C.H. Robinson Reports First Quarter Results

MINNEAPOLIS--()--C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended March 31, 2016. Summarized financial results are as follows (dollars in thousands, except per share data):

  Three months ended March 31,
    %
2016   2015   change
 
Total revenues $ 3,073,943 $ 3,300,890 -6.9 %

Net revenues:

Transportation
Truckload 321,684 298,380 7.8 %
LTL 91,293 85,370 6.9 %
Intermodal 9,264 10,512 -11.9 %
Ocean 58,669 50,190 16.9 %
Air 18,409 20,639 -10.8 %
Customs 10,724 10,263 4.5 %
Other logistics services   24,023     19,791 21.4 %
Total transportation 534,066 495,145 7.9 %
Sourcing   29,269     29,965 -2.3 %
Total net revenues 563,335 525,110 7.3 %
 

Operating expenses

 

364,383

   

343,185

6.2

%

Operating income 198,952 181,925 9.4 %
Net income $ 118,963   $ 106,476 11.7 %
Diluted EPS $ 0.83 $ 0.73 13.7 %
 

Our truckload net revenues increased 7.8 percent in the first quarter of 2016 compared to the first quarter of 2015. Our total truckload volumes increased approximately three percent in the first quarter of 2016. North American truckload volumes increased approximately four percent in the first quarter of 2016. Our truckload net revenue margin increased in the first quarter of 2016 compared to the first quarter of 2015, due primarily to lower transportation costs, excluding fuel. Additionally, the lower cost of fuel contributed to an increase in truckload net revenue margin. In North America, excluding the estimated impacts of the change in fuel, our average truckload rate per mile charged to our customers decreased approximately five percent in the first quarter of 2016 compared to the first quarter of 2015. In North America, our truckload transportation costs decreased approximately seven percent, excluding the estimated impacts of the change in fuel. These decreases were largely the result of available capacity in the market and a change in the mix of our business.

Our less-than-truckload (“LTL”) net revenues increased 6.9 percent in the first quarter of 2016 compared to the first quarter of 2015. LTL volumes increased approximately 10 percent in the first quarter of 2016 compared to the first quarter of 2015. Net revenue margin increased in the first quarter of 2016 compared to the first quarter of 2015.

Our intermodal net revenues decreased 11.9 percent in the first quarter of 2016 compared to the first quarter of 2015. During the first quarter of 2016, intermodal opportunities were negatively impacted by the lower cost truck market.

Our ocean transportation net revenues increased 16.9 percent in the first quarter of 2016 compared to the first quarter of 2015. The increase in net revenues was primarily due to increased net revenue margin and higher volumes.

Our air transportation net revenues decreased 10.8 percent in the first quarter of 2016 compared to the first quarter of 2015. The decrease was primarily due to lower prices, partially offset by margin expansion and volume increases.

Our customs net revenues increased 4.5 percent in the first quarter of 2016 compared to the first quarter of 2015. The increase was due to an increase in transaction volumes.

Our other logistics services revenues, which includes managed services, warehousing, and small parcel, increased 21.4 percent in the first quarter of 2016 compared to the first quarter of 2015 primarily from volume growth in managed services.

Sourcing net revenues decreased 2.3 percent in the first quarter of 2016 compared to the first quarter of 2015. This decrease was primarily due to an increase in product costs caused by adverse weather effects, partially offset by an increase in case volumes.

For the first quarter, operating expenses increased 6.2 percent to $364.4 million in 2016 from $343.2 million in 2015. Operating expenses as a percentage of net revenues decreased to 64.7 percent in the first quarter of 2016 from 65.4 percent in the first quarter of 2015.

For the first quarter, personnel expenses increased 8.8 percent to $277.5 million in 2016 from $255.1 million in 2015. For the first quarter, our average headcount grew 5.5 percent compared to the first quarter of 2015. Additionally, we recognized additional payroll tax expense in the first quarter of 2016 related to the delivery of previously vested restricted equity awards.

For the first quarter, other selling, general, and administrative expenses decreased 1.3 percent to $86.9 million in 2016 from $88.0 million in 2015. This decrease was primarily due to a decrease in the provision for doubtful accounts, partially offset by an increase in travel expenses.

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 110,000 active customers through a network of 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 68,000 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; 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 First Quarter 2016 Earnings Conference Call
Wednesday, April 27, 2016 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: 800-946-0716
International callers dial +1-719-325-2312
Callers should reference the conference ID, which is 4928630
Webcast replay available through Investor Relations link at www.chrobinson.com
Telephone audio replay available until 11:30 a.m. Eastern Time on May 4, 2016: 888-203-1112;
passcode: 4928630#
International callers dial +1-719-457-0820

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except per share data)
 
  Three months ended
March 31,
2016   2015
 
Revenues:
Transportation $ 2,713,688 $ 2,947,257
Sourcing   360,255     353,633  
Total revenues   3,073,943     3,300,890  
Costs and expenses:
Purchased transportation and related services 2,179,622 2,452,112
Purchased products sourced for resale 330,986 323,668
Personnel expenses 277,497 255,144
Other selling, general, and administrative expenses   86,886     88,041  
Total costs and expenses   2,874,991     3,118,965  
 
Income from operations   198,952     181,925  
 
Interest and other expense   (8,772 )   (9,605 )
 
Income before provision for income taxes 190,180 172,320
Provision for income taxes   71,217     65,844  
Net income $ 118,963   $ 106,476  
 
Net income per share (basic) $ 0.83 $ 0.73
Net income per share (diluted) $ 0.83 $ 0.73
 
Weighted average shares outstanding (basic) 143,525 146,204
Weighted average shares outstanding (diluted) 143,658 146,383
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
 
  March 31,   December 31,
2016 2015
Assets
Current assets:
Cash and cash equivalents $ 179,406 $ 168,229
Receivables, net 1,463,240 1,505,620
Other current assets   63,070   56,849
Total current assets 1,705,716 1,730,698
 
Property and equipment, net 195,920 190,874
Intangible and other assets   1,260,609   1,262,786
Total assets $ 3,162,245 $ 3,184,358
 
Liabilities and stockholders’ investment
Current liabilities:
Accounts payable and outstanding checks $ 761,085 $ 783,883
Accrued compensation 61,246 146,666
Accrued income taxes 32,589 12,573
Other accrued expenses 47,135 55,475
Current portion of debt   470,000   450,000

Total current liabilities

1,372,055 1,448,597
 
Noncurrent income taxes payable 18,523 19,634
Deferred tax liabilities 79,653 65,460
Long-term debt 500,000 500,000
Other long term liabilities   208   217
Total liabilities 1,970,439 2,033,908
 
Total stockholders’ investment   1,191,806   1,150,450
Total liabilities and stockholders’ investment $ 3,162,245 $ 3,184,358
 
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands, except operational data)
 
  Three months ended
March 31,
2016   2015
Operating activities:
Net income $ 118,963 $ 106,476
Stock-based compensation 15,179 15,336
Depreciation and amortization 16,875 16,243
Provision for doubtful accounts 85 3,991
Deferred income taxes 15,350 426
Other 180 429
Changes in operating elements, net of acquisitions:
Receivables 42,295 (27,599 )
Prepaid expenses and other (7,378 ) (12,639 )
Other non-current assets - 1,435
Accounts payable and outstanding checks (22,783 ) 21,105
Accrued compensation and profit-sharing contribution (84,431 ) (64,709 )
Accrued income taxes 18,905 48,390
Other accrued liabilities   (9,090 )   (8,489 )
Net cash provided by operating activities 104,150 100,395
 
Investing activities:
Purchases of property and equipment (13,121 ) (3,895 )
Purchases and development of software (4,704 ) (2,771 )
Restricted cash - 359,388
Acquisitions, net of cash - (369,143 )
Other   (770 )   462  
Net cash used for investing activities (18,595 ) (15,959 )
 
Financing activities:
Borrowings on line of credit 1,480,000 2,025,000
Repayments on line of credit (1,460,000 ) (2,000,000 )
Net repurchases of common stock (46,529 ) (40,340 )
Excess tax benefit on stock-based compensation 13,827 4,842
Cash dividends   (63,888 )   (57,335 )
Net cash used for financing activities (76,590 ) (67,833 )
Effect of exchange rates on cash   2,212     (9,760 )
 
Net change in cash and cash equivalents 11,177 6,843
Cash and cash equivalents, beginning of period   168,229     128,940  
Cash and cash equivalents, end of period $ 179,406   $ 135,783  
 
As of March 31,
2016 2015
Operational Data:
Employees 13,343 12,632
 

Contacts

C.H. Robinson Worldwide, Inc.
Andrew Clarke, Chief Financial Officer, 952-683-3474
or
Tim Gagnon, Director, Investor Relations, 952-683-5007

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C.H. Robinson Reports First Quarter Results

C.H. Robinson Worldwide, Inc.