##### Table of Contents



United States
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended July 31, 2008
 Or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 000-31869
(Commission File Number)
 UTi Worldwide Inc.
  British Virgin Islands
    
    N/A(State or Other Jurisdiction of Incorporation or Organization)
    
    (IRS Employer Identification Number)9 Columbus Centre, Pelican Drive
    
    c/o UTi, Services, Inc.Road Town, Tortola
    
    100 Oceangate, Suite 1500British Virgin Islands
    
    Long Beach, CA 90802 USA
  
 
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



UTi Worldwide Inc.
 Report on Form 10-Q
For the Quarter Ended July 31, 2008
 Table of Contents
 PART I. Financial Information
    
    
    2Item 1. Financial Statements (unaudited)
    
    
    2Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    44Item 4. Controls and Procedures
    
    
    44PART II. Other Information
    
    
    46Item 1. Legal Proceedings
    
    
    46Item 1A. Risk Factors
    
    
    47Item 4. Submission of Matters to a Vote of Security Holders
    
    
    49Item 6. Exhibits
    
    
    49Signatures
    
    
    50Exhibit Index
    
    
    51EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Financial Statements
 Consolidated Income Statements
For the three and six months ended July 31, 2008 and 2007  (in thousands, except share and per share amounts)
 Three months ended
    
    
    Six months endedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(Unaudited)Gross revenue
    
    $
    1,255,087
    
    
    $
    1,042,744
    
    
    $
    2,439,537
    
    
    $
    1,984,401Freight consolidation costs
    
    
    839,106
    
    
    
    677,639
    
    
    
    1,634,053
    
    
    
    1,285,251Staff costs
    
    
    222,731
    
    
    
    195,019
    
    
    
    439,423
    
    
    
    378,798Depreciation and amortization
    
    
    11,016
    
    
    
    9,758
    
    
    
    21,205
    
    
    
    19,054Amortization of intangible assets
    
    
    3,079
    
    
    
    2,053
    
    
    
    6,181
    
    
    
    4,038Restructuring and impairments
    
    
    
    
    
    
    
    
    
    
    6,036
    
    
    
    Other operating expenses
    
    
    135,544
    
    
    
    115,061
    
    
    
    265,358
    
    
    
    222,909Operating income
    
    
    43,611
    
    
    
    43,214
    
    
    
    67,281
    
    
    
    74,351Interest income
    
    
    3,242
    
    
    
    2,725
    
    
    
    6,401
    
    
    
    4,914Interest expense
    
    
    (7,285
    )
    
    
    (6,466
    )
    
    
    (14,999
    )
    
    
    (12,743
    )Other income/(expense)
    
    
    193
    
    
    
    (166
    )
    
    
    633
    
    
    
    (534
    )Pretax income
    
    
    39,761
    
    
    
    39,307
    
    
    
    59,316
    
    
    
    65,988Provision for income taxes
    
    
    10,034
    
    
    
    10,890
    
    
    
    15,455
    
    
    
    18,803Income before minority interests
    
    
    29,727
    
    
    
    28,417
    
    
    
    43,861
    
    
    
    47,185Minority interests
    
    
    (1,220
    )
    
    
    (842
    )
    
    
    (2,033
    )
    
    
    (1,732
    )Income from continuing operations
    
    
    28,507
    
    
    
    27,575
    
    
    
    41,828
    
    
    
    45,453Discontinued operations:Operating income/(loss), net of tax
    
    
    (77
    )
    
    
    92
    
    
    
    144
    
    
    
    334Gain on sale, net of tax
    
    
    5,316
    
    
    
    
    
    
    
    5,316
    
    
    
    Net income
    
    $
    33,746
    
    
    $
    27,667
    
    
    $
    47,288
    
    
    $
    45,787Basic earnings per share:Continuing operations
    
    $
    0.29
    
    
    $
    0.28
    
    
    $
    0.42
    
    
    $
    0.46Discontinued operations
    
    
    0.05
    
    
    
    
    
    
    
    0.06
    
    
    
    $
    0.34
    
    
    $
    0.28
    
    
    $
    0.48
    
    
    $
    0.46Diluted earnings per share:Continuing operations
    
    $
    0.28
    
    
    $
    0.28
    
    
    $
    0.41
    
    
    $
    0.46Discontinued operations
    
    
    0.05
    
    
    
    
    
    
    
    0.06
    
    
    
    $
    0.33
    
    
    $
    0.28
    
    
    $
    0.47
    
    
    $
    0.46Number of weighted average shares
used for per share calculations:Basic shares
    
    
    99,350,699
    
    
    
    99,065,970
    
    
    
    99,262,635
    
    
    
    98,885,454Diluted shares
    
    
    100,988,262
    
    
    
    100,315,526
    
    
    
    100,843,762
    
    
    
    100,261,800
 See accompanying notes to consolidated financial statements.
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Consolidated Balance Sheets
As of July 31, 2008 and January 31, 2008  (in thousands, except share amounts)
 July 31,
    
    
    January 31,2008
    
    
    2008(Unaudited)ASSETSCash and cash equivalents
    
    $
    266,341
    
    
    $
    289,141Trade receivables (net of allowance for doubtful receivables of $17,194
and $16,356 as of July 31, 2008 and January 31, 2008, respectively)
    
    
    967,760
    
    
    
    865,019Deferred income tax assets
    
    
    19,904
    
    
    
    18,768Other current assets
    
    
    118,315
    
    
    
    79,207Total current assets
    
    
    1,372,320
    
    
    
    1,252,135Property, plant and equipment (net of accumulated depreciation of $142,890
and $135,859 as of July 31, 2008 and January 31, 2008, respectively)
    
    
    184,602
    
    
    
    154,123Goodwill
    
    
    542,373
    
    
    
    537,429Other intangible assets, net
    
    
    78,371
    
    
    
    80,432Investments
    
    
    3,619
    
    
    
    2,765Deferred income tax assets
    
    
    18,729
    
    
    
    17,311Other non-current assets
    
    
    16,598
    
    
    
    30,481Total assets
    
    $
    2,216,612
    
    
    $
    2,074,676LIABILITIES & SHAREHOLDERS EQUITYBank lines of credit
    
    $
    147,088
    
    
    $
    113,199Short-term bank borrowings
    
    
    6,203
    
    
    
    5,913Current portion of long-term bank borrowings
    
    
    66,667
    
    
    
    33,333Current portion of capital lease obligations
    
    
    20,678
    
    
    
    21,701Trade payables and other accrued liabilities
    
    
    863,692
    
    
    
    817,058Income taxes payable
    
    
    10,779
    
    
    
    12,622Deferred income tax liabilities
    
    
    3,906
    
    
    
    5,030Total current liabilities
    
    
    1,119,013
    
    
    
    1,008,856Long-term bank borrowings
    
    
    150,638
    
    
    
    178,047Capital lease obligations
    
    
    27,234
    
    
    
    30,612Deferred income tax liabilities
    
    
    37,350
    
    
    
    38,063Retirement fund obligations
    
    
    4,508
    
    
    
    4,287Other non-current liabilities
    
    
    20,477
    
    
    
    19,322Minority interests
    
    
    22,933
    
    
    
    21,289Commitments and contingenciesShareholders equity:Common stock  ordinary shares of no par value: 99,667,647 and
99,414,963, shares issued and outstanding as of July 31, 2008 and
January 31, 2008, respectively
    
    
    443,736
    
    
    
    435,355Retained earnings
    
    
    390,384
    
    
    
    349,237Accumulated other comprehensive income/(loss)
    
    
    339
    
    
    
    (10,392
    )Total shareholders equity
    
    
    834,459
    
    
    
    774,200Total liabilities and shareholders equity
    
    $
    2,216,612
    
    
    $
    2,074,676
 See accompanying notes to consolidated financial statements.
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Consolidated Statements of Cash Flows
For the six months ended July 31, 2008 and 2007  (in thousands)
 Six months endedJuly 31,2008
    
    
    2007(Unaudited)OPERATING ACTIVITIES:Net income
    
    $
    47,288
    
    
    $
    45,787Adjustments to reconcile net income to net cash provided by operating activities:Share-based compensation costs, net
    
    
    5,444
    
    
    
    1,304Depreciation and amortization
    
    
    21,429
    
    
    
    19,237Amortization of intangible assets
    
    
    6,181
    
    
    
    4,038Deferred income taxes
    
    
    (5,754
    )
    
    
    (1,857
    )Uncertain tax positions
    
    
    (1,918
    )
    
    
    Gain on sale of subsidiaries
    
    
    (5,316
    )
    
    
    Tax benefit relating to exercise of stock options
    
    
    413
    
    
    
    296Excess tax benefits from share-based compensation
    
    
    (235
    )
    
    
    (243
    )(Gain)/loss on disposal of property, plant and equipment
    
    
    (227
    )
    
    
    6Minority interest and other
    
    
    2,066
    
    
    
    (20
    )Changes in operating assets and liabilities:Increase in trade receivables
    
    
    (94,375
    )
    
    
    (80,243
    )Increase in other current assets
    
    
    (8,857
    )
    
    
    (5,435
    )Increase in trade payables
    
    
    34,921
    
    
    
    24,933Increase in accrued liabilities and other liabilities
    
    
    12,670
    
    
    
    15,918Net cash provided by operating activities
    
    
    13,730
    
    
    
    23,721INVESTING ACTIVITIES:Purchases of property, plant and equipment
    
    
    (30,985
    )
    
    
    (14,164
    )Proceeds from disposal of property, plant and equipment
    
    
    1,828
    
    
    
    971Decrease in other non-current assets
    
    
    3,892
    
    
    
    85Acquisitions and contingent earn-out payments
    
    
    (30,360
    )
    
    
    (4,256
    )Other
    
    
    (3,630
    )
    
    
    (501
    )Net cash used in investing activities
    
    
    (59,255
    )
    
    
    (17,865
    )FINANCING ACTIVITIES:Increase/(decrease) in bank lines of credit
    
    
    34,989
    
    
    
    (3,166
    )Increase/(decrease) in short-term borrowings
    
    
    114
    
    
    
    (1,623
    )Repayment of long-term bank borrowings
    
    
    (311
    )
    
    
    (419
    )Repayment of capital lease obligations
    
    
    (13,895
    )
    
    
    (9,427
    )Dividends to minority interests
    
    
    (526
    )
    
    
    Net proceeds from the issuance of ordinary shares
    
    
    2,936
    
    
    
    7,093Excess tax benefits from share-based compensation
    
    
    235
    
    
    
    243Dividends paid
    
    
    (6,141
    )
    
    
    (5,925
    )Net cash provided by/(used in) financing activities
    
    
    17,401
    
    
    
    (13,224
    )Effect of foreign exchange rate changes on cash and cash
equivalents
    
    
    5,324
    
    
    
    2,204Net decrease in cash and cash equivalents
    
    
    (22,800
    )
    
    
    (5,164
    )Cash and cash equivalents at beginning of period
    
    
    289,141
    
    
    
    278,408Cash and cash equivalents at end of period
    
    $
    266,341
    
    
    $
    273,244
 The condensed consolidated statements of cash flows include the activities of discontinued operations.
See accompanying notes to consolidated financial statements.
 - 4 -




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Notes to the Consolidated Financial Statements
For the three and six months ended July 31, 2008 and 2007 (Unaudited)
 NOTE 1. Presentation of Financial Statements
 Basis of Presentation
   Income Taxes
  Accounting
for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109,
 Segment Reporting
 Disclosures about Segments of an Enterprise and
Related Information
 - 5 -




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Acquisitions
 Accounting for Sales of Stock by a
Subsidiary
   - 6 -




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Three months ended July 31,
    
    
    Six months ended July 31,Diluted
    
    
    
    
    
    
    
    
    
    
    DilutedGross
    
    
    Net
    
    
    earnings
    
    
    Gross
    
    
    Net
    
    
    earningsRevenue
    
    
    income
    
    
    per share *
    
    
    revenue
    
    
    income
    
    
    per share *2007:As reported
    
    $
    1,042,744
    
    
    $
    27,667
    
    
    $
    0.28
    
    
    $
    1,984,401
    
    
    $
    45,787
    
    
    $
    0.46Acquisitions
    
    
    32,069
    
    
    
    2,118
    
    
    
    0.02
    
    
    
    63,956
    
    
    
    4,080
    
    
    
    0.04Total
    
    $
    1,074,813
    
    
    $
    29,785
    
    
    $
    0.30
    
    
    $
    2,048,357
    
    
    $
    49,867
    
    
    $
    0.50
 
 *
    
    Diluted pro forma earnings per share were calculated using 100,315,526 and 100,261,800
diluted ordinary shares for the three and six months periods ended July 31, 2007,
respectively. Currency Translation
  Concentration of Credit Risks and Other
  Put and Call Options
   Reclassifications
  - 7 -




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NOTE 2. Recent Accounting Pronouncements
  The Hierarchy of Generally Accepted Accounting
Principles,
 Determination of the Useful Life of
Intangible Assets, Goodwill and Other Intangible Assets
 Disclosures about Derivative Instruments and Hedging
Activities; An amendment of FASB Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities.
 Noncontrolling Interests in Consolidated Financial
Statements  An amendment of Accounting Research Bulletin (ARB) No. 51 Consolidated Financial Statements,
 Business Combinations,
 - 8 -




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Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards,
 The Fair Value Option for Financial Assets and
Financial Liabilities,
 Fair Value Measurements Application of FASB Statement No. 157 to FASB Statement No. 13 and
Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease
Classification or Measurement under Statement 13 Effective Date
of FASB No. 157 Accounting for Leases
 NOTE 3. Earnings per Share
 Three months ended
    
    
    Six months endedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Basic earnings per share:Net income
    
    $
    33,746
    
    
    $
    27,667
    
    
    $
    47,288
    
    
    $
    45,787Weighted average number of
ordinary shares
    
    
    99,350,699
    
    
    
    99,065,970
    
    
    
    99,262,635
    
    
    
    98,885,454Basic earnings per share:Continuing operations
    
    $
    0.29
    
    
    $
    0.28
    
    
    $
    0.42
    
    
    $
    0.46Discontinued operations
    
    
    0.05
    
    
    
    
    
    
    
    0.06
    
    
    
    $
    0.34
    
    
    $
    0.28
    
    
    $
    0.48
    
    
    $
    0.46
 - 9 -




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Three months ended
    
    
    Six months endedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Diluted earnings per share:Net income
    
    $
    33,746
    
    
    $
    27,667
    
    
    $
    47,288
    
    
    $
    45,787Weighted average number of
ordinary shares
    
    
    99,350,699
    
    
    
    99,065,970
    
    
    
    99,262,635
    
    
    
    98,885,454Incremental shares required for
diluted earnings per share related
to stock options/restricted share
units (RSUs)
    
    
    1,637,563
    
    
    
    1,249,556
    
    
    
    1,581,127
    
    
    
    1,376,346Diluted weighted average number
of ordinary shares
    
    
    100,988,262
    
    
    
    100,315,526
    
    
    
    100,843,762
    
    
    
    100,261,800Diluted earnings per share:Continuing operations
    
    $
    0.28
    
    
    $
    0.28
    
    
    $
    0.41
    
    
    $
    0.46Discontinued operations
    
    
    0.05
    
    
    
    
    
    
    
    0.06
    
    
    
    $
    0.33
    
    
    $
    0.28
    
    
    $
    0.47
    
    
    $
    0.46Cash dividends declared per share
    
    $
    
    
    
    $
    
    
    
    $
    0.06
    
    
    $
    0.06
  NOTE 4. Other Comprehensive Income
 Three months ended
    
    
    Six months endedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    33,746
    
    
    $
    27,667
    
    
    $
    47,288
    
    
    $
    45,787Other comprehensive income, net of tax:Foreign exchange translation adjustments
    
    
    2,367
    
    
    
    6,832
    
    
    
    10,671
    
    
    
    23,017Amortization of unrecognized net pension loss
    
    
    30
    
    
    
    
    
    
    
    61
    
    
    
    68Comprehensive income
    
    $
    36,143
    
    
    $
    34,499
    
    
    $
    58,020
    
    
    $
    68,872
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NOTE 5. Segment Information
  Three months ended July 31, 2008ContractLogisticsFreight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    876,136
    
    
    $
    378,951
    
    
    $
    
    
    
    $
    1,255,087Freight consolidation costs
    
    
    681,855
    
    
    
    157,251
    
    
    
    
    
    
    
    839,106Staff costs
    
    
    102,889
    
    
    
    117,563
    
    
    
    2,279
    
    
    
    222,731Depreciation and amortization
    
    
    3,903
    
    
    
    7,029
    
    
    
    84
    
    
    
    11,016Amortization of intangible assets
    
    
    845
    
    
    
    2,234
    
    
    
    
    
    
    
    3,079Other operating expenses
    
    
    47,702
    
    
    
    83,079
    
    
    
    4,763
    
    
    
    135,544Total operating expenses
    
    
    837,194
    
    
    
    367,156
    
    
    
    7,126
    
    
    
    1,211,476Operating income/(loss)
    
    $
    38,942
    
    
    $
    11,795
    
    
    $
    (7,126
    )
    
    
    43,611Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,242Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,285
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193Pretax income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,761Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,034Income before minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,727Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,220
    )Income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,507Discontinued operationsOperating loss, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77
    )Gain on sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,316Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    33,746Capital expenditures
    
    $
    23,941
    
    
    $
    9,449
    
    
    $
    5,341
    
    
    $
    38,731Segment assets
    
    $
    1,254,687
    
    
    $
    890,544
    
    
    $
    71,381
    
    
    $
    2,216,612
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Three months ended July 31, 2007ContractLogisticsFreight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    694,224
    
    
    $
    348,520
    
    
    $
    
    
    
    $
    1,042,744Freight consolidation costs
    
    
    538,075
    
    
    
    139,564
    
    
    
    
    
    
    
    677,639Staff costs
    
    
    81,322
    
    
    
    110,799
    
    
    
    2,898
    
    
    
    195,019Depreciation and amortization
    
    
    3,241
    
    
    
    6,449
    
    
    
    68
    
    
    
    9,758Amortization of intangible assets
    
    
    
    
    
    
    2,053
    
    
    
    
    
    
    
    2,053Other operating expenses
    
    
    37,172
    
    
    
    75,115
    
    
    
    2,774
    
    
    
    115,061Total operating expenses
    
    
    659,810
    
    
    
    333,980
    
    
    
    5,740
    
    
    
    999,530Operating income/(loss)
    
    $
    34,414
    
    
    $
    14,540
    
    
    $
    (5,740
    )
    
    
    43,214Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,725Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,466
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (166
    )Pretax income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,307Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,890Income before minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,417Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (842
    )Income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,575Discontinued operationsOperating income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92Gain on sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    27,667Capital expenditures
    
    $
    5,502
    
    
    $
    6,603
    
    
    $
    1,367
    
    
    $
    13,472Segment assets
    
    $
    807,582
    
    
    $
    928,285
    
    
    $
    51,950
    
    
    $
    1,787,817
 - 12 -




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##### Table of Contents



Six months ended July 31, 2008ContractLogisticsFreight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    1,702,329
    
    
    $
    737,208
    
    
    $
    
    
    
    $
    2,439,537Freight consolidation costs
    
    
    1,332,379
    
    
    
    301,674
    
    
    
    
    
    
    
    1,634,053Staff costs
    
    
    202,060
    
    
    
    232,673
    
    
    
    4,690
    
    
    
    439,423Depreciation and amortization
    
    
    7,715
    
    
    
    13,323
    
    
    
    167
    
    
    
    21,205Amortization of intangible assets
    
    
    1,690
    
    
    
    4,491
    
    
    
    
    
    
    
    6,181Restructuring and impairments
    
    
    2,382
    
    
    
    3,654
    
    
    
    
    
    
    
    6,036Other operating expenses
    
    
    89,280
    
    
    
    166,357
    
    
    
    9,721
    
    
    
    265,358Total operating expenses
    
    
    1,635,506
    
    
    
    722,172
    
    
    
    14,578
    
    
    
    2,372,256Operating income/(loss)
    
    $
    66,823
    
    
    $
    15,036
    
    
    $
    (14,578
    )
    
    
    67,281Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,401Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,999
    )Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    633Pretax income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,316Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,455Income before minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,861Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,033
    )Income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,828Discontinued operationsOperating income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    144Gain on sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,316Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    47,288Capital expenditures
    
    $
    28,434
    
    
    $
    16,316
    
    
    $
    7,978
    
    
    $
    52,728Segment assets
    
    $
    1,254,687
    
    
    $
    890,544
    
    
    $
    71,381
    
    
    $
    2,216,612
 - 13 -




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##### Table of Contents



Six months ended July 31, 2007ContractLogisticsFreight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    1,306,312
    
    
    $
    678,089
    
    
    $
    
    
    
    $
    1,984,401Freight consolidation costs
    
    
    1,012,591
    
    
    
    272,660
    
    
    
    
    
    
    
    1,285,251Staff costs
    
    
    158,867
    
    
    
    213,879
    
    
    
    6,052
    
    
    
    378,798Depreciation and amortization
    
    
    6,444
    
    
    
    12,503
    
    
    
    107
    
    
    
    19,054Amortization of intangible assets
    
    
    
    
    
    
    4,038
    
    
    
    
    
    
    
    4,038Other operating expenses
    
    
    69,749
    
    
    
    148,183
    
    
    
    4,977
    
    
    
    222,909Total operating expenses
    
    
    1,247,651
    
    
    
    651,263
    
    
    
    11,136
    
    
    
    1,910,050Operating income/(loss)
    
    $
    58,661
    
    
    $
    26,826
    
    
    $
    (11,136
    )
    
    
    74,351Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,914Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,743
    )Other expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (534
    )Pretax income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65,988Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,803Income before minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,185Minority interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,732
    )Income from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,453Discontinued operationsOperating income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    334Gain on sale, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    45,787Capital expenditures
    
    $
    10,858
    
    
    $
    11,165
    
    
    $
    1,369
    
    
    $
    23,392Segment assets
    
    $
    807,582
    
    
    $
    928,285
    
    
    $
    51,950
    
    
    $
    1,787,817
  Three months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    
    
    
    
    Forwarding
    
    
    DistributionRevenue
    
    
    Revenue
    
    
    Total
    
    
    Revenue
    
    
    Revenue
    
    
    TotalEMENA
    
    $
    311,056
    
    
    $
    70,524
    
    
    $
    381,580
    
    
    $
    200,800
    
    
    $
    56,843
    
    
    $
    257,643Americas
    
    
    171,755
    
    
    
    220,133
    
    
    
    391,888
    
    
    
    146,908
    
    
    
    212,150
    
    
    
    359,058Asia Pacific
    
    
    292,042
    
    
    
    9,141
    
    
    
    301,183
    
    
    
    257,191
    
    
    
    7,629
    
    
    
    264,820Africa
    
    
    101,283
    
    
    
    79,153
    
    
    
    180,436
    
    
    
    89,325
    
    
    
    71,898
    
    
    
    161,223Total
    
    $
    876,136
    
    
    $
    378,951
    
    
    $
    1,255,087
    
    
    $
    694,224
    
    
    $
    348,520
    
    
    $
    1,042,744
 - 14 -




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##### Table of Contents



Six months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    
    
    
    
    Forwarding
    
    
    DistributionRevenue
    
    
    Revenue
    
    
    Total
    
    
    Revenue
    
    
    Revenue
    
    
    TotalEMENA
    
    $
    593,288
    
    
    $
    138,405
    
    
    $
    731,693
    
    
    $
    381,433
    
    
    $
    112,635
    
    
    $
    494,068Americas
    
    
    331,545
    
    
    
    429,381
    
    
    
    760,926
    
    
    
    277,941
    
    
    
    411,657
    
    
    
    689,598Asia Pacific
    
    
    580,790
    
    
    
    16,792
    
    
    
    597,582
    
    
    
    475,354
    
    
    
    14,773
    
    
    
    490,127Africa
    
    
    196,706
    
    
    
    152,630
    
    
    
    349,336
    
    
    
    171,584
    
    
    
    139,024
    
    
    
    310,608Total
    
    $
    1,702,329
    
    
    $
    737,208
    
    
    $
    2,439,537
    
    
    $
    1,306,312
    
    
    $
    678,089
    
    
    $
    1,984,401
 NOTE 6. Goodwill and Other Intangible Assets
  ContractLogisticsFreight
    
    
    andForwarding
    
    
    Distribution
    
    
    TotalBalance at
February 1, 2008
    
    $
    188,691
    
    
    $
    348,738
    
    
    $
    537,429Acquisitions and
contingent earn-out
payments
    
    
    
    
    
    
    1,057
    
    
    
    1,057Disposals
    
    
    
    
    
    
    (1,661
    )
    
    
    (1,661
    )Foreign currency
translation and
other adjustments
    
    
    10,349
    
    
    
    (4,801
    )
    
    
    5,548Balance at July 31, 2008
    
    $
    199,040
    
    
    $
    343,333
    
    
    $
    542,373
 Goodwill and Other Intangible Assets
  Gross
    
    
    
    
    
    
    Netcarrying
    
    
    Accumulated
    
    
    carryingValue
    
    
    amortization
    
    
    valueAs of July 31, 2008:Customer contracts and relationships
    
    $
    96,503
    
    
    $
    (27,677
    )
    
    $
    68,826Non-compete agreements
    
    
    3,120
    
    
    
    (2,642
    )
    
    
    478Other
    
    
    2,700
    
    
    
    (1,123
    )
    
    
    1,577Total
    
    $
    102,323
    
    
    $
    (31,442
    )
    
    $
    70,881
 - 15 -




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##### Table of Contents



Gross
    
    
    
    
    
    
    Netcarrying
    
    
    Accumulated
    
    
    carryingValue
    
    
    amortization
    
    
    valueAs of January 31, 2008:Client contracts and relationships
    
    $
    92,496
    
    
    $
    (21,984
    )
    
    $
    70,512Non-compete agreements
    
    
    3,151
    
    
    
    (2,557
    )
    
    
    594Other
    
    
    2,701
    
    
    
    (720
    )
    
    
    1,981Total
    
    $
    98,348
    
    
    $
    (25,261
    )
    
    $
    73,087
  2009
    
    $
    12,9292010
    
    
    12,2642011
    
    
    11,9412012
    
    
    10,8382013
    
    
    9,463
  NOTE 7. Supplemental Cash Flow Information
  Six months endedJuly 31,2008
    
    2007Net cash paid for:Interest
    
    $
    15,326
    
    
    $
    12,992Income taxes
    
    
    26,892
    
    
    
    18,744Non-cash activities:Capital lease obligations incurred to acquire assets
    
    
    9,407
    
    
    
    9,228Liability incurred for software license agreement
    
    
    3,062
    
    
    
    Liability incurred for acquisition earn-out payments
    
    
    1,399
    
    
    
    Adjustment to initially adopt FIN No. 48
    
    
    
    
    
    
    3,993
  - 16 -




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##### Table of Contents



NOTE 8. Contingencies
       - 17 -




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##### Table of Contents



Accounting for Contingencies
 NOTE 9. Retirement Benefit Plans
   Three months ended
    
    
    Six months endedJuly 31,
    
    
    July 31,2008
    
    
    2008
    
    
    2008
    
    
    2007Service cost
    
    $
    216
    
    
    $
    440
    
    
    $
    432
    
    
    $
    880Interest cost
    
    
    581
    
    
    
    590
    
    
    
    1,162
    
    
    
    1,180Expected return on assets
    
    
    (573
    )
    
    
    (528
    )
    
    
    (1,146
    )
    
    
    (1,056
    )Amortization of unrecognized net loss
    
    
    44
    
    
    
    100
    
    
    
    88
    
    
    
    200Net periodic defined benefit pension cost
    
    $
    268
    
    
    $
    602
    
    
    $
    536
    
    
    $
    1,204
  NOTE 10. Share-Based Compensation
  - 18 -




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##### Table of Contents



Share-Based Compensation Activity
  2004 LTIP
    
    
    2000 Stock Option PlanWeighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedShares
    
    
    average
    
    
    Restricted
    
    
    average
    
    
    Shares
    
    
    averagesubject to
    
    
    exercise
    
    
    share
    
    
    grant date
    
    
    subject to
    
    
    exercisestock options
    
    
    price
    
    
    units
    
    
    fair value
    
    
    stock options
    
    
    priceOutstanding balance at January 31, 2008
    
    
    1,916,789
    
    
    $
    21.07
    
    
    
    753,571
    
    
    $
    23.51
    
    
    
    1,993,914
    
    
    $
    6.75Granted
    
    
    79,390
    
    
    
    19.70
    
    
    
    713,507
    
    
    
    19.72
    
    
    
    
    
    
    
    Exercised/vested
    
    
    (67,222
    )
    
    
    16.41
    
    
    
    (22,175
    )
    
    
    18.99
    
    
    
    (125,154
    )
    
    
    7.76Cancelled/forfeited
    
    
    (100,441
    )
    
    
    21.81
    
    
    
    (36,223
    )
    
    
    19.57
    
    
    
    (10,800
    )
    
    
    8.26Outstanding balance at July 31, 2008
    
    
    1,828,516
    
    
    $
    21.03
    
    
    
    1,408,680
    
    
    $
    21.59
    
    
    
    1,857,960
    
    
    $
    6.68
   2004Directors Incentive Plan
    
    
    Directors Option PlanWeighted
    
    
    Shares
    
    
    WeightedRestricted
    
    
    average
    
    
    subject to
    
    
    averageshare
    
    
    grant date
    
    
    stock
    
    
    exerciseunits
    
    
    fair value
    
    
    options
    
    
    priceOutstanding balance at January 31, 2008
    
    
    13,968
    
    
    $
    27.71
    
    
    
    108,000
    
    
    $
    9.59Granted
    
    
    13,180
    
    
    
    22.76
    
    
    
    
    
    
    
    Exercised/vested
    
    
    (13,968
    )
    
    
    27.71
    
    
    
    
    
    
    
    Outstanding balance at July 31, 2008
    
    
    13,180
    
    
    $
    25.04
    
    
    
    108,000
    
    
    $
    9.59
  - 19 -




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##### Table of Contents



NOTE 11. Borrowings
         - 20 -




---



##### Table of Contents



NOTE 12.  Uncertain Tax Positions
  UncertainTaxPositions
    
    
    InterestBalance at January 31, 2008
    
    $
    9,944
    
    
    $
    1,194Interest
    
    
    
    
    
    
    424Decrease for changes in tax positions taken in a prior period
    
    
    (1,571
    )
    
    
    (347
    )Foreign currency translation adjustments
    
    
    143
    
    
    
    1Balance at July 31, 2008
    
    $
    8,516
    
    
    $
    1,272
  NOTE 13. Restructuring and Impairments
  Asset impairments
  - 21 -




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##### Table of Contents



Employee severance benefits
  Balance at
    
    
    AmountsJanuary 31,
    
    
    charged to
    
    
    Settlements
    
    
    Balance at2008
    
    
    expense
    
    
    and other
    
    
    July 31, 2008Freight Forwarding
    
    $
    843
    
    
    $
    2,375
    
    
    $
    (3,218
    )
    
    $
    Contract Logistics and
Distribution
    
    
    998
    
    
    
    789
    
    
    
    (1,787
    )
    
    
    Corporate
    
    
    642
    
    
    
    
    
    
    
    (642
    )
    
    
    Total
    
    $
    2,483
    
    
    $
    3,164
    
    
    $
    (5,647
    )
    
    $
    
  Other exit costs
  Balance at
    
    
    AmountsJanuary 31,
    
    
    charged to
    
    
    Settlements
    
    
    Balance at2008
    
    
    expense
    
    
    and other
    
    
    July 31, 2008Freight Forwarding
    
    $
    158
    
    
    $
    6
    
    
    $
    (164
    )
    
    $
    Contract Logistics and
Distribution
    
    
    2,270
    
    
    
    2,572
    
    
    
    (4,842
    )
    
    
    Corporate
    
    
    
    
    
    
    1
    
    
    
    (1
    )
    
    
    Total
    
    $
    2,428
    
    
    $
    2,579
    
    
    $
    (5,007
    )
    
    $
    
  NOTE 14. Fair Value Disclosures
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities;
    
    Level 2  Observable market data, including quoted prices for similar assets and
liabilities, and inputs other than quoted prices that are observable, such as interest
rates and yield curves; and
    
    Level 3  Unobservable data reflecting the Companys own assumptions, where there is
little or no market activity for the asset or liability.
 - 22 -




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##### Table of Contents



Fair Value Measurement at Reporting Date Using:Quoted Pricesin Active
    
    
    SignificantMarkets for
    
    
    OtherIdentical
    
    
    Observable
    
    
    SignificantBalance at
    
    
    Assets
    
    
    Inputs
    
    
    UnobservableJuly 31, 2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)AssetsCash and cash equivalents
    
    $
    266,341
    
    
    $
    266,341
    
    
    $
    
    
    
    $
    Forward exchange
contracts
    
    
    39,632
    
    
    
    
    
    
    
    39,632
    
    
    
    Other
    
    
    377
    
    
    
    
    
    
    
    
    
    
    
    377Total
    
    $
    306,350
    
    
    $
    266,341
    
    
    $
    39,632
    
    
    $
    377LiabilitiesForward
exchange contracts
    
    $
    8,690
    
    
    $
    
    
    
    $
    8,690
    
    
    $
    Put options and other
    
    
    2,354
    
    
    
    
    
    
    
    
    
    
    
    2,354Total
    
    $
    11,044
    
    
    $
    
    
    
    $
    8,690
    
    
    $
    2,354
  Forward Exchange Contracts
 Other
  Assets
    
    
    LiabilitiesBeginning balance at February 1, 2008
    
    $
    
    
    
    $
    1,532Net change in fair value included in
earnings
    
    
    (4
    )
    
    
    (306
    )Additions
    
    
    381
    
    
    
    1,128Transfers in and/or out of Level 3
    
    
    
    
    
    
    Ending balance at July 31, 2008
    
    $
    377
    
    
    $
    2,354
  - 23 -




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##### Table of Contents



NOTE 15. Discontinued Operations
   Three months ended July 31,
    
    
    Six months ended July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    3,137
    
    
    $
    2,857
    
    
    $
    6,833
    
    
    $
    5,938Pre-tax operating income/(loss) from
discontinued operations
    
    
    (142
    )
    
    
    101
    
    
    
    131
    
    
    
    380Provision for income taxes/(income tax
benefit)
    
    
    (38
    )
    
    
    31
    
    
    
    30
    
    
    
    85Minority interest
    
    
    27
    
    
    
    22
    
    
    
    43
    
    
    
    39Gain on sale, net of tax
    
    
    5,316
    
    
    
    
    
    
    
    5,316
    
    
    
    Net income from discontinued
operations
    
    $
    5,239
    
    
    $
    92
    
    
    $
    5,460
    
    
    $
    334
  As of July 31, 2008
    
    
    As of January 31, 2008Assets
    
    $
    2,986
    
    
    $
    3,350Liabilities
    
    
    3,398
    
    
    
    3,581Net assets/(liabilities) of discontinued operations
    
    $
    (412
    )
    
    $
    (231
    )
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  - 24 -




---



##### Table of Contents



Overview
  Disclosures about Segments of an
Enterprise and Related Information
 Freight Forwarding Segment.
     - 25 -




---



##### Table of Contents



Contract Logistics and Distribution Segment.
     CLIENTasONE CLIENTasONE CLIENTasONE
 - 26 -




---



##### Table of Contents



4asONE 4asONE 4asONE 4asONE
 Termination Notice
  Effect of Foreign Currency Translation on Comparison of Results
  Acquisitions
   Accounting for Sales of Stock by a
Subsidiary
 - 27 -




---



##### Table of Contents



Seasonality
  - 28 -




---



##### Table of Contents



Forward-Looking Statements, Uncertainties and Other Factors
 4asOne
  - 29 -




---



##### Table of Contents



Discussion of Results
  Segment Operating Results
   - 30 -




---



##### Table of Contents



Three months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    Total
    
    
    Forwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    876,136
    
    
    $
    378,951
    
    
    $
    
    
    
    $
    1,255,087
    
    
    $
    694,224
    
    
    $
    348,520
    
    
    $
    
    
    
    $
    1,042,744Freight consolidation costs
    
    
    681,855
    
    
    
    157,251
    
    
    
    
    
    
    
    839,106
    
    
    
    538,075
    
    
    
    139,564
    
    
    
    
    
    
    
    677,639Staff costs
    
    
    102,889
    
    
    
    117,563
    
    
    
    2,279
    
    
    
    222,731
    
    
    
    81,322
    
    
    
    110,799
    
    
    
    2,898
    
    
    
    195,019Depreciation and amortization
    
    
    3,903
    
    
    
    7,029
    
    
    
    84
    
    
    
    11,016
    
    
    
    3,241
    
    
    
    6,449
    
    
    
    68
    
    
    
    9,758Amortization of intangible assets
    
    
    845
    
    
    
    2,234
    
    
    
    
    
    
    
    3,079
    
    
    
    
    
    
    
    2,053
    
    
    
    
    
    
    
    2,053Other operating expenses
    
    
    47,702
    
    
    
    83,079
    
    
    
    4,763
    
    
    
    135,544
    
    
    
    37,172
    
    
    
    75,115
    
    
    
    2,774
    
    
    
    115,061Total operating expenses
    
    
    837,194
    
    
    
    367,156
    
    
    
    7,126
    
    
    
    1,211,476
    
    
    
    659,810
    
    
    
    333,980
    
    
    
    5,740
    
    
    
    999,530Operating income/(loss)
    
    $
    38,942
    
    
    $
    11,795
    
    
    $
    (7,126
    )
    
    $
    43,611
    
    
    $
    34,414
    
    
    $
    14,540
    
    
    $
    (5,740
    )
    
    $
    43,214
 Change to three months ended July 31, 2008from three months ended July 31, 2007Amount
    
    
    PercentageContract
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    Total
    
    
    Forwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    181,912
    
    
    $
    30,431
    
    
    $
    
    
    
    $
    212,343
    
    
    
    26
    %
    
    
    9
    %
    
    
    
    %
    
    
    20
    %Freight consolidation costs
    
    
    143,780
    
    
    
    17,687
    
    
    
    
    
    
    
    161,467
    
    
    
    27
    
    
    
    13
    
    
    
    
    
    
    
    24Staff costs
    
    
    21,567
    
    
    
    6,764
    
    
    
    (619
    )
    
    
    27,712
    
    
    
    27
    
    
    
    6
    
    
    
    (21
    )
    
    
    14Depreciation and amortization
    
    
    662
    
    
    
    580
    
    
    
    16
    
    
    
    1,258
    
    
    
    20
    
    
    
    9
    
    
    
    24
    
    
    
    13Amortization of intangible assets
    
    
    845
    
    
    
    181
    
    
    
    
    
    
    
    1,026
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    50Other operating expenses
    
    
    10,530
    
    
    
    7,964
    
    
    
    1,989
    
    
    
    20,483
    
    
    
    28
    
    
    
    11
    
    
    
    72
    
    
    
    18Total operating expenses
    
    
    177,384
    
    
    
    33,176
    
    
    
    1,386
    
    
    
    211,946
    
    
    
    27
    
    
    
    10
    
    
    
    24
    
    
    
    21Operating income/(loss)
    
    $
    4,528
    
    
    $
    (2,745
    )
    
    $
    (1,386
    )
    
    $
    397
    
    
    
    13
    %
    
    
    (19)
    %
    
    
    24
    %
    
    
    1
    %
 - 31 -




---



##### Table of Contents



Six months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    Total
    
    
    Forwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    1,702,329
    
    
    $
    737,208
    
    
    $
    
    
    
    $
    2,439,537
    
    
    $
    1,306,312
    
    
    $
    678,089
    
    
    $
    
    
    
    $
    1,984,401Freight consolidation costs
    
    
    1,332,379
    
    
    
    301,674
    
    
    
    
    
    
    
    1,634,053
    
    
    
    1,012,591
    
    
    
    272,660
    
    
    
    
    
    
    
    1,285,251Staff costs
    
    
    202,060
    
    
    
    232,673
    
    
    
    4,690
    
    
    
    439,423
    
    
    
    158,867
    
    
    
    213,879
    
    
    
    6,052
    
    
    
    378,798Depreciation and amortization
    
    
    7,715
    
    
    
    13,323
    
    
    
    167
    
    
    
    21,205
    
    
    
    6,444
    
    
    
    12,503
    
    
    
    107
    
    
    
    19,054Amortization of intangible assets
    
    
    1,690
    
    
    
    4,491
    
    
    
    
    
    
    
    6,181
    
    
    
    
    
    
    
    4,038
    
    
    
    
    
    
    
    4,038Restructuring and impairments
    
    
    2,382
    
    
    
    3,654
    
    
    
    
    
    
    
    6,036
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other operating expenses
    
    
    89,280
    
    
    
    166,357
    
    
    
    9,721
    
    
    
    265,358
    
    
    
    69,749
    
    
    
    148,183
    
    
    
    4,977
    
    
    
    222,909Total operating expenses
    
    
    1,635,506
    
    
    
    722,172
    
    
    
    14,578
    
    
    
    2,372,256
    
    
    
    1,247,651
    
    
    
    651,263
    
    
    
    11,136
    
    
    
    1,910,050Operating income/(loss)
    
    $
    66,823
    
    
    $
    15,036
    
    
    $
    (14,578
    )
    
    $
    67,281
    
    
    $
    58,661
    
    
    $
    26,826
    
    
    $
    (11,136
    )
    
    $
    74,351
 Change to six months ended July 31, 2008from six months ended July 31, 2007Amount
    
    
    PercentageContract
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    Corporate
    
    
    Total
    
    
    Forwarding
    
    
    Distribution
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    396,017
    
    
    $
    59,119
    
    
    $
    
    
    
    $
    455,136
    
    
    
    30
    %
    
    
    9
    %
    
    
    
    %
    
    
    23
    %Freight consolidation costs
    
    
    319,788
    
    
    
    29,014
    
    
    
    
    
    
    
    348,802
    
    
    
    32
    
    
    
    11
    
    
    
    
    
    
    
    27Staff costs
    
    
    43,193
    
    
    
    18,794
    
    
    
    (1,362
    )
    
    
    60,625
    
    
    
    27
    
    
    
    9
    
    
    
    (23
    )
    
    
    16Depreciation and amortization
    
    
    1,271
    
    
    
    820
    
    
    
    60
    
    
    
    2,151
    
    
    
    20
    
    
    
    7
    
    
    
    56
    
    
    
    11Amortization of intangible assets
    
    
    1,690
    
    
    
    453
    
    
    
    
    
    
    
    2,143
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    53Restructuring and impairments
    
    
    2,382
    
    
    
    3,654
    
    
    
    
    
    
    
    6,036
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other operating expenses
    
    
    19,531
    
    
    
    18,174
    
    
    
    4,744
    
    
    
    42,449
    
    
    
    28
    
    
    
    12
    
    
    
    95
    
    
    
    19Total operating expenses
    
    
    387,855
    
    
    
    70,909
    
    
    
    3,442
    
    
    
    462,206
    
    
    
    31
    
    
    
    11
    
    
    
    31
    
    
    
    24Operating income/(loss)
    
    $
    8,162
    
    
    $
    (11,790
    )
    
    $
    (3,442
    )
    
    $
    (7,070
    )
    
    
    14
    %
    
    
    (44
    )%
    
    
    31
    %
    
    
    (10
    )%
 - 32 -




---



##### Table of Contents



Three months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    
    
    
    
    Forwarding
    
    
    DistributionRevenues
    
    

Revenues
    
    
    Total
    
    

Revenues
    
    

Revenues
    
    
    TotalEMENA
    
    $
    311,056
    
    
    $
    70,524
    
    
    $
    381,580
    
    
    $
    200,800
    
    
    $
    56,843
    
    
    $
    257,643Americas
    
    
    171,755
    
    
    
    220,133
    
    
    
    391,888
    
    
    
    146,908
    
    
    
    212,150
    
    
    
    359,058Asia Pacific
    
    
    292,042
    
    
    
    9,141
    
    
    
    301,183
    
    
    
    257,191
    
    
    
    7,629
    
    
    
    264,820Africa
    
    
    101,283
    
    
    
    79,153
    
    
    
    180,436
    
    
    
    89,325
    
    
    
    71,898
    
    
    
    161,223Total
    
    $
    876,136
    
    
    $
    378,951
    
    
    $
    1,255,087
    
    
    $
    694,224
    
    
    $
    348,520
    
    
    $
    1,042,744
 Six months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    
    
    
    
    Forwarding
    
    
    DistributionRevenues
    
    

Revenues
    
    
    Total
    
    

Revenues
    
    

Revenues
    
    
    TotalEMENA
    
    $
    593,288
    
    
    $
    138,405
    
    
    $
    731,693
    
    
    $
    381,433
    
    
    $
    112,635
    
    
    $
    494,068Americas
    
    
    331,545
    
    
    
    429,381
    
    
    
    760,926
    
    
    
    277,941
    
    
    
    411,657
    
    
    
    689,598Asia Pacific
    
    
    580,790
    
    
    
    16,792
    
    
    
    597,582
    
    
    
    475,354
    
    
    
    14,773
    
    
    
    490,127Africa
    
    
    196,706
    
    
    
    152,630
    
    
    
    349,336
    
    
    
    171,584
    
    
    
    139,024
    
    
    
    310,608Total
    
    $
    1,702,329
    
    
    $
    737,208
    
    
    $
    2,439,537
    
    
    $
    1,306,312
    
    
    $
    678,089
    
    
    $
    1,984,401
 Three months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    
    
    
    
    Forwarding
    
    
    DistributionNet
    
    
    Net
    
    
    
    
    
    
    Net
    
    
    NetRevenues
    
    

Revenues
    
    
    Total
    
    

Revenues
    
    

Revenues
    
    
    TotalEMENA
    
    $
    80,658
    
    
    $
    44,607
    
    
    $
    125,265
    
    
    $
    52,710
    
    
    $
    29,152
    
    
    $
    81,862Americas
    
    
    43,706
    
    
    
    114,836
    
    
    
    158,542
    
    
    
    40,909
    
    
    
    122,684
    
    
    
    163,593Asia Pacific
    
    
    45,622
    
    
    
    5,814
    
    
    
    51,436
    
    
    
    39,635
    
    
    
    5,192
    
    
    
    44,827Africa
    
    
    24,295
    
    
    
    56,443
    
    
    
    80,738
    
    
    
    22,895
    
    
    
    51,928
    
    
    
    74,823Total
    
    $
    194,281
    
    
    $
    221,700
    
    
    $
    415,981
    
    
    $
    156,149
    
    
    $
    208,956
    
    
    $
    365,105
 - 33 -




---



##### Table of Contents



Six months ended July 31,2008
    
    
    2007Contract
    
    
    
    
    
    
    
    
    
    
    ContractLogistics
    
    
    
    
    
    
    
    
    
    
    LogisticsFreight
    
    
    and
    
    
    
    
    
    
    Freight
    
    
    andForwarding
    
    
    Distribution
    
    
    
    
    
    
    Forwarding
    
    
    DistributionNet
    
    
    Net
    
    
    
    
    
    
    Net
    
    
    NetRevenues
    
    

Revenues
    
    
    Total
    
    

Revenues
    
    

Revenues
    
    
    TotalEMENA
    
    $
    150,283
    
    
    $
    84,996
    
    
    $
    235,279
    
    
    $
    98,401
    
    
    $
    57,317
    
    
    $
    155,718Americas
    
    
    85,229
    
    
    
    230,258
    
    
    
    315,487
    
    
    
    78,623
    
    
    
    237,300
    
    
    
    315,923Asia Pacific
    
    
    87,283
    
    
    
    10,948
    
    
    
    98,231
    
    
    
    74,935
    
    
    
    10,161
    
    
    
    85,096Africa
    
    
    47,155
    
    
    
    109,332
    
    
    
    156,487
    
    
    
    41,762
    
    
    
    100,651
    
    
    
    142,413Total
    
    $
    369,950
    
    
    $
    435,534
    
    
    $
    805,484
    
    
    $
    293,721
    
    
    $
    405,429
    
    
    $
    699,150
 Three months ended
    
    
    Six months endedJuly 31,
    
    
    July 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Airfreight forwarding
    
    $
    456,359
    
    
    $
    360,794
    
    
    $
    905,514
    
    
    $
    679,135Ocean freight forwarding
    
    
    333,956
    
    
    
    265,124
    
    
    
    627,459
    
    
    
    497,414Customs brokerage
    
    
    30,512
    
    
    
    23,952
    
    
    
    58,657
    
    
    
    45,747Contract logistics
    
    
    177,410
    
    
    
    160,382
    
    
    
    342,213
    
    
    
    301,897Distribution
    
    
    156,327
    
    
    
    151,790
    
    
    
    305,706
    
    
    
    296,046Other
    
    
    100,523
    
    
    
    80,702
    
    
    
    199,988
    
    
    
    164,102Total
    
    $
    1,255,087
    
    
    $
    1,042,744
    
    
    $
    2,439,537
    
    
    $
    1,984,401Freight consolidation costs:Airfreight forwarding
    
    $
    358,361
    
    
    $
    282,663
    
    
    $
    719,487
    
    
    $
    530,976Ocean freight forwarding
    
    
    279,779
    
    
    
    222,349
    
    
    
    528,444
    
    
    
    417,664Customs brokerage
    
    
    2,026
    
    
    
    767
    
    
    
    3,555
    
    
    
    1,491Contract logistics
    
    
    24,962
    
    
    
    22,645
    
    
    
    45,835
    
    
    
    42,418Distribution
    
    
    114,716
    
    
    
    100,889
    
    
    
    220,073
    
    
    
    194,630Other
    
    
    59,262
    
    
    
    48,326
    
    
    
    116,659
    
    
    
    98,072Total
    
    $
    839,106
    
    
    $
    677,639
    
    
    $
    1,634,053
    
    
    $
    1,285,251
 - 34 -




---



##### Table of Contents



Three months ended
    
    Six months endedJuly 31,
    
    July 31,2008
    
    2007
    
    2008
    
    2007Revenues:Airfreight forwarding
    
    
    36
    %
    
    
    35
    %
    
    
    37
    %
    
    
    34
    %Ocean freight forwarding
    
    
    27
    
    
    
    25
    
    
    
    26
    
    
    
    25Customs brokerage
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    3Contract logistics
    
    
    14
    
    
    
    15
    
    
    
    14
    
    
    
    15Distribution
    
    
    13
    
    
    
    15
    
    
    
    13
    
    
    
    15Other
    
    
    8
    
    
    
    8
    
    
    
    8
    
    
    
    8Total revenues
    
    
    100
    
    
    
    100
    
    
    
    100
    
    
    
    100Freight consolidation costs:Airfreight forwarding
    
    
    29
    %
    
    
    27
    %
    
    
    29
    %
    
    
    27
    %Ocean freight forwarding
    
    
    22
    
    
    
    21
    
    
    
    22
    
    
    
    21Customs brokerage
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Contract logistics
    
    
    2
    
    
    
    2
    
    
    
    2
    
    
    
    2Distribution
    
    
    9
    
    
    
    10
    
    
    
    9
    
    
    
    10Other
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5Total freight consolidation costs
    
    
    67
    
    
    
    65
    
    
    
    67
    
    
    
    65Staff costs
    
    
    18
    
    
    
    19
    
    
    
    18
    
    
    
    19Depreciation and amortization
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Amortization of intangible assets
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Restructuring and impairments
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Other operating expenses
    
    
    11
    
    
    
    11
    
    
    
    11
    
    
    
    11Total operating expenses
    
    
    97
    
    
    
    96
    
    
    
    97
    
    
    
    96Operating income
    
    
    3
    
    
    
    4
    
    
    
    3
    
    
    
    4Interest income
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Interest expense
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )Other income
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Pretax income
    
    
    3
    
    
    
    4
    
    
    
    2
    
    
    
    3Provision for income taxes
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Income before minority interests
    
    
    2
    
    
    
    3
    
    
    
    2
    
    
    
    2Minority interests
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Income from continuing operations
    
    
    2
    
    
    
    3
    
    
    
    2
    
    
    
    2Discontinued operations:Operating income, net of taxes
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Gain on sale, net of tax
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    *Net income
    
    
    3
    %
    
    
    3
    %
    
    
    2
    %
    
    
    2
    %
 
 *
    
    Less than one percent. Three months ended July 31, 2008 compared to three months ended July 31, 2007
    - 35 -




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Six months ended July 31, 2008 compared to six months ended July 31, 2007
          - 38 -




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Liquidity and Capital Resources
        - 40 -




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
    
    Effective November 17, 2006, we acquired 100% of the issued and outstanding shares of
Span America Holding Company, Inc. and Span Manufacturing Limited, which we collectively
refer to as Span. In addition to the initial acquisition payment for Span, the terms of the
acquisition agreement provided for an additional payment of up to a maximum of $28.0
million, based on the performance of Span for the twelve-month period ended January 31,
2008. We made the final earn-out payment of $27.2 million in May 2008.
    
    We made a payment of $0.3 million for the remaining contingent earn-out payment related
to our acquisition of ET Logistics, S.L., which was calculated based on the performance of
the acquired operation for the fiscal year ended January 31, 2008.
    
    Our remaining earn-out payment relating to the acquisition of Perfect Logistics will be
based on the acquired operations future earnings over the twelve-month period
ending May 31, 2009, and is subject to a maximum U.S. dollar equivalent
of approximately $5.1 million as of July 31, 2008.
    
    We anticipate making two additional contingent earn-out payments subject to a maximum of
$6.3 million related to our acquisition of Concentrek, which will be calculated based on a
multiple of Concentreks future earnings for each of the twelve-month periods ending January
31, 2009, and January 31, 2010. We made a payment in the amount of $2.1 million in June 2008
relating to the twelve month period ended January 31, 2008.
    
    Two remaining contingent earn-out payments related to our acquisition of Logica will be
calculated based on a multiple of the acquired operations future earnings for each of the
twelve-month periods ending January 31, 2009, and January 31, 2010 and which earn-out
payments are subject to a maximum of 10.0 million Euros (equivalent to approximately $15.6
million as of July 31, 2008).
    
    We anticipate making three contingent earn-out payments related to our acquisition of
Cargoforte, subject to a maximum of $20.0 million, which earn-out payments will be offset
against the initial purchase price of $1.0 million and which will be calculated based on a
multiple of the acquired operations future earnings for each of the three twelve month
periods ending January 31, 2011. We made a payment in the amount of $0.3 million in July
2008 relating to the twelve month period ended January 31, 2008.
    
    We anticipate making two contingent earn-out payments related to our acquisition of
Pharma. These payments are subject to a maximum of $3.0 million and are to be calculated
based on a multiple of the acquired operations future earnings for each of the two year
periods ending January 31, 2010 and January 31, 2012.
   - 41 -




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Credit Facilities and Senior Notes
         - 42 -




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Other Factors which May Affect our Liquidity
  Off-Balance Sheet Arrangements
  Critical Accounting Estimates
   - 43 -




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Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Foreign Exchange Risk
     Interest Rate Risk
   
 Item 4. Controls and Procedures
   - 44 -




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(1)
    
    there was a material weakness relating to the design and implementation of controls
over accounting for income taxes, including: (a) computing taxes on a jurisdictional
specific basis to allow proper calculation, analysis and reconciliation of taxes
receivable, taxes payable and related deferred taxes, (b) the application of Statement of
Financial Accounting Standards No. 5, Accounting for Contingencies, as it relates to tax
matters and (c) the application of FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes; and(2)
    
    the company was required to make material adjustments in the aggregate to the
consolidated financial statements intended to be published for the year ended January 31,
2008 (which adjustments were made prior to the publication of such financial statements).
These adjustments were the result of an insufficient number of personnel within the
accounting function possessing an appropriate level of experience in the selection and
application of accounting principles generally accepted in the United States of America
(U.S. GAAP). These adjustments were also the result of a lack of secondary review over
management analysis and estimates underlying recorded amounts.
   (1)
    
    Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the issuer;(2)
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the issuer are being made only in
accordance with authorizations of management and directors of the issuer; and(3)
    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the issuers assets that could have a material effect on
the financial statements.
  - 45 -




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Part II. Other Information
 
 Item 1. Legal Proceedings
      - 46 -




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Item 1A. Risk Factors
    - 47 -




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- 48 -




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Item 4. Submission of Matters to a Vote of Security Holders
   Name of Nominee
    
    Votes For
    
    Votes WithheldLeon J. Level
    
    
    84,885,681
    
    
    
    2,379,676In addition, Brian D. Belchers, C. John Langley, Jr., Roger I. MacFarlane, J. Simon Stubbings, C.
John Langley, Jr., Allan M. Rosenzweig, and Matthys J. Wessels, each a continuing director of the
company, continued their respective terms of office as a director after the annual meeting of
shareholders. J. Simon Stubbings retired as a director and as Chairman of the Board immediately
following the annual meeting of shareholders.The appointment of Deloitte & Touche LLP was ratified as follows:Votes For
    
    Votes Against
    
    Abstentions86,861,850
    
    
    383,958
    
    
    
    19,549
 
 Item 6. Exhibits
 Exhibit
    
    Description3.1
    
    Memorandum of Association of the company, as amended (incorporated
by reference to Exhibit 3.1 to the companys Current Report on
Form 8-K, filed July 31, 2007)3.2
    
    Articles of Association of the company, as amended (incorporated
by reference to Exhibit 3.1 to the companys Current Report on
Form 8-K, filed July 31, 2007)10.1+
    
    Amendment to Employment Agreement between Mr. Wessels and the
company, dated as of May 5, 2008 (incorporated by reference to
Exhibit 10.1 to the companys Quarterly Report on Form 10-Q filed
June 9, 2008)10.2+
    
    Amendment to Employment Agreement between Mr. MacFarlane and the
company, dated as of May 5, 2008 (incorporated by reference to
Exhibit 10.2 to the companys Quarterly Report on Form 10-Q filed
June 9, 2008)10.3+
    
    UTi Worldwide Inc. Supplemental Benefits Allowance Program,
effective June 9, 2008 (incorporated by reference to Exhibit 10.1
to the companys Current Report on Form 8-K filed June 11, 2008)31.1
    
    Certification of Chief Executive Officer pursuant to Securities
Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Securities
Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 +
    
    Management contract or compensatory arrangement. - 49 -




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SIGNATURES
  UTi Worldwide Inc.Date:      September 9, 2008
    By:

    /s/ Roger I. MacFarlaneRoger I. MacFarlaneChief Executive OfficerDate:      September 9, 2008
    By:
    /s/ Lawrence R. SamuelsLawrence R. SamuelsExecutive Vice President  Finance and

Chief Financial OfficerPrincipal Financial Officer and
Principal Accounting Officer - 50 -




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EXHIBIT INDEX
 Exhibit
    
    Description3.1
    
    Memorandum of Association of the company, as amended (incorporated
by reference to Exhibit 3.1 to the companys Current Report on
Form 8-K, filed July 31, 2007)3.2
    
    Articles of Association of the company, as amended (incorporated
by reference to Exhibit 3.1 to the companys Current Report on
Form 8-K, filed July 31, 2007)10.1+
    
    Amendment to Employment Agreement between Mr. Wessels and the
company, dated as of May 5, 2008 (incorporated by reference to
Exhibit 10.1 to the companys Quarterly Report on Form 10-Q filed
June 9, 2008)10.2+
    
    Amendment to Employment Agreement between Mr. MacFarlane and the
company, dated as of May 5, 2008 (incorporated by reference to
Exhibit 10.2 to the companys Quarterly Report on Form 10-Q filed
June 9, 2008)10.3+
    
    UTi Worldwide Inc. Supplemental Benefits Allowance Program,
effective June 9, 2008 (incorporated by reference to Exhibit 10.1
to the companys Current Report on Form 8-K filed June 11, 2008)31.1
    
    Certification of Chief Executive Officer pursuant to Securities
Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Securities
Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 +
    
    Management contract or compensatory arrangement. - 51 -