World Kinect Corporation Completes Sale of the Avinode Group and Portfolio of Aviation Software Products

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World Kinect (NYSE: WKC) has completed the sale of the Avinode Group and aviation software products to CAMP Systems International, Inc. The sale generated approximately $200 million in cash proceeds and is expected to result in a one-time after-tax gain of $75-80 million in the second quarter. The sale allows World Kinect to reduce interest expenses and invest in core business opportunities.

Positive

• World Kinect received gross cash proceeds of approximately $200 million from the sale of the Avinode Group and aviation software products.

Negative

• None.

Financial Analyst

The recent sale by World Kinect Corporation of the Avinode Group and associated aviation software products marks a strategic realignment of the company's assets. With gross cash proceeds of approximately $200 million and a projected after-tax gain of $75-80 million, this transaction not only bolsters the company's liquidity but also offers an opportunity to decrease its annual interest expense by an estimated $10 million. This financial maneuver seems to improve the balance sheet in the near term, potentially enhancing shareholder value. The company's intention to reinvest in synergistic opportunities indicates a proactive approach to growth, focusing on areas that could generate complementarity and efficiency within its core business. Investors might view this as a positive sign of the company's commitment to prudent financial management and strategic capital allocation.

Market Research Analyst

The divestiture of the Avinode Group by World Kinect Corporation to CAMP Systems, a subsidiary of Hearst, could signify a pivot towards more lucrative or core areas of operation. This transaction not only streamlines World Kinect's business model by shedding non-core assets but also might enhance its competitive position within its primary market. With the company looking to deploy the capital in synergistic opportunities, it shows intent to leverage its strengths and possibly enter into or expand within growth markets. For retail investors, the potential for reinvestment in areas that align closely with World Kinect's core competencies could mean a stronger, more focused company in the long run. However, the success of such strategic investments remains to be seen and would be a key factor in evaluating the company's future performance.

MIAMI--(BUSINESS WIRE)-- World Kinect Corporation (NYSE: WKC) announced today it has completed the sale of the Avinode Group, the world’s leading air charter sourcing platform, and its portfolio of aviation FBO software products to CAMP Systems International, Inc., a wholly-owned subsidiary of Hearst.

World Kinect received gross cash proceeds at closing of approximately $200 million, and expects to report a one-time after-tax gain of approximately $75-80 million in the second quarter.

“We are pleased to close on this strategic sale – another example of our efforts to sharpen our portfolio,” said Ira M. Birns, Executive Vice President and Chief Financial Officer. “In the short-term, this transaction provides us with liquidity to reduce our annual run-rate of interest expense by approximately $10 million and, longer-term, the transaction provides additional capital to invest in synergistic opportunities in our core business.”

About World Kinect Corporation

Headquartered in Miami, Florida, World Kinect Corporation (NYSE: WKC) is a global energy management company offering fulfillment and related services to more than 150,000 customers across the aviation, marine, and land-based transportation sectors. We also supply natural gas and power in the United States and Europe along with a growing suite of other sustainability-related products and services.

For more information, visit www.world-kinect.com.

Information Relating to Forward-Looking Statements

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe," "anticipate," "expect," "estimate," "project," "could," "would," "will," "will be," "will continue," "plan," or words or phrases of similar meaning. Specifically, this release includes forward-looking statements regarding our future financial performance, including our operating margin, adjusted EBITDA and free cash flow. This release also includes statements regarding our future capital return plans, which are subject to board approval, applicable law and provisions governing the terms of our credit arrangements. All of our forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in our Securities and Exchange Commission ("SEC") filings, including our most recent Annual Report on Form 10-K filed with the SEC.

Actual results may differ materially from any forward-looking statements due to risks and uncertainties, including, but not limited to: customer and counterparty creditworthiness and our ability to collect accounts receivable and settle derivative contracts; changes in the market prices of energy or commodities or extremely high or low fuel prices that continue for an extended period of time; adverse conditions in the industries in which our customers operate; our inability to effectively mitigate certain financial risks and other risks associated with derivatives and our physical fuel products; our ability to achieve the expected level of benefit from our restructuring activities and cost reduction initiatives; relationships with our employees and potential labor disputes associated with employees covered by collective bargaining agreements; our failure to comply with restrictions and covenants governing our outstanding indebtedness; the impact of cyber and other information security related incidents; changes in the political, economic or regulatory environment generally and in the markets in which we operate, such as the current conflicts in Eastern Europe and the Middle East; greenhouse gas reduction programs and other environmental and climate change legislation adopted by governments around the world, including cap and trade regimes, carbon taxes, increased efficiency standards and mandates for renewable energy, each of which could increase our operating and compliance costs as well as adversely impact our sales of fuel products; changes in credit terms extended to us from our suppliers; non-performance of suppliers on their sale commitments and customers on their purchase commitments; non-performance of third-party service providers; our ability to effectively integrate and derive benefits from acquired businesses; our ability to meet financial forecasts associated with our operating plan; lower than expected cash flows and revenues, which could impair our ability to realize the value of recorded intangible assets and goodwill; the availability of cash and sufficient liquidity to fund our working capital and strategic investment needs; currency exchange fluctuations; inflationary pressures and their impact on our customers or the global economy, including sudden or significant increases in interest rates or a global recession; our ability to effectively leverage technology and operating systems and realize the anticipated benefits; failure to meet fuel and other product specifications agreed with our customers; environmental and other risks associated with the storage, transportation and delivery of petroleum products; reputational harm from adverse publicity arising out of spills, environmental contamination or public perception about the impacts on climate change by us or other companies in our industry; risks associated with operating in high-risk locations, including supply disruptions, border closures and other logistical difficulties that arise when working in these areas; uninsured or underinsured losses; seasonal variability that adversely affects our revenues and operating results, as well as the impact of natural disasters, such as earthquakes, hurricanes and wildfires; declines in the value and liquidity of cash equivalents and investments; our ability to retain and attract senior management and other key employees; changes in U.S. or foreign tax laws, interpretations of such laws, changes in the mix of taxable income among different tax jurisdictions, or adverse results of tax audits, assessments, or disputes; our failure to generate sufficient future taxable income in jurisdictions with material deferred tax assets and net operating loss carryforwards; changes in multilateral conventions, treaties, tariffs or other arrangements between or among sovereign nations, including the U.K.'s exit from the European Union; our ability to comply with U.S. and international laws and regulations, including those related to anti-corruption, economic sanction programs and environmental matters; the outcome of litigation, regulatory investigations and other legal matters, including the associated legal and other costs; and other risks described from time to time in our SEC filings. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in expectations, future events, or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240501285758/en/

Ira M. Birns, Executive Vice President & Chief Financial Officer

Elsa Ballard, Vice President of Investor Relations

investor@worldkinect.com

Source: World Kinect Corporation

FAQ

How much cash proceeds did World Kinect receive from the sale?

World Kinect received approximately $200 million in gross cash proceeds from the sale.

What is the expected one-time after-tax gain from the sale?

The sale is expected to result in a one-time after-tax gain of approximately $75-80 million in the second quarter.

Who did World Kinect sell the Avinode Group and aviation software products to?

World Kinect sold the Avinode Group and aviation software products to CAMP Systems International, Inc., a subsidiary of Hearst.

How will World Kinect utilize the proceeds from the sale?

World Kinect plans to reduce its annual run-rate of interest expense by approximately $10 million in the short-term and invest in synergistic opportunities in its core business in the longer term.