1124827--4/17/2006--UTi_WORLDWIDE

related topics

{operation, international, foreign}

{acquisition, growth, future}

{system, service, information}

{stock, price, operating}

{customer, product, revenue}

{operation, natural, condition}

{personnel, key, retain}

{regulation, government, change}

{cost, regulation, environmental}

{regulation, change, law}

{loss, insurance, financial}

{competitive, industry, competition}

{stock, price, share}

{interest, director, officer}

{property, intellectual, protect}

{financial, litigation, operation}

{debt, indebtedness, cash}

{tax, income, asset}

{condition, economic, financial}

We conduct business throughout the world and our results of operations may be impacted by fluctuations in trade volumes and by global, regional and local economic conditions. Our international presence exposes us to potential difficulties and risks associated with distant operations and to various economic, regulatory, political and other uncertainties and risks. We have grown and plan to grow, in part, through acquisitions of other freight forwarders, transportation management businesses, customs brokers, contract logistics providers, domestic transportation and supply chain management providers. Growth by acquisitions involves risks and we may not be able to identify or acquire companies consistent with our growth strategy or successfully integrate any acquired business into our operations. We may need additional financing to fund our operations and finance our growth or we may need replacement financing, and we may not be able to obtain financing on terms acceptable to us or at all. Restrictions and controls on investments and acquisitions outside of the United States may restrict our ability to operate in those countries. If we fail to develop and integrate information technology systems or we fail to upgrade or replace our information technology systems to handle increased volumes and levels of complexity, meet the demands of our customers and protect against disruptions of our operations, we may lose inventory items, orders or customers, which could seriously harm our business. We are dependent on key management personnel and the loss of any such personnel could materially and adversely affect our business. We are dependent on our relationships with our agents, key employees and third-party carriers in various countries around the world. Foreign currency fluctuations could result in currency translation exchange gains or losses or could increase or decrease the book value of our assets. Because our freight forwarding and truck brokerage operations are dependent on commercial airfreight carriers and air charter operators, ocean freight carriers, major U.S. railroads, other transportation companies, draymen and longshoremen, changes in available cargo capacity and other changes affecting such carriers, as well as interruptions in service or work stoppages, may negatively impact our business. Our non asset-based transportation management, truck brokerage and trucking businesses are subject to a number of factors that are largely beyond our control, any of which could have a material adverse effect on our results of operations. If we are required to reclassify independent contractors as employees in our trucking, truck brokerage and other carrier businesses, we may incur additional costs and taxes which could have a material adverse effect on our results of operations. Our business is subject to seasonal trends. Comparisons of our operating results from period to period are not necessarily meaningful and should not be relied upon as an indicator of future performance. Our growth and profitability may not continue, which may result in a decrease in our stock price. We may not succeed with our NextLeap strategic operating plan or with our next long-term strategic operating plan and, as a result, our revenue and profitability may be adversely impacted. Our effective income tax rate will impact our results of operations, cash flow and profitability. We face intense competition in the freight forwarding, contract logistics, truck brokerage and supply chain management industry. Our industry is consolidating and if we cannot gain sufficient market presence in our industry, we may not be able to compete successfully against larger, global companies in our industry. Because we are a holding company, we are financially dependent on receiving distributions from our subsidiaries and we could be harmed if such distributions could not be made in the future. Because we manage our business on a localized basis in many countries around the world, our operations and internal controls may be materially adversely affected by inconsistent management practices. Our information technology systems are subject to risks which we cannot control. We may be adversely affected if we are unable to license the software necessary for our information technology system. If we fail to adequately protect our intellectual property rights, the value of such rights may diminish and our results of operations and financial condition may be materially adversely affected. If we are not able to limit our liability for customers claims through contract terms and limit our exposure through the purchase of insurance, we could be required to pay large amounts to our customers as compensation for their claims and our results of operations could be materially adversely affected. The failure of our policies and procedures which are designed to prevent the unlawful transportation or storage of hazardous, explosive or illegal materials could subject us to large fines, penalties or lawsuits. If we fail to comply with applicable governmental regulations, we could be subject to substantial fines or revocation of our permits and licenses and we may experience increased costs as a result of governmental regulation. If we are not able to sell container space that we purchase from ocean shipping lines, capacity that we charter from our air carriers and utilize our truck capacity, we will not be able to recover our out-of -pocket costs and our profitability may suffer. If we lose certain of our contract logistics customers or we cannot maintain adequate levels of utilization in our shared warehouses, then we may experience revenue losses and decreased profitability. If we are not reimbursed for amounts which we advance for our customers, our net revenue and profitability may decrease. It may be difficult for our shareholders to effect service of process and enforce judgments obtained in United States courts against us or our directors and executive officers who reside outside of the United States. Because we are incorporated under the laws of the British Virgin Islands, it may be more difficult for our shareholders to protect their rights than it would be for a shareholder of a corporation incorporated in another jurisdiction. Future issuances of preference shares could adversely affect the holders of our ordinary shares.

Full 10-K form ▸

1124827--4/17/2006--UTi_WORLDWIDE_INC