C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW)
today reported financial results for the quarter ended September
30, 2023.
Third Quarter Key
Metrics:
- Gross profits decreased 28.9% to $626.6 million
- Income from operations decreased 60.5% to $113.5
million
- Adjusted operating margin(1) decreased 1,450 basis points to
17.9%
- Adjusted operating margin - excluding restructuring,(1)
decreased 1,070 basis points to 21.7%
- Diluted earnings per share (EPS) decreased 61.8% to
$0.68
- Adjusted EPS(1) decreased 52.8% to $0.84
- Cash generated by operations decreased by $420.2 million to
$205.2 million
(1) Adjusted operating margin, adjusted operating margin –
excluding restructuring 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.
"As has been well documented by many industry participants and
observers, global freight demand continued to be weak in the third
quarter," said C.H. Robinson's President and Chief Executive
Officer, Dave Bozeman. "We are staying focused on what we can
control, by providing superior service to our customers and
carriers, executing on our plans to streamline our processes by
removing waste and manual touches, and delivering tools that enable
our customer- and carrier-facing employees to allocate their time
to relationship building and exception management. Our focus on
delivering quality and improvements to our customers, such as
enhanced visibility and increased automation, has been reflected in
very positive feedback from customers and validated by net promoter
scores this year that are the highest on record for the company,
which we believe sets us up well with customers for the eventual
positive inflection in the freight market."
"Our customers value the quality, stability and reliability that
we provide, as they work to optimize their transportation needs.
This has taken on greater importance to shippers who had exposure
to transportation providers whose business models were not
financially viable. During my many discussions with customers over
the past four months, it’s clear that they prefer partners who have
financial strength and can invest through cycles in the customer
experience. They also want partners who have the expertise to
provide innovative solutions, enabled by technology and people that
they rely on to serve as an extension of their team. C.H. Robinson
is that partner, with people who have deep expertise in the freight
market and longstanding relationships with their customers and
carriers. Combined with Robinson’s strong technology and large data
set, our people are able to provide innovative tech-enabled
solutions powered by our information advantage for the benefit of
our customers and carriers. This secret sauce is not easy to
replicate with a digital-only solution," added Bozeman.
"We’re executing on our plans to streamline our processes by
removing waste and manual touches, and the result has been
meaningful cost reductions and productivity gains across our
business that are ahead of our stated targets. Even though I’m
pleased with the progress that the team has made, I’ve challenged
them to increase our clock speed on decision making and improvement
efforts. We’re now driving focus on a handful of concurrent
workstreams that are addressing the highest leverage areas to
eliminate productivity bottlenecks."
"Ultimately, our focus on continuously improving the customer
and carrier experience and removing waste from our workflows will
result in a company that is quicker, more flexible and more agile
in solving problems for our customers, providing better customer
service and creating operating leverage and profitable growth. I’m
excited about the work that we’re doing to reinvigorate Robinson’s
winning culture, and I’m confident that together we will win for
our customers, carriers, employees and shareholders," Bozeman
concluded.
Summary of Third Quarter of 2023
Results Compared to the Third Quarter of 2022
- Total revenues decreased 27.8% to $4.3 billion,
primarily driven by lower pricing in our ocean and truckload
services.
- Gross profits decreased 28.9% to $626.6 million.
Adjusted gross profits decreased 28.4% to $634.8 million,
primarily driven by lower adjusted gross profit per transaction in
truckload and ocean.
- Operating expenses decreased 13.1% to $521.3 million.
Personnel expenses decreased 21.5% to $343.5 million,
primarily due to cost optimization efforts and lower variable
compensation. Average headcount declined 13.7%. Other selling,
general and administrative (“SG&A”) expenses of $177.8
million increased 9.7%, primarily due to $21.4 million of
restructuring expenses, partially offset by decreased purchased and
contracted services and decreased legal settlements. The
restructuring expenses are primarily related to asset impairments
driven by our decision to divest our global forwarding operations
in Argentina.
- Income from operations totaled $113.5 million, down
60.5% due to the decrease in adjusted gross profits, partially
offset by the decline in operating expenses. Adjusted operating
margin of 17.9% declined 1,450 basis points.
- Interest and other income/expense, net totaled $20.7
million of expense, consisting primarily of $21.8 million of
interest expense, which increased $1.0 million versus last year due
to higher variable interest rates.
- The effective tax rate in the quarter was 11.7% compared
to 16.9% in the third quarter last year. The lower rate in the
third quarter of this year was driven by lower income before taxes
and incremental benefits from foreign tax credits.
- Net income totaled $81.9 million, down 63.7% from a year
ago. Diluted EPS of $0.68 decreased 61.8%. Adjusted
EPS of $0.84 decreased 52.8%.
Summary of 2023 Year-to-Date Results
Compared to 2022
- Total revenues decreased 31.9% to $13.4 billion,
primarily driven by lower pricing in our ocean and truckload
services.
- Gross profits decreased 30.1% to $2.0 billion.
Adjusted gross profits decreased 29.7% to $2.0 billion,
primarily driven by lower adjusted gross profit per transaction in
truckload and ocean.
- Operating expenses decreased 8.3% to $1.6 billion.
Personnel expenses decreased 14.8% to $1.1 billion,
primarily due to cost optimization efforts and lower variable
compensation. Average headcount declined 8.0%. Other SG&A
expenses increased 11.3% to $474.9 million, primarily due to a
$25.3 million gain on the sale-leaseback of our Kansas City
regional center recorded in the prior year and $22.6 million of
restructuring expenses in the current year, partially offset by
decreased purchased and contracted services.
- Income from operations totaled $407.2 million, down
63.1% from last year, due to the decrease in adjusted gross
profits, partially offset by the decline in operating expenses.
Adjusted operating margin of 20.5% decreased 1,850 basis
points.
- Interest and other income/expense, net totaled $67.3
million of expense, which primarily consisted of $68.6 million of
interest expense, which increased $16.3 million versus last year
due to higher variable interest rates. The year-to-date results
also included a $5.9 million net loss from foreign currency
revaluation and realized foreign currency gains and losses,
compared to a $6.6 million net loss last year, driven by foreign
currency impacts on intercompany assets and liabilities.
- The effective tax rate for the nine months ended
September 30, 2023 was 13.5% compared to 19.2% in the year-ago
period. The lower rate in the current period was driven by lower
income before taxes and incremental benefits from foreign tax
credits.
- Net income totaled $294.2 million, down 65.2% from a
year ago. Diluted EPS of $2.46 decreased 62.2%. Adjusted
EPS of $2.73 decreased 57.0%.
North American Surface Transportation
(“NAST”) Results
Summarized financial results of our NAST segment are as follows
(dollars in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Total revenues
$
3,086,970
$
4,002,461
(22.9
)%
$
9,470,425
$
12,264,396
(22.8
)%
Adjusted gross profits(1)
386,510
563,787
(31.4
)%
1,213,697
1,694,438
(28.4
)%
Income from operations
112,121
211,899
(47.1
)%
364,002
670,752
(45.7
)%
____________________________________________
(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.
Third quarter total revenues for the NAST segment totaled $3.1
billion, a decrease of 22.9% 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 31.4% in the quarter to $386.5 million. Adjusted
gross profits in truckload decreased 40.4% due to a 36.5% decrease
in adjusted gross profit per shipment and a 6.0% decline in
truckload shipments. Our average truckload linehaul rate per mile
charged to our customers, which excludes fuel surcharges, decreased
approximately 16.5% in the quarter compared to the prior year,
while truckload linehaul cost per mile, excluding fuel surcharges,
decreased approximately 13.5%, resulting in a 34.0% decrease in
truckload adjusted gross profit per mile. LTL adjusted gross
profits decreased 15.3% versus the year-ago period, as adjusted
gross profit per order decreased 13.5% and LTL shipments decreased
2.0%. NAST overall volume growth was down 3.5% for the quarter.
Operating expenses decreased 22.0% primarily due to cost
optimization efforts, including lower average employee headcount,
and lower variable compensation. NAST average employee headcount
was down 16.2% in the quarter. Income from operations decreased
47.1% to $112.1 million, and adjusted operating margin declined 860
basis points to 29.0%.
Global Forwarding
Results
Summarized financial results of our Global Forwarding segment
are as follows (dollars in thousands):
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Total revenues
$
719,045
$
1,511,115
(52.4
)%
$
2,288,890
$
5,798,702
(60.5
)%
Adjusted gross profits(1)
169,893
248,433
(31.6
)%
527,043
894,724
(41.1
)%
Income from operations
3,491
85,953
(95.9
)%
63,254
421,148
(85.0
)%
____________________________________________
(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.
Third quarter total revenues for the Global Forwarding segment
decreased 52.4% to $719.0 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 31.6% in the quarter to $169.9 million. Ocean adjusted
gross profits decreased 35.0%, driven by a 34.5% decrease in
adjusted gross profit per shipment and a 0.5% decline in shipments.
Air adjusted gross profits decreased 36.8%, driven by a 35.5%
decrease in adjusted gross profit per metric ton shipped and a 2.0%
decline in metric tons shipped. Customs adjusted gross profits
decreased 10.7%, driven primarily by an 8.0% reduction in
transaction volume. Operating expenses increased 2.4%, primarily
due to $23.6 million of restructuring expenses, which were
partially offset by cost optimization efforts, including lower
average employee headcount, and lower variable compensation. Third
quarter average employee headcount decreased 13.3%. Income from
operations decreased 95.9% to $3.5 million, and adjusted operating
margin declined 3,250 basis points to 2.1% in the quarter. Adjusted
operating margin, excluding restructuring expenses, was 15.9% for
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 September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Total revenues
$
535,015
$
501,800
6.6
%
$
1,615,241
$
1,566,706
3.1
%
Adjusted gross profits(1):
Robinson Fresh
$
31,083
$
27,677
12.3
%
$
100,123
$
93,163
7.5
%
Managed Services
29,427
29,595
(0.6
)%
87,350
85,295
2.4
%
Other Surface Transportation
17,936
17,702
1.3
%
57,772
57,383
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.
Third quarter Robinson Fresh adjusted gross profits increased
12.3% to $31.1 million, primarily driven by a 23.0% increase in
case volume in retail and integrated supply chain solutions for
foodservice customers. Managed Services adjusted gross profits
decreased 0.6% in the quarter. Other Surface Transportation
adjusted gross profits increased 1.3% to $17.9 million, primarily
due to an increase in Europe LTL adjusted gross profits.
Other Income Statement
Items
The third quarter effective tax rate was 11.7%, down from 16.9%
last year. The lower rate in the third quarter of this year was
driven by lower income before taxes and incremental benefits from
foreign tax credits. We now expect our 2023 full-year effective tax
rate to be 14% to 15%.
Interest and other income/expense, net totaled $20.7 million of
expense, consisting primarily of $21.8 million of interest expense,
which increased $1.0 million versus the third quarter of 2022 due
to higher variable interest rates.
Diluted weighted average shares outstanding in the quarter were
down 5.8% due to share repurchases over the past twelve months.
Cash Flow Generation and Capital
Distribution
Cash generated from operations totaled $205.2 million in the
third quarter, compared to $625.5 million of cash generated from
operations in the third quarter of 2022. The $420.2 million
decrease was primarily related to a $304.4 million decline in cash
provided by changes in net operating working capital, due to a
$54.9 million sequential decrease in net operating working capital
in the third quarter of 2023 compared to a $359.3 million
sequential decrease in the third quarter of 2022.
In the third quarter of 2023, cash returned to shareholders
totaled $75.8 million, with $72.7 million in cash dividends and
$3.0 million in repurchases of common stock.
Capital expenditures totaled $16.7 million in the quarter.
Capital expenditures for 2023 are expected to be toward the lower
end of the previously provided range of $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 the more
than 450,000 contract carriers on our platform. 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; 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 Third Quarter 2023 Earnings Conference Call
Wednesday, November 1, 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 September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Adjusted gross profits(1):
Transportation
Truckload
$
245,439
$
398,418
(38.4
)%
$
795,240
$
1,214,465
(34.5
)%
LTL
137,949
162,130
(14.9
)%
413,771
482,740
(14.3
)%
Ocean
104,116
160,122
(35.0
)%
321,692
609,543
(47.2
)%
Air
30,201
47,831
(36.9
)%
95,246
166,136
(42.7
)%
Customs
24,904
27,881
(10.7
)%
73,366
83,196
(11.8
)%
Other logistics services
64,838
65,441
(0.9
)%
196,333
182,638
7.5
%
Total transportation
607,447
861,823
(29.5
)%
1,895,648
2,738,718
(30.8
)%
Sourcing
27,402
25,371
8.0
%
90,337
86,285
4.7
%
Total adjusted gross profits
$
634,849
$
887,194
(28.4
)%
$
1,985,985
$
2,825,003
(29.7
)%
____________________________________________
(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.
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 September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Revenues:
Transportation
$
4,029,407
$
5,724,364
(29.6
)%
$
12,442,199
$
18,718,357
(33.5
)%
Sourcing
311,623
291,012
7.1
%
932,357
911,447
2.3
%
Total revenues
4,341,030
6,015,376
(27.8
)%
13,374,556
19,629,804
(31.9
)%
Costs and expenses:
Purchased transportation and related
services
3,421,960
4,862,541
(29.6
)%
10,546,551
15,979,639
(34.0
)%
Purchased products sourced for resale
284,221
265,641
7.0
%
842,020
825,162
2.0
%
Direct internally developed software
amortization
8,233
6,457
27.5
%
24,299
18,831
29.0
%
Total direct expenses
3,714,414
5,134,639
(27.7
)%
11,412,870
16,823,632
(32.2
)%
Gross profit
$
626,616
$
880,737
(28.9
)%
$
1,961,686
$
2,806,172
(30.1
)%
Plus: Direct internally developed software
amortization
8,233
6,457
27.5
%
24,299
18,831
29.0
%
Adjusted gross profit
$
634,849
$
887,194
(28.4
)%
$
1,985,985
$
2,825,003
(29.7
)%
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 and related costs. 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 September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Total revenues
$
4,341,030
$
6,015,376
(27.8
)%
$
13,374,556
$
19,629,804
(31.9
)%
Income from operations
113,522
287,609
(60.5
)%
407,178
1,102,748
(63.1
)%
Operating margin
2.6
%
4.8
%
(220) bps
3.0
%
5.6
%
(260) bps
Adjusted gross profit
$
634,849
$
887,194
(28.4
)%
$
1,985,985
$
2,825,003
(29.7
)%
Income from operations
113,522
287,609
(60.5
)%
407,178
1,102,748
(63.1
)%
Adjusted operating margin
17.9
%
32.4
%
(1,450) bps
20.5
%
39.0
%
(1,850) bps
Adjusted gross profit
$
634,849
$
887,194
(28.4
)%
$
1,985,985
$
2,825,003
(29.7
)%
Income from operations - excluding
restructuring and gain on sale
137,985
$
287,609
(52.0
)%
449,495
$
1,077,452
(58.3
)%
Adjusted operating margin - excluding
restructuring and gain on sale
21.7
%
32.4
%
(1,070) bps
22.6
%
38.1
%
(1,550) 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 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, adjusted operating margin -
excluding restructuring, and adjusted net income per share
(diluted). The reconciliation of 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 September 30, 2023
Income (loss) from operations
$
112,121
$
3,491
$
(2,090
)
$
113,522
Severance
(64
)
2,530
619
3,085
Other selling, general, and administrative
expenses
4
21,079
362
21,445
Other personnel expenses
(9
)
(17
)
(41
)
(67
)
Total restructuring and related
costs(1)
(69
)
23,592
940
24,463
Income (loss) from operations - excluding
restructuring
$
112,052
$
27,083
$
(1,150
)
$
137,985
Adjusted gross profit
$
386,510
$
169,893
$
78,446
$
634,849
Income (loss) from operations - excluding
restructuring
112,052
27,083
(1,150
)
137,985
Adjusted operating margin - excluding
restructuring
29.0
%
15.9
%
N/M
21.7
%
Net income per share (diluted)
$
0.68
Restructuring and related costs, net of
tax(1)
0.16
Adjusted net income per share
(diluted)
$
0.84
NAST
Global Forwarding
All
Other and Corporate
Consolidated
Nine Months Ended September 30, 2023
Income (loss) from operations
$
364,002
$
63,254
$
(20,078
)
$
407,178
Severance
869
4,670
12,365
17,904
Other selling, general, and administrative
expenses
8
21,242
1,324
22,574
Other personnel expenses
214
72
1,553
1,839
Total restructuring and related
costs(1)
1,091
25,984
15,242
42,317
Income (loss) from operations - excluding
restructuring
$
365,093
$
89,238
$
(4,836
)
$
449,495
Adjusted gross profit
$
1,213,697
$
527,043
$
245,245
$
1,985,985
Income (loss) from operations - excluding
restructuring
365,093
89,238
(4,836
)
449,495
Adjusted operating margin - excluding
restructuring
30.1
%
16.9
%
N/M
22.6
%
Net income per share (diluted)
$
2.46
Restructuring and related costs, net of
tax(1)
0.27
Adjusted net income per share
(diluted)
$
2.73
____________________________________________
(1) In the three months ended September
30, 2023, we incurred restructuring expenses of $3.0 million
related to workforce reductions and $21.4 million of asset
impairment and other charges. In the nine months ended September
30, 2023, we incurred restructuring expenses of $19.7 million
related to workforce reductions and $22.6 million of asset
impairment and 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):
Nine Months Ended September 30,
2022
Income from operations
$
1,102,748
Gain on sale of property and
equipment(1)
(25,296
)
Income from operations - excluding gain on
sale
$
1,077,452
Net income per share (diluted)
$
6.50
Gain on sale of property and
equipment(1)
(0.15
)
Adjusted net income per share
(diluted)
$
6.35
_______________________________________
(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 September
30,
Nine Months Ended September
30,
2023
2022
% change
2023
2022
% change
Revenues:
Transportation
$
4,029,407
$
5,724,364
(29.6
)%
$
12,442,199
$
18,718,357
(33.5
)%
Sourcing
311,623
291,012
7.1
%
932,357
911,447
2.3
%
Total revenues
4,341,030
6,015,376
(27.8
)%
13,374,556
19,629,804
(31.9
)%
Costs and expenses:
Purchased transportation and related
services
3,421,960
4,862,541
(29.6
)%
10,546,551
15,979,639
(34.0
)%
Purchased products sourced for resale
284,221
265,641
7.0
%
842,020
825,162
2.0
%
Personnel expenses
343,532
437,545
(21.5
)%
1,103,915
1,295,670
(14.8
)%
Other selling, general, and administrative
expenses
177,795
162,040
9.7
%
474,892
426,585
11.3
%
Total costs and expenses
4,227,508
5,727,767
(26.2
)%
12,967,378
18,527,056
(30.0
)%
Income from operations
113,522
287,609
(60.5
)%
407,178
1,102,748
(63.1
)%
Interest and other income/expense, net
(20,748
)
(15,972
)
29.9
%
(67,272
)
(57,541
)
16.9
%
Income before provision for income
taxes
92,774
271,637
(65.8
)%
339,906
1,045,207
(67.5
)%
Provision for income taxes
10,825
45,839
(76.4
)%
45,750
200,876
(77.2
)%
Net income
$
81,949
$
225,798
(63.7
)%
$
294,156
$
844,331
(65.2
)%
Net income per share (basic)
$
0.69
$
1.81
(61.9
)%
$
2.48
$
6.60
(62.4
)%
Net income per share (diluted)
$
0.68
$
1.78
(61.8
)%
$
2.46
$
6.50
(62.2
)%
Weighted average shares outstanding
(basic)
118,464
124,980
(5.2
)%
118,532
127,944
(7.4
)%
Weighted average shares outstanding
(diluted)
119,751
127,190
(5.8
)%
119,762
129,839
(7.8
)%
Business Segment
Information
(unaudited, in thousands, except
average employee headcount)
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended September 30, 2023
Total revenues
$
3,086,970
$
719,045
$
535,015
$
4,341,030
Adjusted gross profits(1)
386,510
169,893
78,446
634,849
Income (loss) from operations
112,121
3,491
(2,090
)
113,522
Depreciation and amortization
5,882
5,446
14,216
25,544
Total assets(2)
3,162,720
1,081,262
1,073,685
5,317,667
Average employee headcount
6,278
5,082
4,217
15,577
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended September 30, 2022
Total revenues
$
4,002,461
$
1,511,115
$
501,800
$
6,015,376
Adjusted gross profits(1)
563,787
248,433
74,974
887,194
Income (loss) from operations
211,899
85,953
(10,243
)
287,609
Depreciation and amortization
5,739
5,368
11,868
22,975
Total assets(2)
3,624,333
2,266,923
904,274
6,795,530
Average employee headcount
7,493
5,861
4,691
18,045
____________________________________________
(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
Nine Months Ended September 30, 2023
Total revenues
$
9,470,425
$
2,288,890
$
1,615,241
$
13,374,556
Adjusted gross profits(1)
1,213,697
527,043
245,245
1,985,985
Income (loss) from operations
364,002
63,254
(20,078
)
407,178
Depreciation and amortization
17,389
16,410
42,100
75,899
Total assets(2)
3,162,720
1,081,262
1,073,685
5,317,667
Average employee headcount
6,574
5,276
4,390
16,240
NAST
Global Forwarding
All Other and Corporate
Consolidated
Nine Months Ended September 30, 2022
Total revenues
$
12,264,396
$
5,798,702
$
1,566,706
$
19,629,804
Adjusted gross profits(1)
1,694,438
894,724
235,841
2,825,003
Income from operations
670,752
421,148
10,848
1,102,748
Depreciation and amortization
18,101
16,394
34,228
68,723
Total assets(2)
3,624,333
2,266,923
904,274
6,795,530
Average employee headcount
7,420
5,735
4,497
17,652
____________________________________________
(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)
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
174,733
$
217,482
Receivables, net of allowance for credit
loss
2,442,297
2,991,753
Contract assets, net of allowance for
credit loss
204,737
257,597
Prepaid expenses and other
137,476
122,406
Total current assets
2,959,243
3,589,238
Property and equipment, net of accumulated
depreciation and amortization
150,858
159,432
Right-of-use lease assets
350,896
372,141
Intangible and other assets, net of
accumulated amortization
1,856,670
1,833,753
Total assets
$
5,317,667
$
5,954,564
Liabilities and stockholders’
investment
Current liabilities:
Accounts payable and outstanding
checks
$
1,444,186
$
1,570,559
Accrued expenses:
Compensation
134,778
242,605
Transportation expense
156,611
199,092
Income taxes
6,782
15,210
Other accrued liabilities
170,539
168,009
Current lease liabilities
73,681
73,722
Current portion of debt
662,966
1,053,655
Total current liabilities
2,649,543
3,322,852
Long-term debt
920,720
920,049
Noncurrent lease liabilities
294,751
313,742
Noncurrent income taxes payable
29,640
28,317
Deferred tax liabilities
14,656
14,256
Other long-term liabilities
3,773
1,926
Total liabilities
3,913,083
4,601,142
Total stockholders’ investment
1,404,584
1,353,422
Total liabilities and stockholders’
investment
$
5,317,667
$
5,954,564
Condensed Consolidated
Statements of Cash Flow
(unaudited, in thousands, except
operational data)
Nine Months Ended September
30,
Operating activities:
2023
2022
Net income
$
294,156
$
844,331
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization
75,899
68,723
Provision for credit losses
(4,032
)
(2,407
)
Stock-based compensation
37,309
78,346
Deferred income taxes
(35,269
)
(76,362
)
Excess tax benefit on stock-based
compensation
(9,899
)
(12,440
)
Loss on disposal group held for sale
21,113
—
Other operating activities
3,740
(24,011
)
Changes in operating elements, net of
acquisitions:
Receivables
525,761
66,536
Contract assets
52,810
90,481
Prepaid expenses and other
(7,632
)
13,437
Accounts payable and outstanding
checks
(122,312
)
(109,493
)
Accrued compensation
(106,943
)
6,701
Accrued transportation expenses
(42,481
)
(62,278
)
Accrued income taxes
3,131
(24,202
)
Other accrued liabilities
(2,636
)
22,209
Other assets and liabilities
1,900
(2,782
)
Net cash provided by operating
activities
684,615
876,789
Investing activities:
Purchases of property and equipment
(25,889
)
(50,719
)
Purchases and development of software
(42,086
)
(49,935
)
Proceeds from sale of property and
equipment
1,324
63,208
Net cash used for investing activities
(66,651
)
(37,446
)
Financing activities:
Proceeds from stock issued for employee
benefit plans
46,061
93,415
Stock tendered for payment of withholding
taxes
(23,754
)
(26,597
)
Repurchases of common stock
(63,884
)
(1,023,578
)
Cash dividends
(218,942
)
(216,258
)
Proceeds from long-term borrowings
—
200,000
Proceeds from short-term borrowings
2,778,750
3,674,000
Payments on short-term borrowings
(3,169,750
)
(3,595,000
)
Net cash used for financing activities
(651,519
)
(894,018
)
Effect of exchange rates on cash and cash
equivalents
(6,708
)
(15,206
)
Net change in cash and cash equivalents,
including cash classified within assets held for sale
(40,263
)
(69,881
)
Less: net increase in cash and cash
equivalents within assets held for sale
(2,486
)
—
Cash and cash equivalents, beginning of
period
217,482
257,413
Cash and cash equivalents, end of
period
$
174,733
$
187,532
As of September 30,
Operational Data:
2023
2022
Employees
15,391
17,945
CHRW-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101510939/en/
FOR INQUIRIES, CONTACT: Chuck Ives, Director of Investor
Relations Email: chuck.ives@chrobinson.com
CH Robinson Worldwide (NASDAQ:CHRW)
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