C.H. Robinson Reports 2023 Second Quarter Results
Second Quarter Key Metrics:
-
Gross profits decreased
35.9% to$656.7 million
-
Income from operations decreased
71.8% to$132.6 million
-
Adjusted operating margin(1) decreased 2,560 basis points to
19.9%
-
Diluted earnings per share (EPS) decreased
69.7% to$0.81
-
Adjusted EPS(1) decreased
64.3% to$0.90
-
Cash generated by operations decreased by
$40.4 million $224.8 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.
C.H. Robinson's recently appointed President and Chief Executive Officer, Dave Bozeman, said, "It is an absolute privilege to be leading C.H. Robinson, a market leader with enormous scale, a strong base of loyal customers, and a resilient business model that generates profits and free cash flow through the entirety of the freight cycle."
The company noted that global freight markets in the second quarter continued to be impacted by weak demand, high inventories and excess capacity, which resulted in a more competitive marketplace with suppressed transportation rates. North American surface transportation volumes and load-to-truck ratios remain near the low levels of 2019. In the freight forwarding market, ocean vessel and air freight capacity continues to exceed demand, which has kept ocean and air freight rates low during this period of significant decline that has continued since the second half of 2022.
"We are staying focused on what we can control, providing superior service to our customers and carriers and streamlining our processes by removing waste and manual touches," added Bozeman.
"I know from my time in the transportation market that other freight providers and new entrants look to Robinson as an example of a commercial engine with the breadth, scale, expertise and financial strength that they aspire to achieve. However, there is always room for improvement, and I recognize the tremendous opportunity in front of us to accelerate growth in a very fragmented market. Our goal is to provide such a compelling offering that customers feel like C.H. Robinson is essential to the success of their supply chain. As I aim to reinvigorate the winning culture, my focus will be on people, products, processes, technology, collaboration and excellence. To enable greater agility and flexibility and to accelerate our clock speed, I’m empowering our people to uncover new ways to challenge the status quo, move faster and act boldly to better anticipate our customers’ needs, exceed their expectations and make us indispensable. As a Lean practitioner, I'm passionate about continuously improving how organizations operate. Lean principles work and are applicable at Robinson to further improve efficiency."
"Shippers are looking for stable and innovative logistics partners," continued Bozeman. "Robinson has shown the strength of its model through cycles, our balance sheet continues to be strong, and we plan to invest in initiatives that we expect to amplify the expertise of our people and generate high returns on investment. We have some of the best people in the logistics industry, with the grit, grind and hustle needed to solve challenges for our customers and carriers, and I'm confident that together we will win for our customers, carriers and shareholders. While the near-term freight environment presents some challenges, the strength of our people, scaled network, financial model and investments in improving efficiency position us well for the eventual rebound."
"I'm excited about our opportunities and our future. I look forward to leading this great company to new heights and sharing our progress with all of you along our journey," Bozeman concluded.
Summary of Second Quarter Results Compared to the Second Quarter of 2022
-
Total revenues decreased
35.0% to$4.4 billion
-
Gross profits decreased
35.9% to$656.7 million 35.5% to$665.5 million
-
Operating expenses decreased
5.2% to$532.9 million 15.2% to$377.3 million 10.1% . Selling, general and administrative (“SG&A”) expenses of$155.6 million 32.8% , primarily due to the$25.3 million Kansas City regional center recorded in the prior year and increased claims and warehouse expenses in the current year.
-
Income from operations totaled
$132.6 million 71.8% due to the decrease in adjusted gross profits, partially offset by the decline in operating expenses. Adjusted operating margin of19.9% declined 2,560 basis points.
-
Interest and other income/expense, net totaled
$18.3 million $23.2 million $6.3 million $3.5 million $10.3 million
-
The effective tax rate in the quarter was
14.9% compared to21.3% in the second quarter last year. The lower rate in the second quarter of this year was driven by lower income before taxes, increasedU.S. tax credits and incentives, fewer non-deductible expenses, and incremental benefits from foreign tax credit utilization.
-
Net income totaled
$97.3 million 72.1% from a year ago. Diluted EPS of$0.81 69.7% . Adjusted EPS of$0.90 64.3% .
Summary of Year-to-Date Results Compared to 2022
-
Total revenues decreased
33.6% to$9.0 billion
-
Gross profits decreased
30.7% to$1.3 billion 30.3% to$1.4 billion
-
Operating expenses decreased
5.8% to$1.1 billion 11.4% to$760.4 million 5.9% . SG&A expenses increased12.3% to$297.1 million $25.3 million Kansas City regional center recorded in the prior year and increased depreciation and amortization in the current year.
-
Income from operations totaled
$293.7 million 64.0% from last year, due to the decrease in adjusted gross profits, partially offset by the decline in operating expense. Adjusted operating margin of21.7% decreased 2,040 basis points.
-
Interest and other income/expense, net totaled
$46.5 million $46.8 million $15.3 million $6.0 million $11.8 million
-
The effective tax rate for the six months ended June 30, 2023 was
14.1% compared to20.0% in the year-ago period. The lower rate in the current period was driven by lower income before taxes, increasedU.S. tax credits and incentives, and fewer non-deductible expenses in the current year.
-
Net income totaled
$212.2 million 65.7% from a year ago. Diluted EPS of$1.77 62.4% . Adjusted EPS of$1.88 58.8% .
North American Surface Transportation (“NAST”) Results
Summarized financial results of our NAST segment are as follows (dollars in thousands):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
Total revenues |
$ |
3,079,268 |
|
$ |
4,147,046 |
|
(25.7 |
)% |
|
$ |
6,383,455 |
|
$ |
8,261,935 |
|
(22.7 |
)% |
||||
Adjusted gross profits(1) |
|
400,532 |
|
|
|
624,551 |
|
|
(35.9 |
)% |
|
|
827,187 |
|
|
|
1,130,651 |
|
|
(26.8 |
)% |
Income from operations |
|
117,859 |
|
|
|
276,499 |
|
|
(57.4 |
)% |
|
|
251,881 |
|
|
|
458,853 |
|
|
(45.1 |
)% |
____________________________________________ |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Adjusted gross profits is a non-GAAP financial measure explained later in this release. The difference between adjusted gross profits and gross profits is not material. |
|||||||||||||||||||||
Second quarter total revenues for the NAST segment totaled
Global Forwarding Results
Summarized financial results of our Global Forwarding segment are as follows (dollars in thousands):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
Total revenues |
$ |
779,867 |
|
$ |
2,093,190 |
|
(62.7 |
)% |
|
$ |
1,569,845 |
|
$ |
4,287,587 |
|
(63.4 |
)% |
||||
Adjusted gross profits(1) |
|
179,231 |
|
|
|
324,443 |
|
|
(44.8 |
)% |
|
|
357,150 |
|
|
|
646,291 |
|
|
(44.7 |
)% |
Income from operations |
|
29,647 |
|
|
|
167,557 |
|
|
(82.3 |
)% |
|
|
59,763 |
|
|
|
335,195 |
|
|
(82.2 |
)% |
____________________________________________ |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Adjusted gross profits is a non-GAAP financial measure explained later in this release. The difference between adjusted gross profits and gross profits is not material. |
|||||||||||||||||||||
Second quarter total revenues for the Global Forwarding segment decreased
All Other and Corporate Results
Total revenues and adjusted gross profits for Robinson Fresh, Managed Services and Other Surface Transportation are summarized as follows (dollars in thousands):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
Total revenues |
$ |
562,721 |
|
$ |
558,239 |
|
0.8 |
% |
|
$ |
1,080,226 |
|
$ |
1,064,906 |
|
1.4 |
% |
||||
Adjusted gross profits(1): |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Robinson Fresh |
$ |
37,895 |
|
|
$ |
34,981 |
|
|
8.3 |
% |
|
$ |
69,040 |
|
|
$ |
65,486 |
|
|
5.4 |
% |
Managed Services |
|
28,953 |
|
|
|
27,618 |
|
|
4.8 |
% |
|
|
57,923 |
|
|
|
55,700 |
|
|
4.0 |
% |
Other Surface Transportation |
|
18,885 |
|
|
|
20,020 |
|
|
(5.7 |
)% |
|
|
39,836 |
|
|
|
39,681 |
|
|
0.4 |
% |
____________________________________________ |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Adjusted gross profits is a non-GAAP financial measure explained later in this release. The difference between adjusted gross profits and gross profits is not material. |
|||||||||||||||||||||
Second quarter Robinson Fresh adjusted gross profits increased
Other Income Statement Items
The second quarter effective tax rate was
Interest and other income/expense, net totaled
Diluted weighted average shares outstanding in the quarter were down
Cash Flow Generation and Capital Distribution
Cash generated from operations totaled
In the second quarter of 2023, cash returned to shareholders totaled
Capital expenditures totaled
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
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
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date. All remarks made during our financial results conference call will be current at the time of the call, and we undertake no obligation to update the replay.
Conference Call Information:
C.H. Robinson Worldwide Second Quarter 2023 Earnings Conference Call
Wednesday, August 2, 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
Adjusted gross profits(1): |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Truckload |
$ |
261,147 |
|
$ |
456,260 |
|
(42.8 |
)% |
|
$ |
549,801 |
|
$ |
816,047 |
|
(32.6 |
)% |
||||
LTL |
|
137,185 |
|
|
|
168,298 |
|
|
(18.5 |
)% |
|
|
275,822 |
|
|
|
320,610 |
|
|
(14.0 |
)% |
Ocean |
|
107,497 |
|
|
|
227,958 |
|
|
(52.8 |
)% |
|
|
217,576 |
|
|
|
449,421 |
|
|
(51.6 |
)% |
Air |
|
33,728 |
|
|
|
56,871 |
|
|
(40.7 |
)% |
|
|
65,045 |
|
|
|
118,305 |
|
|
(45.0 |
)% |
Customs |
|
25,128 |
|
|
|
27,820 |
|
|
(9.7 |
)% |
|
|
48,462 |
|
|
|
55,315 |
|
|
(12.4 |
)% |
Other logistics services |
|
66,582 |
|
|
|
61,561 |
|
|
8.2 |
% |
|
|
131,495 |
|
|
|
117,197 |
|
|
12.2 |
% |
Total transportation |
|
631,267 |
|
|
|
998,768 |
|
|
(36.8 |
)% |
|
|
1,288,201 |
|
|
|
1,876,895 |
|
|
(31.4 |
)% |
Sourcing |
|
34,229 |
|
|
|
32,845 |
|
|
4.2 |
% |
|
|
62,935 |
|
|
|
60,914 |
|
|
3.3 |
% |
Total adjusted gross profits |
$ |
665,496 |
|
|
$ |
1,031,613 |
|
|
(35.5 |
)% |
|
$ |
1,351,136 |
|
|
$ |
1,937,809 |
|
|
(30.3 |
)% |
____________________________________________ |
|||||||||||||||||||||
(1) Adjusted gross profits is a non-GAAP financial measure explained later in this release. The difference between adjusted gross profits and gross profits is not material. |
|||||||||||||||||||||
GAAP to Non-GAAP Reconciliation
(unaudited, in thousands)
Our adjusted gross profit is a non-GAAP financial measure. Adjusted gross profit is calculated as gross profit excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. We believe adjusted gross profit is a useful measure of our ability to source, add value, and sell services and products that are provided by third parties, and we consider adjusted gross profit to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross profit. The reconciliation of gross profit to adjusted gross profit is presented below (in thousands):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation |
$ |
4,084,827 |
|
$ |
6,465,642 |
|
(36.8 |
)% |
|
$ |
8,412,792 |
|
$ |
12,993,993 |
|
(35.3 |
)% |
||||
Sourcing |
|
337,029 |
|
|
|
332,833 |
|
|
1.3 |
% |
|
|
620,734 |
|
|
|
620,435 |
|
|
— |
% |
Total revenues |
|
4,421,856 |
|
|
|
6,798,475 |
|
|
(35.0 |
)% |
|
|
9,033,526 |
|
|
|
13,614,428 |
|
|
(33.6 |
)% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchased transportation and related services |
|
3,453,560 |
|
|
|
5,466,874 |
|
|
(36.8 |
)% |
|
|
7,124,591 |
|
|
|
11,117,098 |
|
|
(35.9 |
)% |
Purchased products sourced for resale |
|
302,800 |
|
|
|
299,988 |
|
|
0.9 |
% |
|
|
557,799 |
|
|
|
559,521 |
|
|
(0.3 |
)% |
Direct internally developed software amortization |
|
8,749 |
|
|
|
6,640 |
|
|
31.8 |
% |
|
|
16,066 |
|
|
|
12,374 |
|
|
29.8 |
% |
Total direct expenses |
|
3,765,109 |
|
|
|
5,773,502 |
|
|
(34.8 |
)% |
|
|
7,698,456 |
|
|
|
11,688,993 |
|
|
(34.1 |
)% |
Gross profit |
$ |
656,747 |
|
|
$ |
1,024,973 |
|
|
(35.9 |
)% |
|
$ |
1,335,070 |
|
|
$ |
1,925,435 |
|
|
(30.7 |
)% |
Plus: Direct internally developed software amortization |
|
8,749 |
|
|
|
6,640 |
|
|
31.8 |
% |
|
|
16,066 |
|
|
|
12,374 |
|
|
29.8 |
% |
Adjusted gross profit |
$ |
665,496 |
|
|
$ |
1,031,613 |
|
|
(35.5 |
)% |
|
$ |
1,351,136 |
|
|
$ |
1,937,809 |
|
|
(30.3 |
)% |
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 June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues |
$ |
4,421,856 |
|
|
$ |
6,798,475 |
|
|
(35.0 |
)% |
|
$ |
9,033,526 |
|
|
$ |
13,614,428 |
|
|
(33.6 |
)% |
Income from operations |
|
132,623 |
|
|
|
469,665 |
|
|
(71.8 |
)% |
|
|
293,656 |
|
|
|
815,139 |
|
|
(64.0 |
)% |
Operating margin |
|
3.0 |
% |
|
|
6.9 |
% |
|
(390) bps |
|
|
3.3 |
% |
|
|
6.0 |
% |
|
(270) bps |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted gross profit |
$ |
665,496 |
|
|
$ |
1,031,613 |
|
|
(35.5 |
)% |
|
$ |
1,351,136 |
|
|
$ |
1,937,809 |
|
|
(30.3 |
)% |
Income from operations |
|
132,623 |
|
|
|
469,665 |
|
|
(71.8 |
)% |
|
|
293,656 |
|
|
|
815,139 |
|
|
(64.0 |
)% |
Adjusted operating margin |
|
19.9 |
% |
|
|
45.5 |
% |
|
(2,560) bps |
|
|
21.7 |
% |
|
|
42.1 |
% |
|
(2,040) 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
|
|
All
|
|
Consolidated |
||||||||
Three Months Ended June 30, 2023 |
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
$ |
117,859 |
|
$ |
29,647 |
|
$ |
(14,883 |
) |
|
$ |
132,623 |
|||
Severance |
|
323 |
|
|
|
626 |
|
|
|
10,732 |
|
|
|
11,681 |
|
Other personnel expenses |
|
4 |
|
|
|
65 |
|
|
|
1,377 |
|
|
|
1,446 |
|
Other selling, general, and administrative expenses |
|
4 |
|
|
|
39 |
|
|
|
962 |
|
|
|
1,005 |
|
Total restructuring and related costs(1) |
|
331 |
|
|
|
730 |
|
|
|
13,071 |
|
|
|
14,132 |
|
Adjusted income (loss) from operations |
$ |
118,190 |
|
|
$ |
30,377 |
|
|
$ |
(1,812 |
) |
|
$ |
146,755 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share (diluted) |
|
|
|
|
|
|
$ |
0.81 |
|
||||||
Restructuring and related costs(1) |
|
|
|
|
|
|
|
0.09 |
|
||||||
Adjusted net income per share (diluted) |
|
|
|
|
|
|
$ |
0.90 |
|
||||||
|
|
|
|
|
|
|
|
||||||||
|
NAST |
|
Global
|
|
All
|
|
Consolidated |
||||||||
Six Months Ended June 30, 2023 |
|
|
|
|
|
|
|
||||||||
Income (loss) from operations |
$ |
251,881 |
|
|
$ |
59,763 |
|
|
$ |
(17,988 |
) |
|
$ |
293,656 |
|
Severance |
|
933 |
|
|
|
2,140 |
|
|
|
11,746 |
|
|
|
14,819 |
|
Other personnel expenses |
|
223 |
|
|
|
89 |
|
|
|
1,594 |
|
|
|
1,906 |
|
Other selling, general, and administrative expenses |
|
4 |
|
|
|
163 |
|
|
|
962 |
|
|
|
1,129 |
|
Total restructuring and related costs(1) |
|
1,160 |
|
|
|
2,392 |
|
|
|
14,302 |
|
|
|
17,854 |
|
Adjusted income (loss) from operations |
$ |
253,041 |
|
|
$ |
62,155 |
|
|
$ |
(3,686 |
) |
|
$ |
311,510 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share (diluted) |
|
|
|
|
|
|
$ |
1.77 |
|
||||||
Restructuring and related costs(1) |
|
|
|
|
|
|
|
0.11 |
|
||||||
Adjusted net income per share (diluted) |
|
|
|
|
|
|
$ |
1.88 |
|
||||||
____________________________________________ |
|||||||||||||||
(1) In the three months ended June 30, 2023, we incurred restructuring expenses of |
|||||||||||||||
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
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
|
|
||||
Income from operations |
$ |
469,665 |
|
|
$ |
815,139 |
|
Gain on sale of property and equipment(1) |
|
(25,296 |
) |
|
|
(25,296 |
) |
Adjusted income from operations |
$ |
444,369 |
|
|
$ |
789,843 |
|
|
|
|
|
||||
Net income per share (diluted) |
$ |
2.67 |
|
|
$ |
4.71 |
|
Gain on sale of property and equipment(1) |
|
(0.15 |
) |
|
|
(0.15 |
) |
Adjusted net income per share (diluted) |
$ |
2.52 |
|
|
$ |
4.56 |
|
_______________________________________ |
|||||||
(1) The gain on sale of property and equipment related to the sale-leaseback of our |
|||||||
Condensed Consolidated Statements of Income
(unaudited, in thousands, except per share data)
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||||||||
|
2023 |
|
2022 |
|
% change |
|
2023 |
|
2022 |
|
% change |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transportation |
$ |
4,084,827 |
|
|
$ |
6,465,642 |
|
|
(36.8 |
)% |
|
$ |
8,412,792 |
|
|
$ |
12,993,993 |
|
|
(35.3 |
)% |
Sourcing |
|
337,029 |
|
|
|
332,833 |
|
|
1.3 |
% |
|
|
620,734 |
|
|
|
620,435 |
|
|
0.0 |
% |
Total revenues |
|
4,421,856 |
|
|
|
6,798,475 |
|
|
(35.0 |
)% |
|
|
9,033,526 |
|
|
|
13,614,428 |
|
|
(33.6 |
)% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchased transportation and related services |
|
3,453,560 |
|
|
|
5,466,874 |
|
|
(36.8 |
)% |
|
|
7,124,591 |
|
|
|
11,117,098 |
|
|
(35.9 |
)% |
Purchased products sourced for resale |
|
302,800 |
|
|
|
299,988 |
|
|
0.9 |
% |
|
|
557,799 |
|
|
|
559,521 |
|
|
(0.3 |
)% |
Personnel expenses |
|
377,277 |
|
|
|
444,764 |
|
|
(15.2 |
)% |
|
|
760,383 |
|
|
|
858,125 |
|
|
(11.4 |
)% |
Other selling, general, and administrative expenses |
|
155,596 |
|
|
|
117,184 |
|
|
32.8 |
% |
|
|
297,097 |
|
|
|
264,545 |
|
|
12.3 |
% |
Total costs and expenses |
|
4,289,233 |
|
|
|
6,328,810 |
|
|
(32.2 |
)% |
|
|
8,739,870 |
|
|
|
12,799,289 |
|
|
(31.7 |
)% |
Income from operations |
|
132,623 |
|
|
|
469,665 |
|
|
(71.8 |
)% |
|
|
293,656 |
|
|
|
815,139 |
|
|
(64.0 |
)% |
Interest and other income/expense, net |
|
(18,259 |
) |
|
|
(27,395 |
) |
|
(33.3 |
)% |
|
|
(46,524 |
) |
|
|
(41,569 |
) |
|
11.9 |
% |
Income before provision for income taxes |
|
114,364 |
|
|
|
442,270 |
|
|
(74.1 |
)% |
|
|
247,132 |
|
|
|
773,570 |
|
|
(68.1 |
)% |
Provision for income taxes |
|
17,048 |
|
|
|
94,085 |
|
|
(81.9 |
)% |
|
|
34,925 |
|
|
|
155,037 |
|
|
(77.5 |
)% |
Net income |
$ |
97,316 |
|
|
$ |
348,185 |
|
|
(72.1 |
)% |
|
$ |
212,207 |
|
|
$ |
618,533 |
|
|
(65.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share (basic) |
$ |
0.82 |
|
|
$ |
2.71 |
|
|
(69.7 |
)% |
|
$ |
1.79 |
|
|
$ |
4.78 |
|
|
(62.6 |
)% |
Net income per share (diluted) |
$ |
0.81 |
|
|
$ |
2.67 |
|
|
(69.7 |
)% |
|
$ |
1.77 |
|
|
$ |
4.71 |
|
|
(62.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding (basic) |
|
118,500 |
|
|
|
128,405 |
|
|
(7.7 |
)% |
|
|
118,567 |
|
|
|
129,447 |
|
|
(8.4 |
)% |
Weighted average shares outstanding (diluted) |
|
119,807 |
|
|
|
130,338 |
|
|
(8.1 |
)% |
|
|
119,820 |
|
|
|
131,218 |
|
|
(8.7 |
)% |
Business Segment Information
(unaudited, in thousands, except average employee headcount)
|
|
NAST |
|
Global
|
|
All
|
|
Consolidated |
||||||||
Three Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
||||||||
Total revenues |
|
$ |
3,079,268 |
|
$ |
779,867 |
|
$ |
562,721 |
|
|
$ |
4,421,856 |
|||
Adjusted gross profits(1) |
|
|
400,532 |
|
|
|
179,231 |
|
|
|
85,733 |
|
|
|
665,496 |
|
Income (loss) from operations |
|
|
117,859 |
|
|
|
29,647 |
|
|
|
(14,883 |
) |
|
|
132,623 |
|
Depreciation and amortization |
|
|
5,856 |
|
|
|
5,484 |
|
|
|
14,635 |
|
|
|
25,975 |
|
Total assets(2) |
|
|
3,106,092 |
|
|
|
1,149,091 |
|
|
|
1,150,078 |
|
|
|
5,405,261 |
|
Average employee headcount |
|
|
6,497 |
|
|
|
5,225 |
|
|
|
4,363 |
|
|
|
16,085 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
NAST |
|
Global
|
|
All
|
|
Consolidated |
||||||||
Three Months Ended June 30, 2022 |
|
|
|
|
|
|
|
|
||||||||
Total revenues |
|
$ |
4,147,046 |
|
|
$ |
2,093,190 |
|
|
$ |
558,239 |
|
|
$ |
6,798,475 |
|
Adjusted gross profits(1) |
|
|
624,551 |
|
|
|
324,443 |
|
|
|
82,619 |
|
|
|
1,031,613 |
|
Income from operations |
|
|
276,499 |
|
|
|
167,557 |
|
|
|
25,609 |
|
|
|
469,665 |
|
Depreciation and amortization |
|
|
6,123 |
|
|
|
5,471 |
|
|
|
11,668 |
|
|
|
23,262 |
|
Total assets(2) |
|
|
3,688,215 |
|
|
|
2,851,114 |
|
|
|
918,110 |
|
|
|
7,457,439 |
|
Average employee headcount |
|
|
7,552 |
|
|
|
5,759 |
|
|
|
4,582 |
|
|
|
17,893 |
|
____________________________________________ |
||||||||||||||||
(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
|
|
All
|
|
Consolidated |
||||||||
Six Months Ended June 30, 2023 |
|
|
|
|
|
|
|
|
||||||||
Total revenues |
|
$ |
6,383,455 |
|
$ |
1,569,845 |
|
$ |
1,080,226 |
|
|
$ |
9,033,526 |
|||
Adjusted gross profits(1) |
|
|
827,187 |
|
|
|
357,150 |
|
|
|
166,799 |
|
|
|
1,351,136 |
|
Income (loss) from operations |
|
|
251,881 |
|
|
|
59,763 |
|
|
|
(17,988 |
) |
|
|
293,656 |
|
Depreciation and amortization |
|
|
11,507 |
|
|
|
10,964 |
|
|
|
27,884 |
|
|
|
50,355 |
|
Total assets(2) |
|
|
3,106,092 |
|
|
|
1,149,091 |
|
|
|
1,150,078 |
|
|
|
5,405,261 |
|
Average employee headcount |
|
|
6,713 |
|
|
|
5,356 |
|
|
|
4,454 |
|
|
|
16,523 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
NAST |
|
Global
|
|
All
|
|
Consolidated |
||||||||
Six Months Ended June 30, 2022 |
|
|
|
|
|
|
|
|
||||||||
Total revenues |
|
$ |
8,261,935 |
|
|
$ |
4,287,587 |
|
|
$ |
1,064,906 |
|
|
$ |
13,614,428 |
|
Adjusted gross profits(1) |
|
|
1,130,651 |
|
|
|
646,291 |
|
|
|
160,867 |
|
|
|
1,937,809 |
|
Income from operations |
|
|
458,853 |
|
|
|
335,195 |
|
|
|
21,091 |
|
|
|
815,139 |
|
Depreciation and amortization |
|
|
12,362 |
|
|
|
11,026 |
|
|
|
22,360 |
|
|
|
45,748 |
|
Total assets(2) |
|
|
3,688,215 |
|
|
|
2,851,114 |
|
|
|
918,110 |
|
|
|
7,457,439 |
|
Average employee headcount |
|
|
7,442 |
|
|
|
5,690 |
|
|
|
4,422 |
|
|
|
17,554 |
|
____________________________________________ |
||||||||||||||||
(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. |
||||||||||||||||
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
|
June 30, 2023 |
|
December 31, 2022 |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
210,155 |
|
$ |
217,482 |
||
Receivables, net of allowance for credit loss |
|
2,505,130 |
|
|
|
2,991,753 |
|
Contract assets, net of allowance for credit loss |
|
188,207 |
|
|
|
257,597 |
|
Prepaid expenses and other |
|
147,993 |
|
|
|
122,406 |
|
Total current assets |
|
3,051,485 |
|
|
|
3,589,238 |
|
|
|
|
|
||||
Property and equipment, net of accumulated depreciation and amortization |
|
159,222 |
|
|
|
159,432 |
|
Right-of-use lease assets |
|
343,734 |
|
|
|
372,141 |
|
Intangible and other assets, net of accumulated amortization |
|
1,850,820 |
|
|
|
1,833,753 |
|
Total assets |
$ |
5,405,261 |
|
|
$ |
5,954,564 |
|
|
|
|
|
||||
Liabilities and stockholders’ investment |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable and outstanding checks |
$ |
1,449,588 |
|
|
$ |
1,570,559 |
|
Accrued expenses: |
|
|
|
||||
Compensation |
|
112,421 |
|
|
|
242,605 |
|
Transportation expense |
|
142,568 |
|
|
|
199,092 |
|
Income taxes |
|
9,763 |
|
|
|
15,210 |
|
Other accrued liabilities |
|
159,065 |
|
|
|
168,009 |
|
Current lease liabilities |
|
72,223 |
|
|
|
73,722 |
|
Current portion of debt |
|
815,863 |
|
|
|
1,053,655 |
|
Total current liabilities |
|
2,761,491 |
|
|
|
3,322,852 |
|
|
|
|
|
||||
Long-term debt |
|
920,495 |
|
|
|
920,049 |
|
Noncurrent lease liabilities |
|
288,960 |
|
|
|
313,742 |
|
Noncurrent income taxes payable |
|
28,104 |
|
|
|
28,317 |
|
Deferred tax liabilities |
|
15,099 |
|
|
|
14,256 |
|
Other long-term liabilities |
|
3,005 |
|
|
|
1,926 |
|
Total liabilities |
|
4,017,154 |
|
|
|
4,601,142 |
|
|
|
|
|
||||
Total stockholders’ investment |
|
1,388,107 |
|
|
|
1,353,422 |
|
Total liabilities and stockholders’ investment |
$ |
5,405,261 |
|
|
$ |
5,954,564 |
|
Condensed Consolidated Statements of Cash Flow
(unaudited, in thousands, except operational data)
|
Six Months Ended June 30, |
||||||
Operating activities: |
2023 |
|
2022 |
||||
|
|
|
|
||||
Net income |
$ |
212,207 |
|
|
$ |
618,533 |
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities: |
|
|
|
||||
Depreciation and amortization |
|
50,355 |
|
|
|
45,748 |
|
Provision for credit losses |
|
(8,397 |
) |
|
|
(2,142 |
) |
Stock-based compensation |
|
21,642 |
|
|
|
52,535 |
|
Deferred income taxes |
|
(21,825 |
) |
|
|
(5,844 |
) |
Excess tax benefit on stock-based compensation |
|
(8,645 |
) |
|
|
(7,553 |
) |
Other operating activities |
|
3,080 |
|
|
|
(26,356 |
) |
Changes in operating elements, net of acquisitions: |
|
|
|
||||
Receivables |
|
501,210 |
|
|
|
(378,641 |
) |
Contract assets |
|
69,662 |
|
|
|
(65,362 |
) |
Prepaid expenses and other |
|
(23,834 |
) |
|
|
(14,170 |
) |
Accounts payable and outstanding checks |
|
(125,090 |
) |
|
|
37,207 |
|
Accrued compensation |
|
(130,197 |
) |
|
|
(9,673 |
) |
Accrued transportation expenses |
|
(56,524 |
) |
|
|
62,506 |
|
Accrued income taxes |
|
3,308 |
|
|
|
(54,964 |
) |
Other accrued liabilities |
|
(9,611 |
) |
|
|
1,391 |
|
Other assets and liabilities |
|
2,035 |
|
|
|
(1,886 |
) |
Net cash provided by operating activities |
|
479,376 |
|
|
|
251,329 |
|
Investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(21,679 |
) |
|
|
(36,781 |
) |
Purchases and development of software |
|
(29,622 |
) |
|
|
(32,622 |
) |
Proceeds from sale of property and equipment |
|
— |
|
|
|
63,208 |
|
Net cash (used for) investing activities |
|
(51,301 |
) |
|
|
(6,195 |
) |
Financing activities: |
|
|
|
||||
Proceeds from stock issued for employee benefit plans |
|
36,684 |
|
|
|
53,574 |
|
Total repurchases of common stock |
|
(84,607 |
) |
|
|
(514,483 |
) |
Cash dividends |
|
(146,195 |
) |
|
|
(145,268 |
) |
Proceeds from long-term borrowings |
|
— |
|
|
|
200,000 |
|
Proceeds from short-term borrowings |
|
1,861,750 |
|
|
|
2,735,000 |
|
Payments on short-term borrowings |
|
(2,099,750 |
) |
|
|
(2,586,000 |
) |
Net cash (used for) provided by financing activities |
|
(432,118 |
) |
|
|
(257,177 |
) |
Effect of exchange rates on cash |
|
(3,284 |
) |
|
|
(6,445 |
) |
Net change in cash and cash equivalents |
|
(7,327 |
) |
|
|
(18,488 |
) |
Cash and cash equivalents, beginning of period |
|
217,482 |
|
|
|
257,413 |
|
Cash and cash equivalents, end of period |
$ |
210,155 |
|
|
$ |
238,925 |
|
|
As of June 30, |
||||||
Operational Data: |
2023 |
|
2022 |
||||
Employees |
|
15,763 |
|
|
|
18,146 |
|
CHRW-IR
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802120809/en/
Chuck Ives, Director of Investor Relations
chuck.ives@chrobinson.com
Source: C.H. Robinson
