9% since the beginning of the year compared to the S&P 500's gain of 4.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.58 on revenues of $11.24 billion, and for the current fiscal year, it is $2.56 on revenues of $46.08 billion [7] - The estimate revisions trend for World Kinect is currently favorable, leading to a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Alternative Energy - Other industry, to which World Kinect belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Q4 2024 Earnings Call February 20, 2025 www.world-kinect.com Copyright © 2025 World Kinect Corporation. All rights reserved. Disclaimer and Cautionary Note Regarding Forward-Looking Statements Certain statements, including comments about World Kinect Corporation's expectations regarding future plans, performance and acquisitions are forward-looking statements that are subject to a range of uncertainties and risks that could cause World Kinect's actual results to materially differ from the forward-looking in ...

Financial Performance - Gross profit for Q4 2024 was $259 million, an 11% increase year-over-year[4] - GAAP net loss for Q4 2024 was $102 million, or $1.77 per diluted share, compared to a loss of $35 million in Q4 2023[6] - Adjusted net income for Q4 2024 was $36 million, or $0.62 per diluted share, a 15% increase from $0.54 per diluted share in Q4 2023[6] - Full year 2024 revenue decreased by 12% to $42.168 billion from $47.711 billion in 2023[6] - Adjusted EBITDA for Q4 2024 was $95 million, a 5% decrease from $100 million in Q4 2023[6] - Gross profit for the year ended December 31, 2024, was $1,026.4 million, down from $1,058.2 million in 2023, reflecting a gross margin of 2.4%[22] - Net loss attributable to World Kinect for the year ended December 31, 2024, was $67.4 million, compared to a net income of $52.9 million in 2023[22] - Basic earnings per share for the year ended December 31, 2024, was $(1.14), a decline from $0.86 in 2023[22] - Total revenue for Q4 2024 was $9,760.5 million, a decrease of 18.5% from $12,002.9 million in Q4 2023[27] - The total income from operations for the year ended December 31, 2024, was $210.6 million, compared to $198.0 million in 2023, reflecting a 6.6% increase[27] Cash Flow and Liquidity - Operating cash flow generated in 2024 was $260 million, with $139 million returned to shareholders through dividends and share repurchases, reflecting a 47% year-over-year increase[7] - Free cash flow for 2024 was $192 million, indicating strong cash generation capabilities[7] - Cash and cash equivalents increased to $382.9 million as of December 31, 2024, from $304.3 million in 2023, an increase of 25.8%[20] - The company reported a net cash provided by operating activities of $120.3 million for Q4 2024, compared to $4.5 million in Q4 2023[24] - Free cash flow for the three months ended December 31, 2024, was $102.4 million, significantly improved from $(15.2) million in the same period of 2023[35] Segment Performance - Gross profit in the Land segment increased by 83% year-over-year, primarily due to a non-recurring item in Q4 2023[4] - The Aviation segment reported a gross profit of $120 million, an 8% decrease year-over-year[4] - The Aviation segment reported revenue of $4,737.8 million in Q4 2024, down 19.3% from $5,874.3 million in Q4 2023[27] - The Land segment's revenue decreased to $2,951.1 million in Q4 2024, down 19.6% from $3,672.8 million in Q4 2023[27] - The Marine segment's revenue decreased to $2,071.7 million in Q4 2024, down 15.6% from $2,455.8 million in Q4 2023[27] Assets and Liabilities - Total current assets decreased to $3,959.2 million as of December 31, 2024, from $4,503.8 million in 2023, a reduction of 12.1%[20] - Total liabilities decreased to $4,775.8 million as of December 31, 2024, from $5,425.7 million in 2023, a decline of 11.9%[20] - Retained earnings increased to $2,009.2 million as of December 31, 2024, compared to $1,981.6 million in 2023, an increase of 1.4%[20] - Total equity for World Kinect increased slightly to $1,955.9 million as of December 31, 2024, from $1,949.6 million in 2023[20] Other Financial Metrics - The company recorded a one-time, non-cash pre-tax loss of approximately $111 million due to the sale of its Brazil subsidiaries[4] - Comprehensive income for the year ended December 31, 2024, was $(51.7) million, compared to $(13.2) million in 2023, indicating a significant decline[22] - The company experienced a significant unrealized loss on derivatives of $7.1 million in Q4 2024, compared to a loss of $75.8 million in Q4 2023[24] - The total depreciation and amortization expense for the year ended December 31, 2024, was $106.4 million, compared to $104.5 million in 2023[33] - Interest expense and other financing costs for the year ended December 31, 2024, totaled $102.2 million, down from $127.7 million in 2023[33] Strategic Initiatives - The company expects to continue focusing on market expansion and new product development as part of its strategic initiatives moving forward[34]