C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW)
today reported financial results for the quarter ended June 30,
2023.
Second Quarter Key
Metrics:
- Gross profits decreased 35.9% to $656.7 million
- Income from operations decreased 71.8% to $132.6
million
- Adjusted operating margin(1) decreased 2,560 basis points to
19.9%
- Diluted earnings per share (EPS) decreased 69.7% to
$0.81
- Adjusted EPS(1) decreased 64.3% to $0.90
- Cash generated by operations decreased by $40.4 million to
$224.8 million
(1) Adjusted operating margin and adjusted EPS 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 pages 11 through 13 for further discussion and
GAAP to Non-GAAP Reconciliations.
C.H. Robinson's recently appointed President and Chief Executive
Officer, Dave Bozeman, said, "It is an absolute privilege to be
leading C.H. Robinson, a market leader with enormous scale, a
strong base of loyal customers, and a resilient business model that
generates profits and free cash flow through the entirety of the
freight cycle."
The company noted that global freight markets in the second
quarter continued to be impacted by weak demand, high inventories
and excess capacity, which resulted in a more competitive
marketplace with suppressed transportation rates. North American
surface transportation volumes and load-to-truck ratios remain near
the low levels of 2019. In the freight forwarding market, ocean
vessel and air freight capacity continues to exceed demand, which
has kept ocean and air freight rates low during this period of
significant decline that has continued since the second half of
2022.
"We are staying focused on what we can control, providing
superior service to our customers and carriers and streamlining our
processes by removing waste and manual touches," added Bozeman.
"I know from my time in the transportation market that other
freight providers and new entrants look to Robinson as an example
of a commercial engine with the breadth, scale, expertise and
financial strength that they aspire to achieve. However, there is
always room for improvement, and I recognize the tremendous
opportunity in front of us to accelerate growth in a very
fragmented market. Our goal is to provide such a compelling
offering that customers feel like C.H. Robinson is essential to the
success of their supply chain. As I aim to reinvigorate the winning
culture, my focus will be on people, products, processes,
technology, collaboration and excellence. To enable greater agility
and flexibility and to accelerate our clock speed, I’m empowering
our people to uncover new ways to challenge the status quo, move
faster and act boldly to better anticipate our customers’ needs,
exceed their expectations and make us indispensable. As a Lean
practitioner, I'm passionate about continuously improving how
organizations operate. Lean principles work and are applicable at
Robinson to further improve efficiency."
"Shippers are looking for stable and innovative logistics
partners," continued Bozeman. "Robinson has shown the strength of
its model through cycles, our balance sheet continues to be strong,
and we plan to invest in initiatives that we expect to amplify the
expertise of our people and generate high returns on investment. We
have some of the best people in the logistics industry, with the
grit, grind and hustle needed to solve challenges for our customers
and carriers, and I'm confident that together we will win for our
customers, carriers and shareholders. While the near-term freight
environment presents some challenges, the strength of our people,
scaled network, financial model and investments in improving
efficiency position us well for the eventual rebound."
"I'm excited about our opportunities and our future. I look
forward to leading this great company to new heights and sharing
our progress with all of you along our journey," Bozeman
concluded.
Summary of Second Quarter Results
Compared to the Second Quarter of 2022
- Total revenues decreased 35.0% to $4.4 billion,
primarily driven by lower pricing in our ocean and truckload
services.
- Gross profits decreased 35.9% to $656.7 million.
Adjusted gross profits decreased 35.5% to $665.5 million,
primarily driven by lower adjusted gross profit per transaction in
truckload and ocean.
- Operating expenses decreased 5.2% to $532.9 million.
Personnel expenses decreased 15.2% to $377.3 million,
primarily due to cost optimization efforts and lower variable
compensation. Average headcount declined 10.1%. Selling, general
and administrative (“SG&A”) expenses of $155.6 million
increased 32.8%, primarily due to the $25.3 million gain on the
sale-leaseback of our Kansas City regional center recorded in the
prior year and increased claims and warehouse expenses in the
current year.
- Income from operations totaled $132.6 million, down
71.8% due to the decrease in adjusted gross profits, partially
offset by the decline in operating expenses. Adjusted operating
margin of 19.9% declined 2,560 basis points.
- Interest and other income/expense, net totaled $18.3
million of expense, consisting primarily of $23.2 million of
interest expense, which increased $6.3 million versus last year due
to higher variable interest rates. This was partially offset by a
$3.5 million gain of foreign currency revaluation and realized
foreign currency gains and losses, compared to a $10.3 million loss
last year, driven by foreign currency impacts on intercompany
assets and liabilities.
- The effective tax rate in the quarter was 14.9% compared
to 21.3% in the second quarter last year. The lower rate in the
second quarter of this year was driven by lower income before
taxes, increased U.S. tax credits and incentives, fewer
non-deductible expenses, and incremental benefits from foreign tax
credit utilization.
- Net income totaled $97.3 million, down 72.1% from a year
ago. Diluted EPS of $0.81 decreased 69.7%. Adjusted
EPS of $0.90 decreased 64.3%.
Summary of Year-to-Date Results
Compared to 2022
- Total revenues decreased 33.6% to $9.0 billion,
primarily driven by lower pricing in our ocean and truckload
services.
- Gross profits decreased 30.7% to $1.3 billion.
Adjusted gross profits decreased 30.3% to $1.4 billion,
primarily driven by lower adjusted gross profit per transaction in
truckload and ocean.
- Operating expenses decreased 5.8% to $1.1 billion.
Personnel expenses decreased 11.4% to $760.4 million,
primarily due to cost optimization efforts and lower variable
compensation. Average headcount declined 5.9%. SG&A
expenses increased 12.3% to $297.1 million, primarily due to
the $25.3 million gain on the sale-leaseback of our Kansas City
regional center recorded in the prior year and increased
depreciation and amortization in the current year.
- Income from operations totaled $293.7 million, down
64.0% from last year, due to the decrease in adjusted gross
profits, partially offset by the decline in operating expense.
Adjusted operating margin of 21.7% decreased 2,040 basis
points.
- Interest and other income/expense, net totaled $46.5
million of expense, which primarily consisted of $46.8 million of
interest expense, which increased $15.3 million versus last year
due to higher variable interest rates. The year-to-date results
also included a $6.0 million loss from foreign currency revaluation
and realized foreign currency gains and losses, compared to an
$11.8 million loss last year, driven by foreign currency impacts on
intercompany assets and liabilities.
- The effective tax rate for the six months ended June 30,
2023 was 14.1% compared to 20.0% in the year-ago period. The lower
rate in the current period was driven by lower income before taxes,
increased U.S. tax credits and incentives, and fewer non-deductible
expenses in the current year.
- Net income totaled $212.2 million, down 65.7% from a
year ago. Diluted EPS of $1.77 decreased 62.4%. Adjusted
EPS of $1.88 decreased 58.8%.
North American Surface Transportation
(“NAST”) Results
Summarized financial results of our NAST segment are as follows
(dollars in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Total revenues
$
3,079,268
$
4,147,046
(25.7
)%
$
6,383,455
$
8,261,935
(22.7
)%
Adjusted gross profits(1)
400,532
624,551
(35.9
)%
827,187
1,130,651
(26.8
)%
Income from operations
117,859
276,499
(57.4
)%
251,881
458,853
(45.1
)%
____________________________________________
(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.
Second quarter total revenues for the NAST segment totaled $3.1
billion, a decrease of 25.7% over the prior year, primarily driven
by lower truckload pricing, reflecting an oversupply of truckload
capacity compared to soft freight demand. NAST adjusted gross
profits decreased 35.9% in the quarter to $400.5 million. Adjusted
gross profits in truckload decreased 45.4% due to a 41.5% decrease
in adjusted gross profit per shipment and a 6.5% decline in
truckload shipments. Our average truckload linehaul rate per mile
charged to our customers, which excludes fuel surcharges, decreased
approximately 23.0% in the quarter compared to the prior year,
while truckload linehaul cost per mile, excluding fuel surcharges,
decreased approximately 19.0%, resulting in a 41.5% decrease in
truckload adjusted gross profit per mile. LTL adjusted gross
profits decreased 18.8% versus the year-ago period, as adjusted
gross profit per order decreased 19.0% and LTL shipments were flat.
NAST overall volume growth was down 2.5% for the quarter. Operating
expenses decreased 18.8% primarily due to lower variable
compensation and lower average employee headcount. NAST average
employee headcount was down 14.0% in the quarter. Income from
operations decreased 57.4% to $117.9 million, and adjusted
operating margin declined 1,490 basis points to 29.4%.
Global Forwarding
Results
Summarized financial results of our Global Forwarding segment
are as follows (dollars in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Total revenues
$
779,867
$
2,093,190
(62.7
)%
$
1,569,845
$
4,287,587
(63.4
)%
Adjusted gross profits(1)
179,231
324,443
(44.8
)%
357,150
646,291
(44.7
)%
Income from operations
29,647
167,557
(82.3
)%
59,763
335,195
(82.2
)%
____________________________________________
(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.
Second quarter total revenues for the Global Forwarding segment
decreased 62.7% to $779.9 million, primarily driven by lower
pricing in our ocean service, reflecting an oversupply of vessel
capacity compared to soft freight demand. Adjusted gross profits
decreased 44.8% in the quarter to $179.2 million. Ocean adjusted
gross profits decreased 52.9%, driven by a 49.5% decrease in
adjusted gross profit per shipment and a 7.0% decline in shipments.
Air adjusted gross profits decreased 40.3%, driven by a 39.5%
decrease in adjusted gross profit per metric ton shipped and a 2.0%
decline in metric tons shipped. Customs adjusted gross profits
decreased 9.7%, driven by a 14.5% reduction in transaction volume.
Operating expenses decreased 4.7%, primarily driven by lower
variable compensation and lower average employee headcount, which
was partially offset by an increase in credit losses. Second
quarter average employee headcount decreased 9.3%. Income from
operations decreased 82.3% to $29.6 million, and adjusted operating
margin declined 3,510 basis points to 16.5% 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 June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Total revenues
$
562,721
$
558,239
0.8
%
$
1,080,226
$
1,064,906
1.4
%
Adjusted gross profits(1):
Robinson Fresh
$
37,895
$
34,981
8.3
%
$
69,040
$
65,486
5.4
%
Managed Services
28,953
27,618
4.8
%
57,923
55,700
4.0
%
Other Surface Transportation
18,885
20,020
(5.7
)%
39,836
39,681
0.4
%
____________________________________________
(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.
Second quarter Robinson Fresh adjusted gross profits increased
8.3% to $37.9 million, primarily driven by a 10.0% increase in case
volume and integrated supply chain solutions for foodservice and
wholesale customers. Managed Services adjusted gross profits
increased 4.8% in the quarter, due to growth with existing and new
customers. Other Surface Transportation adjusted gross profits
decreased 5.7% to $18.9 million, primarily due to a 7.3% decrease
in Europe truckload adjusted gross profits.
Other Income Statement
Items
The second quarter effective tax rate was 14.9%, down from 21.3%
last year. The lower rate in the second quarter of this year was
driven by lower income before taxes, increased U.S. tax credits and
incentives, fewer non-deductible expenses, and incremental benefits
from foreign tax credit utilization. We now expect our 2023
full-year effective tax rate to be 16% to 18%.
Interest and other income/expense, net totaled $18.3 million of
expense, consisting primarily of $23.2 million of interest expense,
which increased $6.3 million versus the second quarter of 2022 due
to higher variable interest rates, and a $3.5 million gain of
foreign currency revaluation and realized foreign currency gains
and losses on intercompany assets and liabilities.
Diluted weighted average shares outstanding in the quarter were
down 8.1% due to share repurchases over the past twelve months.
Cash Flow Generation and Capital
Distribution
Cash generated from operations totaled $224.8 million in the
second quarter, compared to $265.3 million of cash generated from
operations in the second quarter of 2022. The $40.4 million
decrease was primarily due to a $250.9 million decrease in net
income, partially offset by a $143.7 million sequential decrease in
net operating working capital in the second quarter of 2023
compared to a $45.3 million sequential increase in the second
quarter of 2022. The decrease in net operating working capital in
the second quarter of 2023 resulted primarily from a $180.0 million
sequential decrease in accounts receivable and contract assets,
partially offset by a $36.3 million sequential decrease in total
accounts payable and accrued transportation expense.
In the second quarter of 2023, cash returned to shareholders
totaled $106.1 million, with $72.8 million in cash dividends and
$33.4 million in repurchases of common stock.
Capital expenditures totaled $24.4 million in the quarter.
Capital expenditures for 2023 are expected to be $90 million to
$100 million.
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 $30 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 96,000
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, factors such
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 successfully integrate the operations of acquired
companies with our historic operations; climate change related
risks; risks associated with our indebtedness; interest rates
related risks; risks associated with litigation, including
contingent auto liability and insurance coverage; risks associated
with the potential impact of changes in government regulations;
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 Second Quarter 2023 Earnings Conference Call
Wednesday, August 2, 2023; 5:00 p.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 may
have revenues from multiple service lines.
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Adjusted gross profits(1):
Transportation
Truckload
$
261,147
$
456,260
(42.8
)%
$
549,801
$
816,047
(32.6
)%
LTL
137,185
168,298
(18.5
)%
275,822
320,610
(14.0
)%
Ocean
107,497
227,958
(52.8
)%
217,576
449,421
(51.6
)%
Air
33,728
56,871
(40.7
)%
65,045
118,305
(45.0
)%
Customs
25,128
27,820
(9.7
)%
48,462
55,315
(12.4
)%
Other logistics services
66,582
61,561
8.2
%
131,495
117,197
12.2
%
Total transportation
631,267
998,768
(36.8
)%
1,288,201
1,876,895
(31.4
)%
Sourcing
34,229
32,845
4.2
%
62,935
60,914
3.3
%
Total adjusted gross profits
$
665,496
$
1,031,613
(35.5
)%
$
1,351,136
$
1,937,809
(30.3
)%
____________________________________________
(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 June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Revenues:
Transportation
$
4,084,827
$
6,465,642
(36.8
)%
$
8,412,792
$
12,993,993
(35.3
)%
Sourcing
337,029
332,833
1.3
%
620,734
620,435
—
%
Total revenues
4,421,856
6,798,475
(35.0
)%
9,033,526
13,614,428
(33.6
)%
Costs and expenses:
Purchased transportation and related
services
3,453,560
5,466,874
(36.8
)%
7,124,591
11,117,098
(35.9
)%
Purchased products sourced for resale
302,800
299,988
0.9
%
557,799
559,521
(0.3
)%
Direct internally developed software
amortization
8,749
6,640
31.8
%
16,066
12,374
29.8
%
Total direct expenses
3,765,109
5,773,502
(34.8
)%
7,698,456
11,688,993
(34.1
)%
Gross profit
$
656,747
$
1,024,973
(35.9
)%
$
1,335,070
$
1,925,435
(30.7
)%
Plus: Direct internally developed software
amortization
8,749
6,640
31.8
%
16,066
12,374
29.8
%
Adjusted gross profit
$
665,496
$
1,031,613
(35.5
)%
$
1,351,136
$
1,937,809
(30.3
)%
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 June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Total revenues
$
4,421,856
$
6,798,475
(35.0
)%
$
9,033,526
$
13,614,428
(33.6
)%
Income from operations
132,623
469,665
(71.8
)%
293,656
815,139
(64.0
)%
Operating margin
3.0
%
6.9
%
(390) bps
3.3
%
6.0
%
(270) bps
Adjusted gross profit
$
665,496
$
1,031,613
(35.5
)%
$
1,351,136
$
1,937,809
(30.3
)%
Income from operations
132,623
469,665
(71.8
)%
293,656
815,139
(64.0
)%
Adjusted operating margin
19.9
%
45.5
%
(2,560) bps
21.7
%
42.1
%
(2,040) bps
GAAP to Non-GAAP Reconciliation
(unaudited, in thousands)
Our adjusted income (loss) from operations and adjusted net
income per share (diluted) are non-GAAP financial measures.
Adjusted income (loss) from operations and adjusted net income per
share (diluted) is calculated as income (loss) from operations and
net income per share (diluted) excluding the impact of
restructuring and related costs. We believe that these measures
provide useful information to investors and include them within our
internal reporting to our chief operating decision maker.
Accordingly, the discussion of our results of operations includes
discussion on the changes in our adjusted income (loss) from
operations and adjusted net income per share (diluted). The
reconciliation of income (loss) from operations and net income per
share (diluted) to adjusted income (loss) from operations and
adjusted net income per share (diluted) is presented below (in
thousands except per share data):
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended June 30, 2023
Income (loss) from operations
$
117,859
$
29,647
$
(14,883
)
$
132,623
Severance
323
626
10,732
11,681
Other personnel expenses
4
65
1,377
1,446
Other selling, general, and administrative
expenses
4
39
962
1,005
Total restructuring and related
costs(1)
331
730
13,071
14,132
Adjusted income (loss) from operations
$
118,190
$
30,377
$
(1,812
)
$
146,755
Net income per share (diluted)
$
0.81
Restructuring and related costs(1)
0.09
Adjusted net income per share
(diluted)
$
0.90
NAST
Global Forwarding
All Other and Corporate
Consolidated
Six Months Ended June 30, 2023
Income (loss) from operations
$
251,881
$
59,763
$
(17,988
)
$
293,656
Severance
933
2,140
11,746
14,819
Other personnel expenses
223
89
1,594
1,906
Other selling, general, and administrative
expenses
4
163
962
1,129
Total restructuring and related
costs(1)
1,160
2,392
14,302
17,854
Adjusted income (loss) from operations
$
253,041
$
62,155
$
(3,686
)
$
311,510
Net income per share (diluted)
$
1.77
Restructuring and related costs(1)
0.11
Adjusted net income per share
(diluted)
$
1.88
____________________________________________
(1) In the three months ended June 30,
2023, we incurred restructuring expenses of $13.1 million related
to workforce reductions and $1.0 million of other charges. In the
six months ended June 30, 2023, we incurred restructuring expenses
of $16.7 million related to workforce reductions and $1.1 million
of other charges.
GAAP to Non-GAAP Reconciliation
(unaudited, in thousands)
Our adjusted income from operations and adjusted net income per
share (diluted) are non-GAAP financial measures. Adjusted income
from operations and adjusted net income per share (diluted) is
calculated as income from operations and net income per share
(diluted) excluding the impact of the gain on sale-leaseback of our
Kansas City regional center. We believe that these measures provide
useful information to investors and include them within our
internal reporting to our chief operating decision maker.
Accordingly, the discussion of our results of operations includes
discussion on the changes in our adjusted income from operations
and adjusted net income per share (diluted). The reconciliation of
income from operations and net income per share (diluted) to
adjusted income from operations and adjusted net income per share
(diluted) is presented below (in thousands except per share
data):
Three Months Ended June 30,
2022
Six Months Ended June 30,
2022
Income from operations
$
469,665
$
815,139
Gain on sale of property and
equipment(1)
(25,296
)
(25,296
)
Adjusted income from operations
$
444,369
$
789,843
Net income per share (diluted)
$
2.67
$
4.71
Gain on sale of property and
equipment(1)
(0.15
)
(0.15
)
Adjusted net income per share
(diluted)
$
2.52
$
4.56
_______________________________________
(1) The gain on sale of property and
equipment related to the sale-leaseback of our Kansas City regional
center is included within other selling, general, and
administrative expenses in our condensed consolidated statements of
income.
Condensed Consolidated Statements of
Income (unaudited, in thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2023
2022
% change
2023
2022
% change
Revenues:
Transportation
$
4,084,827
$
6,465,642
(36.8
)%
$
8,412,792
$
12,993,993
(35.3
)%
Sourcing
337,029
332,833
1.3
%
620,734
620,435
0.0
%
Total revenues
4,421,856
6,798,475
(35.0
)%
9,033,526
13,614,428
(33.6
)%
Costs and expenses:
Purchased transportation and related
services
3,453,560
5,466,874
(36.8
)%
7,124,591
11,117,098
(35.9
)%
Purchased products sourced for resale
302,800
299,988
0.9
%
557,799
559,521
(0.3
)%
Personnel expenses
377,277
444,764
(15.2
)%
760,383
858,125
(11.4
)%
Other selling, general, and administrative
expenses
155,596
117,184
32.8
%
297,097
264,545
12.3
%
Total costs and expenses
4,289,233
6,328,810
(32.2
)%
8,739,870
12,799,289
(31.7
)%
Income from operations
132,623
469,665
(71.8
)%
293,656
815,139
(64.0
)%
Interest and other income/expense, net
(18,259
)
(27,395
)
(33.3
)%
(46,524
)
(41,569
)
11.9
%
Income before provision for income
taxes
114,364
442,270
(74.1
)%
247,132
773,570
(68.1
)%
Provision for income taxes
17,048
94,085
(81.9
)%
34,925
155,037
(77.5
)%
Net income
$
97,316
$
348,185
(72.1
)%
$
212,207
$
618,533
(65.7
)%
Net income per share (basic)
$
0.82
$
2.71
(69.7
)%
$
1.79
$
4.78
(62.6
)%
Net income per share (diluted)
$
0.81
$
2.67
(69.7
)%
$
1.77
$
4.71
(62.4
)%
Weighted average shares outstanding
(basic)
118,500
128,405
(7.7
)%
118,567
129,447
(8.4
)%
Weighted average shares outstanding
(diluted)
119,807
130,338
(8.1
)%
119,820
131,218
(8.7
)%
Business Segment Information (unaudited,
in thousands, except average employee headcount)
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended June 30, 2023
Total revenues
$
3,079,268
$
779,867
$
562,721
$
4,421,856
Adjusted gross profits(1)
400,532
179,231
85,733
665,496
Income (loss) from operations
117,859
29,647
(14,883
)
132,623
Depreciation and amortization
5,856
5,484
14,635
25,975
Total assets(2)
3,106,092
1,149,091
1,150,078
5,405,261
Average employee headcount
6,497
5,225
4,363
16,085
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended June 30, 2022
Total revenues
$
4,147,046
$
2,093,190
$
558,239
$
6,798,475
Adjusted gross profits(1)
624,551
324,443
82,619
1,031,613
Income from operations
276,499
167,557
25,609
469,665
Depreciation and amortization
6,123
5,471
11,668
23,262
Total assets(2)
3,688,215
2,851,114
918,110
7,457,439
Average employee headcount
7,552
5,759
4,582
17,893
____________________________________________
(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
Six Months Ended June 30, 2023
Total revenues
$
6,383,455
$
1,569,845
$
1,080,226
$
9,033,526
Adjusted gross profits(1)
827,187
357,150
166,799
1,351,136
Income (loss) from operations
251,881
59,763
(17,988
)
293,656
Depreciation and amortization
11,507
10,964
27,884
50,355
Total assets(2)
3,106,092
1,149,091
1,150,078
5,405,261
Average employee headcount
6,713
5,356
4,454
16,523
NAST
Global Forwarding
All Other and Corporate
Consolidated
Six Months Ended June 30, 2022
Total revenues
$
8,261,935
$
4,287,587
$
1,064,906
$
13,614,428
Adjusted gross profits(1)
1,130,651
646,291
160,867
1,937,809
Income from operations
458,853
335,195
21,091
815,139
Depreciation and amortization
12,362
11,026
22,360
45,748
Total assets(2)
3,688,215
2,851,114
918,110
7,457,439
Average employee headcount
7,442
5,690
4,422
17,554
____________________________________________
(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)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
210,155
$
217,482
Receivables, net of allowance for credit
loss
2,505,130
2,991,753
Contract assets, net of allowance for
credit loss
188,207
257,597
Prepaid expenses and other
147,993
122,406
Total current assets
3,051,485
3,589,238
Property and equipment, net of accumulated
depreciation and amortization
159,222
159,432
Right-of-use lease assets
343,734
372,141
Intangible and other assets, net of
accumulated amortization
1,850,820
1,833,753
Total assets
$
5,405,261
$
5,954,564
Liabilities and stockholders’
investment
Current liabilities:
Accounts payable and outstanding
checks
$
1,449,588
$
1,570,559
Accrued expenses:
Compensation
112,421
242,605
Transportation expense
142,568
199,092
Income taxes
9,763
15,210
Other accrued liabilities
159,065
168,009
Current lease liabilities
72,223
73,722
Current portion of debt
815,863
1,053,655
Total current liabilities
2,761,491
3,322,852
Long-term debt
920,495
920,049
Noncurrent lease liabilities
288,960
313,742
Noncurrent income taxes payable
28,104
28,317
Deferred tax liabilities
15,099
14,256
Other long-term liabilities
3,005
1,926
Total liabilities
4,017,154
4,601,142
Total stockholders’ investment
1,388,107
1,353,422
Total liabilities and stockholders’
investment
$
5,405,261
$
5,954,564
Condensed Consolidated Statements of Cash
Flow (unaudited, in thousands, except operational data)
Six Months Ended June 30,
Operating activities:
2023
2022
Net income
$
212,207
$
618,533
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization
50,355
45,748
Provision for credit losses
(8,397
)
(2,142
)
Stock-based compensation
21,642
52,535
Deferred income taxes
(21,825
)
(5,844
)
Excess tax benefit on stock-based
compensation
(8,645
)
(7,553
)
Other operating activities
3,080
(26,356
)
Changes in operating elements, net of
acquisitions:
Receivables
501,210
(378,641
)
Contract assets
69,662
(65,362
)
Prepaid expenses and other
(23,834
)
(14,170
)
Accounts payable and outstanding
checks
(125,090
)
37,207
Accrued compensation
(130,197
)
(9,673
)
Accrued transportation expenses
(56,524
)
62,506
Accrued income taxes
3,308
(54,964
)
Other accrued liabilities
(9,611
)
1,391
Other assets and liabilities
2,035
(1,886
)
Net cash provided by operating
activities
479,376
251,329
Investing activities:
Purchases of property and equipment
(21,679
)
(36,781
)
Purchases and development of software
(29,622
)
(32,622
)
Proceeds from sale of property and
equipment
—
63,208
Net cash (used for) investing
activities
(51,301
)
(6,195
)
Financing activities:
Proceeds from stock issued for employee
benefit plans
36,684
53,574
Total repurchases of common stock
(84,607
)
(514,483
)
Cash dividends
(146,195
)
(145,268
)
Proceeds from long-term borrowings
—
200,000
Proceeds from short-term borrowings
1,861,750
2,735,000
Payments on short-term borrowings
(2,099,750
)
(2,586,000
)
Net cash (used for) provided by financing
activities
(432,118
)
(257,177
)
Effect of exchange rates on cash
(3,284
)
(6,445
)
Net change in cash and cash
equivalents
(7,327
)
(18,488
)
Cash and cash equivalents, beginning of
period
217,482
257,413
Cash and cash equivalents, end of
period
$
210,155
$
238,925
As of June 30,
Operational Data:
2023
2022
Employees
15,763
18,146
CHRW-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802120809/en/
Chuck Ives, Director of Investor Relations
chuck.ives@chrobinson.com
CH Robinson Worldwide (NASDAQ:CHRW)
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