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 MARCH 31, 2003 |
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Act).
Yes x No ¨
As of April 30, 2003, the number of outstanding shares of the registrant’s common stock was 84,375,840.
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)
(unaudited)
| ASSETS |
March 31, 2003 |
December 31, 2002 |
||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ |
137,166 |
|
$ |
132,999 |
| ||
| Available-for-sale securities |
|
45,380 |
|
|
45,227 |
| ||
| Receivables, net of allowance for doubtful accounts of $24,311 and $24,155 |
|
416,436 |
|
|
391,670 |
| ||
| Deferred tax asset |
|
13,561 |
|
|
14,579 |
| ||
| Prepaid expenses and other |
|
6,034 |
|
|
4,097 |
| ||
| Total current assets |
|
618,577 |
|
|
588,572 |
| ||
| PROPERTY AND EQUIPMENT, net |
|
25,296 |
|
|
26,476 |
| ||
| INTANGIBLE AND OTHER ASSETS, net |
|
162,601 |
|
|
162,103 |
| ||
| Total assets |
$ |
806,474 |
|
$ |
777,151 |
| ||
| LIABILITIES AND STOCKHOLDERS’ INVESTMENT |
||||||||
| CURRENT LIABILITIES: |
||||||||
| Accounts payable |
$ |
289,639 |
|
$ |
275,157 |
| ||
| Accrued expenses – |
||||||||
| Compensation and profit-sharing contribution |
|
22,373 |
|
|
39,533 |
| ||
| Income taxes and other |
|
38,105 |
|
|
28,784 |
| ||
| Total current liabilities |
|
350,117 |
|
|
343,474 |
| ||
| LONG TERM LIABILITIES: |
||||||||
| Deferred tax liability |
|
7,088 |
|
|
6,280 |
| ||
| Nonqualified deferred compensation obligation |
|
2,075 |
|
|
1,567 |
| ||
| Total liabilities |
|
359,280 |
|
|
351,321 |
| ||
| 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 shares issued, 84,617 and 84,506 shares outstanding |
|
8,462 |
|
|
8,451 |
| ||
| Additional paid-in capital |
|
94,350 |
|
|
96,687 |
| ||
| Retained earnings |
|
365,158 |
|
|
345,080 |
| ||
| Deferred compensation |
|
(6,082 |
) |
|
(6,316 |
) | ||
| Cumulative other comprehensive loss |
|
(2,109 |
) |
|
(2,439 |
) | ||
| Treasury stock at cost (425 and 536 shares) |
|
(12,585 |
) |
|
(15,633 |
) | ||
| Total stockholders’ investment |
|
447,194 |
|
|
425,830 |
| ||
| Total liabilities and stockholders’ investment |
$ |
806,474 |
|
$ |
777,151 |
| ||
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 March 31, | ||||||
| 2003 |
2002 | |||||
| GROSS REVENUES |
$ |
816,744 |
$ |
740,031 | ||
| COST OF TRANSPORTATION, PRODUCTS, AND HANDLING |
|
683,653 |
|
626,434 | ||
| GROSS PROFITS |
|
133,091 |
|
113,597 | ||
| SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES: |
||||||
| Personnel |
|
67,219 |
|
58,886 | ||
| Other selling, general, and administrative |
|
22,412 |
|
20,873 | ||
| Total selling, general, and administrative expenses |
|
89,631 |
|
79,759 | ||
| INCOME FROM OPERATIONS |
|
43,460 |
|
33,838 | ||
| INVESTMENT AND OTHER INCOME |
|
344 |
|
328 | ||
| INCOME BEFORE PROVISION FOR INCOME TAXES |
|
43,804 |
|
34,166 | ||
| PROVISION FOR INCOME TAXES |
|
16,968 |
|
13,324 | ||
| NET INCOME |
|
26,836 |
|
20,842 | ||
| OTHER COMPREHENSIVE INCOME: |
||||||
| Foreign currency translation adjustment |
|
330 |
|
339 | ||
| COMPREHENSIVE INCOME |
$ |
27,166 |
$ |
21,181 | ||
| BASIC NET INCOME PER SHARE |
$ |
0.32 |
$ |
0.25 | ||
| DILUTED NET INCOME PER SHARE |
$ |
0.31 |
$ |
0.24 | ||
| BASIC WEIGHTED AVERAGE SHARES OUTSTANDING |
|
84,332 |
|
84,567 | ||
| DILUTIVE EFFECT OF OUTSTANDING STOCK AWARDS |
|
1,291 |
|
1,411 | ||
| DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING |
|
85,623 |
|
85,978 | ||
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)
| Three Months Ended March 31, |
||||||||
| 2003 |
2002 |
|||||||
| OPERATING ACTIVITIES: |
||||||||
| Net income |
$ |
26,836 |
|
$ |
20,842 |
| ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
|
2,780 |
|
|
3,542 |
| ||
| Deferred compensation expense |
|
234 |
|
|
222 |
| ||
| Provision for doubtful accounts |
|
1,206 |
|
|
1,971 |
| ||
| Deferred income taxes |
|
1,826 |
|
|
1,741 |
| ||
| Loss on disposal of assets |
|
196 |
|
|
— |
| ||
| Changes in operating elements, net of effects of acquisitions: |
||||||||
| Receivables |
|
(25,972 |
) |
|
12,460 |
| ||
| Inventories |
|
(55 |
) |
|
190 |
| ||
| Prepaid expenses and other |
|
(1,882 |
) |
|
601 |
| ||
| Accounts payable |
|
14,478 |
|
|
(1,563 |
) | ||
| Accrued compensation and profit sharing contribution |
|
(17,160 |
) |
|
(20,346 |
) | ||
| Accrued income taxes and other |
|
9,321 |
|
|
4,725 |
| ||
| Net cash provided by operating activities |
|
11,808 |
|
|
24,385 |
| ||
| INVESTING ACTIVITIES: |
||||||||
| Purchases of property and equipment, net |
|
(1,305 |
) |
|
(1,576 |
) | ||
| Purchase of available-for-sale securities |
|
(153 |
) |
|
— |
| ||
| Cash paid for acquisitions, net of cash acquired |
|
— |
|
|
(15,716 |
) | ||
| Other |
|
(481 |
) |
|
(432 |
) | ||
| Net cash used for investing activities |
|
(1,939 |
) |
|
(17,724 |
) | ||
| FINANCING ACTIVITIES: |
||||||||
| Proceeds from stock issued for employee benefit plans |
|
3,455 |
|
|
2,902 |
| ||
| Repurchase of common stock |
|
(2,733 |
) |
|
(2,542 |
) | ||
| Cash dividends |
|
(6,754 |
) |
|
(5,064 |
) | ||
| Net cash used for financing activities |
|
(6,032 |
) |
|
(4,704 |
) | ||
| Effect of exchange rates on cash |
|
330 |
|
|
339 |
| ||
| Net increase in cash and cash equivalents |
|
4,167 |
|
|
2,296 |
| ||
| CASH AND CASH EQUIVALENTS, beginning of period |
|
132,999 |
|
|
115,741 |
| ||
| CASH AND CASH EQUIVALENTS, end of period |
$ |
137,166 |
|
$ |
118,037 |
| ||
The accompanying notes are an integral part of these condensed consolidated statements.
4
C.H. ROBINSON WORLDWIDE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| 1. | General |
Basis of Presentation
C.H. Robinson Worldwide, Inc. and its Subsidiaries (“the Company,” “we,” “us,” or “our”) is a global provider of multimodal transportation services and logistics solutions operating through a network of 150 branch offices operating in North America, South America, Europe, and Asia. The condensed consolidated financial statements include the accounts of C.H. Robinson Worldwide, Inc. and its majority owned and controlled subsidiaries. Minority interests in subsidiaries are not significant. All intercompany transactions and balances have been eliminated in the consolidated financial statements.
The condensed consolidated financial statements, which are unaudited