MINNEAPOLIS--(BUSINESS WIRE)--C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ: CHRW),
today reported financial results for the quarter ended September 30,
2008.
Summarized financial results for the quarter ended September 30
are as follows (dollars in thousands, except per share data):
Three months ended
September 30,
------------------------------
2008 2007 % Change
------------------------------
Gross revenues $2,316,593 $1,865,150 24.2%
Gross profits 351,588 313,196 12.3%
Operating income 148,619 131,828 12.7%
Net income 93,560 83,743 11.7%
Diluted EPS $ 0.54 $ 0.48 12.5%
Nine months ended
September 30,
------------------------------
2008 2007 % Change
------------------------------
Gross revenues $6,623,511 $5,364,201 23.5%
Gross profits 1,030,803 921,024 11.9%
Operating income 429,202 376,811 13.9%
Net income 270,296 239,007 13.1%
Diluted EPS $ 1.56 $ 1.37 13.9%
Total Transportation gross profits increased 12.2 percent to
$310.4 million in the third quarter of 2008 from $276.6 million in the
third quarter of 2007. Our Transportation gross profit margin
decreased to 15.9 percent in 2008 from 18.0 percent in 2007 due to
gross profit margin declines in several of our transportation
businesses.
Our truck gross profits consist of truckload and
less-than-truckload ("LTL") services. Our truck gross profit growth of
9.9 percent in the third quarter of 2008 was driven by volume growth,
offset by declines in our truckload gross profit margins. Our
truckload volumes increased approximately 9 percent. Including fuel,
our truckload rates increased approximately 17 percent; excluding
estimated impacts of fuel, underlying linehaul rates increased
approximately 3 percent. Our truckload gross profit margins declined
primarily due to higher fuel prices. In addition, our cost of capacity
increased. Our LTL shipment volumes increased approximately 18
percent. Our LTL gross profit margins were consistent with the third
quarter of 2007.
Our intermodal gross profit increase of 20.8 percent in the third
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.
Our ocean transportation gross profits increased 48.5 percent in
the third quarter of 2008 driven by volume and margin expansion. Our
previously disclosed acquisition of Transera International Holdings
Ltd. ("Transera") on August 1, 2008, contributed approximately 20
percent to the overall increase.
Our air transportation gross profit growth of 22.9 percent in the
third quarter of 2008 was driven by volumes and increased margins. Our
previously disclosed acquisition of Transera contributed approximately
11 percent to the overall increase.
Miscellaneous transportation gross profits consist primarily of
transportation management fees and customs brokerage fees. The
increase of 9.5 percent in the third quarter was driven primarily by
volume growth in transportation management.
For the third quarter, Sourcing gross profits increased 13.3
percent to $28.2 million in 2008 from $24.9 million in 2007. This
increase was driven primarily by changes in produce prices and product
mix, including a shift toward higher cost specialized and valued added
products. Our gross margins increased slightly to 8.1 percent in 2008
compared to 7.9 percent in 2007.
Our Information Services gross profits grew 10.6 percent in the
third quarter of 2008. Our growth was driven by volume growth in our
fleet card, cash advance services products, and our carrier compliance
services. We also continued to benefit from the price of fuel as some
of our merchant fees are based on a percentage of the total sale
amount.
For the third quarter, operating expenses increased 11.9 percent
to $203.0 million in 2008 from $181.4 million in 2007. This was due to
an increase of 8.4 percent in personnel expenses and an increase of
23.9 percent in selling, general, and administrative expenses.
As a percentage of gross profits, total operating expenses
decreased slightly to 57.7 percent in the third quarter of 2008 from
57.9 percent in the third quarter of 2007. This decrease was due to a
decline in personnel expenses as a percentage of gross profits from
44.9 percent to 43.3 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 third quarter of 2008 compared to
the third 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 several expense categories, including occupancy and
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 224 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 Third Quarter 2008 Earnings Conference
Call
Tuesday, October 21, 2008 5:00 p.m. Eastern time
Live webcast available through Investor Relations link at
www.chrobinson.com
Telephone access: 800-218-0204
Webcast replay available through November 5, 2008; Investor
Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on
October 24, 2008: 800-405-2236;
passcode: 11119775#
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(In thousands, except per share data)
--------------------- ---------------------
Three months ended Nine months ended
September 30, September 30,
--------------------- ---------------------
2008 2007 2008 2007
--------------------- ---------------------
Gross Revenues:
Transportation $1,953,555 $1,537,660 $5,522,521 $4,349,251
Sourcing 350,060 315,755 1,062,290 981,114
Information Services 12,978 11,735 38,700 33,836
---------- ---------- ---------- ----------
Total gross revenues 2,316,593 1,865,150 6,623,511 5,364,201
---------- ---------- ---------- ----------
Gross Profits:
Transportation
Truck 262,500 238,804 774,027 700,835
Intermodal 11,952 9,891 31,830 29,461
Ocean 17,164 11,561 43,453 31,606
Air 8,474 6,896 26,235 21,954
Miscellaneous 10,297 9,402 30,997 26,213
---------- ---------- ---------- ----------
Total transportation 310,387 276,554 906,542 810,069
Sourcing 28,223 24,907 85,561 77,119
Information Services 12,978 11,735 38,700 33,836
---------- ---------- ---------- ----------
Total gross profits 351,588 313,196 1,030,803 921,024
---------- ---------- ---------- ----------
Operating costs and
expenses:
Personnel expenses 152,331 140,493 452,606 423,500
Selling, general, and
administrative expenses 50,638 40,875 148,995 120,713
---------- ---------- ---------- ----------
Total operating
expenses 202,969 181,368 601,601 544,213
---------- ---------- ---------- ----------
Income from operations 148,619 131,828 429,202 376,811
Investment and other
income 1,595 3,467 5,778 10,493
---------- ---------- ---------- ----------
Income before provision
for income taxes 150,214 135,295 434,980 387,304
Provision for income taxes 56,654 51,552 164,684 148,297
---------- ---------- ---------- ----------
Net income $ 93,560 $ 83,743 $ 270,296 $ 239,007
========== ========== ========== ==========
Net income per share
(basic) $ 0.55 $ 0.49 $ 1.60 $ 1.40
Net income per share
(diluted) $ 0.54 $ 0.48 $ 1.56 $ 1.37
Weighted average shares
outstanding (basic) 168,864 170,274 169,432 170,798
Weighted average shares
outstanding (diluted) 172,446 173,349 173,236 174,020
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands)
September 30, December 31,
2008 2007
-------------- --------------
Assets
Current assets:
Cash and cash equivalents $ 311,917 $ 338,885
Available-for-sale securities 2,990 115,842
Receivables, net 1,117,965 911,780
Other current assets 23,773 22,649
-------------- --------------
Total current assets 1,456,645 1,389,156
Property and equipment, net 101,752 101,665
Intangible and other assets 364,227 320,486
-------------- --------------
$ 1,922,624 $ 1,811,307
============== ==============
Liabilities and stockholders' investment
Current liabilities:
Accounts payable and outstanding
checks $ 695,700 $ 618,195
Accrued compensation 79,131 101,926
Other accrued expenses 35,251 37,498
-------------- --------------
Total current liabilities 810,082 757,619
Long term liabilities 11,831 11,439
-------------- --------------
Total liabilities 821,913 769,058
Total stockholders' investment 1,100,711 1,042,249
-------------- --------------
$ 1,922,624 $ 1,811,307
============== ==============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands, except operational data)
Nine months ended
September 30,
----------------------
2008 2007
---------- ----------
Operating activities:
Net income $ 270,296 $ 239,007
Stock-based compensation 16,562 32,323
Depreciation and amortization 23,198 20,065
Provision for doubtful accounts 9,982 5,121
Other non-cash expenses, net 4,810 (5,982)
Net changes in operating elements (149,517) (110,856)
---------- ----------
Net cash provided by operating activities 175,331 179,678
Investing activities:
Net property additions (16,108) (31,928)
Cash paid for acquisitions, net (59,696) (22,220)
Purchases of available-for-sale securities (136,954) (144,473)
Sales/maturities of available-for-sale
securities 250,489 141,407
Other assets, net 677 (48)
---------- ----------
Net cash provide by (used for) investing
activities 38,408 (57,262)
Financing activities:
Repayment of acquired line of credit (9,383) -
Net repurchases of common stock (130,477) (107,572)
Excess tax benefit from stock based
compensation plans 9,802 12,596
Cash dividends (113,477) (94,016)
---------- ----------
Net cash used for financing activities (243,535) (188,992)
Effect of exchange rates on cash 2,828 (259)
---------- ----------
Net change in cash and cash equivalents (26,968) (66,835)
Cash and cash equivalents, beginning of period 338,885 348,592
---------- ----------
Cash and cash equivalents, end of period $ 311,917 $ 281,757
========== ==========
As of September 30
----------------------
2008 2007
---------- ----------
Operational Data:
Employees 7,966 7,149
Branches 224 218
Source: C.H. Robinson Worldwide, Inc.
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.