Attached files
| file | filename |
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| 8-K - FORM 8-K - C. H. ROBINSON WORLDWIDE, INC. | d90319d8k.htm |
| EX-99.1 - EX-99.1 - C. H. ROBINSON WORLDWIDE, INC. | d90319dex991.htm |
 Exhibit
99.2 Earnings Conference Call –
Third Quarter 2015 October 28, 2015 John Wiehoff, Chairman & CEO Andrew Clarke, CFO Tim Gagnon, Director, Investor Relations |
 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. |
 3 Results Q3 2015 Three months ended September 30 in thousands, except per share amounts • Organic net revenue increased 5 percent with Freightquote adding 6.5 percentage points to our net revenue growth in the third quarter of 2015 when compared to the third quarter of 2014. • Earnings growth was driven by net revenue growth and network efficiencies. • Freightquote represents approximately 9 percent of the average headcount growth in the third quarter of 2015. 2015 2014 % Change Total revenues $3,419,253 $3,467,362 -1.4% Total net revenues $588,575 $527,564 11.6% Income from operations $232,711 $203,337 14.4% Net income $139,432 $124,981 11.6% Earnings per share (diluted) $0.96 $0.85 12.9% Weighted average shares outstanding (diluted) 144,782 146,856 -1.4% Average headcount 13,112 11,594 13.1% Ending headcount 13,156 11,542 14.0% 2015 2014 % Change $10,265,231 $10,112,865 1.5% $1,697,703 $1,505,836 12.7% $643,731 $560,690 14.8% $383,116 $336,764 13.8% $2.63 $2.28 15.4% 145,601 147,819 -1.5% 12,838 11,642 10.3% 13,156 11,542 14.0% Nine months ended September 30 |
 4 Transportation Results Q3 2015 • Net revenue margin expansion was the result of the following factors: • Lower transportation costs, including fuel. • Change in mix of business due to faster growth in shorter length of haul freight
and the addition of Freightquote.
2015 2014 % Change Total revenues $3,044,500 $3,073,382 -0.9% Total net revenues $560,091 $497,763 12.5% Net revenue margin 18.4% 16.2% 13.6% Three months ended September 30 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% 16.3% 15.3% 16.8% Q2 17.1% 17.9% 15.4% 20.6% 15.8% 16.2% 14.9% 15.4% 16.0% 17.5% Q3 17.5% 18.0% 15.9% 19.8% 16.6% 16.4% 15.6% 15.0% 16.2% 18.4% Q4 18.3% 17.7% 19.0% 18.3% 17.6% 16.3% 15.8% 15.1% 15.9% Year 17.8% 18.4% 17.0% 20.2% 16.8% 16.5% 15.8% 15.4% 15.9% 2015 2014 % Change $9,122,479 $8,922,261 2.2% $1,603,584 $1,414,295 13.4% 17.6% 15.9% 10.9% Nine months ended September 30 |
 5 Truckload Results Q3 2015 2015 2014 % Change $344,715 $311,152 10.8% Three months ended Sept 30 TRUCKLOAD NET REVENUES in thousands North America Truckload Year over year change *Pricing and cost measures are a rate per mile and exclude the estimated impact of the change in fuel prices • Organic net revenue increased approximately 8 percent with Freightquote adding approximately 3 percent to the increase in net revenues in the third quarter of 2015 when compared to the third quarter of 2014. • North America Truckload volume, excluding Freightquote, increased approximately 4 percent in the third quarter of 2015 when compared to the third quarter of 2014. • Volume growth in dry van and temperature controlled freight was partially offset by decreased flatbed volume. • Second consecutive quarter with over 3,000 new contracted carriers. Quarter Volume 7% Approximate pricing* 0% Approximate cost* -1% Net revenue margin 2015 2014 % Change $977,641 $891,651 9.6% Nine months ended Sept 30 YTD 7% 3% 2% |
 6 LTL Results Q3 2015 2015 2014 % Change $94,190 $67,968 38.6% Three months ended Sept 30 LTL NET REVENUES in thousands LTL Year over year change • Organic net revenues increased approximately 6 percent with Freightquote contributing approximately 33 percent to the increase in LTL net revenues in the third quarter of 2015. • Organic LTL volume increased approximately 13 percent in the third quarter of 2015 when compared to the third quarter of 2014. Quarter Volume 32% Pricing Net revenue margin 2015 2014 % Change $271,084 $195,482 38.7% Nine months ended Sept 30 YTD 31% |
 7 Intermodal Results Q3 2015 • North America Intermodal net revenue, excluding Freightquote, decreased approximately 13 percent in the third quarter of 2015 when compared to the third quarter of 2014. • Conversion to truckload from intermodal negatively impacted intermodal volumes and net revenues in the third quarter of 2015. 2015 2014 % Change $10,168 $10,593 -4.0% Three months ended Sept 30 INTERMODAL NET REVENUES in thousands Year over year change INTERMODAL Quarter Volume -4% Pricing Net revenue margin 2015 2014 % Change $32,219 $30,396 6.0% Nine months ended Sept 30 YTD 5% |
 8 Global Forwarding Results Q3 2015 Ocean, Air and Customs 2015 2014 % Change Ocean $58,322 $57,380 1.6% Air $20,248 $20,520 -1.3% Customs $12,012 $11,107 8.1% Three months ended Sept 30 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 1.8 percent in the third quarter when compared to the third quarter of 2014. • Customs net revenues increased 8.1 percent due to an increase in transaction volume. • Airfreight volume and customer count increased in the third quarter of 2015 when compared to the third quarter of 2014. 2015 2014 % Change Ocean $167,578 $151,478 10.6% Air $60,483 $59,721 1.3% Customs $33,248 $30,751 8.1% Nine months ended Sept 30 YTD YTD |
 9 Other Logistics Services Results Q3 2015 • Other Logistics Services net revenues include transportation managed services, warehousing and small parcel. • Net revenues increased in the third quarter when compared to the third quarter of 2014, primarily due to an increase in managed services. 2015 2014 % Change $20,436 $19,043 7.3% Three months ended Sept 30 NET REVENUES in thousands 2015 2014 % Change $61,331 $54,816 11.9% Nine months ended Sept 30 |
 10 Sourcing Results Q3 2015 • Decreases in net revenue per case in two strategic vegetable categories resulted in year over year net revenue declines in the third quarter. • Case volume grew 2.5 percent in the third quarter of 2015 when compared to the third quarter of 2014. 2015 2014 % Change Total revenues $374,753 $393,980 -4.9% Total net revenues 28,484 $29,801 -4.4% Net revenue margin 7.6% 7.6% 0.5% Three months ended Sept 30 SOURCING NET REVENUES in thousands 2015 2014 % Change $1,142,752 $1,190,604 -4.0% $94,119 $91,541 2.8% 8.2% 7.7% 7.1% Nine months ended Sept 30 |
 11 in thousands Summarized Income Statement • Operating income as a percent of net revenues increased versus prior year for the fifth consecutive quarter. • Personnel expense growth was primarily the result of increased headcount as variable compensation was relatively flat. • 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 and travel expenses. Three months ended Sept 30 2015 2014 % Change Total revenues $3,419,253 $3,467,362 -1.4% Total net revenues 588,575 527,564 11.6% Personnel expenses 264,077 244,621 8.0% Selling, general & admin 91,787 79,606 15.3% Total operating expenses 355,864 324,227 9.8% Income from operations $232,711 $203,337 14.4% Percent of net revenue 39.5% 38.5% 2.6% 2015 2014 % Change $10,265,231 $10,112,865 1.5% 1,697,703 1,505,836 12.7% 783,220 703,904 11.3% 270,752 241,242 12.2% 1,053,972 945,146 11.5% $643,731 $560,690 14.8% 37.9% 37.2% 1.9% Nine months ended Sept 30 |
 12 Three months ended Sept 30 September 30, 2015 Cash & investments $143,087 Current assets $1,856,211 Total assets $3,312,565 Debt $1,030,000 Stockholders investment $1,131,363 CASH FLOW DATA BALANCE SHEET DATA Other Financial Information in thousands 2015 2014 % Change Net cash provided by operating activities $213,247 $176,954 20.5% Capital expenditures, net $13,206 $6,312 109.2% • Strong cash flow quarter • Total debt balance $1.030 billion • $500 million, 4.28% average coupon • $530 million drawn on new revolver, 1.32% current rate as of Sept. 30, 2015 |
 13 in thousands Capital Distribution • Capital returned to shareholders during the quarter • $56.9 million cash dividend • $72.7 million in cash for repurchase activity • 1,083,535 shares • Average price $67.09 for shares repurchased • Target is to return approximately 90% of net income to shareholders annually. 2010 2011 2012 (a) 2013 2014 Q3 2015 Net income $387,026 $431,612 $447,007 $415,904 $449,711 $139,432 Capital distribution Cash dividends paid $168,902 $194,697 $219,313 $220,257 $215,008 $56,931 Share repurchases 157,381 250,274 255,849 807,449 (b) 176,645 72,698 Subtotal $326,283 $444,971 $475,162 $1,027,706 $391,653 $129,629 Percent of net income Cash dividends paid 44% 45% 49% 53% 48% 41% Open market share repurchases 41% 58% 57% 194% 39% 52% Subtotal 84% 103% 106% 247% 87% 93% (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.
YTD 2015 $383,116 $171,448 165,622 $337,070 45% 43% 88% |
 14 A look ahead • October total company net revenue growth rate is consistent with the third quarter 2015 growth rate. • Strategic priorities • Sales and Account Management initiatives • Talent acquisition and development • Technology development and innovation • M&A |
 15 Appendix A: 2012 Summarized Adjusted Income Statement In thousands, except per share amounts Twelve months ended December 31, 2012 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. 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. |
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