C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW)
today reported financial results for the quarter ended December 31,
2023.
Fourth Quarter Key
Metrics:
- Gross profits decreased 20.0% to $609.3 million
- Income from operations decreased 34.5% to $107.4
million
- Adjusted operating margin(1) decreased 400 basis points to
17.4%
- Diluted earnings per share (EPS) decreased 67.5% to
$0.26
- Adjusted EPS(1) decreased 52.8% to $0.50
- Cash generated by operations decreased by $726.1 million to
$47.3 million
Full-Year Key Metrics:
- Gross profits decreased 27.9% to $2.6 billion
- Income from operations decreased 59.4% to $514.6
million
- Adjusted operating margin(1) decreased 1,550 basis points to
19.8%
- Diluted EPS decreased 63.2% to $2.72
- Adjusted EPS(1) decreased 56.2% to $3.30
- Cash generated by operations decreased by $918.2 million to
$731.9 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.
"Our fourth quarter results did not meet our expectations as we
continue to battle through a poor demand and pricing environment.
Weak freight demand in an elongated market trough, combined with
excess carrier capacity, continued to result in a very competitive
market," said C.H. Robinson's President and Chief Executive
Officer, Dave Bozeman. "With this environment in play, we targeted
more truckload volume in the spot market, where we could capture
more profit due to seasonal market tension. This led to a
sequential improvement in our overall truckload profit per load in
October and November. However, in December, our profit per load
declined as the cost of purchased transportation moved seasonally
higher. In Global Forwarding, we increased our ocean shipments on a
year-over-year basis, but they were down sequentially, as they
typically are in a fourth quarter.
"As the global freight market fluctuates due to seasonal,
cyclical and geopolitical factors, we remain focused on what we can
control, by providing superior service to our customers and
carriers, streamlining 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, value-added solutioning and exception management. Our 17%
improvement in NAST shipments per person per day in the fourth
quarter exceeded our stated 15% target and is an indicator of the
progress that we’ve made on removing waste and manual touches.
These efforts are also bearing fruit in other key areas of our
business, as Global Forwarding achieved a 20% year-over-year
improvement in their shipments per person per month in the fourth
quarter. Our continued focus on productivity improvements is one
part of our plan to address and optimize our enterprise-wide
structural costs," added Bozeman. "As we continue to improve the
customer experience and our cost to serve, I’m focused on ensuring
that we’ll be ready for the eventual freight market rebound, with a
durable cost structure that decouples volume growth from headcount
growth and drives operating leverage.
"We share the sentiment of some of our peers, in that we’re
happy to say goodbye to 2023. And although 2024 still presents some
of the same challenges and headwinds, I’m excited about the work
that we’re doing to reinvigorate Robinson’s winning culture and
unlock the power of our portfolio. I continue to see an opportunity
for the company to reach its full potential and create more
shareholder value by improving our value proposition, increasing
our market share, accelerating growth, further reducing our
structural costs, and improving our efficiency, operating margins
and profitability. I’m confident that together we will win for our
customers, carriers, employees and shareholders, and I’m incredibly
excited about our future," Bozeman concluded.
Summary of Fourth Quarter of 2023
Results Compared to the Fourth Quarter of 2022
- Total revenues decreased 16.7% to $4.2 billion,
primarily driven by lower pricing in our truckload and ocean
services.
- Gross profits decreased 20.0% to $609.3 million.
Adjusted gross profits decreased 19.5% to $618.6 million,
primarily driven by lower adjusted gross profit per transaction in
truckload.
- Operating expenses decreased 15.4% to $511.2 million.
Personnel expenses decreased 15.3% to $361.8 million,
primarily due to cost optimization efforts and lower variable
compensation. Average headcount declined 13.3%. Other selling,
general and administrative (“SG&A”)expenses decreased 15.5%
to $149.4 million, primarily due to an impairment of internally
developed software recorded in the prior year and a decrease in
purchased and contracted services in the current year.
- Income from operations totaled $107.4 million, down
34.5% due to the decrease in adjusted gross profits, partially
offset by the decline in operating expenses. Adjusted operating
margin(1) of 17.4% declined 400 basis points.
- Interest and other income/expense, net totaled $38.1
million of expense, consisting primarily of $21.6 million of
interest expense, which decreased $3.1 million versus last year,
due to a lower average debt balance, and an $18.5 million net loss
from foreign currency revaluation and realized foreign currency
gains and losses.
- The effective tax rate in the quarter was 55.3%,
compared to 20.9% in the fourth quarter last year. The higher rate
in the fourth quarter of this year was driven by one-time impacts
of a settlement with the IRS related to tax incentives for domestic
investments in the years 2014 through 2017 and the tax effects of
the divestiture of our Argentina operations, partially offset by
lower income before taxes.
- Net income totaled $31.0 million, down 67.8% from a year
ago. Diluted EPS of $0.26 decreased 67.5%. Adjusted
EPS(1) of $0.50 decreased 52.8%.
(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 2023 Year-to-Date Results
Compared to 2022
- Total revenues decreased 28.7% to $17.6 billion,
primarily driven by lower pricing in our ocean and truckload
services.
- Gross profits decreased 27.9% to $2.6 billion.
Adjusted gross profits decreased 27.5% to $2.6 billion,
primarily driven by lower adjusted gross profit per transaction in
truckload and ocean.
- Operating expenses decreased 10.2% to $2.1 billion.
Personnel expenses decreased 14.9% to $1.5 billion,
primarily due to cost optimization efforts and lower variable
compensation. Average headcount declined 8.9%. Other SG&A
expenses increased 3.5% to $624.3 million, primarily due to a
$25.3 million gain on the sale-leaseback of our Kansas City
regional center recorded in the prior year, partially offset by
decreased purchased and contracted services in the current
year.
- Income from operations totaled $514.6 million, down
59.4% from last year, due to the decrease in adjusted gross
profits, partially offset by the decline in operating expenses.
Adjusted operating margin(1) of 19.8% decreased 1,550 basis
points.
- Interest and other income/expense, net totaled $105.4
million of expense, primarily consisting of $90.2 million of
interest expense, which increased $13.1 million versus last year
due to higher average variable interest rates. The year-to-date
results also include a $24.4 million net loss from foreign currency
revaluation and realized foreign currency gains and losses.
- The effective tax rate for the full year ended December
31, 2023 was 20.5% compared to 19.4% in the year-ago period. The
higher rate in the current period was driven by one-time impacts of
a settlement with the IRS related to tax incentives for domestic
investments in the years 2014 through 2017, the tax effects of the
divestiture of our Argentina operations, and lower U.S. tax credits
and incentives, partially offset by lower income before taxes.
- Net income totaled $325.1 million, down 65.4% from a
year ago. Diluted EPS of $2.72 decreased 63.2%. Adjusted
EPS(1) of $3.30 decreased 56.2%.
(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 December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Total revenues
$
3,000,650
$
3,563,071
(15.8
)%
$
12,471,075
$
15,827,467
(21.2
)%
Adjusted gross profits(1)
380,157
502,266
(24.3
)%
1,593,854
2,196,704
(27.4
)%
Income from operations
95,958
162,550
(41.0
)%
459,960
833,302
(44.8
)%
____________________________________________
(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.
Fourth quarter total revenues for the NAST segment totaled $3.0
billion, a decrease of 15.8% 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 24.3% in the quarter to $380.2 million. Adjusted
gross profits in truckload decreased 30.8% due to a 29.5% decrease
in adjusted gross profit per shipment and a 1.5% decline in
truckload shipments. Our average truckload linehaul rate per mile
charged to our customers, which excludes fuel surcharges, decreased
approximately 13.5% in the quarter compared to the prior year,
while truckload linehaul cost per mile, excluding fuel surcharges,
decreased approximately 10.5%, resulting in a 28.0% decrease in
truckload adjusted gross profit per mile. LTL adjusted gross
profits decreased 9.0% versus the year-ago period, as adjusted
gross profit per order decreased 8.5% and LTL shipments decreased
0.5%. NAST overall volume growth was down 1.0% for the quarter.
Operating expenses decreased 16.3%, primarily due to cost
optimization efforts, including lower average employee headcount,
lower variable compensation, and lower technology expenses. NAST
average employee headcount was down 15.8% in the quarter. Income
from operations decreased 41.0% to $96.0 million, and adjusted
operating margin declined 720 basis points to 25.2%.
Global Forwarding
Results
Summarized financial results of our Global Forwarding segment
are as follows (dollars in thousands):
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Total revenues
$
708,814
$
1,013,306
(30.0
)%
$
2,997,704
$
6,812,008
(56.0
)%
Adjusted gross profits(1)
162,322
188,749
(14.0
)%
689,365
1,083,473
(36.4
)%
Income from operations
22,576
28,216
(20.0
)%
85,830
449,364
(80.9
)%
____________________________________________
(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.
Fourth quarter total revenues for the Global Forwarding segment
decreased 30.0% to $708.8 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 14.0% in the quarter to $162.3 million. Ocean adjusted
gross profits decreased 17.2%, driven by a 20.5% decrease in
adjusted gross profit per shipment, partially offset by a 4.0%
increase in shipments. Air adjusted gross profits decreased 11.5%,
driven by a 9.0% decrease in adjusted gross profit per metric ton
shipped and a 2.5% decline in metric tons shipped. Customs adjusted
gross profits decreased 3.1%, driven primarily by a 7.5% decrease
in adjusted gross profit per transaction, partially offset by a
4.5% increase in transaction volume. Operating expenses decreased
12.9%, primarily due to lower restructuring expenses, cost
optimization efforts, including lower average employee headcount,
and lower variable compensation. Fourth quarter average employee
headcount decreased 12.6%. Income from operations decreased 20.0%
to $22.6 million, and adjusted operating margin declined 100 basis
points to 13.9% 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 December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Total revenues
$
512,423
$
490,444
4.5
%
$
2,127,664
$
2,057,150
3.4
%
Adjusted gross profits(1):
Robinson Fresh
$
31,093
$
28,476
9.2
%
$
131,216
$
121,639
7.9
%
Managed Services
28,846
29,799
(3.2
)%
116,196
115,094
1.0
%
Other Surface Transportation
16,205
18,884
(14.2
)%
73,977
76,267
(3.0
)%
____________________________________________
(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.
Fourth quarter Robinson Fresh adjusted gross profits increased
9.2% to $31.1 million, due to a 4.5% increase in case volume and
integrated supply chain solutions for foodservice and wholesale
customers. Managed Services adjusted gross profits decreased 3.2%,
primarily due to a reduction in freight under management related to
lower freight rates. Other Surface Transportation adjusted gross
profits decreased 14.2% to $16.2 million, primarily due to a 16.6%
decrease in Europe truckload adjusted gross profits.
Other Income Statement
Items
The fourth quarter effective tax rate was 55.3%, up from 20.9%
last year. The higher rate in the fourth quarter of this year was
driven by one-time impacts of a settlement with the IRS related to
tax incentives for domestic investments in the years 2014 through
2017, the tax effects from the divestiture of our Argentina
business, and higher foreign taxes, partially offset by lower
income before taxes and higher foreign tax credits. For 2024, we
expect our full-year effective tax rate to be 17% to 19%.
Interest and other income/expense, net totaled $38.1 million of
expense, consisting primarily of $21.6 million of interest expense,
which decreased $3.1 million versus the fourth quarter of 2022 due
to a lower average debt balance, and an $18.5 million net loss from
foreign currency revaluation and realized foreign currency gains
and losses.
Diluted weighted average shares outstanding in the quarter were
down 0.7% due to share repurchases over the past twelve months.
Cash Flow Generation and Capital
Distribution
Cash generated from operations totaled $47.3 million in the
fourth quarter, compared to $773.4 million of cash generated from
operations in the fourth quarter of 2022. The $726.1 million
decrease was primarily related to a $657.3 million decline in cash
provided by changes in net operating working capital, due to a $7.4
million sequential increase in net operating working capital in the
fourth quarter of 2023 compared to a $649.9 million sequential
decrease in the fourth quarter of 2022.
In the fourth quarter of 2023, cash returned to shareholders
totaled $74.1 million, with $72.6 million in cash dividends and
$1.5 million in repurchases of common stock.
Capital expenditures totaled $16.1 million in the quarter.
Capital expenditures for 2024 are expected to be $85 million to $95
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 $22 billion in freight under management and 19 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 more than 90,000 of our 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; risks associated with identifying and completing suitable
acquisitions; 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 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; 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; 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 Fourth Quarter 2023 Earnings Conference Call
Wednesday, January 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 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 December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Adjusted gross profits(1):
Transportation
Truckload
$
243,839
$
346,845
(29.7
)%
$
1,039,079
$
1,561,310
(33.4
)%
LTL
136,602
149,376
(8.6
)%
550,373
632,116
(12.9
)%
Ocean
99,191
120,296
(17.5
)%
420,883
729,839
(42.3
)%
Air
28,224
32,030
(11.9
)%
123,470
198,166
(37.7
)%
Customs
23,730
24,495
(3.1
)%
97,096
107,691
(9.8
)%
Other logistics services
59,402
68,909
(13.8
)%
255,735
251,547
1.7
%
Total transportation
590,988
741,951
(20.3
)%
2,486,636
3,480,669
(28.6
)%
Sourcing
27,635
26,223
5.4
%
117,972
112,508
4.9
%
Total adjusted gross profits
$
618,623
$
768,174
(19.5
)%
$
2,604,608
$
3,593,177
(27.5
)%
____________________________________________
(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 December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Revenues:
Transportation
$
3,930,461
$
4,798,027
(18.1
)%
$
16,372,660
$
23,516,384
(30.4
)%
Sourcing
291,426
268,794
8.4
%
1,223,783
1,180,241
3.7
%
Total revenues
4,221,887
5,066,821
(16.7
)%
17,596,443
24,696,625
(28.7
)%
Costs and expenses:
Purchased transportation and related
services
3,339,473
4,056,076
(17.7
)%
13,886,024
20,035,715
(30.7
)%
Purchased products sourced for resale
263,791
242,571
8.7
%
1,105,811
1,067,733
3.6
%
Direct internally developed software
amortization
9,320
6,656
40.0
%
33,620
25,487
31.9
%
Total direct expenses
3,612,584
4,305,303
(16.1
)%
15,025,455
21,128,935
(28.9
)%
Gross profit
$
609,303
$
761,518
(20.0
)%
$
2,570,988
$
3,567,690
(27.9
)%
Plus: Direct internally developed software
amortization
9,320
6,656
40.0
%
33,620
25,487
31.9
%
Adjusted gross profit
$
618,623
$
768,174
(19.5
)%
$
2,604,608
$
3,593,177
(27.5
)%
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 and gain on
sale of property is a similar non-GAAP financial measure as
adjusted operating margin, but also excludes the impact of
restructuring and the gain on sale and leaseback of our Kansas City
regional center in 2022 (the “gain on sale of property”). We
believe adjusted operating margin and adjusted operating margin -
excluding restructuring and gain on sale of property 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 and
gain on sale of property are presented below:
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Total revenues
$
4,221,887
$
5,066,821
(16.7
%)
$
17,596,443
$
24,696,625
(28.7
%)
Income from operations
107,429
164,034
(34.5
%)
514,607
1,266,782
(59.4
%)
Operating margin
2.5
%
3.2
%
(70) bps
2.9
%
5.1
%
(220) bps
Adjusted gross profit
$
618,623
$
768,174
(19.5
%)
$
2,604,608
$
3,593,177
(27.5
%)
Income from operations
107,429
164,034
(34.5
%)
514,607
1,266,782
(59.4
%)
Adjusted operating margin
17.4
%
21.4
%
(400) bps
19.8
%
35.3
%
(1,550) bps
Adjusted gross profit
$
618,623
$
768,174
(19.5
%)
$
2,604,608
$
3,593,177
(27.5
%)
Adjusted income from operations
103,153
200,718
(48.6
%)
552,648
1,278,170
(56.8
%)
Adjusted operating margin - excluding
restructuring and gain on sale of property
16.7
%
26.1
%
(940) bps
21.2
%
35.6
%
(1,440) bps
GAAP to Non-GAAP Reconciliation
(unaudited, in thousands)
Our adjusted income (loss) from operations, adjusted operating
margin - excluding restructuring and gain on sale of property, 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
gain on sale of property, and net income per share (diluted)
excluding the impact of restructuring and gain on sale of property.
The adjustments to net income per share (diluted) include
restructuring-related costs, gain on sale of property, a foreign
currency loss on divested operations, and an income tax settlement.
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 gain on sale of property, 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 gain on sale of
property, 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 December 31, 2023
Non-GAAP
Reconciliation:
Income (loss) from operations
$
95,958
$
22,576
$
(11,105
)
$
107,429
Severance and other personnel expenses
—
(925
)
(409
)
(1,334
)
Other selling, general, and administrative
expenses
—
(3,084
)
142
(2,942
)
Total adjustments to operating income
(loss)(1)
—
(4,009
)
(267
)
(4,276
)
Adjusted income (loss) from operations
$
95,958
$
18,567
$
(11,372
)
$
103,153
Adjusted gross profit
$
380,157
$
162,322
$
76,144
$
618,623
Adjusted income (loss) from operations
95,958
18,567
(11,372
)
103,153
Adjusted operating margin - excluding
restructuring
25.2
%
11.4
%
N/M
16.7
%
NAST
Global Forwarding
All Other and Corporate
Consolidated
Twelve Months Ended December 31, 2023
Income (loss) from operations
$
459,960
$
85,830
$
(31,183
)
$
514,607
Severance and other personnel expenses
1,083
3,817
13,509
18,409
Other selling, general, and administrative
expenses
8
18,158
1,466
19,632
Total adjustments to operating income
(loss)(2)
1,091
21,975
14,975
38,041
Adjusted income (loss) from operations
$
461,051
$
107,805
$
(16,208
)
$
552,648
Adjusted gross profit
$
1,593,854
$
689,365
$
321,389
$
2,604,608
Adjusted income (loss) from operations
461,051
107,805
(16,208
)
552,648
Adjusted operating margin - excluding
restructuring
28.9
%
15.6
%
N/M
21.2
%
Three Months Ended December 31,
2023
Twelve Months Ended December 31,
2023
$ in 000's
per share
$ in 000's
per share
Net income and per share (diluted)
$
30,973
$
0.26
$
325,129
$
2.72
Restructuring and related costs,
pre-tax(1)(2)
(2,856
)
(0.02
)
39,461
0.32
Foreign currency loss on divested
operations, pre-tax
7,454
0.06
16,375
0.14
Income tax settlement and tax effect of
adjustments
23,928
0.20
14,172
0.12
Adjusted net income and per share
(diluted)
$
59,499
$
0.50
$
395,137
$
3.30
____________________________________________
(1) The three months ended December 31,
2023 include restructuring expense adjustments of $4.3 million
related to the divestiture of our operations in Argentina.
(2) The twelve months ended December 31,
2023 include restructuring expenses of $18.4 million related to
workforce reductions in addition to $19.6 million of asset
impairment and other charges related to the divestiture of our
operations in Argentina.
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended December 31, 2022
Non-GAAP
Reconciliation:
Income (loss) from operations
$
162,550
$
28,216
$
(26,732
)
$
164,034
Severance and other personnel expenses
6,323
3,831
11,380
21,534
Other selling, general, and administrative
expenses
3,175
3,174
8,801
15,150
Total adjustments to operating income
(loss)(1)
9,498
7,005
20,181
36,684
Adjusted income (loss) from operations
$
172,048
$
35,221
$
(6,551
)
$
200,718
Adjusted gross profit
$
502,266
$
188,749
$
77,159
$
768,174
Adjusted income (loss) from operations
172,048
35,221
(6,551
)
200,718
Adjusted operating margin - excluding
restructuring
34.3
%
18.7
%
N/M
26.1
%
NAST
Global Forwarding
All Other and Corporate
Consolidated
Twelve Months Ended December 31, 2022
Income (loss) from operations
$
833,302
$
449,364
$
(15,884
)
$
1,266,782
Severance and other personnel expenses
6,323
3,831
11,380
21,534
Other selling, general, and administrative
expenses
3,175
3,174
(16,495
)
(10,146
)
Total adjustments to operating income
(loss)(1)(2)
9,498
7,005
(5,115
)
11,388
Adjusted income (loss) from operations
$
842,800
$
456,369
$
(20,999
)
$
1,278,170
Adjusted gross profit
$
2,196,704
$
1,083,473
$
313,000
$
3,593,177
Adjusted income (loss) from operations
842,800
456,369
(20,999
)
1,278,170
Adjusted operating margin - excluding
restructuring and gain on sale of property
38.4
%
42.1
%
N/M
35.6
%
Three Months Ended December 31,
2022
Twelve Months Ended December 31,
2022
$ in 000's
per share
$ in 000's
per share
Net income and per share (diluted)
$
96,193
$
0.80
$
940,524
$
7.40
Restructuring and related costs,
pre-tax(1)
36,684
0.30
36,684
0.29
Gain on sale of property, pre-tax(2)
—
—
(25,296
)
(0.20
)
Foreign currency loss on divested
operations, pre-tax
3,407
0.03
9,268
0.07
Tax effect of adjustments
(8,804
)
$
(0.07
)
(2,733
)
$
(0.02
)
Adjusted net income and per share
(diluted)
$
127,480
$
1.06
$
958,447
$
7.54
____________________________________________
(1) The three and twelve months ended
December 31, 2022 include restructuring expenses of $21.5 million
related to workforce reductions and $15.2 million of other charges,
primarily related to an impairment of internally developed software
due to reprioritizing our investments in technology to accelerate
our digital transformation and productivity initiatives.
(2) The twelve months ended December 31,
2022 include a gain on sale of property and equipment of $25.3
million related to the sale-leaseback of our Kansas City regional
center.
Condensed Consolidated
Statements of Income
(unaudited, in thousands, except
per share data)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
% change
2023
2022
% change
Revenues:
Transportation
$
3,930,461
$
4,798,027
(18.1
)%
$
16,372,660
$
23,516,384
(30.4
)%
Sourcing
291,426
268,794
8.4
%
1,223,783
1,180,241
3.7
%
Total revenues
4,221,887
5,066,821
(16.7
)%
17,596,443
24,696,625
(28.7
)%
Costs and expenses:
Purchased transportation and related
services
3,339,473
4,056,076
(17.7
)%
13,886,024
20,035,715
(30.7
)%
Purchased products sourced for resale
263,791
242,571
8.7
%
1,105,811
1,067,733
3.6
%
Personnel expenses
361,820
427,310
(15.3
)%
1,465,735
1,722,980
(14.9
)%
Other selling, general, and administrative
expenses
149,374
176,830
(15.5
)%
624,266
603,415
3.5
%
Total costs and expenses
4,114,458
4,902,787
(16.1
)%
17,081,836
23,429,843
(27.1
)%
Income from operations
107,429
164,034
(34.5
)%
514,607
1,266,782
(59.4
)%
Interest and other income/expense, net
(38,149
)
(42,476
)
(10.2
)%
(105,421
)
(100,017
)
5.4
%
Income before provision for income
taxes
69,280
121,558
(43.0
)%
409,186
1,166,765
(64.9
)%
Provision for income taxes
38,307
25,365
51.0
%
84,057
226,241
(62.8
)%
Net income
$
30,973
$
96,193
(67.8
)%
$
325,129
$
940,524
(65.4
)%
Net income per share (basic)
$
0.26
$
0.81
(67.9
)%
$
2.74
$
7.48
(63.4
)%
Net income per share (diluted)
$
0.26
$
0.80
(67.5
)%
$
2.72
$
7.40
(63.2
)%
Weighted average shares outstanding
(basic)
118,605
119,212
(0.5
)%
118,551
125,743
(5.7
)%
Weighted average shares outstanding
(diluted)
119,613
120,472
(0.7
)%
119,677
127,150
(5.9
)%
Business Segment
Information
(unaudited, in thousands, except
average employee headcount)
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended December 31, 2023
Total revenues
$
3,000,650
$
708,814
$
512,423
$
4,221,887
Adjusted gross profits(1)
380,157
162,322
76,144
618,623
Income (loss) from operations
95,958
22,576
(11,105
)
107,429
Depreciation and amortization
5,638
2,915
14,533
23,086
Total assets(2)
3,008,459
1,094,895
1,121,926
5,225,280
Average employee headcount
6,103
5,021
4,195
15,319
NAST
Global Forwarding
All Other and Corporate
Consolidated
Three Months Ended December 31, 2022
Total revenues
$
3,563,071
$
1,013,306
$
490,444
$
5,066,821
Adjusted gross profits(1)
502,266
188,749
77,159
768,174
Income (loss) from operations
162,550
28,216
(26,732
)
164,034
Depreciation and amortization
5,542
5,441
13,070
24,053
Total assets(2)
3,304,480
1,507,913
1,142,171
5,954,564
Average employee headcount
7,251
5,745
4,676
17,672
____________________________________________
(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
Twelve Months Ended December 31, 2023
Total revenues
$
12,471,075
$
2,997,704
$
2,127,664
$
17,596,443
Adjusted gross profits(1)
1,593,854
689,365
321,389
2,604,608
Income (loss) from operations
459,960
85,830
(31,183
)
514,607
Depreciation and amortization
23,027
19,325
56,633
98,985
Total assets(2)
3,008,459
1,094,895
1,121,926
5,225,280
Average employee headcount
6,469
5,222
4,350
16,041
NAST
Global Forwarding
All Other and Corporate
Consolidated
Twelve Months Ended December 31, 2022
Total revenues
$
15,827,467
$
6,812,008
$
2,057,150
$
24,696,625
Adjusted gross profits(1)
2,196,704
1,083,473
313,000
3,593,177
Income (loss) from operations
833,302
449,364
(15,884
)
1,266,782
Depreciation and amortization
23,643
21,835
47,298
92,776
Total assets(2)
3,304,480
1,507,913
1,142,171
5,954,564
Average employee headcount
7,365
5,712
4,524
17,601
____________________________________________
(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)
December 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
145,524
$
217,482
Receivables, net of allowance for credit
loss
2,381,963
2,991,753
Contract assets, net of allowance for
credit loss
189,900
257,597
Prepaid expenses and other
163,307
122,406
Total current assets
2,880,694
3,589,238
Property and equipment, net of accumulated
depreciation and amortization
144,718
159,432
Right-of-use lease assets
353,890
372,141
Intangible and other assets, net of
accumulated amortization
1,845,978
1,833,753
Total assets
$
5,225,280
$
5,954,564
Liabilities and stockholders’
investment
Current liabilities:
Accounts payable and outstanding
checks
$
1,370,334
$
1,570,559
Accrued expenses:
Compensation
135,104
242,605
Transportation expense
147,921
199,092
Income taxes
4,748
15,210
Other accrued liabilities
159,435
168,009
Current lease liabilities
74,451
73,722
Current portion of debt
160,000
1,053,655
Total current liabilities
2,051,993
3,322,852
Long-term debt
1,420,487
920,049
Noncurrent lease liabilities
297,563
313,742
Noncurrent income taxes payable
21,289
28,317
Deferred tax liabilities
13,177
14,256
Other long-term liabilities
2,074
1,926
Total liabilities
3,806,583
4,601,142
Total stockholders’ investment
1,418,697
1,353,422
Total liabilities and stockholders’
investment
$
5,225,280
$
5,954,564
Condensed Consolidated
Statements of Cash Flow
(unaudited, in thousands, except
operational data)
Twelve Months Ended December
31,
Operating activities:
2023
2022(1)
Net income
$
325,129
$
940,524
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization
98,985
92,776
Provision for credit losses
(6,047
)
(4,476
)
Stock-based compensation
58,169
90,677
Deferred income taxes
(37,746
)
(58,566
)
Excess tax benefit on stock-based
compensation
(11,319
)
(13,662
)
Loss on disposal group held for sale
17,698
—
Other operating activities
5,541
(6,627
)
Changes in operating elements, net of
acquisitions:
Receivables
607,259
923,524
Contract assets
68,041
197,097
Prepaid expenses and other
(39,048
)
(28,495
)
Right of use asset
19,255
(82,754
)
Accounts payable and outstanding
checks
(200,843
)
(307,266
)
Accrued compensation
(108,084
)
42,266
Accrued transportation expenses
(51,171
)
(143,686
)
Accrued income taxes
(2,284
)
(69,817
)
Other accrued liabilities
(11,991
)
2,371
Lease liability
(16,500
)
83,084
Other assets and liabilities
16,902
(6,799
)
Net cash provided by operating
activities
731,946
1,650,171
Investing activities:
Purchases of property and equipment
(29,989
)
(61,915
)
Purchases and development of software
(54,122
)
(66,582
)
Proceeds from sale of property and
equipment
1,324
63,579
Net cash used for investing activities
(82,787
)
(64,918
)
Financing activities:
Proceeds from stock issued for employee
benefit plans
56,914
100,059
Stock tendered for payment of withholding
taxes
(25,294
)
(28,388
)
Repurchases of common stock
(63,884
)
(1,459,900
)
Cash dividends
(291,569
)
(285,317
)
Proceeds from long-term borrowings
—
200,000
Proceeds from short-term borrowings
3,893,750
4,500,000
Payments on short-term borrowings
(4,287,750
)
(4,646,000
)
Net cash used for financing activities
(717,833
)
(1,619,546
)
Effect of exchange rates on cash and cash
equivalents
(3,284
)
(5,638
)
Net change in cash and cash
equivalents
(71,958
)
(39,931
)
Cash and cash equivalents, beginning of
period
217,482
257,413
Cash and cash equivalents, end of
period
$
145,524
$
217,482
As of December 31,
Operational Data:
2023
2022
Employees
15,246
17,399
____________________________________________
(1) The Twelve Months Ended December 31,
2022 has been adjusted to conform to current year presentation.
CHRW-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240131786378/en/
Chuck Ives, Director of Investor Relations
chuck.ives@chrobinson.com
CH Robinson Worldwide (NASDAQ:CHRW)
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