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Press release from Business Wire

C.H. Robinson Reports First Quarter Results

Tuesday, April 26, 2011

C.H. Robinson Reports First Quarter Results16:15 EDT Tuesday, April 26, 2011 MINNEAPOLIS (Business Wire) -- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended March 31, 2011. Summarized financial results for the quarter ended March 31 are as follows (dollars in thousands, except per share data):         Three months ended March 31,                   % 2011         2010           change   Total revenues $ 2,365,472 $ 2,074,617 14.0 %   Net revenues: Transportation Truck $ 294,500 $ 241,665 21.9 % Intermodal 9,600 8,496 13.0 % Ocean 15,570 12,522 24.3 % Air 9,185 8,835 4.0 % Other Logistics Services   14,065           13,419 4.8 % Total Transportation 342,920 284,937 20.3 % Sourcing 32,999 34,938 -5.5 % Information Services   14,422           12,726 13.3 % Total net revenues 390,341 332,601 17.4 %   Operating expenses   233,626           196,594 18.8 % Operating income 156,715 136,007 15.2 % Net income $ 97,028         $ 84,012 15.5 % Diluted EPS $ 0.59 $ 0.50 18.0 %   Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, increased 21.9 percent in the first quarter of 2011. Our truckload volumes increased approximately 7.5 percent in the first quarter of 2011 compared to the first quarter of 2010. Our truckload net revenue margin was consistent with the first quarter of 2010. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately eight percent in the first quarter of 2011 compared to the first quarter of 2010. Our truckload transportation costs increased approximately six percent, excluding the estimated impacts of the change in fuel. Our LTL net revenues increased approximately 31 percent. The increase was driven by an increase in total shipments of approximately 18 percent, pricing increases, and a small increase in our net revenuemargin. Our intermodal net revenue increased 13.0 percent due to increased prices, partially offset by a small volume decline. Price increases were driven by market conditions and the increased price of fuel. Net revenue margins were slightly higher than the first quarter of 2010. Our ocean transportation net revenues increased 24.3 percent in the first quarter of 2011, driven by higher pricing and volume increases, partially offset by increased cost of capacity. Our air transportation net revenue increased 4.0 percent in the first quarter of 2011 due to higher volumes. Other logistics services net revenues consist primarily of transportation management fees and customs brokerage fees. The increase of 4.8 percent was driven primarily by an increase in management fees. For the first quarter, our Sourcing revenues decreased 14.8 percent. Sourcing net revenues decreased 5.5 percent to $33.0 million in 2011 from $34.9 million in 2010, primarily due to decreased volumes with a large customer. Our Information Services revenues increased 13.3 percent in the first quarter of 2011 due to increases in some fees that are impacted by fuel prices and an increase in transactions. For the first quarter, operating expenses increased 18.8 percent to $233.6 million in 2011 from $196.6 million in 2010. This was due to an increase of 19.3 percent in personnel expense and an increase of 17.4 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. We also increased our average headcount from the first quarter of 2010. For the first quarter, other selling, general, and administrative expenses increased to $58.5 million from $49.8 million in the first quarter of 2010. As previously announced, we recorded a $5.9 million charge in the first quarter due to a ruling by the Illinois Court of Appeals. 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 232 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 First Quarter 2011 Earnings Conference CallTuesday, April 26, 2011 5:00 pm. Eastern TimeLive webcast available through Investor Relations link at www.chrobinson.comTelephone access: 877-941-8609; conference ID 4432022Webcast replay available through Investor Relations link at www.chrobinson.comTelephone audio replay available until 12:59 a.m. Eastern Time on April 29: 800-406-7325;passcode: 4432022#       CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data)       Three months ended March 31, 2011       2010   Revenues: Transportation $ 1,991,022 $ 1,639,236 Sourcing 360,028 422,655 Information Services   14,422   12,726 Total revenues   2,365,472   2,074,617 Costs and expenses: Purchased transportation and related services 1,648,102 1,354,299 Purchased products sourced for resale 327,029 387,717 Personnel expenses 175,109 146,755 Other selling, general, and administrative expenses   58,517   49,839 Total costs and expenses   2,208,757   1,938,610   Income from operations   156,715   136,007   Investment and other income   225   474   Income before provision for income taxes 156,940 136,481 Provision for income taxes   59,912   52,469 Net income $ 97,028 $ 84,012   Net income per share (basic) $ 0.59 $ 0.51 Net income per share (diluted) $ 0.59 $ 0.50 Weighted average shares outstanding (basic) 165,124 165,440 Weighted average shares outstanding (diluted) 165,764 166,575     CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)       March 31,       December 31, 2011 2010 Assets Current assets: Cash and cash equivalents $ 359,335 $ 398,607 Available-for-sale securities 982 9,290 Receivables, net 1,175,775 1,036,070 Other current assets   45,979   37,801 Total current assets 1,582,071 1,481,768   Property and equipment, net 114,779 114,333 Intangible and other assets   399,484   399,598 Total Assets $ 2,096,334 $ 1,995,699   Liabilities and stockholders' investment Current liabilities: Accounts payable and outstanding checks $ 709,124 $ 627,561 Accrued compensation 49,098 96,991 Other accrued expenses   93,537   47,055 Total current liabilities 851,759 771,607   Long term liabilities   17,049   20,024 Total liabilities 868,808 791,631   Total stockholders' investment   1,227,526   1,204,068 Total liabilities and stockholders' investment $ 2,096,334 $ 1,995,699     CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data)       Three months ended March 31, 2011       2010 Operating activities: Net income $ 97,028 $ 84,012 Stock-based compensation 12,510 4,664 Depreciation and amortization 7,139 7,559 Provision for doubtful accounts 2,397 2,637 Other non-cash expenses, net (1,822 ) 3,111 Net changes in operating elements   (64,639 )   (98,058 ) Net cash provided by operating activities 52,613 3,925   Investing activities: Purchases of property and equipment (5,663 ) (2,893 ) Purchases and development of software (3,967 ) (1,475 ) Purchases of available-for-sale securities - (8,541 ) Sales/maturities of available-for-sale securities 8,327 6,481 Other   18     (25 ) Net cash used for investing activities (1,285 ) (6,453 )   Financing activities: Payment of contingent purchase price (3,850 ) - Net repurchases of common stock (44,286 ) (62,847 ) Excess tax benefit on stock-based compensation 7,511 2,391 Cash dividends   (48,851 )   (42,409 ) Net cash used for financing activities (89,476 ) (102,865 ) Effect of exchange rates on cash   (1,124 )   (2,270 )   Net change in cash and cash equivalents (39,272 ) (107,663 ) Cash and cash equivalents, beginning of period   398,607     337,308   Cash and cash equivalents, end of period $ 359,335   $ 229,645       As of March 31, 2011       2010 Operational Data: Employees 7,783 7,350 Branches 232 235 C.H. Robinson Worldwide, Inc.Chad Lindbloom, 952-937-7779Senior Vice President and Chief Financial OfficerorAngie Freeman, 952-937-7847Vice President, Investor Relations and Public Affairs