CHRWD C.H. Robinson Worldwide (MM)

C.H. Robinson Worldwide, Inc. ("C.H. Robinson") (NASDAQ:CHRWD), today reported financial results for the three months and twelve months ended December 31, 2005. As previously reported, all share and per share data is reflective of a two-for-one stock split, effective October 14, 2005. For the fourth quarter, gross profits increased 30.3 percent to $236.1 million in 2005 from $181.2 million in 2004. Income from operations increased 49.2 percent to $92.6 million in the fourth quarter of 2005 from $62.1 million in the fourth quarter of 2004. Net income increased 50.8 percent to $58.1 million in the fourth quarter of 2005 from $38.6 million in the fourth quarter of 2004. Diluted net income per share increased 50.0 percent to $0.33 per share in the fourth quarter of 2005 from $0.22 per share in the fourth quarter of 2004. For the twelve months ended December 31, 2005, gross profits increased 33.1 percent to $879.8 million from $661.0 million in 2004. Income from operations increased 46.5 percent to $326.4 million from $222.8 million in 2004. Net income increased 48.2 percent to $203.4 million from $137.3 million in 2004. Diluted net income per share increased 46.8 percent to $1.16 per share from $0.79 per share in 2004. For the fourth quarter, total Transportation gross profits increased 27.5 percent to $205.9 million in 2005 from $161.5 million in 2004. Our transportation gross profit margin decreased to 15.7 percent in 2005 from 16.0 percent in 2004. The increase in our truck transportation gross profits of 25.6 percent in the fourth quarter of 2005 was driven by volume growth in truckload and less-than-truckload transactions, offset by a slight decrease in gross profit margins. Tight capacity created opportunities with new and existing customers. Our intermodal gross profits increase of 7.6 percent in the fourth quarter of 2005 resulted from an increase in gross profit margins, offset by a decrease in volume. Our gross profit margin expanded due to rate increases and the elimination of some lower margin business. Market conditions continued to drive business back to truck in certain lanes, impacting our volumes. In our international freight forwarding business, our ocean gross profits increased 66.0 percent and our air gross profits increased 124.3 percent in the fourth quarter of 2005. Excluding the impact of the acquisitions of Bussini Transport S.r.l. ('Bussini') and Hirdes Group Worldwide ('Hirdes'), announced in the third quarter, our ocean gross profits would have increased 46.6 percent and our air gross profits would have decreased 3.2 percent in the fourth quarter of 2005. Miscellaneous transportation gross profits consist of transportation management fees, customs brokerage fees, warehouse and cross-dock services, and other miscellaneous transportation related services. The increase of 31.2 percent in the fourth quarter was driven by increases in our transportation management fees and customs brokerage business. Excluding the impact of the acquisitions of Bussini and Hirdes, our Miscellaneous transportation gross profits increased 23.1 percent. For the fourth quarter, Sourcing gross profits increased 88.2 percent to $20.3 million in 2005 from $10.8 million in 2004. Excluding the impact of the acquisitions of FoodSource and Epic Roots, announced in the first quarter, our Sourcing gross profits increased 21.3 percent. For the fourth quarter, Information Services gross profits increased 11.2 percent to $9.9 million in 2005 from $8.9 million in 2004, primarily due to transaction volume growth. For the quarter, operating expenses increased 20.4 percent to $143.5 million in 2005 from $119.1 million in 2005. As a percentage of gross profits, operating expenses decreased to 60.8 percent in 2005 from 65.7 percent in 2004. For 2006, we plan to have total capital expenditures of approximately $50 million. Of that, we anticipate approximately $25 million for land and office space expansion for our Eden Prairie headquarters and adjacent branch offices. Founded in 1905, C.H. Robinson Worldwide, Inc., is one of the largest non-asset based third party logistics companies in the world. C.H. Robinson is a global provider of multimodal transportation services and logistics solutions, currently serving over 20,000 customers through a network of 196 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 40,000 carriers 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 market demand and pressures on the pricing for our services; competition and growth rates within the fourth-party logistics industry; freight levels 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.; changing economic conditions such as general economic slowdown, decreased consumer confidence, fuel shortages and the impact of war on the economy; and other risks and uncertainties detailed in our Annual and Quarterly Reports. -0- *T Conference Call Information: C.H. Robinson Worldwide Fourth Quarter 2005 Earnings Conference Call Wednesday, February 8, 2006 10:00 a.m. Eastern time Live webcast available through Investor Relations link at www.chrobinson.com Telephone access:1-800-240-2134 Webcast replay available through February 22, 2006; Investor Relations link at www.chrobinson.com Telephone audio replay available until 12:59 a.m. Eastern Time on February 11, 2006: 800-405-2236; passcode:11051188# CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (In thousands, except per share data) (All share and per share data is reflective of a two-for-one stock split effective October 14, 2005) ----------------------- ----------------------- Three months ended Twelve months ended December 31, December 31, ----------------------- ----------------------- 2005 2004 2005 2004 ----------------------- ----------------------- Gross Revenues: Transportation $1,315,479 $1,009,866 $4,655,746 $3,597,249 Sourcing 258,168 175,294 995,235 710,807 Information Services 9,850 8,861 37,967 33,482 ----------- ----------- ----------- ----------- Total gross revenues 1,583,497 1,194,021 5,688,948 4,341,538 ----------- ----------- ----------- ----------- Gross Profits: Transportation Truck 178,167 141,856 666,605 501,940 Intermodal 8,655 8,041 31,392 29,960 Ocean 8,770 5,283 29,182 20,558 Air 4,840 2,158 13,321 8,570 Miscellaneous 5,503 4,195 19,824 14,709 ----------- ----------- ----------- ----------- Total transportation 205,935 161,533 760,324 575,737 Sourcing 20,297 10,785 81,459 51,772 Information Services 9,850 8,861 37,967 33,482 ----------- ----------- ----------- ----------- Total gross profits 236,082 181,179 879,750 660,991 ----------- ----------- ----------- ----------- Operating costs and expenses: Personnel expenses 109,649 89,341 427,311 334,118 Selling, general, and administrative expenses 33,811 29,769 126,078 104,105 ----------- ----------- ----------- ----------- Total operating expenses 143,460 119,110 553,389 438,223 ----------- ----------- ----------- ----------- Income from operations 92,622 62,069 326,361 222,768 Investment and other income: Interest income and other 2,039 1,135 6,168 3,116 Nonqualified deferred compensation investment gain 70 203 224 154 ----------- ----------- ----------- ----------- Investment and other income 2,109 1,338 6,392 3,270 ----------- ----------- ----------- ----------- Income before provision for income taxes 94,731 63,407 332,753 226,038 Provision for income taxes 36,585 24,852 129,395 88,784 ----------- ----------- ----------- ----------- Net income $58,146 $38,555 $203,358 $137,254 =========== =========== =========== =========== Net income per share (basic) $0.34 $0.23 $1.20 $0.81 Net income per share (diluted) $0.33 $0.22 $1.16 $0.79 Weighted average shares outstanding (basic) 169,990 169,086 170,052 169,228 Weighted average shares outstanding (diluted) 175,731 173,526 174,698 173,144 CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands) December 31, December 31, 2005 2004 ------------ ------------ Assets Current assets: Cash and cash equivalents $230,628 $166,476 Available-for-sale securities 122,551 121,600 Receivables, net 716,725 544,274 Other current assets 14,877 13,637 ------------ ------------ Total current assets 1,084,781 845,987 Property and equipment, net 60,721 51,122 Intangible and other assets 249,566 183,587 ------------ ------------ $1,395,068 $1,080,696 ============ ============ Liabilities and stockholders' investment Current liabilities Accounts payable and outstanding checks $473,882 $358,929 Accrued compensation 94,333 60,261 Other accrued expenses 44,268 33,629 ------------ ------------ Total current liabilities 612,483 452,819 Long term liabilities: Deferred tax liability 1,469 4,153 Nonqualified deferred compensation obligation 1,079 2,868 ------------ ------------ Total long term liabilities 2,548 7,021 ------------ ------------ Total liabilities 615,031 459,840 Total stockholders' investment 780,037 620,856 ------------ ------------ $1,395,068 $1,080,696 ============ ============ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (In thousands, except operational data) Twelve months ended December 31, ------------------------- 2005 2004 ------------ ------------ Operating activities: Net income $203,358 $137,254 Depreciation and amortization 18,500 11,814 Other non-cash expenses, net 41,971 33,303 Net changes in operating elements (34,741) (26,430) ------------ ------------ Net cash provided by operating activities 229,088 155,941 Investing activities: Net property additions (21,824) (34,741) Insurance proceeds - 1,590 Cash paid for acquisitions (60,153) (19,112) Purchases of available-for-sale securities (114,696) (70,139) Sales/maturities of available-for-sale securities 113,747 69,366 Other assets, net (3,748) (1,780) ------------ ------------ Net cash used for investing activities (86,674) (54,816) Financing activities: Net repurchases of common stock (23,293) (19,120) Cash dividends (51,458) (40,902) ------------ ------------ Net cash used for financing activities (74,751) (60,022) Effect of exchange rates on cash (3,511) 1,960 ------------ ------------ Net increase in cash and cash equivalents 64,152 43,063 Cash and cash equivalents, beginning of period 166,476 123,413 ------------ ------------ Cash and cash equivalents, end of period $230,628 $166,476 ============ ============ As of December 31, ------------------------- 2005 2004 ------------ ------------ Operational Data: Employees 5,776 4,806 Branches 196 176 *T