MINNEAPOLIS--(BUSINESS WIRE)--July 26, 2005--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported
financial results for the three months and six months ended June 30,
2005.
For the second quarter, gross profits increased 36.3 percent to
$215.4 million in 2005 from $158.1 million in 2004. Income from
operations increased 53.0 percent to $80.3 million in the second
quarter of 2005 from $52.5 million in the second quarter of 2004. Net
income increased 52.9 percent to $49.3 million in the second quarter
of 2005 from $32.3 million in the second quarter of 2004. Diluted net
income per share increased 54.1 percent to $0.57 per share in the
second quarter of 2005 from $0.37 per share in the second quarter of
2004.
During the second quarter of 2005 we settled the previously
disclosed lawsuit against two of our insurance carriers in which we
sought recovery for the amount we contributed to settle a wrongful
death lawsuit stemming from a multi-vehicle accident. This settlement
reduced our selling, general, and administrative expenses by $2.8
million and increased our diluted net income per share for the second
quarter of 2005 by $0.02.
For the six months ended June 30, 2005, gross profits increased
34.8 percent to $414.8 million from $307.6 million in 2004. Income
from operations increased 48.6 percent to $148.1 million from $99.7
million in 2004. Net income increased 48.5 percent to $91.1 million
from $61.4 million in 2004. Diluted net income per share increased
47.9 percent to $1.05 per share from $0.71 per share in 2004.
For the second quarter, total Transportation gross profits
increased 36.0 percent to $182.6 million in 2005 from $134.2 million
in 2004. Our Transportation gross profit margin increased slightly
from the second quarter of 2004.
The increase in our truck transportation gross profits of 39.8
percent in the second quarter of 2005 was driven by volume growth in
both truckload and less-than-truckload transactions and an increase in
gross profit margin. We gained new relationships with customers and
carriers and expanded many existing relationships. Our new and
expanded carrier relationships gave us the capacity we needed to
efficiently meet our customers' needs.
Our intermodal gross profits decrease of 0.8 percent in the second
quarter of 2005 resulted from an increase in gross profit margins,
offset by a decrease in volume. Our volume was impacted by market
conditions which continue to drive business back to truck in certain
lanes. Our gross profit margin increase resulted from the elimination
of some lower margin business and some rate increases to offset
increased costs.
Our international ocean and air gross profits increased 12.2
percent in the second quarter of 2005. This growth includes the impact
of our June 2004 expansion into China and our volume growth with
several of our large international customers. These gross profits are
influenced by our customers' shipping patterns, which can vary in the
quarters we provide the service. We are continuing to add new
customers and broaden our relationships with existing customers to
include international transportation and customs brokerage services.
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 40.5 percent in the second quarter was
driven by increases in our transportation management fees and customs
brokerage business.
For the second quarter, Sourcing gross profits increased 50.4
percent to $23.6 million in 2005 from $15.7 million in 2004. Excluding
the impact of the acquisitions of FoodSource and Epic Roots, announced
last quarter, our Sourcing gross profits decreased 4.3 percent. This
decrease was the result of slight declines in volume and gross profit
margin.
For the second quarter, Information Services gross profits
increased 13.6 percent to $9.3 million in 2005 from $8.2 million in
2004, primarily due to transaction volume growth.
For the quarter, personnel expense as a percentage of gross
profits decreased to 49.3 percent in 2005 from 51.4 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 19.1 percent to $28.9 million in 2005 from $24.3 million in
2004. Selling, general, and administrative expenses as a percentage of
gross profits decreased for the second quarter of 2005 to 13.4 percent
compared to 15.4 percent in 2004. Excluding the impact of the
settlement of the lawsuit against our insurance carriers mentioned
above, selling, general and administrative expenses would have
increased 30.7 percent and would have been 14.8 percent of gross
profits.
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 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 Second Quarter 2005 Earnings Conference Call
Wednesday, July 27, 2005; 10:00 a.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access: 800-240-2430
Webcast replay available through August 10, 2005: Investor Relations
link at www.chrobinson.com
Telephone audio replay available until 11:59 p.m. Eastern Time on
July 29, 2005: 800-405-2236; passcode: 11034569#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
---------------------- -----------------------
2005 2004 2005 2004
----------- ---------- ----------- -----------
Gross revenues:
Transportation $1,122,305 $871,678 $2,122,241 $1,644,127
Sourcing 273,549 197,244 479,658 363,487
Information Services 9,288 8,179 18,183 16,097
----------- ---------- ----------- -----------
Total gross
revenues 1,405,142 1,077,101 2,620,082 2,023,711
----------- ---------- ----------- -----------
Gross profits:
Transportation
Truck 161,983 115,880 316,003 228,836
Intermodal 7,312 7,373 14,268 14,836
Ocean 6,114 5,136 11,774 9,469
Air 2,319 2,383 4,986 4,128
Miscellaneous 4,840 3,444 9,383 6,787
----------- ---------- ----------- -----------
Total
transportation 182,568 134,216 356,414 264,056
Sourcing 23,556 15,660 40,197 27,486
Information Services 9,288 8,179 18,183 16,097
----------- ---------- ----------- -----------
Total gross
profits 215,412 158,055 414,794 307,639
----------- ---------- ----------- -----------
Operating costs and
expenses:
Personnel expenses 106,138 81,225 207,067 158,799
Selling, general,
and administrative
expenses 28,945 24,313 59,606 49,152
----------- ---------- ----------- -----------
Total operating
costs and
expenses 135,083 105,538 266,673 207,951
----------- ---------- ----------- -----------
Income from operations 80,329 52,517 148,121 99,688
Investment and other
income:
Interest income and
other 1,389 757 2,403 1,344
Nonqualified deferred
compensation
investment gain
(loss) (102) (39) 15 31
----------- ---------- ----------- -----------
Investment and other
income 1,287 718 2,418 1,375
----------- ---------- ----------- -----------
Income before provision
for income taxes 81,616 53,235 150,539 101,063
Provision for income
taxes 32,269 20,957 59,416 39,713
----------- ---------- ----------- -----------
Net income $49,347 $32,278 $91,123 $61,350
=========== ========== =========== ===========
Net income per share
(basic) $0.58 $0.38 $1.07 $0.72
Net income per share
(diluted) $0.57 $0.37 $1.05 $0.71
Weighted average shares
outstanding (basic) 85,118 84,677 85,028 84,638
Weighted average shares
outstanding (diluted) 87,197 86,563 87,132 86,477
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
June 30, December 31,
2005 2004
------------ ------------
Assets
Current assets:
Cash and cash equivalents $156,947 $166,476
Available-for-sale securities 122,411 121,600
Receivables, net 667,499 544,274
Other current assets 21,403 13,637
------------ ------------
Total current assets 968,260 845,987
Property and equipment, net 57,940 51,122
Intangible and other assets 233,237 183,587
------------ ------------
$1,259,437 $1,080,696
============ ============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding
checks $458,098 $358,929
Accrued compensation 53,296 60,261
Other accrued expenses 33,435 33,629
------------ ------------
Total current liabilities 544,829 452,819
Long term liabilities:
Deferred tax liability 4,260 4,153
Nonqualified deferred compensation
obligation 3,040 2,868
------------ ------------
Total long term liabilities 7,300 7,021
------------ ------------
Total liabilities 552,129 459,840
Total stockholders' investment 707,308 620,856
------------ ------------
$1,259,437 $1,080,696
============ ============
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Six months ended
June 30,
-------------------
2005 2004
--------- ---------
Operating activities:
Net income $91,123 $61,350
Depreciation and amortization 8,614 5,374
Other non-cash expenses 16,845 15,368
Net changes in operating elements (36,734) (51,408)
--------- ---------
Net cash provided by operating activities 79,848 30,684
Investing activities:
Net property additions (12,455) (15,697)
Cash paid for acquisitions (43,590) (9,112)
Purchases of available-for-sale securities (51,620) (26,390)
Sales/maturities of available-for-sale
securities 50,824 26,052
Other assets, net (1,609) (837)
--------- ---------
Net cash used for investing activities (58,450) (25,984)
Financing activities:
Net repurchases of common stock (4,560) (3,966)
Cash dividends (25,703) (20,499)
--------- ---------
Net cash used for financing activities (30,263) (24,465)
Effect of exchange rates on cash (664) (1,779)
--------- ---------
Net decrease in cash and cash equivalents (9,529) (21,544)
Cash and cash equivalents, beginning of period 166,476 123,413
--------- ---------
Cash and cash equivalents, end of period $156,947 $101,869
========= =========
As of June 30,
-------------------
Operational Data: 2005 2004
--------- ---------
Employees 5,368 4,410
Branches 178 162
C.H. Robinson Worldwide, Inc.
Chad Lindbloom, chief financial officer, 1-952-937-7779
Angie Freeman, vice president, 1-952-937-7847
Source: C.H. Robinson Worldwide, Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding C.H. Robinson Worldwide Inc's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.