MINNEAPOLIS--(BUSINESS WIRE)--July 22, 2008--C.H. Robinson
Worldwide, Inc. ("C.H. Robinson") (NASDAQ: CHRW), today reported
financial results for the quarter ended June 30, 2008.
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,
--------------------------- ---------------------------
2008 2007 % Change 2008 2007 % Change
--------------------------- ---------------------------
Gross profits $341,186 $310,898 9.7% $679,215 $607,828 11.7%
Operating
income 144,506 129,794 11.3% 280,583 244,983 14.5%
Net income 90,418 82,299 9.9% 176,736 155,264 13.8%
Diluted EPS $ 0.52 $ 0.47 10.6% $ 1.02 $ 0.89 14.6%
"We are pleased that in a tough freight environment, our people
continued to do a good job finding opportunities in the marketplace,"
said John P. Wiehoff, chairman and chief executive officer of C.H.
Robinson. "While the environment is still challenging and our
truckload gross profit margins continue to be compressed in the first
part of July, we continue to feel very positive about our long-term
growth strategy and our business model."
Total Transportation gross profits increased 9.7 percent to $297.5
million in the second quarter of 2008 from $271.1 million in the
second quarter of 2007. Our Transportation gross profit margin
decreased to 15.4 percent in 2008 from 17.9 percent in 2007 due to
gross profit margin declines in most of our transportation modes.
Our truck gross profits consist of truckload and
less-than-truckload ("LTL") services. Our truck gross profit growth of
8.3 percent in the second quarter of 2008 was driven by volume growth,
offset by declines in our truckload gross profit margins. Our
truckload volumes increased approximately 11 percent. Including fuel,
our truckload rates increased approximately 14 percent; excluding
estimated impacts of fuel, underlying linehaul rates were consistent
with the second quarter of 2007. Our truckload gross profit margins
declined due to higher fuel prices and increased cost of capacity. Our
LTL shipments increased approximately 21 percent. Our LTL gross profit
margins were consistent with the second quarter of 2007.
Our intermodal gross profit increase of 5.0 percent in the second
quarter was driven by volume growth, offset slightly by a decline in
gross profit margins. Our gross profit margin decline was due to
increased fuel prices.
The increase of 30.0 percent in our ocean transportation gross
profits in the second quarter of 2008 was driven by volume growth and
price increases.
In our air transportation business, approximately two-thirds of
our gross profit growth of 18.1 percent in the second quarter of 2008
was driven by our domestic air business, which includes 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 20.6 percent in the second quarter was driven primarily by
volume growth in transportation management.
For the second quarter, Sourcing gross profits increased 6.9
percent to $30.3 million in 2008 from $28.3 million in 2007, due to
higher volumes.
Our Information Services gross profits grew 16.8 percent in the
second quarter of 2008. Our growth was driven by volume growth in our
core fuel card and cash advance services and an increase in our
revenue per transaction, due to the price of fuel. With certain
merchants our fee is based on a percentage of the sale amount.
Approximately one-quarter of the growth was related to other services,
such as fleet card and carrier compliance services.
For the second quarter, operating expenses increased 8.6 percent
to $196.7 million in 2008 from $181.1 million in 2007. This was due to
an increase of 3.7 percent in personnel expenses and an increase of
25.8 percent in selling, general, and administrative expenses.
As a percentage of gross profits, total operating expenses
decreased to 57.6 percent in the second quarter of 2008 from 58.3
percent in the second quarter of 2007. This decrease was due to a
decline in personnel expenses as a percentage of gross profits from
45.4 percent to 42.9 percent, offset partially by an 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 second quarter of 2008 compared to
the second quarter of 2007 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.
The increase in our selling, general, and administrative expenses
was driven by increased spending in several expense categories. We are
investing in the business to support our future plans, by continuing
to travel and seek sales opportunities in the marketplace, open new
offices, add people, and expand existing offices. More significant
expense increases included occupancy, travel, and insurance and
claims. In addition, due to the growth in our gross revenues and
receivables, we increased our provision for doubtful accounts.
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 221 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 potential impacts of changes in
government regulations; 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 2008 Earnings Conference
Call
Tuesday, July 22, 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 August 5, 2008; Investor
Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on
July 25, 2008: 800-405-2236;
passcode: 11116078#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
--------------------- ---------------------
Three months ended Six months ended
June 30, June 30,
--------------------- ---------------------
2008 2007 2008 2007
--------------------- ---------------------
Gross Revenues:
Transportation $1,927,354 $1,511,173 $3,568,966 $2,811,591
Sourcing 380,933 357,062 712,230 665,359
Information Services 13,419 11,491 25,722 22,101
---------- ---------- ---------- ----------
Total gross
revenues 2,321,706 1,879,726 4,306,918 3,499,051
---------- ---------- ---------- ----------
Gross Profits:
Transportation
Truck 252,204 232,892 511,527 462,031
Intermodal 10,700 10,190 19,878 19,570
Ocean 14,034 10,799 26,289 20,045
Air 9,711 8,224 17,761 15,058
Miscellaneous 10,833 8,983 20,700 16,811
---------- ---------- ---------- ----------
Total
transportation 297,482 271,088 596,155 533,515
Sourcing 30,285 28,319 57,338 52,212
Information Services 13,419 11,491 25,722 22,101
---------- ---------- ---------- ----------
Total gross profits 341,186 310,898 679,215 607,828
---------- ---------- ---------- ----------
Operating costs and
expenses:
Personnel expenses 146,521 141,231 300,275 283,007
Selling, general, and
administrative expenses 50,159 39,873 98,357 79,838
---------- ---------- ---------- ----------
Total operating
expenses 196,680 181,104 398,632 362,845
---------- ---------- ---------- ----------
Income from operations 144,506 129,794 280,583 244,983
Investment and other income 1,709 3,430 4,183 7,026
---------- ---------- ---------- ----------
Income before provision for
income taxes 146,215 133,224 284,766 252,099
Provision for income taxes 55,797 50,925 108,030 96,745
---------- ---------- ---------- ----------
Net income $ 90,418 $ 82,299 $ 176,736 $ 155,264
========== ========== ========== ==========
Net income per share
(basic) $ 0.53 $ 0.48 $ 1.04 $ 0.91
Net income per share
(diluted) $ 0.52 $ 0.47 $ 1.02 $ 0.89
Weighted average shares
outstanding (basic) 169,731 170,942 169,794 171,062
Weighted average shares
outstanding (diluted) 173,483 174,200 173,747 174,725
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
June 30, December 31,
2008 2007
---------- ------------
Assets
Current assets:
Cash and cash equivalents $ 318,713 $ 338,885
Available-for-sale securities 38,738 115,842
Receivables, net 1,148,727 911,780
Other current assets 23,718 22,649
---------- ------------
Total current assets 1,529,896 1,389,156
Property and equipment, net 101,520 101,665
Intangible and other assets 324,708 320,486
---------- ------------
$1,956,124 $1,811,307
========== ============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding checks $ 758,009 $ 618,195
Accrued compensation 58,543 101,926
Other accrued expenses 33,103 37,498
---------- ------------
Total current liabilities 849,655 757,619
Long term liabilities 11,972 11,439
---------- ------------
Total liabilities 861,627 769,058
Total stockholders' investment 1,094,497 1,042,249
---------- ------------
$1,956,124 $1,811,307
========== ============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Six months ended
June 30,
---------------------
2008 2007
---------- ----------
Operating activities:
Net income $ 176,736 $ 155,264
Stock-based compensation 12,596 23,988
Depreciation and amortization 15,370 13,162
Other non-cash expenses, net 11,217 (2,699)
Net changes in operating elements (152,734) (94,062)
---------- ----------
Net cash provided by operating activities 63,185 95,653
Investing activities:
Net property additions (11,053) (23,501)
Cash paid for acquisitions (9,410) (9,261)
Purchases of available-for-sale securities (110,324) (85,725)
Sales/maturities of available-for-sale
securities 187,784 79,131
Other assets, net 146 (53)
---------- ----------
Net cash provided by (used for) investing
activities 57,143 (39,409)
Financing activities:
Net repurchases of common stock (78,348) (65,665)
Excess tax benefit from stock based
compensation plans 8,506 10,336
Cash dividends (75,803) (62,724)
---------- ----------
Net cash used for financing activities (145,645) (118,053)
Effect of exchange rates on cash 5,145 1,909
---------- ----------
Net change in cash and cash equivalents (20,172) (59,900)
Cash and cash equivalents, beginning of period 338,885 348,592
---------- ----------
Cash and cash equivalents, end of period $ 318,713 $ 288,692
========== ==========
As of June 30
---------------------
2008 2007
---------- ----------
Operational Data:
Employees 7,793 6,996
Branches 221 217
C.H. Robinson Worldwide, Inc.
Chad Lindbloom, chief financial officer, 1-952-937-7779
Angie Freeman, vice president, 1-952-937-7847