C.H. Robinson Worldwide (CHRW) 8-K C.H. Robinson Reports Second Quarter Results

C.H. Robinson Worldwide, Inc.
14701 Charlson Road
Eden Prairie, Minnesota 55347

Chad Lindbloom, senior vice president and chief financial officer (952) 937-7779 Angie Freeman, investor relations (952) 937-7847

FOR IMMEDIATE RELEASE

C.H. ROBINSON REPORTS SECOND QUARTER RESULTS

MINNEAPOLIS, July 22, 2008 – C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended June 30, 2008.

Summarized financial results for the quarter ended June 30 are as follows (dollars in thousands, except per share data):

		Three months ended					Six months ended
			June 30,					June 30,
		2008		2007	% Change	2008		2007		% Change
Gross profits	$	341,186		$ 310,898	9.7%	$	679,215	$607,828		11.7%
Operating income		144,506		129,794	11.3%		280,583		244,983	14.5%
Net income		90,418		82,299	9.9%		176,736		155,264	13.8%
Diluted EPS	$	0.52	$	0.47	10.6%	$	1.02	$	0.89	14.6%

“We are pleased that in a tough freight environment, our people continued to do a good job finding opportunities in the marketplace,” said John P. Wiehoff, chairman and chief executive officer of C.H. Robinson. “While the environment is still challenging and our truckload gross profit margins continue to be compressed in the first part of July, we continue to feel very positive about our long-term growth strategy and our business model.”

Total Transportation gross profits increased 9.7 percent to $297.5 million in the second quarter of 2008 from $271.1 million in the second quarter of 2007. Our Transportation gross profit margin decreased to 15.4 percent in 2008 from 17.9 percent in 2007 due to gross profit margin declines in most of our transportation modes.

Our truck gross profits consist of truckload and less-than-truckload (“LTL”) services. Our truck gross profit growth of 8.3 percent in the second quarter of 2008 was driven by volume growth, offset by declines in our truckload gross profit margins. Our truckload volumes increased approximately 11 percent. Including fuel, our truckload rates increased approximately 14 percent; excluding estimated impacts of fuel, underlying linehaul rates were consistent with the

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C.H. Robinson Worldwide, Inc.
July 22, 2008
Page 2

second quarter of 2007. Our truckload gross profit margins declined due to higher fuel prices and increased cost of capacity. Our LTL shipments increased approximately 21 percent. Our LTL gross profit margins were consistent with the second quarter of 2007.

Our intermodal gross profit increase of 5.0 percent in the second quarter was driven by volume growth, offset slightly by a decline in gross profit margins. Our gross profit margin decline was due to increased fuel prices.

The increase of 30.0 percent in our ocean transportation gross profits in the second quarter of 2008 was driven by volume growth and price increases.

In our air transportation business, approximately two-thirds of our gross profit growth of 18.1 percent in the second quarter of 2008 was driven by our domestic air business, which includes our previously-disclosed acquisition of LXSI Services, Inc. on July 13, 2007.

Miscellaneous transportation gross profits consist primarily of transportation management fees and customs brokerage fees. The increase of 20.6 percent in the second quarter was driven primarily by volume growth in transportation management.

For the second quarter, Sourcing gross profits increased 6.9 percent to $30.3 million in 2008 from $28.3 million in 2007, due to higher volumes.

Our Information Services gross profits grew 16.8 percent in the second quarter of 2008. Our growth was driven by volume growth in our core fuel card and cash advance services and an increase in our revenue per transaction, due to the price of fuel. With certain merchants our fee is based on a percentage of the sale amount. Approximately one-quarter of the growth was related to other services, such as fleet card and carrier compliance services.

For the second quarter, operating expenses increased 8.6 percent to $196.7 million in 2008 from $181.1 million in 2007. This was due to an increase of 3.7 percent in personnel expenses and an increase of 25.8 percent in selling, general, and administrative expenses.

As a percentage of gross profits, total operating expenses decreased to 57.6 percent in the second quarter of 2008 from 58.3 percent in the second quarter of 2007. This decrease was due to a decline in personnel expenses as a percentage of gross profits from 45.4 percent to 42.9 percent, offset partially by an increase in our selling, general, and administrative expenses as a percentage of gross profits. Expenses related to our restricted stock program and various other incentive plans are variable, based on growth in our earnings. Our slower earnings growth in the second quarter of 2008 compared to the second quarter of 2007 resulted in a decrease in expense related to some of these incentives plans. This contributed to our personnel expenses growing slower than our gross profits.

The increase in our selling, general, and administrative expenses was driven by increased spending in several expense categories. We are investing in the business to support our future plans, by continuing to travel and seek sales opportunities in the marketplace, open new offices, add people, and expand existing offices. More significant expense increases included occupancy,

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C.H. Robinson Worldwide, Inc.
July 22, 2008
Page 3

travel, and insurance and claims. In addition, due to the growth in our gross revenues and receivables, we increased our provision for doubtful accounts.

Founded in 1905, C.H. Robinson Worldwide, Inc., is one of the largest non-asset based third party logistics companies in the world. C.H. Robinson is a global provider of multimodal transportation services and logistics solutions, currently serving over 29,000 customers through a network of 221 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 48,000 carriers worldwide.

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.; risks associated with the potential impacts of changes in government regulations; risks associated with the produce industry, including food safety and contamination issues; 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 Second Quarter 2008 Earnings Conference Call Tuesday, July 22, 2008 5:00 p.m. Eastern time Live webcast available through Investor Relations link at www.chrobinson.com Telephone access: 800-240-2134

Webcast replay available through August 5, 2008; Investor Relations link at www.chrobinson.com Telephone audio replay available until 12:59 a.m. Eastern Time on July 25, 2008: 800-405-2236; passcode: 11116078#

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C.H. Robinson Worldwide, Inc.
July 22, 2008
Page 4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		(unaudited)
(In thousands, except per share data)
		Three months ended				Six months ended
		June 30,				June 30,
		2008		2007		2008		2007
Gross Revenues:
Transportation	$	1,927,354	$ 1,511,173		$	3,568,966	$	2,811,591
Sourcing		380,933		357,062		712,230		665,359
Information Services		13,419		11,491		25,722		22,101
Total gross revenues		2,321,706	1,879,726			4,306,918		3,499,051
Gross Profits:
Transportation
Truck		252,204		232,892		511,527		462,031
Intermodal		10,700		10,190		19,878		19,570
Ocean		14,034		10,799		26,289		20,045
Air		9,711		8,224		17,761		15,058
Miscellaneous		10,833		8,983		20,700		16,811
Total transportation		297,482		271,088		596,155		533,515
Sourcing		30,285		28,319		57,338		52,212
Information Services		13,419		11,491		25,722		22,101
Total gross profits		341,186		310,898		679,215		607,828
Operating costs and expenses:
Personnel expenses		146,521		141,231		300,275		283,007
Selling, general, and administrative expenses		50,159		39,873		98,357		79,838
Total operating expenses		196,680		181,104		398,632		362,845
Income from operations		144,506		129,794		280,583		244,983
Investment and other income		1,709		3,430		4,183		7,026
Income before provision for income taxes		146,215		133,224		284,766		252,099
Provision for income taxes		55,797		50,925		108,030		96,745
Net income	$	90,418	$	82,299	$	176,736	$	155,264
Net income per share (basic)	$	0.53	$	0.48	$	1.04	$	0.91
Net income per share (diluted)	$	0.52	$	0.47	$	1.02	$	0.89
Weighted average shares outstanding (basic)		169,731		170,942		169,794		171,062
Weighted average shares outstanding (diluted)		173,483		174,200		173,747		174,725

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C.H. Robinson Worldwide, Inc.
July 22, 2008
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CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
		June 30,	December 31,
		2008		2007
Assets
Current assets:
Cash and cash equivalents	$	318,713	$	338,885
Available-for-sale securities		38,738		115,842
Receivables, net		1,148,727		911,780
Other current assets		23,718		22,649
Total current assets		1,529,896		1,389,156
Property and equipment, net		101,520		101,665
Intangible and other assets		324,708		320,486
	$	1,956,124	$	1,811,307
Liabilities and stockholders’ investment
Current liabilities:
Accounts payable and outstanding checks	$	758,009	$	618,195
Accrued compensation		58,543		101,926
Other accrued expenses		33,103		37,498
Total current liabilities		849,655		757,619
Long term liabilities		11,972		11,439
Total liabilities		861,627		769,058
Total stockholders’ investment		1,094,497		1,042,249
	$	1,956,124	$	1,811,307

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C.H. Robinson Worldwide, Inc.
July 22, 2008
Page 6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
		Six months ended
		June 30,
		2008		2007
Operating activities:
Net income	$	176,736	$	155,264
Stock-based compensation		12,596		23,988
Depreciation and amortization		15,370		13,162
Other non-cash expenses, net		11,217		(2,699)
Net changes in operating elements		(152,734)		(94,062)
Net cash provided by operating activities		63,185		95,653
Investing activities:
Net property additions		(11,053)		(23,501)
Cash paid for acquisitions		(9,410)		(9,261)
Purchases of available-for-sale securities		(110,324)		(85,725)
Sales/maturities of available-for-sale securities		187,784		79,131
Other assets, net		146		(53)
Net cash provided by (used for) investing activities		57,143		(39,409)
Financing activities:
Net repurchases of common stock		(78,348)		(65,665)
Excess tax benefit from stock based compensation plans		8,506		10,336
Cash dividends		(75,803)		(62,724)
Net cash used for financing activities		(145,645)		(118,053)
Effect of exchange rates on cash		5,145		1,909
Net change in cash and cash equivalents		(20,172)		(59,900)
Cash and cash equivalents, beginning of period		338,885		348,592
Cash and cash equivalents, end of period	$	318,713	$	288,692
		As of June 30
		2008		2007
Operational Data:
Employees		7,793		6,996
Branches		221		217

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