C.H. Robinson Reports Third Quarter Results

  C.H. Robinson Reports Third Quarter Results

Business Wire

MINNEAPOLIS -- October 23, 2012

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         17,196      14,752      16.6 %    53,472      43,665      22.5 %
services
Total              382,774       374,477     2.2  %     1,118,996     1,085,244   3.1  %
transportation
Sourcing           33,747        33,089      2.0  %     105,895       101,017     4.8  %
Payment           16,149      15,500      4.2  %    48,048      45,012      6.7  %
Services
Total net          432,670       423,066     2.3  %     1,272,939     1,231,273   3.4  %
revenues
                                                                                       
Operating         245,413     239,101     2.6  %    731,223     710,498     2.9  %
expenses
Income from        187,257       183,965     1.8  %     541,716       520,775     4.0  %
operations
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 Call
Tuesday October 23, 2012 5:00 pm. Eastern Time
The 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.com
To participate in the conference call by telephone, please call ten minutes
early by dialing: 877-941-6009
Callers should reference the conference ID, which is 4568762
Webcast replay available through Investor Relations link at www.chrobinson.com
Telephone 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         2,063,109     1,905,731     5,980,489     5,455,022
related services
Purchased products         384,630       366,131       1,134,809     1,081,767
sourced for resale
Personnel expenses         179,342       178,117       539,964       532,171
Other selling,
general, and              66,071       60,984       191,259      178,327
administrative
expenses
Total costs and           2,693,152    2,510,963    7,846,521    7,247,287
expenses
                                                                   
Income from operations    187,257      183,965      541,716      520,775
                                                                   
Investment and other      76           50           976          601
income
                                                                   
Income before
provision for income       187,333       184,015       542,692       521,376
taxes
Provision for income      71,003       69,668       205,280      198,978
taxes
Net income               $ 116,330     $ 114,347     $ 337,412     $ 322,398
                                                                   
Net income per share     $ 0.72        $ 0.70        $ 2.09        $ 1.96
(basic)
Net income per share     $ 0.72        $ 0.70        $ 2.08        $ 1.95
(diluted)
Weighted average
shares outstanding         160,782       163,948       161,784       164,512
(basic)
Weighted average
shares outstanding         161,003       164,471       162,042       165,094
(diluted)
                                                                   

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       72,235         -
of cash)
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               -              9,311
securities
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

Contact:

C.H. Robinson Worldwide, Inc.
Chad Lindbloom, chief financial officer, 952-937-7779
or
Angie Freeman, vice president, 952-937-7847
 
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