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Press release from Business Wire

C.H. Robinson Reports Second Quarter Results

Tuesday, July 26, 2011

C.H. Robinson Reports Second Quarter Results16:15 EDT Tuesday, July 26, 2011 MINNEAPOLIS (Business Wire) -- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended June 30, 2011. 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,     %     % 2011   2010   change 2011   2010   change   Total revenues $ 2,707,662 $ 2,453,982 10.3 % $ 5,073,134 $ 4,528,599 12.0 % Net revenues: Transportation Truck $ 314,302 $ 259,917 20.9 % $ 608,802 $ 501,582 21.4 % Intermodal 10,862 9,425 15.2 % 20,462 17,921 14.2 % Ocean 16,400 14,470 13.3 % 31,970 26,992 18.4 % Air 11,435 11,271 1.5 % 20,620 20,106 2.6 % Other logistics services   14,848     14,772 0.5 %   28,913     28,191 2.6 % Total transportation 367,847 309,855 18.7 % 710,767 594,792 19.5 % Sourcing 34,929 40,814 -14.4 % 67,928 75,752 -10.3 % Payment services   15,090     13,964 8.1 %   29,512     26,690 10.6 % Total net revenues 417,866 364,633 14.6 % 808,207 697,234 15.9 %   Operating expenses   237,771     208,178 14.2 %   471,397     404,772 16.5 % Operating income 180,095 156,455 15.1 % 336,810 292,462 15.2 % Net income $ 111,023   $ 97,226 14.2 % $ 208,051   $ 181,238 14.8 % Diluted EPS $ 0.67 $ 0.59 13.6 % $ 1.26 $ 1.09 15.6 %   Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, increased 20.9 percent in the second quarter of 2011. Our truckload volumes increased 3.5 percent in the second quarter of 2011 compared to the second quarter of 2010. Our truckload net revenue margin increased slightly in the second quarter of 2011 compared to the second quarter of 2010. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately six percent in the second quarter of 2011 compared to the second quarter of 2010. Our truckload transportation costs increased approximately four percent, excluding the estimated impacts of the change in fuel. Our LTL net revenues increased approximately 28 percent. The increase was driven by an increase in total shipments of approximately 14 percent, pricing increases, and an increase in our net revenuemargin. Our intermodal net revenue increased 15.2 percent due to increased net revenue margin and price increases. Price increases were driven by market conditions and the increased price of fuel. Intermodal volumes increased slightly over the second quarter of 2010. Our ocean transportation net revenues increased 13.3 percent in the second quarter of 2011, driven by higher pricing, partially offset by volume declines. Our air transportation net revenue increased 1.5 percent in the second quarter of 2011 due to higher pricing and increased net revenue margin, largely offset by decreased volumes. For the second quarter, our Sourcing revenues decreased 11.0 percent. Sourcing net revenues decreased 14.4 percent to $34.9 million in 2011 from $40.8 million in 2010, primarily due to decreased volumes with a large customer. Our Payment Services revenues increased 8.1 percent in the second quarter of 2011 due to increases in some fees that are impacted by fuel prices and an increase in transactions. For the second quarter, operating expenses increased 14.2 percent to $237.8 million in 2011 from $208.2 million in 2010. This was due to an increase of 16.1 percent in personnel expense and an increase of 8.8 percent in other selling, general, and administrative expenses. Personnel expenses related to our various incentive plans, including restricted stock, increased compared to last year. Many of these plans are variable based on growth in our earnings. Our average headcount for the second quarter of 2011 increased 6.6 percent to 7,898 from 7,408 in 2010. For the second quarter, other selling, general, and administrative expenses increased to $58.8 million from $54.1 million in the second quarter of 2010. As a percentage of net revenues, selling, general, and administrative expenses decreased to 14.1 percent from 14.8 percent in 2010. 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, 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; 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 2011 Earnings Conference CallTuesday, July 26, 2011 5:00 pm. Eastern TimeThe call will be limited to 60 minutes, including questions and answers.Presentation slides and a live audio webcast of the conference call may be accessed through the Investor Relations link on C.H. Robinson's website at www.chrobinson.comTo participate in the conference call by telephone, please call ten minutes early by dialing: 888-549-7750. Callers should reference the conference ID, which is 4452992Webcast replay available through Investor Relations link at www.chrobinson.comTelephone audio replay available until 12:59 a.m. Eastern Time on July 29: 800-406-7325; passcode: 4452992# CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data)     Three months ended   Six months ended June 30, June 30, 2011   2010 2011   2010   Revenues: Transportation $ 2,269,036 $ 1,963,944 $ 4,260,058 $ 3,603,180 Sourcing 423,536 476,074 783,564 898,729 Payment Services   15,090   13,964   29,512   26,690 Total revenues   2,707,662   2,453,982   5,073,134   4,528,599 Costs and expenses: Purchased transportation and related services 1,901,189 1,654,089 3,549,291 3,008,388 Purchased products sourced for resale 388,607 435,260 715,636 822,977 Personnel expenses 178,945 154,091 354,054 300,846 Other selling, general, and administrative expenses   58,826   54,087   117,343   103,926 Total costs and expenses   2,527,567   2,297,527   4,736,324   4,236,137   Income from operations   180,095   156,455   336,810   292,462   Investment and other income   326   363   551   837   Income before provision for income taxes 180,421 156,818 337,361 293,299 Provision for income taxes   69,398   59,592   129,310   112,061 Net income $ 111,023 $ 97,226 $ 208,051 $ 181,238   Net income per share (basic) $ 0.67 $ 0.59 $ 1.26 $ 1.10 Net income per share (diluted) $ 0.67 $ 0.59 $ 1.26 $ 1.09 Weighted average shares outstanding (basic) 164,607 164,749 164,847 165,087 Weighted average shares outstanding (diluted) 165,194 165,765 165,461 166,163   CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)     June 30,   December 31, 2011 2010 Assets Current assets: Cash and cash equivalents $ 315,897 $ 398,607 Available-for-sale securities - 9,290 Receivables, net 1,311,192 1,036,070 Other current assets   48,992   37,801 Total current assets 1,676,081 1,481,768   Property and equipment, net 114,872 114,333 Intangible and other assets   402,844   399,598 Total Assets $ 2,193,797 $ 1,995,699   Liabilities and stockholders' investment Current liabilities: Accounts payable and outstanding checks $ 758,023 $ 627,561 Accrued compensation 77,516 96,991 Other accrued expenses   54,348   47,055 Total current liabilities 889,887 771,607   Long term liabilities   15,484   20,024 Total liabilities 905,371 791,631   Total stockholders' investment   1,288,426   1,204,068 Total liabilities and stockholders' investment $ 2,193,797 $ 1,995,699   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data)     Six months ended June 30, 2011   2010 Operating activities: Net income $ 208,051 $ 181,238 Stock-based compensation 22,609 12,381 Depreciation and amortization 15,299 14,701 Provision for doubtful accounts 4,062 7,059 Other non-cash expenses, net (618 ) 10,592 Net changes in operating elements   (170,549 )   (216,098 ) Net cash provided by operating activities 78,854 9,873   Investing activities: Purchases of property and equipment (11,733 ) (7,988 ) Purchases and development of software (8,052 ) (4,757 ) Purchases of available-for-sale securities - (10,752 ) Sales/maturities of available-for-sale securities 9,311 12,990 Other   5     (5,027 ) Net cash used for investing activities (10,469 ) (15,534 )   Financing activities: Payment of contingent purchase price (4,318 ) - Net repurchases of common stock (59,583 ) (80,232 ) Excess tax benefit on stock-based compensation 11,053 4,297 Cash dividends   (97,562 )   (84,636 ) Net cash used for financing activities (150,410 ) (160,571 ) Effect of exchange rates on cash   (685 )   (4,951 )   Net change in cash and cash equivalents (82,710 ) (171,183 ) Cash and cash equivalents, beginning of period   398,607     337,308   Cash and cash equivalents, end of period $ 315,897   $ 166,125       As of June 30, 2011   2010 Operational Data: Employees 8,013 7,466 Branches 232 233 C.H. Robinson Worldwide, Inc.Chad Lindbloom, chief financial officer, 952-937-7779orAngie Freeman, vice president, investor relations, 952-937-7847