CHRW - Earnings call transcript Q1 2020 | C.H. Robinson Worldwide, Inc.

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Operator

Good morning ladies and gentlemen, and welcome to the C.H. Robinson First Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode.

Following today's presentation, Bob Houghton will facilitate a review of previously submitted questions. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, April 29, 2020.

to of conference Corporate like Houghton, to now President Vice Finance. would turn over the Bob I

Bob Houghton

Thank you, Executive Donna call Zechmeister, today and Chief good morning be our Biesterfeld, everyone. Bob our Officer. Chief Financial Officer; Mike will and On our

as are In we possible to our a couple of time the order much as portion Q&A to of quarter. devote implementing call, changes this

our our will presentation prepared press review performance of we our included our a in and not is slides covering both as in release. remarks, in be this information First, segment

our We longer day have company growth day to brief month. also XXXX net made the on Mike the total for include per first decision no and quarter and business volume the provide Bob truckload results. per current revenue growth will business commentary

accompany remarks Investor found in that of website slides be their at the our can chrobinson.com. section Relations Presentation

to today their after our to follow remarks with our comments forward-looking release will remind yesterday. earnings received We pre-submitted like may statements. I'd responses questions we that contain you, the

Slide cause differ our factors actual that two could to management's expectations. from list results today's in presentation

will that, turn call Bob. over I with And to the

Bob Biesterfeld

C.H. stay and and that Bob businesses for and employees our goods platform I Thanks, morning like across XX,XXX for helping everything I'd start carriers We're in and excellence customers keep in they're around remarks of how XXX,XXX times. delivering examples to commerce nearly thankful good see and flowing the to delivering I'm order today doing. during over essential recognizing the everybody. open. my world these critical efforts their by day, tireless to unprecedented and Robinson Every stepping they're

team as for of our guideposts key on beginning three focused the has Since COVID-XX decision-making. pandemic, our the pillars

organization. our second, and the extent these on protecting to the our keep safety evaluate greatest the providing decisions the people focus way carriers; for our economic possible. continuity health health employees; right ensuring our the that pillars We the third, are security and First, our customers to and long-term supply of our to of of chain and believe

our into effectively a Because Given gained these from workforce, to or the carriers, nature from were nature home. we while visibility work able to we COVID-XX without technology, to virus. disruption with insights, of output coupled in the convert safely of our early of to our global investments disruptive remote our business, the enabling the employees customers

Today, of we remote remotely. over XXX% global have workforce is ample our needed. to move if XX% working And to bandwidth work

move. customers' through are experienced continue chains situations to expertise and to facilitating produce equipment, distribution the crisis global enabling to of surge on leveraging retailers have movement supply items our ensuring the been are demand Our or Whether in in our help that when teams laser-focused managing meet movement it's protective our they in truckload committed to environment. of goods it providing continued customers in and services fresh simply employees the food for most, capacity this need the personal

business Related this the current our evaluating conditions. monitoring constantly changing economic environment, operations global to and we're

We're costs. steps down. the reduce the expenses still we reduce operating furloughs while of implementing organization unknown, and is duration the our are our While volumes will have effect term, taken across that industry across workforce COVID-XX short to in

as short-term this to navigate further needed and reduce current actions decisions we'll company. time and U.S. members officers, the even stronger of costs steps through Canadian company salary include for company-matched reduction for cost monitor and temporary elimination employees. for Our a are retainers These a reduction of nonessential and and our to Board the additional to take retirement also environment a cash efforts plans travel, reduction executive in temporary temporary prudent difficult emerge to continue an suspension

I highlights touch for quarter. the on briefly Mike, I'll turn call the Before over to

improvement. long-term initiatives make We on to and strategic productivity our market gains continue progress around share

Cass results quarter a significant as growth declined quarter gains by first where industry X%. in LTL the X% NAST, and volumes Index share included measured in X.X% a both in Freight market truckload volume between Our and

continue the as truckload X,XXX-basis spread growth a business. operating volume by in our growth and business We in point favorable investments efficiency indicated our technology to drive headcount in NAST between see

and As in said an important productivity the this is we've past, our key technology focus of metric a investments.

down of of in increase only And modest quarter global delivering Global declines during at Services volumes a significantly, consolidation. and well Our both is acquisition performance recent business Distribution Forwarding performed for ocean. trade significant retail Prime outstanding demand a were when with in air our time

first with liquidity. billion strong we a sheet and quarter We of over $X.X balance exited have

responsive Our business the and the are to economic weather positioned is well resilient in we ahead. months highly model to And adversity. uncertainty

call the quarter to financial turn performance. first our Mike to now I'll review

Mike Zechmeister

Thanks, $X of our $XXX good million capital solid I'd begin committed facility, and which XXXX. by to some of of comments was in $X.XX our matures position. morning. we the under end QX, adding my billion like Bob's At about which billion October in color Bob liquidity, comprised to credit of liquidity remarks had

In addition, million cash. we $XXX finished QX in with

operating $XXX to in and business million difficult environment. QX the Our the past including million continues solid cash $XX deliver flow quarters over model four

Our model revenue. with customer from also customer benefits representing less net X% concentration than very of top our low our

our Slide QX income X shows statement summary.

last extra year. contained our first day one versus quarter reminder, a QX As business results

from the Our results Services. contribution of Prime acquisition month Distribution of quarter included first also one

offset revenues truckload X.X%, pricing gross in our driven LTL mostly total lines truckload. and quarter primarily by higher First by in service lower increased volumes

anticipated rapidly shipment by revenues falling first business expanding costs. carrier contractual company service the to due was truckload benefited led decreased A truckload QX year as quarter compression line. in in net in Total the our margins revenues from decline in truckload quarter our last largely XX.X% margin net per

today were XX% and year. March, down same February the QX periods down January, XX% per to revenues business in compared when net XX% in in down last

per increased X% in and reference, net in in revenues company March. and total both February day For XXXX, business XX% increased January

year, versus the by net Operating drop XX.X% year. to points last was margin driven declined down QX primarily basis XXXX in operating income revenue Total first by quarter dollars. last compared

QX our were savings accelerating Diluted XX.X% expense. growth services was compensation year, lower spend primarily partially to QX These variable share due offset reduction travel and cost SG&A increases increased higher and technology in a by QX reduction year. was in in related per a down earnings and expense to related than last to expenses from personnel purchased initiatives. QX, $X.XX last

impacting X other net highlights Slide covers income.

basis approximately QX first Our improvement year. in XX.X%, tax XXX rate rate quarter from XX.X% effective the an was last of points

Our tax benefit a first due effective rate compensation. quarter tax the has to stock-based lower typically to related

on a of earnings essentially the was While tax benefit this versus year, larger QX due to pre-tax the QX. rate the impact value unchanged last in lower tax it dollar had

XXXX that lower We expect January. to full provided XX% our the XX% rate range be year on of late in to we effective the tax end

revaluation, First the expense other other currency impact where and in interest to of the Interest working expense functional million, reside. those related quarter balances conversion $XX.X down totaled investments the from and year. cash country of capital each includes last to million $XX.X QX primarily currency in and

in $X.X last year this $X.X revaluation, the QX $X.X expense. currency a lower debt QX balance that declined QX a average expense by included interest million million driven quarter. year primarily million, by from compared a included expense to

back of year which to this versus Turning declined QX from and of a in to last slowed XXXX, changes and both cash receivables in sequentially flow of declined a cash use December source last compared $XXX in business capital of Cash receivables QX increased of unfavorable as last million working revenues operations of XX.X% slide half year due In this X. In QX year. lower following the in million capital in to sequentially capital decreased QX XXXX. working year, working drove from of gross drove QX year. That QX earnings. the reduction $XXX

an QX to in in XX% accounts balance, which receivable past QX also of uptick balance. the was our There receivables our less than increase due amounted

collection and higher-risk We particularly have and higher-risk and minimize risk exposure categories tightened in processes to our customers. with credit

QX capital $XX.X totaled million. expenditures

We to to $XX to expenditures to full capital range XXXX with $XX million million continue primarily expect spending in be dedicated technology. year the

committed on investment to continue highest-returning XXXX. to initiatives in We and to from billion the $X technology the we technology a XXXX basis remain risk-adjusted prioritize

Over shareholder continue to we opportunistic be the repurchases committed to long-term, share to enhance value.

share have we the to our of continue assess we of activity However, COVID-XX. suspended caution, an as out abundance of impacts temporarily repurchase

repurchase March share on last XX. was Our

solid is liquidity utmost $XXX important, QX, returned we and to during remain dividends X% In last dividend. of quarterly times the through uncertain year. approximately our While a which a we increase shareholders share to QX million repurchases maintaining versus represent of combination

highlights slide on sheet X. some on Now to balance

decreased accounts payable. quarter X.X% increase an working year in capital operating versus by driven prior First the

QX for at the year. was balance of QX weighted average up debt quarter end versus $XX $X.XX the rate approximately billion, was our year in X.X% and to last compared million X.X% interest end Our quarter last

our As March. and financed the in combination previously results month for with was was The of of the acquisition of acquisition Services to announced, completed borrowing QX $XXX a Distribution Prime and on our expectations of million from for QX. and business acquisition Integration and existing credit plans are synergy were track ahead facilities. Prime in assumptions growth in the earnings cash the contributed

have performance on and Historically, and specific volume provided we quantitative net intra-quarter revenue trends.

economy, recent trends uncertain believe relevant the of it changing industry a the the and more broader is in growth. and to freight we dynamics provide Given within description volume

that in the truckload we April, continue QX. of experienced In the we of see At saw results. our impact beginning general, continuation COVID-XX growth to a volume we

within declines truckload first week our the seen business. volume have after However, we

for some this context now turn Bob listening the business. additional Thanks on provide morning. I'll call to back And the to over

Bob Biesterfeld

Mike. you, Thank

on on As about the largest the it of through I going revenues. during the the indicated our since segment quarter, slides market to is but net call line state Bob want our represents be not and service opening, do all I will of touch on half truckload his of today's

paid contract and change truckload the in excluding and cost to our the NAST represent percent per decade. On slide our X over per billed costs light the to mile current blue mile rate dark fuel customers carriers lines

while price net resulting of The year-over-year decline margin in compression. quarter, per contract a cost to billed carriers X.X%, X.X%. paid per declined fuel fourth declined our moderated of our mile to the revenue the versus mile on rate net cost basis During customers quarter,

quarter levels market net line very during the experienced mile truckload in revenue However, first freight with per was XXXX. in much balance

serve as experienced per for load will first continue NAST As earnings net a the headwind we this past XXXX. revenue first and to high XXXX in truckload half calls, of two through quarters we've of historically indicated the in

we about honoring values. delivering evolving embracing customers and on markets experience acronym C.H. customer our commitments, is E.D.G.E. talk is lot that our way One disrupted. constantly, together a integrity. are growing through our E.D.G.E. values when for focus an even Robinson, our excellence, At these

in resulted exceed to transportation negative Throughout on our instances truckload pricing. customers, our with we an agreements the where files exceeded in commitments first pricing of increase continue the our for quarter. meet customer contractual quarter, This purchase despite cost and our the truckload

that base. with just honoring times have we commitments retention such reasons our that difficult the these believe customer We during is one rates of higher

As mentioned X% X.X% quarter truckload outpacing volumes LTL increased and decline Freight first volumes earlier to increased Cass in the X% NAST X.X%, the Index. I significantly

share volume market represented of fifth gains. quarter the QX Our consecutive

remarks I'll to across wrap vary broader final direction In supply and global up quarters. cost industry of XX. month-to-month volume, freight likely the of prepared slide next logistics and the on very difficult comments will the from with demand, verticals. and and economy The industry, significantly pricing our a this predict morning different over market few few the be will

while packaging, across as gross in data, and these verticals. of at manufacturing, meaningfully looking retail, XX% in automotive, and are April Combined, well our volumes energy grow beverage, chemical revenues XXXX. continue volumes verticals comprise the to North food In technology, paper company American as and our declining

employees, decisions. best our and make thoughtful of contract our long-term global and in the the role remains the customers, to health crisis. carriers of So in pillars that true time vital to our delivering the guide and company, thing measured certain. by to goods is our the decisions the critical and supply We'll situation one services, especially are fluid, essential remaining continue interest business in We're values while while that and chain, this committed of

the in with efforts, investments reduction shareholders, best prudent our long-term We value interest cost by of will our short long-term creation. and also technology to long-term act continue to balancing maximize in continued

growth will we'll Robinson at there company. approach as starts this And We While will value us, that as be our and of believe stakeholders. well stronger happen, and a we'll positioned recovery challenging is of ready recovery. leave drive a environment all an emerge for us C.H. create for even this to all to be

one My they and that of unprecedented and I'm customers them and times. the the deliver carriers the finally proud thanks and And work the our live incredibly truly these and their employees provide they of of to our focus, world support do in in. the that each effort to for to every we all to around dedication our excellence what communities

And that, the comments. the questions. prepared our answer turn I'll concludes with submitted we so That to it can back operator,

Operator

Houghton, yours for Q&A Mr. the is the floor session.

Bob Houghton

you, Thank Donna.

investors First, after questions I'd analysts many like for yesterday. earnings our to taking release the and to thank submit the time

to today's For question session the a for over frame turn Mike it Bob I will response. Q&A and up then or

is for similar Scott Schneeberger question BofA asked Todd from Atkins and Fowler question. Bob first Jack with Ken from Stephens. with with KeyBank, Our Oppenheimer, a Hoexter

strategic versus goals? net operating history containment you in the as to balance company. in margin Bob, meet slower taking given Robinson's this was What cost investments a lowest steps to C.H. the quarterly business the long-term initiatives macro public your are

Bob Biesterfeld

the And thanks Hey. Good question gentlemen. morning. for

macro impact structure. impacted steps environment has on put our containment the that of revenue address duration already The near being that our to but definitely several So we unknown have is And there's the term. to COVID-XX. question cost impact is cost that taken by pressure no in

So to are furloughs implement underway to results. decisions our across X% we've now portions that we of implementation of and in that a work made, workforce the of represented workforce. our directly difficult and made recap is The quarter about will very our these the of impact first decision of none few

reduction temporary our the employees my Earlier and U.S. my with in had starting shared April, our we'd we plans XX% reductions reports. match Canadian in a the compensation temporarily direct XX% for in executive that team suspended pay for to taken and and retirement

Directors retainers of have our reductions directors, of XX%. our their taken Board Additionally, in cash

we've this expanded some to will at And domestic non-essential savings. travel this international of point started the quarter balance was Furthermore, Prior our associated through expected and the to given business that we'd freeze COVID also hiring outbreak, limited quarter. already a drive virtually limit rate this expenses. through obviously, travel. we've and and And implemented the all attrition cost

personnel steps these around they but in smaller others to quarters. of savings, cost are incremental along are savings are SG&A the that the short-term $XXX with in we've savings and So million between should million that several drive previously three target nature next These $XX discussed.

that quarters output harness done due work in doing to coming of the employees and is been the in NAST, the is in we're you in our of an on core We we X% employees. fewer extremely have organic of doing to There's there's an less when more the in growth and and today order As strong our we impact Prime more business. centralize reported to to within had with investments here did doubt, our teams no put, LTL. being the investments truckload both basis quarter and volume additional standardize, X% work this of the be with processes factor the Simply but these field fewer technology progress made. the full automate in this impact and

moment I in long-term is second goals address of of the part which to around want the So the enterprise. investment to that take question strategic a

a alone quarter quarter alone. $XXX up tough variable income quarter. anything from way tough call It's to in truckload in the million in margin $XXX we almost in the still compression million was quarter a But net We other it revenue than overcome no is we operations really First did quarter. gave NAST in a that. delivered in and in over to single NAST. There

where employees critical up science for to these talent and teammates Many the that's that attract, come incremental compensation showed cost professional level But used the compensation. results. sales future in model, shared the areas engineering, past services. with our are made of Robinson and variable our in teams at in of and These quarter structure we've highly account of and leaders network shows other to additions highest personnel Robinson. expenses this a and our of critical what to the we're have This managers, it these less our the variable in type in than branch order headcount of couple are roles are in the data years

and headcount of in our fully expanding time, remains that improving long-term, it share, to around business, our center industry-leading between customers. to said productivity volume and focus strategic more So over parts provide to that digitizing and continues relationship operating taking unchanged continuing that service I our also our could margins over margins in past while I've time, the believe down. that trend

model engineer our tomorrow. to investments we So cost to need for today make of out

a investments with a we that course future map through road enterprise, faced and we're should the pain of of and stay short-term our strategic the manage best-off back short-term that some with the stopping scaling or question. in our or in significantly long-term Are or challenge in So will the cause? success we the

that reductions about the good cost really still short-term teams sacrificing focused and will creating made I impact of decisions could to At couple reductions, I this value our much long-term but depending it but drive our results, the we're come around cost that future of doing our quarters. work be on cost There a the the to that to capable I not point, in and want to the prudent minimize about order feel in more growth take great short-term reduce on more we've feel future.

Bob Houghton

why employee a from to been not next we has temporary change? that absorber traditional The kicked question in several or down to this down analysts. per XX%, net a personnel in should shock is is Mike, the dislocation has and in relationship Historically permanent only X%. business you be more whether Can the talk expect per is more cost while revenue line. employee

Mike Zechmeister

has market years this net the in million expense cost improve more certainly alignment will question. alignment the year. and personnel that versus revenue it short-term $XX increased the historically. recent volatility The has in revenue freight made cost difficult than additional between The been for Thanks Yes. takeout net in

expense heavily like variable As equity. cost bonus, components was Bob pointed to commissions weighted personnel out historically, our performance based more and

enabled employees our and meant expenses more also that personnel freight saw reductions that issues. it softer overall cycle, in closely experienced our retention in with changes revenue, While to we talent in compensation net align a significant

in several fixed the brought from standpoint. we overall variable have versus past line more compensation our the a market programs Over years, with

in grown technology unlocking headcount and compensation in role for provide These our long-term commitment structure increase to in customer To and critical than play more additional XX% value our some on folks a has than customers, their role, fixed past plays clarity a our our two how investment IT but years. cost the is employees. more carrier-facing carriers

Bob Houghton

Our from Jack Are provide and volume in Morningstar, is you far with on Young your seeing And relief costs given next any in Matt asked Chris market transportation question for to you Citi similar from April? seeing changes Wetherbee are truckload with the growth your continued color April? a into Atkins outperformance market? Can you thus in Bob purchase Stephens, has some and question. strong broader the relative spot the trends

Bob Biesterfeld

growth, truckload to first team of obviously the delivered in proud growth first the quarter. off, Related that I'm

to our the it's we each a out and when environment I fully the commitments in important customers that quarter and needed of point us delivered think, three honored volume our the months most. grew in of remote

Cass range. compare Industry-wide similar was about a or DAT down was in X% or X% it down and to our if pricing pricing you

transportation retail as March significant, and the both through extremely rationally did started of the see out short-term cost the of market. in we again from purchase restocking robust. pricing year albeit the disruption as holidays, as the was we're We then we're in spikes December So quarter the coming with

our during the exceeding this and of led for change shipments the of that our between And the rate cost negative of spread part those During periods. wide the in quarter. contribution those files times to had XX%

intent provide and terms volume decision, and to analysts visibility that a limit the one relevant of try we our I But month-to-date suspend to decision In providing on with that's of this the made to not the and you total net business. is have, more April, to company the amongst all information realized revenues be the state April appearing to investors truckload not popular call. but

large of the the given two Given made have remarks average providing the end halves that an all quarter of the other prepared to just and couple dynamics the and uncertainties market variations between marketplace didn't occurred in prudent we carries comments April. in a April, seem the the that beginning I April important of into reliable. think how the but what of and reinforce simply forward in saw or I it's

U.S., saw small to seemed into compared industries We COVID-XX commerce the disruption hardest we took a the outside and the the virtually had to businesses an impact market drive orders. this critical outsized truckload. across to pandemic in and saw of As strict entered This country hit first shelter-in-place hold LTL draw to and halt. cities

Obviously as negative as a on entire this such automotive volumes. had industry impact shutdowns

really about For hardest of beverage, industries us verticals revenues. up our and volume perform XX% and our staples These and these of manufacturing all hit to side well consumer automotive revenues. for the in XX% show food about of make retail been this paper, have continue technology that growth. and is and account The flip

So would to a in market space. these normally available Demand there's today, perfectly. loops accounts. truckload Routing And is shuttered be of industries looking guides at amount some the performing capacity that dedicated for-hire fair by almost general industries. across are now actually all that's down it the

longer the of agreements. The customer we to confluence We current these or truckload XX% duration rate our to continue term factors know portfolio that exposed is have of of unknown. more

answered in So that We be using of elusive results. come back we're April reopen, the when and any will can't the open or response when back our what once really the us be be guide around industries information. cities to And unknowns do up, in be would the unrealistic. to that stores plan attempt manufacturers month-to-date really quarter trying online, not consumer intra-quarter to believe to states scaling just

Bob Houghton

reductions. quarter we on much? reductions update reduce about next the do million you Were The If SG&A to longer How first costs Mike realized realize how from think question any in for increased relative XXXX reductions announced cost provide so, comes to your $XXX Please much should cost of previously anticipate of XXXX? analysts. to an cost how in the the earnings? And term? several

Mike Zechmeister

continue realized move be having $XXX expect cost the and impact benefit Most through that through be million year. one-third the designed in increasing of to to We QX we will to efficiency. come of on least savings projects to and XXXX enhance that as benefit NAST realized

We savings growth technology also are those an go help and purchase initiatives. services cost not for the referenced of completed savings increase SG&A and in expenses and will should These to Once associated projects accelerate ongoing. expenses be are the considered course ongoing.

next And earlier, quarters. Bob and million near-term mentioned as the approximately takeout $XX of costs the yield we to personnel expect SG&A over cost initiatives three

For clarity, announced million and in are that short-term we January. cost $XXX steps incremental late long-term the initiatives reduction to these

Bob Houghton

with question Bascome next Bob for The Susquehanna. Majors is from

Bascome Majors

the structural There business are substantial this, challenges on for financial Robinson side expectations today. your number strategic try other should either what facing are a be like there more of looks of cyclical that or two we your changes one investors for? set But realistic model, prepared from as or to historic

Bob Biesterfeld

Bascome. Thanks,

a So we've talked we've going much calls forums. of of past through on these in and change about been the amount which tremendous years of other couple

of and outside work decisions Some more how people made and we it's how making our capitalize looking has and model if our and on clear and even order of leverage subtle, through in our collaborate and the changes the apparent in process large-scale we other to terms in and been to the of which that's together, manner this speed from of the structured, how scale process of digitalization. automation and services deliver carriers to pretty teams our global how We're effectively are you're been our more customers network strength in. in the parts

It connected, Our platform much more with future enabled digital integrated more more model customers. will our and will in be deeply much be nature.

down path value by be supply driven but a fair will We're this of number lower to a model global a cost-to-serve, already this experts. chain network and to future we ways come there's deliver of fueled initiatives by be state. continue that will Our together in a

already these finish already of line crossed initiatives Some value. creating have and the are

longer in deliver of in Some are nature. will the some and term next quarters couple

As evolution, throughout our we our continued to history industry continue as our the -- we to evolve, have lead that organization. continues to plan as of

moving targets. the Our past We're strategy those aggressively than right pursuing order time our we're to have one. reach in any faster it is and we

Bob Houghton

for describe next would the on analysts. increasing you the The focusing Bob brokerage? is more competitive digital brokers margins? from environment begun several question in How current freight gross Have

Bob Biesterfeld

performing is and the how and So has there, mix almost compete regions many demand. with exceeding still be market spot seems we lanes of large and truckload XX% we much XX% And given asset-based many for In The contractual, as literally companies other routing quarter of loosened the as are as customers supply competitive. with our has brokers. in as much to compete to flow ebb we always that guides as our economy perfectly. the slowed April many and I market trucking tend within further in I said think

to In the brokers, don't our cycles. that service continuing that to can customers and stay I things variables control that really we're the and strong perspective go-to-market. terms their focused We're earn business a stand have we on is ensuring through of on continuing we the that up their digital holding for the and

Bob Houghton

Stanley. KeyBank from similar is question Morgan Ravi asked with from Shanker Fowler next Todd question. a The

Ravi Shanker

allocation? plans out clarify liquidity you capital at this for lay you about your Can long-term leverage, thinking priorities can Mike, and your point? are you how for

Mike Zechmeister

Ravi. Thanks,

healthy. Our balance sheet remains

ensured mentioned $X was facility we the over and it billion working liquidity prepared at As billion. remarks, credit properly. $X.X we have In from our in ample QX, borrowed we

our covenants. We debt have clearance plenty of on

finishing low to the of of end impact included at continues QX, March. leverage the the be in early Prime which acquisition times Our X.X at

$XXX ongoing note and refinancing XXXX, liquidity and the our matures $XXX our unsecured matures our of facility years million in majority than eight credit eight private a million October From in standpoint, years. more matures placement of in

repurchases to an our repurchases. suspended As said, enhance over earlier, have term. we committed share shareholder out That abundance of the mentioned caution, temporarily long value remain share opportunistic I we of to

our maintain dividend debt. investment-grade an corporate also to our will on rating and manage We credit quarterly

Bob Houghton

The for Atkins. from next Jack question is Bob

Jack Atkins

Can you the market weeks? in talk been about past in to the seen in April? what from you to surge six benefit able the Have you over seeing forwarding are eight that activity we have airfreight

Bob Biesterfeld

several had added air here activity we've of sales many row We've customs. in strong in and new really our across and business quarters forwarding ocean customers a

to During to help manufacturing our China first meet April, in have been back and secure air we online. unique as come continues capacity and able charters quarter on the into customers charters to air their demands

driven ocean Our existing as -- backlogs well well industry by of new volumes shipping ocean customers as as the additions. are mix largely with nice existing as April of mix being a customer in a

Bob Houghton

question next Atkins Jack Credit Stephens with Allison from asked similar question. Landry The with a Suisse. comes

Allison Landry

looking are could extend shippers to speak you any concerns? payment terms? customer liquidity And Mike, to

Mike Zechmeister

Yes.

have increase We for frequency an the and weeks. terms X% of total, Canada. than In the extensions less seen in past these in several the over requests represent requests of customers U.S.

In requests firm they entertain circumstances, and As we terms. of greater extensions a we don't a general are accept accompanied exchange certain for may extensions when practice, payment by value.

key of and receivables monitor variety customer metrics. our across We continue by a to category by

place. range our and are data wide put credit recently internal on external with focus we safeguards limits risk enhance higher-risk in tightened collections And we've results. We utilizing customers additional categories a have and to across and credit credit and of a

limits understand customers customers we a moved concern would a electronic to customers liquidity credit and to and on, expect remote when terms to payments From variety collections. targeted As proactively to help facilitate moving converting accordingly. standpoint, invoicing early an conversations of you to requirements outlook with began we're having and their better electronic customers example as liquidity higher-risk converted workforces,

Bob Houghton

The for from JPMorgan. with is Ossenbeck next question Brian Bob

Brian Ossenbeck

carriers you the What capacity are you front? seeing or exit Have small to capacity see park started is early it on too yet, tell? or to

Bob Biesterfeld

I tell. do think it's early too to

first think I all in X,XXX in quality. these I to see are our truckload but else added And about new markets carriers when Robinson the companies. to that the carrier a have that Typically, we we see they're see anticipate down, in trucking small than new do industry. industry, a our And to come put we the bit all of carriers anybody Robinson. freight we slides quarter. to adds towards because new were freight retreat virtually these more don't slow program we we and balanced contract

these and In a success. to our keep across business, to improve their terms waste and moving America, to of really eliminate carriers of them are them the carriers we're their helping small networks, critical These small them part in goods our them right hard North exiting, and keep they're working critical to in helping economy yields. miles getting

Advantage to that As carriers was help to that an benefits our which work the to the of small of in we example, quarter some specifically Robinson, them Program allows one program our our we the of extend and a took them Carrier steps on with to carriers of to fuel affinity diesel gallon on some $X.XX through of save extended allows end that programs, that to the capitalize to May. up them all

Bob Houghton

question next is with Jordan The for from Goldman Sachs. Bob Alliger

Jordan Alliger

do or hold contract Is a a the is how it perspective? does ago? to on contract bid look season look prices relative year How proceeding? it And from

Bob Biesterfeld

one's a customer customer. little and of obviously This to varies target moving a from it bit

COVID-XX, that expect it's we challenges companies dealing expect as activity with we've and they I more many our bit back look. of so annual of a intend their say forward that customers bid over their online that slow cycles. I little heard bid customers been our did the as do to many month but fully. expect of from businesses activity to pick I stick to come a with think, own or with up fair past have

will as bids renegotiations mini forward think of out clear cycle. bids there picture be I the pulling of some occurrences becomes the though likely economic

on I long. market for think and moves far dependent a the how that be will how of lot

not I some a to guide those bit see pricing to be Given little careful uncertainties, want of we moving. where

Bob Houghton

The Mike next from question Dave for Vernon with is Bernstein.

Dave Vernon

volume down off, Is routing while headcount of X% as shallower it up technology productivity Net up the signs of or guide early is this that result going paying depth? is is X.X%. is a

Mike Zechmeister

The answer success productivity indication with an short is is technology The yes. for investments. question. improved seeing of we're the Thanks the

non-financial increased been head correlated. we've Historically, and year into volume of per and and our As productivity We're change will headcount about, a one that seeing count. tech you're shift have now key expecting we've investments metrics talked continue. our volume is a been

depth routing guide been for has for As last depth, routing average quarters. guide on the your question X.X five

volume contributing headcount in to to NAST. So favorable comparisons year-over-year the not that would be

Bob Houghton

Scott for The next Schneeberger from from question Bob is Oppenheimer.

Scott Schneeberger

price How and in volume balancing you environment? current are the

Bob Biesterfeld

Scott. Thanks,

pricing to saw this before, our market on in and it quarter, growth really future services share As first And our is growing the you in market is largely focused no share line our market I've in market. we're really with to exception. our moved all of across key our customers the the said and movements

Bob Houghton

Chris is next The from from question Citi. Wetherbee

Chris Wetherbee

as returned towards sustainable growth volume environment? we truckload a in this to weaker in QX. a capturing Should read Bob, market more share move

Bob Biesterfeld

industry this out I one in similar share of that volume plan X.X% relationship to in and becoming the where is the more down Mike us volume the efficient laid in as positively for results and Truckload output QX. a around up environment an I that the at that terms in volumes It's the between addressed. and QX just look people. executing we've in question are think taking speaks

of look at make of market, in somewhere total in volumes, you of the the expand. don't area we're up, I continues area And somewhere which the hire brokerage X% When we know of for XX% our marketplace. to the

same do fewer ton around as grow able at to we than in were people last XXX a So us room quarter, that with And there's for continue in had cycles. NAST through demonstrated the the to time share to we of year. we

Bob Houghton

is Bob Allison from for question Landry Suisse. next from The Credit

Allison Landry

to Can you plans? lower ability sequentially? headcount Is the talk or about there willingness headcount

Bob Biesterfeld

as million about expense each implemented three we've and on made market X% furloughs new of of to amounts going headcount. in said, as the global to down basis. in past $XX current quarters this I go-forward implementing NAST impact personnel technologies. dynamics, our decision of a to a come Because structural launched the begin to impact about that positive are difficult that we've has Annualized, headcount Allison, changes

support and still to the work clear to really this of we absence, we do though, felt continue other business. demands as employees to time furloughs workforce to them to decision going different approach will be made the parts in was because of dictate. soon align it covering these and though bring right the them employees use as our through to leave We're in the to of their benefits of furloughed We their of some insurance are the C.H. unplanned business medical To thing back our Robinson. case our and of the demands reductions,

the we're the we business the health the to levels move we'll macro, continue staffing as overall have forward. to demands And across different of continue going evaluate In of we shared and monitor and terms divisions services. to as always

Bob Houghton

from Chris next Wetherbee Mike. is The Citi for with question

Chris Wetherbee

there in Are Do to in are you for consider Robinson financial enough XXXX? strong M&A you M&A? a interesting position opportunities think

Mike Zechmeister

sheet solid that balance are liquidity and and us Our gives capability.

uncertainties to returns. a However, the generate in marketplace, can are opportunities strong risk-adjusted continue taking given we We'll more conservative the evaluate acquisition approach. that

As you with and fit compelling strategic model. know proven prefer a we non-asset-based cultural opportunities business and a

that and are hesitate acquisition critical continue making initiatives. remain about would before us about we NAST a deployment. said, of and value from those creation opportunities and the prospects maintain initiatives in would capital disciplined That excited we'll to also the of We pipeline transformation an office distract

Bob Houghton

question for Landry Bob Our Allison is from Suisse. with Credit final

Allison Landry

and rates in improvement loosening net expect spot NAST in capacity, revenue deceleration in truckload the sequential QX? Given margins do you

Bob Biesterfeld

that the short-term margins. a return our given the coupled more were on would in side first the saw cost on in I to them normal customer dynamics in to net expect mix improvement with revenue between quarter. the seeing levels the see And our the state spot from In business of where supply depressed side, we they contract and we're and

length recession, any then play The across in in underlying capacity may that occur the repricing given customer potential pace including economy of the a industry of factors improvement as activity the which and the speed unknown well sectors on as is demand of side. duration market the network accelerates the restarts or bit that different all health the of any depth and

levels. factors of lot a revenue So But we margins to our to normal expect short-term, there. more convergence different net in would yes, of return the

Bob Houghton

our Q&A section earnings Relations Investor of chrobinson.com of the at today's of replay concludes call. in available today's That will at portion a.m. call approximately today. website the Time Eastern A XX:XX be

additional be phone have I a XXXX by email. conference our quarter for questions, or participating call. you can If day. good first in you Thank Have again reached

Operator

concludes your gentlemen, and you event. thank participation. today's for This Ladies

this webcast day may time disconnect and have the your You lines a or off wonderful at log

C.H. Robinson Worldwide (CHRW) 29 Apr 202020 Q1 Earnings call transcript