CHRW CH Robinson Worldwide Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 29, 2014

 

 

C.H. ROBINSON WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

 

 

Commission File Number: 000-23189

 

Delaware		41-1883630
(State or other jurisdiction of incorporation)		(IRS Employer Identification No.)

14701 Charlson Road, Eden Prairie, MN 55347

(Address of principal executive offices, including zip code)

(952) 937-8500

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02. Results of Operations and Financial Condition.

The following information is being “furnished” in accordance with General Instruction B.2 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Furnished herewith as Exhibits 99.1 and 99.2, respectively, and incorporated by reference herein are the text of C.H. Robinson Worldwide, Inc.’s announcement regarding its financial results for the quarter ended June 30, 2014 and its earnings conference call slides.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

99.1		Press Release dated July 29, 2014 of C.H. Robinson Worldwide, Inc.
99.2		Earnings conference call slides dated July 30, 2014.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: July 29, 2014

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EXHIBIT INDEX

 

99.1		Press Release dated July 29, 2014 of C.H. Robinson Worldwide, Inc.
99.2		Earnings conference call slides dated July 30, 2014.

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 SECOND QUARTER RESULTS

MINNEAPOLIS, July 29, 2014 – C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended June 30, 2014. Summarized financial results for the quarter ended June 30 are as follows (dollars in thousands, except per share data):

 

		Three months ended June 30,												Six months ended June 30,
		2014				2013				% change				2014				2013				% change
Total revenues		$	3,502,918			$	3,288,262				6.5	%		$	6,645,503			$	6,282,529				5.8	%
Net revenues:
Transportation
Truckload		$	305,561			$	264,335				15.6	%		$	575,398			$	532,939				8.0	%
LTL			67,376				60,711				11.0	%			127,514				119,202				7.0	%
Intermodal			10,863				9,920				9.5	%			19,803				19,021				4.1	%
Ocean			50,486				49,124				2.8	%			94,098				91,612				2.7	%
Air			21,747				20,202				7.6	%			39,201				36,970				6.0	%
Customs			10,312				9,769				5.6	%			19,644				18,375				6.9	%
Other logistics services			17,207				17,084				0.7	%			35,773				34,278				4.4	%
Total transportation			483,552				431,145				12.2	%			911,431				852,397				6.9	%
Sourcing			34,894				38,752				-10.0	%			61,740				70,598				-12.5	%
Payment services			2,591				2,705				-4.2	%			5,101				5,329				-4.3	%
Total net revenues			521,037				472,602				10.2	%			978,272				928,324				5.4	%
Operating expenses			320,655				290,126				10.5	%			620,919				577,142				7.6	%
Operating income			200,382				182,476				9.8	%			357,353				351,182				1.8	%
Net income		$	118,596			$	111,872				6.0	%		$	211,783			$	215,215				-1.6	%
Diluted EPS		$	0.80			$	0.70				14.3	%		$	1.43			$	1.34				6.7	%

Our truckload net revenues increased 15.6 percent in the second quarter of 2014 compared to the second quarter of 2013. Our truckload volumes increased approximately four percent in the second quarter of 2014 compared to the second quarter of 2013. Our North American truckload volumes increased approximately three percent. Our truckload net revenue margin increased in the second quarter of 2014 compared to the second 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 second quarter of 2014 compared to the second quarter of 2013. In North America, our truckload transportation costs increased approximately nine percent, excluding the estimated impacts of the change in fuel.

 

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C.H. Robinson Worldwide, Inc.

July 29, 2014

Page 2

 

Our less-than-truckload (“LTL”) net revenues increased 11.0 percent in the second quarter of 2014 compared to the second quarter of 2013. The increase was driven by an eight percent increase in total shipments and a slight increase in net revenue margin.

Our intermodal net revenues increased 9.5 percent in the second quarter of 2014 compared to the second quarter of 2013. This increase was primarily driven by improved purchased transportation costs, a change in business mix, and a volume increase of one percent. Intermodal volumes were adversely impacted by railroad service levels.

Our ocean transportation net revenues increased 2.8 percent in the second quarter of 2014 compared to the second quarter of 2013. This increase in net revenues was primarily due to volume increases partially offset by a decrease in net revenue margin.

Our air transportation net revenues increased 7.6 percent in the second quarter of 2014 compared to the second quarter of 2013. This increase was primarily due to increased volumes and an increase in net revenue margin.

Our customs net revenues increased 5.6 percent in the second quarter of 2014 compared to the second quarter of 2013. This increase was primarily due to higher transaction volumes.

Our other logistics services revenues increased 0.7 percent in the second quarter of 2014 compared to the second quarter of 2013. This increase was primarily due to increases in transportation management services, partially offset by declines in other logistics services.

Sourcing net revenues decreased 10.0 percent in the second quarter of 2014 compared to the second quarter of 2013. We continued to experience volume and net revenue declines from a large customer. We expect these declines with this large customer to continue throughout 2014. Volumes were also negatively impacted by the west coast drought which affected product availability.

For the second quarter, operating expenses increased 10.5 percent to $320.7 million in 2014 from $290.1 million in 2013. Operating expenses as a percentage of net revenues increased slightly to 61.5 percent in the second quarter of 2014 from 61.4 percent in the second quarter of 2013.

For the second quarter, personnel expenses increased 16.0 percent to $239.0 million in 2014 from $206.0 million. 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 approximately four percent.

For the second quarter, other selling, general, and administrative expenses decreased 2.9 percent to $81.7 million in 2014 from $84.1 million in 2013. This was due to a decrease in claims and travel expenses, partially offset by an increase in the provision for doubtful accounts. In the second quarter of 2013, we recorded a $5.0 million charge related to the settlement of a contingent auto liability claim.

For the second quarter, interest and other expense was an expense of $6.3 million in 2014 compared to an expense of $589,000 in the second 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 the accelerated share repurchase agreements.

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.

July 29, 2014

Page 3

 

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 Second Quarter 2014 Earnings Conference Call

Wednesday, July 30, 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: 888-740-6137

International callers dial +1-913-312-1495

Callers should reference the conference ID, which is 5181255

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

Telephone audio replay available until 11:30 a.m. Eastern Time on August 6: 800-203-1112;

passcode: 5181255#

 

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C.H. Robinson Worldwide, Inc.

July 29, 2014

Page 4

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands, except per share data)

 

		Three months ended June 30,								Six months ended June 30,
		2014				2013				2014				2013
Revenues:
Transportation		$	3,038,923			$	2,818,077			$	5,842,627			$	5,421,259
Sourcing			460,816				466,811				796,624				854,663
Payment Services			3,179				3,374				6,252				6,607
Total revenues			3,502,918				3,288,262				6,645,503				6,282,529
Costs and expenses:
Purchased transportation and related services			2,555,371				2,386,932				4,931,196				4,568,862
Purchased products sourced for resale			425,922				428,059				734,884				784,065
Purchased payment services			588				669				1,151				1,278
Personnel expenses			238,986				206,009				459,283				418,654
Other selling, general, and administrative expenses			81,669				84,117				161,636				158,488
Total costs and expenses			3,302,536				3,105,786				6,288,150				5,931,347
Income from operations			200,382				182,476				357,353				351,182
Interest and other expense			(6,252	)			(589	)			(12,383	)			(649	)
Income before provision for income taxes			194,130				181,887				344,970				350,533
Provision for income taxes			75,534				70,015				133,187				135,318
Net income		$	118,596			$	111,872			$	211,783			$	215,215
Net income per share (basic)		$	0.80			$	0.70			$	1.43			$	1.34
Net income per share (diluted)		$	0.80			$	0.70			$	1.43			$	1.34
Weighted average shares outstanding (basic)			147,826				159,818				148,167				160,137
Weighted average shares outstanding (diluted)			147,974				159,917				148,293				160,198

 

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C.H. Robinson Worldwide, Inc.

July 29, 2014

Page 5

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

 

		June 30, 2014				December 31, 2013
Assets
Current assets:
Cash and cash equivalents		$	144,215			$	162,047
Receivables, net			1,699,787				1,449,581
Other current assets			65,199				52,857
Total current assets			1,909,201				1,664,485
Property and equipment, net			160,268				160,703
Intangible and other assets			967,637				977,630
Total Assets		$	3,037,106			$	2,802,818
Liabilities and stockholders’ investment
Current liabilities:
Accounts payable and outstanding checks		$	876,113			$	755,007
Accrued compensation			78,917				85,247
Accrued income taxes			25,682				11,681
Other accrued expenses			50,286				43,046
Current portion of debt			400,000				375,000
Total current liabilities			1,430,998				1,269,981
Noncurrent income taxes payable			20,281				21,584
Deferred tax liabilities			75,502				70,618
Long-term debt			500,000				500,000
Other long term liabilities			224				911
Total liabilities			2,027,005				1,863,094
Total stockholders’ investment			1,010,101				939,724
Total liabilities and stockholders’ investment		$	3,037,106			$	2,802,818

 

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C.H. Robinson Worldwide, Inc.

July 29, 2014

Page 6

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands, except operational data)

 

		Six months ended June 30,
		2014				2013
Operating activities:
Net income		$	211,783			$	215,215
Stock-based compensation			16,423				9,885
Depreciation and amortization			29,349				27,952
Provision for doubtful accounts			11,128				5,635
Deferred income taxes			5,894				25,993
Other			(1,348	)			143
Changes in operating elements
Receivables			(261,334	)			(198,669	)
Prepaid expenses and other			(14,214	)			(12,146	)
Other non-current assets			270				—
Accounts payable and outstanding checks			121,109				100,481
Accrued compensation and profit-sharing contribution			(6,137	)			(35,277	)
Accrued income taxes			12,698				(69,631	)
Other accrued liabilities			2,747				(11,310	)
Net cash provided by operating activities			128,368				58,271
Investing activities:
Purchases of property and equipment			(14,860	)			(18,316	)
Purchases and development of software			(3,964	)			(4,261	)
Acquisitions, net of cash			—				19,126
Other			268				107
Net cash used for investing activities			(18,556	)			(3,344	)
Financing activities:
Borrowings on line of credit			2,435,000				2,134,023
Repayments on line of credit			(2,410,000	)			(2,022,017	)
Payment of contingent purchase price			—				(927	)
Net repurchases of common stock			(52,740	)			(134,043	)
Excess tax benefit on stock-based compensation			5,198				24,755
Cash dividends			(104,909	)			(113,031	)
Net cash used for financing activities			(127,451	)			(111,240	)
Effect of exchange rates on cash			(193	)			(3,689	)
Net change in cash and cash equivalents			(17,832	)			(60,002	)
Cash and cash equivalents, beginning of period			162,047				210,019
Cash and cash equivalents, end of period		$	144,215			$	150,017
		As of June 30,
		2014				2013
Operational Data:
Employees			11,645				11,297
Branches			282				276

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