C.H. Robinson Reports 2022 Fourth Quarter Results

Rhea-AI Summary

C.H. Robinson Worldwide, Inc. (Nasdaq: CHRW) reported a challenging fourth quarter ending December 31, 2022, with total revenues falling 22.1% to $5.1 billion due to decreased pricing and volume. Gross profits dropped 10.5% to $761.5 million and diluted EPS fell 54% to $0.80. Full-year results showed total revenues increased 6.9% to $24.7 billion, and net income rose 11.4% to $940.5 million.

Interim CEO Scott Anderson emphasized a scalable operating model to enhance profitability amidst a softening market. The company remains focused on improving customer and carrier experiences, despite current economic challenges.

Positive

• Full-year net income increased 11.4% to $940.5 million.
• Total revenues for the year increased 6.9% to $24.7 billion.
• Adjusted EPS for the full year rose 20.8% to $7.62.

Negative

• Fourth quarter gross profits decreased 10.5% to $761.5 million.
• Diluted EPS for Q4 dropped 54% to $0.80.
• Fourth quarter total revenues declined 52.7% in Global Forwarding segment.

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)-- C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW) today reported financial results for the quarter ended December 31, 2022.

Fourth Quarter Key Metrics:

• Gross profits decreased 10.5% to $761.5 million
• Income from operations decreased 42.9% to $164.0 million
• Adjusted operating margin⁽¹⁾ decreased 1,220 basis points to 21.4%
• Diluted earnings per share (EPS) decreased 54.0% to $0.80
• Adjusted EPS⁽¹⁾ decreased 40.8% to $1.03
• Cash generated by operations improved to $773.4 million

Full-Year Key Metrics:

• Gross profits increased 13.9% to $3.6 billion
• Income from operations increased 17.1% to $1.3 billion
• Adjusted operating margin⁽¹⁾ increased 100 basis points to 35.3%
• Diluted EPS increased 17.3% to $7.40
• Adjusted EPS⁽¹⁾ increased 20.8% to $7.62
• Cash generated by operations improved to $1.7 billion

(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 and 12 for further discussion and GAAP to Non-GAAP reconciliations.

"We're increasing our focus on delivering a scalable operating model to lower our costs, improve the customer and carrier experience and foster long-term profitable growth through cycles," said Scott Anderson, Interim Chief Executive Officer. "The current point in the cycle is one of shippers managing through elevated inventories amidst slowing economic growth, causing unseasonably soft demand for transportation services. At the same time, prices for ground transportation and global freight forwarding are declining due to the changing balance of supply and demand. While a correction in the freight forwarding market was certainly expected, the speed and magnitude of the correction in only two quarters was unexpected, with ocean rates on some trade lanes already back to pre-pandemic levels."

"I believe we’re uniquely positioned in the marketplace to deliver for our shippers, carriers and shareholders through a combination of our digital solutions, our global suite of services and our network of global logistics experts," Anderson added.

Summary of Fourth Quarter Results Compared to the Fourth Quarter of 2021

• Total revenues decreased 22.1% to $5.1 billion, driven by lower pricing and volume across most of our services.
• Gross profits decreased 10.5% to $761.5 million. Adjusted gross profits decreased 10.3% to $768.2 million, primarily driven by lower adjusted gross profit per transaction in ocean and air.
• Operating expenses increased 6.2% to $604.1 million. Personnel expenses increased 1.7% to $427.3 million, primarily due to $21.5 million of restructuring-related costs, which were partially offset by a decrease in equity compensation. Selling, general and administrative ("SG&A") expenses of $176.8 million increased 18.7%, primarily due to $15.2 million of restructuring charges, primarily related to an impairment of internally developed software, and increased legal settlements, partially offset by a decrease in credit losses.
• Income from operations totaled $164.0 million, down 42.9% due to the decrease in adjusted gross profits and $36.7 million of restructuring charges. Adjusted operating margin of 21.4% declined 1,220 basis points.
• Interest and other income/expense, net totaled $42.5 million of expense, consisting primarily of $24.8 million of interest expense, which increased $10.7 million versus last year due primarily to higher short-term average interest rates, and $16.9 million of foreign currency revaluation and realized foreign currency gains and losses, which increased $10.4 million versus last year primarily due to foreign currency revaluation on intercompany assets and liabilities denominated in U.S. Dollars in countries where the U.S. Dollar is not the functional currency.
• The effective tax rate in the quarter was 20.9% compared to 14.5% in the fourth quarter last year. The lower rate in the fourth quarter of last year was due primarily to a favorable mix of foreign earnings and an increased benefit related to U.S. tax credits and incentives.
• Net income totaled $96.2 million, down 58.2% from a year ago. Diluted EPS of $0.80 decreased 54.0%. Adjusted EPS of $1.03 decreased 40.8%.

Summary of Full Year Results Compared to 2021

• Total revenues increased 6.9% to $24.7 billion, driven primarily by higher pricing in truckload, less-than truckload ("LTL") and ocean services.
• Gross profits increased 13.9% to $3.6 billion. Adjusted gross profits increased 14.0% to $3.6 billion, primarily driven by higher adjusted gross profit per transaction in truckload and LTL services.
• Operating expenses increased 12.4% to $2.3 billion. Personnel expenses increased 11.6% to $1.7 billion, primarily due to higher average employee headcount, which increased 11.7%. SG&A expenses increased 14.6% to $603.4 million, primarily due to increases in purchased and contracted services, legal settlements, travel expenses and an impairment of internally developed software, partially offset by a $25.3 million gain on the sale-leaseback of our Kansas City regional center and a decrease in credit losses.
• Income from operations totaled $1.3 billion, up 17.1% from last year, primarily due to the increase in adjusted gross profits, partially offset by the increase in operating expenses. Adjusted operating margin of 35.3% increased 100 basis points.
• Interest and other income/expense, net totaled $100.0 million of expense, which primarily consisted of $77.1 million of interest expense, which increased $25.0 million versus last year due to a higher average debt balance. The year-to-date results also included a $23.5 million unfavorable impact from foreign currency revaluation and realized foreign currency gains and losses, which increased $8.4 million versus last year primarily due to foreign currency revaluation on intercompany assets and liabilities denominated in U.S. Dollars in countries where the U.S. Dollar is not the functional currency.
• The effective tax rate for the full year was 19.4% compared to 17.4% in the year-ago period. The lower rate in the year-ago period was due primarily to a favorable mix of foreign earnings and an increased benefit related to U.S. tax credits and incentives.
• Net income totaled $940.5 million, up 11.4% from a year ago. Diluted EPS of $7.40 increased 17.3%. Adjusted EPS of $7.62 increased 20.8%.

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,
	2022			2021			% change			2022			2021			% change
Total revenues	$	3,563,071		$	3,896,025		(8.5	) %		$	15,827,467		$	14,507,917		9.1	%
Adjusted gross profits(1)		502,266			475,100		5.7	%			2,196,704			1,792,953		22.5	%
Income from operations		162,550			148,440		9.5	%			833,302			585,351		42.4	%

____________________________________________

(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.

Fourth quarter total revenues for the NAST segment totaled $3.6 billion, a decrease of 8.5% over the prior year, primarily driven by lower truckload pricing and volume. NAST adjusted gross profits increased 5.7% in the quarter to $502.3 million. Adjusted gross profits in truckload increased 2.0% due to a 6.5% increase in adjusted gross profit per shipment, partially offset by a 4.0% decline in truckload shipments. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, decreased approximately 21.0% in the quarter compared to the prior year, while truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 24.0%, resulting in a 3.0% increase in truckload adjusted gross profit per mile. LTL adjusted gross profits increased 7.3% versus the year-ago period, as adjusted gross profit per order increased 8.0% and volume declined 1.0%. NAST overall volume growth was down 2.0% for the quarter. Operating expenses increased 4.0% primarily due to $9.5 million of restructuring charges, higher legal settlements and increased technology expenses, partially offset by lower equity compensation. NAST average employee headcount was up 2.9% in the quarter. Income from operations increased 9.5% to $162.6 million, and adjusted operating margin expanded 120 basis points to 32.4%.

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,
	2022			2021			% change			2022			2021			% change
Total revenues	$	1,013,306		$	2,144,056		(52.7	) %		$	6,812,008		$	6,729,790		1.2	%
Adjusted gross profits(1)		188,749			309,589		(39.0	) %			1,083,473			1,073,541		0.9	%
Income from operations		28,216			146,800		(80.8	) %			449,364			510,756		(12.0	) %

____________________________________________

(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 total revenues for the Global Forwarding segment decreased 52.7% to $1.0 billion, driven by lower pricing and volumes in our ocean and air services, reflecting softening freight demand. Adjusted gross profits decreased 39.0% in the quarter to $188.7 million. Ocean adjusted gross profits decreased 42.7%, driven by a 36.5% decrease in adjusted gross profit per shipment and a 9.5% decline in shipments. Adjusted gross profits in air decreased 51.5%, driven by a 40.0% decrease in adjusted gross profit per metric ton shipped and a 19.5% decrease in metric tons shipped. Customs adjusted gross profits decreased 3.3%, driven by a 5.5% reduction in transaction volume. Operating expenses decreased 1.4%, primarily driven by lower incentive compensation and credit losses, partially offset by $7.0 million of restructuring charges and increased technology expenses. Fourth quarter average employee headcount increased 5.8%. Income from operations decreased 80.8% to $28.2 million, and adjusted operating margin declined 3,250 basis points to 14.9% 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,
	2022			2021			% change			2022			2021			% change
Total revenues	$	490,444		$	461,767		6.2	%		$	2,057,150		$	1,864,431		10.3	%
Adjusted gross profits(1):
Robinson Fresh	$	28,476		$	26,004		9.5	%		$	121,639		$	107,543		13.1	%
Managed Services		29,799			26,554		12.2	%			115,094			105,064		9.5	%
Other Surface Transportation		18,884			19,094		(1.1	) %			76,267			72,988		4.5	%

____________________________________________

(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.

Fourth quarter Robinson Fresh adjusted gross profits increased 9.5% to $28.5 million, driven by an increase in adjusted gross profit per case, which is primarily related to integrated supply chain and technology services and a 2.5% increase in case volume. Managed Services adjusted gross profits increased 12.2% in the quarter, due to growth in adjusted gross profit per transaction. Other Surface Transportation adjusted gross profits decreased 1.1% to $18.9 million, primarily due to a 1.4% decrease in Europe truckload adjusted gross profits.

Other Income Statement Items

The fourth quarter effective tax rate was 20.9%, up from 14.5% last year. The lower rate in the fourth quarter of last year was due primarily to a favorable mix of foreign earnings and an increased benefit related to U.S. tax credits and incentives. We expect our 2023 full-year effective tax rate to be 19% to 21%.

Interest and other income/expense, net totaled $42.5 million of expense, consisting primarily of $24.8 million of interest expense, which increased $10.7 million versus the fourth quarter of 2021 due primarily to higher average interest rates, and $16.9 million of foreign currency revaluation and realized foreign currency gains and losses.

Diluted weighted average shares outstanding in the quarter were down 9.2% due primarily to share repurchases over the past twelve months.

Cash Flow Generation and Capital Distribution

Cash generated from operations totaled $773.4 million in the fourth quarter, compared to $75.9 million cash generated from operations in the fourth quarter of 2021. The $697.5 million improvement was primarily due to a $649.9 million sequential decrease in net operating working capital in the fourth quarter of 2022, compared to a $199.9 million sequential increase in the fourth quarter of 2021. The decrease in net operating working capital in the fourth quarter of 2022 resulted primarily from a $916.5 million sequential decrease in accounts receivable and contract assets, compared to a $266.6 million sequential decrease in total accounts payable and accrued transportation expense in the fourth quarter of 2021.

In the fourth quarter of 2022, cash returned to shareholders increased 128% versus last year to $507.2 million, with $438.1 million in repurchases of common stock and $69.1 million in cash dividends.

Capital expenditures totaled $27.8 million in the quarter. Capital expenditures for 2023 are expected to be $90 million to $100 million.

Outlook

"As inflationary pressures continue to weigh on global economic growth and freight markets present cyclical challenges, we need to continue evolving our organization to bring greater focus to our highest long-term strategic priorities, including keeping the needs of our customers and carriers at the center of what we do while lowering our overall cost structure by driving scale," Anderson stated. "I believe in the strategy that the team is executing on to deliver a scalable operating model. We expect this initiative will continue to drive improvements in our customer and carrier experience and amplify the expertise of our people, all of which we believe will drive market share gains and growth. We expect these efforts will also improve our productivity, which will reduce our operating costs and lead to improved returns for our shareholders."

"Thank you to our employees for persevering during the period of extended market disruption and the market correction that has followed, and for continuing to provide industry-leading service to our customers and carriers," concluded Anderson.

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 85,000 contract carriers. Our technology is built by and for supply chain experts to bring faster, more meaningful improvements to our customers’ businesses. As a responsible global citizen, we are also proud to contribute millions of dollars to support causes that matter to our company, our Foundation and our employees. For more information, visit us at www.chrobinson.com (Nasdaq: CHRW).

Except for the historical information contained herein, the matters set forth in this release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to, factors such as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with significant disruptions in the transportation industry; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer base due to possible consolidation among our customers; risks with reliance on technology to operate our business; cyber-security related risks; risks associated with operations outside of the United States; our ability to successfully integrate the operations of acquired companies with our historic operations; risks related to our search for a permanent CEO and retention of key management personnel; climate change related risks; risks associated with our indebtedness, interest rates related risks; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulations; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of war on the economy; changes to our capital structure; changes due to catastrophic events including pandemics such as COVID-19; and other risks and uncertainties detailed in our Annual and Quarterly Reports.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date. All remarks made during our financial results conference call will be current at the time of the call, and we undertake no obligation to update the replay.

Conference Call Information:
C.H. Robinson Worldwide Fourth Quarter 2022 Earnings Conference Call
Wednesday, February 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 have revenues from multiple service lines.
	Three Months Ended December 31,									Twelve Months Ended December 31,
	2022			2021			% change			2022			2021			% change
Adjusted gross profits(1):
Transportation
Truckload		346,845		$	339,512		2.2	%		$	1,561,310		$	1,280,629		21.9	%
LTL		149,376			139,462		7.1	%			632,116			523,365		20.8	%
Ocean		120,296			209,801		(42.7	)%			729,839			711,223		2.6	%
Air		32,030			65,783		(51.3	)%			198,166			225,286		(12.0	)%
Customs		24,495			25,338		(3.3	)%			107,691			100,539		7.1	%
Other logistics services		68,909			52,508		31.2	%			251,547			210,958		19.2	%
Total transportation		741,951			832,404		(10.9	)%			3,480,669			3,052,000		14.0	%
Sourcing		26,223			23,937		9.6	%			112,508			100,089		12.4	%
Total adjusted gross profits		768,174		$	856,341		(10.3	)%		$	3,593,177		$	3,152,089		14.0	%

____________________________________________

(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.

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,
	2022			2021			% change			2022			2021			% change
Revenues:
Transportation	$	4,798,027		$	6,245,998		(23.2	)%		$	23,516,384		$	22,046,574		6.7	%
Sourcing		268,794			255,850		5.1	%			1,180,241			1,055,564		11.8	%
Total revenues		5,066,821			6,501,848		(22.1	)%			24,696,625			23,102,138		6.9	%
Costs and expenses:
Purchased transportation and related services		4,056,076			5,413,594		(25.1	)%			20,035,715			18,994,574		5.5	%
Purchased products sourced for resale		242,571			231,913		4.6	%			1,067,733			955,475		11.7	%
Direct internally developed software amortization		6,656			5,607		18.7	%			25,487			20,208		26.1	%
Total direct expenses		4,305,303			5,651,114		(23.8	)%			21,128,935			19,970,257		5.8	%
Gross profit	$	761,518		$	850,734		(10.5	)%		$	3,567,690		$	3,131,881		13.9	%
Plus: Direct internally developed software amortization		6,656			5,607		18.7	%			25,487			20,208		26.1	%
Adjusted gross profit	$	768,174		$	856,341		(10.3	)%		$	3,593,177		$	3,152,089		14.0	%

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profit. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross profit which we consider a primary performance metric as discussed above. The comparison of operating margin to adjusted operating margin is presented below:
	Three Months Ended December 31,											Twelve Months Ended December 31,
	2022				2021				% change			2022				2021				% change
Total revenues	$	5,066,821			$	6,501,848			(22.1	)%		$	24,696,625			$	23,102,138			6.9	%
Income from operations		164,034				287,406			(42.9	)%			1,266,782				1,082,108			17.1	%
Operating margin		3.2	%			4.4	%		(120) bps				5.1	%			4.7	%		40 bps
Adjusted gross profit	$	768,174			$	856,341			(10.3	)%		$	3,593,177			$	3,152,089			14.0	%
Income from operations		164,034				287,406			(42.9	)%			1,266,782				1,082,108			17.1	%
Adjusted operating margin		21.4	%			33.6	%		(1,220) bps				35.3	%			34.3	%		100 bps

GAAP to Non-GAAP Reconciliation (unaudited, in thousands)
Our adjusted income (loss) from operations and adjusted net income per share (diluted) are non-GAAP financial measures. Adjusted income (loss) from operations and adjusted net income per share (diluted) is calculated as income (loss) from operations and net income per share (diluted) excluding the impact of restructuring and related costs. We believe that these measures provide useful information to investors and include them within our internal reporting to our chief operating decision maker. Accordingly, the discussion of our results of operations includes discussion on the changes in our adjusted income (loss) from operations and adjusted net income per share (diluted). The reconciliation of income (loss) from operations and net income per share (diluted) to adjusted income (loss) from operations and adjusted net income per share (diluted) is presented below (in thousands except per share data):
	NAST			Global Forwarding			All Other and Corporate				Consolidated
Three Months Ended December 31, 2022
Income (loss) from operations	$	162,550		$	28,216		$	(26,732	)		$	164,034
Severance		5,404			3,482			9,986				18,872
Other personnel expenses		919			349			1,394				2,662
Other selling, general, and administrative expenses		3,175			3,174			8,801				15,150
Total restructuring and related costs(1)		9,498			7,005			20,181				36,684
Adjusted income (loss) from operations	$	172,048		$	35,221		$	(6,551	)		$	200,718
Net income per share (diluted)											$	0.80
Restructuring and associated costs(1)												0.23
Adjusted net income per share (diluted)											$	1.03
	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		5,404			3,482			9,986				18,872
Other personnel expenses		919			349			1,394				2,662
Other selling, general, and administrative expenses		3,175			3,174			8,801				15,150
Restructuring and related costs(1)		9,498			7,005			20,181				36,684
Adjusted income from operations	$	842,800		$	456,369		$	4,297			$	1,303,466
Net income per share (diluted)											$	7.40
Restructuring and associated costs(1)												0.22
Adjusted net income per share (diluted)											$	7.62

____________________________________________

(1) In 2022, we incurred 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.

Condensed Consolidated Statements of Income (unaudited, in thousands, except per share data)
	Three Months Ended December 31,											Twelve Months Ended December 31,
	2022				2021				% change			2022				2021				% change
Revenues:
Transportation	$	4,798,027			$	6,245,998			(23.2	)%		$	23,516,384			$	22,046,574			6.7	%
Sourcing		268,794				255,850			5.1	%			1,180,241				1,055,564			11.8	%
Total revenues		5,066,821				6,501,848			(22.1	)%			24,696,625				23,102,138			6.9	%
Costs and expenses:
Purchased transportation and related services		4,056,076				5,413,594			(25.1	)%			20,035,715				18,994,574			5.5	%
Purchased products sourced for resale		242,571				231,913			4.6	%			1,067,733				955,475			11.7	%
Personnel expenses		427,310				419,994			1.7	%			1,722,980				1,543,610			11.6	%
Other selling, general, and administrative expenses		176,830				148,941			18.7	%			603,415				526,371			14.6	%
Total costs and expenses		4,902,787				6,214,442			(21.1	)%			23,429,843				22,020,030			6.4	%
Income from operations		164,034				287,406			(42.9	)%			1,266,782				1,082,108			17.1	%
Interest and other income/expense, net		(42,476	)			(18,398	)		130.9	%			(100,017	)			(59,817	)		67.2	%
Income before provision for income taxes		121,558				269,008			(54.8	)%			1,166,765				1,022,291			14.1	%
Provision for income taxes		25,365				38,910			(34.8	)%			226,241				178,046			27.1	%
Net income	$	96,193			$	230,098			(58.2	)%		$	940,524			$	844,245			11.4	%
Net income per share (basic)	$	0.81			$	1.77			(54.2	)%		$	7.48			$	6.37			17.4	%
Net income per share (diluted)	$	0.80			$	1.74			(54.0	)%		$	7.40			$	6.31			17.3	%
Weighted average shares outstanding (basic)		119,212				130,348			(8.5	)%			125,743				132,482			(5.1	)%
Weighted average shares outstanding (diluted)		120,472				132,617			(9.2	)%			127,150				133,834			(5.0	)%

Business Segment Information (unaudited, in thousands, except average employee headcount)
		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
		NAST			Global Forwarding			All Other and Corporate				Consolidated
Three Months Ended December 31, 2021
Total revenues		$	3,896,025		$	2,144,056		$	461,767			$	6,501,848
Adjusted gross profits(1)			475,100			309,589			71,652				856,341
Income (loss) from operations			148,440			146,800			(7,834	)			287,406
Depreciation and amortization			6,464			5,471			10,703				22,638
Total assets(2)			3,349,578			2,843,239			835,295				7,028,112
Average employee headcount			7,044			5,430			4,080				16,554

____________________________________________

(1) Adjusted gross profits is a non-GAAP financial measure explained above. The difference between adjusted gross profits and gross profits is not material.

(2) All cash and cash equivalents are included in All Other and Corporate.

Business Segment Information (unaudited, in thousands, except average employee headcount)
		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
		NAST			Global Forwarding			All Other and Corporate				Consolidated
Twelve Months Ended December 31, 2021
Total revenues		$	14,507,917		$	6,729,790		$	1,864,431			$	23,102,138
Adjusted gross profits(1)			1,792,953			1,073,541			285,595				3,152,089
Income (loss) from operations			585,351			510,756			(13,999	)			1,082,108
Depreciation and amortization			26,243			22,823			42,193				91,259
Total assets(2)			3,349,578			2,843,239			835,295				7,028,112
Average employee headcount			6,764			5,071			3,926				15,761

____________________________________________

(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, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	217,482		$	257,413
Receivables, net of allowance for credit loss		2,991,753			3,963,487
Contract assets, net of allowance for credit loss		257,597			453,660
Prepaid expenses and other		122,406			129,593
Total current assets		3,589,238			4,804,153
Property and equipment, net of accumulated depreciation and amortization		159,432			139,831
Right-of-use lease assets		372,141			292,559
Intangible and other assets, net of accumulated amortization		1,833,753			1,791,569
Total assets	$	5,954,564		$	7,028,112
Liabilities and stockholders’ investment
Current liabilities:
Accounts payable and outstanding checks	$	1,570,559		$	1,919,301
Accrued expenses:
Compensation		242,605			201,421
Transportation expense		199,092			342,778
Income taxes		15,210			100,265
Other accrued liabilities		168,009			171,266
Current lease liabilities		73,722			66,311
Current portion of debt		1,053,655			525,000
Total current liabilities		3,322,852			3,326,342
Long-term debt		920,049			1,393,649
Noncurrent lease liabilities		313,742			241,369
Noncurrent income taxes payable		28,317			28,390
Deferred tax liabilities		14,256			16,113
Other long-term liabilities		1,926			315
Total liabilities		4,601,142			5,006,178
Total stockholders’ investment		1,353,422			2,021,934
Total liabilities and stockholders’ investment	$	5,954,564		$	7,028,112

Condensed Consolidated Statements of Cash Flow (unaudited, in thousands, except operational data)
	Twelve Months Ended December 31,
	2022				2021
Operating activities:
Net income	$	940,524			$	844,245
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization		92,776				91,259
Provision for credit losses		(4,476	)			10,649
Stock-based compensation		90,677				129,977
Deferred income taxes		(58,566	)			(110,188	)
Excess tax benefit on stock-based compensation		(13,662	)			(13,101	)
Other operating activities		(6,627	)			1,915
Changes in operating elements, net of acquisitions:
Receivables		923,524				(1,547,545	)
Contract assets		197,097				(257,728	)
Prepaid expenses and other		(28,495	)			(43,819	)
Accounts payable and outstanding checks		(307,266	)			660,028
Accrued compensation		42,266				63,912
Accrued transportation expenses		(143,686	)			189,204
Accrued income taxes		(69,817	)			72,665
Other accrued liabilities		2,371				1,607
Other assets and liabilities		(6,469	)			1,875
Net cash provided by operating activities		1,650,171				94,955
Investing activities:
Purchases of property and equipment		(61,915	)			(34,197	)
Purchases and development of software		(66,582	)			(36,725	)
Acquisitions, net of cash acquired		—				(14,750	)
Proceeds from sale of property and equipment		63,579				—
Net cash used for investing activities		(64,918	)			(85,672	)
Financing activities:
Proceeds from stock issued for employee benefit plans		100,059				70,669
Total repurchases of common stock		(1,488,288	)			(608,476	)
Cash dividends		(285,317	)			(277,321	)
Proceeds from long-term borrowings		200,000				300,000
Payments on long-term borrowings		—				(2,048	)
Proceeds from short-term borrowings		4,500,000				3,728,000
Payments on short-term borrowings		(4,646,000	)			(3,203,251	)
Net cash (used for) provided by financing activities		(1,619,546	)			7,573
Effect of exchange rates on cash		(5,638	)			(3,239	)
Net change in cash and cash equivalents		(39,931	)			13,617
Cash and cash equivalents, beginning of period		257,413				243,796
Cash and cash equivalents, end of period	$	217,482			$	257,413
	As of December 31,
Operational Data:	2022				2021
Employees		17,399				16,877

CHRW-IR

View source version on businesswire.com: https://www.businesswire.com/news/home/20230201005812/en/

Chuck Ives, Director of Investor Relations

Email: chuck.ives@chrobinson.com

Source: C.H. Robinson

FAQ

What were C.H. Robinson's earnings results for Q4 2022?

C.H. Robinson reported a 22.1% decline in total revenues to $5.1 billion and diluted EPS decreased 54% to $0.80.

How did C.H. Robinson perform financially in 2022?

The company reported a full-year net income of $940.5 million, up 11.4%, while total revenues increased by 6.9% to $24.7 billion.

What challenges did C.H. Robinson face in Q4 2022?

The company faced decreased demand for transportation services and lower pricing, impacting revenues and profits significantly.

What is the outlook for C.H. Robinson in 2023?

C.H. Robinson plans to focus on a scalable operating model to enhance profitability amidst ongoing economic challenges.

What factors contributed to the decline in gross profits for C.H. Robinson?

Lower pricing and volumes across most services contributed to a 10.5% decrease in gross profits for Q4 2022.