C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW)
today reported financial results for the quarter ended September
30, 2022.
Third Quarter Key
Metrics:
- Gross profits increased 5.0% to $880.7 million and adjusted
gross profits(1) increased 5.1% to $887.2 million
- Income from operations decreased 7.5% to $287.6
million
- Adjusted operating margin(1) decreased 440 basis points to
32.4%
- Diluted earnings per share (EPS) decreased 3.8% to
$1.78
- Cash generated by operations improved by $699.0 million to
$625.5 million
(1) Adjusted gross profits and adjusted
operating margin are non-GAAP financial measures. The same factors
described in this release that impacted these non-GAAP measures
also impacted the comparable GAAP measures. Refer to page 11 for
further discussion and a GAAP to Non-GAAP reconciliation.
"On our second quarter earnings call in late July, I talked
about a deceleration in demand that we expected to see in the
second half of 2022 in three large verticals for freight, including
weakness in the retail market and further slowing in the housing
market. We’re now seeing those expectations play out, with slowing
freight demand and price declines in the freight forwarding and
surface transportation markets," said Bob Biesterfeld, President
and Chief Executive Officer of C.H. Robinson. "Throughout the
changes in the freight cycle, we have maintained our focus on
continuing to improve the customer and carrier experience and
scaling our digital processes and operating model to foster
sustainable, profitable growth."
"Today, we believe that we are entering a time of slower
economic growth where freight markets will continue to cool from
their peaks and will operate more reliably and at more normalized
rates, with fewer disruptions. These changes in market conditions,
coupled with many successful endeavors on our digital roadmap
directed at scaling our model to be more efficient, are allowing us
to take actions to structurally reduce our overall cost structure,"
stated Biesterfeld.
"Compared to our third quarter operating expenses, the actions
we’re currently taking are expected to generate $175 million of
gross cost savings on an annualized basis by the fourth quarter of
2023. Inflation, other headwinds such as annual pay increases and
tailwinds such as lower incentive compensation are expected to
result in net cost headwinds of $25 million in 2023 that we expect
will partially offset the gross savings, resulting in net
annualized cost reductions of $150 million by the fourth quarter of
next year."
Biesterfeld added, "We also continue to identify opportunities
to accelerate our enterprise-wide digital and product strategy. To
drive greater impact and speed of execution, Arun Rajan has been
promoted to the role of Chief Operating Officer. Since joining C.H.
Robinson in 2021, Arun has been a critical contributor to, and
strategic leader of, our digital and product strategy. Arun is
helping us think and act differently as we accelerate our pace of
digital transformation and scale our operating model. In his new
role, in addition to leading the product organization, Arun will
have expanded direct responsibility for the technology and
marketing organizations. Bringing these three critical functions
together under a single vision and leadership structure will allow
us to integrate these functions more deeply into single-threaded
teams and put the needs of our customers and carriers at the center
of our organizational design and ensure that we are positioned well
to meet their needs while accelerating the impacts across the
business units of C.H. Robinson. Arun's teams will work directly
with the business unit presidents to operationalize these
efforts."
Summary of Third Quarter Results
Compared to the Third Quarter of 2021
- Total revenues decreased 4.0% to $6.0 billion, driven
primarily by lower ocean and air pricing, partially offset by
higher pricing in less-than-truckload ("LTL") and truckload.
- Gross profits increased 5.0% to $880.7 million.
Adjusted gross profits increased 5.1% to $887.2 million,
primarily driven by higher adjusted gross profit per transaction in
truckload, partially offset by the lower adjusted gross profit per
transaction in ocean.
- Operating expenses increased 12.4% to $599.6 million.
Personnel expenses increased 9.4% to $437.5 million,
primarily due to higher average employee headcount, which increased
13.0%. Selling, general and administrative ("SG&A")
expenses of $162.0 million increased 21.3%, primarily due to
increased legal settlements, higher purchased and contracted
services and increased travel expenses.
- Income from operations totaled $287.6 million, down 7.5%
due to the increase in operating expenses, partially offset by the
increase in adjusted gross profits. Adjusted operating
margin of 32.4% declined 440 basis points.
- Interest and other income/expense, net totaled $16.0
million of expense, consisting primarily of $20.8 million of
interest expense, which increased $7.7 million versus last year due
primarily to a higher average debt balance, partially offset by a
$5.2 million favorable impact from foreign currency revaluation and
realized foreign currency gains and losses.
- The effective tax rate in the quarter was 16.9% compared
to 16.0% in the third quarter last year.
- Net income totaled $225.8 million, down 8.6% from a year
ago. Diluted EPS of $1.78 decreased 3.8%.
Summary of Year-to-Date Results
Compared to 2021
- Total revenues increased 18.2% to $19.6 billion, driven
primarily by higher pricing across most of our services.
- Gross profits increased 23.0% to $2.8 billion.
Adjusted gross profits increased 23.1% to $2.8 billion,
primarily driven by higher adjusted gross profit per transaction
across most of our services.
- Operating expenses increased 14.7% to $1.7 billion.
Personnel expenses increased 15.3% to $1.3 billion,
primarily due to higher average employee headcount, which increased
14.0%, and higher incentive compensation costs. SG&A
expenses increased 13.0% to $426.6 million, primarily due to
increases in purchased and contracted services, legal settlements,
travel expenses, and warehouse expenses, partially offset by a
$25.3 million gain on the sale-leaseback of our Kansas City
regional center.
- Income from operations totaled $1.1 billion, up 38.8%
from last year, primarily due to the increase in adjusted gross
profits, partially offset by the increase in operating expenses.
Adjusted operating margin of 39.0% increased 440 basis
points.
- Interest and other income/expense, net totaled $57.5
million of expense, which primarily consisted of $52.3 million of
interest expense, which increased $14.3 million versus last year
due to a higher average debt balance. The year-to-date results also
included a $6.6 million unfavorable impact from foreign currency
revaluation and realized foreign currency gains and losses.
- The effective tax rate for the nine months was 19.2%
compared to 18.5% in the year-ago period.
- Net income totaled $844.3 million, up 37.5% from a year
ago. Diluted EPS of $6.50 increased 42.5%.
North American Surface Transportation
("NAST") Results
Summarized financial results of our NAST segment are as follows
(dollars in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Total revenues
$
4,002,461
$
3,814,988
4.9
%
$
12,264,396
$
10,611,892
15.6
%
Adjusted gross profits(1)
563,787
460,149
22.5
%
1,694,438
1,317,853
28.6
%
Income from operations
211,899
149,035
42.2
%
670,752
436,911
53.5
%
____________________________________________
(1) Adjusted gross profits is a non-GAAP
financial measure explained later in this release. The difference
between adjusted gross profits and gross profits is not
material.
Third quarter total revenues for the NAST segment totaled $4.0
billion, an increase of 4.9% over the prior year, primarily driven
by higher LTL and truckload pricing. NAST adjusted gross profits
increased 22.5% in the quarter to $563.8 million. Adjusted gross
profits in truckload increased 20.8% due to a 20.5% increase in
adjusted gross profit per shipment and a 0.5% increase in truckload
volume. Our average truckload linehaul rate per mile charged to our
customers, which excludes fuel surcharges, decreased approximately
13.0% in the quarter compared to the prior year, while truckload
linehaul cost per mile, excluding fuel surcharges, decreased
approximately 17.0%, resulting in a 15.5% increase in truckload
adjusted gross profit per mile. LTL adjusted gross profits
increased 22.7% versus the year-ago period, as adjusted gross
profit per order increased 24.5% and LTL volumes declined 1.5%.
Operating expenses increased 13.1% primarily due to increased
employee headcount, legal settlements, and technology expenses.
Income from operations increased 42.2% to $211.9 million, and
adjusted operating margin expanded 520 basis points to 37.6%. NAST
average employee headcount was up 10.8% in the quarter.
Global Forwarding
Results
Summarized financial results of our Global Forwarding segment
are as follows (dollars in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Total revenues
$
1,511,115
$
1,978,901
(23.6
)%
$
5,798,702
$
4,585,734
26.5
%
Adjusted gross profits(1)
248,433
310,898
(20.1
)%
894,724
763,952
17.1
%
Income from operations
85,953
165,155
(48.0
)%
421,148
363,956
15.7
%
____________________________________________
(1) Adjusted gross profits is a non-GAAP
financial measure explained later in this release. The difference
between adjusted gross profits and gross profits is not
material.
Third quarter total revenues for the Global Forwarding segment
decreased 23.6% to $1.5 billion, driven by lower pricing and
volumes in our ocean and air services, reflecting softening market
demand. Adjusted gross profits decreased 20.1% in the quarter to
$248.4 million. Ocean adjusted gross profits decreased 25.6%,
driven by a 24.0% decrease in adjusted gross profit per shipment
and a 2.5% decline in shipments. Adjusted gross profits in air
decreased 21.1%, driven by a 16.5% decrease in metric tons shipped
and a 5.5% decrease in adjusted gross profit per metric ton
shipped. Customs adjusted gross profits increased 9.5%, driven by a
5.5% increase in adjusted gross profit per transaction and a 4.0%
increase in transaction volume. Operating expenses increased 11.5%,
primarily driven by increased salaries and technology expenses.
Third quarter average employee headcount increased 13.4%. Income
from operations decreased 48.0% to $86.0 million, and adjusted
operating margin declined 1,850 basis points to 34.6% in the
quarter.
All Other and Corporate
Results
Total revenues and adjusted gross profits for Robinson Fresh,
Managed Services and Other Surface Transportation are summarized as
follows (dollars in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Total revenues
$
501,800
$
469,806
6.8
%
$
1,566,706
$
1,402,664
11.7
%
Adjusted gross profits(1):
Robinson Fresh
$
27,677
$
26,651
3.8
%
$
93,163
$
81,539
14.3
%
Managed Services
29,595
26,720
10.8
%
85,295
78,510
8.6
%
Other Surface Transportation
17,702
19,774
(10.5
)%
57,383
53,894
6.5
%
____________________________________________
(1) Adjusted gross profits is a non-GAAP
financial measure explained later in this release. The difference
between adjusted gross profits and gross profits is not
material.
Third quarter Robinson Fresh adjusted gross profits increased
3.8% to $27.7 million, driven by an increase in adjusted gross
profit per case, which is primarily related to integrated supply
chain and technology services. Managed Services adjusted gross
profits increased 10.8% in the quarter, due to growth in adjusted
gross profit per transaction. Other Surface Transportation adjusted
gross profits decreased 10.5% to $17.7 million, primarily due to a
7.3% decrease in Europe truckload adjusted gross profits.
Other Income Statement
Items
The third quarter effective tax rate was 16.9%, up from 16.0%
last year. We expect our 2022 full-year effective tax rate to be
near the low end of our previous guidance of 19% to 21%.
Interest and other income/expense, net totaled $16.0 million of
expense, consisting primarily of $20.8 million of interest expense,
which increased $7.7 million versus the third quarter of 2021 due
to a higher average debt balance, partially offset by a $5.2
million favorable impact from foreign currency revaluation and
realized foreign currency gains and losses.
Diluted weighted average shares outstanding in the quarter were
down 4.7% due primarily to share repurchases over the past twelve
months.
Cash Flow Generation and Capital
Distribution
Cash generated from operations totaled $625.5 million in the
third quarter, compared to $73.5 million cash used by operations in
the third quarter of 2021. The $699.0 million improvement was
primarily due to a $359.3 million sequential decrease in net
operating working capital in the third quarter of 2022, compared to
a $411.8 million sequential increase in the third quarter of 2021.
The decrease in net operating working capital in the third quarter
of 2022 resulted primarily from a $655.2 million sequential
decrease in accounts receivable and contract assets, compared to a
$295.9 million sequential decrease in total accounts payable and
accrued transportation expense.
In the third quarter of 2022, cash returned to shareholders
increased 156% versus last year to $606.7 million, with $535.7
million in repurchases of common stock and $71.0 million in cash
dividends.
Capital expenditures totaled $31.3 million in the quarter.
Capital expenditures for 2022 are expected to be at the high end of
our previous guidance of $110 million to $120 million.
Outlook
"As inflationary pressures weigh on consumer discretionary
spending and global economic growth, we continue to believe that
our global suite of services, our growing digital platform, our
responsive team of logistics experts, and our broad exposure to
different industry verticals and geographies, supported by our
resilient and flexible non-asset-based business model put us in a
position to continue delivering strong financial results,"
Biesterfeld stated. "But we also need to continue evolving our
organization to bring focus to our highest strategic priorities,
including keeping the needs of our customers and carriers at the
center of what we do and lowering our overall cost structure by
driving scale. The work that our team is executing on related to
scaling our digital processes and operating model, while working
backwards from the needs of our customers and carriers, is focused
on driving improvements in our customer and carrier experience, and
in turn, driving market share gains and growth. We're also focused
on improving productivity, which in turn reduces our long-term
operating costs and increases profits, leading to continued strong
returns to shareholders."
About C.H. Robinson
C.H. Robinson solves logistics problems for companies across the
globe and across industries, from the simple to the most complex.
With $28 billion in freight under management and 20 million
shipments annually, we are one of the world’s largest logistics
platforms. Our global suite of services accelerates trade to
seamlessly deliver the products and goods that drive the world’s
economy. With the combination of our multimodal transportation
management system and expertise, we use our information advantage
to deliver smarter solutions for our 100,000 customers and 85,000
contract carriers. Our technology is built by and for supply chain
experts to bring faster, more meaningful improvements to our
customers’ businesses. As a responsible global citizen, we are also
proud to contribute millions of dollars to support causes that
matter to our company, our Foundation and our employees. For more
information, visit us at www.chrobinson.com (Nasdaq: CHRW).
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; fuel price increases or decreases, or fuel shortages;
competition and growth rates within the global logistics industry;
freight levels and increasing costs and availability of truck
capacity or alternative means of transporting freight; risks
associated with significant disruptions in the transportation
industry; changes in relationships with existing contracted truck,
rail, ocean, and air carriers; changes in our customer base due to
possible consolidation among our customers; risks with reliance on
technology to operate our business; cyber-security related risks;
risks associated with operations outside of the United States; our
ability to identify or complete suitable acquisitions; our ability
to successfully integrate the operations of acquired companies with
our historic operations; risks associated with litigation,
including contingent auto liability and insurance coverage; risks
associated with the potential impact of changes in government
regulations; our ability to hire and retain a sufficient number of
qualified personnel; risks associated with the changes to income
tax regulations; risks associated with the produce industry,
including food safety and contamination issues; the impact of war
on the economy; changes to our capital structure; changes due to
catastrophic events including pandemics such as COVID-19; 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 2022 Earnings Conference
Call Wednesday, November 2, 2022; 8:30 a.m. Eastern Time
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: 877-269-7756 International callers dial
+1-201-689-7817
Adjusted Gross Profit by
Service Line
(in thousands)
This table of summary results presents our
service line adjusted gross profits on an enterprise basis. The
service line adjusted gross profits in the table differ from the
service line adjusted gross profits discussed within the segments
as our segments have revenues from multiple service lines.
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Adjusted gross profits(1):
Transportation
Truckload
$
398,418
$
333,067
19.6
%
$
1,214,465
$
941,117
29.0
%
LTL
162,130
132,482
22.4
%
482,740
383,903
25.7
%
Ocean
160,122
214,926
(25.5
)%
609,543
501,422
21.6
%
Air
47,831
60,552
(21.0
)%
166,136
159,503
4.2
%
Customs
27,881
25,466
9.5
%
83,196
75,201
10.6
%
Other logistics services
65,441
53,018
23.4
%
182,638
158,450
15.3
%
Total transportation
861,823
819,511
5.2
%
2,738,718
2,219,596
23.4
%
Sourcing
25,371
24,681
2.8
%
86,285
76,152
13.3
%
Total adjusted gross profits
$
887,194
$
844,192
5.1
%
$
2,825,003
$
2,295,748
23.1
%
____________________________________________
(1) Adjusted gross profits is a non-GAAP
financial measure explained later in this release. The difference
between adjusted gross profits and gross profits is not
material.
GAAP to Non-GAAP
Reconciliation
(unaudited, in thousands)
Our adjusted gross profit is a non-GAAP
financial measure. Adjusted gross profit is calculated as gross
profit excluding amortization of internally developed software
utilized to directly serve our customers and contracted carriers.
We believe adjusted gross profit is a useful measure of our ability
to source, add value, and sell services and products that are
provided by third parties, and we consider adjusted gross profit to
be a primary performance measurement. Accordingly, the discussion
of our results of operations often focuses on the changes in our
adjusted gross profit. The reconciliation of gross profit to
adjusted gross profit is presented below (in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Revenues:
Transportation
$
5,724,364
$
5,999,901
(4.6
)%
$
18,718,357
$
15,800,576
18.5
%
Sourcing
291,012
263,794
10.3
%
911,447
799,714
14.0
%
Total revenues
6,015,376
6,263,695
(4.0
)%
19,629,804
16,600,290
18.2
%
Costs and expenses:
Purchased transportation and related
services
4,862,541
5,180,390
(6.1
)%
15,979,639
13,580,980
17.7
%
Purchased products sourced for resale
265,641
239,113
11.1
%
825,162
723,562
14.0
%
Direct internally developed software
amortization
6,457
5,152
25.3
%
18,831
14,601
29.0
%
Total direct expenses
5,134,639
5,424,655
(5.3
)%
16,823,632
14,319,143
17.5
%
Gross profit
$
880,737
$
839,040
5.0
%
$
2,806,172
$
2,281,147
23.0
%
Plus: Direct internally developed software
amortization
6,457
5,152
25.3
%
18,831
14,601
29.0
%
Adjusted gross profit
$
887,194
$
844,192
5.1
%
$
2,825,003
$
2,295,748
23.1
%
Our adjusted operating margin is a
non-GAAP financial measure calculated as operating income divided
by adjusted gross profit. We believe adjusted operating margin is a
useful measure of our profitability in comparison to our adjusted
gross profit which we consider a primary performance metric as
discussed above. The comparison of operating margin to adjusted
operating margin is presented below:
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Total revenues
$
6,015,376
$
6,263,695
(4.0
)%
$
19,629,804
$
16,600,290
18.2
%
Income from operations
287,609
310,769
(7.5
)%
1,102,748
794,702
38.8
%
Operating margin
4.8
%
5.0
%
(20) bps
5.6
%
4.8
%
80 bps
Adjusted gross profit
$
887,194
$
844,192
5.1
%
$
2,825,003
$
2,295,748
23.1
%
Income from operations
287,609
310,769
(7.5
)%
1,102,748
794,702
38.8
%
Adjusted operating margin
32.4
%
36.8
%
(440) bps
39.0
%
34.6
%
440 bps
Condensed Consolidated
Statements of Income
(unaudited, in thousands, except
per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
% change
2022
2021
% change
Revenues:
Transportation
$
5,724,364
$
5,999,901
(4.6
)%
$
18,718,357
$
15,800,576
18.5
%
Sourcing
291,012
263,794
10.3
%
911,447
799,714
14.0
%
Total revenues
6,015,376
6,263,695
(4.0
)%
19,629,804
16,600,290
18.2
%
Costs and expenses:
Purchased transportation and related
services
4,862,541
5,180,390
(6.1
)%
15,979,639
13,580,980
17.7
%
Purchased products sourced for resale
265,641
239,113
11.1
%
825,162
723,562
14.0
%
Personnel expenses
437,545
399,880
9.4
%
1,295,670
1,123,616
15.3
%
Other selling, general, and administrative
expenses
162,040
133,543
21.3
%
426,585
377,430
13.0
%
Total costs and expenses
5,727,767
5,952,926
(3.8
)%
18,527,056
15,805,588
17.2
%
Income from operations
287,609
310,769
(7.5
)%
1,102,748
794,702
38.8
%
Interest and other income/expense, net
(15,972
)
(16,662
)
(4.1
)%
(57,541
)
(41,419
)
38.9
%
Income before provision for income
taxes
271,637
294,107
(7.6
)%
1,045,207
753,283
38.8
%
Provision for income taxes
45,839
47,054
(2.6
)%
200,876
139,136
44.4
%
Net income
$
225,798
$
247,053
(8.6
)%
$
844,331
$
614,147
37.5
%
Net income per share (basic)
$
1.81
$
1.87
(3.2
)%
$
6.60
$
4.61
43.2
%
Net income per share (diluted)
$
1.78
$
1.85
(3.8
)%
$
6.50
$
4.56
42.5
%
Weighted average shares outstanding
(basic)
124,980
131,845
(5.2
)%
127,944
133,201
(3.9
)%
Weighted average shares outstanding
(diluted)
127,190
133,436
(4.7
)%
129,839
134,661
(3.6
)%
Business Segment
Information
(unaudited, in thousands, except
average employee headcount)
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended September 30, 2022
Total revenues
$
4,002,461
$
1,511,115
$
501,800
$
6,015,376
Adjusted gross profits(1)
563,787
248,433
74,974
887,194
Income (loss) from operations
211,899
85,953
(10,243
)
287,609
Depreciation and amortization
5,739
5,368
11,868
22,975
Total assets(2)
3,624,333
2,266,923
904,274
6,795,530
Average employee headcount
7,493
5,861
4,691
18,045
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended September 30, 2021
Total revenues
$
3,814,988
$
1,978,901
$
469,806
$
6,263,695
Adjusted gross profits(1)
460,149
310,898
73,145
844,192
Income (loss) from operations
149,035
165,155
(3,421
)
310,769
Depreciation and amortization
6,620
5,427
10,359
22,406
Total assets(2)
3,437,461
2,438,106
727,039
6,602,606
Average employee headcount
6,764
5,167
4,037
15,968
____________________________________________
(1) Adjusted gross profits is a non-GAAP
financial measure explained above. The difference between adjusted
gross profits and gross profits is not material.
(2) All cash and cash equivalents are
included in All Other and Corporate.
Business Segment
Information
(unaudited, in thousands, except
average employee headcount)
NAST
Global Forwarding
All Other and Corporate
Consolidated
Nine Months Ended September 30, 2022
Total revenues
$
12,264,396
$
5,798,702
$
1,566,706
$
19,629,804
Adjusted gross profits(1)
1,694,438
894,724
235,841
2,825,003
Income from operations
670,752
421,148
10,848
1,102,748
Depreciation and amortization
18,101
16,394
34,228
68,723
Total assets(2)
3,624,333
2,266,923
904,274
6,795,530
Average employee headcount
7,420
5,735
4,497
17,652
NAST
Global Forwarding
All Other and Corporate
Consolidated
Nine Months Ended September 30, 2021
Total revenues
$
10,611,892
$
4,585,734
$
1,402,664
$
16,600,290
Adjusted gross profits(1)
1,317,853
763,952
213,943
2,295,748
Income (loss) from operations
436,911
363,956
(6,165
)
794,702
Depreciation and amortization
19,779
17,352
31,490
68,621
Total assets(2)
3,437,461
2,438,106
727,039
6,602,606
Average employee headcount
6,650
4,951
3,881
15,482
____________________________________________
(1) Adjusted gross profits is a non-GAAP
financial measure explained above. The difference between adjusted
gross profits and gross profits is not material.
(2)All cash and cash equivalents are
included in All Other and Corporate.
Condensed Consolidated Balance
Sheets
(unaudited, in thousands)
September 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
187,532
$
257,413
Receivables, net of allowance for credit
loss
3,802,160
3,963,487
Contract assets, net of allowance for
credit loss
363,697
453,660
Prepaid expenses and other
79,977
129,593
Total current assets
4,433,366
4,804,153
Property and equipment, net of accumulated
depreciation and amortization
158,706
139,831
Right-of-use lease assets
349,386
292,559
Intangible and other assets, net of
accumulated amortization
1,854,072
1,791,569
Total assets
$
6,795,530
$
7,028,112
Liabilities and stockholders’
investment
Current liabilities:
Accounts payable and outstanding
checks
$
1,755,769
$
1,919,301
Accrued expenses:
Compensation
204,661
201,421
Transportation expense
280,500
342,778
Income taxes
62,912
100,265
Other accrued liabilities
205,034
171,266
Current lease liabilities
71,002
66,311
Current portion of debt
779,000
525,000
Total current liabilities
3,358,878
3,326,342
Long-term debt
1,419,380
1,393,649
Noncurrent lease liabilities
293,325
241,369
Noncurrent income taxes payable
26,865
28,390
Deferred tax liabilities
18,041
16,113
Other long-term liabilities
1,480
315
Total liabilities
5,117,969
5,006,178
Total stockholders’ investment
1,677,561
2,021,934
Total liabilities and stockholders’
investment
$
6,795,530
$
7,028,112
Condensed Consolidated
Statements of Cash Flow
(unaudited, in thousands, except
operational data)
Nine Months Ended September
30,
2022
2021
Operating activities:
Net income
$
844,331
$
614,147
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization
68,723
68,621
Provision for credit losses
(2,407
)
3,979
Stock-based compensation
78,346
93,962
Deferred income taxes
(76,362
)
(11,683
)
Excess tax benefit on stock-based
compensation
(12,440
)
(10,830
)
Other operating activities
(24,011
)
1,384
Changes in operating elements, net of
acquisitions:
Receivables
66,536
(1,290,485
)
Contract assets
90,481
(220,889
)
Prepaid expenses and other
13,437
(38,525
)
Accounts payable and outstanding
checks
(109,493
)
595,036
Accrued compensation
6,701
35,413
Accrued transportation expenses
(62,278
)
165,580
Accrued income taxes
(24,202
)
6,400
Other accrued liabilities
22,209
4,947
Other assets and liabilities
(2,782
)
2,043
Net cash provided by operating
activities
876,789
19,100
Investing activities:
Purchases of property and equipment
(50,719
)
(26,503
)
Purchases and development of software
(49,935
)
(26,062
)
Acquisitions, net of cash acquired
—
(14,749
)
Other investing activities
63,208
—
Net cash used for investing activities
(37,446
)
(67,314
)
Financing activities:
Proceeds from stock issued for employee
benefit plans
93,415
43,183
Total repurchases of common stock
(1,050,175
)
(454,047
)
Cash dividends
(216,258
)
(208,926
)
Proceeds from long-term borrowings
200,000
—
Payments on long-term borrowings
—
(2,048
)
Proceeds from short-term borrowings
3,674,000
2,768,000
Payments on short-term borrowings
(3,595,000
)
(2,136,251
)
Net cash (used for) provided by financing
activities
(894,018
)
9,911
Effect of exchange rates on cash
(15,206
)
(2,844
)
Net change in cash and cash
equivalents
(69,881
)
(41,147
)
Cash and cash equivalents, beginning of
period
257,413
243,796
Cash and cash equivalents, end of
period
$
187,532
$
202,649
As of September 30,
Operational Data:
2022
2021
Employees
17,945
16,231
CHRW-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102005255/en/
Chuck Ives, Director of Investor Relations Email:
chuck.ives@chrobinson.com
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