C.H. Robinson Worldwide, Inc.
8100 Mitchell Road, Suite 200
Eden Prairie, Minnesota 55344
Chad Lindbloom, vice president and chief financial officer (952) 937-7779
Angie Freeman, investor relations (952) 937-7847
FOR IMMEDIATE RELEASE
C.H. ROBINSON REPORTS FIRST QUARTER RESULTS
MINNEAPOLIS, April 26, 2005 -- C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported financial results for the three months ended March 31, 2005.
For the first quarter, gross profits increased 33.3 percent to $199.4 million in 2005 from $149.6 million in 2004. Income from operations increased 43.7 percent to $67.8 million in the first quarter of 2005 from $47.2 million in the first quarter of 2004. Net income increased 43.7 percent to $41.8 million in the first quarter of 2005 from $29.1 million in the first quarter of 2004. Diluted net income per share increased 41.2 percent to $0.48 per share in the first quarter of 2005 from $0.34 per share in the first quarter of 2004.
"The year began with a high demand for our services in the marketplace," said John P. Wiehoff, chief executive officer of C.H. Robinson. "In the first quarter, we continued to use current market conditions as an opportunity both to build new relationships and to strengthen existing ones. Our acquisitions of FoodSource and Epic Roots helped our Sourcing business to a strong start. We continue to invest in our foundation of people and locations for the future. Including these acquisitions, we added 223 employees and two new branch locations to our network in the quarter."
For the first quarter, total Transportation gross profits increased 33.9 percent to $173.8 million in 2005 from $129.8 million in 2004. Our Transportation gross profit margin increased slightly from the first quarter of 2004.
The increase in our truck transportation gross profits of 36.4 percent in the first quarter of 2005 was driven by volume growth in both truckload and less-than-truckload transactions and an increase in gross profit margin. We expanded relationships with a diverse mix of existing and new customers. Our decentralized network of branch offices continues to be an advantage in gaining new, local accounts and enhancing our ability to service customers and carriers.
Our intermodal gross profits decrease of 6.8 percent in the first quarter of 2005 resulted from a decrease in volumes and a decrease in gross profit margins.Our volume and margins were impacted by increased costs, service lane eliminations, and regional service disruptions that continue to drive business back to truck service.
Our international ocean gross profits increased 30.6 percent in the first quarter of 2005.This growth includes the impacts of our June 2004 expansion into China and growth in volumes with several of our large international customers. We are continuing to broaden our relationships with existing customers to include international transportation and customs brokerage services.
Our air gross profits, which are primarily international, increased 52.8 percent in the first quarter of 2005. The significant growth in our air gross profits was primarily due to increased volumes with several large international customers.
Miscellaneous transportation gross profits consist of transportation management fees, customs brokerage fees, warehouse and cross-dock services, and other miscellaneous transportation related services. The increase of 35.9 percent in the first quarter was driven by increases in our transportation management fees and customs brokerage business.
For the first quarter, Sourcing gross profits increased 40.7 percent to $16.6 million in 2005 from $11.8 million in 2004. Excluding the impact of the acquisitions of FoodSource and Epic Roots, announced on February 14, 2005, our internal growth rate of Sourcing gross profits was 10 percent. We have continued to have success growing our business with retailers and foodservice providers. In 2004, volatile prices for certain produce items negatively impacted our volumes. We have entered into more favorable arrangements with both suppliers and customers to reduce this volatility.
For the first quarter, Information Services gross profits increased 12.3 percent to $8.9 million in 2005 from $7.9 million in 2004, primarily due to transaction growth.
For the quarter, personnel expense as a percentage of gross profits decreased to 50.6 percent in 2005 from 51.9 percent in 2004.Average gross profits per employee, a key measure of productivity, increased approximately 13 percent in 2005 compared to 2004.While many of our personnel expenses are variable, we gain leverage in periods of growth.
For the quarter, selling, general, and administrative expenses increased 23.4 percent to $30.7 million in 2005 from $24.8 million in 2004. Selling, general, and administrative expenses as a percentage of gross profits decreased for the first quarter of 2005 to 15.4 percent compared to 16.6 percent in 2004.
Founded in 1905, C.H. Robinson Worldwide, Inc., is one of the largest third-party logistics companies in North America. C.H. Robinson is a global provider of multimodal transportation services and logistics solutions, currently serving 18,000 customers through a network of 178 offices in North America, South America, Europe, and Asia. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with approximately 35,000 carriers worldwide. C.H. Robinson is one of the largest third-party providers of intermodal services in the United States.
Except for the historical information contained herein, the matters set forth in this release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to such factors as market demand and pressures on the pricing for our services; competition and growth rates within the third-party logistics industry; freight levels and availability of truck capacity or alternative means of transporting freight, and changes in relationships with existing truck, rail, ocean and air carriers; changes in our customer base due to possible consolidation among our customers;our ability to integrate the operations of acquired companies with our historic operations successfully; risks associated with litigation and insurance coverage; risks associated with operations outside of the U.S.; changing economic conditions such as general economic slowdown, decreased consumer confidence, fuel shortages and the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports.
Conference Call Information:
C.H. Robinson Worldwide First Quarter 2005 Earnings Conference Call
Wednesday, April 27, 2005; 11:00 a.m. Eastern time
Live webcast available through Investor Relations at www.chrobinson.com
Telephone access: 800-240-2134
Webcast replay available through May 12, 2005: Investor Relations at www.chrobinson.com
Telephone audio replay available through April 29, 2005: 800-405-2236; passcode: 11028123#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(unaudited) |
(In thousands, except per share data) |
| | | |
| Three months ended |
| March 31, |
| 2005 | | 2004 |
Gross revenues: | | | |
Transportation | $ 999,936 | | $ 772,449 |
Sourcing | 206,109 | | 166,243 |
Information Services | 8,895 | | 7,918 |
Total gross revenues | 1,214,940 | | 946,610 |
Gross profits: | | | |
Transportation | | | |
Truck | 154,020 | | 112,956 |
Intermodal | 6,956 | | 7,463 |
Ocean | 5,660 | | 4,333 |
Air | 2,667 | | 1,745 |
Miscellaneous | 4,543 | | 3,343 |
Total transportation | 173,846 | | 129,840 |
Sourcing | 16,641 | | 11,826 |
Information Services | 8,895 | | 7,918 |
Total gross profits | 199,382 | | 149,584 |
Operating costs and expenses: | | | |
Personnel expenses | 100,929 | | 77,574 |
Selling, general and administrative expenses | 30,661 | | 24,839 |
Total operating costs and expenses | 131,590 | | 102,413 |
Income from operations | 67,792 | | 47,171 |
Investment and other income: | | | |
Interest income and other | 1,014 | | 587 |
Nonqualified deferred compensation investment gain | 117 | | 70 |
Investment and other income | 1,131 | | 657 |
Income before provision for income | | | |
Taxes | 68,923 | | 47,828 |
Provision for income taxes | 27,147 | | 18,756 |
Net income | $ 41,776 | | $ 29,072 |
Net income per share (basic) | $ 0.49 | | $ 0.34 |
Net income per share (diluted) | $ 0.48 | | $ 0.34 |
Weighted average shares outstanding (basic) | 84,938 | | 84,621 |
Weighted average shares outstanding (diluted) | 87,066 | | 86,414 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
(unaudited) (In thousands) |
| | | March 31, 2005 | | December 31, 2004 |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | | $ 125,236 | | $ 166,476 |
Available-for-sale securities | | | 122,174 | | 121,600 |
Receivables | | | 599,784 | | 544,274 |
Other current assets | | | 17,897 | | 13,637 |
Total current assets | | | 865,091 | | 845,987 |
| | | | | |
Net property and equipment | | | 57,178 | | 51,122 |
Intangible and other assets | | | 234,435 | | 183,587 |
| | | $ 1,156,704 | | $ 1,080,696 |
| | | | | |
Liabilities and stockholders' investment | | | | | |
Current liabilities: | | | | | |
Accounts payable and outstanding checks | | | $ 399,391 | | $ 358,929 |
Accrued compensation | | | 29,394 | | 60,261 |
Other accrued expenses | | | 50,015 | | 33,629 |
Total current liabilities | | | 478,800 | | 452,819 |
| | | | | |
Long term liabilities: | | | | | |
Deferred tax liability | | | 6,218 | | 4,153 |
Nonqualified deferred compensation obligation | | | 3,119 | | 2,868 |
Total long term liabilities | | | 9,337 | | 7,021 |
Total liabilities | | | 488,137 | | 459,840 |
| | | | | |
Total stockholders' investment | | | 668,567 | | 620,856 |
| | | $ 1,156,704 | | $ 1,080,696 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(unaudited) (In thousands, except operational data) |
| | | Three months ended March 31, |
2005 | | 2004 |
Operating activities: | | | |
Net income | | | $ 41,776 | | $ 29,072 |
Depreciation and amortization | | | 3,883 | | 2,634 |
Other non-cash expenses | | | 10,664 | | 8,182 |
Net changes in operating elements | | | (31,809) | | (25,414) |
Net cash provided by operating activities | | | 24,514 | | 14,474 |
Investing activities: | | | | | |
Net property additions | | | (8,505) | | (11,625) |
Cash paid for acquisitions | | | (43,590) | | (7,302) |
Net purchases of investments | | | (567) | | (118) |
Other assets, net | | | (1,185) | | 24 |
Net cash used for investing activities | | | (53,847) | | (19,021) |
Financing activities: | | | | | |
Net issuance of common stock | | | 1,695 | | 634 |
Cash dividends | | | (12,832) | | (10,247) |
Net cash used for financing activities | | | (11,137) | | (9,613) |
Effect of exchange rates on cash | | | (770) | | (725) |
| | | | | |
Net decrease in cash and cash equivalents | | | (41,240) | | (14,885) |
Cash and cash equivalents, beginning of period | | | 166,476 | | 123,413 |
Cash and cash equivalents, end of period | | | $ 125,236 | | $ 108,528 |
| As of March 31, |
Operational Data: | 2005 | | 2004 |
Employees | 5,029 | | 4,231 |
Branches | 178 | | 160 |
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