C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW)
today reported financial results for the quarter ended June 30,
2024.
Second Quarter Key
Metrics:
- Gross profits increased 3.0% year-over-year to $676.5
million, and increased 4.5% sequentially
- Income from operations increased 34.3% year-over-year to
$178.1 million, and increased 40.1% sequentially
- Adjusted operating margin(1) increased 600 basis points to
25.9%
- Diluted earnings per share (EPS) increased 29.6% to
$1.05
- Adjusted EPS(1) increased 25.0% to $1.15
- Cash generated by operations decreased by $58.4 million to
$166.4 million provided by operations
(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.
"Our second quarter results reflect a higher quality of
execution and performance, as we continue to implement the new
Robinson operating model. And although we continue to fight through
an elongated freight recession, we are winning and executing better
at this point in the cycle," said C.H. Robinson's President and
Chief Executive Officer, Dave Bozeman. "Our truckload business grew
market share for the fourth consecutive quarter, and we took share
the right way, with margin improvement in mind. And our adjusted
income from operations increased 32 percent year-over-year for the
full enterprise."
"I also want to commend our people for continuing to embrace the
changes that we’re making to deliver a higher and more consistent
level of performance and for the high quality second quarter
results that they delivered in what continues to be a challenging
market," added Bozeman. "With ongoing efforts to improve the
customer experience and our cost to serve, we continue to focus on
ensuring that we’ll be ready for the eventual freight market
rebound, with a disciplined operating model that decouples
headcount growth from volume growth and drives operating
leverage."
"All of the changes that we’re making are aimed at our North
Star of generating incremental operating income and delivering
higher highs and higher lows over the course of freight market
cycles. We will do this by focusing on two main fronts…growing
market share and expanding our operating income margins," said
Bozeman. "We’ll continue to grow market share by leveraging our
robust capabilities to power vertical-centric solutions, by
reclaiming share in targeted segments, and by expanding our
addressable market through value-added services and solutions that
drive new volume to our four core modes. We’ll also be more
intentional with our go-to market strategy to drive additional
synergies and cross-selling across our portfolio."
"We’ll expand our operating income margins by embedding Lean
practices, removing waste and expanding our digital capabilities.
This will enable us to strengthen our productivity and optimize our
organization structure in order to be the most efficient operator,
in addition to the highest value provider. We’ll optimize our gross
profit by monitoring key input metrics and responding faster to
error states and changing market conditions with countermeasures
and innovative technology that improves our execution. As we take
action on all of these fronts, I’m excited about the work that
we’re doing to reinvigorate Robinson’s winning culture and to
instill discipline with our new operating model. The operating
model is helping us execute a solid strategy even better, and we
expect further improvement as we continue to cascade the new
operating model deeper into the organization and as our team
continues to embrace it and build operational muscle. I know from
my past experiences of implementing Lean operating models, that
improvement isn’t always linear, and we still have a lot of grass
to cut. I’m confident in the team’s willingness and ability to
drive a higher level of discipline in our operational execution,"
Bozeman concluded.
Summary of Second Quarter of 2024
Results Compared to the Second Quarter of 2023
- Total revenues increased 1.4% to $4.5 billion, primarily
driven by higher pricing in our ocean services, partially offset by
lower pricing in our truckload services.
- Gross profits increased 3.0% to $676.5 million.
Adjusted gross profits increased 3.3% to $687.4 million,
primarily driven by higher adjusted gross profit per transaction in
truckload and less than truckload (“LTL”) services.
- Operating expenses decreased 4.4% to $509.3 million.
Personnel expenses decreased 4.3% to $361.2 million,
primarily due to cost optimization efforts. Average employee
headcount declined 10.0%. Other selling, general and
administrative (“SG&A”) expenses decreased 4.8% to $148.1
million, with reductions across several expense categories.
- Income from operations totaled $178.1 million, up 34.3%
due to the increase in adjusted gross profits and decrease in
operating expenses. Adjusted operating margin(1) of 25.9%
increased 600 basis points.
- Interest and other income/expense, net totaled $21.5
million of expense, consisting primarily of $22.9 million of
interest expense, which decreased $0.3 million versus last year,
due to a lower average debt balance, and a $0.5 million net gain
from foreign currency revaluation and realized foreign currency
gains and losses.
- The effective tax rate in the quarter was 19.4%,
compared to 14.9% in the second quarter last year. The higher rate
in the second quarter of this year was driven by lower benefits
from foreign tax credits, a higher foreign tax rate, and the impact
of higher pretax income, partially offset by higher U.S. tax
credits and incentives.
- Net income totaled $126.3 million, up 29.7% from a year
ago. Diluted EPS of $1.05 increased 29.6%. Adjusted
EPS(1) of $1.15 increased 25.0%.
(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.
Summary of 2024 Year-to-Date Results
Compared to 2023
- Total revenues decreased 1.5% to $8.9 billion, primarily
driven by lower pricing in our truckload services, partially offset
by higher pricing in our ocean services and increased volume in our
ocean and air services.
- Gross profits decreased 0.8% to $1.3 billion.
Adjusted gross profits decreased 0.4% to $1.3 billion,
primarily driven by lower adjusted gross profit per transaction in
truckload and air services, partially offset by increased volume in
our ocean services.
- Operating expenses decreased 1.7% to $1.0 billion.
Personnel expenses decreased 2.6% to $740.3 million,
primarily due to cost optimization efforts. Average employee
headcount declined 10.8%. Other SG&A expenses increased
0.8% to $299.6 million.
- Income from operations totaled $305.2 million, up 3.9%
from last year, due to the decrease in operating expenses.
Adjusted operating margin(1) of 22.7% increased 100 basis
points.
- Interest and other income/expense, net totaled $38.3
million of expense, primarily consisting of $45.0 million of
interest expense, which decreased $1.8 million versus last year,
due to a lower average debt balance. The year-to-date results also
include a $4.4 million net gain from foreign currency revaluation
and realized foreign currency gains and losses.
- The effective tax rate for the six months ended June 30,
2024 was 17.9% compared to 14.1% in the year-ago period. The higher
rate in the current period was driven by lower tax benefits related
to stock-based compensation deliveries, a higher foreign tax rate,
and lower foreign tax credit utilization, partially offset by
higher U.S. tax credits and incentives.
- Net income totaled $219.2 million, up 3.3% from a year
ago. Diluted EPS of $1.83 increased 3.4%. Adjusted
EPS(1) of $2.01 increased 4.7%.
(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.
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,
2024
2023
% change
2024
2023
% change
Total revenues
$
2,989,909
$
3,079,268
(2.9
)%
$
5,990,222
$
6,383,455
(6.2
)%
Adjusted gross profits(1)
419,657
400,532
4.8
%
816,767
827,187
(1.3
)%
Income from operations
141,102
117,859
19.7
%
249,997
251,881
(0.7
)%
____________________________________________
(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.
Second quarter total revenues for the NAST segment totaled $3.0
billion, a decrease of 2.9% over the prior year, primarily driven
by lower truckload pricing, reflecting an oversupply of truckload
capacity compared to freight demand. NAST adjusted gross profits
increased 4.8% in the quarter to $419.7 million. Adjusted gross
profits in truckload increased 7.9% due to a 6.5% increase in
adjusted gross profit per shipment and a 1.5% increase in truckload
shipments. Our average truckload linehaul rate per mile charged to
our customers, which excludes fuel surcharges, decreased
approximately 2.0% in the quarter compared to the prior year, while
truckload linehaul cost per mile, excluding fuel surcharges, also
decreased approximately 3.5%, resulting in an 8.0% increase in
truckload adjusted gross profit per mile. LTL adjusted gross
profits increased 6.5% versus the year-ago period, driven by a 1.5%
increase in LTL volume and a 5.0% increase in adjusted gross profit
per order. NAST overall volume growth increased 1.5% for the
quarter. Operating expenses decreased 1.5%, primarily due to lower
technology expenses and cost optimization efforts, which were
partially offset by higher variable compensation. NAST average
employee headcount was down 9.7% in the quarter. Income from
operations increased 19.7% to $141.1 million, and adjusted
operating margin expanded 420 basis points to 33.6%.
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,
2024
2023
% change
2024
2023
% change
Total revenues
$
921,223
$
779,867
18.1
%
$
1,779,860
$
1,569,845
13.4
%
Adjusted gross profits(1)
184,067
179,231
2.7
%
364,112
357,150
1.9
%
Income from operations
40,982
29,647
38.2
%
72,534
59,763
21.4
%
____________________________________________
(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 total revenues for the Global Forwarding segment
increased 18.1% to $921.2 million, primarily driven by higher
pricing in our ocean services. Adjusted gross profits increased
2.7% in the quarter to $184.1 million. Ocean adjusted gross profits
increased 8.6%, driven by a 4.0% increase in shipments and a 4.5%
increase in adjusted gross profit per shipment. Air adjusted gross
profits decreased 8.9%, driven by an 18.0% decrease in adjusted
gross profit per metric ton shipped, partially offset by a 11.0%
increase in metric tons shipped. Customs adjusted gross profits
increased 6.1%, driven by a 6.0% increase in transaction volume.
Operating expenses decreased 4.3%, primarily due to lower
technology expenses and due to cost optimization efforts. Second
quarter average employee headcount decreased 11.0%. Income from
operations increased 38.2% to $41.0 million, and adjusted operating
margin expanded 580 basis points to 22.3% 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,
2024
2023
% change
2024
2023
% change
Total revenues
$
572,216
$
562,721
1.7
%
$
1,125,577
$
1,080,226
4.2
%
Adjusted gross profits(1):
Robinson Fresh
$
39,883
$
37,895
5.2
%
$
73,619
$
69,040
6.6
%
Managed Services
28,752
28,953
(0.7
)%
57,688
57,923
(0.4
)%
Other Surface Transportation
15,050
18,885
(20.3
)%
32,952
39,836
(17.3
)%
____________________________________________
(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.
Second quarter Robinson Fresh adjusted gross profits increased
5.2% to $39.9 million due to an increase in integrated supply chain
solutions for retail and foodservice customers. Managed Services
adjusted gross profits decreased 0.7%. Other Surface Transportation
adjusted gross profits decreased 20.3% to $15.1 million, primarily
due to a 23.3% decrease in Europe truckload adjusted gross
profits.
Other Income Statement
Items
Interest and other income/expense, net totaled $21.5 million of
expense, consisting primarily of $22.9 million of interest expense,
which decreased $0.3 million versus the second quarter of 2023 due
to a lower average debt balance, and a $0.5 million net gain from
foreign currency revaluation and realized foreign currency gains
and losses.
The second quarter effective tax rate was 19.4%, up from 14.9%
last year. The higher rate in the second quarter of this year was
driven by lower benefits from foreign tax credits, a higher foreign
tax rate, and the impact of higher pretax income, partially offset
by higher U.S. tax credits and incentives. For 2024, we expect our
full-year effective tax rate to be 17% to 19%.
Diluted weighted average shares outstanding in the quarter were
up 0.1%.
Cash Flow Generation and Capital
Distribution
Cash generated from operations totaled $166.4 million in the
second quarter, compared to $224.8 million of cash generated from
operations in the second quarter of 2023. The $58.4 million
decrease in cash flow from operations was primarily related to a
$166.7 million decline in cash provided by changes in net operating
working capital, due to a $23.1 million sequential increase in net
operating working capital in the second quarter of 2024 compared to
a $143.7 million sequential decrease in the second quarter of
2023.
In the second quarter of 2024, cash returned to shareholders
totaled $76.4 million, with $72.7 million in cash dividends and
$3.7 million in repurchases of common stock.
Capital expenditures totaled $19.3 million in the quarter.
Capital expenditures for 2024 are expected to be toward the lower
end of the previously provided range of $85 million to $95
million.
About C.H. Robinson
C.H. Robinson is one of the original logistics leaders.
Companies around the world look to us to reimagine supply chains,
advance freight technology, and solve logistics challenges—from the
simple to the most complex. Over 90,000 customers and 450,000
contract carriers in our network trust us to manage $22 billion in
freight annually. Through our unmatched expertise, unrivaled scale,
and tailored solutions, we ensure the seamless delivery of goods
across industries and continents via truckload,
less-than-truckload, ocean, air, and beyond. As a responsible
global citizen, we make supply chains more sustainable and proudly
contribute millions to the causes that matter most to our
employees. For more information, visit us at 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
that could adversely impact our profitability; freight levels and
increasing costs and availability of truck capacity or alternative
means of transporting freight; risks associated with seasonal
changes or significant disruptions in the transportation industry;
risks associated with identifying and completing suitable
acquisitions; our dependence on and changes in relationships with
existing contracted truck, rail, ocean, and air carriers; risks
associated with the loss of significant customers; risks associated
with reliance on technology to operate our business; cyber-security
related risks; our ability to staff and retain employees; risks
associated with operations outside of the U.S.; our ability to
successfully integrate the operations of acquired companies with
our historic operations; climate change related risks; risks
associated with our indebtedness; risks associated with interest
rates; risks associated with litigation, including contingent auto
liability and insurance coverage; risks associated with the
potential impact of changes in government regulations including
environmental-related 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 changes in political and governmental conditions;
changes to our capital structure; changes due to catastrophic
events; risks associated with the usage of artificial intelligence
technologies; 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 2024 Earnings Conference
Call Wednesday, July 31, 2024; 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 chrobinson.com. To participate in the
conference call by telephone, please call ten minutes early by
dialing: 877-269-7756
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,
2024
2023
% change
2024
2023
% change
Adjusted gross profits(1):
Transportation
Truckload
$
274,187
$
261,147
5.0
%
$
531,600
$
549,801
(3.3
)%
LTL
145,823
137,185
6.3
%
286,959
275,822
4.0
%
Ocean
116,659
107,497
8.5
%
229,517
217,576
5.5
%
Air
30,906
33,728
(8.4
)%
61,438
65,045
(5.5
)%
Customs
26,652
25,128
6.1
%
52,747
48,462
8.8
%
Other logistics services
57,320
66,582
(13.9
)%
116,878
131,495
(11.1
)%
Total transportation
651,547
631,267
3.2
%
1,279,139
1,288,201
(0.7
)%
Sourcing
35,862
34,229
4.8
%
65,999
62,935
4.9
%
Total adjusted gross profits
$
687,409
$
665,496
3.3
%
$
1,345,138
$
1,351,136
(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.
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,
2024
2023
% change
2024
2023
% change
Revenues:
Transportation
$
4,121,930
$
4,084,827
0.9
%
$
8,204,518
$
8,412,792
(2.5
)%
Sourcing
361,418
337,029
7.2
%
691,141
620,734
11.3
%
Total revenues
4,483,348
4,421,856
1.4
%
8,895,659
9,033,526
(1.5
)%
Costs and expenses:
Purchased transportation and related
services
3,470,383
3,453,560
0.5
%
6,925,379
7,124,591
(2.8
)%
Purchased products sourced for resale
325,556
302,800
7.5
%
625,142
557,799
12.1
%
Direct internally developed software
amortization
10,883
8,749
24.4
%
21,105
16,066
31.4
%
Total direct expenses
3,806,822
3,765,109
1.1
%
7,571,626
7,698,456
(1.6
)%
Gross profit
$
676,526
$
656,747
3.0
%
$
1,324,033
$
1,335,070
(0.8
)%
Plus: Direct internally developed software
amortization
10,883
8,749
24.4
%
21,105
16,066
31.4
%
Adjusted gross profit
$
687,409
$
665,496
3.3
%
$
1,345,138
$
1,351,136
(0.4
)%
Our adjusted operating margin is a non-GAAP financial measure
calculated as operating income divided by adjusted gross profit.
Our adjusted operating margin - excluding restructuring is a
similar non-GAAP financial measure as adjusted operating margin,
but also excludes the impact of restructuring. We believe adjusted
operating margin and adjusted operating margin - excluding
restructuring are useful measures of our profitability in
comparison to our adjusted gross profit, which we consider a
primary performance metric as discussed above. The comparisons of
operating margin to adjusted operating margin and adjusted
operating margin - excluding restructuring are presented below:
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
% change
2024
2023
% change
Total revenues
$
4,483,348
$
4,421,856
1.4
%
$
8,895,659
$
9,033,526
(1.5
%)
Income from operations
178,090
132,623
34.3
%
305,223
293,656
3.9
%
Operating margin
4.0
%
3.0
%
100 bps
3.4
%
3.3
%
10 bps
Adjusted gross profit
$
687,409
$
665,496
3.3
%
$
1,345,138
$
1,351,136
(0.4
%)
Income from operations
178,090
132,623
34.3
%
305,223
293,656
3.9
%
Adjusted operating margin
25.9
%
19.9
%
600 bps
22.7
%
21.7
%
100 bps
Adjusted gross profit
$
687,409
$
665,496
3.3
%
$
1,345,138
$
1,351,136
(0.4
%)
Adjusted income from operations
193,279
146,755
31.7
%
333,355
311,510
7.0
%
Adjusted operating margin - excluding
restructuring
28.1
%
22.1
%
600 bps
24.8
%
23.1
%
170 bps
GAAP to Non-GAAP Reconciliation
(unaudited, in thousands)
Our adjusted income (loss) from operations, adjusted operating
margin - excluding restructuring, 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, adjusted operating
margin - excluding restructuring, and net income per share
(diluted) excluding the impact of restructuring. The adjustments to
net income per share (diluted) include restructuring-related costs
and a foreign currency loss on divested operations. 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, adjusted operating margin - excluding
restructuring, and adjusted net income per share (diluted). The
reconciliation of income (loss) from operations to adjusted income
(loss) from operations, adjusted operating margin - excluding
restructuring, 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, 2024
Non-GAAP
Reconciliation:
Income (loss) from operations
$
141,102
$
40,982
$
(3,994
)
$
178,090
Severance and other personnel expenses
4,758
2,179
2,508
9,445
Other selling, general, and administrative
expenses
3,776
1,331
637
5,744
Total adjustments to income (loss) from
operations(1)
8,534
3,510
3,145
15,189
Adjusted income (loss) from operations
$
149,636
$
44,492
$
(849
)
$
193,279
Adjusted gross profit
$
419,657
$
184,067
$
83,685
$
687,409
Adjusted income (loss) from operations
149,636
44,492
(849
)
193,279
Adjusted operating margin - excluding
restructuring
35.7
%
24.2
%
N/M
28.1
%
NAST
Global Forwarding
All
Other and Corporate
Consolidated
Six Months Ended June 30, 2024
Income (loss) from operations
$
249,997
$
72,534
$
(17,308
)
$
305,223
Severance and other personnel expenses
7,784
5,394
4,209
17,387
Other selling, general, and administrative
expenses
5,654
1,592
3,499
10,745
Total adjustments to income (loss) from
operations(2)
13,438
6,986
7,708
28,132
Adjusted income (loss) from operations
$
263,435
$
79,520
$
(9,600
)
$
333,355
Adjusted gross profit
$
816,767
$
364,112
$
164,259
$
1,345,138
Adjusted income (loss) from operations
263,435
79,520
(9,600
)
333,355
Adjusted operating margin - excluding
restructuring
32.3
%
21.8
%
N/M
24.8
%
Three Months Ended June 30,
2024
Six Months Ended June 30,
2024
$ in 000's
per share
$ in 000's
per share
Net income and per share (diluted)
$
126,251
$
1.05
$
219,155
$
1.83
Restructuring and related costs,
pre-tax(1)(2)
15,189
0.13
28,132
0.24
Tax effect of adjustments
(3,645
)
(0.03
)
(6,746
)
(0.06
)
Adjusted net income and per share
(diluted)
$
137,795
$
1.15
$
240,541
$
2.01
____________________________________________
(1) The three months ended June 30, 2024
include restructuring expenses of $9.4 million related to workforce
reductions and $5.7 million of other charges, primarily related to
reducing our facilities footprint including early termination or
abandonment of office buildings under operating leases.
(2) The six months ended June 30, 2024
include restructuring expenses of $17.4 million related to
workforce reductions and $10.7 million of other charges, primarily
related to an impairment of internally developed software and
charges related to reducing our facilities footprint including
early termination or abandonment of office buildings under
operating leases.
NAST
Global Forwarding
All
Other and Corporate
Consolidated
Three Months Ended June 30, 2023
Non-GAAP
Reconciliation:
Income (loss) from operations
$
117,859
$
29,647
$
(14,883
)
$
132,623
Severance and other personnel expenses
327
691
12,109
13,127
Other selling, general, and administrative
expenses
4
39
962
1,005
Total adjustments to income (loss) from
operations(1)
331
730
13,071
14,132
Adjusted income (loss) from operations
$
118,190
$
30,377
$
(1,812
)
$
146,755
Adjusted gross profit
$
400,532
$
179,231
$
85,733
$
665,496
Adjusted income (loss) from operations
118,190
30,377
(1,812
)
146,755
Adjusted operating margin - excluding
restructuring
29.5
%
16.9
%
N/M
22.1
%
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 and other personnel expenses
1,156
2,229
13,340
16,725
Other selling, general, and administrative
expenses
4
163
962
1,129
Total adjustments to income (loss) from
operations(2)
1,160
2,392
14,302
17,854
Adjusted income (loss) from operations
$
253,041
$
62,155
$
(3,686
)
$
311,510
Adjusted gross profit
$
827,187
$
357,150
$
166,799
$
1,351,136
Adjusted income (loss) from operations
253,041
62,155
(3,686
)
311,510
Adjusted operating margin - excluding
restructuring
30.6
%
17.4
%
N/M
23.1
%
Three Months Ended June 30,
2023
Six Months Ended June 30,
2023
$ in 000's
per share
$ in 000's
per share
Net income and per share (diluted)
$
97,316
$
0.81
$
212,207
$
1.77
Restructuring and related costs,
pre-tax(1)(2)
14,132
0.12
17,854
0.15
Foreign currency loss on divested
operations, pre-tax
2,051
0.02
3,808
0.04
Tax effect of adjustments
(3,393
)
(0.03
)
(4,287
)
(0.04
)
Adjusted net income and per share
(diluted)
$
110,106
$
0.92
$
229,582
$
1.92
____________________________________________
(1) The three months ended June 30, 2023
includes restructuring expenses of $13.1 million related to
workforce reductions and $1.0 million of other charges.
(2) The six months ended June 30, 2023
includes restructuring expenses of $16.7 million related to
workforce reductions and $1.1 million of other charges.
Condensed Consolidated
Statements of Income
(unaudited, in thousands, except
per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
% change
2024
2023
% change
Revenues:
Transportation
$
4,121,930
$
4,084,827
0.9
%
$
8,204,518
$
8,412,792
(2.5
)%
Sourcing
361,418
337,029
7.2
%
691,141
620,734
11.3
%
Total revenues
4,483,348
4,421,856
1.4
%
8,895,659
9,033,526
(1.5
)%
Costs and expenses:
Purchased transportation and related
services
3,470,383
3,453,560
0.5
%
6,925,379
7,124,591
(2.8
)%
Purchased products sourced for resale
325,556
302,800
7.5
%
625,142
557,799
12.1
%
Personnel expenses
361,222
377,277
(4.3
)%
740,309
760,383
(2.6
)%
Other selling, general, and administrative
expenses
148,097
155,596
(4.8
)%
299,606
297,097
0.8
%
Total costs and expenses
4,305,258
4,289,233
0.4
%
8,590,436
8,739,870
(1.7
)%
Income from operations
178,090
132,623
34.3
%
305,223
293,656
3.9
%
Interest and other income/expense, net
(21,525
)
(18,259
)
17.9
%
(38,305
)
(46,524
)
(17.7
)%
Income before provision for income
taxes
156,565
114,364
36.9
%
266,918
247,132
8.0
%
Provision for income taxes
30,314
17,048
77.8
%
47,763
34,925
36.8
%
Net income
$
126,251
$
97,316
29.7
%
$
219,155
$
212,207
3.3
%
Net income per share (basic)
$
1.06
$
0.82
29.3
%
$
1.84
$
1.79
2.8
%
Net income per share (diluted)
$
1.05
$
0.81
29.6
%
$
1.83
$
1.77
3.4
%
Weighted average shares outstanding
(basic)
119,418
118,500
0.8
%
119,381
118,567
0.7
%
Weighted average shares outstanding
(diluted)
119,920
119,807
0.1
%
119,732
119,820
(0.1
)%
Business Segment
Information
(unaudited, in thousands, except
average employee headcount)
NAST
Global Forwarding
All
Other and Corporate
Consolidated
Three Months Ended June 30, 2024
Total revenues
$
2,989,909
$
921,223
$
572,216
$
4,483,348
Adjusted gross profits(1)
419,657
184,067
83,685
687,409
Income (loss) from operations
141,102
40,982
(3,994
)
178,090
Depreciation and amortization
5,525
2,793
16,736
25,054
Total assets(2)
3,053,769
1,306,075
1,152,502
5,512,346
Average employee headcount
5,868
4,652
3,954
14,474
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
____________________________________________
(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, 2024
Total revenues
$
5,990,222
$
1,779,860
$
1,125,577
$
8,895,659
Adjusted gross profits(1)
816,767
364,112
164,259
1,345,138
Income (loss) from operations
249,997
72,534
(17,308
)
305,223
Depreciation and amortization
10,875
5,637
32,420
48,932
Total assets(2)
3,053,769
1,306,075
1,152,502
5,512,346
Average employee headcount
5,929
4,770
4,032
14,731
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
____________________________________________
(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, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
113,166
$
145,524
Receivables, net of allowance for credit
loss
2,650,800
2,381,963
Contract assets, net of allowance for
credit loss
260,401
189,900
Prepaid expenses and other
154,807
163,307
Total current assets
3,179,174
2,880,694
Property and equipment, net of accumulated
depreciation and amortization
139,636
144,718
Right-of-use lease assets
351,823
353,890
Intangible and other assets, net of
accumulated amortization
1,841,713
1,845,978
Total assets
$
5,512,346
$
5,225,280
Liabilities and stockholders’
investment
Current liabilities:
Accounts payable and outstanding
checks
$
1,488,632
$
1,370,334
Accrued expenses:
Compensation
120,819
135,104
Transportation expense
211,310
147,921
Income taxes
2,483
4,748
Other accrued liabilities
158,846
159,435
Current lease liabilities
74,123
74,451
Current portion of debt
188,000
160,000
Total current liabilities
2,244,213
2,051,993
Long-term debt
1,421,066
1,420,487
Noncurrent lease liabilities
299,564
297,563
Noncurrent income taxes payable
21,611
21,289
Deferred tax liabilities
11,929
13,177
Other long-term liabilities
3,522
2,074
Total liabilities
4,001,905
3,806,583
Total stockholders’ investment
1,510,441
1,418,697
Total liabilities and stockholders’
investment
$
5,512,346
$
5,225,280
Condensed Consolidated
Statements of Cash Flow
(unaudited, in thousands, except
operational data)
Six Months Ended June 30,
Operating activities:
2024
2023(1)
Net income
$
219,155
$
212,207
Adjustments to reconcile net income to net
cash (used for) provided by operating activities:
Depreciation and amortization
48,932
50,355
Provision for credit losses
4,298
(8,397
)
Stock-based compensation
42,245
21,642
Deferred income taxes
(13,392
)
(21,825
)
Excess tax benefit on stock-based
compensation
(2,274
)
(8,645
)
Other operating activities
10,841
3,080
Changes in operating elements:
Receivables
(290,042
)
501,210
Contract assets
(70,514
)
69,662
Prepaid expenses and other
8,034
(23,834
)
Right of use asset
(3,093
)
28,728
Accounts payable and outstanding
checks
122,404
(125,090
)
Accrued compensation
(13,276
)
(130,197
)
Accrued transportation expenses
63,389
(56,524
)
Accrued income taxes
(60
)
3,308
Other accrued liabilities
1,108
(9,611
)
Lease liability
3,248
(26,663
)
Other assets and liabilities
2,096
(30
)
Net cash provided by operating
activities
133,099
479,376
Investing activities:
Purchases of property and equipment
(15,238
)
(21,679
)
Purchases and development of software
(26,573
)
(29,622
)
Net cash used for investing activities
(41,811
)
(51,301
)
Financing activities:
Proceeds from stock issued for employee
benefit plans
19,026
36,684
Stock tendered for payment of withholding
taxes
(19,808
)
(21,853
)
Repurchase of common stock
—
(62,754
)
Cash dividends
(147,283
)
(146,195
)
Proceeds from short-term borrowings
1,653,000
1,861,750
Payments on short-term borrowings
(1,625,000
)
(2,099,750
)
Net cash used for financing activities
(120,065
)
(432,118
)
Effect of exchange rates on cash and cash
equivalents
(3,581
)
(3,284
)
Net change in cash and cash
equivalents
(32,358
)
(7,327
)
Cash and cash equivalents, beginning of
period
145,524
217,482
Cash and cash equivalents, end of
period
$
113,166
$
210,155
As of June 30,
Operational Data:
2024
2023
Employees
14,213
15,763
____________________________________________
(1) The six months ended June 30, 2023 has
been adjusted to conform to current year presentation.
CHRW-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731553374/en/
Chuck Ives, Director of Investor Relations Email:
chuck.ives@chrobinson.com
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