Indeed, 2024 has effectively ushered in a topsy-turvy period for global supply chains. Major Panama and Suez Canal disruptions and escalating geopolitical tensions reshape decades-old trade routes. In particular, retailers are feeling the heat of these major upheavals, especially with the continuing attacks in the Red Sea. Those impact Suez Canal accessibility, a critical route for East Coast U.S. and European markets. Amidst these challenges, businesses are forced to adapt. This leads to a growing focus on ...

C.H. Robinson Worldwide (CHRW) is scheduled to report fourth-quarter 2023 results on Jan 31, after market close.C.H. Robinson has underperformed the Zacks Consensus Estimate in two of the preceding four quarters, met once and beat in the remaining occasion, the average miss being 6.06%.Let’s see how things have shaped up for C.H. Robinson this earnings season.Q4 ExpectationsThe Zacks Consensus Estimate for C.H. Robinson’s fourth-quarter 2023 revenues is pegged at $4.37 billion, indicating a 13.7% decline fr ...

C.H. Robinson Worldwide (CHRW) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released o ...

See accompanying notes to the condensed consolidated financial statements. Table of Contents 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 our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial statements for the interim periods presented. Interim results are not nec ...

Financial Data and Key Metrics Changes - The company reported Q3 total revenues of $4.3 billion, down 28% year-over-year, with adjusted gross profit (AGP) also down 28% or $252 million, driven by a 31.4% decline in North American Surface Transportation (NAST) and a 31.6% decline in Global Forwarding [111] - Q3 cash flow generated from operations was $205 million, a decline from $626 million in Q3 of the previous year, primarily due to changes in net operating working capital [115] - The company ended Q3 with approximately $1 billion in liquidity, including $837 million of committed funding and a cash balance of $175 million [116] Business Line Data and Key Metrics Changes - In the NAST truckload business, Q3 volume declined approximately 6% year-over-year, with a 4.5% decline on a per business day basis [112] - The average truckload line haul rate, excluding fuel surcharges, declined 16.5% year-over-year, resulting in a 34% year-over-year decrease in truckload AGP per mile and a 36.5% decrease in AGP per load [113] - In the Global Forwarding business, AGP generated was approximately $170 million, a 32% decline year-over-year, with ocean forwarding AGP declining by 35% year-over-year [22][112] Market Data and Key Metrics Changes - The freight market remains soft, with global freight demand continuing to be weak in Q3, leading to low spot rates and a loose market [15][111] - The company noted a mix of 70% contractual volume and 30% transactional volume in the truckload business, indicating a suppressed spot market [20][121] - The company observed a seasonal bump in spot rates in Q4, driven by holiday demand and some carriers taking time off [8][9] Company Strategy and Development Direction - The company is focused on improving customer and carrier experiences through enhanced visibility and increased automation, which has resulted in positive feedback and high net promoter scores [96] - The leadership is driving productivity improvements, targeting a 15% year-over-year improvement in shipments per person per day, with an 18% year-to-date improvement achieved by Q3 [97][108] - The company is leveraging generative AI and technology to streamline processes, reduce manual touches, and improve overall efficiency [29][105] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's capacity to handle incremental volume without adding headcount, preparing for a market rebound [3][15] - The management highlighted the importance of maintaining financial strength and investing through cycles to meet customer needs [16] - The company expects to see continued pricing pressure in the LTL market due to temporary capacity exiting, but anticipates that some of this capacity will return [44][126] Other Important Information - The company has reduced Q3 operating expenses in NAST by 22% year-over-year, despite a volume decline of only 3.5% [97] - Personnel expenses for Q3 were $343.5 million, down 21.5% year-over-year, with a headcount reduction of 14.2% [24] - The company plans to return $76 million to shareholders in Q3 through dividends and share repurchases, equating to 92% of Q3 net income [31] Q&A Session Summary Question: How is October trending in terms of AGP? - Management noted that the mix of volume in truckload is currently 70% contract and 30% spot, with expectations for improved AGP as demand returns [121] Question: What is the outlook for personnel costs heading into Q4? - Personnel expenses are expected to increase from Q3 to Q4, primarily due to lower incentive costs in Q3 that are not expected to repeat [122] Question: What impact does the exit of certain competitors have on the market? - Management indicated that while the exit of competitors like Convoy does not have a material impact on results, it does create opportunities for capturing profitable volume [41][126] Question: How does the company plan to balance market share and profitability during the bid season? - The company aims to gain both margin and market share, operating within the current market dynamics while protecting margins [78]

Except for the historical information contained herein, the matters set forth in this presentation and the accompanying earnings 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 e ...

[PART I - Financial Information](index=3&type=section&id=PART%20I%20-%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents C.H. Robinson Worldwide, Inc.'s unaudited condensed consolidated financial statements for Q2 2023 and the six months ended June 30, 2023 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$5.41 billion** from **$5.95 billion** at year-end 2022, primarily due to reduced receivables, while total liabilities also declined Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $3,051.5 | $3,589.2 | | **Total assets** | $5,405.3 | $5,954.6 | | **Total current liabilities** | $2,761.5 | $3,322.9 | | **Total liabilities** | $4,017.2 | $4,601.1 | | **Total stockholders' investment** | $1,388.1 | $1,353.4 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q2 2023 total revenues declined **35.0%** to **$4.42 billion**, with net income decreasing **72.1%** to **$97.3 million** and diluted EPS falling to **$0.81** Q2 2023 vs Q2 2022 Performance (in millions, except per share data) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Total Revenues | $4,421.9 | $6,798.5 | | Income from Operations | $132.6 | $469.7 | | Net Income | $97.3 | $348.2 | | Diluted EPS | $0.81 | $2.67 | [Condensed Consolidated Statements of Stockholders' Investment](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Investment) Stockholders' equity changes for H1 2023 include **$212.2 million** net income, **$147.2 million** in dividends, and **$62.8 million** in common stock repurchases Changes in Stockholders' Investment (Six Months Ended June 30, 2023, in millions) | Activity | Amount | | :--- | :--- | | Balance, Dec 31, 2022 | $1,353.4 | | Net Income (H1 2023) | $212.2 | | Dividends Declared | ($147.2) | | Repurchase of Common Stock | ($62.8) | | Balance, June 30, 2023 | $1,388.1 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly increased to **$479.4 million** from **$251.3 million** in H1 2023, while financing activities used **$432.1 million** for debt, dividends, and repurchases Cash Flow Summary (Six Months Ended June 30, in millions) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $479.4 | $251.3 | | Net cash used for investing activities | ($51.3) | ($6.2) | | Net cash used for financing activities | ($432.1) | ($257.2) | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies and financial items, including segment reporting, financing, stock-based compensation, and restructuring activities - The company's reportable segments are North American Surface Transportation (NAST) and Global Forwarding, with other activities grouped into All Other and Corporate[38](index=38&type=chunk) - As of June 30, 2023, the company had total debt of approximately **$1.74 billion** across various facilities, including a **$1 billion** revolving credit facility and a **$500 million** receivables securitization facility[23](index=23&type=chunk)[198](index=198&type=chunk) - The company recognized restructuring charges of **$14.1 million** in Q2 2023, primarily related to workforce reductions, with actions expected to be complete by the end of 2023[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2023 financial performance, attributing revenue and profit declines to challenging market conditions, excess carrier capacity, and suppressed freight rates - Market conditions in Q2 2023 were characterized by plentiful carrier capacity relative to demand in North American surface transportation, suppressing rates, with the truckload routing guide depth falling to **1.1**, its lowest level since Q2 2020[133](index=133&type=chunk) - In global forwarding, higher ocean vessel and air freight capacity than demand kept rates low, a trend that began in H2 2022, with weak consumer demand nearly eliminating port congestion and equipment shortages[107](index=107&type=chunk) Q2 2023 vs Q2 2022 Consolidated Performance | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $4,421.9M | $6,798.5M | (35.0)% | | Adjusted Gross Profits | $665.5M | $1,031.6M | (35.5)% | | Income from Operations | $132.6M | $469.7M | (71.8)% | | Diluted EPS | $0.81 | $2.67 | (69.7)% | [North American Surface Transportation (NAST) Segment Results](index=25&type=section&id=North%20American%20Surface%20Transportation%20(NAST)%20Segment%20Results) NAST segment income from operations fell **57.4%** to **$117.9 million** in Q2 2023, driven by lower pricing and margins in truckload services due to excess capacity NAST Q2 2023 vs Q2 2022 Performance (in millions) | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $3,079.3 | $4,147.0 | (25.7)% | | Adjusted Gross Profits | $400.5 | $624.6 | (35.9)% | | Income from Operations | $117.9 | $276.5 | (57.4)% | - The average truckload linehaul rate charged to customers decreased by approximately **23.0%**, while the cost per mile paid to carriers decreased by only **19.0%**, compressing margins[179](index=179&type=chunk)[134](index=134&type=chunk) [Global Forwarding Segment Results](index=27&type=section&id=Global%20Forwarding%20Segment%20Results) Global Forwarding operating income dropped **82.3%** to **$29.6 million** in Q2 2023, due to significantly lower margins and volumes in ocean and air freight services Global Forwarding Q2 2023 vs Q2 2022 Performance (in millions) | Metric | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $779.9 | $2,093.2 | (62.7)% | | Adjusted Gross Profits | $179.2 | $324.4 | (44.8)% | | Income from Operations | $29.6 | $167.6 | (82.3)% | - Volume declines in Q2 2023 vs Q2 2022 were significant: Ocean volumes decreased by **7.0%**, air freight tonnage by **2.0%**, and customs transactions by **14.5%**[192](index=192&type=chunk)[108](index=108&type=chunk) [All Other and Corporate Segment Results](index=28&type=section&id=All%20Other%20and%20Corporate%20Segment%20Results) All Other and Corporate segment reported a **$14.9 million** operating loss in Q2 2023, despite a **3.8%** increase in adjusted gross profits driven by Robinson Fresh and Managed Services All Other and Corporate Adjusted Gross Profits (Q2, in millions) | Business Line | Q2 2023 | Q2 2022 | % Change | | :--- | :--- | :--- | :--- | | Robinson Fresh | $37.9 | $35.0 | 8.3% | | Managed Services | $29.0 | $27.6 | 4.8% | | Other Surface Transportation | $18.9 | $20.0 | (5.7)% | | **Total** | **$85.7** | **$82.6** | **3.8%** | - Growth in Robinson Fresh was driven by increased case volume and integrated supply chain solutions for foodservice customers, while Managed Services grew with existing and new customers[196](index=196&type=chunk)[3](index=3&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity, with cash from operations increasing to **$479.4 million** in H1 2023, sufficient for future needs despite debt repayments, dividends, and share repurchases - Cash flow from operations improved by **$228.0 million** in the first six months of 2023, despite a decrease in net income, due to changes in working capital from declining freight rates and lower volumes[169](index=169&type=chunk)[189](index=189&type=chunk) - The company remains committed to its quarterly dividend and share repurchases to enhance shareholder value, though the pace of repurchases may be affected by debt reduction plans[216](index=216&type=chunk) - As of June 30, 2023, the company was in compliance with all debt covenants[217](index=217&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of June 30, 2023, there were no material changes in the company's market risk compared to its 2022 Annual Report on Form 10-K - There were no material changes in market risk from those disclosed in the company's 2022 Annual Report on Form 10-K as of June 30, 2023[220](index=220&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023[221](index=221&type=chunk) - There were no changes in internal control over financial reporting during Q2 2023 that have materially affected, or are reasonably likely to materially affect, internal controls[222](index=222&type=chunk) [PART II. Other Information](index=31&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material pending or threatened litigation beyond routine business operations - The company reports no material litigation outside of routine proceedings from ordinary business operations, and any potential losses are not expected to have a material effect on financial results[224](index=224&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, including the appointment of a new CEO and a new risk concerning the use of machine learning and artificial intelligence - A new risk factor was added regarding the use of machine learning and AI, citing risks of falling behind in technological development, as well as potential liabilities from regulatory, ethical, and security concerns[226](index=226&type=chunk) - The company appointed David Bozeman as its new President and Chief Executive Officer, effective June 26, 2023[207](index=207&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **329,256** common shares at an average price of **$96.41** in Q2 2023, with **6,763,445** shares remaining authorized for future repurchases Share Repurchases in Q2 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2023 | 111,642 | $96.12 | | May 2023 | 110,469 | $100.69 | | June 2023 | 125,663 | $92.92 | | **Q2 2023 Total** | **347,774** | **$96.41** | [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the new CEO's employment letter and Sarbanes-Oxley certifications - Key exhibits filed include the employment agreement with new CEO David Bozeman and Sarbanes-Oxley certifications[210](index=210&type=chunk)

C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) Q2 2023 Earnings Conference Call August 2, 2023 5:00 PM ET Company Participants Dave Bozeman - President, Chief Executive Officer Mike Zechmeister - Chief Financial Officer Arun Rajan - Chief Operating Officer Chuck Ives - Director of Investor Relations Conference Call Participants Jack Atkins - Stephens Scott Group - Wolfe Research David Vernon - Bernstein Christopher Kuhn - The Benchmark Company Jason Seidl - TD Cowen Matthew Spahn - TCW Stephanie Moore - Jeffer ...

3 2. Growth rates are rounded to the nearest 0.5 percent. 18% 1 Except for the historical information contained herein, the matters set forth in this presentation and the accompanying earnings 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 expectat ...

Revenue and Profit Decline - Total revenues decreased 32.3% to $4.6 billion, driven primarily by lower ocean and truckload pricing[113] - Adjusted gross profits decreased 24.3% to $685.6 million, primarily driven by lower adjusted gross profits per transaction in ocean and truckload[113] - Income from operations decreased 53.4% to $161.0 million, driven by decreased adjusted gross profits, partially offset by the decline in operating expenses[118] - Adjusted operating margin of 23.5% declined 1,460 basis points[118] - Net income totaled $114.9 million, down 57.5% from a year ago[120] - Diluted earnings per share (EPS) decreased 53.2% to $0.96[120] - NAST total revenues decreased by 19.7% to $3,304,187 in Q1 2023 compared to $4,114,889 in Q1 2022[129] - NAST adjusted gross profits decreased by 15.7% to $426,655 in Q1 2023, with Truckload adjusted gross profits down 21.9% and LTL down 9.1%[129] - Global Forwarding total revenues decreased by 64.0% to $789,978 in Q1 2023, with Ocean adjusted gross profits down 50.3% and Air down 49.0%[139] Cost and Expense Management - Personnel expenses decreased 7.3% to $383.1 million, primarily due to cost optimization efforts, including lower average employee headcount, which decreased 2.1%[114] - Average employee headcount decreased by 6.5% to 6,870 in Q1 2023 compared to 7,348 in Q1 2022[129] - Global Forwarding average employee headcount decreased by 2.5% to 5,471 in Q1 2023 compared to 5,610 in Q1 2022[139] Transportation and Logistics Performance - Ocean volumes decreased 14.5% while air freight tonnage decreased 18.5%[112] - The average truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 28.5% during the first quarter of 2023[111] - NAST truckload linehaul rate per mile decreased by 27.5% in Q1 2023 compared to Q1 2022, while truckload linehaul cost per mile decreased by 28.5%[136] Cash Flow and Financial Position - Cash flow from operations improved $268.5 million in the three months ended March 31, 2023 driven by changes in operating working capital[120] - Cash provided by operating activities in Q1 2023 was $254.544 million, compared to a net use of $13.928 million in Q1 2022, representing a significant improvement[147] - Cash used for investing activities in Q1 2023 was $26.95 million, a 12.4% increase from $23.979 million in Q1 2022[147] - Cash used for financing activities in Q1 2023 was $205.992 million, compared to $21.77 million provided in Q1 2022[147] - Net change in cash and cash equivalents in Q1 2023 was $21.678 million, compared to a net decrease of $14.604 million in Q1 2022[147] - The company expects available cash, future cash from operations, and credit facilities to be sufficient for working capital, capital expenditures, and cash dividends for at least the next 12 months[150] Debt and Capital Management - Total debt as of March 31, 2023, was $1,873,031, with a borrowing capacity of $3,100,000 across various debt facilities[144] - Net payments on debt in Q1 2023 were used to reduce the current portion of outstanding debt, with potential impacts on future share repurchases[149] Tax and Accounting - Effective income tax rate for Q1 2023 was 13.5%, down from 18.4% in Q1 2022, primarily due to tax benefits from share-based payment awards and U.S. tax credits[127] - No material changes to critical accounting policies and estimates as of March 31, 2023[154] - No material changes in market risk as of March 31, 2023 compared to the 2022 Annual Report[155] Segment Performance - Robinson Fresh adjusted gross profits increased due to integrated supply chain solutions for foodservice and retail customers[143]