EX-99.1 2 rrd166818_21019.htm SECOND QUARTER EARNINGS PRESS RELEASE 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 SECOND QUARTER RESULTS

MINNEAPOLIS, July 24, 2007 - C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ: CHRW), today reported financial results for the quarter ended June 30, 2007.

Summarized financial results for the quarter ended June 30 are as follows (dollars in thousands, except per share data):

Three months ended

June 30,

Six months ended

June 30,

2007

2006

% Change

2007

2006

% Change

Gross profits

$ 310,898

$ 270,619

14.9%

$ 607,828

$525,676

15.6%

Operating income

129,794

103,918

24.9%

244,983

196,352

24.8%

Net income

82,299

66,594

23.6%

155,264

124,708

24.5%

Diluted EPS

$ 0.47

$ 0.38

23.7%

$ 0.89

$ 0.71

25.4%

 

Total Transportation gross profits increased 16.4 percent to $271.1 million in the second quarter of 2007 from $233.0 million in the second quarter of 2006. Our Transportation gross profit margin increased to 17.9 percent in 2007 from 17.1 percent in 2006.

The increase in our Transportation gross profit margin in the second quarter was due to an increase in our truck transportation gross profit margins and to our mix of business. We had faster growth in our miscellaneous transportation management services business, which has a higher gross profit margin than our Transportation business overall.

Our truck transportation gross profits increased 15.6 percent in the second quarter of 2007. Our growth was driven by increased volumes and an increase in our gross profit margin, which expanded due to more widely available capacity in the marketplace compared to the second quarter of 2006.

Our intermodal gross profit growth of 6.5 percent in the second quarter was due to an increase in volumes, driven primarily by new customer growth.

In our international freight forwarding business, our combined air and ocean gross profits increased 26.6 percent in the second quarter of 2007. Our growth in international forwarding resulted from margin expansion and volume growth. Our volumes grew due to new customer growth in both ocean and air, and from increased project-based airfreight business with existing customers.

Miscellaneous transportation gross profits consist primarily of transportation management fees, customs brokerage fees, and warehouse and cross-dock services. The increase of 30.4 percent in the second quarter was driven primarily by increases in our transportation management business.

For the second quarter, Sourcing gross profits increased 5.7 percent to $28.3 million in 2007 from $26.8 million in 2006.  Our Sourcing gross profit margins declined from 8.2 percent in 2006 to 7.9 percent in 2007 due to higher market prices for certain produce commodities, caused primarily by weather issues through the growing season.

For the second quarter, operating expenses increased 8.6 percent to $181.1 million in 2007 from $166.7 million in 2006. This was due to an increase of 9.0 percent in personnel expenses and an increase of 7.5 percent in selling, general and administrative expenses.

As a percentage of gross profits, operating expenses decreased to 58.3 percent in the second quarter of 2007 from 61.6 percent in the second quarter of 2006.  This decrease was due to a decline in personnel expenses as a percentage of gross profits from 47.9 percent to 45.4 percent. Expenses related to our restricted stock program and various other incentive plans are based on growth in our earnings. Our slower earnings growth in the second quarter of 2007 compared to the second quarter of 2006 resulted in a decrease in expense related to some of these incentives plans. This contributed to our personnel expenses growing slower than our gross profits.

In addition, during the second quarter of 2007 the C.H. Robinson Board of Directors authorized management to repurchase up to an additional 10 million shares for our future, variable share repurchase activities. We have approximately 1.7 million shares remaining on the previous share repurchase authorization.

Subsequent to the end of the quarter, we completed the acquisition of LXSI Services, Inc., a third-party domestic air and expedited services provider based in Los Angeles, California. LXSI has approximately 50 employees and had gross revenues of approximately $25 million in 2006.

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 25,000 customers through a network of 217 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 45,000 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.; risks associated with the produce industry, including food safety and contamination issues; 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 Second Quarter 2007 Earnings Conference Call

Tuesday, July 24, 2007 5:00 p.m. Eastern time

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

Telephone access: 800-218-9073

Webcast replay available through August 9, 2007; Investor Relations link at www.chrobinson.com

Telephone audio replay available until 12:59 a.m. Eastern Time on July 27, 2007: 800-405-2236;

passcode: 11092490#

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(In thousands, except per share data)

Three months ended

June 30,

Six months ended

June 30,

2007

2006

2007

2006

Gross Revenues:

Transportation

$ 1,511,173

$ 1,363,246

$ 2,811,591

$ 2,579,155

Sourcing

357,062

326,853

665,359

600,275

Information Services

11,491

10,898

22,101

20,682

Total gross revenues

1,879,726

1,700,997

3,499,051

3,200,112

Gross Profits:

Transportation

Truck

232,892

201,431

462,031

396,564

Intermodal

10,190

9,572

19,570

17,503

Ocean

10,799

8,595

20,045

17,419

Air

8,224

6,433

15,058

11,477

Miscellaneous

8,983

6,891

16,811

12,926

Total transportation

271,088

232,922

533,515

455,889

Sourcing

28,319

26,799

52,212

49,105

Information Services

11,491

10,898

22,101

20,682

Total gross profits

310,898

270,619

607,828

525,676

Operating costs and expenses:

Personnel expenses

141,231

129,609

283,007

256,820

Selling, general, and administrative expenses

39,873

37,092

79,838

72,504

Total operating expenses

181,104

166,701

362,845

329,324

Income from operations

129,794

103,918

244,983

196,352

Investment and other income

3,430

2,877

7,026

5,542

Income before provision for income taxes

133,224

106,795

252,009

201,894

Provision for income taxes

50,925

40,201

96,745

77,186

Net income

$ 82,299

$ 66,594

$ 155,264

$ 124,708

Net income per share (basic)

$ 0.48

$ 0.39

$ 0.91

$ 0.73

Net income per share (diluted)

$ 0.47

$ 0.38

$ 0.89

$ 0.71

Weighted average shares outstanding (basic)

170,942

171,215

171,062

171,051

Weighted average shares outstanding (diluted)

174,200

175,198

174,725

175,070

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands)

June 30,

2007

December 31,

2006

Assets

Current assets:

Cash and cash equivalents

$ 288,692

$ 348,592

Available-for-sale securities

131,652

124,767

Receivables, net

880,595

764,995

Other current assets

25,432

17,794

Total current assets

1,326,371

1,256,148

Property and equipment, net

93,776

82,071

Intangible and other assets

308,795

293,474

$ 1,728,942

$ 1,631,693

Liabilities and stockholders' investment

Current liabilities:

Accounts payable and outstanding checks

$ 614,781

$ 540,129

Accrued compensation

59,587

98,408

Other accrued expenses

36,149

48,412

Total current liabilities

710,517

686,949

Long term liabilities

9,674

1,022

Total liabilities

720,191

687,971

Total stockholders' investment

1,008,751

943,722

$ 1,728,942

$ 1,631,693

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(In thousands, except operational data)

 

Six months ended

June 30,

2007

2006

Operating activities:

Net income

$ 155,264

$ 124,708

Stock-based compensation

23,988

26,856

Depreciation and amortization

13,162

11,547

Other non-cash expenses, net

(2,699)

(3,009)

Net changes in operating elements

(94,062)

(47,265)

Net cash provided by operating activities

95,653

112,837

Investing activities:

Net property additions

(23,501)

(15,662)

Cash paid for acquisitions

(9,261)

(33,974)

Purchases of available-for-sale securities

(85,725)

(55,116)

Sales/maturities of available-for-sale securities

79,131

54,512

Other assets, net

(53)

1,778

Net cash used for investing activities

(39,409)

(48,462)

Financing activities:

Net repurchases of common stock

(65,665)

(21,560)

Excess tax benefit from stock based compensation plans

10,336

9,367

Cash dividends

(62,724)

(45,370)

Net cash used for financing activities

(118,053)

(57,563)

Effect of exchange rates on cash

1,909

1,966

Net change in cash and cash equivalents

(59,900)

8,778

Cash and cash equivalents, beginning of period

348,592

230,628

Cash and cash equivalents, end of period

$ 288,692

$ 239,406

As of June 30

2007

2006

Operational Data:

Employees

6,996

6,382

Branches

217

203

 

 

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