MINNEAPOLIS--(BUSINESS WIRE)--Oct. 24, 2006--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported
financial results for the three months and nine months ended September
30, 2006. As previously reported, all share and per share data is
reflective of a two-for-one stock split, effective October 14, 2005.
Summarized financial results for the quarter and nine months ended
September 30 are as follows (dollars in thousands, except per share
data):
Three months ended Nine months ended
September 30, September 30,
----------------------------- -----------------------------
2006 2005 % Change 2006 2005 % Change
----------------------------- -----------------------------
Gross
profits $278,346 $228,874 21.6 % $804,022 $643,668 24.9 %
Operating
income 111,118 85,618 29.8 % 307,470 233,739 31.5 %
Net income 70,390 54,089 30.1 % 195,098 145,212 34.4 %
Diluted EPS $0.40 $0.31 29.0 % $1.11 $0.83 33.7 %
Total Transportation gross profits increased 23.2 percent to
$243.9 million in the third quarter of 2006 from $198.0 million in the
third quarter of 2005. Our Transportation gross profit margin
increased to 17.5 percent in 2006 from 16.3 percent in 2005.
The increase in our Transportation gross profit margin is due to
the mix of services that make up this business line. We had faster
growth in our air freight and miscellaneous transportation management
services business lines, which have a higher gross profit margin than
our overall Transportation business line.
Our truck transportation gross profits increased 23.5 percent in
the third quarter of 2006. Approximately half of the growth was driven
by increased volumes, with the remainder of the growth due to an
increase in gross profit margins and increased truck transportation
rates compared to 2005. Our growth in truck net revenues slowed as the
quarter progressed. While gross profit margins were consistent
throughout the quarter, volume growth slowed. A significant amount of
the volume in the second half of 2005 was driven by a robust spot
market. In the third quarter and through the first three weeks of
October 2006, we have not seen the same level of spot market demand.
Our intermodal gross profit increase of 6.9 percent in the third
quarter of 2006 resulted from an increase in gross profit margins,
offset by a slight decrease in volume.
In our international freight forwarding business, our ocean gross
profits increased 17.4 percent and our air gross profits increased
25.0 percent in the third 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 10
percent and our air gross profits would have decreased approximately
10 percent in the third quarter of 2006. In the third quarter of 2005
we had project-related airfreight business with a few large customers
that did not recur in the third quarter of 2006.
Miscellaneous transportation gross profits consist primarily of
transportation management fees, customs brokerage fees, and warehouse
and cross-dock services. The increase of 48.5 percent in the third
quarter was driven by increases in our transportation management fees
and customs brokerage business.
For the third quarter, Sourcing gross profits increased 11.1
percent to $23.3 million in 2006 from $21.0 million in 2005. This
increase was due to higher volumes with retail and foodservice
customers through integrated programs. Our Sourcing gross profit
margin decreased from 8.1% to 7.6%, due to weather-related growing
conditions that increased our costs of some commodities.
Information Services gross profits increased 12.0 percent to $11.1
million in the third quarter of 2006 from $9.9 million in the third
quarter of 2005, due to transaction volume growth and an increase in
pricing related to certain truck stop services.
For the third quarter, operating expenses increased 16.7 percent
to $167.2 million in 2006 from $143.3 million in 2005. This was due to
an increase of 17.5 percent in personnel expenses and an increase of
14.0 percent in selling, general and administrative expenses.
As a percentage of gross profits, operating expenses decreased to
60.1 percent in 2006 from 62.6 percent in 2005. This decrease was due
to a decline in personnel expenses as a percentage of gross profits
from 48.3 percent to 46.7 percent and a decrease in selling, general
and administrative expenses as a percentage of gross profits from 14.3
percent to 13.4 percent. 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.
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 210 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.; risks associated with the produce industry, including food
safety and contamination issues; 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 Third Quarter 2006 Earnings Conference
Call
Wednesday, October 25, 2006 10:00 a.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access:
800-257-2101
Webcast replay available through November 8, 2006; Investor
Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on
October 28, 2006: 800-405-2236; passcode:11073232#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
----------------------- -----------------------
Three months ended Nine months ended
September 30, September 30,
----------------------- -----------------------
2006 2005 2006 2005
----------------------- -----------------------
Gross Revenues:
Transportation $1,394,979 $1,218,026 $3,974,134 $3,340,267
Sourcing 307,384 257,409 907,659 737,067
Information Services 11,128 9,934 31,810 28,117
----------- ----------- ----------- -----------
Total gross
revenues 1,713,491 1,485,369 4,913,603 4,105,451
----------- ----------- ----------- -----------
Gross Profits:
Transportation
Truck 213,015 172,435 609,579 488,438
Intermodal 9,053 8,469 26,556 22,737
Ocean 10,144 8,638 27,563 20,412
Air 4,370 3,495 15,847 8,481
Miscellaneous 7,334 4,938 20,260 14,321
----------- ----------- ----------- -----------
Total
transportation 243,916 197,975 699,805 554,389
Sourcing 23,302 20,965 72,407 61,162
Information Services 11,128 9,934 31,810 28,117
----------- ----------- ----------- -----------
Total gross profits 278,346 228,874 804,022 643,668
----------- ----------- ----------- -----------
Operating costs and
expenses:
Personnel expenses 129,981 110,595 386,801 317,662
Selling, general, and
administrative
expenses 37,247 32,661 109,751 92,267
----------- ----------- ----------- -----------
Total operating
expenses 167,228 143,256 496,552 409,929
----------- ----------- ----------- -----------
Income from operations 111,118 85,618 307,470 233,739
Investment and other
income 2,971 1,865 8,513 4,283
----------- ----------- ----------- -----------
Income before provision
for income taxes 114,089 87,483 315,983 238,022
Provision for income
taxes 43,699 33,394 120,885 92,810
----------- ----------- ----------- -----------
Net income $70,390 $54,089 $195,098 $145,212
=========== =========== =========== ===========
Net income per share
(basic) $0.41 $0.32 $1.14 $0.85
Net income per share
(diluted) $0.40 $0.31 $1.11 $0.83
Weighted average shares
outstanding (basic) 170,925 170,105 171,001 170,072
Weighted average shares
outstanding (diluted) 174,776 174,533 174,989 174,357
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
September 30, December 31,
2006 2005
------------- -------------
Assets
Current assets:
Cash and cash equivalents $285,388 $230,628
Available-for-sale securities 129,031 122,551
Receivables, net 786,405 716,725
Other current assets 18,551 14,877
------------- -------------
Total current assets 1,219,375 1,084,781
Property and equipment, net 78,924 60,721
Intangible and other assets 289,402 249,566
------------- -------------
$1,587,701 $1,395,068
============= =============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding
checks $542,594 $473,882
Accrued compensation 77,557 94,333
Other accrued expenses 49,346 44,268
------------- -------------
Total current liabilities 669,497 612,483
Long term liabilities 1,231 2,548
------------- -------------
Total liabilities 670,728 615,031
Total stockholders' investment 916,973 780,037
------------- -------------
$1,587,701 $1,395,068
============= =============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Nine months ended
September 30,
-----------------------
2006 2005
----------- -----------
Operating activities:
Net income $195,098 $145,212
Stock-based compensation 38,048 28,324
Depreciation and amortization 17,742 13,326
Other non-cash expenses, net (712) 8,786
Net changes in operating elements (19,265) (41,750)
----------- -----------
Net cash provided by operating activities 230,911 153,898
Investing activities:
Net property additions (32,951) (16,151)
Cash paid for acquisitions (36,174) (60,124)
Purchases of available-for-sale securities (83,956) (99,791)
Sales/maturities of available-for-sale
securities 78,203 98,225
Other assets, net (2,017) (1,891)
----------- -----------
Net cash used for investing activities (76,895) (79,732)
Financing activities:
Net repurchases of common stock (43,622) (12,720)
Excess tax benefit from stock based
compensation plans 11,378 2,734
Cash dividends (68,046) (38,578)
----------- -----------
Net cash used for financing activities (100,290) (48,564)
Effect of exchange rates on cash 1,034 (135)
----------- -----------
Net increase in cash and cash equivalents 54,760 25,467
Cash and cash equivalents, beginning of period 230,628 166,476
----------- -----------
Cash and cash equivalents, end of period $285,388 $191,943
=========== ===========
As of September 30,
-----------------------
2006 2005
----------- -----------
Operational Data:
Employees 6,590 5,605
Branches 210 195
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.