MINNEAPOLIS--(BUSINESS WIRE)--July 25, 2006--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported
financial results for the three months and six months ended June 30,
2006. As previously reported, all share and per share data is
reflective of a two-for-one stock split, effective October 14, 2005.
For the second quarter, gross profits increased 25.6 percent to
$270.6 million from $215.4 million in 2005. Income from operations
increased 29.4 percent to $103.9 million in the second quarter of 2006
from $80.3 million in the second quarter of 2005. Net income increased
35.0 percent to $66.6 million in the second quarter of 2006 from $49.3
million in the second quarter of 2005. Diluted net income per share
increased 35.7 percent to $0.38 per share in the second quarter of
2006 from $0.28 per share in the second quarter of 2005.
For the six months ended June 30, 2006, gross profits increased
26.7 percent to $525.7 million from $414.8 million in 2005. Income
from operations increased 32.6 percent to $196.4 million from $148.1
million in 2005. Net income increased 36.9 percent to $124.7 million
from $91.1 million in 2005. Diluted net income per share increased
36.5 percent to $0.71 per share from $0.52 per share in 2005.
For the second quarter, total Transportation gross profits
increased 27.6 percent to $232.9 million in 2006 from $182.6 million
in 2005. Our transportation gross profit margin increased to 17.1
percent in 2006 from 16.3 percent in 2005.
Our truck transportation gross profits increased 24.4 percent in
the second quarter of 2006. Approximately half of the growth was
driven by increased volumes, with the remainder of the growth due to a
small increase in gross profit margins and increased transportation
rates.
Our intermodal gross profit increase of 30.9 percent in the second
quarter of 2006 resulted from an increase in gross profit margins,
offset by a slight decrease in volume. Our gross profit margin
expanded due to rate increases and the elimination of some lower
margin business.
In our international freight forwarding business, our ocean gross
profits increased 40.6 percent and our air gross profits increased
177.4 percent in the second quarter of 2006. Excluding the impact of
the acquisitions of Bussini Transport S.r.l. ("Bussini") and Hirdes
Group Worldwide ("Hirdes"), announced in the third quarter of 2005, we
estimate our ocean gross profits would have increased approximately 25
percent in the second quarter of 2006. Our growth was driven by
increased volumes and expanded margins, due to increased availability
of capacity in the marketplace. Excluding the acquisitions, our air
gross profits would have increased approximately 70 percent in the
second quarter of 2006, due to increased volumes with project-related
business and increased volume in the Asia Pacific region.
Miscellaneous transportation gross profits consist primarily of
transportation management fees, customs brokerage fees, and warehouse
and cross-dock services. The increase of 42.4 percent in the second
quarter was driven by increases in our transportation management fees
and customs brokerage business. Excluding the impact of the
acquisitions of Bussini and Hirdes, we estimate our miscellaneous
transportation gross profits increased approximately 35 percent.
For the second quarter, Sourcing gross profits increased 13.8
percent to $26.8 million in 2006 from $23.6 million in 2005. This
increase was due to higher volumes with retail and foodservice
customers through integrated programs.
For the second quarter, Information Services gross profits
increased 17.3 percent to $10.9 million in 2006 from $9.3 million in
2005, due to transaction volume growth.
For the quarter, operating expenses increased 23.4 percent to
$166.7 million in 2006 from $135.1 million in 2005. This was due to an
increase of 22.1 percent in personnel expenses and an increase of 28.1
percent in selling, general and administrative expenses. In the second
quarter of 2005 we announced the recovery of $2.8 million from our
insurance companies, as a result of a previously disclosed lawsuit to
recover a settlement payment made by C.H. Robinson in a prior wrongful
death action. Excluding that recovery, our selling, general and
administrative expenses would have increased 16.8 percent in the
second quarter of 2006.
As a percentage of gross profits, operating expenses decreased to
61.6 percent in 2006 from 62.7 percent in 2005. This decrease was due
to a decline in personnel expenses as a percentage of gross profits
from 49.3 percent to 47.9 percent, offset by an increase in selling,
general and administrative expenses as a percentage of gross profits
from 13.4 percent to 13.7 percent. Excluding the recovery from our
insurance companies in the second quarter of 2005, our selling,
general and administrative expenses would have decreased as a
percentage of gross profits from 14.7 percent in the second quarter of
2005 to 13.7 percent in the second quarter of 2006. We gain leverage
in periods of strong gross profit growth in our personnel expenses and
also in several categories of our selling, general and administrative
expenses.
On May 18, 2006, we acquired Payne, Lynch & Associates, Inc
("Payne Lynch"), a non-asset based, third party logistics company that
specializes in flat bed and over dimensional freight brokerage. Payne
Lynch has 48 employees and is located in Sartell, Minnesota.
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 20,500
customers through a network of 203 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 40,000 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.; 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 2006 Earnings Conference Call
Wednesday, July 26, 2006 10:00 a.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access: 800-240-5318
Webcast replay available through August 9, 2006; Investor Relations
link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on July
29, 2006: 800-405-2236; passcode:11065323#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
----------------------- -----------------------
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------------------- -----------------------
Gross Revenues:
Transportation $1,363,246 $1,122,305 $2,579,155 $2,122,241
Sourcing 326,853 273,549 600,275 479,658
Information Services 10,898 9,288 20,682 18,183
----------- ----------- ----------- -----------
Total gross
revenues 1,700,997 1,405,142 3,200,112 2,620,082
----------- ----------- ----------- -----------
Gross Profits:
Transportation
Truck 201,431 161,983 396,564 316,003
Intermodal 9,572 7,312 17,503 14,268
Ocean 8,595 6,114 17,419 11,774
Air 6,433 2,319 11,477 4,986
Miscellaneous 6,891 4,840 12,926 9,383
----------- ----------- ----------- -----------
Total
transportation 232,922 182,568 455,889 356,414
Sourcing 26,799 23,556 49,105 40,197
Information Services 10,898 9,288 20,682 18,183
----------- ----------- ----------- -----------
Total gross
profits 270,619 215,412 525,676 414,794
----------- ----------- ----------- -----------
Operating costs and
expenses:
Personnel expenses 129,609 106,138 256,820 207,067
Selling, general, and
administrative
expenses 37,092 28,945 72,504 59,606
----------- ----------- ----------- -----------
Total operating
expenses 166,701 135,083 329,324 266,673
----------- ----------- ----------- -----------
Income from operations 103,918 80,329 196,352 148,121
Investment and other
income 2,877 1,287 5,542 2,418
----------- ----------- ----------- -----------
Income before provision
for income taxes 106,795 81,616 201,894 150,539
Provision for income
taxes 40,201 32,269 77,186 59,416
----------- ----------- ----------- -----------
Net income $66,594 $49,347 $124,708 $91,123
=========== =========== =========== ===========
Net income per share
(basic) $0.39 $0.29 $0.73 $0.54
Net income per share
(diluted) $0.38 $0.28 $0.71 $0.52
Weighted average shares
outstanding (basic) 171,215 170,236 171,051 170,056
Weighted average shares
outstanding (diluted) 175,198 174,394 175,070 174,264
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
June 30, December 31,
2006 2005
------------- ------------
Assets
Current assets:
Cash and cash equivalents $239,406 $230,628
Available-for-sale securities 123,155 122,551
Receivables, net 788,467 716,725
Other current assets 22,650 14,877
------------- ------------
Total current assets 1,173,678 1,084,781
Property and equipment, net 66,108 60,721
Intangible and other assets 287,664 249,566
------------- ------------
$1,527,450 $1,395,068
============= ============
Liabilities and stockholders' investment
Current liabilities
Accounts payable and outstanding checks $539,188 $473,882
Accrued compensation 57,932 94,333
Other accrued expenses 51,181 44,268
------------- ------------
Total current liabilities 648,301 612,483
Long term liabilities 1,243 2,548
------------- ------------
Total liabilities 649,544 615,031
Total stockholders' investment 877,906 780,037
------------- ------------
$1,527,450 $1,395,068
============= ============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Six months ended
June 30,
-------------------
2006 2005
--------- ---------
Operating activities:
Net income $124,708 $91,123
Stock-based compensation 26,856 18,982
Depreciation and amortization 11,547 8,613
Other non-cash expenses, net (163) 962
Net changes in operating elements (47,265) (42,105)
--------- ---------
Net cash provided by operating activities 115,683 77,575
Investing activities:
Net property additions (15,802) (12,455)
Cash paid for acquisitions (33,974) (43,590)
Purchases of available-for-sale securities (55,116) (51,620)
Sales/maturities of available-for-sale securities 54,512 50,824
Other assets, net (928) (1,609)
--------- ---------
Net cash used for investing activities (51,308) (58,450)
Financing activities:
Net repurchases of common stock (21,560) (4,560)
Excess tax benefit from stock based compensation
plans 9,367 2,273
Cash dividends (45,370) (25,703)
--------- ---------
Net cash used for financing activities (57,563) (27,990)
Effect of exchange rates on cash 1,966 (664)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 8,778 (9,529)
Cash and cash equivalents, beginning of period 230,628 166,476
--------- ---------
Cash and cash equivalents, end of period $239,406 $156,947
========= =========
As of June 30,
-------------------
2006 2005
--------- ---------
Operational Data:
Employees 6,382 5,368
Branches 203 178
C.H. Robinson Worldwide, Inc.
Chad Lindbloom, chief financial officer, 1-952-937-7779
Angie Freeman, vice president, 1-952-937-7847
"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.