MINNEAPOLIS--(BUSINESS WIRE)--July 24, 2007--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported
financial results for the quarter ended June 30, 2007.
Summarized financial results for the quarter ended June 30 are as
follows (dollars in thousands, except per share data):
Three months ended Six months ended
June 30, June 30,
--------------------------- ---------------------------
2007 2006 % Change 2007 2006 % Change
--------------------------- ---------------------------
Gross profits $310,898 $270,619 14.9% $607,828 $525,676 15.6%
Operating
income 129,794 103,918 24.9% 244,983 196,352 24.8%
Net income 82,299 66,594 23.6% 155,264 124,708 24.5%
Diluted EPS $ 0.47 $ 0.38 23.7% $ 0.89 $ 0.71 25.4%
Total Transportation gross profits increased 16.4 percent to
$271.1 million in the second quarter of 2007 from $233.0 million in
the second quarter of 2006. Our Transportation gross profit margin
increased to 17.9 percent in 2007 from 17.1 percent in 2006.
The increase in our Transportation gross profit margin in the
second quarter was due to an increase in our truck transportation
gross profit margins and to our mix of business. We had faster growth
in our miscellaneous transportation management services business,
which has a higher gross profit margin than our Transportation
business overall.
Our truck transportation gross profits increased 15.6 percent in
the second quarter of 2007. Our growth was driven by increased volumes
and an increase in our gross profit margin, which expanded due to more
widely available capacity in the marketplace compared to the second
quarter of 2006.
Our intermodal gross profit growth of 6.5 percent in the second
quarter was due to an increase in volumes, driven primarily by new
customer growth.
In our international freight forwarding business, our combined air
and ocean gross profits increased 26.6 percent in the second quarter
of 2007. Our growth in international forwarding resulted from margin
expansion and volume growth. Our volumes grew due to new customer
growth in both ocean and air, and from increased project-based
airfreight business with existing customers.
Miscellaneous transportation gross profits consist primarily of
transportation management fees, customs brokerage fees, and warehouse
and cross-dock services. The increase of 30.4 percent in the second
quarter was driven primarily by increases in our transportation
management business.
For the second quarter, Sourcing gross profits increased 5.7
percent to $28.3 million in 2007 from $26.8 million in 2006. Our
Sourcing gross profit margins declined from 8.2 percent in 2006 to 7.9
percent in 2007 due to higher market prices for certain produce
commodities, caused primarily by weather issues through the growing
season.
For the second quarter, operating expenses increased 8.6 percent
to $181.1 million in 2007 from $166.7 million in 2006. This was due to
an increase of 9.0 percent in personnel expenses and an increase of
7.5 percent in selling, general and administrative expenses.
As a percentage of gross profits, operating expenses decreased to
58.3 percent in the second quarter of 2007 from 61.6 percent in the
second quarter of 2006. This decrease was due to a decline in
personnel expenses as a percentage of gross profits from 47.9 percent
to 45.4 percent. Expenses related to our restricted stock program and
various other incentive plans are based on growth in our earnings. Our
slower earnings growth in the second quarter of 2007 compared to the
second 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.
In addition, during the second quarter of 2007 the C.H. Robinson
Board of Directors authorized management to repurchase up to an
additional 10 million shares for our future, variable share repurchase
activities. We have approximately 1.7 million shares remaining on the
previous share repurchase authorization.
Subsequent to the end of the quarter, we completed the acquisition
of LXSI Services, Inc., a third-party domestic air and expedited
services provider based in Los Angeles, California. LXSI has
approximately 50 employees and had gross revenues of approximately $25
million in 2006.
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 25,000
customers through a network of 217 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 45,000 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 Second Quarter 2007 Earnings Conference Call
Tuesday, July 24, 2007 5:00 p.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access: 800-218-9073
Webcast replay available through August 9, 2007; Investor Relations
link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on
July 27, 2007: 800-405-2236;
passcode: 11092490#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
--------------------- ---------------------
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2007 2006 2007 2006
--------------------- ---------------------
Gross Revenues:
Transportation $1,511,173 $1,363,246 $2,811,591 $2,579,155
Sourcing 357,062 326,853 665,359 600,275
Information Services 11,491 10,898 22,101 20,682
---------- ---------- ---------- ----------
Total gross
revenues 1,879,726 1,700,997 3,499,051 3,200,112
---------- ---------- ---------- ----------
Gross Profits:
Transportation
Truck 232,892 201,431 462,031 396,564
Intermodal 10,190 9,572 19,570 17,503
Ocean 10,799 8,595 20,045 17,419
Air 8,224 6,433 15,058 11,477
Miscellaneous 8,983 6,891 16,811 12,926
---------- ---------- ---------- ----------
Total
transportation 271,088 232,922 533,515 455,889
Sourcing 28,319 26,799 52,212 49,105
Information Services 11,491 10,898 22,101 20,682
---------- ---------- ---------- ----------
Total gross profits 310,898 270,619 607,828 525,676
---------- ---------- ---------- ----------
Operating costs and
expenses:
Personnel expenses 141,231 129,609 283,007 256,820
Selling, general, and
administrative expenses 39,873 37,092 79,838 72,504
---------- ---------- ---------- ----------
Total operating
expenses 181,104 166,701 362,845 329,324
---------- ---------- ---------- ----------
Income from operations 129,794 103,918 244,983 196,352
Investment and other
income 3,430 2,877 7,026 5,542
---------- ---------- ---------- ----------
Income before provision
for income taxes 133,224 106,795 252,009 201,894
Provision for income taxes 50,925 40,201 96,745 77,186
---------- ---------- ---------- ----------
Net income $ 82,299 $ 66,594 $ 155,264 $ 124,708
========== ========== ========== ==========
Net income per share
(basic) $ 0.48 $ 0.39 $ 0.91 $ 0.73
Net income per share
(diluted) $ 0.47 $ 0.38 $ 0.89 $ 0.71
Weighted average shares
outstanding (basic) 170,942 171,215 171,062 171,051
Weighted average shares
outstanding (diluted) 174,200 175,198 174,725 175,070
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
June 30, December 31,
2007 2006
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 288,692 $ 348,592
Available-for-sale securities 131,652 124,767
Receivables, net 880,595 764,995
Other current assets 25,432 17,794
------------ ------------
Total current assets 1,326,371 1,256,148
Property and equipment, net 93,776 82,071
Intangible and other assets 308,795 293,474
------------ ------------
$ 1,728,942 $ 1,631,693
============ ============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding checks $ 614,781 $ 540,129
Accrued compensation 59,587 98,408
Other accrued expenses 36,149 48,412
------------ ------------
Total current liabilities 710,517 686,949
Long term liabilities 9,674 1,022
------------ ------------
Total liabilities 720,191 687,971
Total stockholders' investment 1,008,751 943,722
------------ ------------
$ 1,728,942 $ 1,631,693
============ ============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Six months ended
June 30,
--------------------
2007 2006
---------- ---------
Operating activities:
Net income $ 155,264 $ 124,708
Stock-based compensation 23,988 26,856
Depreciation and amortization 13,162 11,547
Other non-cash expenses, net (2,699) (3,009)
Net changes in operating elements (94,062) (47,265)
---------- ---------
Net cash provided by operating activities 95,653 112,837
Investing activities:
Net property additions (23,501) (15,662)
Cash paid for acquisitions (9,261) (33,974)
Purchases of available-for-sale securities (85,725) (55,116)
Sales/maturities of available-for-sale
securities 79,131 54,512
Other assets, net (53) 1,778
---------- ---------
Net cash used for investing activities (39,409) (48,462)
Financing activities:
Net repurchases of common stock (65,665) (21,560)
Excess tax benefit from stock based
compensation plans 10,336 9,367
Cash dividends (62,724) (45,370)
---------- ---------
Net cash used for financing activities (118,053) (57,563)
Effect of exchange rates on cash 1,909 1,966
---------- ---------
Net change in cash and cash equivalents (59,900) 8,778
Cash and cash equivalents, beginning of period 348,592 230,628
---------- ---------
Cash and cash equivalents, end of period $ 288,692 $ 239,406
========== =========
As of June 30
--------------------
2007 2006
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Operational Data:
Employees 6,996 6,382
Branches 217 203
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.