UTi WORLDWIDE INC

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). All statements, other than statements of historical facts, included or incorporated by reference in this Annual Report which address activities, events or developments that the company expects or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and analyses made by the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “could,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” “projects,” or “continue” and other similar expressions or the negative of these terms or other comparable terms. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, including some which are not under the control of the company, and that actual results may differ materially from those projected in the forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, those set forth under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015 filed with the SEC (together with any amendments thereto and additions and changes thereto contained in our filings with the SEC since the filing of our Annual Report on Form 10-K), those discussed elsewhere in this Quarterly Report, including in Part II., Item 1A below, those risks discussed in our definitive proxy statement filed with SEC on December 4, 2015 and the following: the company has incurred losses for each of the last three fiscal years and during the three and nine months ended October 31, 2015, and such losses are expected to continue; the company’s ability to maintain sufficient liquidity and capital resources to fund its business and to generate sufficient cash to service its debt and other obligations; the company’s ability to refinance its indebtedness when it comes due, including near term maturities; the company’s ability to accurately predict its future business results and liquidity; risks associated with the company’s clients, including delays or the inability by such clients to pay the company; the risk that the company may not be able to achieve improvements in its working capital; volatility with respect to global trade; global economic, political and market conditions and unrest, including those in Africa, Asia Pacific and Europe; volatile fuel costs; transportation capacity, pricing dynamics and the ability of the company to secure space on third party aircraft, ocean vessels and other modes of transportation; changes in interest and foreign exchange rates, particularly with respect to the South African rand and the euro; material interruptions in transportation services; risks of international operations; risks that the carrying values of the company’s assets might be impaired; risks associated with, and the potential for penalties, fines, costs and expenses the company may incur as a result of the investigation by the government of Brazil into the international air freight and air cargo transportation industry; risks associated with the pending investigation by the Securities and Exchange Commission (SEC); risks of adverse legal judgments or other liabilities not limited by contract or covered by insurance; the company’s ability to retain clients while facing increased competition; disruptions caused by epidemics, natural disasters, conflicts, strikes, wars and terrorism; the impact of changes in the company’s effective tax rates; the company’s ability to maintain effective disclosure controls and procedures and effective internal control over financial reporting; the other risks and uncertainties described herein and in the company’s other filings with the SEC; and other factors outside the company’s control. Other risks and uncertainties include the timing and likelihood of completion of the proposed merger between the company and DSV A/S, a Danish corporation, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the proposed merger that could cause the parties to abandon the transaction; the possibility that the company will not receive the required ordinary shareholder approvals; disruption from the proposed merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; the possibility that the proposed merger does not close, including due to the failure to satisfy the closing conditions; as well as more specific risks and uncertainties. All forward-looking statements included in this Quarterly Report speak only as of the date of this Quarterly Report and investors should not place undue reliance on any forward-looking statement.

All of the forward-looking statements made in this Quarterly Report are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the company or its business or results of operations. The company does not undertake any obligation to update forward-looking statements as a result of new information, future events or otherwise except as may be required by law.

Recent Developments. On October 9, 2015, we entered into a Merger Agreement (Merger Agreement) with DSV A/S, a Danish corporation (DSV) and an indirect wholly-owned subsidiary of DSV (Merger Sub). Pursuant to the Merger Agreement and subject to its terms and conditions, Merger Sub will be merged with and into us (Merger), with our company surviving the Merger as an indirect wholly-owned subsidiary of DSV. At the effective time of the Merger, each ordinary share, no par value, of us (Ordinary Shares) issued and outstanding immediately prior to the effective time (other than Ordinary Shares owned by (1) DSV, Merger Sub, our subsidiaries or held by us as treasury shares or (2) shareholders who have properly exercised dissenter’s rights under the law of the British Virgin Islands) will be converted into the right to receive $7.10 per share in cash, without interest. At the effective time of the Merger, each of our Class A 7.0% Convertible Preference Shares, no par value (Convertible Preference Shares) issued and outstanding immediately prior to the effective time will become the right to receive $1,125.71 per share in cash, without interest. The completion of the Merger is subject to various closing conditions, including (a) the absence of any law or order preventing the consummation of the Merger, (b) the receipt of certain required antitrust and other regulatory approvals and (c) our obtaining the approval of the Merger, the Merger Agreement and the transactions contemplated by the Merger Agreement by the holders of the Ordinary Shares (including the holders of the Convertible Preference Shares voting on an as-converted basis) and the holders of our Ordinary Shares (excluding our largest shareholder and the Convertible Preference Shares). The Merger Agreement contains customary representations and warranties from both of us and DSV, and also contains customary pre-closing covenants. The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement under specified circumstances, that we will pay DSV a termination fee of $34.0 million.

We continue to experience losses and we expect to incur further losses. We may not return to or sustain profitability in the future. In the nine months ended October 31, 2015, our operating loss and net loss attributable to UTi Worldwide Inc. increased to $91.9 million and $136.7 million, respectively, as a result of weaker than anticipated business conditions and operating results, particularly with respect to freight forwarding volumes. We also incurred operating losses and net losses attributable to UTi Worldwide Inc. in fiscal years 2015, 2014 and 2013. Furthermore, based on our results of operations through the nine months ended October 31, 2015 and our current expectations for the remainder of fiscal 2016, particularly with respect to freight forwarding volumes, we currently expect to report losses at least through the end of the second quarter of fiscal 2017. Our liquidity, financial condition and operating performance have been materially and adversely impacted by our weaker than anticipated financial results through the nine months ended October 31, 2015. We will likely not return to profitability prior to the completion of the Merger with DSV and, if the Merger is not completed, we may not return to profitability in future periods. Additionally, our revenues could further decline, or could grow more slowly than we expect and we may incur significant losses in the future due to a number of factors and reasons, including those related to the planned Merger with DSV described elsewhere in this Item 1.A. “Risk Factors”. Our future liquidity, financial condition and operating performance could be materially and adversely impacted by a number of factors, including the other risks, uncertainties and factors described elsewhere in this Form 10-Q, in our definitive proxy statement filed with the SEC on December 4, 2015, in our Annual Report on Form 10-K for the fiscal year ended January 31, 2015 filed with the SEC (together with any amendments thereto and additions and changes thereto contained in our filings with the SEC since the filing of our Annual Report on Form 10-K) and in our other filings with the SEC.

Uncertainties associated with the Merger may cause a loss of management and other key employees and have disrupted our business relationships, which has and may continue to adversely affect our business. Uncertainty about the effect of the Merger on our employees, customers and suppliers has and may continue to have an adverse effect on our business. These uncertainties may impair our ability to attract, retain and motivate key personnel until the Merger is completed and for a period of time thereafter. Employee retention may be particularly challenging during the pendency of the Merger, as employees of the Company may experience uncertainty about their future roles with the Company. As we face additional uncertainties relating to the Merger, our business relationships have and may continue to be subject to disruption as customers, suppliers and other third parties attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than the Company. If key employees depart or if our existing business relationships suffer, our results of operations may continue to be adversely affected. The adverse effects of such disruptions could be further exacerbated by any delay in the completion of the Merger.

The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us for greater consideration than what DSV has agreed to pay. The Merger Agreement contains provisions that make it more difficult for us to sell our business to a company other than DSV. These provisions include a general prohibition on us soliciting any acquisition proposal or offer for a competing transaction, subject to limited exceptions. If we or DSV terminate the Merger Agreement and we agree to be or are subsequently acquired by another company, we may in some circumstances be required to pay to DSV a termination fee of $34.0 million. Further, our Board of Directors has agreed in the Merger Agreement, subject to limited exceptions, that it will not withdraw or modify in a manner adverse to DSV its recommendation that our shareholders approve the Merger.

These provisions might discourage a third party that has an interest in acquiring all or a significant part of the Company from considering or proposing an acquisition, even if the party were prepared to pay consideration with a higher per share cash or market value than the cash value proposed to be received in the Merger, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.