EX-99.1

EX-99.1 2 d864983dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

C.H. Robinson Worldwide, Inc.

14701 Charlson Road

Eden Prairie, Minnesota 55347

Chad Lindbloom, chief financial officer and chief information officer (952) 937-7779

Tim Gagnon, director, investor relations (952) 683-5007

FOR IMMEDIATE RELEASE

C.H. ROBINSON REPORTS FOURTH QUARTER RESULTS

MINNEAPOLIS, February 3, 2015 – C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (NASDAQ: CHRW), today reported financial results for the quarter ended December 31, 2014. Summarized financial results for the quarter and twelve months ended December 31 are as follows (dollars in thousands, except per share data):


	Three months ended December 31,							Twelve months ended December 31,
	2014		2013		% change			2014		2013		% change

Total revenues	$	3,357,202	$	3,152,882		6.5	%	$	13,470,067	$	12,752,076		5.6	%

Net revenues:
Transportation
Truckload	$	295,216	$	256,117		15.3	%	$	1,177,990	$	1,054,565		11.7	%
LTL		63,402		58,839		7.8	%		258,884		239,477		8.1	%
Intermodal		10,235		9,861		3.8	%		40,631		39,084		4.0	%
Ocean		56,944		46,367		22.8	%		208,422		187,671		11.1	%
Air		19,404		17,982		7.9	%		79,125		73,089		8.3	%
Customs		10,824		9,271		16.8	%		41,575		36,578		13.7	%
Other logistics services		18,281		17,583		4.0	%		73,097		67,931		7.6	%

Total transportation		474,306		416,020		14.0	%		1,879,724		1,698,395		10.7	%
Sourcing		24,005		25,799		-7.0	%		115,546		126,950		-9.0	%
Payment services		3,505		2,646		32.5	%		12,382		10,750		15.2	%

Total net revenues		501,816		444,465		12.9	%		2,007,652		1,836,095		9.3	%

Operating expenses		314,088		289,352		8.5	%		1,259,234		1,153,445		9.2	%

Operating income		187,728		155,113		21.0	%		748,418		682,650		9.6	%
Net income	$	112,947	$	92,952		21.5	%	$	449,711	$	415,904		8.1	%

Diluted EPS	$	0.77	$	0.62		24.2	%	$	3.05	$	2.65		15.1	%

“2014 was a very good year for us. We were successful in achieving our long term target of double digit earnings per share growth and we made good progress with many strategic initiatives. We did a great job of adjusting to very significant changes in North America surface transportation market conditions. Global forwarding was able to continue earning more market share and expanding our global offerings to our customers. We were able to drive positive change and productivity, to serve our customers and providers in more efficient ways,” said John P. Wiehoff, chairman and chief executive officer of C.H. Robinson.

Our truckload net revenues increased 15.3 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. Our North American truckload volumes increased approximately three percent. Our truckload net revenue margin increased in the fourth quarter of 2014 compared to the fourth quarter of 2013, due primarily

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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 twelve percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. In North America, our truckload transportation costs increased approximately eleven percent, excluding the estimated impacts of the change in fuel. These increases were largely the result of market conditions and a change in the mix of our business.

Our less-than-truckload (“LTL”) net revenues increased 7.8 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. The increase was driven by a four percent increase in total shipments, and increased customer pricing, partially offset by higher costs.

Our intermodal net revenues increased 3.8 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. The increase in net revenues was primarily driven by increased operational improvements and customer pricing.

Our ocean transportation net revenues increased 22.8 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. The increase in net revenues was primarily due to increased net revenue margin and volumes.

Our air transportation net revenues increased 7.9 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. The increase was primarily due to increased net revenue margin and volumes.

Our customs net revenues increased 16.8 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. The increase was due to increased transaction volumes.

Our other logistics services revenues, which includes managed services, warehousing, and small parcel, increased 4.0 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. The increase was primarily due to increases in managed services.

Sourcing net revenues decreased 7.0 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. This decrease was due to a change in customer, product, and service mix.

Payment services net revenues increased 32.5 percent in the fourth quarter of 2014 compared to the fourth quarter of 2013. This was primarily due to a rate increase on our cash advance option in July 2014.

For the fourth quarter, operating expenses increased 8.5 percent to $314.1 million in 2014 from $289.4 million in 2013. Operating expenses as a percentage of net revenues decreased to 62.6 percent in the fourth quarter of 2014 from 65.1 percent in the fourth quarter of 2013.

For the fourth quarter, personnel expenses increased 15.5 percent to $235.1 million in 2014 from $203.6 million in 2013. 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, partially offset by a decrease in our average headcount of 0.6 percent.

For the fourth quarter, other selling, general, and administrative expenses decreased 7.9 percent to $79.0 million in 2014 from $85.7 million in 2013. This was primarily due to a decrease in our allowance for bad debt. During the fourth quarter, we had improvements in our overall accounts receivable portfolio. Additionally, we there were decreases in travel and claims 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

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solutions, currently serving over 46,000 active customers through a network of 281 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 66,000 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 Fourth Quarter 2014 Earnings Conference Call

Wednesday, February 4, 2015 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: 888-378-4361

International callers dial +1-719-457-2652

Callers should reference the conference ID, which is 7290001

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

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

passcode: 7290001#

International callers dial +1-719-457-0820

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in thousands, except per share data)


	Three months ended December 31,						Twelve months ended December 31,
	2014			2013			2014			2013

Revenues:
Transportation	$	3,010,291		$	2,767,550		$	11,921,974		$	11,069,710
Sourcing		342,951			382,098			1,533,555			1,669,134
Payment Services		3,960			3,234			14,538			13,232

Total revenues		3,357,202			3,152,882			13,470,067			12,752,076

Costs and expenses:
Purchased transportation and related services		2,535,985			2,351,530			10,042,250			9,371,315
Purchased products sourced for resale		318,946			356,299			1,418,009			1,542,184
Purchased payment services		455			588			2,156			2,482
Personnel expenses		235,117			203,619			939,021			826,661
Other selling, general, and administrative expenses		78,971			85,733			320,213			326,784

Total costs and expenses		3,169,474			2,997,769			12,721,649			12,069,426


Income from operations		187,728			155,113			748,418			682,650


Interest and other expense		(6,400	)		(6,005	)		(24,987	)		(9,289	)


Income before provision for income taxes		181,328			149,108			723,431			673,361
Provision for income taxes		68,381			56,156			273,720			257,457

Net income	$	112,947		$	92,952		$	449,711		$	415,904


Net income per share (basic)	$	0.77		$	0.62		$	3.06		$	2.65
Net income per share (diluted)	$	0.77		$	0.62		$	3.05		$	2.65

Weighted average shares outstanding (basic)		145,856			150,856			147,202			156,915
Weighted average shares outstanding (diluted)		146,650			151,130			147,542			157,080

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CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)


	December 31, 2014		December 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	128,940	$	162,047
Restricted cash		359,388		—
Receivables, net		1,571,591		1,449,581
Other current assets		45,540		52,857

Total current assets		2,105,459		1,664,485
Property and equipment, net		152,471		160,703
Intangible and other assets		956,408		977,630

Total Assets	$	3,214,338	$	2,802,818


Liabilities and stockholders’ investment
Current liabilities:
Accounts payable and outstanding checks	$	795,255	$	755,007
Accrued compensation		125,624		85,247
Accrued income taxes		4,616		11,681
Other accrued expenses		45,365		43,046
Current portion of debt		605,000		375,000

Total current liabilities		1,575,860		1,269,981
Noncurrent income taxes payable		24,279		21,584
Deferred tax liabilities		66,961		70,618
Long-term debt		500,000		500,000
Other long term liabilities		223		911

Total liabilities		2,167,323		1,863,094

Total stockholders’ investment		1,047,015		939,724

Total liabilities and stockholders’ investment	$	3,214,338	$	2,802,818

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands, except operational data)


	Twelve months ended December 31,
	2014			2013
Operating activities:
Net income	$	449,711		$	415,904
Stock-based compensation		47,861			9,094
Depreciation and amortization		57,009			56,882
Provision for doubtful accounts		15,092			15,587
Deferred income taxes		(3,117	)		25,226
Other		(1,138	)		319
Changes in operating elements, net of acquisitions:
Receivables		(137,102	)		(87,316	)
Prepaid expenses and other		6,294			(5,254	)
Other non-current assets		380			—
Accounts payable and outstanding checks		40,251			47,488
Accrued compensation and profit-sharing contribution		40,236			(15,097	)
Accrued income taxes		(4,370	)		(105,857	)
Other accrued liabilities		2,319			(9,199	)

Net cash provided by operating activities		513,426			347,777

Investing activities:
Purchases of property and equipment		(22,364	)		(40,354	)
Purchases and development of software		(7,138	)		(7,852	)
Restricted cash		(359,388	)		—
Acquisitions, net of cash		—			19,126
Other		(6	)		221

Net cash used for investing activities		(388,896	)		(28,859	)

Financing activities:
Borrowings on line of credit		4,823,000			4,165,023
Repayments on line of credit		(4,593,000	)		(4,043,669	)
Debt issuance costs		(1,484	)		—
Borrowings of long-term debt		—			500,000
Payment of contingent purchase price		—			(927	)
Net repurchases of common stock		(164,703	)		(792,283	)
Excess tax benefit on stock-based compensation		7,558			27,209
Cash dividends		(215,008	)		(220,257	)

Net cash used for financing activities		(143,637	)		(364,904	)
Effect of exchange rates on cash		(14,000	)		(1,986	)


Net change in cash and cash equivalents		(33,107	)		(47,972	)
Cash and cash equivalents, beginning of period		162,047			210,019

Cash and cash equivalents, end of period	$	128,940		$	162,047


	As of December 31,
	2014			2013
Operational Data:
Employees		11,521			11,676
Branches		281			285

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