EX-99.1 3 dex991.htm PRESS RELEASE Press Release

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 FIRST QUARTER RESULTS

 

MINNEAPOLIS, April 20, 2004 — C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ:CHRW), today reported financial results for the three months ended March 31, 2004.

 

For the first quarter, gross profits increased 12.4 percent to $149.6 million in 2004 from $133.1 million in 2003. Income from operations increased 13.7 percent to $47.2 million in the first quarter of 2004 from $41.5 million in the first quarter of 2003. Net income increased 15.6 percent to $29.1 million in the first quarter of 2004 from $25.1 million in the first quarter of 2003. Diluted net income per share increased 17.2 percent to $0.34 per share in the first quarter of 2004 from $0.29 per share in the first quarter of 2003.

 

“We’re happy with our results and feel the first quarter was a solid start for 2004,” said John P. Wiehoff, chief executive officer of C.H. Robinson. “Our transaction volumes were up significantly. We gained a lot of new spot market, transactional business in the quarter, particularly in March. This was driven by a tighter truck capacity market, which made finding carriers tougher and did impact our margins on our contractual business. We continue to sign up new carriers and we believe that if the rate environment stays strong, new carriers will come into the marketplace. We’re pleased that despite this challenging environment, our motivated people and flexible business model enabled us to adapt and capitalize on new opportunities. We remain focused on our long-term growth strategy and feel we’re in a solid position to help our customers deal with volatility in the freight marketplace.”

 

For the first quarter, total Transportation gross profits increased 13.9 percent to $129.8 million in 2004 from $114.0 million in 2003. The increase in our truck transportation gross profits of 12.3 percent was driven by volume growth in both truckload and less-than-truckload transactions. Profit per transaction decreased. As we have experienced in the past, a tight truck capacity market helped us gain additional spot market business, while increasing our cost of hire and decreasing our gross profit margins in our contractual business.

 

Our intermodal gross profits growth of 37.4 percent in the first quarter of 2004 was the result of increased volumes. Volume growth was driven by the addition of new customers, expansion of business with existing customers, and mode conversion from truck to intermodal, in response to tightness in the truck capacity market. Near term intermodal growth may be more volatile due to temporary rail congestion issues.

 

Our international ocean gross profits decreased 5.9 percent this quarter compared to the first quarter of 2003. In the first quarter of 2003 we experienced a significant amount of growth, due in part to our customers pre-shipping in advance of an ocean carrier general rate increase that took place in the second quarter of 2003.

 

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C. H. Robinson Worldwide, Inc.

April 20, 2004

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Our air gross profits, which are primarily international, increased 126.3 percent this quarter compared to the first quarter of 2003. The significant growth in our air gross profits was primarily due to increased volumes with several large international customers, and because our Hong Kong office managed more air freight business through our own network, rather than through agents.

 

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 27.0 percent in the first quarter was driven by an increase in transportation management fees, offset by a decrease in our customs brokerage fees.

 

For the first quarter, Sourcing gross profits were $11.8 million in 2004 and in 2003. We continue to see the long-term trend of growth in our integrated relationships with large retailers and foodservice providers, offset by a decline in our transactional business.

 

For the first quarter, Information Services gross profits increased 8.7 percent to $7.9 million in 2004 from $7.3 million in 2003, primarily due to transaction growth.

 

For the quarter, personnel expense as a percentage of gross profits decreased to 51.9 percent in 2004 from 52.0 percent in 2003. This includes the expenses of adopting the fair value recognition method of accounting as provided in Financial Accounting Standards Board SFAS No. 123.

 

For the quarter, selling, general, and administrative expenses increased 10.8 percent to $24.8 million in 2004 from $22.4 million in 2003. Operating expenses as a percentage of gross profits decreased slightly for the first quarter of 2004 compared to 2003.

 

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, serving 16,000 customers through a network of 160 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 25,000 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

 

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C. H. Robinson Worldwide, Inc.

April 20, 2004

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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 First Quarter 2004 Earnings Conference Call

Wednesday, April 21, 2004; 10:00 a.m. Eastern time

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

Telephone access: U.S. Participants: 888-792-9510; International Participants: 484-630-2264

Passcode: CHRW

Webcast replay available through May 5, 2004: Investor Relations at www.chrobinson.com

Telephone audio replay available through April 23, 2004: 800-876-0726

 

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C. H. Robinson Worldwide, Inc.

April 20, 2004

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(In thousands, except per share data)

 

     Three months ended
March 31,


 
     2004

   2003 (1)

 

Gross revenues:

               

Transportation

   $ 772,449    $ 641,544  

Sourcing

     166,243      167,914  

Information Services

     7,918      7,286  
    

  


Total gross revenues

     946,610      816,744  
    

  


Gross profits:

               

Transportation

               

Truck

     112,956      100,543  

Intermodal

     7,463      5,433  

Ocean

     4,333      4,605  

Air

     1,745      771  

Miscellaneous

     3,343      2,632  
    

  


Total transportation

     129,840      113,984  

Sourcing

     11,826      11,821  

Information Services

     7,918      7,286  
    

  


Total gross profits

     149,584      133,091  
    

  


Operating costs and expenses:

               

Personnel expenses

     77,574      69,192  

Selling, general and administrative expenses

     24,839      22,412  
    

  


Total operating costs and expenses

     102,413      91,604  
    

  


Income from operations

     47,171      41,487  

Investment and other income:

               

Interest income and other

     587      410  

Nonqualified deferred compensation investment gain (loss)

     70      (66 )
    

  


Investment and other income

     657      344  
    

  


Income before provision for income Taxes

     47,828      41,831  

Provision for income taxes

     18,756      16,691  
    

  


Net income

   $ 29,072    $ 25,140  
    

  


Net income per share (basic)

   $ 0.34    $ 0.30  

Net income per share (diluted)

   $ 0.34    $ 0.29  

Weighted average shares outstanding (basic)

     84,621      84,332  

Weighted average shares outstanding (diluted)

     86,414      85,623  

(1) The three months ended March 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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C. H. Robinson Worldwide, Inc.

April 20, 2004

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CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands)

 

     March 31,
2004


   December 31,
2003 (1)


Assets

             

Current assets:

             

Cash and cash equivalents

   $ 183,628    $ 198,513

Available-for-sale securities

     45,857      45,736

Receivables

     470,923      457,455

Other current assets

     18,865      15,625
    

  

Total current assets

     719,273      717,329

Net property and equipment

     35,341      25,625

Intangible and other assets

     172,621      165,195
    

  

     $ 927,235    $ 908,149
    

  

Liabilities and stockholders’ investment

             

Current liabilities:

             

Accounts payable

   $ 317,557    $ 311,927

Accrued compensation

     20,443      46,582

Other accrued expenses

     36,417      21,553
    

  

Total current liabilities

     374,417      380,062

Long term liabilities:

             

Deferred tax liability

     6,063      4,914

Nonqualified deferred compensation obligation

     2,762      2,603
    

  

Total long term liabilities

     8,825      7,517
    

  

Total liabilities

     383,242      387,579

Total stockholders’ investment

     543,993      520,570
    

  

     $ 927,235    $ 908,149
    

  


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

 

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C. H. Robinson Worldwide, Inc.

April 20, 2004

Page 6

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands, except operational data)

 

     Three months ended
March 31,


 
     2004

    2003 (1)

 

Operating activities:

                

Net income

   $ 29,072     $ 25,140  

Depreciation and amortization

     2,634       2,780  

Other non-cash expenses

     8,096       5,382  

Net changes in operating elements

     (25,804 )     (21,494 )
    


 


Net cash provided by operating activities

     13,998       11,808  

Investing activities:

                

Net property additions

     (11,625 )     (1,305 )

Cash paid for acquisition

     (7,302 )     —    

Net purchases of investments

     (118 )     (153 )

Other assets, net

     24       (481 )
    


 


Net cash used for investing activities

     (19,021 )     (1,939 )

Financing activities:

                

Net repurchases of common stock

     1,110       722  

Cash dividends

     (10,247 )     (6,754 )
    


 


Net cash used for financing activities

     (9,137 )     (6,032 )

Effect of exchange rates on cash

     (725 )     330  
    


 


Net increase (decrease) in cash and cash equivalents

     (14,885 )     4,167  

Cash and cash equivalents, beginning of period

     198,513       132,999  
    


 


Cash and cash equivalents, end of period

   $ 183,628     $ 137,166  
    


 



(1) March 31, 2003 cash flow statement has been restated for retroactive adoption of the fair value recognition provisions of SFAS 123.

 

     As of March 31,

     2004

   2003

Operational Data:

         

Employees

   4,231    3,873

Branches

   160    150

 

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