MINNEAPOLIS--(BUSINESS WIRE)--Oct. 28, 2014--
C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today
reported financial results for the quarter ended September 30, 2014.
Summarized financial results for the quarter and nine months ended
September 30 are as follows (dollars in thousands, except per share
data):
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
|
|
2014
|
|
2013
|
|
%
change
|
|
2014
|
|
2013
|
|
%
change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
3,467,362
|
|
$
|
3,316,665
|
|
4.5
|
%
|
|
$
|
10,112,865
|
|
$
|
9,599,194
|
|
5.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truckload
|
|
$
|
307,376
|
|
$
|
265,509
|
|
15.8
|
%
|
|
$
|
882,774
|
|
$
|
798,448
|
|
10.6
|
%
|
|
LTL
|
|
|
67,968
|
|
|
61,436
|
|
10.6
|
%
|
|
|
195,482
|
|
|
180,638
|
|
8.2
|
%
|
|
Intermodal
|
|
|
10,593
|
|
|
10,202
|
|
3.8
|
%
|
|
|
30,396
|
|
|
29,223
|
|
4.0
|
%
|
|
Ocean
|
|
|
57,380
|
|
|
49,692
|
|
15.5
|
%
|
|
|
151,478
|
|
|
141,304
|
|
7.2
|
%
|
|
Air
|
|
|
20,520
|
|
|
18,137
|
|
13.1
|
%
|
|
|
59,721
|
|
|
55,107
|
|
8.4
|
%
|
|
Customs
|
|
|
11,107
|
|
|
8,932
|
|
24.4
|
%
|
|
|
30,751
|
|
|
27,307
|
|
12.6
|
%
|
|
Other logistics services
|
|
|
19,043
|
|
|
16,070
|
|
18.5
|
%
|
|
|
54,816
|
|
|
50,348
|
|
8.9
|
%
|
|
Total transportation
|
|
|
493,987
|
|
|
429,978
|
|
14.9
|
%
|
|
|
1,405,418
|
|
|
1,282,375
|
|
9.6
|
%
|
|
Sourcing
|
|
|
29,801
|
|
|
30,553
|
|
-2.5
|
%
|
|
|
91,541
|
|
|
101,151
|
|
-9.5
|
%
|
|
Payment services
|
|
|
3,776
|
|
|
2,775
|
|
36.1
|
%
|
|
|
8,877
|
|
|
8,104
|
|
9.5
|
%
|
|
Total net revenues
|
|
|
527,564
|
|
|
463,306
|
|
13.9
|
%
|
|
|
1,505,836
|
|
|
1,391,630
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
324,227
|
|
|
286,951
|
|
13.0
|
%
|
|
|
945,146
|
|
|
864,093
|
|
9.4
|
%
|
|
Operating income
|
|
|
203,337
|
|
|
176,355
|
|
15.3
|
%
|
|
|
560,690
|
|
|
527,537
|
|
6.3
|
%
|
|
Net income
|
|
$
|
124,981
|
|
$
|
107,737
|
|
16.0
|
%
|
|
$
|
336,764
|
|
$
|
322,952
|
|
4.3
|
%
|
|
Diluted EPS
|
|
$
|
0.85
|
|
$
|
0.69
|
|
23.2
|
%
|
|
$
|
2.28
|
|
$
|
2.03
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our truckload net revenues increased 15.8 percent in the third quarter
of 2014 compared to the third quarter of 2013. Our North American
truckload volumes increased approximately one percent. Our truckload net
revenue margin increased in the third quarter of 2014 compared to the
third quarter of 2013, due primarily to increased rate per mile. In
North America, excluding the estimated impacts of the change in fuel,
our average truckload rate per mile charged to our customers increased
approximately ten percent in the third quarter of 2014 compared to the
third quarter of 2013. In North America, our truckload transportation
costs increased approximately eight percent, excluding the estimated
impacts of the change in fuel. These increases were largely the result
of market conditions and a change in the mix of our business.
Our less-than-truckload (“LTL”) net revenues increased 10.6 percent in
the third quarter of 2014 compared to the third quarter of 2013. The
increase was driven by a seven percent increase in total shipments and
increased customer pricing, partially offset by higher costs.
Our intermodal net revenues increased 3.8 percent in the third quarter
of 2014 compared to the third quarter of 2013. The increase in net
revenues was primarily driven by increased operational efficiency and
customer pricing.
Our ocean transportation net revenues increased 15.5 percent in the
third quarter of 2014 compared to the third quarter of 2013. The
increase in net revenues was primarily due to increased volumes and net
revenue margin.
Our air transportation net revenues increased 13.1 percent in the third
quarter of 2014 compared to the third quarter of 2013. The increase was
primarily due to increased volumes and net revenue margin.
Our customs net revenues increased 24.4 percent in the third quarter of
2014 compared to the third quarter of 2013. The increase was due to
increased rates and transaction volumes.
Our other logistics services revenues increased 18.5 percent in the
third quarter of 2014 compared to the third quarter of 2013. The
increase was primarily due to increases in transportation management
services.
Sourcing net revenues decreased 2.5 percent in the third quarter of 2014
compared to the third quarter of 2013. We continued to experience volume
and net revenue declines from a large customer.
Payment services net revenues increased 36.1 percent in the third
quarter of 2014 compared to the third quarter of 2013. This was
primarily due to a rate increase on our cash advance option in July 2014.
For the third quarter, operating expenses increased 13.0 percent to
$324.2 million in 2014 from $287.0 million in 2013. Operating expenses
as a percentage of net revenues decreased slightly to 61.5 percent in
the third quarter of 2014 from 61.9 percent in the third quarter of 2013.
For the third quarter, personnel expenses increased 19.7 percent to
$244.6 million in 2014 from $204.4 million in 2013. This was primarily
due to an increase in the expenses related to incentive plans that are
designed to keep expenses variable with changes in net revenues and
profitability and an increase in our average headcount of 1.6 percent.
For the third quarter, other selling, general, and administrative
expenses decreased 3.6 percent to $79.6 million in 2014 from $82.6
million in 2013. This was primarily due to a decrease in travel and
claims expenses.
For the third quarter, interest and other expense was $6.2 million in
2014 compared to $2.6 million in the third quarter of 2013. This
increase was primarily driven by the interest expense on our notes
payable, issued during the third quarter of 2013 and used to fund share
repurchases.
For the third quarter, our effective income tax rate was 36.6 percent in
2014 compared to 38.0 percent in the third quarter of 2013. The lower
rate was primarily due to foreign tax credits, which increased earnings
per share approximately $0.03 for the third quarter.
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 46,000 active customers
through a network of 282 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
63,000 transportation providers 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 changes in economic conditions,
including uncertain consumer demand; changes in market demand and
pressures on the pricing for our services; competition and growth rates
within the third party logistics industry; freight levels and increasing
costs 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; fuel prices and availability; the impact of war on
the economy; and other risks and uncertainties detailed in our Annual
and Quarterly Reports.
Any forward-looking statement speaks only as of the date on which such
statement is made, and we undertake no obligation to update such
statement to reflect events or circumstances arising after such date.
All remarks made during our financial results conference call will be
current at the time of the call and we undertake no obligation to update
the replay.
Conference Call Information:
C.H.
Robinson Worldwide Third Quarter 2014 Earnings Conference Call
Wednesday,
October 29, 2014 8:30 a.m. Eastern Time
The call will be
limited to 60 minutes, including questions and answers. We invite
call participants to submit questions in advance of the conference call
and we will respond to as many of the questions as we can in the time
allowed. To submit your question(s) in advance of the call, please email tim.gagnon@chrobinson.com.
Presentation slides and a simultaneous live audio webcast of the
conference call may be accessed through the Investor Relations link on
C.H. Robinson’s website at www.chrobinson.com.
To
participate in the conference call by telephone, please call ten minutes
early by dialing: 1-888-523-1228
International callers dial
1-719-325-2455
Callers should reference the conference ID,
which is 8557362
Webcast replay available through Investor
Relations link at www.chrobinson.com
Telephone
audio replay available until 11:30 a.m. Eastern Time on November 5:
1-888-203-1112;
passcode: 8557362#
International
callers dial 1-719-457-0820
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
(unaudited, in thousands, except per share data)
|
|
|
|
|
|
Three months ended
|
|
Nine months ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Transportation
|
|
$
|
3,069,056
|
|
|
$
|
2,880,901
|
|
|
$
|
8,911,683
|
|
|
$
|
8,302,160
|
|
|
Sourcing
|
|
|
393,980
|
|
|
|
432,373
|
|
|
|
1,190,604
|
|
|
|
1,287,036
|
|
|
Payment Services
|
|
|
4,326
|
|
|
|
3,391
|
|
|
|
10,578
|
|
|
|
9,998
|
|
|
Total revenues
|
|
|
3,467,362
|
|
|
|
3,316,665
|
|
|
|
10,112,865
|
|
|
|
9,599,194
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
Purchased transportation and related services
|
|
|
2,575,069
|
|
|
|
2,450,923
|
|
|
|
7,506,265
|
|
|
|
7,019,785
|
|
|
Purchased products sourced for resale
|
|
|
364,179
|
|
|
|
401,820
|
|
|
|
1,099,063
|
|
|
|
1,185,885
|
|
|
Purchased payment services
|
|
|
550
|
|
|
|
616
|
|
|
|
1,701
|
|
|
|
1,894
|
|
|
Personnel expenses
|
|
|
244,621
|
|
|
|
204,388
|
|
|
|
703,904
|
|
|
|
623,042
|
|
|
Other selling, general, and administrative expenses
|
|
|
79,606
|
|
|
|
82,563
|
|
|
|
241,242
|
|
|
|
241,051
|
|
|
Total costs and expenses
|
|
|
3,264,025
|
|
|
|
3,140,310
|
|
|
|
9,552,175
|
|
|
|
9,071,657
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
203,337
|
|
|
|
176,355
|
|
|
|
560,690
|
|
|
|
527,537
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other expense
|
|
|
(6,204
|
)
|
|
|
(2,635
|
)
|
|
|
(18,587
|
)
|
|
|
(3,284
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes
|
|
|
197,133
|
|
|
|
173,720
|
|
|
|
542,103
|
|
|
|
524,253
|
|
|
Provision for income taxes
|
|
|
72,152
|
|
|
|
65,983
|
|
|
|
205,339
|
|
|
|
201,301
|
|
|
Net income
|
|
$
|
124,981
|
|
|
$
|
107,737
|
|
|
$
|
336,764
|
|
|
$
|
322,952
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share (basic)
|
|
$
|
0.85
|
|
|
$
|
0.69
|
|
|
$
|
2.28
|
|
|
$
|
2.03
|
|
|
Net income per share (diluted)
|
|
$
|
0.85
|
|
|
$
|
0.69
|
|
|
$
|
2.28
|
|
|
$
|
2.03
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (basic)
|
|
|
146,646
|
|
|
|
156,924
|
|
|
|
147,661
|
|
|
|
158,820
|
|
|
Weighted average shares outstanding (diluted)
|
|
|
146,856
|
|
|
|
157,044
|
|
|
|
147,819
|
|
|
|
158,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(unaudited, in thousands)
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2014
|
|
2013
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
127,716
|
|
$
|
162,047
|
|
Receivables, net
|
|
|
1,640,634
|
|
|
1,449,581
|
|
Other current assets
|
|
|
56,366
|
|
|
52,857
|
|
Total current assets
|
|
|
1,824,716
|
|
|
1,664,485
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
156,936
|
|
|
160,703
|
|
Intangible and other assets
|
|
|
960,132
|
|
|
977,630
|
|
Total Assets
|
|
$
|
2,941,784
|
|
$
|
2,802,818
|
|
|
|
|
|
|
|
Liabilities and stockholders’ investment
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and outstanding checks
|
|
$
|
822,129
|
|
$
|
755,007
|
|
Accrued compensation
|
|
|
108,153
|
|
|
85,247
|
|
Accrued income taxes
|
|
|
13,961
|
|
|
11,681
|
|
Other accrued expenses
|
|
|
39,959
|
|
|
43,046
|
|
Current portion of debt
|
|
|
345,000
|
|
|
375,000
|
|
Total current liabilities
|
|
|
1,329,202
|
|
|
1,269,981
|
|
|
|
|
|
|
|
Noncurrent income taxes payable
|
|
|
21,994
|
|
|
21,584
|
|
Deferred tax liabilities
|
|
|
71,653
|
|
|
70,618
|
|
Long-term debt
|
|
|
500,000
|
|
|
500,000
|
|
Other long term liabilities
|
|
|
218
|
|
|
911
|
|
Total liabilities
|
|
|
1,923,067
|
|
|
1,863,094
|
|
|
|
|
|
|
|
Total stockholders’ investment
|
|
|
1,018,717
|
|
|
939,724
|
|
Total liabilities and stockholders’ investment
|
|
$
|
2,941,784
|
|
$
|
2,802,818
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(unaudited, in thousands, except operational data)
|
|
|
|
|
|
Nine months ended
|
|
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
336,764
|
|
|
$
|
322,952
|
|
|
Stock-based compensation
|
|
|
33,561
|
|
|
|
10,856
|
|
|
Depreciation and amortization
|
|
|
43,442
|
|
|
|
42,052
|
|
|
Provision for doubtful accounts
|
|
|
15,917
|
|
|
|
10,323
|
|
|
Deferred income taxes
|
|
|
901
|
|
|
|
28,696
|
|
|
Other
|
|
|
(1,280
|
)
|
|
|
232
|
|
|
Changes in operating elements, net of acquisitions:
|
|
|
|
|
|
Receivables
|
|
|
(206,970
|
)
|
|
|
(197,468
|
)
|
|
Prepaid expenses and other
|
|
|
(4,081
|
)
|
|
|
(10,465
|
)
|
|
Other non-current assets
|
|
|
270
|
|
|
|
-
|
|
|
Accounts payable and outstanding checks
|
|
|
67,125
|
|
|
|
103,226
|
|
|
Accrued compensation and profit-sharing contribution
|
|
|
23,058
|
|
|
|
(23,023
|
)
|
|
Accrued income taxes
|
|
|
2,690
|
|
|
|
(94,027
|
)
|
|
Other accrued liabilities
|
|
|
(6,075
|
)
|
|
|
(10,425
|
)
|
|
Net cash provided by operating activities
|
|
|
305,322
|
|
|
|
182,929
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(19,291
|
)
|
|
|
(27,861
|
)
|
|
Purchases and development of software
|
|
|
(5,845
|
)
|
|
|
(6,375
|
)
|
|
Acquisitions, net of cash
|
|
|
-
|
|
|
|
19,126
|
|
|
Other
|
|
|
428
|
|
|
|
221
|
|
|
Net cash used for investing activities
|
|
|
(24,708
|
)
|
|
|
(14,889
|
)
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Borrowings on line of credit
|
|
|
3,498,000
|
|
|
|
3,054,023
|
|
|
Repayments on line of credit
|
|
|
(3,528,000
|
)
|
|
|
(2,957,669
|
)
|
|
Borrowings of long-term debt
|
|
|
-
|
|
|
|
500,000
|
|
|
Payment of contingent purchase price
|
|
|
-
|
|
|
|
(927
|
)
|
|
Net repurchases of common stock
|
|
|
(127,106
|
)
|
|
|
(700,631
|
)
|
|
Excess tax benefit on stock-based compensation
|
|
|
6,202
|
|
|
|
26,180
|
|
|
Cash dividends
|
|
|
(157,590
|
)
|
|
|
(167,130
|
)
|
|
Net cash used for financing activities
|
|
|
(308,494
|
)
|
|
|
(246,154
|
)
|
|
Effect of exchange rates on cash
|
|
|
(6,451
|
)
|
|
|
(2,182
|
)
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(34,331
|
)
|
|
|
(80,296
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
162,047
|
|
|
|
210,019
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
127,716
|
|
|
$
|
129,723
|
|
|
|
|
|
|
|
|
|
|
As of September 30,
|
|
|
|
2014
|
|
2013
|
|
Operational Data:
|
|
|
|
|
|
Employees
|
|
|
11,542
|
|
|
|
11,533
|
|
|
Branches
|
|
|
282
|
|
|
|
285
|
|
|
|
|
|
|
|
|
|
|
|
Source: C.H. Robinson Worldwide, Inc.
C.H. Robinson Worldwide, Inc.
Chad Lindbloom, 1-952-937-7779
Chief Financial Officer and Chief Information Officer
or
Tim Gagnon, 952-683-5007
Director, Investor Relations
"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.