MINNEAPOLIS–(BUSINESS WIRE)–Jan. 31, 2012– C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended December 31, 2011.
Summarized financial results for the quarter ended December 31 are as follows (dollars in thousands, except per share data):
| Three months ended | Twelve months ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| % | % | |||||||||||||||||
| 2011 | 2010 | change | 2011 | 2010 | change | |||||||||||||
| Total revenues | $ | 2,568,284 | $ | 2,325,349 | 10.4 | % | $ | 10,336,346 | $ | 9,274,305 | 11.5 | % | ||||||
| Net revenues: | ||||||||||||||||||
| Transportation | ||||||||||||||||||
| Truck | $ | 306,443 | $ | 290,465 | 5.5 | % | $ | 1,236,611 | $ | 1,076,247 | 14.9 | % | ||||||
| Intermodal | 10,189 | 9,441 | 7.9 | % | 41,189 | 36,550 | 12.7 | % | ||||||||||
| Ocean | 17,022 | 16,714 | 1.8 | % | 66,873 | 60,763 | 10.1 | % | ||||||||||
| Air | 8,811 | 10,756 | -18.1 | % | 39,371 | 42,315 | -7.0 | % | ||||||||||
| Other logistics services | 16,207 | 14,397 | 12.6 | % | 59,872 | 57,254 | 4.6 | % | ||||||||||
| Total transportation | 358,672 | 341,773 | 4.9 | % | 1,443,916 | 1,273,129 | 13.4 | % | ||||||||||
| Sourcing | 27,431 | 31,704 | -13.5 | % | 128,448 | 139,377 | -7.8 | % | ||||||||||
| Payment services | 15,282 | 14,687 | 4.1 | % | 60,294 | 55,472 | 8.7 | % | ||||||||||
| Total net revenues | 401,385 | 388,164 | 3.4 | % | 1,632,658 | 1,467,978 | 11.2 | % | ||||||||||
| Operating expenses | 229,430 | 224,099 | 2.4 | % | 939,928 | 845,118 | 11.2 | % | ||||||||||
| Operating income | 171,955 | 164,065 | 4.8 | % | 692,730 | 622,860 | 11.2 | % | ||||||||||
| Net income | $ | 109,214 | $ | 103,161 | 5.9 | % | $ | 431,612 | $ | 387,026 | 11.5 | % | ||||||
| Diluted EPS | $ | 0.67 | $ | 0.62 | 8.1 | % | $ | 2.62 | $ | 2.33 | 12.4 | % | ||||||
Our truck net revenues, which consist of truckload and less-than-truckload (“LTL”) services, increased 5.5 percent in the fourth quarter of 2011. Our truckload volumes increased approximately seven percent in the fourth quarter of 2011 compared to the fourth quarter of 2010. Our truckload net revenue margin decreased in the fourth quarter of 2011 compared to the fourth quarter of 2010, due to the higher cost of fuel and our cost per mile rising faster than our price per mile. Excluding the estimated impacts of the change in fuel, our truckload pricing to our customers increased approximately three percent in the fourth quarter of 2011 compared to the fourth quarter of 2010. Our truckload transportation costs increased approximately four percent, excluding the estimated impacts of the change in fuel. Our LTL net revenues increased approximately 22 percent. The increase was driven by an increase in total shipments of approximately 14 percent and pricing increases, offset partially by a decreased net revenue margin.
Our intermodal net revenue increased 7.9 percent in the fourth quarter of 2011. This was due to volume growth, partially offset by decreased net revenue margin. Our net revenue margin decline was due to a change in our mix of business.
Our ocean transportation net revenues increased 1.8 percent in the fourth quarter of 2011, driven primarily by increased volumes, largely offset by price declines.
Our air transportation net revenue decreased 18.1 percent in the fourth quarter of 2011 due to decreases in volumes, pricing, and net revenue margin.
Other logistics services, which include transportation management fees, customs, warehousing, and small parcel, increased 12.6 percent in the fourth quarter of 2011. This was primarily due to increases in our management fee and customs net revenues.
For the fourth quarter, our Sourcing revenues decreased 3.2 percent. Sourcing net revenues decreased 13.5 percent to $27.4 million in 2011 from $31.7 million in 2010, primarily due to decreased net revenue margin, partially offset by volume growth.
Our Payment Services revenues increased 4.1 percent in the fourth quarter of 2011 primarily due to fee increases driven by higher fuel prices and changes to merchant agreements, and by an increase in MasterCard® transactions and other fuel card services.
For the fourth quarter, operating expenses increased 2.4 percent to $229.4 million in 2011 from $224.1 million in 2010. This was due to a decrease of 3.1 percent in personnel expense and an increase of 19.2 percent in other selling, general, and administrative expenses. The personnel expense decrease was driven by a reduction in certain incentive compensation plans that are based on growth in earnings, including our restricted stock program. Our earnings grew slower in the fourth quarter of 2011 compared to the earnings growth in the fourth quarter of 2010. Other operating expense growth was driven by an increase in claims, travel, temporary services, depreciation, and amortization of internally developed software. For the fourth quarter, operating expenses as a percentage of net revenues declined slightly, to 57.2 percent in 2011 and 57.7 percent in 2010.
Through January 30, 2012, our North American truckload volume growth per business day was approximately seven percent. Through the same period, our total net revenue growth per business day was approximately six percent.
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 37,000 customers through a network of 235 offices in North America, South America, Europe, Asia, Australia, and the Middle East. C.H. Robinson maintains one of the largest networks of motor carrier capacity in North America and works with over 53,000 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; 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 Fourth Quarter 2011 Earnings Conference Call
Tuesday, January 31, 2012 5:00 pm. Eastern Time
The call will be limited to 60 minutes, including questions and answers.
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: 877-941-6009. Callers should reference the conference ID, which is 4504485
Webcast replay available through Investor Relations link at www.chrobinson.com
Telephone audio replay available until 12:59 a.m. Eastern Time on February 3: 800-406-7325; passcode: 4504485#
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| (unaudited, in thousands, except per share data) | ||||||||||||
| Three months ended | Twelve months ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||
| Revenues: | ||||||||||||
| Transportation | $ | 2,200,258 | $ | 1,946,325 | $ | 8,740,524 | $ | 7,575,659 | ||||
| Sourcing | 352,744 | 364,337 | 1,535,528 | 1,643,174 | ||||||||
| Payment Services | 15,282 | 14,687 | 60,294 | 55,472 | ||||||||
| Total revenues | 2,568,284 | 2,325,349 | 10,336,346 | 9,274,305 | ||||||||
| Costs and expenses: | ||||||||||||
| Purchased transportation and related services | 1,841,586 | 1,604,552 | 7,296,608 | 6,302,530 | ||||||||
| Purchased products sourced for resale | 325,313 | 332,633 | 1,407,080 | 1,503,797 | ||||||||
| Personnel expenses | 164,062 | 169,271 | 696,233 | 632,064 | ||||||||
| Other selling, general, and administrative expenses | 65,368 | 54,828 | 243,695 | 213,054 | ||||||||
| Total costs and expenses | 2,396,329 | 2,161,284 | 9,643,616 | 8,651,445 | ||||||||
| Income from operations | 171,955 | 164,065 | 692,730 | 622,860 | ||||||||
| Investment and other income | 1,373 | 256 | 1,974 | 1,242 | ||||||||
| Income before provision for income taxes | 173,328 | 164,321 | 694,704 | 624,102 | ||||||||
| Provision for income taxes | 64,114 | 61,160 | 263,092 | 237,076 | ||||||||
| Net income | $ | 109,214 | $ | 103,161 | $ | 431,612 | $ | 387,026 | ||||
| Net income per share (basic) | $ | 0.67 | $ | 0.63 | $ | 2.63 | $ | 2.35 | ||||
| Net income per share (diluted) | $ | 0.67 | $ | 0.62 | $ | 2.62 | $ | 2.33 | ||||
| Weighted average shares outstanding (basic) | 162,919 | 164,729 | 164,114 | 164,909 | ||||||||
| Weighted average shares outstanding (diluted) | 163,825 | 166,075 | 164,741 | 165,972 | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
| (unaudited, in thousands) | ||||||
| December 31, | December 31, | |||||
| 2011 | 2010 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 373,669 | $ | 398,607 | ||
| Available-for-sale securities | – | 9,290 | ||||
| Receivables, net | 1,189,637 | 1,036,070 | ||||
| Other current assets | 48,237 | 37,801 | ||||
| Total current assets | 1,611,543 | 1,481,768 | ||||
| Property and equipment, net | 126,830 | 114,333 | ||||
| Intangible and other assets | 399,668 | 399,598 | ||||
| Total Assets | $ | 2,138,041 | $ | 1,995,699 | ||
| Liabilities and stockholders’ investment | ||||||
| Current liabilities: | ||||||
| Accounts payable and outstanding checks | $ | 704,734 | $ | 627,561 | ||
| Accrued compensation | 117,541 | 96,991 | ||||
| Other accrued expenses | 54,357 | 47,055 | ||||
| Total current liabilities | 876,632 | 771,607 | ||||
| Long term liabilities | 12,935 | 20,024 | ||||
| Total liabilities | 889,567 | 791,631 | ||||
| Total stockholders’ investment | 1,248,474 | 1,204,068 | ||||
| Total liabilities and stockholders’ investment | $ | 2,138,041 | $ | 1,995,699 | ||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
| (unaudited, in thousands, except operational data) | ||||||||
| Twelve months ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 431,612 | $ | 387,026 | ||||
| Stock-based compensation | 38,601 | 37,047 | ||||||
| Depreciation and amortization | 32,498 | 29,369 | ||||||
| Provision for doubtful accounts | 9,052 | 13,922 | ||||||
| Other non-cash expenses, net | 7,363 | 10,619 | ||||||
| Net changes in operating elements | (89,414 | ) | (133,204 | ) | ||||
| Net cash provided by operating activities | 429,712 | 344,779 | ||||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (35,932 | ) | (17,718 | ) | ||||
| Purchases and development of software | (16,874 | ) | (10,959 | ) | ||||
| Purchases of available-for-sale securities | – | (10,752 | ) | |||||
| Sales/maturities of available-for-sale securities | 9,311 | 53,111 | ||||||
| Restricted cash | 5,000 | (5,000 | ) | |||||
| Other | 182 | (84 | ) | |||||
| Net cash (used for) provided by investing activities | (38,313 | ) | 8,598 | |||||
| Financing activities: | ||||||||
| Payment of contingent purchase price | (4,318 | ) | – | |||||
| Net repurchases of common stock | (231,338 | ) | (133,324 | ) | ||||
| Excess tax benefit on stock-based compensation | 15,255 | 13,092 | ||||||
| Cash dividends | (194,697 | ) | (168,902 | ) | ||||
| Net cash used for financing activities | (415,098 | ) | (289,134 | ) | ||||
| Effect of exchange rates on cash | (1,239 | ) | (2,944 | ) | ||||
| Net change in cash and cash equivalents | (24,938 | ) | 61,299 | |||||
| Cash and cash equivalents, beginning of period | 398,607 | 337,308 | ||||||
| Cash and cash equivalents, end of period | $ | 373,669 | $ | 398,607 | ||||
| As of December 31, | ||||||||
| 2011 | 2010 | |||||||
| Operational Data: | ||||||||
| Employees | 8,353 | 7,628 | ||||||
| Branches | 235 | 231 | ||||||
Source: C.H. Robinson Worldwide, Inc.
C.H. Robinson Worldwide, Inc.
Chad Lindbloom, chief financial officer, 952-937-7779
or
Angie Freeman, vice president, investor relations, 952-937-7847
