EX-99.1 3 rrd68602_3962.htm PRESS RELEASE, DATED FEBRUARY 8, 2005, OF C.H. ROBINSON WORLDWIDE, INC. C

Exhibit 99.1

C.H. Robinson Worldwide, Inc.

8100 Mitchell Road, Suite 200

Eden Prairie, Minnesota 55344

Chad Lindbloom, vice president and chief financial officer (952) 937-7779

Angie Freeman, investor relations (952) 937-7847

FOR IMMEDIATE RELEASE

C.H. ROBINSON REPORTS FOURTH QUARTER AND ANNUAL RESULTS

MINNEAPOLIS, February 8, 2005 -- C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRW), today reported financial results for the three months and twelve months ended December 31, 2004.

For the fourth quarter, gross profits increased 29.5 percent to $181.2 million in 2004 from $139.9 million in 2003. Income from operations increased 36.7 percent to $62.1 million in the fourth quarter of 2004 from $45.4 million in the fourth quarter of 2003. Net income increased 38.7 percent to $38.6 million in the fourth quarter of 2004 from $27.8 million in the fourth quarter of 2003. Diluted net income per share increased 37.5 percent to $0.44 per share in the fourth quarter of 2004 from $0.32 per share in the fourth quarter of 2003.

For the year ended December 31, 2004, gross profits increased 21.3 percent to $661.0 million from $544.8 million in 2003. Income from operations increased 26.5 percent to $222.8 million from $176.0 million in 2003. Net income increased 27.8 percent to $137.3 million from $107.4 million in 2003. Diluted net income per share increased 27.2 percent to $1.59 per share from $1.25 per share in 2003.

"Freight demand remained strong through the end of the year, which enabled us to have another quarter of exceptional growth," said John P. Wiehoff, chief executive officer of C.H. Robinson. "Escalating transportation costs were challenging for us and for many of our customers in 2004. Our people worked hard to meet our customers' logistics needs and find ways to help them adapt to an environment of significant rate increases and fuel volatility."

Wiehoff continued, "We are investing in our people and expanding our branch office network, and remain committed to our flexible, multimodal business model which we believe is an advantage in this very transactional transportation market."

For the fourth quarter, total Transportation gross profits increased 34.2 percent to $161.5 million in 2004 from $120.4 million in 2003. Consistent with historical patterns, the tight capacity market created additional business for us. Our Transportation gross profit margin increased slightly from the fourth quarter of 2003.

The increase in our truck transportation gross profits of 37.6 percent in the fourth quarter of 2004 was driven by volume growth in both truckload and less-than-truckload transactions and an increase in gross profit margin.

Our intermodal gross profits increase of 5.1 percent in the fourth quarter of 2004 resulted from an increase in volumes offset by a decrease in margin per load. Our margin per load was impacted by increased rail prices, service changes, and tighter capacity. These changes also drove higher-margin transactional business back to truck service.

Miscellaneous transportation gross profits consist of customs brokerage fees, transportation management fees, warehouse and cross-dock services, and other miscellaneous transportation related services. The increase of 47.0 percent in the fourth quarter was driven by increases in our transportation management fees and customs brokerage business.

For the fourth quarter, Sourcing gross profits decreased 8.7 percent to $10.8 million in 2004 from $11.8 million in 2003. Our Sourcing gross profit margin decreased compared to the fourth quarter of 2003 due to market conditions and product mix.

For the fourth quarter, Information Services gross profits increased 15.1 percent to $8.9 million in 2004 from $7.7 million in 2003, primarily due to transaction growth.

For the quarter, personnel expense as a percentage of gross profits decreased to 49.3 percent in 2004 from 50.8 percent in 2003. Average gross profits per employee, a key measure of productivity, increased approximately 8 percent in 2004 compared to 2003. While many of our personnel expenses are variable, we gain leverage in periods of growth.

For the quarter, selling, general, and administrative expenses increased 26.7 percent to $29.8 million in 2004 from $23.5 million in 2003. Selling, general, and administrative expenses as a percentage of gross profits decreased for the fourth quarter of 2004 to 16.4 percent compared to 16.8 percent in 2003.

In the fourth quarter, we acquired all of the ongoing operations and certain assets of U.S. Traffic, Inc., a Utah-based third party logistics company that provides domestic truckload and intermodal transportation brokerage services. U.S. Traffic has 11 employees and had gross revenues of approximately $27 million in 2004. The new office will operate as the C.H. Robinson-Provo branch.

Founded in 1905, C.H. Robinson Worldwide, Inc., is one of the largest third-party logistics companies in North America. C.H. Robinson is a global provider of multimodal transportation services and logistics solutions, currently serving 20,000 customers through a network of 176 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 through contracts with more than 30,000 motor carriers, and is one of the largest third-party providers of intermodal services in the United States.

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 market demand and pressures on the pricing for our services; competition and growth rates within the third-party logistics industry; freight levels 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; the impact of new Hours of Service regulations adopted by the United States Department of Transportation Federal Motor Carrier Safety Administration; 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.; changing economic conditions such as general economic slowdown, decreased consumer confidence, fuel shortages and the impact of war on the economy; and other risk and uncertainties detailed under "Cautionary Statement" in Exhibit 99.1 to C.H. Robinson's Annual Report on Form 10-K filed on March 15, 2004.

 

 

Conference Call Information:

C.H. Robinson Worldwide Fourth Quarter 2004 Earnings Conference Call

Wednesday, February 9, 2005; 11:00 a.m. Eastern time

Live webcast available through Investor Relations at www.chrobinson.com

Telephone access: 800-240-7305

Webcast replay available through February 23, 2005: Investor Relations at www.chrobinson.com

Telephone audio replay available through February 11, 2005: 800-405-2236; passcode: 11022327#

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(In thousands, except per share data)

Three months ended

Twelve months ended

December 31,

December 31,

2004

2003 (1)

2004

2003 (1)

Gross revenues:

Transportation

$ 1,009,866

$ 760,587

$ 3,597,249

$ 2,845,934

Sourcing

175,294

174,074

710,807

737,939

Information Services

8,861

7,696

33,482

29,772

Total gross revenues

1,194,021

942,357

4,341,538

3,613,645

Gross profits:

Transportation

Truck

141,856

103,109

501,940

401,709

Intermodal

8,041

7,651

29,960

28,103

Ocean

5,283

4,863

20,558

19,027

Air

2,158

1,927

8,570

4,891

Miscellaneous

4,195

2,853

14,709

10,973

Total transportation

161,533

120,403

575,737

464,703

Sourcing

10,785

11,812

51,772

50,373

Information Services

8,861

7,696

33,482

29,772

Total gross profits

181,179

139,911

660,991

544,848

Operating costs and expenses:

Personnel expenses

89,341

71,009

334,118

279,008

Selling, general and administrative expenses

29,769

23,501

104,105

89,794

Total operating costs and expenses

119,110

94,510

438,223

368,802

Income from operations

62,069

45,401

222,768

176,046

Investment and other income:

Interest income and other

1,135

647

3,116

2,141

Nonqualified deferred compensation investment gain

203

203

154

447

Investment and other income

1,338

850

3,270

2,588

Income before provision for income

Taxes

63,407

46,251

226,038

178,634

Provision for income taxes

24,852

18,455

88,784

71,265

Net income

$ 38,555

$ 27,796

$ 137,254

$ 107,369

Net income per share (basic)

$ 0.46

$ 0.33

$ 1.62

$ 1.27

Net income per share (diluted)

$ 0.44

$ 0.32

$ 1.59

$ 1.25

Weighted average shares outstanding (basic)

84,543

84,425

84,614

84,387

Weighted average shares outstanding (diluted)

86,763

86,299

86,572

86,069

  1. The three months and twelve months ended December 31, 2003 results have been restated for retroactive adoption of the fair value recognition provisions of SFAS 123, Accounting for Stock Based Compensation.

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CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands)

December 31,

2004

December 31,

2003 (1)

Assets

Current assets:

Cash and cash equivalents

$ 241,776

$ 198,513

Available-for-sale securities

46,300

45,736

Receivables

544,274

457,455

Other current assets

13,637

15,625

Total current assets

845,987

717,329

Net property and equipment

51,122

25,625

Intangible and other assets

183,587

165,195

$ 1,080,696

$ 908,149

Liabilities and stockholders' investment

Current liabilities:

Accounts payable

$ 358,928

$ 311,927

Accrued compensation

60,261

46,582

Other accrued expenses

33,630

22,692

Total current liabilities

452,819

381,201

Long term liabilities:

Deferred tax liability

4,153

5,598

Nonqualified deferred compensation obligation

2,868

2,603

Total long term liabilities

7,021

8,201

Total liabilities

459,840

389,402

Total stockholders' investment

620,856

518,747

$ 1,080,696

$ 908,149

(1) December 31, 2003 balance sheet has been restated for retroactive adoption of the fair value recognition provisions of SFAS 123.

(more)

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands, except operational data)

Twelve months ended

December 31,

2004

2003 (1)

Operating activities:

Net income

$ 137,254

$ 107,369

Depreciation and amortization

11,814

10,992

Other non-cash expenses

32,578

31,609

Net changes in operating elements

(26,430)

(38,716)

Net cash provided by operating activities

155,216

111,254

Investing activities:

Net property additions

(34,741)

(8,265)

Insurance proceeds

1,590

-

Cash paid for acquisitions

(19,112)

(2,089)

Net purchases of investments

(573)

(521)

Other assets, net

(1,780)

(2,198)

Net cash used for investing activities

(54,616)

(13,073)

Financing activities:

Net repurchases of common stock

(18,395)

(7,709)

Cash dividends

(40,902)

(27,046)

Net cash used for financing activities

(59,297)

(34,755)

Effect of exchange rates on cash

1,960

2,088

Net increase in cash and cash equivalents

43,263

65,514

Cash and cash equivalents, beginning of period

198,513

132,999

Cash and cash equivalents, end of period

$ 241,776

$ 198,513

  1. December 31, 2003 cash flow statement has been restated for retroactive adoption of the fair value recognition provisions

of SFAS 123.

As of December 31,

Operational Data:

2004

2003

Employees

4,806

4,112

Branches

176

158

 

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