C.H. Robinson Reports 2024 Second Quarter Results

C.H. Robinson

14701 Charlson Rd.

Eden Prairie, MN 55347

www.chrobinson.com

FOR IMMEDIATE RELEASE

FOR INQUIRIES, CONTACT:

Chuck Ives, Director of Investor Relations

Email: [email protected]

C.H. Robinson Reports 2024 Second Quarter Results

Eden Prairie, MN, July 31, 2024 - C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW)

today reported financial results for the quarter ended June 30, 2024.

Second Quarter Key Metrics:

• Gross profits increased 3.0% year-over-year to $676.5 million, and increased 4.5% sequentially

• Income from operations increased 34.3% year-over-year to $178.1 million, and increased 40.1%

sequentially

• Adjusted operating margin

(1)

increased 600 basis points to 25.9%

• Diluted earnings per share (EPS) increased 29.6% to $1.05

• Adjusted EPS

(1)

increased 25.0% to $1.15

• Cash generated by operations decreased by $58.4 million to $166.4 million provided by

operations

(1)

Adjusted operating margin and adjusted EPS are non-GAAP financial measures. The same factors described in this release

that impacted these non-GAAP measures also impacted the comparable GAAP measures. Refer to pages 11 through 13 for

further discussion and GAAP to Non-GAAP Reconciliations.

"Our second quarter results reflect a higher quality of execution and performance, as we continue to

implement the new Robinson operating model. And although we continue to fight through an elongated

freight recession, we are winning and executing better at this point in the cycle," said C.H. Robinson's

President and Chief Executive Officer, Dave Bozeman. "Our truckload business grew market share for the

fourth consecutive quarter, and we took share the right way, with margin improvement in mind. And our

adjusted income from operations increased 32 percent year-over-year for the full enterprise."

"I also want to commend our people for continuing to embrace the changes that we’re making to deliver a

higher and more consistent level of performance and for the high quality second quarter results that they

delivered in what continues to be a challenging market," added Bozeman. "With ongoing efforts to

improve the customer experience and our cost to serve, we continue to focus on ensuring that we’ll be

ready for the eventual freight market rebound, with a disciplined operating model that decouples

headcount growth from volume growth and drives operating leverage."

"All of the changes that we’re making are aimed at our North Star of generating incremental operating

income and delivering higher highs and higher lows over the course of freight market cycles. We will do

this by focusing on two main fronts…growing market share and expanding our operating income

margins," said Bozeman. "We’ll continue to grow market share by leveraging our robust capabilities to

power vertical-centric solutions, by reclaiming share in targeted segments, and by expanding our

addressable market through value-added services and solutions that drive new volume to our four core

modes. We’ll also be more intentional with our go-to market strategy to drive additional synergies and

cross-selling across our portfolio."

"We’ll expand our operating income margins by embedding Lean practices, removing waste and

expanding our digital capabilities. This will enable us to strengthen our productivity and optimize our

organization structure in order to be the most efficient operator, in addition to the highest value provider.

We’ll optimize our gross profit by monitoring key input metrics and responding faster to error states and

changing market conditions with countermeasures and innovative technology that improves our execution.

As we take action on all of these fronts, I’m excited about the work that we’re doing to reinvigorate

Robinson’s winning culture and to instill discipline with our new operating model. The operating model is

helping us execute a solid strategy even better, and we expect further improvement as we continue to

cascade the new operating model deeper into the organization and as our team continues to embrace it and

build operational muscle. I know from my past experiences of implementing Lean operating models, that

improvement isn’t always linear, and we still have a lot of grass to cut. I’m confident in the team’s

willingness and ability to drive a higher level of discipline in our operational execution," Bozeman

concluded.

Summary of Second Quarter of 2024 Results Compared to the Second Quarter of 2023

• Total revenues increased 1.4% to $4.5 billion, primarily driven by higher pricing in our ocean

services, partially offset by lower pricing in our truckload services.

• Gross profits increased 3.0% to $676.5 million. Adjusted gross profits increased 3.3% to

$687.4 million, primarily driven by higher adjusted gross profit per transaction in truckload and less

than truckload (“LTL”) services.

• Operating expenses decreased 4.4% to $509.3 million. Personnel expenses decreased 4.3% to

$361.2 million, primarily due to cost optimization efforts. Average employee headcount declined

10.0%. Other selling, general and administrative (“SG&A”) expenses decreased 4.8% to

$148.1 million, with reductions across several expense categories.

• Income from operations totaled $178.1 million, up 34.3% due to the increase in adjusted gross profits

and decrease in operating expenses. Adjusted operating margin

(1)

of 25.9% increased 600 basis

points.

• Interest and other income/expense, net totaled $21.5 million of expense, consisting primarily of

$22.9 million of interest expense, which decreased $0.3 million versus last year, due to a lower

average debt balance, and a $0.5 million net gain from foreign currency revaluation and realized

foreign currency gains and losses.

• The effective tax rate in the quarter was 19.4%, compared to 14.9% in the second quarter last year.

The higher rate in the second quarter of this year was driven by lower benefits from foreign tax credits,

a higher foreign tax rate, and the impact of higher pretax income, partially offset by higher U.S. tax

credits and incentives.

• Net income totaled $126.3 million, up 29.7% from a year ago. Diluted EPS of $1.05 increased 29.6%.

Adjusted EPS

(1)

of $1.15 increased 25.0%.

(1)

Adjusted operating margin and adjusted EPS are non-GAAP financial measures. The same factors described in this release

that impacted these non-GAAP measures also impacted the comparable GAAP measures. Refer to pages 11 through 13 for

further discussion and GAAP to Non-GAAP Reconciliations.

Summary of 2024 Year-to-Date Results Compared to 2023

• Total revenues decreased 1.5% to $8.9 billion, primarily driven by lower pricing in our truckload

services, partially offset by higher pricing in our ocean services and increased volume in our ocean and

air services.

• Gross profits decreased 0.8% to $1.3 billion. Adjusted gross profits decreased 0.4% to $1.3 billion,

primarily driven by lower adjusted gross profit per transaction in truckload and air services, partially

offset by increased volume in our ocean services.

• Operating expenses decreased 1.7% to $1.0 billion. Personnel expenses decreased 2.6% to $740.3

million, primarily due to cost optimization efforts. Average employee headcount declined 10.8%.

Other SG&A expenses increased 0.8% to $299.6 million.

• Income from operations totaled $305.2 million, up 3.9% from last year, due to the decrease in

operating expenses. Adjusted operating margin

(1)

of 22.7% increased 100 basis points.

• Interest and other income/expense, net totaled $38.3 million of expense, primarily consisting of

$45.0 million of interest expense, which decreased $1.8 million versus last year, due to a lower

average debt balance. The year-to-date results also include a $4.4 million net gain from foreign

currency revaluation and realized foreign currency gains and losses.

• The effective tax rate for the six months ended June 30, 2024 was 17.9% compared to 14.1% in the

year-ago period. The higher rate in the current period was driven by lower tax benefits related to stock-

based compensation deliveries, a higher foreign tax rate, and lower foreign tax credit utilization,

partially offset by higher U.S. tax credits and incentives.

• Net income totaled $219.2 million, up 3.3% from a year ago. Diluted EPS of $1.83 increased 3.4%.

Adjusted EPS

(1)

of $2.01 increased 4.7%.

(1)

Adjusted operating margin and adjusted EPS are non-GAAP financial measures. The same factors described in this release

that impacted these non-GAAP measures also impacted the comparable GAAP measures. Refer to pages 11 through 13 for

further discussion and GAAP to Non-GAAP Reconciliations.

North American Surface Transportation (“NAST”) Results

Summarized financial results of our NAST segment are as follows (dollars in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 % change 2024 2023 % change

Total revenues $ 2,989,909 $ 3,079,268 (2.9) % $ 5,990,222 $ 6,383,455 (6.2) %

Adjusted gross profits

(1)

419,657 400,532 4.8 % 816,767 827,187 (1.3) %

Income from operations 141,102 117,859 19.7 % 249,997 251,881 (0.7) %

____________________________________________

(1)

Adjusted gross profits is a non-GAAP financial measure explained later in this release. The difference between adjusted gross profits and gross profits is not

material.

Second quarter total revenues for the NAST segment totaled $3.0 billion, a decrease of 2.9% over the prior

year, primarily driven by lower truckload pricing, reflecting an oversupply of truckload capacity compared

to freight demand. NAST adjusted gross profits increased 4.8% in the quarter to $419.7 million. Adjusted

gross profits in truckload increased 7.9% due to a 6.5% increase in adjusted gross profit per shipment and

a 1.5% increase in truckload shipments. Our average truckload linehaul rate per mile charged to our

customers, which excludes fuel surcharges, decreased approximately 2.0% in the quarter compared to the

prior year, while truckload linehaul cost per mile, excluding fuel surcharges, also decreased approximately

3.5%, resulting in an 8.0% increase in truckload adjusted gross profit per mile. LTL adjusted gross profits

increased 6.5% versus the year-ago period, driven by a 1.5% increase in LTL volume and a 5.0% increase

in adjusted gross profit per order. NAST overall volume growth increased 1.5% for the quarter. Operating

expenses decreased 1.5%, primarily due to lower technology expenses and cost optimization efforts,

which were partially offset by higher variable compensation. NAST average employee headcount was

down 9.7% in the quarter. Income from operations increased 19.7% to $141.1 million, and adjusted

operating margin expanded 420 basis points to 33.6%.

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,

2024 2023 % change 2024 2023 % change

Total revenues $ 921,223 $ 779,867 18.1 % $ 1,779,860 $ 1,569,845 13.4 %

Adjusted gross profits

(1)

184,067 179,231 2.7 % 364,112 357,150 1.9 %

Income from operations 40,982 29,647 38.2 % 72,534 59,763 21.4 %

____________________________________________

(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 total revenues for the Global Forwarding segment increased 18.1% to $921.2 million,

primarily driven by higher pricing in our ocean services. Adjusted gross profits increased 2.7% in the

quarter to $184.1 million. Ocean adjusted gross profits increased 8.6%, driven by a 4.0% increase in

shipments and a 4.5% increase in adjusted gross profit per shipment. Air adjusted gross profits decreased

8.9%, driven by an 18.0% decrease in adjusted gross profit per metric ton shipped, partially offset by a

11.0% increase in metric tons shipped. Customs adjusted gross profits increased 6.1%, driven by a 6.0%

increase in transaction volume. Operating expenses decreased 4.3%, primarily due to lower technology

expenses and due to cost optimization efforts. Second quarter average employee headcount decreased

11.0%. Income from operations increased 38.2% to $41.0 million, and adjusted operating margin

expanded 580 basis points to 22.3% 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 June 30, Six Months Ended June 30,

2024 2023 % change 2024 2023 % change

Total revenues $ 572,216 $ 562,721 1.7 % $ 1,125,577 $ 1,080,226 4.2 %

Adjusted gross profits

(1)

Robinson Fresh $ 39,883 $ 37,895 5.2 % $ 73,619 $ 69,040 6.6 %

Managed Services 28,752 28,953 (0.7) % 57,688 57,923 (0.4) %

Other Surface Transportation 15,050 18,885 (20.3) % 32,952 39,836 (17.3) %

____________________________________________

(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.

Second quarter Robinson Fresh adjusted gross profits increased 5.2% to $39.9 million due to an increase

in integrated supply chain solutions for retail and foodservice customers. Managed Services adjusted gross

profits decreased 0.7%. Other Surface Transportation adjusted gross profits decreased 20.3% to

$15.1 million, primarily due to a 23.3% decrease in Europe truckload adjusted gross profits.

Other Income Statement Items

Interest and other income/expense, net totaled $21.5 million of expense, consisting primarily of

$22.9 million of interest expense, which decreased $0.3 million versus the second quarter of 2023 due to a

lower average debt balance, and a $0.5 million net gain from foreign currency revaluation and realized

foreign currency gains and losses.

The second quarter effective tax rate was 19.4%, up from 14.9% last year. The higher rate in the second

quarter of this year was driven by lower benefits from foreign tax credits, a higher foreign tax rate, and the

impact of higher pretax income, partially offset by higher U.S. tax credits and incentives. For 2024, we

expect our full-year effective tax rate to be 17% to 19%.

Diluted weighted average shares outstanding in the quarter were up 0.1%.

Cash Flow Generation and Capital Distribution

Cash generated from operations totaled $166.4 million in the second quarter, compared to $224.8 million

of cash generated from operations in the second quarter of 2023. The $58.4 million decrease in cash flow

from operations was primarily related to a $166.7 million decline in cash provided by changes in net

operating working capital, due to a $23.1 million sequential increase in net operating working capital in

the second quarter of 2024 compared to a $143.7 million sequential decrease in the second quarter of

2023.

In the second quarter of 2024, cash returned to shareholders totaled $76.4 million, with $72.7 million in

cash dividends and $3.7 million in repurchases of common stock.

Capital expenditures totaled $19.3 million in the quarter. Capital expenditures for 2024 are expected to be

toward the lower end of the previously provided range of $85 million to $95 million.

About C.H. Robinson

C.H. Robinson is one of the original logistics leaders. Companies around the world look to us to reimagine supply chains,

advance freight technology, and solve logistics challenges—from the simple to the most complex. Over 90,000 customers and

450,000 contract carriers in our network trust us to manage $22 billion in freight annually. Through our unmatched expertise,

unrivaled scale, and tailored solutions, we ensure the seamless delivery of goods across industries and continents via truckload,

less-than-truckload, ocean, air, and beyond. As a responsible global citizen, we make supply chains more sustainable and

proudly contribute millions to the causes that matter most to our employees. For more information, visit us at 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 that could adversely impact our

profitability; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight;

risks associated with seasonal changes or significant disruptions in the transportation industry; risks associated with

identifying and completing suitable acquisitions; our dependence on and changes in relationships with existing contracted

truck, rail, ocean, and air carriers; risks associated with the loss of significant customers; risks associated with reliance on

technology to operate our business; cyber-security related risks; our ability to staff and retain employees; risks associated with

operations outside of the U.S.; our ability to successfully integrate the operations of acquired companies with our historic

operations; climate change related risks; risks associated with our indebtedness; risks associated with interest rates; risks

associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact

of changes in government regulations including environmental-related 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

changes in political and governmental conditions; changes to our capital structure; changes due to catastrophic events; risks

associated with the usage of artificial intelligence technologies; and other risks and uncertainties detailed in our Annual and

Quarterly Reports.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no

obligation to update such statement to reflect events or circumstances arising after such date. All remarks made during

our financial results conference call will be current at the time of the call, and we undertake no obligation to update the

replay.

Conference Call Information:

C.H. Robinson Worldwide Second Quarter 2024 Earnings Conference Call

Wednesday, July 31, 2024; 5:00 p.m. Eastern Time

Presentation slides and a simultaneous live audio webcast of the conference call may be accessed through the Investor

Relations link on C.H. Robinson’s website at chrobinson.com.

To participate in the conference call by telephone, please call ten minutes early by dialing: 877-269-7756

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,

2024 2023 % change 2024 2023 % change

Adjusted gross profits

(1)

Transportation

Truckload $ 274,187 $ 261,147 5.0 % $ 531,600 $ 549,801 (3.3) %

LTL 145,823 137,185 6.3 % 286,959 275,822 4.0 %

Ocean 116,659 107,497 8.5 % 229,517 217,576 5.5 %

Air 30,906 33,728 (8.4) % 61,438 65,045 (5.5) %

Customs 26,652 25,128 6.1 % 52,747 48,462 8.8 %

Other logistics services 57,320 66,582 (13.9) % 116,878 131,495 (11.1) %

Total transportation 651,547 631,267 3.2 % 1,279,139 1,288,201 (0.7) %

Sourcing 35,862 34,229 4.8 % 65,999 62,935 4.9 %

Total adjusted gross profits $ 687,409 $ 665,496 3.3 % $ 1,345,138 $ 1,351,136 (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.

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,

2024 2023 % change 2024 2023 % change

Revenues:

Transportation $ 4,121,930 $ 4,084,827 0.9 % $ 8,204,518 $ 8,412,792 (2.5) %

Sourcing 361,418 337,029 7.2 % 691,141 620,734 11.3 %

Total revenues 4,483,348 4,421,856 1.4 % 8,895,659 9,033,526 (1.5) %

Costs and expenses:

Purchased transportation and related

services

3,470,383 3,453,560 0.5 % 6,925,379 7,124,591 (2.8) %

Purchased products sourced for resale 325,556 302,800 7.5 % 625,142 557,799 12.1 %

Direct internally developed software

amortization

10,883 8,749 24.4 % 21,105 16,066 31.4 %

Total direct expenses 3,806,822 3,765,109 1.1 % 7,571,626 7,698,456 (1.6) %

Gross profit $ 676,526 $ 656,747 3.0 % $ 1,324,033 $ 1,335,070 (0.8) %

Plus: Direct internally developed software

amortization

10,883 8,749 24.4 % 21,105 16,066 31.4 %

Adjusted gross profit $ 687,409 $ 665,496 3.3 % $ 1,345,138 $ 1,351,136 (0.4) %

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross

profit. Our adjusted operating margin - excluding restructuring is a similar non-GAAP financial measure as adjusted operating

margin, but also excludes the impact of restructuring. We believe adjusted operating margin and adjusted operating margin -

excluding restructuring are useful measures of our profitability in comparison to our adjusted gross profit, which we consider a

primary performance metric as discussed above. The comparisons of operating margin to adjusted operating margin and

adjusted operating margin - excluding restructuring are presented below:

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 % change 2024 2023 % change

Total revenues

$ 4,483,348

$ 4,421,856

1.4%

$ 8,895,659

$ 9,033,526

(1.5%)

Income from operations 178,090 132,623 34.3% 305,223 293,656 3.9%

Operating margin 4.0% 3.0% 100 bps 3.4% 3.3% 10 bps

Adjusted gross profit $ 687,409 $ 665,496 3.3%

$ 1,345,138

$ 1,351,136

(0.4%)

Income from operations 178,090 132,623 34.3% 305,223 293,656 3.9%

Adjusted operating margin 25.9% 19.9% 600 bps 22.7% 21.7% 100 bps

Adjusted gross profit $ 687,409 $ 665,496 3.3%

$ 1,345,138

$ 1,351,136

(0.4%)

Adjusted income from operations 193,279 146,755 31.7% 333,355 311,510 7.0%

Adjusted operating margin - excluding

restructuring

28.1% 22.1% 600 bps 24.8% 23.1% 170 bps

GAAP to Non-GAAP Reconciliation

(unaudited, in thousands)

Our adjusted income (loss) from operations, adjusted operating margin - excluding restructuring, and adjusted net income per

share (diluted) are non-GAAP financial measures. Adjusted income (loss) from operations and adjusted net income per share

(diluted) is calculated as income (loss) from operations, adjusted operating margin - excluding restructuring, and net income per

share (diluted) excluding the impact of restructuring. The adjustments to net income per share (diluted) include restructuring-

related costs and a foreign currency loss on divested operations. We believe that these measures provide useful information to

investors and include them within our internal reporting to our chief operating decision maker. Accordingly, the discussion of

our results of operations includes discussion on the changes in our adjusted income (loss) from operations, adjusted operating

margin - excluding restructuring, and adjusted net income per share (diluted). The reconciliation of income (loss) from

operations to adjusted income (loss) from operations, adjusted operating margin - excluding restructuring, and net income per

share (diluted) to adjusted income (loss) from operations and adjusted net income per share (diluted) is presented below (in

thousands except per share data):

NAST

Global

Forwarding

All

Other and

Corporate

Consolidated

Three Months Ended June 30, 2024

Non-GAAP Reconciliation:

Income (loss) from operations

$ 141,102

$ 40,982

$ (3,994)

$ 178,090

Severance and other personnel expenses

4,758

2,179

2,508

9,445

Other selling, general, and administrative expenses

3,776

1,331

637

5,744

Total adjustments to income (loss) from operations

(1)

8,534

3,510

3,145

15,189

Adjusted income (loss) from operations

$ 149,636

$ 44,492

$ (849)

$ 193,279

Adjusted gross profit

$ 419,657 $ 184,067 $ 83,685

$ 687,409

Adjusted income (loss) from operations

149,636

44,492

(849)

193,279

Adjusted operating margin - excluding restructuring 35.7 % 24.2 % N/M 28.1 %

NAST

Global

Forwarding

All

Other and

Corporate

Consolidated

Six Months Ended June 30, 2024

Income (loss) from operations

$ 249,997

$ 72,534

$ (17,308)

$ 305,223

Severance and other personnel expenses

7,784

5,394

4,209

17,387

Other selling, general, and administrative expenses

5,654

1,592

3,499

10,745

Total adjustments to income (loss) from operations

(2)

13,438

6,986

7,708

28,132

Adjusted income (loss) from operations

$ 263,435

$ 79,520

$ (9,600)

$ 333,355

Adjusted gross profit

$ 816,767

$ 364,112

$ 164,259

$ 1,345,138

Adjusted income (loss) from operations

263,435

79,520

(9,600)

333,355

Adjusted operating margin - excluding restructuring

32.3 %

21.8 %

N/M

24.8 %

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

$ in 000's per share $ in 000's per share

Net income and per share (diluted) $ 126,251 $ 1.05 $ 219,155 $ 1.83

Restructuring and related costs, pre-tax

(1)(2)

15,189 0.13 28,132 0.24

Tax effect of adjustments (3,645) (0.03) (6,746) (0.06)

Adjusted net income and per share (diluted) $ 137,795 $ 1.15 $ 240,541 $ 2.01

____________________________________________

(1)

The three months ended June 30, 2024 include restructuring expenses of $9.4 million related to workforce reductions and $5.7 million of other charges,

primarily related to reducing our facilities footprint including early termination or abandonment of office buildings under operating leases.

(2)

The six months ended June 30, 2024 include restructuring expenses of $17.4 million related to workforce reductions and $10.7 million of

other charges, primarily related to an impairment of internally developed software and charges related to reducing our facilities footprint including early

termination or abandonment of office buildings under operating leases.

NAST

Global

Forwarding

All

Other and

Corporate

Consolidated

Three Months Ended June 30, 2023

Non-GAAP Reconciliation:

Income (loss) from operations

$ 117,859

$ 29,647

$ (14,883)

$ 132,623

Severance and other personnel expenses

327

691

12,109

13,127

Other selling, general, and administrative expenses

962

1,005

Total adjustments to income (loss) from operations

(1)

331

730

13,071

14,132

Adjusted income (loss) from operations

$ 118,190

$ 30,377

$ (1,812)

$ 146,755

Adjusted gross profit

$ 400,532 $ 179,231 $ 85,733

$ 665,496

Adjusted income (loss) from operations

118,190

30,377

(1,812)

146,755

Adjusted operating margin - excluding restructuring

29.5 %

16.9 %

N/M

22.1 %

NAST

Global

Forwarding

All

Other and

Corporate

Consolidated

Six Months Ended June 30, 2023

Income (loss) from operations

$ 251,881

$ 59,763

$ (17,988)

$ 293,656

Severance and other personnel expenses

1,156

2,229

13,340

16,725

Other selling, general, and administrative expenses

163

962

1,129

Total adjustments to income (loss) from operations

(2)

1,160

2,392

14,302

17,854

Adjusted income (loss) from operations

$ 253,041

$ 62,155

$ (3,686)

$ 311,510

Adjusted gross profit

$ 827,187

$ 357,150

$ 166,799

$ 1,351,136

Adjusted income (loss) from operations

253,041

62,155

(3,686)

311,510

Adjusted operating margin - excluding restructuring 30.6 % 17.4 % N/M 23.1 %

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

$ in 000's per share $ in 000's per share

Net income and per share (diluted) $ 97,316 $ 0.81 $ 212,207 $ 1.77

Restructuring and related costs, pre-tax

(1)(2)

14,132 0.12 17,854 0.15

Foreign currency loss on divested operations, pre-tax 2,051 0.02 3,808 0.04

Tax effect of adjustments (3,393) (0.03) (4,287) (0.04)

Adjusted net income and per share (diluted) $ 110,106 $ 0.92 $ 229,582 $ 1.92

____________________________________________

(1)

The three months ended June 30, 2023 includes restructuring expenses of $13.1 million related to workforce reductions and $1.0 million of other charges.

(2)

The six months ended June 30, 2023 includes restructuring expenses of $16.7 million related to workforce reductions and $1.1 million of other charges.

Condensed Consolidated Statements of Income

(unaudited, in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 % change 2024 2023 % change

Revenues:

Transportation $ 4,121,930 $ 4,084,827 0.9 % $ 8,204,518 $ 8,412,792 (2.5) %

Sourcing 361,418 337,029 7.2 % 691,141 620,734 11.3 %

Total revenues 4,483,348 4,421,856 1.4 % 8,895,659 9,033,526 (1.5) %

Costs and expenses:

Purchased transportation and related services 3,470,383 3,453,560 0.5 % 6,925,379 7,124,591 (2.8) %

Purchased products sourced for resale 325,556 302,800 7.5 % 625,142 557,799 12.1 %

Personnel expenses 361,222 377,277 (4.3) % 740,309 760,383 (2.6) %

Other selling, general, and administrative

expenses

148,097 155,596 (4.8) % 299,606 297,097 0.8 %

Total costs and expenses 4,305,258 4,289,233 0.4 % 8,590,436 8,739,870 (1.7) %

Income from operations 178,090 132,623 34.3 % 305,223 293,656 3.9 %

Interest and other income/expense, net (21,525) (18,259) 17.9 % (38,305) (46,524) (17.7) %

Income before provision for income taxes 156,565 114,364 36.9 % 266,918 247,132 8.0 %

Provision for income taxes 30,314 17,048 77.8 % 47,763 34,925 36.8 %

Net income $ 126,251 $ 97,316 29.7 % $ 219,155 $ 212,207 3.3 %

Net income per share (basic) $ 1.06 $ 0.82 29.3 % $ 1.84 $ 1.79 2.8 %

Net income per share (diluted) $ 1.05 $ 0.81 29.6 % $ 1.83 $ 1.77 3.4 %

Weighted average shares outstanding (basic) 119,418 118,500 0.8 % 119,381 118,567 0.7 %

Weighted average shares outstanding (diluted) 119,920 119,807 0.1 % 119,732 119,820 (0.1) %

Business Segment Information

(unaudited, in thousands, except average employee headcount)

NAST

Global

Forwarding

All

Other and

Corporate Consolidated

Three Months Ended June 30, 2024

Total revenues $ 2,989,909 $ 921,223 $ 572,216 $ 4,483,348

Adjusted gross profits

(1)

419,657 184,067 83,685 687,409

Income (loss) from operations 141,102 40,982 (3,994) 178,090

Depreciation and amortization 5,525 2,793 16,736 25,054

Total assets

(2)

3,053,769 1,306,075 1,152,502 5,512,346

Average employee headcount 5,868 4,652 3,954 14,474

NAST

Global

Forwarding

All

Other and

Corporate 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

____________________________________________

(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

Six Months Ended June 30, 2024

Total revenues $ 5,990,222 $ 1,779,860 $ 1,125,577 $ 8,895,659

Adjusted gross profits

(1)

816,767 364,112 164,259 1,345,138

Income (loss) from operations 249,997 72,534 (17,308) 305,223

Depreciation and amortization 10,875 5,637 32,420 48,932

Total assets

(2)

3,053,769 1,306,075 1,152,502 5,512,346

Average employee headcount 5,929 4,770 4,032 14,731

NAST

Global

Forwarding

All

Other and

Corporate 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

____________________________________________

(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, 2024 December 31, 2023

Assets

Current assets:

Cash and cash equivalents $ 113,166 $ 145,524

Receivables, net of allowance for credit loss 2,650,800 2,381,963

Contract assets, net of allowance for credit loss 260,401 189,900

Prepaid expenses and other 154,807 163,307

Total current assets 3,179,174 2,880,694

Property and equipment, net of accumulated depreciation and amortization 139,636 144,718

Right-of-use lease assets 351,823 353,890

Intangible and other assets, net of accumulated amortization 1,841,713 1,845,978

Total assets $ 5,512,346 $ 5,225,280

Liabilities and stockholders’ investment

Current liabilities:

Accounts payable and outstanding checks $ 1,488,632 $ 1,370,334

Accrued expenses:

Compensation 120,819 135,104

Transportation expense 211,310 147,921

Income taxes 2,483 4,748

Other accrued liabilities 158,846 159,435

Current lease liabilities 74,123 74,451

Current portion of debt 188,000 160,000

Total current liabilities 2,244,213 2,051,993

Long-term debt 1,421,066 1,420,487

Noncurrent lease liabilities 299,564 297,563

Noncurrent income taxes payable 21,611 21,289

Deferred tax liabilities 11,929 13,177

Other long-term liabilities 3,522 2,074

Total liabilities 4,001,905 3,806,583

Total stockholders’ investment 1,510,441 1,418,697

Total liabilities and stockholders’ investment $ 5,512,346 $ 5,225,280

Condensed Consolidated Statements of Cash Flow

(unaudited, in thousands, except operational data)

Six Months Ended June 30,

Operating activities: 2024 2023

(1)

Net income $ 219,155 $ 212,207

Adjustments to reconcile net income to net cash (used for) provided by operating activities:

Depreciation and amortization 48,932 50,355

Provision for credit losses 4,298 (8,397)

Stock-based compensation 42,245 21,642

Deferred income taxes (13,392) (21,825)

Excess tax benefit on stock-based compensation (2,274) (8,645)

Other operating activities 10,841 3,080

Changes in operating elements:

Receivables (290,042) 501,210

Contract assets (70,514) 69,662

Prepaid expenses and other 8,034 (23,834)

Right of use asset (3,093) 28,728

Accounts payable and outstanding checks 122,404 (125,090)

Accrued compensation (13,276) (130,197)

Accrued transportation expenses 63,389 (56,524)

Accrued income taxes (60) 3,308

Other accrued liabilities 1,108 (9,611)

Lease liability 3,248 (26,663)

Other assets and liabilities 2,096 (30)

Net cash provided by operating activities 133,099 479,376

Investing activities:

Purchases of property and equipment (15,238) (21,679)

Purchases and development of software (26,573) (29,622)

Net cash used for investing activities (41,811) (51,301)

Financing activities:

Proceeds from stock issued for employee benefit plans 19,026 36,684

Stock tendered for payment of withholding taxes

(19,808) (21,853)

Repurchase of common stock

— (62,754)

Cash dividends

(147,283) (146,195)

Proceeds from short-term borrowings

1,653,000 1,861,750

Payments on short-term borrowings (1,625,000) (2,099,750)

Net cash used for financing activities (120,065) (432,118)

Effect of exchange rates on cash and cash equivalents (3,581) (3,284)

Net change in cash and cash equivalents (32,358) (7,327)

Cash and cash equivalents, beginning of period 145,524 217,482

Cash and cash equivalents, end of period $ 113,166 $ 210,155

As of June 30,

Operational Data:

2024 2023

Employees 14,213 15,763

____________________________________________

(1)

The six months ended June 30, 2023 has been adjusted to conform to current year presentation.

Source: C.H. Robinson

CHRW-IR