MINNEAPOLIS--(BUSINESS WIRE)--Jan. 29, 2008--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported
financial results for the quarter ended December 31, 2007.
Summarized financial results for the quarter ended December 31 are
as follows (dollars in thousands, except per share data):
Three months ended Twelve months ended
December 31, December 31,
---------------------------- ----------------------------
% %
2007 2006 Change 2007 2006 Change
---------- ---------- ------ ---------- ---------- ------
Gross
revenues $1,952,022 $1,642,591 18.8% $7,316,223 $6,556,194 11.6%
Gross
profits 322,754 278,522 15.9% 1,243,778 1,082,544 14.9%
Operating
income 132,873 110,375 20.4% 509,684 417,845 22.0%
Net income 85,254 71,827 18.7% 324,261 266,925 21.5%
Diluted EPS $ 0.49 $ 0.41 19.5% $ 1.86 $ 1.53 21.6%
Total Transportation gross profits increased 17.0 percent to
$288.0 million in the fourth quarter of 2007 from $246.2 million in
the fourth quarter of 2006. Our Transportation gross profit margin
decreased to 17.7 percent in 2007 from 18.3 percent in 2006 due to
gross profit margin declines in several of our transportation modes.
In our North American truck business, our volume growth
approximated our gross profit growth of 16.4 percent in the fourth
quarter of 2007. Our gross profit margins declined slightly. Inclusive
of fuel, our truckload rates increased approximately 3 percent;
excluding estimated impacts of fuel, rates decreased approximately 3
percent.
Our intermodal gross profit decrease of 4.3 percent in the fourth
quarter was due to a decline in our gross profit margins, partially
offset by an increase in volumes. Our gross profit margin decline was
due to a change in our mix of business from higher-margin,
transactional opportunities to more contractual intermodal business.
The increase of 24.4 percent in our ocean transportation gross
profits in the fourth quarter of 2007 was driven by volume growth. Our
air transportation gross profit growth of 64.6 percent in the fourth
quarter of 2007 includes approximately $1.3 million of domestic air
gross profits from our previously-disclosed acquisition of LXSI
Services Inc. on July 13, 2007. Our international air business had
significant volume growth in all regions, especially Asia.
Miscellaneous transportation gross profits consist primarily of
transportation management fees and customs brokerage fees. The
increase of 14.4 percent in the fourth quarter was driven by an
increase in our transportation management business, offset by a
decline in our customs business. Our customs brokerage gross profits
declined due to a decrease in our fee per transaction, offset in part
by an increase in our transaction volumes.
For the fourth quarter, Sourcing gross profits increased 5.9
percent to $23.1 million in 2007 from $21.8 million in 2006. We
continued to have success growing our business with retailers and
foodservice providers. Our gross profit margin declined primarily
because of higher prices for certain commodities, related to weather
and higher labor and fuel costs.
Our Information Services gross profits grew 10.9 percent in the
fourth quarter of 2007. Our growth was driven primarily by volume
growth in our core fuel card and cash advance services. In addition,
our revenue per transaction was up slightly due to the price of fuel.
With certain merchants our fee is based on a percentage of the sale
amount. Approximately one-third of the growth was related to other
services, such as fleet card and carrier compliance services.
For the fourth quarter, operating expenses increased 12.9 percent
to $189.9 million in 2007 from $168.1 million in 2006. This was due to
an increase of 11.9 percent in personnel expenses and an increase of
16.4 percent in selling, general and administrative expenses.
As a percentage of gross profits, total operating expenses
decreased to 58.8 percent in the fourth quarter of 2007 from 60.4
percent in the fourth quarter of 2006. This decrease was due to a
decline in personnel expenses as a percentage of gross profits from
46.4 percent to 44.8 percent, offset by a slight increase in our
selling, general and administrative expenses as a percentage of gross
profits. Expenses related to our restricted stock program and various
other incentive plans are variable, based on growth in our earnings.
Our slower earnings growth in the fourth quarter of 2007 compared to
the fourth quarter of 2006 resulted in a decrease in expense related
to some of these incentives plans. This contributed to our personnel
expenses growing slower than our gross profits.
Our selling, general, and administrative expenses grew faster than
our gross profits, due primarily to increases in our legal, travel,
and occupancy 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 29,000
customers through a network of 218 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 48,000 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 Fourth Quarter 2007 Earnings Conference
Call
Tuesday, January 29, 2008 5:00 p.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access: 800-240-2134
Webcast replay available through February 11, 2008; Investor
Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on
February 1, 2008: 800-405-2236;
passcode: 11105696#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
--------------------- ---------------------
Three months ended Twelve months ended
December 31, December 31,
--------------------- ---------------------
2007 2006 2007 2006
--------------------- ---------------------
Gross Revenues:
Transportation $1,622,533 $1,347,413 $5,971,784 $5,321,547
Sourcing 317,799 284,638 1,298,913 1,192,297
Information Services 11,690 10,540 45,526 42,350
---------- ---------- ---------- ----------
Total gross revenues 1,952,022 1,642,591 7,316,223 6,556,194
---------- ---------- ---------- ----------
Gross Profits:
Transportation
Truck 248,442 213,375 949,277 822,954
Intermodal 9,209 9,620 38,670 36,176
Ocean 11,924 9,587 43,530 37,150
Air 9,361 5,686 31,315 21,533
Miscellaneous 9,027 7,892 35,240 28,152
---------- ---------- ---------- ----------
Total transportation 287,963 246,160 1,098,032 945,965
Sourcing 23,101 21,822 100,220 94,229
Information Services 11,690 10,540 45,526 42,350
---------- ---------- ---------- ----------
Total gross profits 322,754 278,522 1,243,778 1,082,544
---------- ---------- ---------- ----------
Operating costs and
expenses:
Personnel expenses 144,486 129,146 567,986 515,947
Selling, general, and
administrative expenses 45,395 39,001 166,108 148,752
---------- ---------- ---------- ----------
Total operating
expenses 189,881 168,147 734,094 664,699
---------- ---------- ---------- ----------
Income from operations 132,873 110,375 509,684 417,845
Investment and other
income 3,337 3,330 13,830 11,843
---------- ---------- ---------- ----------
Income before provision
for income taxes 136,210 113,705 523,514 429,688
Provision for income taxes 50,956 41,878 199,253 162,763
---------- ---------- ---------- ----------
Net income $ 85,254 $ 71,827 $ 324,261 $ 266,925
========== ========== ========== ==========
Net income per share
(basic) $ 0.50 $ 0.42 $ 1.90 $ 1.56
Net income per share
(diluted) $ 0.49 $ 0.41 $ 1.86 $ 1.53
Weighted average shares
outstanding (basic) 169,591 170,555 170,493 170,888
Weighted average shares
outstanding (diluted) 174,269 174,104 174,040 174,787
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
December 31, December 31,
2007 2006
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 338,885 $ 348,592
Available-for-sale securities 115,842 124,767
Receivables, net 911,780 764,995
Other current assets 22,649 17,794
------------ ------------
Total current assets 1,389,156 1,256,148
Property and equipment, net 101,665 82,071
Intangible and other assets 320,486 293,474
------------ ------------
$1,811,307 $1,631,693
============ ============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding checks $ 618,195 $ 540,129
Accrued compensation 101,926 98,408
Other accrued expenses 37,498 48,412
------------ ------------
Total current liabilities 757,619 686,949
Long term liabilities 11,439 1,022
------------ ------------
Total liabilities 769,058 687,971
Total stockholders' investment 1,042,249 943,722
------------ ------------
$1,811,307 $1,631,693
============ ============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Twelve months ended
December 31,
---------------------
2007 2006
---------- ----------
Operating activities:
Net income $ 324,261 $ 266,925
Stock-based compensation 38,002 47,292
Depreciation and amortization 27,366 23,932
Other non-cash expenses, net 199 (1,718)
Net changes in operating elements (81,398) 6,946
---------- ----------
Net cash provided by operating activities 308,430 343,377
Investing activities:
Net property additions (43,713) (41,543)
Cash paid for acquisitions (22,220) (39,724)
Purchases of available-for-sale securities (204,020) (119,864)
Sales/maturities of available-for-sale
securities 214,299 118,838
Other assets, net (68) 1,056
---------- ----------
Net cash used for investing activities (55,722) (81,237)
Financing activities:
Net repurchases of common stock (153,582) (67,086)
Excess tax benefit from stock based
compensation plans 16,667 12,078
Cash dividends (125,183) (90,837)
---------- ----------
Net cash used for financing activities (262,098) (145,845)
Effect of exchange rates on cash (317) 1,669
---------- ----------
Net change in cash and cash equivalents (9,707) 117,964
Cash and cash equivalents, beginning of period 348,592 230,628
---------- ----------
Cash and cash equivalents, end of period $ 338,885 $ 348,592
========== ==========
As of December 31
---------------------
2007 2006
---------- ----------
Operational Data:
Employees 7,332 6,768
Branches 218 214
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.