Exhibit 99.1
C.H. Robinson Worldwide, Inc.
14701 Charlson Road
Eden Prairie, Minnesota 55347
Andrew Clarke, Chief Financial Officer (952) 683-3474
Tim Gagnon, Director, Investor Relations (952) 683-5007
FOR IMMEDIATE RELEASE
C.H. ROBINSON REPORTS FOURTH QUARTER RESULTS
MINNEAPOLIS, February 2, 2016 – C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended December 31, 2015. Summarized financial results are as follows (dollars in thousands, except per share data):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three months ended December 31, | | | Twelve months ended December 31, | |
| | | 2015 | | | 2014 | | | %
change | | | 2015 | | | 2014 | | | %
change | |
| | | | | | |
Total revenues | | $ | 3,210,853 | | | $ | 3,357,202 | | | | -4.4 | % | | $ | 13,476,084 | | | $ | 13,470,067 | | | | 0.0 | % |
| | | | | | |
Net revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Transportation | | | | | | | | | | | | | | | | | | | | | | | | |
Truckload (1) | | $ | 338,892 | | | $ | 298,721 | | | | 13.4 | % | | $ | 1,316,533 | | | $ | 1,190,372 | | | | 10.6 | % |
LTL | | | 89,622 | | | | 63,402 | | | | 41.4 | % | | | 360,706 | | | | 258,884 | | | | 39.3 | % |
Intermodal | | | 8,835 | | | | 10,235 | | | | -13.7 | % | | | 41,054 | | | | 40,631 | | | | 1.0 | % |
Ocean | | | 56,065 | | | | 56,944 | | | | -1.5 | % | | | 223,643 | | | | 208,422 | | | | 7.3 | % |
Air | | | 18,613 | | | | 19,404 | | | | -4.1 | % | | | 79,096 | | | | 79,125 | | | | 0.0 | % |
Customs | | | 10,681 | | | | 10,824 | | | | -1.3 | % | | | 43,929 | | | | 41,575 | | | | 5.7 | % |
Other logistics services | | | 21,217 | | | | 18,281 | | | | 16.1 | % | | | 82,548 | | | | 73,097 | | | | 12.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total transportation | | | 543,925 | | | | 477,811 | | | | 13.8 | % | | | 2,147,509 | | | | 1,892,106 | | | | 13.5 | % |
Sourcing | | | 26,852 | | | | 24,005 | | | | 11.9 | % | | | 120,971 | | | | 115,546 | | | | 4.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total net revenues | | | 570,777 | | | | 501,816 | | | | 13.7 | % | | | 2,268,480 | | | | 2,007,652 | | | | 13.0 | % |
| | | | | | |
Operating expenses | | | 356,198 | | | | 314,088 | | | | 13.4 | % | | | 1,410,170 | | | | 1,259,234 | | | | 12.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 214,579 | | | | 187,728 | | | | 14.3 | % | | | 858,310 | | | | 748,418 | | | | 14.7 | % |
Net income | | $ | 126,583 | | | $ | 112,947 | | | | 12.1 | % | | $ | 509,699 | | | $ | 449,711 | | | | 13.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Diluted EPS | | $ | 0.88 | | | $ | 0.77 | | | | 14.3 | % | | $ | 3.51 | | | $ | 3.05 | | | | 15.1 | % |
| (1) | Includes Payment Services revenues which were previously reported separately. |
“Our team delivered great results in the fourth quarter and the full year in 2015,” said John Wiehoff, CEO and Chairman. “The growth in net revenue, net income and earnings per share represent the effectiveness of our network and the positive outcomes we are delivering for customers.”
Our truckload net revenues increased 13.4 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Organic truckload net revenues increased approximately ten percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Our acquisition of Freightquote.com (“Freightquote”) on January 1, 2015 contributed approximately 3.5 percentage points to our truckload net revenue growth in the fourth quarter of 2015. Our North American truckload volumes increased approximately five percent in the fourth quarter of 2015 compared to the same period of 2014. North American truckload volumes, excluding Freightquote,
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C.H. Robinson Worldwide, Inc.
February 2, 2016
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increased approximately two percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Our truckload net revenue margin increased in the fourth quarter of 2015 compared to the fourth quarter of 2014, due primarily to lower transportation costs, including fuel. In North America, excluding the estimated impacts of the reduction in fuel costs, our average truckload rate per mile charged to our customers decreased approximately three percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. In North America, our truckload transportation costs decreased approximately five percent, excluding the estimated impacts of the reduction in fuel costs.
Our less-than-truckload (“LTL”) net revenues increased 41.4 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Freightquote contributed approximately 32 percentage points to our LTL net revenue growth in the fourth quarter of 2015. LTL volumes increased approximately 36 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Organic LTL volume increased approximately 17 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Net revenue margin increased in the fourth quarter of 2015 compared to the fourth quarter of 2014. This was primarily the result of a change in our freight mix with more small customers from the higher margin Freightquote business.
Our intermodal net revenues decreased 13.7 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014, notwithstanding the increase in intermodal net revenues attributed to Freightquote. Conversion to truckload from intermodal negatively impacted intermodal volumes and net revenues in the fourth quarter of 2015.
Our ocean transportation net revenues decreased 1.5 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. The decrease in net revenues was primarily due to lower rates charged to our customers, offset partially by decreased costs and higher volumes.
Our air transportation net revenues decreased 4.1 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. The decrease was due to lower rates charged to our customers, partially offset by increased net revenue margin.
Our customs net revenues decreased 1.3 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. The decrease was due to lower rates, partially offset by higher volume.
Our other logistics services revenues, which includes managed services, warehousing, and small parcel, increased 16.1 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014 primarily from volume growth in managed services. Freightquote contributed approximately two percentage points to our other logistics services net revenue growth in the fourth quarter of 2015.
Sourcing net revenues increased 11.9 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. This increase was primarily due to an increase in net revenue per case and a case volume increase of 4.5 percent across a variety of commodities and services.
For the fourth quarter, operating expenses increased 13.4 percent to $356.2 million in 2015 from $314.1 million in 2014. Operating expenses as a percentage of net revenues decreased to 62.4 percent in the fourth quarter of 2015 from 62.6 percent in the fourth quarter of 2014.
For the fourth quarter, personnel expenses increased 14.1 percent to $268.2 million in 2015 from $235.1 million in 2014. This was primarily due to an average headcount increase of 14.1 percent compared to the fourth quarter of 2014. Our acquisition of Freightquote contributed approximately nine percentage points of the growth in average headcount during the fourth quarter of 2015.
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February 2, 2016
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For the fourth quarter, other selling, general, and administrative expenses increased 11.4 percent to $88.0 million in 2015 from $79.0 million in 2014. This increase was primarily due to our acquisition of Freightquote including amortization expense of approximately $1.9 million, and an increase in travel expenses.
Interest and other expense increased during the fourth quarter of 2015 by $7.1 million. During the fourth quarter, we wrote off an indemnification asset related to the acquisition of Phoenix International Freight Services, Ltd., as the indemnifications expired. The impact of this write off was partially offset within the provision for income taxes by related tax liabilities that expired under applicable statute of limitations. These items decreased earnings per share by $0.02 in the fourth quarter.
About C.H. Robinson
Founded in 1905, C.H. Robinson Worldwide, Inc. is one of the largest non-asset based fourth party logistics companies in the world. C.H. Robinson is a global provider of multimodal transportation services and logistics solutions, currently serving over 110,000 active customers through a network of 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 68,000 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, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; competition and growth rates within the fourth party logistics industry; freight levels and increasing costs 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; the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports.
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date. All remarks made during our financial results conference call will be current at the time of the call and we undertake no obligation to update the replay.
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February 2, 2016
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Conference Call Information:
C.H. Robinson Worldwide Fourth Quarter 2015 Earnings Conference Call
Wednesday, February 3, 2016, 8:30 a.m. Eastern Time
The call will be limited to 60 minutes, including questions and answers. We invite call participants to submit questions in advance of the conference call and we will respond to as many of the questions as we can in the time allowed. To submit your question(s) in advance of the call, please emailtim.gagnon@chrobinson.com.
Presentation slides and a simultaneous live audio webcast of the conference call may be accessed through the Investor Relations link on C.H. Robinson’s website atwww.chrobinson.com.
To participate in the conference call by telephone, please call ten minutes early by dialing: 800-723-6751
International callers dial +1-785-830-7980
Callers should reference the conference ID, which is 4722702
Webcast replay available through Investor Relations link atwww.chrobinson.com
Telephone audio replay available until 11:30 a.m. Eastern Time on February 10, 2016: 888-203-1112;
passcode: 4722702#
International callers dial +1-719-457-0820
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C.H. Robinson Worldwide, Inc.
February 2, 2016
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three months ended
December 31, | | | Twelve months ended
December 31, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Transportation(1) | | $ | 2,867,301 | | | $ | 3,014,251 | | | $ | 11,989,780 | | | $ | 11,936,512 | |
Sourcing | | | 343,552 | | | | 342,951 | | | | 1,486,304 | | | | 1,533,555 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 3,210,853 | | | | 3,357,202 | | | | 13,476,084 | | | | 13,470,067 | |
| | | | | | | | | | | | | | | | |
| | | | |
Costs and expenses: | | | | | | | | | | | | | | | | |
Purchased transportation and related services(1) | | | 2,323,376 | | | | 2,536,440 | | | | 9,842,271 | | | | 10,044,406 | |
Purchased products sourced for resale | | | 316,700 | | | | 318,946 | | | | 1,365,333 | | | | 1,418,009 | |
Personnel expenses | | | 268,190 | | | | 235,117 | | | | 1,051,410 | | | | 939,021 | |
Other selling, general, and administrative expenses | | | 88,008 | | | | 78,971 | | | | 358,760 | | | | 320,213 | |
| | | | | | | | | | | | | | | | |
Total costs and expenses | | | 2,996,274 | | | | 3,169,474 | | | | 12,617,774 | | | | 12,721,649 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income from operations | | | 214,579 | | | | 187,728 | | | | 858,310 | | | | 748,418 | |
| | | | | | | | | | | | | | | | |
| | | | |
Interest and other expense | | | (13,471 | ) | | | (6,400 | ) | | | (35,529 | ) | | | (24,987 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Income before provision for income taxes | | | 201,108 | | | | 181,328 | | | | 822,781 | | | | 723,431 | |
Provisions for income taxes | | | 74,525 | | | | 68,381 | | | | 313,082 | | | | 273,720 | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 126,583 | | | $ | 112,947 | | | $ | 509,699 | | | $ | 449,711 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net income per share (basic) | | $ | 0.88 | | | $ | 0.77 | | | $ | 3.52 | | | $ | 3.06 | |
Net income per share (diluted) | | $ | 0.88 | | | $ | 0.77 | | | $ | 3.51 | | | $ | 3.05 | |
| | | | |
Weighted average shares outstanding (basic) | | | 143,484 | | | | 145,856 | | | | 144,967 | | | | 147,202 | |
Weighted average shares outstanding (diluted) | | | 144,144 | | | | 146,650 | | | | 145,349 | | | | 147,542 | |
| (1) | Includes Payment Services revenues and related costs which were previously reported separately. |
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February 2, 2016
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CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| | | | | | | | |
| | | December 31,
2015 | | | December 31,
2014 | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 168,229 | | | $ | 128,940 | |
Restricted cash | | | — | | | | 359,388 | |
Receivables, net | | | 1,505,620 | | | | 1,571,591 | |
Other current assets | | | 56,849 | | | | 45,540 | |
| | | | | | | | |
Total current assets | | | 1,730,698 | | | | 2,105,459 | |
| | |
Property and equipment, net | | | 190,874 | | | | 152,471 | |
Intangible and other assets | | | 1,262,786 | | | | 956,408 | |
| | | | | | | | |
Total assets | | $ | 3,184,358 | | | $ | 3,214,338 | |
| | | | | | | | |
| | |
Liabilities and stockholders’ investment | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable and outstanding checks | | $ | 783,883 | | | $ | 795,255 | |
Accrued compensation | | | 146,666 | | | | 125,624 | |
Accrued income taxes | | | 12,573 | | | | 4,616 | |
Other accrued expenses | | | 55,475 | | | | 45,365 | |
Current portion of debt | | | 450,000 | | | | 605,000 | |
| | | | | | | | |
Total current liabilities | | | 1,448,597 | | | | 1,575,860 | |
| | |
Noncurrent income taxes payable | | | 19,634 | | | | 24,279 | |
Deferred tax liabilities | | | 78,105 | | | | 66,961 | |
Long-term debt | | | 500,000 | | | | 500,000 | |
Other long term liabilities | | | 217 | | | | 223 | |
| | | | | | | | |
Total liabilities | | | 2,046,553 | | | | 2,167,323 | |
| | |
Total stockholders’ investment | | | 1,137,805 | | | | 1,047,015 | |
| | | | | | | | |
Total liabilities and stockholders’ investment | | $ | 3,184,358 | | | $ | 3,214,338 | |
| | | | | | | | |
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C.H. Robinson Worldwide, Inc.
February 2, 2016
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands, except operational data)
| | | | | | | | |
| | | Twelve months ended
December 31, | |
| | | 2015 | | | 2014 | |
Operating activities: | | | | | | | | |
Net income | | $ | 509,699 | | | $ | 449,711 | |
Stock-based compensation | | | 57,661 | | | | 47,861 | |
Depreciation and amortization | | | 66,409 | | | | 57,009 | |
Provision for doubtful accounts | | | 11,538 | | | | 15,092 | |
Deferred income taxes | | | (17,095 | ) | | | (3,117 | ) |
Other | | | 7,409 | | | | (1,138 | ) |
Changes in operating elements, net of acquisitions: | | | | | | | | |
Receivables | | | 107,560 | | | | (137,102 | ) |
Prepaid expenses and other | | | (228 | ) | | | 6,294 | |
Other non-current assets | | | 741 | | | | 380 | |
Accounts payable and outstanding checks | | | (53,272 | ) | | | 40,251 | |
Accrued compensation and profit-sharing contribution | | | 18,580 | | | | 40,236 | |
Accrued income taxes | | | 5,178 | | | | (4,370 | ) |
Other accrued liabilities | | | 4,156 | | | | 2,319 | |
| | | | | | | | |
Net cash provided by operating activities | | | 718,336 | | | | 513,426 | |
| | |
Investing activities: | | | | | | | | |
Purchases of property and equipment | | | (28,115 | ) | | | (22,364 | ) |
Purchases and development of software | | | (16,527 | ) | | | (7,138 | ) |
Restricted cash | | | 359,388 | | | | (359,388 | ) |
Acquisitions, net of cash | | | (369,833 | ) | | | — | |
Other | | | 641 | | | | (6 | ) |
| | | | | | | | |
Net cash used for investing activities | | | (54,446 | ) | | | (388,896 | ) |
| | |
Financing activities: | | | | | | | | |
Borrowings on line of credit | | | 6,833,000 | | | | 4,823,000 | |
Repayments on line of credit | | | (6,988,000 | ) | | | (4,593,000 | ) |
Debt issuance costs | | | — | | | | (1,484 | ) |
Net repurchases of common stock | | | (225,674 | ) | | | (164,703 | ) |
Excess tax benefit on stock-based compensation | | | 8,548 | | | | 7,558 | |
Cash dividends | | | (235,615 | ) | | | (215,008 | ) |
| | | | | | | | |
Net cash used for financing activities | | | (607,741 | ) | | | (143,637 | ) |
Effect of exchange rates on cash | | | (16,860 | ) | | | (14,000 | ) |
| | | | | | | | |
| | |
Net change in cash and cash equivalents | | | 39,289 | | | | (33,107 | ) |
Cash and cash equivalents, beginning of period | | | 128,940 | | | | 162,047 | |
| | | | | | | | |
Cash and cash equivalents, end of period | | $ | 168,229 | | | $ | 128,940 | |
| | | | | | | | |
| |
| | | As of December 31, | |
| | | 2015 | | | 2014 | |
Operational Data: | | | | | | | | |
Employees | | | 13,159 | | | | 11,521 | |
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