[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section presents the unaudited financial statements, management's analysis of operations, market risk disclosures, and internal controls for the period [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for World Kinect Corporation for the three months ended March 31, 2025, show a shift from net income to a net loss compared to the prior year, driven by decreased revenue, lower gross profit, and increased operating expenses from asset impairments and restructuring. Despite this, operating cash flows remained positive and slightly increased, while cash used in investing and financing activities decreased **Consolidated Financial Highlights (Q1 2025 vs. Q1 2024):** | Metric | Q1 2025 (Millions) | Q1 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Revenue | $9,452.5 | $10,951.4 | $(1,498.9) | -13.7% | | Gross Profit | $230.4 | $254.1 | $(23.7) | -9.3% | | Net Income (Loss) attributable to World Kinect | $(21.1) | $27.4 | $(48.5) | -177.0% | | Net cash provided by operating activities | $114.4 | $110.2 | $4.2 | 3.8% | - Total assets decreased to **$6,589.1 million** as of March 31, 2025, from $6,731.8 million at December 31, 2024[6](index=6&type=chunk) - Total equity decreased to **$1,928.3 million** as of March 31, 2025, from $1,955.9 million at December 31, 2024[6](index=6&type=chunk)[9](index=9&type=chunk) [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's balance sheet as of March 31, 2025, shows a slight decrease in total assets and liabilities compared to December 31, 2024, with cash and cash equivalents increasing while accounts receivable and accounts payable decreased **Condensed Consolidated Balance Sheet Highlights (Millions):** | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $456.4 | $382.9 | | Accounts receivable, net | $2,245.8 | $2,432.6 | | Total current assets | $3,829.9 | $3,959.2 | | Total assets | $6,589.1 | $6,731.8 | | 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 | | Total equity | $1,928.3 | $1,955.9 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the three months ended March 31, 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 the prior-year period, primarily due to decreased revenue, lower gross profit, and increased operating expenses including asset impairments and restructuring charges **Condensed Consolidated Statements of Income and Comprehensive Income (Millions, except per share data):** | Metric | Q1 2025 | Q1 2024 | | :------------------------------------- | :------ | :------ | | Revenue | $9,452.5 | $10,951.4 | | Gross profit | $230.4 | $254.1 | | Total 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 | | Basic earnings (loss) per common share | $(0.37) | $0.46 | | Diluted earnings (loss) per common share | $(0.37) | $0.45 | - Total operating expenses increased by **$46.2 million**, or **24%**, primarily attributable to **$44.5 million** in asset impairment charges and **$15.0 million** in restructuring charges in Q1 2025[7](index=7&type=chunk)[96](index=96&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) The company's total equity decreased from $1,955.9 million at December 31, 2024, to $1,928.3 million at March 31, 2025, primarily due to a net loss, cash dividends declared, and common stock repurchases, partially offset by other comprehensive income **Changes in Shareholders' Equity (Millions):** | Item | Q1 2025 Impact | | :------------------------------------- | :------------- | | Net income (loss) | $(21.1) | | Cash dividends declared | $(9.6) | | Purchases of common stock | $(10.1) | | Other comprehensive income (loss) | $10.0 | | Balance as of December 31, 2024 | $1,955.9 | | Balance as of March 31, 2025 | $1,928.3 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2025, net cash provided by operating activities increased slightly to $114.4 million, while net cash used in investing activities decreased to $5.8 million, and net cash used in financing activities significantly decreased to $32.4 million, leading to a net increase in cash and cash equivalents of $73.5 million **Condensed Consolidated Statements of Cash Flows (Millions):** | Cash Flow Activity | Q1 2025 | Q1 2024 | | :----------------------------------- | :------ | :------ | | Net cash provided by 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, end of period | $456.4 | $321.3 | - The increase in operating cash flows was principally due to increased cash provided by RPA activity and transaction tax refunds, offset by cash used in derivative activities and a decrease in net income[121](index=121&type=chunk) - The decrease in net cash used in investing activities was primarily driven by lower capital expenditures and cash received from the net repayment of notes receivable[122](index=122&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the company's accounting policies, financial instruments, debt, equity, and segment information, highlighting recent divestitures, restructuring efforts, and ongoing legal and tax contingencies [Note 1. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies](index=7&type=section&id=Note%201.%20Basis%20of%20Presentation,%20New%20Accounting%20Standards,%20and%20Significant%20Accounting%20Policies) World Kinect Corporation is a global energy management company. The financial statements are unaudited, prepared under U.S. GAAP, and do not include all disclosures required for complete annual statements. The company is evaluating new accounting standards for income taxes (ASU 2023-09) and expense disaggregation (ASU 2024-03), which are effective in future fiscal years. No significant changes to accounting policies were reported - World Kinect Corporation is a global energy management company offering fulfillment and related services across the aviation, marine, and land-based transportation sectors, also supplying natural gas and power and sustainability-related products[11](index=11&type=chunk) - The company is evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), which are effective for fiscal years beginning after **December 15, 2024**, and **December 15, 2026**, respectively[15](index=15&type=chunk)[16](index=16&type=chunk) - No significant changes in the company's accounting policies from those disclosed in its 2024 10-K Report[20](index=20&type=chunk) [Note 2. Accounts Receivable](index=8&type=section&id=Note%202.%20Accounts%20Receivable) The company's net accounts receivable decreased to $2.2 billion as of March 31, 2025, from $2.4 billion at December 31, 2024. The allowance for expected credit losses increased slightly to $24.4 million. The company utilizes Receivable Purchase Agreements (RPAs) to sell qualifying accounts receivable, selling $2.8 billion in Q1 2025, down from $3.0 billion in Q1 2024 **Accounts Receivable and Allowance for Credit Losses (Millions):** | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Accounts receivable, net | $2,245.8 | $2,432.6 | | Allowance for expected credit losses | $24.4 | $23.7 | - **95%** of accounts receivable were outstanding less than 60 days as of March 31, 2025[23](index=23&type=chunk) **Receivable Purchase Agreements (RPAs) Activity (Millions):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Aggregate face value of receivables sold | $2,800.0 | $3,000.0 | | Fees recognized | $8.1 | $10.2 | [Note 3. Acquisitions and Divestitures](index=9&type=section&id=Note%203.%20Acquisitions%20and%20Divestitures) The company completed the sale of its U.K. land fuels business (Watson Fuels) on April 9, 2025, for estimated proceeds of $42.8 million, recognizing a $44.5 million asset impairment charge in Q1 2025. This follows the May 2024 sale of the Avinode Group, which resulted in a $96.0 million pre-tax gain - Sale of WFL (UK) Ltd. (Watson Fuels disposal group) closed on **April 9, 2025**, for total estimated proceeds of **$42.8 million**, with **$23.6 million** collected in cash at closing[27](index=27&type=chunk) - An asset impairment charge of **$44.5 million** was recognized in Q1 2025 with respect to the Watson Fuels disposal group assets[27](index=27&type=chunk)[49](index=49&type=chunk) - The sale of Avinode Group and aviation FBO software products was completed on **May 1, 2024**, for cash proceeds of **$200.1 million**, resulting in a pre-tax gain of **$96.0 million**[28](index=28&type=chunk) [Note 4. Derivative Instruments](index=9&type=section&id=Note%204.%20Derivative%20Instruments) World Kinect uses various derivative instruments, including fair value hedges, cash flow hedges, and non-designated derivatives, to manage exposure to commodity price, foreign currency, and interest rate risks. As of March 31, 2025, the company held gross derivative assets of $518.9 million and gross derivative liabilities of $436.1 million. Non-designated commodity contracts generated a net gain of $5.5 million in Q1 2025, a significant improvement from a $72.0 million loss in Q1 2024 - The company's risk management program includes Fair Value Hedges, Cash Flow Hedges, and Non-designated Derivatives to mitigate commodity price, foreign currency exchange rate, and interest rate risks[29](index=29&type=chunk)[30](index=30&type=chunk) **Gross Fair Value of Derivative Instruments (Millions):** | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | Total Gross Derivative Assets | $518.9 | $499.6 | | Total Gross Derivative Liabilities | $436.1 | $401.6 | **Realized and Unrealized Gains (Losses) on Non-designated Derivatives (Millions):** | Derivative Type | Q1 2025 | Q1 2024 | | :---------------------- | :------ | :------ | | Commodity contracts (net) | $5.5 | $(72.0) | | Foreign currency contracts (net) | $(5.2) | $(2.6) | [Note 5. Fair Value Measurements](index=13&type=section&id=Note%205.%20Fair%20Value%20Measurements) The company measures certain assets and liabilities at fair value on a recurring basis, primarily commodity and foreign currency contracts, using Level 1 and Level 2 inputs. As of March 31, 2025, total assets at fair value were $538.7 million and total liabilities at fair value were $436.1 million. A nonrecurring asset impairment charge of $44.5 million was recognized in Q1 2025 for the Watson Fuels asset group, measured using Level 2 inputs **Recurring Fair Value Measurements (March 31, 2025, Millions):** | Category | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total | | :-------------------------- | :------------- | :------------- | :------------- | :---- | | Assets: Commodities contracts | $160.3 | $337.8 | $7.3 | $505.4 | | Assets: Foreign currency contracts | — | $13.5 | — | $13.5 | | Liabilities: Commodities contracts | $195.4 | $215.4 | $4.1 | $414.9 | | Liabilities: Foreign currency contracts | — | $21.2 | — | $21.2 | - A nonrecurring asset impairment charge of **$44.5 million** was recognized in Q1 2025 for the Watson Fuels asset group within the land segment, with its fair value determined based on estimated sale proceeds (Level 2 measurement)[49](index=49&type=chunk) [Note 6. Supplier Financing Programs](index=15&type=section&id=Note%206.%20Supplier%20Financing%20Programs) The company participates in supplier finance programs, with outstanding obligations of $129.1 million as of March 31, 2025, a decrease from $168.8 million at December 31, 2024. These obligations are included in Accounts payable **Outstanding Obligations under Supplier Finance Programs (Millions):** | Date | Amount | | :---------------- | :----- | | March 31, 2025 | $129.1 | | December 31, 2024 | $168.8 | [Note 7. Debt, Interest Income, Expense, and Other Finance Costs](index=15&type=section&id=Note%207.%20Debt,%20Interest%20Income,%20Expense,%20and%20Other%20Finance%20Costs) Total debt slightly decreased to $879.0 million as of March 31, 2025. The company's debt primarily consists of a term loan ($449.1 million) and Convertible Senior Notes due 2028 ($341.5 million net carrying amount). Net interest expense decreased to $22.9 million in Q1 2025 from $28.9 million in Q1 2024 **Outstanding Debt (Millions):** | Debt Type | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Term loan | $449.1 | $455.3 | | Convertible Notes (net) | $341.5 | $340.9 | | Total debt | $879.0 | $880.8 | | Long-term debt | $792.3 | $796.8 | - The fair value of the Convertible Notes was approximately **$403.3 million** as of March 31, 2025[52](index=52&type=chunk) **Interest Income, Expense, and Other Financing Costs, net (Millions):** | Metric | Q1 2025 | Q1 2024 | | :------------------------------------- | :------ | :------ | | Interest income | $3.7 | $2.0 | | Interest expense and other financing costs | $(26.6) | $(30.9) | | Interest expense and other financing costs, net | $(22.9) | $(28.9) | [Note 8. Commitments and Contingencies](index=16&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The company is involved in various legal and tax proceedings, including an investigation by the Finnish energy regulatory authority regarding an erroneous bid submission in 2023, and significant tax assessments in South Korea totaling approximately $23.3 million. While reserves for general claims are not material, an unfavorable resolution of these matters could have a material adverse effect on financial statements - An investigation by the Finnish energy regulatory authority was initiated in **December 2023** regarding an erroneous bid submission in the Finnish power market, which led to **$48.8 million** in extraordinary losses in Q4 2023[54](index=54&type=chunk) - The South Korean branch of a subsidiary received tax assessments totaling approximately **$23.3 million** (KRW 34.3 billion) for allegedly failing to issue VAT invoices and report certain transactions during 2011-2014[56](index=56&type=chunk) - As of March 31, 2025, reserves for claims and other matters where losses are probable and estimable were not material[57](index=57&type=chunk) [Note 9. Shareholders' Equity](index=17&type=section&id=Note%209.%20Shareholders'%20Equity) The Board declared quarterly cash dividends of $0.17 per common share for both Q1 2025 ($9.6 million) and Q1 2024 ($10.1 million). Accumulated other comprehensive income (loss) improved from $(91.0) million at January 1, 2025, to $(81.0) million at March 31, 2025, primarily due to positive foreign currency translation adjustments **Cash Dividends Declared (Millions):** | Period | Per Common Share | Total | | :-------------------------- | :--------------- | :---- | | Q1 2025 | $0.17 | $9.6 | | Q1 2024 | $0.17 | $10.1 | **Accumulated Other Comprehensive Income (Loss) (Millions):** | Metric | January 1, 2025 | March 31, 2025 | | :------------------------------------- | :-------------- | :------------- | | Balance | $(91.0) | $(81.0) | | Other comprehensive income (loss) before reclassifications | — | $11.7 | | Foreign currency translation adjustments | — | $12.6 | [Note 10. Revenue from Contracts with Customers](index=18&type=section&id=Note%2010.%20Revenue%20from%20Contracts%20with%20Customers) Total revenue for Q1 2025 was $9,452.5 million, a decrease from $10,951.4 million in Q1 2024. This decline was observed across all major geographic areas (Asia Pacific, EMEA, LATAM, North America) and segments (Aviation, Land, Marine) **Revenue from Contracts with Customers (Millions):** | Geographic Area | Q1 2025 | Q1 2024 | | :---------------- | :------ | :------ | | Asia Pacific | $1,149.6 | $1,445.1 | | EMEA | $1,999.0 | $2,358.5 | | LATAM | $1,287.2 | $1,604.2 | | North America | $4,992.3 | $5,620.2 | | Total revenue | $9,452.5 | $10,951.4 | **Revenue by Segment (Millions):** | Segment | Q1 2025 | Q1 2024 | | :-------- | :------ | :------ | | Aviation | $4,654.2 | $5,144.2 | | Land | $2,865.4 | $3,416.6 | | Marine | $1,932.9 | $2,390.5 | [Note 11. Income Taxes](index=19&type=section&id=Note%2011.%20Income%20Taxes) For Q1 2025, the company recognized an income tax benefit of $6.8 million, a significant change from an income tax expense of $3.3 million in Q1 2024. The effective income tax rate for Q1 2025 was 24.3%, up from 11.0% in Q1 2024, influenced by a reduction in income before taxes and changes in the mix of worldwide earnings, partially offset by increased net discrete tax expenses. The company is also facing a material tax audit in Denmark with proposed assessments of approximately $138.0 million **Income Tax Provision and Effective Rate (Millions, except rates):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Provision for income taxes | $(6.8) | $3.3 | | Effective income tax rate | 24.3% | 11.0% | - The Q1 2025 provision includes a net discrete income tax expense of **$0.5 million**, primarily a **$2.6 million** valuation allowance against deferred tax assets of a foreign subsidiary[64](index=64&type=chunk) - A tax audit in Denmark has proposed tax assessments for 2015-2021 of approximately **$138.0 million** (DKK 951.5 million), excluding interest, which could be material[67](index=67&type=chunk) [Note 12. Business Segments](index=19&type=section&id=Note%2012.%20Business%20Segments) The company operates in three segments: aviation, land, and marine. For Q1 2025, the aviation segment reported an operating income of $56.2 million, while the land segment incurred an operating loss of $45.3 million, and the marine segment reported an operating income of $14.8 million. Overall, consolidated income from operations was $25.7 million before unallocated corporate expenses **Segment Operating Income (Loss) (Millions):** | Segment | Q1 2025 | Q1 2024 | | :-------- | :------ | :------ | | Aviation | $56.2 | $44.0 | | Land | $(45.3) | $18.5 | | Marine | $14.8 | $26.8 | | Total Operating Income - segment profit (loss) | $25.7 | $89.2 | **Segment Revenue (Millions):** | Segment | Q1 2025 | Q1 2024 | | :-------- | :------ | :------ | | Aviation | $4,654.2 | $5,144.2 | | Land | $2,865.4 | $3,416.6 | | Marine | $1,932.9 | $2,390.5 | **Total Assets by Reportable Segment (Millions):** | Segment | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Aviation segment | $2,466.6 | $2,548.2 | | Land segment | $2,989.1 | $2,970.6 | | Marine segment | $833.5 | $929.6 | | Total reportable segment assets | $6,289.2 | $6,448.5 | [Note 13. Earnings Per Common Share](index=22&type=section&id=Note%2013.%20Earnings%20Per%20Common%20Share) For Q1 2025, the company reported a basic and diluted loss per common share of $(0.37), a significant decrease from basic EPS of $0.46 and diluted EPS of $0.45 in Q1 2024, primarily due to the net loss attributable to World Kinect **Earnings Per Common Share (per share amounts):** | Metric | Q1 2025 | Q1 2024 | | :------------------------------------- | :------ | :------ | | Basic earnings (loss) per common share | $(0.37) | $0.46 | | Diluted earnings (loss) per common share | $(0.37) | $0.45 | - The net loss attributable to World Kinect was **$(21.1) million** in Q1 2025, compared to net income of $27.4 million in Q1 2024[72](index=72&type=chunk) [Note 14. Restructuring and Exit Activities](index=22&type=section&id=Note%2014.%20Restructuring%20and%20Exit%20Activities) In Q1 2025, the company initiated a company-wide transformation, recognizing $15.0 million in restructuring charges, primarily severance costs, with an expectation of approximately $30 million in annualized compensation-related savings. This follows 2024 actions to exit certain operations, including the sale of the U.K. land fuels business - Restructuring charges of **$15.0 million** were recognized during Q1 2025, composed principally of severance costs, with an expectation of approximately **$30 million** in annualized compensation-related savings[73](index=73&type=chunk)[84](index=84&type=chunk) **Accrued Restructuring and Exit Activity Charges (Millions):** | Segment | Accrued charges as of Dec 31, 2024 | Restructuring and exit activity charges (Q1 2025) | Paid during the period (Q1 2025) | Accrued charges as of Mar 31, 2025 | | :---------- | :--------------------------------- | :------------------------------------------ | :------------------------------- | :--------------------------------- | | Aviation | — | $2.2 | $(0.5) | $1.6 | | Land | $1.7 | $7.3 | $(3.3) | $5.7 | | Marine | — | $0.4 | $(0.2) | $0.3 | | Corporate | $0.3 | $5.2 | $(1.0) | $4.5 | | Consolidated | $2.0 | $15.0 | $(4.9) | $12.1 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights World Kinect's global energy management business, ongoing restructuring and divestiture efforts (including the Watson Fuels sale), and segment-specific performance. The company experienced a consolidated revenue decline and operating loss in Q1 2025, attributed to lower fuel prices, reduced demand, and significant asset impairment and restructuring charges. Liquidity remains sufficient, supported by cash, credit facilities, and operating cash flows - World Kinect Corporation is a global energy management company primarily engaged in the distribution of fuel and related products and services in the aviation, land, and marine transportation industries[82](index=82&type=chunk) - The company initiated a company-wide transformation in Q1 2025, resulting in **$15.0 million** in restructuring charges and expected annualized compensation-related savings of approximately **$30 million**[84](index=84&type=chunk) - Consolidated revenue for Q1 2025 decreased by **14%** to **$9.5 billion**, and gross profit decreased by **9%** to **$230.4 million**, leading to an operating loss of **$6.6 million**[94](index=94&type=chunk)[95](index=95&type=chunk) - The company believes its cash and cash equivalents, available funds from its Credit Facility, and cash flows from operations are sufficient to fund working capital and capital expenditure requirements for at least the next twelve months[112](index=112&type=chunk) [Business Overview](index=25&type=section&id=Business%20Overview) World Kinect Corporation is a global energy management company focused on fuel distribution and related services across aviation, land, and marine transportation, also supplying natural gas and power and sustainability-related products - The company is a global energy management company offering fulfillment and related services across the aviation, marine, and land-based transportation sectors, and supplies natural gas and power in the United States and Europe[82](index=82&type=chunk) [Restructuring and Exit Activities](index=25&type=section&id=Restructuring%20and%20Exit%20Activities) The company is undergoing a company-wide transformation, initiating cost management actions in Q1 2025, resulting in $15.0 million in restructuring charges and expected annualized compensation savings of approximately $30 million. This follows 2024 actions to exit certain operations, including the sale of the U.K. land fuels business (Watson Fuels) for $42.8 million - In Q1 2025, the company began a company-wide transformation initiative, recognizing **$15.0 million** in restructuring charges, primarily severance costs, with an expectation of approximately **$30 million** in annualized compensation-related savings[84](index=84&type=chunk) - In 2024, the company took actions to exit certain operations, including rationalization of assets in its North American land business and disposal of operations in Brazil[83](index=83&type=chunk) - The sale of WFL (UK) Ltd. (U.K. land fuels business) closed in **April 2025** for total estimated proceeds of **$42.8 million**[83](index=83&type=chunk) [Reportable Segments](index=25&type=section&id=Reportable%20Segments) The company operates in aviation, land, and marine segments. The aviation segment has seen growth and higher returns, benefiting from working capital management and divesting Avinode Group. The land segment is focused on improving asset utilization and realigning operations, including recent divestitures. The marine segment is positioned for moderate earnings in stable markets and additional value in volatile conditions - Aviation segment has benefited from growth in fuel and related service offerings, enhanced logistics, and geographic expansion, achieving higher returns since **2023** through working capital management[86](index=86&type=chunk) - The land segment focuses on improving asset utilization and realigning its operational platform, including exiting certain operations in North America and Brazil in **2024**, and the Watson Fuels sale in **April 2025**[88](index=88&type=chunk) - The marine business traditionally benefits from elevated fuel prices and volatility, and a constrained credit environment, positioned to generate moderate earnings in stable markets and additional value in volatile markets[89](index=89&type=chunk) [Macroeconomic Environment](index=26&type=section&id=Macroeconomic%20Environment) The company faces ongoing uncertainty from U.S. trade policy, which can lead to volatility in global markets and impact demand. While inflation decelerated in 2024, a significant or prolonged period of trade uncertainty or high inflation, along with higher interest rates, could adversely affect results by increasing costs and interest expense - Significant uncertainty remains regarding the impact of U.S. trade policy on international trade and demand for global transportation services, potentially leading to volatility in financial and commodity markets[90](index=90&type=chunk) - Inflation decelerated in **2024**, but a prolonged period of trade uncertainty or high inflation, along with higher interest rates, could adversely impact the company's results of operations[90](index=90&type=chunk)[92](index=92&type=chunk) - The company mitigates the impact of increases in fuel prices through comprehensive hedging programs and financial derivative contracts[91](index=91&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Consolidated revenue for Q1 2025 decreased by 14% to $9.5 billion, leading to a 9% decrease in gross profit to $230.4 million and a shift from operating income to an operating loss of $6.6 million. This was primarily driven by lower average fuel prices and volumes across all segments, coupled with increased operating expenses from asset impairments and restructuring charges [Consolidated Results of Operations](index=27&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated revenue for Q1 2025 decreased by 14% to $9.5 billion, and gross profit decreased by 9% to $230.4 million. The company reported an operating loss of $6.6 million, a significant decline from an operating income of $63.3 million in Q1 2024, primarily due to increased operating expenses from asset impairments and restructuring charges. Net non-operating expense decreased by $11.3 million due to lower interest expense and higher foreign currency exchange gains **Consolidated Results of Operations (Millions, except per share amounts):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Revenue | $9,452.5 | $10,951.4 | | Gross profit | $230.4 | $254.1 | | Total 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 | | Basic earnings (loss) per common share | $(0.37) | $0.46 | - The **$1.5 billion** decrease in revenue was attributable to decreases in the land (**$551.2 million**), marine (**$457.6 million**), and aviation (**$490.0 million**) segments[94](index=94&type=chunk) - Operating expenses increased by **$46.2 million**, or **24%**, primarily due to **$44.5 million** in asset impairment charges and **$15.0 million** in restructuring charges[96](index=96&type=chunk) [Aviation Segment Results of Operations](index=28&type=section&id=Aviation%20Segment%20Results%20of%20Operations) Aviation segment revenue decreased by 10% to $4.7 billion in Q1 2025, primarily due to lower average jet fuel prices, despite a 2% increase in volumes. Gross profit increased by 7% to $115.7 million, and income from operations rose by 28% to $56.2 million, benefiting from higher profit contribution from European airport locations and physical inventory business, and lower operating expenses post-Avinode sale **Aviation Segment Results of Operations (Millions, except price per gallon):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Revenue | $4,654.2 | $5,144.2 | | Gross profit | $115.7 | $108.4 | | Income (loss) from operations | $56.2 | $44.0 | | Aviation segment volumes (gallons) | 1,700.2 | 1,673.1 | | Aviation segment average price per gallon | $2.50 | $2.86 | - The increase in gross profit was primarily attributable to higher profit contribution from operated airport locations in Europe, physical inventory business, and business and general aviation activities[100](index=100&type=chunk) - Operating expenses decreased primarily due to lower compensation and general and administrative expenses associated with the Avinode sale[101](index=101&type=chunk) [Land Segment Results of Operations](index=28&type=section&id=Land%20Segment%20Results%20of%20Operations) Land segment revenue decreased by 16% to $2.9 billion in Q1 2025, driven by lower average fuel prices and a 6% decrease in volumes due to the sale of the Brazil fuel business and asset rationalization. Gross profit declined by 19% to $79.0 million, and the segment reported an operating loss of $45.3 million, a significant drop from a $18.5 million income in Q1 2024, primarily due to lower profit contribution and increased operating expenses from asset impairments and restructuring **Land Segment Results of Operations (Millions, except price per gallon):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Revenue | $2,865.4 | $3,416.6 | | Gross profit | $79.0 | $97.3 | | Income (loss) from operations | $(45.3) | $18.5 | | Land segment volumes (gallons) | 1,494.3 | 1,598.1 | | Land segment average price per gallon | $1.92 | $2.14 | - The decrease in revenue was driven by lower average fuel prices (**10% decrease**) and a decrease in total volumes (**6% decrease**), primarily attributable to the sale of the Brazil fuel business and asset rationalization in North America[103](index=103&type=chunk) - Operating expenses increased due to asset impairment charges recognized in connection with the Watson Fuels sale and restructuring charges during Q1 2025[105](index=105&type=chunk) [Marine Segment Results of Operations](index=29&type=section&id=Marine%20Segment%20Results%20of%20Operations) Marine segment revenue decreased by 19% to $1.9 billion in Q1 2025, driven by lower average fuel prices and a 14% decrease in volumes due to reduced demand and market uncertainty. Gross profit declined by 26% to $35.7 million, and income from operations decreased by 45% to $14.8 million, primarily due to lower bunker fuel prices, reduced volatility, and lower margins in resale and physical businesses **Marine Segment Results of Operations (Millions, except price per metric ton):** | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Revenue | $1,932.9 | $2,390.5 | | Gross profit | $35.7 | $48.4 | | Income (loss) from operations | $14.8 | $26.8 | | Marine segment volumes (metric tons) | 3.7 | 4.3 | | Marine segment average price per metric ton | $519.49 | $552.04 | - The decrease in gross profit was principally due to lower bunker fuel prices, reduced volatility, and lower margins in resale and physical businesses as a result of increasing market uncertainty[107](index=107&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company believes its cash, Credit Facility, and operating cash flows are sufficient to fund working capital and capital expenditures for the next twelve months. Liquidity is influenced by customer receipts, supplier payments, and fuel prices. Key liquidity sources include $350.0 million Convertible Notes due 2028 and a $1.5 billion revolving Credit Facility, which has covenants that can impact availability - The company believes its cash and cash equivalents as of March 31, 2025, and available funds from its Credit Facility, together with cash flows generated by operations, are sufficient to fund working capital and capital expenditure requirements for at least the next twelve months[112](index=112&type=chunk) - Key liquidity sources include **$350.0 million** aggregate principal amount of 3.250% Convertible Senior Notes due 2028 and a revolving credit facility of up to **$1.5 billion** under the Fourth Amended and Restated Credit Agreement[113](index=113&type=chunk)[114](index=114&type=chunk) - Availability under the Credit Facility is limited by covenants, including a consolidated total leverage ratio of not more than **4.75 to 1**[114](index=114&type=chunk)[115](index=115&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) For Q1 2025, net cash provided by operating activities increased slightly to $114.4 million, driven by RPA activity and tax refunds, offset by derivative activities. Net cash used in investing activities decreased to $5.8 million due to lower capital expenditures and notes receivable repayments. Net cash used in financing activities significantly decreased to $32.4 million, primarily due to lower deferred acquisition payments and net debt repayments, despite common stock repurchases **Major Categories of Cash Flows (Millions):** | Cash Flow Activity | Q1 2025 | Q1 2024 | | :----------------------------------- | :------ | :------ | | Net cash provided by 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) | - The **$4.1 million** increase in operating cash flows was principally due to increased cash provided by RPA activity and the collection of transaction tax refunds[121](index=121&type=chunk) - Net cash used in financing activities decreased primarily due to lower payments of deferred consideration for acquisitions (**$0.4 million** in Q1 2025 vs. **$50.7 million** in Q1 2024) and net repayments under the Credit Facility[123](index=123&type=chunk) [Critical Accounting Estimates](index=31&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates, including impairment assessments of goodwill, long-lived assets, and equity investments, remain unchanged from the 2024 10-K Report. The land reporting unit is considered at risk as of March 31, 2025, due to its fair value not exceeding its carrying amount by more than 10% - There have been no material changes to the Critical Accounting Estimates disclosed in the 2024 10-K Report[125](index=125&type=chunk) - The land reporting unit is considered at risk as of March 31, 2025, as its fair value does not exceed its carrying amount by more than **10%**[126](index=126&type=chunk) **Goodwill Balances by Reporting Unit (March 31, 2025, Millions):** | Reporting Unit | Goodwill Balance | | :------------- | :--------------- | | Land | $831.9 | | Aviation | $354.5 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's exposures to commodity price, interest rate, or foreign currency risk since December 31, 2024 - No material changes to the company's exposures to commodity price, interest rate, or foreign currency risk since **December 31, 2024**[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025. There were no material changes in internal control over financial reporting during the three months ended March 31, 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of **March 31, 2025**[132](index=132&type=chunk) - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the three months ended **March 31, 2025**[133](index=133&type=chunk) [PART II. Other Information](index=33&type=section&id=PART%20II.%20Other%20Information) This section details legal proceedings, equity security sales, director trading plans, and required exhibits [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and tax proceedings, including ongoing tax audits in the U.S. and foreign jurisdictions (e.g., Denmark, South Korea) and claims arising in the ordinary course of business. While no current proceedings are expected to have a material adverse effect, an unfavorable resolution of any matter could be material to a specific reporting period - The company is under review by the IRS and various other domestic and foreign tax authorities regarding income tax and indirect tax matters[136](index=136&type=chunk) - The company is a party to various claims, complaints, and proceedings arising in the ordinary course of business, including environmental, commercial, governmental contract, and personal injury claims[137](index=137&type=chunk) - No current claim, complaint, or proceeding is expected to have a material adverse effect on the company's business or financial condition, but an adverse resolution could be material for a particular reporting period[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased 351 thousand shares of common stock at an average price of $28.38 per share, totaling approximately $10.0 million. As of March 31, 2025, approximately $227.0 million remained available under the existing stock repurchase authorizations **Issuer Purchases of Equity Securities (Q1 2025):** | Metric | Value | | :-------------------------------- | :---- | | Total Number of Shares Purchased | 351 thousand | | Average Price Paid Per Share | $28.38 | | Approximate Dollar Value of Shares Purchased | $10.0 million | | Approximate Dollar Value of Shares that May Yet Be Purchased | $227.0 million | - The company has two stock repurchase programs, approved in **March 2020** and **September 2024**, authorizing a total of **$400.0 million** in common stock repurchases, with no expiration date[140](index=140&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) A director, Jorge Benitez, adopted a Rule 10b5-1 trading plan on March 6, 2025, for the sale of up to 13,000 shares of common stock, expiring by March 6, 2026. No other officers or directors adopted or terminated such plans in Q1 2025 - On **March 6, 2025**, director Jorge Benitez adopted a Rule 10b5-1 trading plan for the sale of up to **13,000 shares** of common stock, expiring by **March 6, 2026**[141](index=141&type=chunk) - No other officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended **March 31, 2025**[142](index=142&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the 10-Q Report, including certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1) and XBRL formatted financial statements (Exhibits 101, 104) - Exhibits include certifications from the Chief Executive Officer (**31.1**) and Chief Financial Officer (**31.2**) pursuant to Rule 13a-14(a) or Rule 15d-14(a), and under Section 906 of the Sarbanes-Oxley Act of 2002 (**32.1**)[143](index=143&type=chunk) - XBRL formatted financial statements (Condensed Consolidated Balance Sheets, Income, Equity, Cash Flows, and Notes) are filed as Exhibit **101**, with the cover page interactive file as Exhibit **104**[143](index=143&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) This section provides the official signatures of the company's executive officers for the quarterly report [Signatures](index=35&type=section&id=Signatures) The Quarterly Report on Form 10-Q was signed on behalf of World Kinect Corporation by Michael J. Kasbar, Chairman and Chief Executive Officer, and Ira M. Birns, President and Chief Financial Officer, on April 25, 2025 - The report was signed by Michael J. Kasbar, Chairman and Chief Executive Officer, and Ira M. Birns, President and Chief Financial Officer[146](index=146&type=chunk) - The signing date for the report was **April 25, 2025**[146](index=146&type=chunk)

Financial Data and Key Metrics Changes - The first quarter consolidated volume was 4.2 billion gallons, down 5% year over year [21] - Consolidated gross profit declined 9% from last year's first quarter to $230 million [21] - Adjusted operating expenses were $178 million in the first quarter, down 6% year over year [30] - Interest expense was $23 million in the first quarter, down over 20% year over year [31] - The adjusted effective tax rate in the first quarter was 15%, lower than the full-year guidance range of 22% to 25% [32] Business Line Data and Key Metrics Changes - Aviation volume was 1.7 billion gallons, up 2% year over year, with gross profit of $116 million, a 7% increase [23] - Land volumes decreased 6% year over year, with adjusted gross profit of $79 million, a 19% decline [25] - Marine volumes were down 14% year over year, with gross profit declining about 26% [27] Market Data and Key Metrics Changes - The North American liquid land fuel business was negatively impacted by market trends and broader economic conditions [9] - Volume in Singapore, the world's largest bunker fuel hub, dropped to its lowest level in nearly two years [28] Company Strategy and Development Direction - The company is focused on streamlining its portfolio and reducing fixed costs to improve profitability and reduce earnings volatility [8] - Recent divestments of the Brazilian and UK land businesses are part of the strategy to concentrate on core business activities [10][11] - The company aims to leverage its expertise in last half-mile distribution solutions for sustainable growth [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds but expressed confidence in achieving strategic and operational objectives [8] - The company expects profit improvement from restructuring actions by the second half of 2025 [10] - Despite uncertainty in some markets, management anticipates second quarter consolidated gross profit to be in the range of $235 to $244 million [29] Other Important Information - The company generated operating cash flow of $114 million and free cash flow of $99 million in the first quarter [32] - The company repurchased $10 million of shares during the first quarter [32] Q&A Session Summary Question: Details on the UK sale and its impact on land volumes - The UK land business generated an operating loss in 2024, and its sale is expected to improve Land's operating margin [40][41] Question: Clarification on land segment performance and future expectations - The company expects to perform better than the previous year's weak second quarter, despite ongoing economic uncertainty [62] Question: Insights on restructuring actions and expected savings - A $15 million charge was taken for restructuring, expected to result in about $30 million of annualized cost savings [85] Question: M&A opportunities in the current environment - The pipeline for acquisitions remains stable, with some opportunities arising from more reasonable seller expectations [90]

Financial Performance - For the quarter ended March 2025, World Kinect (WKC) reported revenue of $9.45 billion, down 13.7% year-over-year, and EPS of $0.48, slightly up from $0.47 in the same quarter last year [1] - The reported revenue was below the Zacks Consensus Estimate of $10.27 billion, resulting in a revenue surprise of -7.99%, while the EPS exceeded the consensus estimate of $0.45, yielding an EPS surprise of +6.67% [1] Key Metrics - World Kinect's stock has returned -16.3% over the past month, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Segment Performance - Aviation volume was reported at 1,700.2 million gallons, exceeding the average estimate of 1,646.91 million gallons, with revenue of $4.65 billion, above the $4.41 billion estimate, but showing a year-over-year decline of -9.5% [4] - Land segment revenue was reported at $2.87 billion, significantly below the $3.68 billion estimate, reflecting a year-over-year decline of -16.1% [4] - Marine segment revenue was $1.93 billion, also below the $2.22 billion estimate, with a year-over-year decline of -19.1% [4] - Income from operations in the Aviation segment was $56.20 million, surpassing the estimate of $42.91 million, while Land reported a loss of -$45.30 million against an expected profit of $15.38 million [4]

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]

Financial Performance - World Kinect Corporation's Q1 2025 diluted EPS was -$0.37, compared to $0.45 in Q1 2024, a decrease of 182%[24] - Adjusted diluted EPS increased by 2% year-over-year, from $0.47 in Q1 2024 to $0.48 in Q1 2025[24] - Adjusted EBITDA decreased by 6%, from $86 million in Q1 2024 to $80 million in Q1 2025[24] - Gross profit decreased by 9% year-over-year, from $254 million in Q1 2024 to $230 million in Q1 2025[24] - Free cash flow increased by 7%, from $93 million in Q1 2024 to $99 million in Q1 2025[24] Segment Performance - Aviation gross profit increased by 7%, from $108.4 million in Q1 2024 to $115.7 million in Q1 2025, with volumes up by 2%[27, 30] - Land gross profit decreased by 19%, from $97.3 million in Q1 2024 to $79.0 million in Q1 2025, with volumes down by 6%[27, 34] - Marine gross profit decreased by 26%, from $48.4 million in Q1 2024 to $35.7 million in Q1 2025, with volumes down by 14%[27, 39] Strategic Actions and Outlook - The company recognized a one-time charge of $44.5 million related to the sale of its UK Land business[23] - Restructuring charges of $15 million were recognized to streamline the operating model[23] - Q2 2025 gross profit is projected to be between $235 million and $244 million[42]

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]