C.H. Robinson Reports First Quarter Results Business Wire MINNEAPOLIS -- April 29, 2014 C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended March 31, 2014. Summarized financial results for the quarter ended March 31 are as follows (dollars in thousands, except per share data): Three months ended March 31, % 2014 2013 change Total revenues $ 3,142,585 $ 2,994,267 5.0 % Net revenues: Transportation Truckload $ 269,837 $ 268,604 0.5 % LTL 60,138 58,491 2.8 % Intermodal 8,940 9,101 -1.8 % Ocean 43,612 42,488 2.6 % Air 17,454 16,768 4.1 % Customs 9,332 8,606 8.4 % Other logistics services 18,566 17,194 8.0 % Total transportation 427,879 421,252 1.6 % Sourcing 26,846 31,846 -15.7 % Payment Services 2,510 2,624 -4.3 % Total net revenues 457,235 455,722 0.3 % Operating expenses 300,264 287,016 4.6 % Income from operations 156,971 168,706 -7.0 % Net income $ 93,187 $ 103,343 -9.8 % Diluted EPS $ 0.63 $ 0.64 -1.6 % Our total net revenues decreased through the first two months of 2014 compared to the first two months of 2013. Our total net revenues increased significantly in March 2014 compared to March 2013 primarily due to growth in North American truckload net revenues. Our truckload net revenues increased 0.5 percent in the first quarter of 2014 compared to the first quarter of 2013. Our truckload volumes increased approximately four percent in the first quarter of 2014 compared to the first quarter of 2013. Our North American truckload volumes increased approximately three percent. Volume growth was impacted by the capacity constraints caused by the many weather events across North America during the first quarter of 2014. Our truckload net revenue margin decreased in the first quarter of 2014 compared to the first quarter of 2013, due primarily to increased cost per mile. In North America, excluding the estimated impacts of the change in fuel, our average truckload rate per mile charged to our customers increased approximately 10 percent in the first quarter of 2014 compared to the first quarter of 2013. In North America, our truckload transportation costs increased approximately 12 percent, excluding the estimated impacts of the change in fuel. Our less-than-truckload (“LTL”) net revenues increased 2.8 percent in the first quarter of 2014 compared to the first quarter of 2013. Our LTL net revenue growth rate slowed in the first quarter of 2014 compared to the first quarter of 2013 partially as a result of weather related issues. LTL net revenue margin decreased slightly in the first quarter of 2014 compared to the first quarter of 2013, primarily due to carrier price increases. Our intermodal net revenues decreased 1.8 percent in the first quarter of 2014 compared to the first quarter of 2013. This was primarily due to a decline in volume partially offset by an increase in net revenue margin. Our ocean transportation net revenues increased 2.6 percent in the first quarter of 2014 compared to the first quarter of 2013. This increase in net revenues was primarily due to volume increases partially offset by a decrease in net revenue margin, which was driven by market volatility and strong competition. Our air transportation net revenues increased 4.1 percent in the first quarter of 2014 compared to the first quarter of 2013. This increase was primarily due to an increase in net revenue margin and increased volumes. Our customs net revenues increased 8.4 percent in the first quarter of 2014 compared to the first quarter of 2013. This increase was primarily due to higher transaction volumes. Other logistics services net revenues, which include transportation management services, warehousing, and small parcel, increased 8.0 percent in the first quarter of 2014 compared to the first quarter of 2013. This increase was primarily due to increases in both warehousing and management services. Sourcing net revenues decreased 15.7 percent in the first quarter of 2014 compared to the first quarter of 2013. We continued to experience volume and net revenue declines from a large customer. We expect the revenue declines with this large customer to continue throughout 2014. Sourcing net revenue margins declined due to weather, a lack of product availability with some key commodities, and market volatility. For the first quarter, operating expenses increased 4.6 percent to $300.3 million in 2014 from $287.0 million in 2013.Operating expenses as a percentage of net revenues increased to 65.7 percent in 2014 from 63.0 percent in 2013. For the first quarter, personnel expenses increased 3.6 percent to $220.3 million in 2014 from $212.6 million in 2013. This was due to an increase in our average headcount of approximately six percent, partially offset by declines in expenses related to incentive plans that are designed to keep expenses variable with changes in net revenues and profitability. For the first quarter, other selling, general, and administrative expenses increased 7.5 percent to $80.0 million in 2014 from $74.4 million in 2013. This change was primarily driven by an increase in our allowance for bad debt. For the first quarter, investment and other (expense) income was an expense of $6.1 million in 2014 compared to an expense of $60,000 in the first quarter of 2013. The increase was primarily driven by the interest expense on our notes payable, issued during the third quarter of 2013 and used to fund the accelerated share repurchase agreements. 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 46,000 active customers through a network of 282 offices in North America, South America, Europe, and Asia. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with approximately 63,000 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 First Quarter 2014 Earnings Conference Call Wednesday, April 30, 2014, 8:30 a.m. Eastern Time The call will be limited to 60 minutes, including questions and answers. We invite call participants to submit questions in advance of the conference call and we will respond to as many of the questions as we can in the time allowed. If time permits, we will accept live questions. To submit your question(s) in advance of the call, please email firstname.lastname@example.org. 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: 877-941-0844 Callers should reference the conference ID, which is 4676571 Webcast replay available through Investor Relations link at www.chrobinson.com Telephone audio replay available until 12:59 a.m. Eastern Time on May 2: 800-406-7325; passcode: 4676571# CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share data) Three months ended March 31, 2014 2013 Revenues: Transportation $ 2,803,704 $ 2,603,182 Sourcing 335,808 387,852 Payment Services 3,073 3,233 Total revenues 3,142,585 2,994,267 Costs and expenses: Purchased transportation and related 2,375,825 2,181,930 services Purchased products sourced for resale 308,962 356,006 Purchased payment services 563 609 Personnel expenses 220,297 212,645 Other selling, general, and administrative 79,967 74,371 expenses Total costs and expenses 2,985,614 2,825,561 Income from operations 156,971 168,706 Investment and other (expense) income (6,131 ) (60 ) Income before provision for income taxes 150,840 168,646 Provision for income taxes 57,653 65,303 Net income $ 93,187 $ 103,343 Net income per share (basic) $ 0.63 $ 0.64 Net income per share (diluted) $ 0.63 $ 0.64 Weighted average shares outstanding 148,517 160,637 (basic) Weighted average shares outstanding 149,008 160,690 (diluted) CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited, in thousands) March 31, December 31, 2014 2013 Assets Current assets: Cash and cash equivalents $ 142,813 $ 162,047 Receivables, net 1,612,034 1,449,581 Other current assets 68,235 52,857 Total current assets 1,823,082 1,664,485 Property and equipment, net 163,957 160,703 Intangible and other assets 973,129 977,630 Total Assets $ 2,960,168 $ 2,802,818 Liabilities and stockholders’ investment Current liabilities: Accounts payable and outstanding checks $ 843,061 $ 755,007 Accrued compensation 46,576 85,247 Income taxes 44,905 11,681 Other accrued expenses 35,947 43,046 Current portion of debt 410,000 375,000 Total current liabilities 1,380,489 1,269,981 Noncurrent income taxes payable 20,583 21,584 Deferred tax liabilities 76,587 70,618 Long-term debt 500,000 500,000 Other long term liabilities 912 911 Total liabilities 1,978,571 1,863,094 Total stockholders’ investment 981,597 939,724 Total liabilities and stockholders’ $ 2,960,168 $ 2,802,818 investment CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited, in thousands, except operational data) Three months ended March 31, 2014 2013 Operating activities: Net income $ 93,187 $ 103,343 Stock-based compensation 4,793 5,115 Depreciation and amortization 14,549 13,807 Provision for doubtful accounts 6,270 2,293 Deferred income taxes 6,757 27,303 Other (1,476 ) 40 Changes in operating elements: Receivables (168,723 ) (74,267 ) Prepaid expenses and other (16,286 ) (12,158 ) Other non-current assets 201 - Accounts payable and outstanding checks 88,052 51,238 Accrued compensation and profit-sharing (38,008 ) (49,920 ) contribution Accrued income taxes 32,223 (111,805 ) Other accrued liabilities (7,099 ) (13,039 ) Net cash provided by (used for) operating 14,440 (58,050 ) activities Investing activities: Purchases of property and equipment (11,124 ) (8,745 ) Purchases and development of software (1,471 ) (1,432 ) Other 268 43 Net cash used for investing activities (12,327 ) (10,134 ) Financing activities: Borrowings on line of credit 1,225,000 1,008,000 Repayments on line of credit (1,190,000 ) (871,017 ) Payment of contingent purchase price - (927 ) Net repurchases of common stock (8,264 ) (84,510 ) Excess tax benefit on stock-based 4,253 23,554 compensation Cash dividends (52,420 ) (56,473 ) Net cash (used for) provided by financing (21,431 ) 18,627 activities Effect of exchange rates on cash 84 (562 ) Net change in cash and cash equivalents (19,234 ) (50,119 ) Cash and cash equivalents, beginning of 162,047 210,019 period Cash and cash equivalents, end of period $ 142,813 $ 159,900 As of March 31, 2014 2013 Operational Data: Employees 11,703 11,144 Branches 282 276 Contact: C.H. Robinson Worldwide, Inc. Chad Lindbloom, chief financial officer, 952-937-7779 or Tim Gagnon, director, investor relations, 952-683-5007
C.H. Robinson Reports First Quarter Results
Press spacebar to pause and continue. Press esc to stop.