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, vice president, investor relations and public affairs (952) 937-7847
FOR IMMEDIATE RELEASE
C.H. ROBINSON REPORTS FIRST QUARTER RESULTS
MINNEAPOLIS, April 21, 2010 - C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ: CHRW), today reported financial results for the quarter ended March 31, 2010.
Summarized financial results for the quarter ended March 31 are as follows (dollars in thousands, except per share data):
| Three months ended March 31, |
| 2010 | | 2009 | | % change |
| | | | | |
Total revenues | $ 2,074,617 | | $ 1,688,000 | | 22.9% |
Net revenues: | | | | | |
Transportation | | | | | |
Truck | 241,665 | | 256,359 | | -5.7% |
Intermodal | 8,496 | | 9,801 | | -13.3% |
Ocean | 12,522 | | 14,227 | | -12.0% |
Air | 8,835 | | 7,337 | | 20.4% |
Other logistics services | 13,419 | | 9,970 | | 34.6% |
Total transportation | 284,937 | | 297,694 | | -4.3% |
Sourcing | 34,938 | | 30,569 | | 14.3% |
Information services | 12,726 | | 10,340 | | 23.1% |
Total net revenues | 332,601 | | 338,603 | | -1.8% |
Operating expenses | 196,594 | | 201,235 | | -2.3% |
Operating income | 136,007 | | 137,368 | | -1.0% |
Net income | $ 84,012 | | $ 85,383 | | -1.6% |
Diluted EPS | $ 0.50 | | $ 0.50 | | 0.0% |
Our Transportation revenue increased 24.3 percent in the first quarter of 2010. Transportation net revenues decreased 4.3 percent to $284.9 million in the first quarter of 2010 from $297.7 million in the first quarter of 2009. Our Transportation net revenue margin decreased to 17.4 percent in 2010 from 22.6 percent in 2009.
Our truck net revenues, which consist of truckload and less-than-truckload ("LTL") services, decreased 5.7 percent in the first quarter of 2010. Our truckload volumes increased 22 percent in the first quarter of 2010 compared to the first quarter of 2009. Our truckload net revenue margins decreased due to higher transportation costs, higher fuel prices, and lower pricing to our customers, exclusive of the impact of fuel. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers decreased approximately three percent in the first quarter of 2010 compared to the first quarter of 2009. Our truckload transportation costs increased approximately three percent, excluding the estimated impacts of fuel. Our LTL net revenues increased approximately 20 percent. The increase was driven by an increase in total shipments of approximately 40 percent, partially offset by decreased net revenue margin and lower revenue per shipment. Our revenue per shipment declined due to pric e declines, including lower average weight per shipment.
Our intermodal net revenue decrease of 13.3 percent in the first quarter of 2010 was driven by the higher cost of transportation services, partially offset by increased volume.
Our ocean transportation net revenues decreased 12.0 percent in the first quarter of 2010 driven by decreased pricing, partially offset by volume increases. Excluding our previously announced acquisition of Walker Logistics Overseas Ltd. ("Walker") on June 12, 2009, our ocean transportation net revenues declined approximately 16 percent.
Our air transportation net revenue increased 20.4 percent in the first quarter of 2010. Excluding the Walker acquisition, our air transportation net revenues increased approximately 10 percent.
Other logistics services net revenues consist primarily of transportation management fees and customs brokerage fees. The increase of 34.6 percent was driven by an increase in management fees as well as the previously announced acquisition of International Trade & Commerce, Inc. ("ITC") on July 7, 2009.Excluding the acquisition of ITC, our other logistics services net revenues increased approximately 20 percent in the first quarter of 2010.
For the first quarter, our Sourcing revenues increased 17.7 percent due to the previously announced acquisition of Rosemont Farms, Inc. ("Rosemont") on September 15, 2009 and volume growth. Sourcing net revenues increased 14.3 percent to $34.9 million in 2010 from $30.6 million in 2009. Excluding the Rosemont acquisition, Sourcing net revenues decreased approximately three percent in the first quarter of 2010, due to a decrease in net revenue per case, offset partially by increased volumes.
Our Information Services revenues increased 23.1 percent in the first quarter of 2010 due to an increase in transactions and increases in some fees that are impacted by fuel prices.
For the first quarter, operating expenses decreased 2.3 percent to $196.6 million in 2010 from $201.2 million in 2009. This was due to a decrease of 4.2 percent in personnel expense. Our average headcount during the first quarter of 2010 was 4.8 percent lower than the first quarter of 2009. For the quarter, other selling, general, and administrative expenses increased 3.8 percent. As a percentage of net revenues, total operating expenses decreased slightly to 59.1 percent in the first quarter of 2010 from 59.4 percent in the first quarter of 2009.
"We are very encouraged by our volume growth in transportation," said John P. Wiehoff, chairman and chief executive officer. "While we have many ways to measure our success, shipment volume, market share, and the scope and strength of our relationships have always been some of the most critical metrics of our long-term performance. Those metrics all look positive to us for the first quarter of 2010."
Wiehoff continued, "Net revenue margin fluctuations are a part of our business model that we believe we are very capable of managing, but are difficult to predict and can have a significant impact on our results in the short term. The trends of margin compression and strong volume growth during the first quarter of 2010 have continued into the first three weeks of April, with our total net revenue activity approximating that of the first quarter."
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 35,000 customers through a network of 235 offices in North America, South America, Europe, Asia, Australia, and the Middle East. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with over 47,000 transportation providers 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 changes in economic conditions such as the current recession and decreased consumer confidence, changes in 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; fuel prices and availability; 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 2010 Earnings Conference Call
Wednesday, April 21, 2010 10:00 a.m. Eastern time
Live webcast available through Investor Relations link at www.chrobinson.com
Telephone access: 877-941-0843; conference ID 4282239
Webcast replay available through Investor Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on April 24, 2010:800-406-7325;
passcode: 4282239#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(unaudited, in thousands, except per share data) |
|
| Three months ended March 31, |
| 2010 | | 2009 |
| | | |
Revenues: | | | |
Transportation | $1,639,236 | | $ 1,318,526 |
Sourcing | 422,655 | | 359,134 |
Information Services | 12,726 | | 10,340 |
Total revenues | 2,074,617 | | 1,688,000 |
Costs and expenses: | | | |
Purchased transportation and related services | 1,354,299 | | 1,020,832 |
Purchased products sourced for resale | 387,717 | | 328,565 |
Personnel expenses | 146,755 | | 153,223 |
Other selling, general, and administrative expenses | 49,839 | | 48,012 |
Total costs and expenses | 1,938,610 | | 1,550,632 |
| | | |
Income from operations | 136,007 | | 137,368 |
| | | |
Investment and other income | 474 | | 490 |
| | | |
Income before provision for income taxes | 136,481 | | 137,858 |
Provision for income taxes | 52,469 | | 52,475 |
Net income | $ 84,012 | | $ 85,383 |
| | | |
Net income per share (basic) | $ 0.51 | | $ 0.50 |
Net income per share (diluted) | $ 0.50 | | $ 0.50 |
Weighted average shares outstanding (basic) | 165,440 | | 169,140 |
Weighted average shares outstanding (diluted) | 166,575 | | 170,825 |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(unaudited, in thousands) |
|
| March 31, 2010 | | December 31, 2009 |
Assets | | | |
Current assets: | | | |
Cash and cash equivalents | $ 229,645 | | $ 337,308 |
Available-for-sale securities | 52,716 | | 48,310 |
Receivables, net | 1,002,807 | | 885,543 |
Other current assets | 38,270 | | 36,108 |
Total current assets | 1,323,438 | | 1,307,269 |
| | | |
Property and equipment, net | 115,543 | | 117,699 |
Intangible and other assets | 403,226 | | 409,280 |
Total Assets | $ 1,842,207 | | $ 1,834,248 |
| | | |
Liabilities and stockholders' investment | | | |
Current liabilities: | | | |
Accounts payable and outstanding checks | $ 643,235 | | $ 606,514 |
Accrued compensation | 37,254 | | 90,855 |
Other accrued expenses | 75,571 | | 34,438 |
Total current liabilities | 756,060 | | 731,807 |
| | | |
Long term liabilities | 23,052 | | 22,541 |
Total liabilities | 779,112 | | 754,348 |
| | | |
Total stockholders' investment | 1,063,095 | | 1,079,900 |
Total liabilities and stockholders' investment | $ 1,842,207 | | $ 1,834,248 |
| | | |
| | | |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
(unaudited, in thousands, except operational data) |
|
| Three months ended March 31, |
| 2010 | | 2009 |
Operating activities: | | | |
Net income | $ 84,012 | | $ 85,383 |
Stock-based compensation | 4,664 | | 5,627 |
Depreciation and amortization | 7,559 | | 7,481 |
Provision for doubtful accounts | 2,637 | | 3,858 |
Other non-cash change, net | 3,111 | | (1,258) |
Net changes in operating elements | (98,058) | | (42,408) |
Net cash provided by operating activities | 3,925 | | 58,683 |
| | | |
Investing activities: | | | |
Net property additions | (4,368) | | (11,613) |
Purchases of available-for-sale securities | (8,541) | | - |
Sales/maturities of available-for-sale securities | 6,481 | | 750 |
Other assets | (25) | | - |
Net cash used for investing activities | (6,453) | | (10,863) |
| | | |
Financing activities: | | | |
Net repurchases of common stock | (62,847) | | (49,278) |
Excess tax benefit from stock-based compensation plans | 2,391 | | 1,983 |
Cash dividends | (42,409) | | (39,573) |
Net cash used for financing activities | (102,865) | | (86,868) |
Effect of exchange rates on cash | (2,270) | | (5,995) |
| | | |
Net change in cash and cash equivalents | (107,663) | | (45,043) |
Cash and cash equivalents, beginning of period | 337,308 | | 494,743 |
Cash and cash equivalents, end of period | $229,645 | | $ 449,700 |
| | | |
| | | |
| As of March 31, |
| 2010 | | 2009 |
Operational Data: | | | |
Employees | 7,350 | | 7,481 |
Branches | 235 | | 231 |
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