<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY
PERIOD ENDED JUNE 30, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR
THE TRANSITION PERIOD FROM ___________ TO ____________
Commission File Number
000-23189
C.H. ROBINSON WORLDWIDE, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1883630
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 South Mitchell Road, Eden Prairie, Minnesota 55344-2248
(Address of principal executive offices) (Zip Code)
(612) 937-8500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes /x/ No
As of July 31, 1999, the number of outstanding shares of the registrant's common
stock was 41,187,405.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
C.H. ROBINSON WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
1999 1998
----------- ------------
(unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 101,125 $ 99,341
Available-for-sale securities 31,611 30,730
Receivables, net of allowance for doubtful accounts
of $17,807 and $12,412 273,351 221,021
Deferred tax benefit 16,930 12,821
Inventories 4,711 3,488
Prepaid expenses and other 4,824 7,442
------------ ------------
Total current assets 432,552 374,843
PROPERTY AND EQUIPMENT, net 18,477 19,484
INTANGIBLE & OTHER ASSETS, net 17,921 14,789
------------ ------------
$ 468,950 $ 409,116
============ ============
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 230,160 $192,908
Accrued expenses-
Compensation and profit-sharing contribution 18,480 27,481
Income taxes & other 32,181 19,209
------------ ------------
Total current liabilities 280,781 239,598
STOCKHOLDERS' INVESTMENT:
Preferred stock, $0.10 par value, 20,000 shares authorized;
none outstanding -- --
Common stock, $0.10 par value; 130,000 shares authorized;
41,265 shares issued, 41,190 and 41,190 shares outstanding 4,119 4,119
Additional paid-in capital 62,062 62,054
Retained earnings 125,166 106,178
Cumulative other comprehensive loss (1,251) (1,145)
Treasury stock at cost (75 and 75 shares) (1,927) (1,688)
------------ ------------
Total stockholders' investment 188,169 169,518
------------ ------------
$ 468,950 $ 409,116
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
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<PAGE>
C.H. ROBINSON WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------------------------------------
1999 1998 1999 1998
--------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
GROSS REVENUES $ 579,423 $ 546,672 $ 1,088,698 $ 1,014,861
COST OF TRANSPORTATION AND
PRODUCTS 506,027 483,380 948,283 896,348
----------- --------- ----------- ------------
NET REVENUES 73,396 63,292 140,415 118,513
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 51,336 44,671 101,444 86,538
----------- --------- ----------- ------------
INCOME FROM OPERATIONS 22,060 18,621 38,971 31,975
INVESTMENT AND OTHER INCOME 1,133 639 2,080 1,130
----------- --------- ----------- ------------
INCOME BEFORE PROVISION FOR INCOME
TAXES 23,193 19,260 41,051 33,105
PROVISION FOR INCOME TAXES 9,211 7,648 16,297 13,119
----------- --------- ----------- ------------
NET INCOME 13,982 11,612 24,754 19,986
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustment 23 (202) (106) (247)
----------- --------- ----------- ------------
COMPREHENSIVE INCOME $ 14,005 $ 11,410 $ 24,648 $ 19,739
=========== ========= =========== ============
BASIC NET INCOME PER SHARE $ 0.34 $ 0.28 $ 0.60 $ 0.48
DILUTED NET INCOME PER SHARE $ 0.34 $ 0.28 $ 0.60 $ 0.48
BASIC WEIGHTED AVERAGE SHARES
OUTSTANDING 41,195 41,215 41,190 41,233
DILUTIVE EFFECT OF OUTSTANDING
STOCK OPTIONS 283 100 220 101
----------- --------- ----------- ------------
DILUTED WEIGHTED AVERAGE SHARES
OUTSTANDING 41,478 41,315 41,410 41,334
=========== ========= =========== ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
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<PAGE>
C.H. ROBINSON WORLDWIDE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------
1999 1998
----------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 24,754 $ 19,986
Adjustments to reconcile net income to net cash provided
by operating activities-
Depreciation and amortization 4,703 4,137
Deferred income taxes (4,744) 532
Loss (gain) on sale of assets (3) 11
Changes in operating elements-
Receivables (43,258) (41,794)
Inventories (1,223) (951)
Prepaid expenses and other 2,781 717
Accounts payable 28,014 41,655
Accrued compensation and profit sharing contribution (9,296) (7,289)
Accrued income taxes and other 14,210 27,007
----------- ---------
Net cash provided by operating activities 15,938 44,011
INVESTING ACTIVITIES:
Purchases of property and equipment (2,779) (2,791)
Sales of property and equipment 106 22
Sales/maturities of available-for-sale securities 7,840 12,053
Purchases of available-for-sale securities (8,721) (27,162)
Other, net (4,604) (1,036)
----------- ---------
Net cash used for investing activities (8,158) (18,914)
FINANCING ACTIVITIES:
Sales of treasury stock 913 826
Repurchases of treasury stock (1,143) (2,077)
Cash dividends (5,766) (4,947)
----------- ---------
Net cash used for financing activities (5,996) (6,198)
----------- ---------
Net increase in cash and cash equivalents 1,784 18,899
CASH AND CASH EQUIVALENTS, beginning of period 99,341 62,497
----------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 101,125 $ 81,396
=========== =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
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<PAGE>
C.H. ROBINSON WORLDWIDE INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General:
Basis Of Presentation
C.H. Robinson Worldwide, Inc. and its Subsidiaries (the "Company," "we,"
"us," or "our") is a global provider of multimodal transportation services and
logistic solutions through a network of 129 branch offices in 38 states
throughout the United States, along with offices in Canada, Mexico, Belgium, the
United Kingdom, France, Spain, Germany, Italy, Poland, Brazil, Argentina,
Venezuela and South Africa. The condensed consolidated financial statements
include the accounts of C.H. Robinson Worldwide, Inc. and its majority owned and
controlled subsidiaries. Minority interests in subsidiaries are not significant.
All significant intercompany transactions and balances have been eliminated in
the condensed consolidated financial statements.
The condensed consolidated financial statements which are unaudited have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). In management's opinion, these financial statements
include all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of operations for the interim
periods presented. The results of operations for the six months ended June 30,
1999 and 1998 are not necessarily indicative of results to be expected for the
entire year. Pursuant to SEC rules and regulations, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted from these statements. The condensed consolidated financial statements
and notes thereto should be read in conjunction with the financial statements
and notes included in our Annual Report on Form 10-K.
-5-
<PAGE>
ITEM 2. Managements' Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Company's
Condensed Consolidated Financial Statements and Notes thereto.
General
Gross revenues represent the total dollar value of services and goods we
sell to our customers. Our costs of transportation and products include the
direct costs of transportation, including motor carrier, intermodal, ocean, air,
and other costs, and the purchase price of the products we source. We act
principally as a service provider to add value and expertise in the execution
and procurement of these services for our customers. Our net revenues (gross
revenues less cost of transportation and products) are the primary indicator of
our ability to source, add value and resell services and products that are
provided by third parties, and are considered by management to be our primary
measurement of growth. Accordingly, the discussion of results of operations
below focuses on the changes in our net revenues.
In the transportation industry, results of operations generally show a
seasonal pattern as customers reduce shipments during and after the winter
holiday season. In recent years, our operating income and income from
continuing operations have been higher in the second and third quarters than in
the first and fourth quarters. Seasonality in the transportation industry has
not had a significant impact on our results of operations or our cash flows in
recent years. Also, inflation has not materially affected our operations due to
the short-term, transactional basis of our business. However, we cannot fully
predict the impact seasonality and inflation may have in the future.
Results of Operations
The following table summarizes net revenue by service line:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ----------------------------------
1999 1998 % Change 1999 1998 % Change
------------------------------ ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues (in thousands)
Transportation $ 58,507 $ 48,485 20.7% $ 111,578 $ 90,225 23.7%
Sourcing 11,065 12,186 (9.2)% 21,439 23,283 (7.9)%
Information services 3,824 2,621 45.9% 7,398 5,005 47.8%
----------------------------- ----------------------------------
Total $ 73,396 $ 63,292 16.0% $ 140,415 $ 118,513 18.5%
============================= ==================================
</TABLE>
The following table represents certain income statement data shown as
percentages of our net revenues:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ----------------------
1999 1998 1999 1998
-------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net revenues 100.0% 100.0% 100.0% 100.0%
Selling, general and administrative expenses 69.9% 70.6% 72.2% 73.0%
------------------- --------------------
Income from operations 30.1% 29.4% 27.8% 27.0%
Investment and other income 1.5% 1.0% 1.4% 1.0%
------------------- --------------------
Income before provision for income taxes 31.6% 30.4% 29.2% 28.0%
Provision for income taxes 12.5% 12.1% 11.6% 11.1%
------------------- --------------------
Net income 19.1% 18.3% 17.6% 16.9%
=================== ====================
</TABLE>
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<PAGE>
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30, 1998
Revenues. Gross revenues for the three months ended June 30, 1999 were
$579.4 million, an increase of 6.0% over gross revenues of $546.7 million for
the three months ended June 30, 1998. Net revenues for the three months ended
June 30, 1999 were $73.4 million, an increase of 16.0% over net revenues of
$63.3 million for the three months ended June 30, 1998 resulting from an
increase in transportation services net revenues of 20.7% to $58.5 million, a
decrease in sourcing net revenues of 9.2% to $11.1 million, and an increase in
information services net revenues of 45.9% to $3.8 million. Our net revenues
are increasing at a faster rate than our gross revenues due to expanding margins
in our truck transportation revenues and the different growth rates in the mix
of our service lines. Our information services net revenues as a percentage of
their gross revenues is highest of our three lines, followed by our
transportation business and finally our sourcing business.
The increase in transportation net revenues resulted primarily from an
increase in our truck transportation, including our short haul and less-than-
truckload business. The increase in transaction volume was driven by
significant expansion of business with current customers and from new domestic
and international customers. We also expanded our truck margins slightly due
primarily to our ability to hire services of trucks at more favorable rates
resulting from increased supply in the marketplace.
Sourcing net revenues decreased by 9.2% due principally to the abnormal
growth of 15.4% shown in the second quarter of 1998 as compared to the second
quarter of 1997. Adverse weather conditions in major produce growing areas in
the first and second quarters of 1998 coupled with the strength of our branch
network and relationships with produce growers worldwide provided us with
sources of produce in this challenging market. This provided growth to both our
number of transactions and our profit per transaction. No similar conditions
existed in the second quarter of 1999.
The increase in information services net revenues was the result of
significant growth in transaction volume with our existing customers.
Additionally, during the fourth quarter of 1998, we added many new customers to
our portfolio which contributed to the current growth.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the three months ended June 30, 1999 were $51.3
million, an increase of 14.9% over $44.7 million for the three months ended June
30, 1998. This increase was primarily due to increased costs associated with our
growth. Selling, general and administrative expenses as a percentage of net
revenues decreased to 69.9% for the three months ended June 30, 1999 compared to
70.6% for the three months ended June 30, 1998. This decrease is due primarily
to a reduction in personnel expenses as a percentage of net revenues resulting
from efficiency gains and our compensation structure. Our personnel expenses as
a percentage of net revenues have historically been highest in the first quarter
of the year, with declining percentages each quarter thereafter as a result of
our compensation structure. With the continued growth in our profitability,
these declining percentages have been slightly accelerated. We can not be
certain that these trends will continue in the future.
Income from Operations. Income from operations was $22.1 million for the
three months ended June 30, 1999, an increase of 18.5% over $18.6 million for
the three months ended June 30, 1998. Income from operations as percent of net
revenue was 30.1% and 29.4% for the three months ended June 30, 1999 and 1998.
Investment and Other Income. Investment and other income was $1.1 million
for the three months ended June 30, 1999, an increase of 77.3% from $639,000 for
the three months ended June 30, 1998. Our cash and investments as of June 30,
1999 increased $25.8 million over the balance as of June 30, 1998 as a result of
our operations.
Provision for Income Taxes. The effective income tax rates for operations
were 39.7% and 39.7% for the three months ended June 30, 1999 and 1998. The
effective income tax rate for both periods is greater than the statutory federal
income tax rate primarily due to state income taxes, net of federal benefit.
Net Income. Net income was $14.0 million for the three months ended June
30, 1999, an increase of 20.4% over $11.6 million for the three months ended
June 30, 1998. Net income per share increased by 21.4% to
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<PAGE>
$0.34 (basic and diluted) for the three months ended June 30, 1999 compared to
$0.28 (basic and diluted) for the three months ended June 30, 1998.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
Revenues. Gross revenues for the six months ended June 30, 1999 were $1.09
billion, an increase of 7.3% over gross revenues of $1.01 billion for the
six months ended June 30, 1998. Net revenues for the six months ended June 30,
1999 were $140.4 million, an increase of 18.5% over net revenues of $118.5
million for the six months ended June 30, 1998 resulting from an increase in
transportation services net revenues of 23.7% to $111.6 million, a decrease in
sourcing net revenues of 7.9% to $21.4 million, and an increase in information
services net revenues of 47.8% to $7.4 million. Our net revenues are increasing
at a faster rate than our gross revenues due to expanding margins in our truck
transportation revenues and the different growth rates in the mix of our service
lines. Our information services net revenues as a percentage of their gross
revenues is highest of our three lines, followed by our transportation business
and finally our sourcing business.
The increase in transportation net revenues resulted primarily from an
increase in our truck transportation, including our short haul and less-than-
truckload business. The increase in transaction volume was driven by
significant expansion of business with current customers and from new domestic
and international customers. We also expanded our truck margins slightly in the
second quarter due primarily to our ability to hire services of trucks at more
favorable rates resulting from increased supply in the marketplace.
Sourcing net revenues decreased by 7.9% due principally to the abnormal
growth of 18.4% shown in the first six months of 1998 as compared to the first
six months of 1997. Adverse weather conditions in major produce growing areas
in the first six months of 1998 coupled with the strength of our branch network
and relationships with produce growers worldwide provided us with sources of
produce in this challenging market. This provided growth to both our number of
transactions and our profit per transaction. No similar conditions existed in
the first six months of 1999.
The increase in information services net revenues was the result of
significant growth in transaction volume with our existing customers.
Additionally, during the fourth quarter of 1998, we added many new customers to
our portfolio which contributed to the current growth.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the six months ended June 30, 1999 were $101.4
million, an increase of 17.2% over $86.5 million for the six months ended June
30, 1998. This increase was primarily due to increased costs associated with our
growth. Selling, general and administrative expenses as a percentage of net
revenues decreased to 72.2% for the six months ended June 30, 1999 compared to
73.0% for the six months ended June 30, 1998. This decrease is due primarily to
a reduction in personnel expenses as a percentage of net revenues revenues
resulting from efficiency gains and our compensation structure. Our personnel
expenses as a percentage of net revenues have historically been highest in the
first quarter of the year, with declining percentages each quarter thereafter as
a result of our compensation structure. With the continued growth in our
profitability, these declining percentages have been slightly accelerated. With
the continued growth in our profitability, these declining percentages have been
slightly accelerated. We can not be certain that these trends will continue in
the future.
Income from Operations. Income from operations was $39.0 million for the
six months ended June 30, 1999, an increase of 21.9% over $32.0 million for the
six months ended June 30, 1998. Income from operations as percent of net revenue
was 27.8% and 27.0% for the six months ended June 30, 1999 and 1998.
Investment and Other Income. Investment and other income was $2.1 million
for the six months ended June 30, 1999, an increase of 84.1% from $1.1 million
for the six months ended June 30, 1998. Our cash and investments as of June 30,
1999 increased $25.8 million over the balance as of June 30, 1998 as a result of
our operations.
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<PAGE>
Provision for Income Taxes. The effective income tax rates for operations
were 39.7% and 39.6% for the six months ended June 30, 1999 and 1998. The
effective income tax rate for both periods is greater than the statutory federal
income tax rate primarily due to state income taxes, net of federal benefit.
Net Income. Net income was $24.8 million for the six months ended June 30,
1999, an increase of 23.9% over $20.0 million for the six months ended June 30,
1998. Net income per share increased by 25.0% to $0.60 (basic and diluted) for
the six months ended June 30, 1999 compared to $0.48 (basic and diluted) for the
six months ended June 30, 1998.
Liquidity and Capital Resources
We have historically generated substantial cash from operations which has
enabled us to fund our growth while paying cash dividends and repurchasing
stock. Cash and cash equivalents totaled $101.1 million and $99.3 million and
available-for-sale securities totaled $31.6 million and $30.7 million as of June
30, 1999 and December 31, 1998. Working capital at June 30, 1999 and December
31, 1998 totaled $151.8 million and $135.2 million. We have had no long-term
debt for the last five years and have no material commitments for future capital
expenditures. The conversion to the euro has not had a material business or
financial impact on us, and we don't expect any material business or financial
impacts to occur in the foreseeable future.
We generated $15.9 million of positive cash flow from operations for the
six months ended June 30, 1999. This was due to net income generated, offset by
annual employee bonus payments and profit sharing contributions which occur in
the first quarter of each year. We used $8.2 million net of cash and cash
equivalents for investing activities, resulting from $7.8 million generated by
sales and maturities of available-for-sale securities, $8.7 million spent on
purchases of available-for-sale securities, $4.6 million spent for acquisitions
and other, and $2.8 million to fund capital expenditures necessary for continued
growth. We also used $6.0 million of cash and cash equivalents for financing
activities, primarily to pay quarterly cash dividends. We have declared a $0.07
per share dividend payable to shareholders of record as of June 10, 1999
payable on July 1, 1999.
Assuming no change in our current business plan, management believes that
our available cash, together with expected future cash generated from
operations, are expected to be sufficient to satisfy our anticipated needs for
working capital, capital expenditures and cash dividends for all future periods.
During 1999, the Board of Directors authorized a stock repurchase program under
which up to two million shares of our common stock may be repurchased. Any
repurchases would be made from available cash or cash generated from future
operations. In addition, we have $17.5 million available under our two existing
lines of credit, both with interest rates of 6.2%, as of June 30, 1999. The
lines of credit renew annually and do not restrict the payment of dividends.
There were no borrowings under the lines of credit during the six months ended
June 30, 1999 or during 1998. We expect to be able to renew these lines of
credit in the future.
Impact of Year 2000
We have completed an assessment of our compliance with Year 2000 issues and
will modify or replace portions of our hardware and software so that our
computer systems will function properly with respect to dates after December 31,
1999. We have completed a majority of the modifications and testing of our Year
2000 compliance process. This testing included running test transactions with
dates beyond December 31, 1999 through our systems to ensure our daily, monthly
and yearly processes accept the transactions, process and store them, and allow
for extraction of the transaction data as needed to operate our business and
generate our internal and external financial information.
We do not anticipate any disruptions to be caused by embedded circuitry in
our operational systems. Our information services line also has a commercial
application from the Federal Reserve which is not Year 2000 compliant. A new
version is expected to be available by September 30, 1999. We do not anticipate
this to create any implementation problems on our scheduled timeline.
In addition, we are not aware of any material relationships with any
customer, produce supplier or transportation carrier that would have a material
impact on our business, results of operations or financial condition in the
instance that these third parties would have material systems interruptions as a
result of the Year 2000 situation. We have no single third party relationship
that accounts for more than 6% of our business.
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<PAGE>
Although we believe we have internally addressed our risks and have not
discovered any material exposure with our third party relationships, there are
inherent risks that we may not meet our objectives by December 31, 1999 or that
unforeseen circumstances may arise. We could experience business interruption
in the event our systems would be unable to process information or would process
information incorrectly. Additionally, we could suffer loss of business if a
number of our third party relationships, taken together, would have similar
problems. It is impossible to fully assess the potential consequences in the
event there are disruptions in such infrastructure areas as utilities,
communications, transportation, banking and government. Any such business
interruption could have a material adverse effect on our results of operations,
liquidity, and financial condition depending on the duration and severity of the
interruption. We are developing contingency plans in the event we are unable to
complete remediation efforts or unidentified problems develop. We expect to
have these plans in place by September 30, 1999.
We are using primarily internal resources for system modifications and
testing. Total costs we have incurred, plus costs we plan to incur for
programming, testing, purchase of Year 2000 testing software, and outside
consultant costs are expected to be in the range of $500,000 to $600,000. The
actual cost could exceed this estimate. These costs, however, are not expected
to have a material effect on our financial condition, results of operations or
cash flows. We have incurred and expensed approximately $450,000 as of June 30,
1999. All system modification costs are being expensed as incurred.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
We had approximately $132.7 million of cash and investments on June 30,
1999, approximately $101.1 million of which were cash and cash equivalents and
$31.6 million of which were available for sale (non-trading) securities.
Substantially all of the cash equivalents and available for sale securities are
investment grade, fixed income securities from domestic issuers. Because of the
credit risk criteria of our investment policy, the primary market risk
associated with these investments is interest rate risk. We do not use
derivative financial instruments to manage interest rate risk or to speculate on
future changes in interest rates. A rise in interest rates could negatively
affect the fair value of our investments. However, because we consider it
unlikely that we would need or choose to substantially liquidate our
investments, we believe that such an increase in interest rates would not have a
material impact on our future earnings or cash flows. We also conduct business
in foreign currencies and at times we enter into forward contracts to hedge
against foreign currency exposure. There were no such contracts outstanding
during the six months ended June 30, 1999. We also have inventory which is
subject to certain commodity price volatility, and we sometimes choose to hedge
our positions with futures and options. We believe a reasonable near-term
change in foreign currency exchange rates or commodity prices would not have a
material impact on our future earnings or cash flows because the amount of our
inventory and foreign currency exposure is not material.
Cautionary Statement Relevant to Forward-looking Information
Our discussions and analysis of our financial condition and results of
operations, including our Year 2000 and market risk discussions, contain certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements represent our expectations or
beliefs, including, but not limited to, our current assumptions about future
financial performance, anticipated problems, estimated Year 2000 costs and our
plans for future operations, which are subject to various risks and
uncertainties. When used in this Form 10-Q and in future filings by the Company
with the Securities and Exchange Commission, in our press releases,
presentations to securities analysts or investors, in oral statements made by or
with the approval of an executive officer of the Company, the words or phrases
"believes," "may," "will," "expects," "should," "continue," "anticipates,"
"intends," "will likely result," "estimates," "projects" or similar expressions
and variations thereof are intended to identify such forward-looking statements.
However, any statements contained in this Form 10-Q that are not statements of
historical fact may be deemed to be forward-looking statements. We caution that
these statements by their nature involve risks and uncertainties, certain of
which are beyond our control, and actual results may differ materially depending
on a variety of important factors, including those described in Exhibit 99 to
our Form 10-K filed with the Securities and Exchange Commission with respect to
the fiscal year ended December 31, 1998.
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<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings
In accordance with reporting requirements promulgated by the Securities and
Exchange Commission, the Company has no new information to report regarding
legal proceedings for this Quarterly Report on Form 10-Q.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Company's stockholders was held on May 4, 1999.
At the meeting, stockholders voted on the reelection of three directors for
terms expiring at the Annual Meeting of the Company in 2002. Each of the
directors was reelected by a vote as follows: Looe Baker III received 27,503,492
votes "For" and 616,265 votes were "Withheld;" Robert Ezrilov received
27,513,166 votes "For" and 606,591 votes were "Withheld," and Owen P. Gleason
received 27,513,489 votes "For" and 606,268 votes were "Withheld."
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30, 1999.
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 9, 1999
C.H.ROBINSON WORLDWIDE, INC.
By /s/ D.R. Verdoorn
-----------------
D.R. Verdoorn
Chief Executive Officer
By /s/ Chad Lindbloom
------------------
Chad Lindbloom
Controller
(principal accounting officer)
-12-
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
27 Financial Data Schedule
-13-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF C.H. ROBINSON WORLDWIDE, INC. AND
SUBSIDIARIES FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-Q REPORT.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 101,125
<SECURITIES> 31,611
<RECEIVABLES> 291,158
<ALLOWANCES> 17,807
<INVENTORY> 4,711
<CURRENT-ASSETS> 432,552
<PP&E> 44,040
<DEPRECIATION> 25,563
<TOTAL-ASSETS> 468,950
<CURRENT-LIABILITIES> 280,781
<BONDS> 0
0
0
<COMMON> 4,119
<OTHER-SE> 184,050
<TOTAL-LIABILITY-AND-EQUITY> 468,950
<SALES> 0
<TOTAL-REVENUES> 1,088,698
<CGS> 0
<TOTAL-COSTS> 1,049,727
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,406
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 41,051
<INCOME-TAX> 16,297
<INCOME-CONTINUING> 24,754
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,754
<EPS-BASIC> 0.60
<EPS-DILUTED> 0.60
</TABLE>
