The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Business Wire

C.H. Robinson Reports Second Quarter Results

Tuesday, July 27, 2010

C.H. Robinson Reports Second Quarter Results16:15 EDT Tuesday, July 27, 2010 MINNEAPOLIS (Business Wire) -- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended June 30, 2010. Summarized financial results for the quarter ended June 30 are as follows (dollars in thousands, except per share data):   Three months ended June 30,   Six months ended June 30,     %     % 2010   2009   change 2010   2009   change   Total revenues $ 2,453,982 $ 1,926,020 27.4 % $ 4,528,599 $ 3,614,020 25.3 % Net revenues: Transportation Truck $ 259,917 $ 266,226 -2.4 % $ 501,582 $ 522,585 -4.0 % Intermodal 9,425 8,457 11.4 % 17,921 18,258 -1.8 % Ocean 14,470 12,947 11.8 % 26,992 27,174 -0.7 % Air 11,271 7,748 45.5 % 20,106 15,085 33.3 % Other logistics services   14,772     10,845 36.2 %   28,191     20,815 35.4 % Total transportation 309,855 306,223 1.2 % 594,792 603,917 -1.5 % Sourcing 40,814 34,048 19.9 % 75,752 64,617 17.2 % Information services   13,964     11,433 22.1 %   26,690     21,773 22.6 % Total net revenues 364,633 351,704 3.7 % 697,234 690,307 1.0 % Operating expenses   208,178     201,820 3.2 %   404,772     403,055 0.4 % Operating income 156,455 149,884 4.4 % 292,462 287,252 1.8 % Net income $ 97,226   $ 92,253 5.4 % $ 181,238   $ 177,636 2.0 % Diluted EPS $ 0.59 $ 0.54 9.3 % $ 1.09 $ 1.04 4.8 % Our Transportation revenue increased 32.0 percent in the second quarter of 2010. Transportation net revenues increased 1.2 percent to $309.9 million in the second quarter of 2010 from $306.2 million in the second quarter of 2009. Our Transportation net revenue margin decreased to 15.8 percent in 2010 from 20.6 percent in 2009. Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, decreased 2.4 percent in the second quarter of 2010. Our truckload volumes increased approximately 18 percent in the second quarter of 2010 compared to the second quarter of 2009. Our truckload net revenue margins decreased due to higher transportation costs and higher fuel prices, partially offset by increased pricing to our customers. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately five percent in the second quarter of 2010 compared to the second quarter of 2009. Our truckload transportation costs increased approximately 11 percent, excluding the estimated impacts of fuel. Our LTL net revenues increased approximately 20 percent. The increase was driven by an increase in total shipments of approximately 25 percent, partially offset by decreased net revenue margin. Our intermodal net revenue increase of 11.4 percent in the second quarter of 2010 was driven by increased volume, partially offset by the higher cost of transportation services. Our ocean transportation net revenues increased 11.8 percent in the second quarter of 2010, driven by large volume increases, partially offset by a significant net revenue margin decline. Our air transportation net revenue increased 45.5 percent in the second quarter of 2010 due to higher volumes. Other logistics services net revenues consist primarily of transportation management fees and customs brokerage fees. The increase of 36.2 percent was driven by an increase in management fees as well as the previously announced acquisition of International Trade & Commerce, Inc. (“ITC”) on July 7, 2009.Excluding the acquisition of ITC, our other logistics services net revenues increased approximately 25 percent in the second quarter of 2010. For the second quarter, our Sourcing revenues increased 11.5 percent due primarily to the previously announced acquisition of Rosemont Farms, Inc. (“Rosemont”) on September 15, 2009 and volume growth. Sourcing net revenues increased 19.9 percent to $40.8 million in 2010 from $34.0 million in 2009. Excluding the Rosemont acquisition, Sourcing net revenues increased approximately two percent in the second quarter of 2010, due to an increase in net revenue per case and increased volumes. Our Information Services revenues increased 22.1 percent in the second quarter of 2010 due to an increase in transactions and increases in some fees that are impacted by fuel prices. For the second quarter, operating expenses increased 3.2 percent to $208.2 million in 2010 from $201.8 million in 2009. This was due to an increase of 1.5 percent in personnel expense, consistent with the change in our average headcount during the quarter. For the quarter, other selling, general, and administrative expenses increased 8.0 percent. As a percentage of net revenues, total operating expenses decreased slightly to 57.1 percent in the second quarter of 2010 from 57.4 percent in the second quarter of 2009. Based on results through July 26, 2010, our total net revenues per business day in July 2010 increased approximately seven percent over the same period in July 2009. 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 35,000 customers through a network of 233 offices in North America, South America, Europe, Asia, Australia, and the Middle East. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with over 47,000 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 such as the strength of the current recovery and 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; 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 2010 Earnings Conference CallTuesday, July 27, 2010 5:00 pm. Eastern timeLive webcast available through Investor Relations link at www.chrobinson.comTelephone access: 877-941-6010; conference ID 4325612Webcast replay available through Investor Relations link at www.chrobinson.comTelephone audio replay available until 12:59 a.m. Eastern Time on July 30, 2010: 800-406-7325;passcode: 4325612# CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data)     Three months ended   Six months ended June 30, June 30, 2010   2009 2010   2009   Revenues: Transportation $ 1,963,944 $ 1,487,577 $ 3,603,180 $ 2,806,103 Sourcing 476,074 427,010 898,729 786,144 Information Services   13,964   11,433   26,690   21,773 Total revenues   2,453,982   1,926,020   4,528,599   3,614,020 Costs and expenses: Purchased transportation and related services 1,654,089 1,181,354 3,008,388 2,202,186 Purchased products sourced for resale 435,260 392,962 822,977 721,527 Personnel expenses 154,091 151,743 300,846 304,966 Other selling, general, and administrative expenses   54,087   50,077   103,926   98,089 Total costs and expenses   2,297,527   1,776,136   4,236,137   3,326,768   Income from operations   156,455   149,884   292,462   287,252   Investment and other income   363   729   837   1,219   Income before provision for income taxes 156,818 150,613 293,299 288,471 Provision for income taxes   59,592   58,360   112,061   110,835 Net income $ 97,226 $ 92,253 $ 181,238 $ 177,636   Net income per share (basic) $ 0.59 $ 0.55 $ 1.10 $ 1.05 Net income per share (diluted) $ 0.59 $ 0.54 $ 1.09 $ 1.04 Weighted average shares outstanding (basic) 164,749 167,972 165,087 168,422 Weighted average shares outstanding (diluted) 165,765 169,584 166,163 170,089   CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)     June 30,   December 31, 2010 2009 Assets Current assets: Cash and cash equivalents $ 166,125 $ 337,308 Available-for-sale securities 49,397 48,310 Receivables, net 1,150,283 885,543 Other current assets   45,051   36,108 Total current assets 1,410,856 1,307,269   Property and equipment, net 115,438 117,699 Intangible and other assets   395,600   409,280 Total Assets $ 1,921,894 $ 1,834,248   Liabilities and stockholders' investment Current liabilities: Accounts payable and outstanding checks $ 697,375 $ 606,514 Accrued compensation 55,193 90,855 Other accrued expenses   39,605   34,438 Total current liabilities 792,173 731,807   Long term liabilities   24,849   22,541 Total liabilities 817,022 754,348   Total stockholders' investment   1,104,872   1,079,900 Total liabilities and stockholders' investment $ 1,921,894 $ 1,834,248   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data)     Six months ended June 30, 2010   2009 Operating activities: Net income $ 181,238 $ 177,636 Stock-based compensation 12,381 11,667 Depreciation and amortization 14,701 14,654 Provision for doubtful accounts 7,059 9,908 Other non-cash expenses, net 10,592 (4,671 ) Net changes in operating elements   (216,098 )   (122,857 ) Net cash provided by operating activities 9,873 86,337   Investing activities: Net property additions (7,988 ) (18,225 ) Purchases and development of software (4,757 ) (1,800 ) Purchases of available-for-sale securities (10,752 ) - Sales/maturities of available-for-sale securities 12,990 2,146 Cash paid for acquisition, net - (12,412 ) Other investing activities   (5,027 )   39   Net cash used for investing activities (15,534 ) (30,252 )   Financing activities: Net repurchases of common stock (80,232 ) (113,811 ) Excess tax benefit from stock-based compensation plans 4,297 4,226 Cash dividends   (84,636 )   (80,848 ) Net cash used for financing activities (160,571 ) (190,433 ) Effect of exchange rates on cash   (4,951 )   (3,524 )   Net change in cash and cash equivalents (171,183 ) (137,872 ) Cash and cash equivalents, beginning of period   337,308     494,743   Cash and cash equivalents, end of period $ 166,125   $ 356,871       As of June 30, 2010   2009 Operational Data: Employees 7,466 7,312 Branches 233 233