EX-99.1 2 rrd95418_9221.htm PRESS RELEASE, DATED OCTOBER 25, 2005, OF C.H. ROBINSON WORLDWIDE, INC. C

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 THIRD QUARTER RESULTS

MINNEAPOLIS, October 25, 2005 -- C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ: CHRWD), today reported financial results for the three months and nine months ended September 30, 2005. As previously reported, all share and per share data is reflective of a two-for-one stock split, effective October 14, 2005.

For the third quarter, gross profits increased 32.9 percent to $228.9 million in 2005 from $172.2 million in 2004. Income from operations increased 40.3 percent to $85.6 million in the third quarter of 2005 from $61.0 million in the third quarter of 2004. Net income increased 44.8 percent to $54.1 million in the third quarter of 2005 from $37.3 million in the third quarter of 2004. Diluted net income per share increased 40.9 percent to $0.31 per share in the third quarter of 2005 from $0.22 per share in the third quarter of 2004.

For the nine months ended September 30, 2005, gross profits increased 34.2 percent to $643.7 million from $479.8 million in 2004. Income from operations increased 45.5 percent to $233.7 million from $160.7 million in 2004. Net income increased 47.1 percent to $145.2 million from $98.7 million in 2004. Diluted net income per share increased 45.6 percent to $0.83 per share from $0.57 per share in 2004.

For the third quarter, total Transportation gross profits increased 31.9 percent to $198.0 million in 2005 from $150.1 million in 2004. Our transportation gross profit margin increased to 16.3 percent in 2005 from 15.9 percent in 2004.

The increase in our truck transportation gross profits of 31.4 percent in the third quarter of 2005 was driven by volume growth and price increases in both truckload and less-than-truckload transactions. Tight capacity created opportunities with new and existing customers. We are adding new carriers and expanding our existing carrier relationships, both of which gave us the capacity we needed to efficiently meet these needs.

Our intermodal gross profits increase of 19.6 percent in the third quarter of 2005 resulted from an increase in gross profit margins, offset by a decrease in volume. Our volume was impacted by market conditions that continue to drive business back to truck in certain lanes. Our gross profit margin increase resulted from the elimination of some lower margin business and some rate increases to offset increased costs.

Our international ocean and air gross profits increased 50.0 percent in the third quarter of 2005. This growth includes the impact of our acquisitions of Bussini Transport S.r.l. and Hirdes Group Worldwide during the quarter.

Our ocean gross profits increased 48.8 percent and our air gross profits increased 53.0 percent in the third quarter of 2005. Excluding the impact of the acquisitions above, our growth rates in ocean and air gross profits would have been 38.2 percent and 17.3 percent in the third quarter of 2005.  We continue to add new customers and broaden our relationships with existing customers to include international transportation.

Miscellaneous transportation gross profits consist of transportation management fees, customs brokerage fees, warehouse and cross-dock services, and other miscellaneous transportation related services. The increase of 32.5 percent in the third quarter was driven by increases in our transportation management fees and customs brokerage business.

For the third quarter, Sourcing gross profits increased 55.3 percent to $21.0 million in 2005 from $13.5 million in 2004. Excluding the impact of the acquisitions of FoodSource and Epic Roots, announced in the first quarter, our Sourcing gross profits increased 0.6 percent.

For the third quarter, Information Services gross profits increased 16.5 percent to $9.9 million in 2005 from $8.5 million in 2004, primarily due to transaction volume growth.

For the quarter, personnel expense as a percentage of gross profits decreased to 48.3 percent in 2005 from 49.9 percent in 2004. While many of our personnel expenses are variable, we gain leverage in periods of growth.

For the quarter, selling, general, and administrative expenses increased 29.7 percent to $32.7 million in 2005 from $25.2 in 2004. Selling, general, and administrative expenses as a percentage of gross profits decreased for the third quarter of 2005 to 14.3 percent compared to 14.6 percent in 2004.

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 18,000 customers through a network of 195 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 35,000 carriers 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 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; 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 risks and uncertainties detailed in our Annual and Quarterly Reports.

Conference Call Information:

C.H. Robinson Worldwide Third Quarter 2005 Earnings Conference Call

Wednesday, October 26, 2005 10:00 a.m. Eastern time

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

Telephone access:1-800-219-6110

Webcast replay available through November 9, 2005; Investor Relations link at www.chrobinson.com

Telephone audio replay available until 12:59 a.m. Eastern Time on October 29, 2005: 800-405-2236; passcode:11040861#

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(In thousands, except per share data)

(All share and per share data is reflective of a two-for-one stock split effective October 14, 2005)

Three months ended September 30,

Nine months ended September 30,

2005

2004

2005

2004

Gross Revenues:

Transportation

$ 1,218,026

$ 943,256

$3,340,267

$2,587,383

Sourcing

257,409

172,026

737,067

535,513

Information Services

9,934

8,524

28,117

24,621

Total gross revenues

1,485,369

1,123,806

4,105,451

3,147,517

Gross Profits:

Transportation

Truck

172,435

131,248

488,438

360,084

Intermodal

8,469

7,083

22,737

21,919

Ocean

8,638

5,806

20,412

15,275

Air

3,495

2,284

8,481

6,412

Miscellaneous

4,938

3,727

14,321

10,514

Total transportation

197,975

150,148

554,389

414,204

Sourcing

20,965

13,501

61,162

40,987

Information Services

9,934

8,524

28,117

24,621

Total gross profits

228,874

172,173

643,668

479,812

Operating costs and expenses:

Personnel expenses

110,595

85,978

317,662

244,777

Selling, general, and administrative expenses

32,661

25,184

92,267

74,336

Total operating expenses

143,256

111,162

409,929

319,113

Income from operations

85,618

61,011

233,739

160,699

Investment and other income:

Interest income and other

1,726

637

4,129

1,981

Nonqualified deferred compensation

investment gain (loss)

139

(80)

154

(49)

Investment and other income

1,865

557

4,283

1,932

Income before provision for income taxes

87,483

61,568

238,022

162,631

Provision for income taxes

33,394

24,219

92,810

63,932

Net income

$ 54,089

$ 37,349

$ 145,212

$ 98,699

Net income per share (basic)

$ 0.32

$ 0.22

$ 0.85

$ 0.58

Net income per share (diluted)

$ 0.31

$ 0.22

$ 0.83

$ 0.57

Weighted average shares outstanding (basic)

170,105

169,232

170,072

169,276

Weighted average shares outstanding (diluted)

174,533

173,096

174,357

173,017

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands)

September 30,

2005

December 31, 2004

Assets

Current Assets:

Cash and cash equivalents

$ 191,942

$ 166,476

Available-for-sale securities

123,181

121,600

Receivables, net

698,254

544,274

Other current assets

15,666

13,637

Total current assets

1,029,043

845,987

Property and equipment, net

58,595

51,122

Intangible and other assets

249,311

183,587

$ 1,336,949

$ 1,080,696

Liabilities and stockholders' investment

Current liabilities

Accounts payable and outstanding checks

$ 469,132

$ 358,929

Accrued compensation

71,969

60,261

Other accrued expenses

38,253

33,629

Total current liabilities

579,354

452,819

Long term liabilities:

Deferred tax liability

4,871

4,153

Nonqualified deferred compensation obligation

3,030

2,868

Total long term liabilities

7,901

7,021

Total liabilities

587,255

459,840

Total stockholders' investment

749,694

620,856

$ 1,336,949

$ 1,080,696

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands, except operational data)

Nine months ended

September 30,

2005

2004

Operating activities:

Net income

$ 145,212

$ 98,699

Depreciation and amortization

13,326

8,461

Net changes in operating elements

(1,907)

(44,178)

Net cash provided by operating activities

156,631

62,982

Investing activities:

Net property additions

(16,151)

(22,575)

Insurance proceeds

-

1,590

Cash paid for acquisitions

(60,124)

(9,112)

Purchases of available-for-sale securities

(99,791)

(37,050)

Sales/maturities of available-for-sale securities

98,225

36,569

Other assets, net

(1,891)

(1,050)

Net cash used for investing activities

(79,732)

(31,628)

Financing activities:

Net repurchases of common stock

(12,720)

(10,694)

Cash dividends

(38,578)

(30,648)

Net cash used for financing activities

(51,298)

(41,342)

Effect of exchange rates on cash

(135)

(1,000)

Net increase (decrease) in cash and cash equivalents

25,466

(10,988)

Cash and cash equivalents, beginning of period

166,476

123,413

Cash and cash equivalents, end of period

$ 191,942

$ 112,425

As of September 30,

2005

2004

Operational Data:

Employees

5,605

4,671

Branches

195

170

 

 

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