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Press release from Business Wire

C.H. Robinson Reports Third Quarter Results

Tuesday, October 25, 2011

C.H. Robinson Reports Third Quarter Results16:15 EDT Tuesday, October 25, 2011 MINNEAPOLIS (Business Wire) -- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended September 30, 2011. Summarized financial results for the quarter ended September 30 are as follows (dollars in thousands, except per share data):       Three months ended September 30, Nine months ended September 30,         %         % 2011     2010     change 2011     2010     change   Total revenues $ 2,694,928 $ 2,420,357 11.3 % $ 7,768,062 $ 6,948,956 11.8 %   Net revenues: Transportation Truck $ 321,366 $ 284,200 13.1 % $ 930,168 $ 785,782 18.4 % Intermodal 10,538 9,188 14.7 % 31,000 27,109 14.4 % Ocean 17,881 17,057 4.8 % 49,851 44,049  13.2 % Air 9,940 11,453 -13.2 % 30,560 31,559  -3.2 % Other logistics services   14,752       14,666 0.6 %   43,665       42,857 1.9 % Total transportation 374,477 336,564 11.3 % 1,085,244 931,356 16.5 % Sourcing 33,089 31,921 3.7 % 101,017 107,673 -6.2 % Payment services   15,500       14,095 10.0 %   45,012       40,785 10.4 % Total net revenues 423,066 382,580 10.6 % 1,231,273 1,079,814 14.0 %   Operating expenses   239,101       216,247 10.6 %   710,498       621,019 14.4 % Operating income 183,965 166,333 10.6 % 520,775 458,795 13.5 % Net income $ 114,347     $ 102,627 11.4 % $ 322,398     $ 283,865 13.6 % Diluted EPS $ 0.70 $ 0.62 12.9 % $ 1.95 $ 1.71 14.0 %   Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, increased 13.1 percent in the third quarter of 2011. Our truckload volumes increased approximately four percent in the third quarter of 2011 compared to the third quarter of 2010. Our truckload net revenue margin decreased slightly in the third quarter of 2011 compared to the third quarter of 2010. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately four percent in the third quarter of 2011 compared to the third quarter of 2010. Our truckload transportation costs increased approximately three 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 15 percent and pricing increases. Our intermodal net revenue increased 14.7 percent in the third quarter of 2011. This was due to increased volumes and price increases. Our ocean transportation net revenues increased 4.8 percent in the third quarter of 2011, driven primarily by increased volumes. Our air transportation net revenue decreased 13.2 percent in the third quarter of 2011 due to decreased volumes and net revenue margin compression. Other logistics services, which include transportation management fees, customs, warehousing, and small parcel, increased 0.6 percent in the third quarter of 2011. Increases in our management fee and customs net revenues were largely offset by declines in the other services in this category. For the third quarter, our Sourcing revenues increased 5.0 percent. Sourcing net revenues increased 3.7 percent to $33.1 million in 2011 from $31.9 million in 2010, primarily driven by a change in our mix of business due to an increase in value-added services. On September 26, 2011, we acquired Timco Worldwide, a leading melon category provider, in Davis, California. Our Payment Services revenues increased 10.0 percent in the third quarter of 2011 primarily due to increases in some fees that are impacted by fuel prices and an increase in MasterCard® transactions. For the third quarter, operating expenses increased 10.6 percent to $239.1 million in 2011 from $216.2 million in 2010. This was due to an increase of 10.0 percent in personnel expense and an increase of 12.3 percent in other selling, general, and administrative expenses. For the third quarter, operating expenses as a percentage of net revenues were 56.5 percent in both 2011 and 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 235 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 Third Quarter 2011 Earnings Conference CallTuesday, October 25, 2011 5:00 pm. Eastern TimeThe call will be limited to 60 minutes, including questions and answers.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.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 4478446Webcast replay available through Investor Relations link at www.chrobinson.comTelephone audio replay available until 12:59 a.m. Eastern Time on October 29: 800-406-7325; passcode: 4478446#   CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data)       Three months ended     Nine months ended September 30, September 30, 2011     2010 2011     2010   Revenues: Transportation $ 2,280,208 $ 2,026,154 $ 6,540,266 $ 5,629,334 Sourcing 399,220 380,108 1,182,784 1,278,837 Payment Services   15,500   14,095   45,012   40,785 Total revenues   2,694,928   2,420,357   7,768,062   6,948,956 Costs and expenses: Purchased transportation and related services 1,905,731 1,689,590 5,455,022 4,697,978 Purchased products sourced for resale 366,131 348,187 1,081,767 1,171,164 Personnel expenses 178,117 161,947 532,171 462,793 Other selling, general, and administrative expenses   60,984   54,300   178,327   158,226 Total costs and expenses   2,510,963   2,254,024   7,247,287   6,490,161   Income from operations   183,965   166,333   520,775   458,795   Investment and other income   50   149   601   986   Income before provision for income taxes 184,015 166,482 521,376 459,781 Provision for income taxes   69,668   63,855   198,978   175,916 Net income $ 114,347 $ 102,627 $ 322,398 $ 283,865   Net income per share (basic) $ 0.70 $ 0.62 $ 1.96 $ 1.72 Net income per share (diluted) $ 0.70 $ 0.62 $ 1.95 $ 1.71 Weighted average shares outstanding (basic) 163,948 164,691 164,512 164,968 Weighted average shares outstanding (diluted) 164,471 165,576 165,094 165,985     CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)       September 30,     December 31, 2011 2010 Assets Current assets: Cash and cash equivalents $ 382,737 $ 398,607 Available-for-sale securities - 9,290 Receivables, net 1,238,079 1,036,070 Other current assets   35,932   37,801 Total current assets 1,656,748 1,481,768   Property and equipment, net 114,806 114,333 Intangible and other assets   407,884   399,598 Total Assets $ 2,179,438 $ 1,995,699   Liabilities and stockholders' investment Current liabilities: Accounts payable and outstanding checks $ 740,977 $ 627,561 Accrued compensation 105,439 96,991 Other accrued expenses   50,293   47,055 Total current liabilities 896,709 771,607   Long term liabilities   14,505   20,024 Total liabilities 911,214 791,631   Total stockholders' investment   1,268,224   1,204,068 Total liabilities and stockholders' investment $ 2,179,438 $ 1,995,699     CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data)       Nine months ended September 30, 2011     2010 Operating activities: Net income $ 322,398 $ 283,865 Stock-based compensation 32,074 22,568 Depreciation and amortization 23,714 22,113 Provision for doubtful accounts 6,916 11,442 Other non-cash expenses, net 94 10,782 Net changes in operating elements   (91,641)   (213,634) Net cash provided by operating activities 293,555 137,136   Investing activities: Purchases of property and equipment (17,402) (14,000) Purchases and development of software (11,679) (7,715) Purchases of available-for-sale securities - (10,752) Sales/maturities of available-for-sale securities 9,311 28,230 Restricted cash 5,000 (5,000) Other   161   (12) Net cash used for investing activities (14,609) (9,249)   Financing activities: Payment of contingent purchase price (4,318) - Net repurchases of common stock (154,982) (96,822) Excess tax benefit on stock-based compensation 12,967 9,497 Cash dividends   (146,318)   (126,709) Net cash used for financing activities (292,651) (214,034) Effect of exchange rates on cash   (2,165)   (1,728)   Net change in cash and cash equivalents (15,870) (87,875) Cash and cash equivalents, beginning of period   398,607   337,308 Cash and cash equivalents, end of period $ 382,737 $ 249,433     As of September 30, 2011     2010 Operational Data: Employees 8,120 7,589 Branches 235 232 C.H. Robinson Worldwide, Inc.Chad LindbloomChief Financial Officer952-937-7779orAngie FreemanVice President, Investor Relations952-937-7847