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Press release from Business Wire

C.H. Robinson Reports Third Quarter Results

Tuesday, October 23, 2012

C.H. Robinson Reports Third Quarter Results16:15 EDT Tuesday, October 23, 2012 MINNEAPOLIS (Business Wire) -- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended September 30, 2012. 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,     %     % 2012   2011   change 2012   2011   change   Total revenues $ 2,880,409 $ 2,694,928 6.9 % $ 8,388,237 $ 7,768,062 8.0 %   Net revenues: Transportation Truck $ 327,960 $ 321,366 2.1 % $ 956,007 $ 930,168 2.8 % Intermodal 10,074 10,538 -4.4 % 29,804 31,000 -3.9 % Ocean 18,498 17,881 3.5 % 51,217 49,851 2.7 % Air 9,046 9,940 -9.0 % 28,496 30,560 -6.8 % Other logistics services   17,196     14,752 16.6 %   53,472     43,665 22.5 % Total transportation 382,774 374,477 2.2 % 1,118,996 1,085,244 3.1 % Sourcing 33,747 33,089 2.0 % 105,895 101,017 4.8 % Payment Services   16,149     15,500 4.2 %   48,048     45,012 6.7 % Total net revenues 432,670 423,066 2.3 % 1,272,939 1,231,273 3.4 %   Operating expenses   245,413     239,101 2.6 %   731,223     710,498 2.9 % Income from operations 187,257 183,965 1.8 % 541,716 520,775 4.0 % Net income $ 116,330   $ 114,347 1.7 % $ 337,412   $ 322,398 4.7 % Diluted EPS $ 0.72 $ 0.70 2.9 % $ 2.08 $ 1.95 6.7 %   Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, increased 2.1 percent in the third quarter of 2012. Our truckload volumes increased approximately eight percent in the third quarter of 2012 compared to the third quarter of 2011. Our truckload net revenue margin decreased in the third quarter of 2012 compared to the third quarter of 2011, due to increased cost per mile. Excluding the estimated impacts of the change in fuel, our average truckload rate per mile to our customers was unchanged in the third quarter of 2012 compared to the third quarter of 2011. Our truckload transportation costs increased approximately one percent, excluding the estimated impacts of the change in fuel. Our LTL net revenues increased approximately 11 percent. The increase was driven by an increase in total shipments of approximately 17 percent, partially offset by decreased net revenue margin. Our intermodal net revenues decreased 4.4 percent in the third quarter of 2012. This was due to decreased net revenue margin, offset partially by volume growth. Our net revenue margin decline was due to a change in our mix of business and increased cost of capacity. Our ocean transportation net revenues increased 3.5 percent in the third quarter of 2012, due to increased pricing, partially offset by volume declines. Our air transportation net revenues decreased 9.0 percent in the third quarter of 2012 due to pricing declines, partially offset by volume increases. Other logistics services net revenues, which include transportation management services, customs, warehousing, and small parcel, increased 16.6 percent in the third quarter of 2012. This was primarily due to transaction increases in our transportation management and customs net revenues. Sourcing net revenues increased 2.0 percent in the third quarter of 2012. This was due to volume growth, partially offset by decreased net revenue margin. Excluding Timco Worldwide, which was acquired on September 26, 2011, we estimate that Sourcing net revenues decreased approximately two percent in the third quarter of 2012. Our payment services net revenues increased 4.2 percent in the third quarter of 2012 primarily due to an increase in transactions. On October 16, 2012, we completed the sale of our payment services business, T-Chek Systems, Inc., to Electronic Funds Source, LLC. The related assets and liabilities that were sold are classified as “held for sale” on the balance sheet as of September 30, 2012. For the third quarter, operating expenses increased 2.6 percent to $245.4 million in 2012 from $239.1 million in 2011. This was due to an increase of 0.7 percent in personnel expense and an increase of 8.3 percent in other selling, general, and administrative expenses. For the third quarter, operating expenses as a percentage of net revenues increased to 56.7 percent in 2012 from 56.5 percent in 2011. Our personnel expense increase was driven by an increase in our average headcount of approximately nine percent, partially offset by declines in various incentive plans that are designed to keep expenses variable based on growth in earnings. Other operating expense growth was driven primarily by an increase in the provision for doubtful accounts, accounting and legal due diligence costs related to acquisitions, and in travel expenses, partially offset by a decrease in claims. 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 37,000 active customers through a network of 234 offices in North America, South America, Europe, Asia, and Australia. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with approximately 53,000 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; the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date. All remarks made during our financial results conference call will be current at the time of the call and we undertake no obligation to update the replay. Conference Call Information:C.H. Robinson Worldwide Third Quarter 2012 Earnings Conference CallTuesday October 23, 2012 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: 877-941-6009Callers should reference the conference ID, which is 4568762Webcast replay available through Investor Relations link at www.chrobinson.comTelephone audio replay available until 12:59 a.m. Eastern Time on October 26: 800-406-7325; passcode: 4568762# CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data)     Three months ended   Nine months ended September 30, September 30, 2012   2011 2012   2011   Revenues: Transportation $ 2,445,883 $ 2,280,208 $ 7,099,485 $ 6,540,266 Sourcing 418,377 399,220 1,240,704 1,182,784 Payment Services   16,149   15,500   48,048   45,012 Total revenues   2,880,409   2,694,928   8,388,237   7,768,062 Costs and expenses: Purchased transportation and related services 2,063,109 1,905,731 5,980,489 5,455,022 Purchased products sourced for resale 384,630 366,131 1,134,809 1,081,767 Personnel expenses 179,342 178,117 539,964 532,171 Other selling, general, and administrative expenses   66,071   60,984   191,259   178,327 Total costs and expenses   2,693,152   2,510,963   7,846,521   7,247,287   Income from operations   187,257   183,965   541,716   520,775   Investment and other income   76   50   976   601   Income before provision for income taxes 187,333 184,015 542,692 521,376 Provision for income taxes   71,003   69,668   205,280   198,978 Net income $ 116,330 $ 114,347 $ 337,412 $ 322,398   Net income per share (basic) $ 0.72 $ 0.70 $ 2.09 $ 1.96 Net income per share (diluted) $ 0.72 $ 0.70 $ 2.08 $ 1.95 Weighted average shares outstanding (basic) 160,782 163,948 161,784 164,512 Weighted average shares outstanding (diluted) 161,003 164,471 162,042 165,094   CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands)     September 30,   December 31, 2012 2011 Assets Current assets: Cash and cash equivalents $ 272,955 $ 373,669 Receivables, net 1,334,577 1,189,637 Other current assets 46,399 48,237 Assets held for sale (excluding $24.3 million of cash)   72,235   - Total current assets 1,726,166 1,611,543   Property and equipment, net 134,437 126,830 Intangible and other assets   382,664   399,668 Total Assets $ 2,243,267 $ 2,138,041   Liabilities and stockholders' investment Current liabilities: Accounts payable and outstanding checks $ 729,744 $ 704,734 Accrued compensation 86,473 117,541 Other accrued expenses 34,514 54,357 Liabilities held for sale   87,324   - Total current liabilities 938,055 876,632   Long term liabilities   14,337   12,935 Total liabilities 952,392 889,567   Total stockholders' investment   1,290,875   1,248,474 Total liabilities and stockholders' investment $ 2,243,267 $ 2,138,041   CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data)     Nine months ended September 30, 2012   2011 Operating activities: Net income $ 337,412 $ 322,398 Stock-based compensation 21,077 32,074 Depreciation and amortization 26,081 23,714 Provision for doubtful accounts 8,143 6,916 Other non-cash expenses, net 6,346 94 Net changes in operating elements   (131,903 )   (91,641 ) Net cash provided by operating activities 267,156 293,555   Investing activities: Purchases of property and equipment (28,096 ) (17,402 ) Purchases and development of software (10,795 ) (11,679 ) Sales/maturities of available-for-sale securities - 9,311 Restricted cash - 5,000 Other   206     161   Net cash used for investing activities (38,685 ) (14,609 )   Financing activities: Payment of contingent purchase price (11,613 ) (4,318 ) Net repurchases of common stock (163,412 ) (154,982 ) Excess tax benefit on stock-based compensation 9,831 12,967 Cash dividends   (163,273 )   (146,318 ) Net cash used for financing activities (328,467 ) (292,651 ) Effect of exchange rates on cash   (718 )   (2,165 )   Net change in cash and cash equivalents (100,714 ) (15,870 ) Cash and cash equivalents, beginning of period   373,669     398,607   Cash and cash equivalents, end of period $ 272,955   $ 382,737       As of September 30, 2012   2011 Operational Data: Employees 8,811 8,120 Branches 234 235 C.H. Robinson Worldwide, Inc.Chad Lindbloom, chief financial officer, 952-937-7779orAngie Freeman, vice president, 952-937-7847