C. H. ROBINSON WORLDWIDE, INC. - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - C. H. ROBINSON WORLDWIDE, INC.	d810676d8k.htm
EX-99.2 - EARNINGS CONFERENCE CALL SLIDES - C. H. ROBINSON WORLDWIDE, INC.	d810676dex992.htm

Exhibit 99.1

C.H. Robinson Worldwide, Inc.

14701 Charlson Road

Eden Prairie, Minnesota 55347

Chad Lindbloom, chief financial officer (952) 937-7779

Tim Gagnon, director, investor relations (952) 683-5007

FOR IMMEDIATE RELEASE

C.H. ROBINSON REPORTS THIRD QUARTER RESULTS

MINNEAPOLIS, October 28, 2014 – C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended September 30, 2014. Summarized financial results for the quarter and nine months ended September 30 are as follows (dollars in thousands, except per share data):


	Three months ended September 30,							Nine months ended September 30,
	2014		2013		% change			2014		2013		% change
Total revenues	$	3,467,362	$	3,316,665		4.5	%	$	10,112,865	$	9,599,194		5.4	%
Net revenues:
Transportation
Truckload	$	307,376	$	265,509		15.8	%	$	882,774	$	798,448		10.6	%
LTL		67,968		61,436		10.6	%		195,482		180,638		8.2	%
Intermodal		10,593		10,202		3.8	%		30,396		29,223		4.0	%
Ocean		57,380		49,692		15.5	%		151,478		141,304		7.2	%
Air		20,520		18,137		13.1	%		59,721		55,107		8.4	%
Customs		11,107		8,932		24.4	%		30,751		27,307		12.6	%
Other logistics services		19,043		16,070		18.5	%		54,816		50,348		8.9	%

Total transportation		493,987		429,978		14.9	%		1,405,418		1,282,375		9.6	%
Sourcing		29,801		30,553		-2.5	%		91,541		101,151		-9.5	%
Payment services		3,776		2,775		36.1	%		8,877		8,104		9.5	%

Total net revenues		527,564		463,306		13.9	%		1,505,836		1,391,630		8.2	%
Operating expenses		324,227		286,951		13.0	%		945,146		864,093		9.4	%

Operating income		203,337		176,355		15.3	%		560,690		527,537		6.3	%
Net income	$	124,981	$	107,737		16.0	%	$	336,764	$	322,952		4.3	%

Diluted EPS	$	0.85	$	0.69		23.2	%	$	2.28	$	2.03		12.3	%

Our truckload net revenues increased 15.8 percent in the third quarter of 2014 compared to the third quarter of 2013. Our North American truckload volumes increased approximately one percent. Our truckload net revenue margin increased in the third quarter of 2014 compared to the third quarter of 2013, due primarily to increased rate per mile. In North America, excluding the estimated impacts of the change in fuel, our average truckload rate per mile charged to our customers increased approximately ten percent in the third quarter of 2014 compared to the third quarter of 2013. In North America, our truckload transportation costs increased approximately eight percent, excluding the estimated impacts of the change in fuel. These increases were largely the result of market conditions and a change in the mix of our business.

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C.H. Robinson Worldwide, Inc.

October 28, 2014

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Our less-than-truckload (“LTL”) net revenues increased 10.6 percent in the third quarter of 2014 compared to the third quarter of 2013. The increase was driven by a seven percent increase in total shipments and increased customer pricing, partially offset by higher costs.

Our intermodal net revenues increased 3.8 percent in the third quarter of 2014 compared to the third quarter of 2013. The increase in net revenues was primarily driven by increased operational efficiency and customer pricing.

Our ocean transportation net revenues increased 15.5 percent in the third quarter of 2014 compared to the third quarter of 2013. The increase in net revenues was primarily due to increased volumes and net revenue margin.

Our air transportation net revenues increased 13.1 percent in the third quarter of 2014 compared to the third quarter of 2013. The increase was primarily due to increased volumes and net revenue margin.

Our customs net revenues increased 24.4 percent in the third quarter of 2014 compared to the third quarter of 2013. The increase was due to increased rates and transaction volumes.

Our other logistics services revenues increased 18.5 percent in the third quarter of 2014 compared to the third quarter of 2013. The increase was primarily due to increases in transportation management services.

Sourcing net revenues decreased 2.5 percent in the third quarter of 2014 compared to the third quarter of 2013. We continued to experience volume and net revenue declines from a large customer.

Payment services net revenues increased 36.1 percent in the third quarter of 2014 compared to the third quarter of 2013. This was primarily due to a rate increase on our cash advance option in July 2014.

For the third quarter, operating expenses increased 13.0 percent to $324.2 million in 2014 from $287.0 million in 2013. Operating expenses as a percentage of net revenues decreased slightly to 61.5 percent in the third quarter of 2014 from 61.9 percent in the third quarter of 2013.

For the third quarter, personnel expenses increased 19.7 percent to $244.6 million in 2014 from $204.4 million in 2013. This was primarily due to an increase in the expenses related to incentive plans that are designed to keep expenses variable with changes in net revenues and profitability and an increase in our average headcount of 1.6 percent.

For the third quarter, other selling, general, and administrative expenses decreased 3.6 percent to $79.6 million in 2014 from $82.6 million in 2013. This was primarily due to a decrease in travel and claims expenses.

For the third quarter, interest and other expense was $6.2 million in 2014 compared to $2.6 million in the third quarter of 2013. This increase was primarily driven by the interest expense on our notes payable, issued during the third quarter of 2013 and used to fund share repurchases.

For the third quarter, our effective income tax rate was 36.6 percent in 2014 compared to 38.0 percent in the third quarter of 2013. The lower rate was primarily due to foreign tax credits, which increased earnings per share approximately $0.03 for the third quarter.

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 46,000 active customers through a network of 282 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 63,000 transportation providers worldwide.

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C.H. Robinson Worldwide, Inc.

October 28, 2014

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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; the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date. All remarks made during our financial results conference call will be current at the time of the call and we undertake no obligation to update the replay.

Conference Call Information:

C.H. Robinson Worldwide Third Quarter 2014 Earnings Conference Call

Wednesday, October 29, 2014 8:30 a.m. Eastern Time

The call will be limited to 60 minutes, including questions and answers. We invite call participants to submit questions in advance of the conference call and we will respond to as many of the questions as we can in the time allowed. To submit your question(s) in advance of the call, please email tim.gagnon@chrobinson.com.

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: 888-523-1228

International callers dial +1-719-325-2455

Callers should reference the conference ID, which is 8557362

Webcast replay available through Investor Relations link at www.chrobinson.com

Telephone audio replay available until 11:30 a.m. Eastern Time on November 5: 800-203-1112;

passcode: 8557362#

International callers dial +1-719-457-0820

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C.H. Robinson Worldwide, Inc.

October 28, 2014

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands, except per share data)


	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Revenues:
Transportation	$	3,069,056		$	2,880,901		$	8,911,683		$	8,302,160
Sourcing		393,980			432,373			1,190,604			1,287,036
Payment Services		4,326			3,391			10,578			9,998

Total revenues		3,467,362			3,316,665			10,112,865			9,599,194

Costs and expenses:
Purchased transportation and related services		2,575,069			2,450,923			7,506,265			7,019,785
Purchased products sourced for resale		364,179			401,820			1,099,063			1,185,885
Purchased payment services		550			616			1,701			1,894
Personnel expenses		244,621			204,388			703,904			623,042
Other selling, general, and administrative expenses		79,606			82,563			241,242			241,051

Total costs and expenses		3,264,025			3,140,310			9,552,175			9,071,657

Income from operations		203,337			176,355			560,690			527,537

Interest and other expense		(6,204	)		(2,635	)		(18,587	)		(3,284	)

Income before provision for income taxes		197,133			173,720			542,103			524,253
Provision for income taxes		72,152			65,983			205,339			201,301

Net income	$	124,981		$	107,737		$	336,764		$	322,952

Net income per share (basic)	$	0.85		$	0.69		$	2.28		$	2.03
Net income per share (diluted)	$	0.85		$	0.69		$	2.28		$	2.03
Weighted average shares outstanding (basic)		146,646			156,924			147,661			158,820
Weighted average shares outstanding (diluted)		146,856			157,044			147,819			158,884

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C.H. Robinson Worldwide, Inc.

October 28, 2014

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CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)


	September 30, 2014		December 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	127,716	$	162,047
Receivables, net		1,640,634		1,449,581
Other current assets		56,366		52,857

Total current assets		1,824,716		1,664,485
Property and equipment, net		156,936		160,703
Intangible and other assets		960,132		977,630

Total Assets	$	2,941,784	$	2,802,818

Liabilities and stockholders’ investment
Current liabilities:
Accounts payable and outstanding checks	$	822,129	$	755,007
Accrued compensation		108,153		85,247
Accrued income taxes		13,961		11,681
Other accrued expenses		39,959		43,046
Current portion of debt		345,000		375,000

Total current liabilities		1,329,202		1,269,981
Noncurrent income taxes payable		21,994		21,584
Deferred tax liabilities		71,653		70,618
Long-term debt		500,000		500,000
Other long term liabilities		218		911

Total liabilities		1,923,067		1,863,094
Total stockholders’ investment		1,018,717		939,724

Total liabilities and stockholders’ investment	$	2,941,784	$	2,802,818

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C.H. Robinson Worldwide, Inc.

October 28, 2014

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands, except operational data)


	Nine months ended September 30,
	2014			2013
Operating activities:
Net income	$	336,764		$	322,952
Stock-based compensation		33,561			10,856
Depreciation and amortization		43,442			42,052
Provision for doubtful accounts		15,917			10,323
Deferred income taxes		901			28,696
Other		(1,280	)		232
Changes in operating elements, net of acquisitions:
Receivables		(206,970	)		(197,468	)
Prepaid expenses and other		(4,081	)		(10,465	)
Other non-current assets		270			—
Accounts payable and outstanding checks		67,125			103,226
Accrued compensation and profit-sharing contribution		23,058			(23,023	)
Accrued income taxes		2,690			(94,027	)
Other accrued liabilities		(6,075	)		(10,425	)

Net cash provided by operating activities		305,322			182,929
Investing activities:
Purchases of property and equipment		(19,291	)		(27,861	)
Purchases and development of software		(5,845	)		(6,375	)
Acquisitions, net of cash		—			19,126
Other		428			221

Net cash used for investing activities		(24,708	)		(14,889	)
Financing activities:
Borrowings on line of credit		3,498,000			3,054,023
Repayments on line of credit		(3,528,000	)		(2,957,669	)
Borrowings of long-term debt		—			500,000
Payment of contingent purchase price		—			(927	)
Net repurchases of common stock		(127,106	)		(700,631	)
Excess tax benefit on stock-based compensation		6,202			26,180
Cash dividends		(157,590	)		(167,130	)

Net cash used for financing activities		(308,494	)		(246,154	)
Effect of exchange rates on cash		(6,451	)		(2,182	)

Net change in cash and cash equivalents		(34,331	)		(80,296	)
Cash and cash equivalents, beginning of period		162,047			210,019

Cash and cash equivalents, end of period	$	127,716		$	129,723


	As of September 30,
	2014			2013
Operational Data:
Employees		11,542			11,533
Branches		282			285

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C. H. ROBINSON WORLDWIDE, INC. - FORM 8-K - EX-99.1 - PRESS RELEASE - October 28, 2014

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C. H. ROBINSON WORLDWIDE, INC. Reports