C.H. Robinson and Cross Country Healthcare Report Q2 2024 Financial Results

C.H. Robinson Reports 2024 Second Quarter Results

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: 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 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 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): 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): 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): 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. 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): 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: 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): CHRW-IR View source version on businesswire.com: https://www.businesswire.com/news/home/20240731553374/en/

Cross Country Healthcare Announces Second Quarter 2024 Financial Results

Cross Country Healthcare, Inc. (the "Company") (Nasdaq: CCRN) today announced financial results for its second quarter ended June 30, 2024. "Our second quarter results were in line with expectations, reflecting our ability to execute in a challenging environment for core nurse and allied. Coming into the back half of the year, I am encouraged by a rise in the level of demand for our services and cautiously optimistic that we are nearing an inflection point in our ability to grow the number of professionals on assignment," said John A. Martins, President and Chief Executive Officer of Cross Country Healthcare. He continued, "Additionally, we continue to have a strong pipeline for new business driven by the robustness of Intellify, our proprietary client-facing workforce solutions platform." Second quarter consolidated revenue was $339.8 million, a decrease of 37% year-over-year and 10% sequentially. Consolidated gross profit margin was 20.8%, down 200 basis points year-over-year and up 40 basis points sequentially. Net loss attributable to common stockholders was $16.1 million as compared to net income of $21.3 million in the prior year and $2.7 million in the prior quarter. Diluted loss per share (EPS) was $0.47 as compared to diluted income per share of $0.60 in the prior year and $0.08 in the prior quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $14.2 million, or 4.2% of revenue, as compared with $44.4 million, or 8.2% of revenue, in the prior year, and $15.3 million, or 4.0% of revenue, in the prior quarter. Adjusted EPS was $0.10, as compared to $0.69 in the prior year and $0.19 in the prior quarter. For the six months ended June 30, 2024, consolidated revenue was $718.9 million, a decrease of 38% year-over-year. Consolidated gross profit margin was 20.6%, down 200 basis points year-over-year. Net loss attributable to common stockholders was $13.4 million, or $0.39 per diluted share, as compared to net income of $50.8 million, or $1.41 per diluted share, in the prior year. Adjusted EBITDA was $29.5 million, or 4.1% of revenue, as compared to $96.6 million, or 8.3% of revenue, in the prior year. Adjusted EPS was $0.29, as compared to $1.53 in the prior year. Revenue was $291.5 million, a decrease of 41% year-over-year and 12% sequentially. Contribution income was $5.8 million, a decrease from $56.5 million year-over-year and $27.2 million sequentially. Average field contract personnel on a full-time equivalent (FTE) basis was 8,415 as compared with 11,385 in the prior year and 9,124 in the prior quarter. Revenue per FTE per day was $377 as compared to $474 in the prior year and $397 in the prior quarter. Physician Staffing Revenue was $48.3 million, an increase of 7% year-over-year and 3% sequentially. Contribution income was $4.0 million, an increase from $3.5 million year-over-year and $3.1 million sequentially. Total days filled were 24,252 as compared with 23,826 in the prior year and 23,785 in the prior quarter. Revenue per day filled was $1,992 as compared with $1,902 in the prior year and $1,976 in the prior quarter. Cash Flow and Balance Sheet Highlights Net cash provided by operating activities for the three months ended June 30, 2024 was $82.4 million, as compared to $119.2 million for the three months ended June 30, 2023 and $6.0 million for the three months ended March 31, 2024. We experienced an 18 day sequential improvement in days' sales outstanding primarily due to robust collections, returning to a more historic level of below 60 days. For the six months ended June 30, 2024, net cash provided by operating activities was $88.4 million as compared to $166.1 million in the prior year. During the second quarter, the Company repurchased a total of approximately 980,000 shares of the Company's common stock for an aggregate price of $14.9 million, at an average market price of $15.23 per share. As of June 30, 2024, the Company had 33.4 million unrestricted shares outstanding and $56.0 million remaining for share repurchase. As of June 30, 2024, the Company had $69.6 million in cash and cash equivalents with no debt outstanding. There were no borrowings drawn under its revolving senior secured asset-based credit facility (ABL). As of June 30, 2024, borrowing base availability under the ABL was $166.7 million, with $152.9 million of availability net of $13.8 million of letters of credit. Outlook for Third Quarter 2024 The guidance below applies to management's expectations for the third quarter of 2024. The above estimates are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future significant share repurchases. INVITATION TO CONFERENCE CALL The Company will hold its quarterly conference call on Wednesday, July 31, 2024, at 5:00 P.M. Eastern Time to discuss its second quarter 2024 financial results. This call will be webcast live and can be accessed at the Company's website at ir.crosscountry.com or by dialing 888-566-1290 from anywhere in the U.S. or by dialing 773-799-3776 from non-U.S. locations - Passcode: Cross Country. A replay of the webcast will be available from July 31st through August 14th on the Company's website and a replay of the conference call will be available by telephone by calling 866-360-8701 from anywhere in the U.S. or 203-369-0179 from non-U.S. locations - Passcode: 1703. ABOUT CROSS COUNTRY HEALTHCARE Cross Country Healthcare, Inc. is a market-leading, tech-enabled workforce solutions and advisory firm with 38 years of industry experience and insight. We help clients tackle complex labor-related challenges and achieve high-quality outcomes, while reducing complexity and improving visibility through data-driven insights. Diversity, equality, and inclusion is at the heart of the organization's overall corporate social responsibility program, and closely aligned with our core values to create a better future for its people, communities, and its stockholders. Copies of this and other press releases, as well as additional information about the Company, can be accessed online at ir.crosscountry.com. Stockholders and prospective investors can also register to automatically receive the Company's press releases, filings with the Securities and Exchange Commission (SEC), and other notices by e-mail. NON-GAAP FINANCIAL MEASURES This press release and the accompanying financial statement tables reference non-GAAP financial measures, such as gross profit margin, adjusted EBITDA, and adjusted EPS. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in accordance with GAAP. Such non-GAAP financial measures are provided for consistency and comparability to prior year results; furthermore, management believes such non-GAAP financial measures are useful to investors when evaluating the Company's performance, as such non-GAAP financial measures exclude certain items that management believes are not indicative of the Company's future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned. Such non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. The financial statement tables that accompany this press release include a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure and a more detailed discussion of each financial measure; as such, the financial statement tables should be read in conjunction with the presentation of these non-GAAP financial measures. In addition, forward-looking adjusted EBITDA and adjusted EPS for fiscal 2024 exclude potential charges or gains that may be recorded during the fiscal year, including among other things, the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future significant share repurchases. We have not attempted to provide reconciliations of such forward-looking non-GAAP earnings guidance to the comparable GAAP measure, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K, because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of our financial performance. FORWARD-LOOKING STATEMENTS In addition to historical information, this press release contains statements relating to our future results (including certain projections and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, and are subject to the "safe harbor" created by those sections. Forward-looking statements consist of statements that are predictive in nature and/or depend upon or refer to future events. Words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "suggests," "appears," "seeks," "will," "could," and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: the overall macroeconomic environment, including increased inflation and interest rates, demand for the healthcare services that we provide, both nationally and in the regions in which we operate, our ability to attract and retain qualified nurses, physicians, and other healthcare personnel, costs and availability of short-term housing for our travel healthcare professionals, the functioning of our information systems, the effect of cyber security risks and cyber incidents on our business, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, including data privacy and protection laws, social, ethical, and security issues relating to the use of artificial intelligence, our customers' ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors, including, without limitation, the risk factors set forth in Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed and updated in our Quarterly Reports on Form 10-Q and other filings with the SEC. You should consult any further disclosures that the Company makes on related subjects in its filings with the SEC. Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this press release. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors' likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. Except as may be required by law, the Company undertakes no obligation to update or revise forward-looking statements. All references to "the Company," "we," "us," "our," or "Cross Country" in this press release mean Cross Country Healthcare, Inc. and its consolidated subsidiaries.