Attached files
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| 8-K - FORM 8-K - C. H. ROBINSON WORLDWIDE, INC. | d916037d8k.htm |
| EX-99.1 - EX-99.1 - C. H. ROBINSON WORLDWIDE, INC. | d916037dex991.htm |
 Earnings Conference Call –
First Quarter 2015
April 28, 2015
John Wiehoff, Chairman & CEO
Chad Lindbloom, CFO & CIO
Tim Gagnon, Director, Investor Relations
Exhibit 99.2 |
 2
Safe Harbor Statement
Except for the historical information contained herein, the matters set forth in
this presentation and the accompanying earnings 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; changes to
our share repurchase activity; the impact of war on the economy; and other risks
and uncertainties detailed in our Annual and Quarterly Reports.
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 3
Results Q1 2015
Three months ended March 31
in thousands, except per share amounts
•
Total
revenue
impacted
by
the
decreased
fuel
prices
in
the
first
quarter
of 2015.
•
Freightquote added approximately 7 percentage points to our total
company net revenue growth in the first quarter.
2015
2014
% Change
Total revenues
$3,300,890
$3,142,585
5.0%
Total net revenues
$525,110
$457,235
14.8%
Income from operations
$181,925
$156,971
15.9%
Net income
$106,476
$93,187
14.3%
Earnings per share
(diluted)
$0.73
$0.63
15.9%
Weighted average shares
outstanding (diluted)
146,383
149,008
-1.8%
Average headcount
12,565
11,690
7.5%
Ending headcount
12,632
11,703
7.9% |
 4
Transportation Results Q1 2015
The
decrease
in
fuel
prices
increased
Transportation
net
revenue
margin
in
the
first quarter of 2015.
2015
2014
% Change
Total revenues
$2,947,257
$2,806,777
5.0%
Total net revenues
$495,145
$430,389
15.0%
Net revenue margin
16.8%
15.3%
9.6%
Three months ended March 31
TRANSPORTATION in thousands
TRANSPORTATION NET REVENUE MARGIN PERCENTAGE
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Q1
18.3%
20.2%
18.2%
22.6%
17.4%
17.2%
16.9%
16.2%
15.3%
16.8%
Q2
17.1%
17.9%
15.4%
20.6%
15.8%
16.2%
14.9%
15.3%
15.9%
Q3
17.5%
18.0%
15.9%
19.8%
16.6%
16.4%
15.6%
14.9%
16.1%
Q4
18.3%
17.7%
19.0%
18.3%
17.6%
16.3%
15.8%
15.0%
15.8%
Year
16.3%
17.8%
18.4%
17.0%
20.2%
16.8%
16.5%
15.8%
15.3% |
 5
Truckload Results Q1 2015
TRUCKLOAD NET REVENUES in thousands
North America
Truckload
Year over year change
*Pricing and cost measures exclude the estimated impact
of the change in fuel prices
Freightquote added approximately 3 percentage points to our truckload
net
revenue
growth
in
the
first
quarter
of
2015
when
compared
to
the
first
quarter of 2014.
North America truckload shipments increased approximately 6 percent in
the first quarter when compared to the first quarter of 2014. Approximately
half of this increase was due to the acquisition of Freightquote.
North America truckload net revenue margins increased in the first quarter
of 2015 when compared to the first quarter of 2014. This is largely the
result of the decrease in the price of fuel.
Quarter
Volume
6%
Approximate pricing*
6%
Approximate cost*
6%
Net revenue margin
$298,380
$272,347
9.6%
% Change
2015
2014
Three months ended March 31 |
 6
LTL Results Q1 2015
2015
2014
% Change
$85,370
$60,138
42.0%
Three months ended March 31
LTL NET REVENUES in thousands
LTL
Year over year change
Freightquote added approximately 34 percentage points to our LTL
net
revenue
growth
in
the
first
quarter
of
2015
when
compared
to
the
first
quarter of 2014.
Freightquote added approximately 19 percentage points to our LTL
volume growth in the first quarter of 2015 when compared to the first
quarter of 2014.
Net revenue margin increased in the first quarter of 2015 when
compared to the first quarter of 2014. This is primarily the result of a
change in our freight mix with more small customers from the
Freightquote business.
Quarter
Volume
28%
Pricing
Net revenue margin |
 7
Intermodal Results Q1 2015
Freightquote added approximately 10 percentage points to our
intermodal net revenue growth and to our intermodal volume
growth in the first quarter of 2015 when compared to the first
quarter of 2014.
The West Coast port delays negatively impacted intermodal
volumes in the first quarter of 2015.
2015
2014
% Change
$10,512
$8,940
17.6%
Three months ended March 31
INTERMODAL NET REVENUES in thousands
Year over year change
INTERMODAL
Quarter
Volume
14%
Pricing
Net revenue margin |
 8
Global Forwarding Results Q1 2015
Ocean, Air and Customs
2015
2014
% Change
Ocean
$50,190
$43,612
15.1%
Air
$20,639
$17,454
18.2%
Customs
$10,263
$9,332
10.0%
Three months ended March 31
NET REVENUES in thousands
Quarter
Volume
Pricing
Net revenue margin
OCEAN
Quarter
Volume
Pricing
Net revenue margin
AIR
Year over year change
Year over year change
Combined
Global
Forwarding
services
net
revenues
increased
15.2%
in
the
first quarter when compared to the first quarter of 2014.
Global Forwarding net revenue growth was driven by margin expansion and
volume growth.
The West Coast port delays had a favorable impact on our global forwarding
net revenues in the first quarter of 2015 as we assisted customers with
alternative solutions to their ocean shipment needs.
|
 9
Other Logistics Services Results Q1 2015
Other Logistics Services net revenues include transportation
managed services, warehousing and small parcel.
Freightquote added approximately 2 percentage points to our
Other
Logistics
Services
net
revenue
growth
in
the
first
quarter
of
2015.
Managed Services provided growth in Other Logistics Services.
2015
2014
% Change
$19,791
$18,566
6.6%
Three months ended March 31
NET REVENUES in thousands
|
 10
Sourcing Results Q1 2015
Net revenue growth driven by a 9% case volume increase across a
variety of commodities and services.
Q1 2015 net revenue margin is consistent with expectations.
Q1 2014 net revenue margin was low, due primarily to high
commodity prices caused by weather issues.
2015
2014
% Change
Total revenues
$353,633
$335,808
5.3%
Total net revenues
$29,965
$26,846
11.6%
Net revenue margin
8.5%
8.0%
5.3%
Three months ended March 31
SOURCING NET REVENUES in thousands
|
 11
in thousands
Summarized Income Statement
Personnel expense growth was primarily the result of increased
equity vesting, profit sharing expenses and personnel expenses
from the Freightquote acquisition.
Other SG&A expenses increased primarily due to our acquisition of
Freightquote, including amortization expenses of approximately
$1.9 million, and an increase in claims expenses.
Three months ended March 31
2015
2014
% Change
Total revenues
$3,300,890
$3,142,585
5.0%
Total net revenues
525,110
457,235
14.8%
Personnel expenses
255,144
220,297
15.8%
Selling, general & admin
88,041
79,967
10.1%
Total operating expenses
343,185
300,264
14.3%
Income from operations
$181,925
$156,971
15.9%
Percent of net revenue
34.6%
34.3%
0.9% |
 12
Three months ended March 31
March 31, 2015
Cash & investments
$135,783
Current assets
$1,846,915
Total assets
$3,309,224
Debt
$1,130,000
Stockholders investment
$1,058,020
CASH FLOW DATA
BALANCE SHEET DATA
Other Financial Information
in thousands
2015
2014
% Change
Net cash provided by operating activities
$100,395
$14,440
595.3%
Capital expenditures, net
$6,666
$12,595
-47.1%
•
Strong cash flow quarter
•
Total debt balance $1.130 billion
•
$500 million, 4.28% average coupon
•
$630 million drawn on new revolver,
1.30% current rate as of March 31,
2015 |
 13
in thousands
Capital Distribution
•
Capital returned to shareholders during the quarter
•
$57.3 million cash dividend
•
$47.3 million in cash for repurchase activity
•
593,100 shares
•
Average price $74.06 for shares repurchased
•
Target is to return approximately 90% of net income to shareholders
annually.
2010
2011
2012 (a)
2013
2014
Q1 2015
Net income
$387,026
$431,612
$447,007
$415,904
$449,711
$106,476
Capital distribution
Cash dividends paid
$168,902
$194,697
$219,313
$220,257
$215,008
$57,335
Share repurchases
157,381
250,274
255,849
807,449 (b)
176,645
47,254
Subtotal
$326,283
$444,971
$475,162
$1,027,706
$391,653
$104,589
Percent of net income
Cash dividends paid
44%
45%
49%
53%
48%
54%
Open market share repurchases
41%
58%
57%
194%
39%
44%
Subtotal
84%
103%
106%
247%
87%
98%
(a) 2012 Net Income is adjusted to excluded transaction related gains and expenses. A
reconciliation of adjusted results appears in Appendix A. 2012 Dividends exclude the
fifth dividend payment made during the year.
(b) Includes a $500 million accelerated share repurchase. |
 14
A look ahead
2015 outlook is progressing as planned
Margin comparisons become more challenging
April to date, total company net revenue has increased approximately 6 percent per
business day when compared to April to date in 2014
Areas of focus in 2015
Freightquote performance and integration is going well
Sales and account management initiatives
Technology development, process efficiency and network optimization
Acquiring and developing the industries best talent |
 15
Appendix A: 2012 Summarized Adjusted Income Statement
In thousands, except per share amounts
Twelve months ended December 31, 2012
1)
The
adjustment
to
personnel
consists
of
$33
million
of
incremental
vesting
expense
of
our
equity
awards
triggered
by
the
gain
on
the
divestiture
of
T-Chek. The balance consists of transaction related bonuses.
2)
The
adjustments
to
other
operating
expenses
reflect
fees
paid
to
third
parties
for:
a)
Investment
banking
fees
related
to
the
acquisition
of
Phoenix
b)
External legal and accounting fees related to the acquisitions of Apreo and
Phoenix and the divestiture of T-Chek. 3)
The adjustment to investment and other income reflects the gain from the
divestiture of T-Chek. 4)
The adjustment to diluted weighted average shares outstanding relates to the
shares of C.H. Robinson stock issued as consideration paid to the sellers
in the acquisition of Phoenix. 5)
The adjustment to diluted weighted average shares outstanding relates to the
additional vesting of performance-based restricted stock as a result of
the gain on sale recognized from the divestiture of T-Chek.
2012 Actual
Non-recurring
Acquisition Impacts
Non-recurring
Divestiture Impacts
Adjusted
Total net revenues
$1,717,571
$1,717,571
Personnel expenses (1)
766,006
-385
-34,207
731,414
Other operating expenses (2)
276,245
-10,225
-379
265,641
Total operating expenses
1,042,251
-10,610
-34,586
997,055
Income from operations
675,320
10,610
34,586
720,516
Investment & other income (3)
283,142
-281,551
1,591
Income before taxes
958,462
10,610
-246,965
722,107
Provision for income taxes
364,658
2,745
-92,303
275,100
Net income
$593,804
7,865
-$154,662
$447,007
Net income per share (diluted)
3.67
2.76
Weighted average shares (diluted)
161,946
185 (4)
92 (5)
161,669
To assist investors in understanding our financial performance, we supplement the
financial results that are generated in accordance with the accounting
principles generally accepted in the United States, or GAAP, with non-GAAP financial measures, including non-GAAP operating expenses,
non-GAAP income from operations, non-GAAP net income and non-GAAP
diluted net income per share. We believe that these non-GAAP measures
provide meaningful insight into our operating performance excluding certain
event-specific charges, and provide an alternative perspective of our results
of operations. We use non-GAAP measures to assess our operating performance for
the quarter. Management believes that these non-GAAP financial measures
reflect an additional way of analyzing aspects of our ongoing operations that, when viewed with our GAAP results, provides a more complete
understanding of the factors and trends affecting our business.
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