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 Fourth Quarter Results

Tuesday, February 01, 2011

C.H. Robinson Reports Fourth Quarter Results16:15 EST Tuesday, February 01, 2011 MINNEAPOLIS (Business Wire) -- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended December 31, 2010. Summarized financial results for the quarter ended December 31 are as follows (dollars in thousands, except per share data):   Three months ended   Twelve months ended December 31, December 31,     %     % 2010   2009   change 2010   2009   change   Total revenues $ 2,325,349 $ 2,008,366 15.8 % $ 9,274,305 $ 7,577,189 22.4 %   Net revenues: Transportation Truck $ 290,465 $ 250,063 16.2 % $ 1,076,247 $ 1,040,703 3.4 % Intermodal 9,441 8,637 9.3 % 36,550 35,245 3.7 % Ocean 16,714 13,610 22.8 % 60,763 54,188 12.1 % Air 10,756 9,268 16.1 % 42,315 32,662 29.6 % Other logistics services   14,397     12,255 17.5 %   57,254     44,784 27.8 % Total transportation 341,773 293,833 16.3 % 1,273,129 1,207,582 5.4 % Sourcing 31,704 33,105 -4.2 % 139,377 128,582 8.4 % Information services   14,687     12,148 20.9 %   55,472     45,795 21.1 % Total net revenues 388,164 339,086 14.5 % 1,467,978 1,381,959 6.2 %   Operating expenses   224,099     196,328 14.1 %   845,118     797,148 6.0 % Operating income 164,065 142,758 14.9 % 622,860 584,811 6.5 % Net income $ 103,161   $ 87,734 17.6 % $ 387,026   $ 360,830 7.3 % Diluted EPS $ 0.62 $ 0.52 19.2 % $ 2.33 $ 2.13 9.4 %   “We're very pleased with our performance in 2010, and we are especially proud that we were able to continue our long track record of annual earnings increases. The last few years have been challenging for many companies, and we think our results show the strength of our business model, the dedication and talent of our people, and our execution discipline,” said John P. Wiehoff, chairman and chief executive officer of C.H. Robinson. Wiehoff continued, “There is still a lot of uncertainty in the marketplace. While supply and demand variables continue to be volatile in most of our services, we have much better net revenue growth momentum going into 2011 than we had the last few years. In January 2011, compared to January 2010, we have achieved consolidated net revenue growth, per business day, in the mid-teens. Our North American truckload volumes increased approximately seven percent in January. A lot could change in marketplace demand and capacity availability as the year progresses, but we are pleased with our early results so far this year.” Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, increased 16.2 percent in the fourth quarter of 2010. Our truckload volumes increased approximately nine percent in the fourth quarter of 2010 compared to the fourth quarter of 2009. Our truckload net revenue margins decreased primarily due to higher fuel prices. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately eight percent in the fourth quarter of 2010 compared to the fourth quarter of 2009. Our truckload transportation costs increased approximately eight percent, excluding the estimated impacts of fuel. Our LTL net revenues increased approximately 17 percent. The increase was driven by an increase in total shipments of approximately 11 percent and increased pricing. Our intermodal net revenue increased 9.3 percent due to increased prices, partially offset by slightly lower net revenue margins. Prices increased due to higher fuel costs, longer average length of haul, and price increases driven by a shortage of container capacity in many markets. Our ocean transportation net revenues increased 22.8 percent in the fourth quarter of 2010, driven by large volume increases. We experienced a net revenue margin decline due to increased cost of capacity, which was partially offset by increased pricing to our customers. Our air transportation net revenue increased 16.1 percent in the fourth 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 17.5 percent was driven primarily by an increase in management fees. For the fourth quarter, our Sourcing revenues decreased 6.5 percent. Sourcing net revenues decreased 4.2 percent to $31.7 million in 2010 from $33.1 million in 2009, primarily due to decreased volumes with a large customer. Our Information Services revenues increased 20.9 percent in the fourth quarter of 2010 due to an increase in transactions and increases in some fees that are impacted by fuel prices. For the fourth quarter, operating expenses increased 14.1 percent to $224.1 million in 2010 from $196.3 million in 2009. This was due to an increase of 17.7 percent in personnel expense and an increase of 4.5 percent in other selling, general, and administrative expenses. Personnel expenses related to our restricted stock program and various other incentive plans increased compared to last year. Many of these plans are variable based on growth in our earnings, and the expense increased as our year-over-year earnings growth rate accelerated through 2010. We also increased average headcount by 3.4 percent from the fourth quarter of 2009. As a percentage of net revenues, total operating expenses decreased slightly to 57.7 percent in the fourth quarter of 2010 from 57.9 percent in the fourth quarter of 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 36,000 customers through a network of 231 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 49,000 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 Fourth Quarter 2010 Earnings Conference CallTuesday, February 1, 2011 5:00 pm. Eastern TimeLive webcast available through Investor Relations link at www.chrobinson.comTelephone access: 877-941-6011; conference ID 4399530Webcast replay available through Investor Relations link at www.chrobinson.comTelephone audio replay available until 12:59 a.m. Eastern Time on February 4: 800-406-7325;passcode: 4399530# CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data)     Three months ended   Twelve months ended December 31, December 31, 2010   2009 2010   2009   Revenues: Transportation $ 1,946,325 $ 1,606,664 $ 7,575,659 $ 5,976,102 Sourcing 364,337 389,554 1,643,174 1,555,292 Information Services   14,687   12,148   55,472   45,795 Total revenues   2,325,349   2,008,366   9,274,305   7,577,189 Costs and expenses: Purchased transportation and related services 1,604,552 1,312,831 6,302,530 4,768,520 Purchased products sourced for resale 332,633 356,449 1,503,797 1,426,710 Personnel expenses 169,271 143,852 632,064 597,568 Other selling, general, and administrative expenses   54,828   52,476   213,054   199,580 Total costs and expenses   2,161,284   1,865,608   8,651,445   6,992,378   Income from operations   164,065   142,758   622,860   584,811   Investment and other income   256   592   1,242   2,250   Income before provision for income taxes 164,321 143,350 624,102 587,061 Provision for income taxes   61,160   55,616   237,076   226,231 Net income $ 103,161 $ 87,734 $ 387,026 $ 360,830   Net income per share (basic) $ 0.63 $ 0.53 $ 2.35 $ 2.15 Net income per share (diluted) $ 0.62 $ 0.52 $ 2.33 $ 2.13 Weighted average shares outstanding (basic) 164,729 166,258 164,909 167,695 Weighted average shares outstanding (diluted) 166,075 167,729 165,972 169,194   CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)     December 31,   December 31, 2010 2009 Assets Current assets: Cash and cash equivalents $ 398,607 $ 337,308 Available-for-sale securities 9,290 48,310 Receivables, net 1,036,070 885,543 Other current assets   37,801   36,108 Total current assets 1,481,768 1,307,269   Property and equipment, net 114,333 117,699 Intangible and other assets   399,598   409,280 Total Assets $ 1,995,699 $ 1,834,248   Liabilities and stockholders' investment Current liabilities: Accounts payable and outstanding checks $ 627,561 $ 606,514 Accrued compensation 96,991 90,855 Other accrued expenses   47,055   34,438 Total current liabilities 771,607 731,807   Long term liabilities   20,024   22,541 Total liabilities 791,631 754,348   Total stockholders' investment   1,204,068   1,079,900 Total liabilities and stockholders' investment $ 1,995,699 $ 1,834,248   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data)     Twelve months ended December 31, 2010   2009 Operating activities: Net income $ 387,026 $ 360,830 Stock-based compensation 37,047 21,267 Depreciation and amortization 29,369 30,514 Provision for doubtful accounts 13,922 16,685 Other non-cash expenses, net 10,619 267 Net changes in operating elements   (133,204 )   (56,992 ) Net cash provided by operating activities 344,779 372,571   Investing activities: Net property additions (17,718 ) (30,362 ) Purchases and development of software (10,959 ) (4,104 ) Purchases of available-for-sale securities (10,752 ) (52,437 ) Sales/maturities of available-for-sale securities 53,111 3,975 Cash paid for acquisition, net - (41,145 ) Restricted cash (5,000 ) - Other investing activities   (84 )   185   Net cash provided by (used for) investing activities 8,598 (123,888 )   Financing activities: Net repurchases of common stock (133,324 ) (249,165 ) Excess tax benefit from stock-based compensation plans 13,092 9,966 Cash dividends   (168,902 )   (162,865 ) Net cash used for financing activities (289,134 ) (402,064 ) Effect of exchange rates on cash   (2,944 )   (4,054 )   Net change in cash and cash equivalents 61,299 (157,435 ) Cash and cash equivalents, beginning of period   337,308     494,743   Cash and cash equivalents, end of period $ 398,607   $ 337,308       As of December 31, 2010   2009 Operational Data: Employees 7,628 7,347 Branches 231 235 C.H. Robinson Worldwide, Inc.Chad Lindbloom, senior vice presidentand chief financial officer, 952-937-7779orAngie Freeman, vice president, investor relationsand public affairs, 952-937-7847