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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
(Mark One)
 
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE  QUARTERLY PERIOD ENDED JUNE 30, 2002
 
OR
 
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE  TRANSITION PERIOD FROM                          TO                         
 
Commission File Number
000-23189
 
 
C.H. ROBINSON WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware
  
41-1883630
(State or other jurisdiction of
  
(I.R.S. Employer
incorporation or organization)
  
Identification No.)
     
8100 Mitchell Road, Eden Prairie, Minnesota
  
55344-2248
(Address of principal executive offices)
  
(Zip Code)
     
 
(952) 937-8500
(Registrant’s telephone number, including area code)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
 
Yes  x    No  ¨
 
 
As of August 1, 2002, the number of outstanding shares of the registrant’s common stock was 84,577,391.
 

PART I — FINANCIAL INFORMATION
 
ITEM 1.    Financial Statements
 
C.H. ROBINSON WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
 
ASSETS
   
June 30,
2002
     
December 31, 2001
  
    
(unaudited)
         
CURRENT ASSETS:
                  
Cash and cash equivalents
   
$
124,658
 
   
$
115,741
 
Receivables, net of allowance for doubtful accounts of $26,169 and $23,011
   
 
409,056
 
   
 
370,378
 
Deferred tax asset
   
 
12,313
 
   
 
12,164
 
Prepaid expenses and other
   
 
5,084
 
   
 
4,932
 
    
  
Total current assets
   
 
551,111
 
   
 
503,215
 
PROPERTY AND EQUIPMENT, net
   
 
29,448
 
   
 
30,920
 
INTANGIBLE AND OTHER ASSETS, net
   
 
162,303
 
   
 
149,355
 
    
  
Total assets
   
$
742,862
 
   
$
683,490
 
    
  
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
                  
CURRENT LIABILITIES:
                  
Accounts payable
   
$
299,878
 
   
$
267,708
 
Accrued expenses –
                  
Compensation and profit-sharing contribution
   
 
22,488
 
   
 
32,098
 
Income taxes and other
   
 
23,999
 
   
 
23,722
 
    
  
Total current liabilities
   
 
346,365
 
   
 
323,528
 
LONG TERM LIABILITIES:
                  
Deferred tax liability
   
 
4,735
 
   
 
3,241
 
Non-qualified deferred compensation obligation
   
 
1,675
 
   
 
906
 
    
  
Total liabilities
   
 
352,775
 
   
 
327,675
 
    
  
STOCKHOLDERS’ INVESTMENT:
                  
Preferred stock, $0.10 par value, 20,000 shares authorized; no shares issued or outstanding
   
 
—
 
   
 
—
 
Common stock, $0.10 par value, 130,000 shares authorized; 85,042 and 85,008 shares issued, 84,576 and 84,457 shares outstanding
   
 
8,458
 
   
 
8,446
 
Additional paid-in capital
   
 
97,858
 
   
 
99,551
 
Retained earnings
   
 
  306,622
 
   
 
270,711
 
Deferred compensation
   
 
(6,783
)
   
 
(6,247
)
Cumulative other comprehensive loss
   
 
(2,483
)
   
 
(1,592
)
Treasury stock at cost (466 and 551 shares)
   
 
(13,585
)
   
 
(15,054
)
    
  
Total stockholders’ investment
   
 
390,087
 
   
 
355,815
 
    
  
    
$
742,862
 
   
$
683,490
 
    
  
 
The accompanying notes are an integral part of these condensed consolidated balance sheets.

2

C.H. ROBINSON WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share data)
(unaudited)
 
    
Three Months Ended
June 30,
     
Six Months Ended
June 30,
  
    
2002
     
2001
     
2002
     
2001
  
GROSS REVENUES
   
$
842,720
 
   
$
796,694
 
   
$
1,582,751
 
   
$
1,529,178
 
COST OF TRANSPORTATION AND PRODUCTS
   
 
721,150
 
   
 
678,691
 
   
 
1,347,584
 
   
 
1,297,866
 
    
  
  
  
GROSS PROFIT
   
 
121,570
 
   
 
118,003
 
   
 
235,167
 
   
 
231,312
 
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES
                                    
Personnel expenses
   
 
58,634
 
   
 
56,445
 
   
 
117,520
 
   
 
113,708
 
Other selling, general, and administrative expenses
   
 
21,965
 
   
 
25,001
 
   
 
42,838
 
   
 
51,673
 
    
  
  
  
Total selling, general, and administrative expenses
   
 
80,599
 
   
 
81,446
 
   
 
160,358
 
   
 
165,381
 
    
  
  
  
INCOME FROM OPERATIONS
   
 
40,971
 
   
 
36,557
 
   
 
74,809
 
   
 
65,931
 
INVESTMENT AND OTHER INCOME
   
 
352
 
   
 
739
 
   
 
680
 
   
 
1,245
 
    
  
  
  
INCOME BEFORE PROVISION FOR INCOME TAXES
   
 
41,323
 
   
 
37,296
 
   
 
75,489
 
   
 
67,176
 
PROVISION FOR INCOME TAXES
   
 
16,117
 
   
 
14,654
 
   
 
29,441
 
   
 
26,400
 
    
  
  
  
NET INCOME
   
 
25,206
 
   
 
22,642
 
   
 
46,048
 
   
 
40,776
 
OTHER COMPREHENSIVE LOSS:
                                    
Foreign currency translation adjustment
   
 
(1,230
)
   
 
(137
)
   
 
(891
)
   
 
(175
)
    
  
  
  
COMPREHENSIVE INCOME
   
$
23,976
 
   
$
22,505
 
   
$
45,157
 
   
$
40,601
 
    
  
  
  
BASIC NET INCOME PER SHARE
   
$
0.30
 
   
$
0.27
 
   
$
0.55
 
   
$
0.48
 
    
  
  
  
DILUTED NET INCOME PER SHARE
   
$
0.29
 
   
$
0.26
 
   
$
0.54
 
   
$
0.48
 
    
  
  
  
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING
   
 
84,339
 
   
 
84,353
 
   
 
84,307
 
   
 
84,362
 
DILUTIVE EFFECT OF OUTSTANDING STOCK AWARDS
   
 
1,641
 
   
 
1,529
 
   
 
1,518
 
   
 
1,456
 
    
  
  
  
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
   
 
85,980
 
   
 
85,882
 
   
 
85,825
 
   
 
85,818
 
    
  
  
  
 
The accompanying notes are an integral part of these condensed consolidated statements.

3

C.H. ROBINSON WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
 
    
Six Months Ended
June 30,
  
    
2002
     
2001
  
OPERATING ACTIVITIES:
                  
Net income
   
$
46,048
 
   
$
40,776
 
Adjustments to reconcile net income to net cash provided by operating activities –
                  
Depreciation and amortization
   
 
7,121
 
   
 
9,600
 
Deferred compensation expense
   
 
454
 
   
 
366
 
Deferred income taxes
   
 
1,345
 
   
 
3,205
 
Loss on sale of assets
   
 
335
 
   
 
270
 
Changes in operating elements –
                  
Receivables
   
 
(35,794
)
   
 
(23,995
)
Prepaid expenses and other
   
 
(142
)
   
 
(1,951
)
Accounts payable
   
 
30,859
 
   
 
(11,312
)
Accrued compensation and profit sharing contribution
   
 
(9,614
)
   
 
(11,640
)
Accrued income taxes and other
   
 
277
 
   
 
3,157
 
    
  
Net cash provided by operating activities
   
 
40,889
 
   
 
8,476
 
    
  
INVESTING ACTIVITIES:
                  
Purchases of property and equipment, net
   
 
(4,454
)
   
 
(4,431
)
Cash paid for acquisitions, net
   
 
(15,716
)
   
 
—
 
Other, net
   
 
(470
)
   
 
(366
)
    
  
Net cash used for investing activities
   
 
(20,640
)
   
 
(4,797
)
    
  
FINANCING ACTIVITIES:
                  
Sale of common stock
   
 
5,098
 
   
 
2,944
 
Repurchase of common stock
   
 
(6,298
)
   
 
(6,500
)
Cash dividends
   
 
(10,132
)
   
 
(8,450
)
    
  
Net cash used for financing activities
   
 
(11,332
)
   
 
(12,006
)
    
  
Net increase (decrease) in cash and cash equivalents
   
 
8,917
 
   
 
(8,327
)
CASH AND CASH EQUIVALENTS, beginning of period
   
 
115,741
 
   
 
79,912
 
    
  
CASH AND CASH EQUIVALENTS, end of period
   
$
124,658