World Kinect Corp 10-Q for FY2024 Q1

World Kinect Corp (WKC)

10-Q 2024-04-26 For: 2024-03-31

Added on April 11, 2026

About this 10-Q

World Kinect Corp filed this 10-Q on April 26, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).

Headline figures

Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.95B; down 12.3% from $12.48B a year earlier
Net income: $27.4M; up 20.2% from net income of $22.8M a year earlier
Diluted EPS: $0.45; up 25.0% from $0.36 a year earlier

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PART I.	Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Income and Comprehensive Income for the Three Months Ended March 31, 2024 and 2023	2
	Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2024 and 2023	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	4
	Notes to the Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II.	Other Information
Item 1.	Legal Proceedings	31


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 5.	Other Information	31
Item 6.	Exhibits	32

SIGNATURES


	March 31, 2024		December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	321.3	$	304.3
Accounts receivable, net of allowance for credit losses of $20.0 million and $18.3 million as of March 31, 2024 and December 31, 2023, respectively	2,679.0		2,735.5
Inventories	654.6		664.6
Prepaid expenses	73.9		77.6
Short-term derivative assets, net	233.6		275.4
Other current assets	430.1		446.4
Total current assets	4,392.6		4,503.8
Property and equipment, net	496.1		515.3
Goodwill	1,175.2		1,238.0
Identifiable intangible assets, net	284.0		299.7
Other non-current assets	826.4		818.6
Total assets	$	7,174.4	$	7,375.3
Liabilities:
Current liabilities:
Current maturities of long-term debt	$	81.1	$	78.8
Accounts payable	2,965.5		3,097.6
Short-term derivative liabilities, net	134.9		128.2
Accrued expenses and other current liabilities	680.9		745.0
Total current liabilities	3,862.4		4,049.7
Long-term debt	802.6		809.1
Other long-term liabilities	550.9		566.9
Total liabilities	5,215.9		5,425.7
Commitments and contingencies
Equity:
World Kinect shareholders' equity:
Preferred stock, $1.00 par value; 0.1 shares authorized, none issued	—		—
Common stock, $0.01 par value; 100.0 shares authorized, 59.9 and 59.8 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	0.6		0.6
Capital in excess of par value	114.3		109.6
Retained earnings	1,998.8		1,981.6
Accumulated other comprehensive income (loss)	(161.7)		(148.9)
Total World Kinect shareholders' equity	1,952.0		1,943.0
Noncontrolling interest	6.5		6.7
Total equity	1,958.5		1,949.6
Total liabilities and equity	$	7,174.4	$	7,375.3


	For the Three Months Ended March 31,
	2024		2023
Revenue	$	10,951.4	$	12,481.6
Cost of revenue	10,697.3		12,218.9
Gross profit	254.1		262.7
Operating expenses:
Compensation and employee benefits	115.5		119.2
General and administrative	75.1		79.0

Restructuring charges	0.2		—
Total operating expenses	190.8		198.2
Income (loss) from operations	63.3		64.6
Non-operating income (expenses), net:
Interest expense and other financing costs, net	(28.9)		(34.3)
Other income (expense), net	(3.9)		(3.5)
Total non-operating income (expense), net	(32.8)		(37.8)
Income (loss) before income taxes	30.5		26.7
Provision for income taxes	3.3		4.2
Net income (loss) including noncontrolling interest	27.2		22.6
Net income (loss) attributable to noncontrolling interest	(0.2)		(0.2)
Net income (loss) attributable to World Kinect	$	27.4	$	22.8
Basic earnings (loss) per common share	$	0.46	$	0.37
Basic weighted average common shares	59.9		62.2
Diluted earnings (loss) per common share	$	0.45	$	0.36
Diluted weighted average common shares	60.3		62.8
Comprehensive income:
Net income (loss) including noncontrolling interest	$	27.2	$	22.6
Other comprehensive income (loss):
Foreign currency translation adjustments	(11.8)		5.7
Cash flow hedges, net of income tax expense (benefit) of ($0.5) and ($0.7) for the three months ended March 31, 2024 and 2023, respectively	(1.0)		(2.2)
Total other comprehensive income (loss)	(12.9)		3.5
Comprehensive income (loss) including noncontrolling interest	14.3		26.1
Comprehensive income (loss) attributable to noncontrolling interest	(0.2)		(0.2)
Comprehensive income (loss) attributable to World Kinect	$	14.5	$	26.3


	Common Stock			Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total World Kinect Shareholders' Equity		Noncontrolling Interest Equity		Total Equity
	Shares	Amount
Balance as of December 31, 2023	59.8	$	0.6	$	109.6	$	1,981.6	$	(148.9)	$	1,943.0	$	6.7	$	1,949.6
Net income (loss)	—	—		—		27.4		—		27.4		(0.2)		27.2

Cash dividends declared	—	—		—		(10.1)		—		(10.1)		—		(10.1)
Amortization of share-based payment awards	—	—		5.9		—		—		5.9		—		5.9
Issuance (cancellation) of common stock related to share-based payment awards	0.1	—		—		—		—		—		—		—

Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—	—		(1.2)		—		—		(1.2)		—		(1.2)

Other comprehensive income (loss)	—	—		—		—		(12.9)		(12.9)		—		(12.9)



Balance as of March 31, 2024	59.9	$	0.6	$	114.3	$	1,998.8	$	(161.7)	$	1,952.0	$	6.5	$	1,958.5


	Common Stock			Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total World Kinect Shareholders' Equity		Noncontrolling Interest Equity		Total Equity
	Shares	Amount
Balance as of December 31, 2022	62.0	$	0.6	$	182.4	$	1,962.5	$	(160.6)	$	1,984.9	$	5.9	$	1,990.7
Net income (loss)	—	—		—		22.8		—		22.8		(0.2)		22.6

Cash dividends declared	—	—		—		(8.6)		—		(8.6)		—		(8.6)
Amortization of share-based payment awards	—	—		6.1		—		—		6.1		—		6.1
Issuance (cancellation) of common stock related to share-based payment awards	0.1	—		—		—		—		—		—		—

Purchases of common stock tendered by employees to satisfy the required withholding taxes related to share-based payment awards	—	—		(0.3)		—		—		(0.3)		—		(0.3)

Other comprehensive income (loss)	—	—		—		—		3.5		3.5		—		3.5



Balance as of March 31, 2023	62.1	$	0.6	$	188.2	$	1,976.7	$	(157.1)	$	2,008.3	$	5.7	$	2,014.0


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	March 31, 2024
Cash and cash equivalents	$	6.2
Accounts receivable, net	3.3
Prepaid expenses and other current assets	4.1
Property and equipment	19.5
Intangible assets, net	6.6
Goodwill	59.5
Other non-current assets	0.3
Total assets held for sale	$	99.5

Accounts payable	$	0.4
Accrued expenses and other liabilities	13.0
Other long-term liabilities	1.0
Total liabilities held for sale	$	14.3


	Aviation Segment		Land Segment		Total
As of December 31, 2023	$	398.3	$	839.7	$	1,238.0

Goodwill reclassified to held for sale (1)	(59.5)		—		(59.5)
Foreign currency translation of non-USD functional currency subsidiary goodwill	(1.2)		(2.1)		(3.3)
As of March 31, 2024	$	337.6	$	837.6	$	1,175.2


	Condensed Consolidated Balance Sheets Location	Gross Derivative Assets				Gross Derivative Liabilities
Derivative Instruments		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments

Commodity contracts	Other non-current assets	$	—	$	0.3	$	—	$	—
	Short-term derivative liabilities, net	22.7		24.8		20.1		20.9


Interest rate contracts	Short-term derivative assets, net	13.4		12.7		—		—
	Other non-current assets	—		2.2		—		—


Total derivatives designated as hedging instruments		36.1		39.9		20.1		20.9

Derivatives not designated as hedging instruments
Commodity contracts	Short-term derivative assets, net	339.8		343.9		94.7		73.1
	Other non-current assets	148.8		139.8		20.1		17.2
	Short-term derivative liabilities, net	155.5		161.8		323.5		340.0
	Other long-term liabilities	115.2		121.2		221.0		217.9

Foreign currency contracts	Short-term derivative assets, net	10.2		24.7		6.3		9.8
	Other non-current assets	0.2		0.6		0.1		0.5
	Short-term derivative liabilities, net	4.6		8.7		8.5		18.3
	Other long-term liabilities	0.1		—		0.1		—
Total derivatives not designated as hedging instruments		774.3		800.8		674.3		676.8
Total derivatives		$	810.4	$	840.7	$	694.4	$	697.8


Line item in the Consolidated Balance Sheets in which the hedged item is included	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Asset/(Liabilities)
	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Inventory	$	54.6	$	55.3	$	0.7	$	(1.3)


	For the Three Months Ended
	March 31, 2024						March 31, 2023
	Revenue		Cost of revenue		Interest expense and other financing costs, net		Revenue		Cost of revenue		Interest expense and other financing costs, net
Total amounts of income and expense line items in which the effects of fair value or cash flow hedged are recorded	$	10,951.4	$	10,697.3	$	28.9	$	12,481.6	$	12,218.9	$	34.3
Gains (losses) on fair value hedge relationships:
Commodity contracts:
Hedged item	—		2.1		—		—		(3.3)		—
Derivatives designated as hedging instruments	—		(3.2)		—		—		3.8		—
Amount excluded from effectiveness testing recognized in earnings based on amortization approach	—		—		—		—		—		—
Gains (losses) on cash flow hedge relationships:
Commodity contracts:
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	—		(0.5)		—		(0.5)		(0.1)		—
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value	—		—		—		—		—		—
Interest rate contracts:
Amount of gain (loss) reclassified from Accumulated other comprehensive income (loss) into net income	—		—		3.7		—		—		3.1
Amount excluded from effectiveness testing recognized in earnings based on changes in fair value	—		—		—		—		—		—
Total amount of income and expense line items excluding the impact of hedges	$	10,951.4	$	10,695.7	$	32.6	$	12,482.1	$	12,219.3	$	37.4


Gain (Loss) Not Recorded in Accumulated other comprehensive income (loss) Due to Intra-Period Settlement		For the Three Months Ended March 31,
	Location	2024		2023
Commodity contracts	Revenue	$	0.4	$	(0.4)
Commodity contracts	Cost of revenue	$	(1.7)	$	(1.7)


Amount of Gain (Loss) Recognized in Accumulated other comprehensive income (loss), Net of Income Tax (Expense) Benefit	For the Three Months Ended March 31,
	2024		2023
Commodity contracts (Revenue)	$	(0.1)	$	0.7
Commodity contracts (Cost of revenue)	(0.2)		(0.4)
Interest rate contracts (Interest expense and other financing costs, net)	1.7		(0.7)
Total gain (loss)	$	1.3	$	(0.3)


		For the Three Months Ended March 31,
Derivative Instruments - Non-designated	Location	2024		2023
Commodity contracts	Revenue	$	(78.0)	$	(90.3)
	Cost of revenue	6.0		(7.1)
		(72.0)		(97.4)
Foreign currency contracts	Revenue	(0.5)		(3.6)
	Other (expense), net	(2.1)		3.8
		(2.6)		0.2
Total gain (loss)		$	(74.6)	$	(97.2)


	March 31, 2024		December 31, 2023
Net derivative liability positions with credit contingent features	$	108.9	$	99.1
Collateral posted and held by our counterparties	(0.4)		—
Maximum additional potential collateral requirements	$	108.6	$	99.1


	For the Three Months Ended March 31,
	2024		2023
Aviation	$	298.1	$	272.3
Land	63.2		4.3
Marine	1,083.8		1,110.3
Asia Pacific	1,445.1		1,386.9

Aviation	916.1		824.7
Land	896.5		1,057.1
Marine	545.9		525.4
EMEA	2,358.5		2,407.2

Aviation	1,091.6		1,218.0
Land	247.2		217.7
Marine	265.5		287.1
LATAM	1,604.2		1,722.8

Aviation	2,830.3		3,897.9
Land	2,295.7		2,707.9
Marine	494.2		445.5
North America	5,620.2		7,051.3

Other revenues (excluded from ASC 606) (1)	(76.6)		(86.6)

Total revenue	$	10,951.4	$	12,481.6


	For the Three Months Ended March 31,
Revenue:	2024		2023
Aviation segment	$	5,144.2	$	6,222.8
Land segment	3,416.6		3,891.3
Marine segment	2,390.5		2,367.5
Total revenue	$	10,951.4	$	12,481.6

Income from operations:
Aviation segment	$	44.0	$	34.0
Land segment	18.5		26.2
Marine segment	26.8		30.8
Corporate overhead - unallocated	(25.9)		(26.4)
Total income from operations	$	63.3	$	64.6


	For the Three Months Ended March 31,
	2024		2023		Change
Revenue	$	5,144.2	$	6,222.8	$	(1,078.6)

Gross profit	$	108.4	$	100.6	$	7.9
Operating expenses	64.5		66.6		(2.1)
Income (loss) from operations	$	44.0	$	34.0	$	10.0

Operational metrics:
Aviation segment volumes (gallons)	1,673.1		1,777.1		(104.0)
Aviation segment average price per gallon	$	2.86	$	3.30	$	(0.43)


	Fair Value Measurements as of March 31, 2024
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Commodities contracts	$	233.8	$	536.9	$	11.1	$	781.9
Interest rate contract	—		13.4		—		13.4
Foreign currency contracts	—		15.1		—		15.1
Cash surrender value of life insurance	—		17.8		—		17.8
Total assets at fair value	$	233.8	$	583.3	$	11.1	$	828.2

Liabilities:
Commodities contracts	$	317.6	$	360.6	$	1.1	$	679.3

Foreign currency contracts	—		15.0		—		15.0
Total liabilities at fair value	$	317.6	$	375.6	$	1.1	$	694.4


	Fair Value Measurements as of December 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total
Assets:
Commodities contracts	$	220.0	$	560.2	$	11.6	$	791.8
Interest rate contract	—		14.8		—		14.8
Foreign currency contracts	—		34.1		—		34.1
Cash surrender value of life insurance	—		16.5		—		16.5
Total assets at fair value	$	220.0	$	625.6	$	11.6	$	857.3

Liabilities:
Commodities contracts	$	322.1	$	345.3	$	1.8	$	669.1

Foreign currency contracts	—		28.7		—		28.7
Total liabilities at fair value	$	322.1	$	373.9	$	1.8	$	697.8


	Fair Value as of March 31, 2024
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Collateral		Gross Amounts without Right of Offset		Net Amounts
Assets:
Commodities contracts	$	781.9	$	408.2	$	373.7	$	61.0	$	—	$	312.7
Interest rate contract	13.4		—		13.4		—		—		13.4
Foreign currency contracts	15.1		11.1		4.0		—		—		4.0
Total assets at fair value	$	810.4	$	419.3	$	391.2	$	61.0	$	—	$	330.2

Liabilities:
Commodities contracts	$	679.3	$	408.2	$	271.2	$	83.9	$	—	$	187.3
Interest rate contract	—		—		—		—		—		—
Foreign currency contracts	15.0		11.1		3.9		—		—		3.9
Total liabilities at fair value	$	694.4	$	419.3	$	275.1	$	83.9	$	—	$	191.2


	Fair Value as of December 31, 2023
	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Collateral		Gross Amounts without Right of Offset		Net Amounts
Assets:
Commodities contracts	$	791.8	$	399.0	$	392.8	$	45.2	$	—	$	347.7
Interest rate contract	14.8		—		14.8		—		—		14.8
Foreign currency contracts	34.1		19.1		15.0		—		—		15.0
Total assets at fair value	$	840.7	$	418.0	$	422.7	$	45.2	$	—	$	377.5

Liabilities:
Commodities contracts	$	669.1	$	399.0	$	270.1	$	100.5	$	—	$	169.7

Foreign currency contracts	28.7		19.1		9.6		—		—		9.6
Total liabilities at fair value	$	697.8	$	418.0	$	279.7	$	100.5	$	—	$	179.2


	March 31, 2024		December 31, 2023
Credit Facility (1)	$	—	$	—
Term loan (1)	473.4		476.4
Convertible Notes (2)	339.1		338.5
Finance leases	14.7		15.7
Other (3)	56.5		57.3
Total debt	883.7		887.9
Less: Current maturities of long-term debt and finance leases	81.1		78.8
Long-term debt	$	802.6	$	809.1


	Foreign Currency Translation Adjustments		Cash Flow Hedges		Accumulated Other Comprehensive Income (Loss)
Balance as of January 1, 2024	$	(159.6)	$	10.8	$	(148.9)
Other comprehensive income (loss) before reclassifications	(11.8)		1.3		(10.5)
Amounts reclassified from Accumulated other comprehensive income (loss)	—		(2.4)		(2.4)

Balance as of March 31, 2024	$	(171.5)	$	9.7	$	(161.7)

Balance as of January 1, 2023	$	(179.5)	$	18.9	$	(160.6)
Other comprehensive income (loss) before reclassifications	5.7		(0.3)		5.4
Amounts reclassified from Accumulated other comprehensive income (loss)	—		(1.8)		(1.8)

Balance as of March 31, 2023	$	(173.8)	$	16.7	$	(157.1)


	March 31, 2024		December 31, 2023
Accounts receivable, net:
Aviation segment, net of allowance for credit losses of $9.0 and $9.1 as of March 31, 2024 and December 31, 2023, respectively	$	1,199.8	$	1,285.7
Land segment, net of allowance for credit losses of $8.2 and $6.3 as of March 31, 2024 and December 31, 2023, respectively	827.2		767.4
Marine segment, net of allowance for credit losses of $2.9 and $2.9 as of March 31, 2024 and December 31, 2023, respectively	652.0		682.4
Total accounts receivable, net	$	2,679.0	$	2,735.5

Total assets:
Aviation segment	$	2,559.8	$	2,767.4
Land segment	3,346.2		3,323.4
Marine segment	1,000.7		992.8
Corporate	267.6		291.8
Total assets	$	7,174.4	$	7,375.3


Exhibit No.						Description

10.1						Amendment No. 10 to the Fourth Amended and Restated Credit Agreement, dated as of January 19, 2024, among World Kinect Corporation, World Fuel Services Europe, Ltd., World Fuel Services (Singapore) Pte Ltd, World Fuel Services, Inc., WFS UK Holding Company IV Limited, Kinect Energy AS and Kinect Energy Spot AS, and Bank of America, N.A., as administrative agent (incorporated by reference herein from Exhibit 10.34 to our Annual Report on Form 10-K filed on February 23, 2024)

31.1						Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d — 14(a)

31.2						Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d — 14(a)

32.1						Certification of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101						The following materials from World Kinect Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in XBRL (Extensible Business Reporting Language); (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income and Comprehensive Income, (iii) Condensed Consolidated Statements of Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.

104						Cover page interactive file (formatted in Inline XBRL and contained in Exhibit 101)



Date: April 26, 2024			World Kinect Corporation


			/s/ Michael J. Kasbar
			Michael J. Kasbar
			Chairman, President and Chief Executive Officer


			/s/ Ira M. Birns
			Ira M. Birns
			Executive Vice President and Chief Financial Officer