MINNEAPOLIS--(BUSINESS WIRE)--Oct. 23, 2007--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported
financial results for the quarter ended September 30, 2007.
Summarized financial results for the quarter ended September 30
are as follows (dollars in thousands, except per share data):
Three months ended Nine months ended
September 30, September 30,
--------------------------- --------------------------
2007 2006 % Change 2007 2006 % Change
--------------------------- --------------------------
Gross profits $ 313,196 $278,346 12.5% $921,024 $804,022 14.6%
Operating income 131,828 111,118 18.6% 376,811 307,470 22.6%
Net income 83,743 70,390 19.0% 239,007 195,098 22.5%
Diluted EPS $ 0.48 $ 0.40 20.0% $ 1.37 $ 1.11 23.4%
Total Transportation gross profits increased 13.4 percent to
$276.6 million in the third quarter of 2007 from $243.9 million in the
third quarter of 2006. Our Transportation gross profit margin
increased to 18.0 percent in 2007 from 17.5 percent in 2006.
The increase in our Transportation gross profit margin in the
third quarter was due to a slight increase in our truck transportation
gross profit margins and to our mix of business. We had faster growth
in our air and miscellaneous transportation management services
businesses, which have higher gross profit margins than our
Transportation business overall.
Continued softness in the North American truck market slowed our
truck transportation gross profit growth in the third quarter of 2007.
Our truck transportation gross profit growth of 12.1 percent was
driven primarily by increased volumes and a small increase in our
gross profit margin, offset by a slight decrease in truckload rates.
Our intermodal gross profit growth of 9.3 percent in the third
quarter was due to an increase in volumes. Our volume growth was
driven primarily by cross-selling with existing C.H. Robinson
customers.
The increase of 14.0 percent in our ocean transportation gross
profits in the third quarter of 2007 was driven primarily by volume
growth. Our air transportation gross profit growth of 57.8 percent in
the third quarter of 2007 includes approximately $1 million of
domestic air gross profits from our previously-disclosed acquisition
of LXSI Services Inc. on July 13, 2007.
Miscellaneous transportation gross profits consist primarily of
transportation management fees and customs brokerage fees. The
increase of 28.2 percent in the third quarter was driven primarily by
increases in our transportation management business.
For the third quarter, Sourcing gross profits increased 6.9
percent to $24.9 million in 2007 from $23.3 million in 2006. We
continued to have success growing our business with retailers and
foodservice providers.
For the third quarter, operating expenses increased 8.5 percent to
$181.4 million in 2007 from $167.2 million in 2006. This was due to an
increase of 8.1 percent in personnel expenses and an increase of 9.7
percent in selling, general and administrative expenses.
As a percentage of gross profits, operating expenses decreased to
57.9 percent in the third quarter of 2007 from 60.1 percent in the
third quarter of 2006. This decrease was due to a decline in personnel
expenses as a percentage of gross profits from 46.7 percent to 44.9
percent. 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 third quarter of 2007 compared to
the third 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.
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 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 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 Third Quarter 2007 Earnings Conference
Call
Tuesday, October 23, 2007 5:00 p.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access: 800-366-7417
Webcast replay available through November 6, 2007; Investor
Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on
October 26, 2007: 800-405-2236; passcode: 11097521#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
--------------------- ---------------------
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2007 2006 2007 2006
--------------------- ---------------------
Gross Revenues:
Transportation $1,537,660 $1,394,979 $4,349,251 $3,974,134
Sourcing 315,755 307,384 981,114 907,659
Information Services 11,735 11,128 33,836 31,810
---------- ---------- ---------- ----------
Total gross
revenues 1,865,150 1,713,491 5,364,201 4,913,603
---------- ---------- ---------- ----------
Gross Profits:
Transportation
Truck 238,804 213,015 700,835 609,579
Intermodal 9,891 9,053 29,461 26,556
Ocean 11,561 10,144 31,606 27,563
Air 6,896 4,370 21,954 15,847
Miscellaneous 9,402 7,334 26,213 20,260
---------- ---------- ---------- ----------
Total
transportation 276,554 243,916 810,069 699,805
Sourcing 24,907 23,302 77,119 72,407
Information Services 11,735 11,128 33,836 31,810
---------- ---------- ---------- ----------
Total gross profits 313,196 278,346 921,024 804,022
---------- ---------- ---------- ----------
Operating costs and
expenses:
Personnel expenses 140,493 129,981 423,500 386,801
Selling, general, and
administrative expenses 40,875 37,247 120,713 109,751
---------- ---------- ---------- ----------
Total operating
expenses 181,368 167,228 544,213 496,552
---------- ---------- ---------- ----------
Income from operations 131,828 111,118 376,811 307,470
Investment and other income 3,467 2,971 10,493 8,513
---------- ---------- ---------- ----------
Income before provision for
income taxes 135,295 114,089 387,304 315,983
Provision for income taxes 51,552 43,699 148,297 120,885
---------- ---------- ---------- ----------
Net income $ 83,743 $ 70,390 $ 239,007 $ 195,098
========== ========== ========== ==========
Net income per share
(basic) $ 0.49 $ 0.41 $ 1.40 $ 1.14
Net income per share
(diluted) $ 0.48 $ 0.40 $ 1.37 $ 1.11
Weighted average shares
outstanding (basic) 170,274 170,925 170,798 171,001
Weighted average shares
outstanding (diluted) 173,349 174,776 174,020 174,989
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
September 30, December 31,
2007 2006
------------- ------------
Assets
Current assets:
Cash and cash equivalents $ 281,757 $ 348,592
Available-for-sale securities 129,076 124,767
Receivables, net 937,984 764,995
Other current assets 20,155 17,794
------------- ------------
Total current assets 1,368,972 1,256,148
Property and equipment, net 96,699 82,071
Intangible and other assets 319,377 293,474
------------- ------------
$1,785,048 $1,631,693
============= ============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding checks $ 624,526 $ 540,129
Accrued compensation 84,698 98,408
Other accrued expenses 39,448 48,412
------------- ------------
Total current liabilities 748,672 686,949
Long term liabilities 9,916 1,022
------------- ------------
Total liabilities 758,588 687,971
Total stockholders' investment 1,026,460 943,722
------------- ------------
$1,785,048 $1,631,693
============= ============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Nine months ended
September 30,
---------------------
2007 2006
---------- ----------
Operating activities:
Net income $ 239,007 $ 195,098
Stock-based compensation 32,323 38,048
Depreciation and amortization 20,065 17,742
Other non-cash expenses, net (861) (712)
Net changes in operating elements (110,856) (19,265)
---------- ----------
Net cash provided by operating activities 179,678 230,911
Investing activities:
Net property additions (31,928) (32,951)
Cash paid for acquisitions (22,220) (36,174)
Purchases of available-for-sale securities (144,473) (83,956)
Sales/maturities of available-for-sale
securities 141,407 78,203
Other assets, net (48) (2,017)
---------- ----------
Net cash used for investing activities (57,262) (76,895)
Financing activities:
Net repurchases of common stock (107,572) (43,622)
Excess tax benefit from stock based
compensation plans 12,596 11,378
Cash dividends (94,016) (68,046)
---------- ----------
Net cash used for financing activities (188,992) (100,290)
Effect of exchange rates on cash (259) 1,034
---------- ----------
Net change in cash and cash equivalents (66,835) 54,760
Cash and cash equivalents, beginning of period 348,592 230,628
---------- ----------
Cash and cash equivalents, end of period $ 281,757 $ 285,388
========== ==========
As of September 30
---------------------
2007 2006
---------- ----------
Operational Data:
Employees 7,149 6,590
Branches 218 210
C.H. Robinson Worldwide, Inc.
Chad Lindbloom, chief financial officer, 1-952-937-7779
Angie Freeman, vice president, 1-952-937-7847