Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 06, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-14690 | |
Entity Registrant Name | WERNER ENTERPRISES, INC. | |
Entity Incorporation, State or Country Code | NE | |
Entity Tax Identification Number | 47-0648386 | |
Entity Address, Address Line One | 14507 Frontier Road | |
Entity Address, Address Line Two | Post Office Box 45308 | |
Entity Address, City or Town | Omaha | |
Entity Address, State or Province | NE | |
Entity Address, Postal Zip Code | 68145-0308 | |
City Area Code | 402 | |
Local Phone Number | 895-6640 | |
Title of 12(b) Security | Common Stock, $0.01 Par Value | |
Trading Symbol | WERN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 63,394,945 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000793074 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Operating revenues | $ 817,744 | $ 827,606 | $ 2,461,554 | $ 2,428,487 |
Operating expenses: | ||||
Salaries, wages and benefits | 268,054 | 264,443 | 802,742 | 760,078 |
Fuel | 90,369 | 111,985 | 259,523 | 325,852 |
Supplies and maintenance | 60,181 | 68,009 | 193,370 | 187,690 |
Taxes and licenses | 25,852 | 25,016 | 76,685 | 72,640 |
Insurance and claims | 31,261 | 34,501 | 104,552 | 103,064 |
Depreciation and amortization | 74,586 | 70,397 | 223,797 | 206,097 |
Rent and purchased transportation | 224,556 | 187,449 | 661,866 | 569,802 |
Communications and utilities | 4,555 | 3,720 | 13,957 | 11,427 |
Other | 430 | (14,175) | (13,422) | (42,858) |
Total operating expenses | 779,844 | 751,345 | 2,323,070 | 2,193,792 |
Operating income | 37,900 | 76,261 | 138,484 | 234,695 |
Other expense (income): | ||||
Interest expense | 8,661 | 2,778 | 24,716 | 6,004 |
Interest income | (1,727) | (392) | (5,178) | (980) |
Loss (gain) on investments in equity securities, net | 34 | (114) | 36 | (14,403) |
Loss from equity method investment | 110 | 0 | 954 | 0 |
Other | 284 | 77 | 377 | 276 |
Total other expense (income) | 7,362 | 2,349 | 20,905 | (9,103) |
Income before income taxes | 30,538 | 73,912 | 117,579 | 243,798 |
Income tax expense | 7,034 | 17,987 | 28,521 | 59,229 |
Net income | 23,504 | 55,925 | 89,058 | 184,569 |
Net loss (income) attributable to noncontrolling interest | 200 | (874) | (249) | (3,479) |
Net income attributable to Werner | $ 23,704 | $ 55,051 | $ 88,809 | $ 181,090 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.37 | $ 0.87 | $ 1.40 | $ 2.81 |
Diluted (in dollars per share) | $ 0.37 | $ 0.86 | $ 1.39 | $ 2.79 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 63,390 | 63,386 | 63,360 | 64,433 |
Diluted (in shares) | 63,737 | 63,782 | 63,703 | 64,819 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 23,504 | $ 55,925 | $ 89,058 | $ 184,569 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (1,333) | (708) | 4,410 | 398 |
Change in fair value of interest rate swaps, net of tax | (694) | 1,857 | (1,768) | 6,771 |
Other comprehensive income (loss), net | (2,027) | 1,149 | 2,642 | 7,169 |
Comprehensive income | 21,477 | 57,074 | 91,700 | 191,738 |
Comprehensive loss (income) attributable to noncontrolling interest | 200 | (874) | (249) | (3,479) |
Comprehensive income attributable to Werner | $ 21,677 | $ 56,200 | $ 91,451 | $ 188,259 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 42,754 | $ 107,240 |
Accounts receivable, trade, less allowance of $10,636 and $10,271, respectively | 449,786 | 518,815 |
Other receivables | 26,417 | 29,875 |
Inventories and supplies | 17,251 | 14,527 |
Prepaid taxes, licenses and permits | 7,931 | 17,699 |
Other current assets | 100,669 | 74,459 |
Total current assets | 644,808 | 762,615 |
Property and equipment | 2,952,430 | 2,885,641 |
Less – accumulated depreciation | 965,540 | 1,060,365 |
Property and equipment, net | 1,986,890 | 1,825,276 |
Goodwill | 129,104 | 132,717 |
Intangible assets, net | 88,994 | 81,502 |
Other non-current assets | 344,666 | 295,145 |
Total assets | 3,194,462 | 3,097,255 |
Current liabilities: | ||
Checks issued in excess of cash balances | 14,659 | 0 |
Accounts payable | 129,008 | 124,483 |
Current portion of long-term debt | 3,750 | 6,250 |
Insurance and claims accruals | 73,206 | 78,620 |
Accrued payroll | 48,851 | 49,793 |
Accrued expenses | 27,719 | 20,358 |
Other current liabilities | 32,471 | 30,016 |
Total current liabilities | 329,664 | 309,520 |
Long-term debt, net of current portion | 686,250 | 687,500 |
Other long-term liabilities | 52,579 | 59,677 |
Insurance and claims accruals, net of current portion | 238,080 | 244,946 |
Deferred income taxes | 336,726 | 313,278 |
Total liabilities | 1,643,299 | 1,614,921 |
Commitments and contingencies | ||
Temporary equity - redeemable noncontrolling interest | 38,948 | 38,699 |
Stockholders’ equity: | ||
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 63,390,516 and 63,223,003 shares outstanding, respectively | 805 | 805 |
Paid-in capital | 133,038 | 129,837 |
Retained earnings | 1,938,694 | 1,875,873 |
Accumulated other comprehensive loss | (8,650) | (11,292) |
Treasury stock, at cost; 17,143,020 and 17,310,533 shares, respectively | (551,672) | (551,588) |
Total stockholders’ equity | 1,512,215 | 1,443,635 |
Total liabilities, temporary equity and stockholders’ equity | $ 3,194,462 | $ 3,097,255 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Allowance for doubtful trade accounts receivable | $ 10,636 | $ 10,271 |
Stockholders’ equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 80,533,536 | 80,533,536 |
Common stock, shares outstanding (in shares) | 63,390,516 | 63,223,003 |
Treasury stock, shares (in shares) | 17,143,020 | 17,310,533 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 89,058,000 | $ 184,569,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 223,797,000 | 206,097,000 |
Deferred income taxes | 23,775,000 | 10,262,000 |
Gain on disposal of property and equipment | (39,346,000) | (62,659,000) |
Non-cash equity compensation | 8,671,000 | 9,120,000 |
Insurance and claims accruals, net of current portion | (6,866,000) | 1,469,000 |
Loss (gain) on investments in equity securities, net | 36,000 | (14,403,000) |
Loss from equity method investment | 954,000 | 0 |
Other | (4,741,000) | (5,056,000) |
Changes in certain working capital items: | ||
Accounts receivable, net | 69,079,000 | (32,258,000) |
Other current assets | (12,135,000) | 3,922,000 |
Accounts payable | 5,844,000 | 21,061,000 |
Other current liabilities | (2,107,000) | 10,592,000 |
Net cash provided by operating activities | 356,019,000 | 332,716,000 |
Cash flows from investing activities: | ||
Additions to property and equipment | (530,085,000) | (379,902,000) |
Proceeds from sales of property and equipment | 155,924,000 | 125,830,000 |
Net cash invested in acquisition | (188,000) | 705,000 |
Investment in equity securities, net | (2,865,000) | (20,250,000) |
Payment to acquire equity method investment | (2,645,000) | 0 |
Issuance of notes receivable | (25,000,000) | 0 |
Decrease in notes receivable | 2,809,000 | 4,870,000 |
Net cash used in investing activities | (402,050,000) | (268,747,000) |
Cash flows from financing activities: | ||
Repayments of short-term debt | (33,750,000) | (3,750,000) |
Proceeds from issuance of short-term debt | 30,000,000 | 0 |
Repayments of long-term debt | (50,000,000) | (100,000,000) |
Proceeds from issuance of long-term debt | 50,000,000 | 250,000,000 |
Change in checks issued in excess of cash balances | 14,659,000 | 0 |
Dividends on common stock | (25,333,000) | (23,946,000) |
Repurchases of common stock | 0 | (110,400,000) |
Tax withholding related to net share settlements of restricted stock awards | (5,554,000) | (3,704,000) |
Other cash flows from financing activities | 0 | (750,000) |
Net cash provided by (used in) financing activities | (19,978,000) | 7,450,000 |
Effect of exchange rate fluctuations on cash | 1,523,000 | 68,000 |
Net increase (decrease) in cash and cash equivalents | (64,486,000) | 71,487,000 |
Cash and cash equivalents, beginning of period | 107,240,000 | 54,196,000 |
Cash and cash equivalents, end of period | 42,754,000 | 125,683,000 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 25,299,000 | 5,664,000 |
Income taxes paid | 17,140,000 | 38,797,000 |
Supplemental schedule of non-cash investing and financing activities: | ||
Notes receivable issued upon sale of property and equipment | 1,968,000 | 3,771,000 |
Change in fair value of interest rate swaps | (1,768,000) | 6,772,000 |
Property and equipment acquired included in accounts payable | 4,701,000 | 7,143,000 |
Property and equipment disposed included in other receivables | 0 | 190,000 |
Dividends accrued but not yet paid at end of period | 8,875,000 | 8,216,000 |
Contingent consideration associated with acquisitions | $ (800,000) | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY - REDEEMABLE NONCONTROLLING INTEREST - USD ($) $ in Thousands | Total | Common Stock | Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance at Dec. 31, 2021 | $ 1,327,550 | $ 805 | $ 121,904 | $ 1,667,104 | $ (20,604) | $ (441,659) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Werner | 181,090 | 181,090 | ||||
Net income (loss) attributable to noncontrolling interest | 0 | |||||
Other comprehensive income (loss) | 7,169 | 7,169 | ||||
Purchases of common stock | (110,400) | (110,400) | ||||
Dividends on common stock | (24,267) | (24,267) | ||||
Equity compensation activity | (3,704) | (3,978) | 274 | |||
Non-cash equity compensation expense | 9,120 | 9,120 | ||||
Ending balance at Sep. 30, 2022 | 1,386,558 | 805 | 127,046 | 1,823,927 | (13,435) | (551,785) |
Beginning balance at Dec. 31, 2021 | 35,947 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net income (loss) attributable to noncontrolling interest | 3,479 | |||||
Distribution to noncontrolling interest | (750) | |||||
Ending balance at Sep. 30, 2022 | 38,676 | |||||
Beginning balance at Jun. 30, 2022 | 1,343,872 | 805 | 124,065 | 1,777,092 | (14,584) | (543,506) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Werner | 55,051 | 55,051 | ||||
Net income (loss) attributable to noncontrolling interest | 0 | |||||
Other comprehensive income (loss) | 1,149 | 1,149 | ||||
Purchases of common stock | (8,287) | (8,287) | ||||
Dividends on common stock | (8,216) | (8,216) | ||||
Equity compensation activity | (46) | (54) | 8 | |||
Non-cash equity compensation expense | 3,035 | 3,035 | ||||
Ending balance at Sep. 30, 2022 | 1,386,558 | 805 | 127,046 | 1,823,927 | (13,435) | (551,785) |
Beginning balance at Jun. 30, 2022 | 38,552 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net income (loss) attributable to noncontrolling interest | 874 | |||||
Distribution to noncontrolling interest | (750) | |||||
Ending balance at Sep. 30, 2022 | 38,676 | |||||
Beginning balance at Dec. 31, 2022 | 1,443,635 | 805 | 129,837 | 1,875,873 | (11,292) | (551,588) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Werner | 88,809 | 88,809 | ||||
Net income (loss) attributable to noncontrolling interest | 0 | |||||
Other comprehensive income (loss) | 2,642 | 2,642 | ||||
Dividends on common stock | (25,988) | (25,988) | ||||
Equity compensation activity | (5,554) | (5,470) | (84) | |||
Non-cash equity compensation expense | 8,671 | 8,671 | ||||
Ending balance at Sep. 30, 2023 | 1,512,215 | 805 | 133,038 | 1,938,694 | (8,650) | (551,672) |
Beginning balance at Dec. 31, 2022 | 38,699 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net income (loss) attributable to noncontrolling interest | 249 | |||||
Ending balance at Sep. 30, 2023 | 38,948 | |||||
Beginning balance at Jun. 30, 2023 | 1,497,070 | 805 | 130,694 | 1,923,865 | (6,623) | (551,671) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Werner | 23,704 | 23,704 | ||||
Net income (loss) attributable to noncontrolling interest | 0 | |||||
Other comprehensive income (loss) | (2,027) | (2,027) | ||||
Dividends on common stock | (8,875) | (8,875) | ||||
Equity compensation activity | (37) | (36) | (1) | |||
Non-cash equity compensation expense | 2,380 | 2,380 | ||||
Ending balance at Sep. 30, 2023 | 1,512,215 | $ 805 | $ 133,038 | $ 1,938,694 | $ (8,650) | $ (551,672) |
Beginning balance at Jun. 30, 2023 | 39,148 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net income (loss) attributable to noncontrolling interest | (200) | |||||
Ending balance at Sep. 30, 2023 | $ 38,948 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY - REDEEMABLE NONCONTROLLING INTEREST (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Purchase of common stock (in shares) | 215,204 | 2,710,304 | ||
Dividends declared (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.41 | $ 0.38 |
Equity compensation activity (in shares) | 1,020 | 1,692 | 167,513 | 122,245 |
Basis of Presentation and Recen
Basis of Presentation and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Recent Accounting Pronouncements | Basis of Presentation and Recent Accounting Pronouncements Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of Werner Enterprises, Inc. and its subsidiaries (collectively, the “Company” or “Werner”). Noncontrolling interest on the consolidated condensed balance sheets represents the portion of a consolidated entity in which we do not have a direct equity ownership. In these notes, the terms “we,” “us,” or “our” refer to Werner Enterprises, Inc. and its subsidiaries. All significant intercompany accounts and transactions relating to these entities have been eliminated. These consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (SEC) instructions to Form 10-Q and, in the opinion of management, reflect all adjustments, which are all of normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”). These consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements; although in management’s opinion, the disclosures are adequate so that the information presented is not misleading. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. In the opinion of management, the information set forth in the accompanying consolidated condensed balance sheets is fairly stated in all material respects in relation to the consolidated balance sheets from which it has been derived. These consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes contained in our 2022 Form 10-K. |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions Developments during the nine months ended September 30, 2023 related to our 2022 business acquisitions are discussed below. ReedTMS On November 5, 2022, we acquired 100% of the equity interests in Reed Transport Services, Inc. and RTS-TMS, Inc., doing business as ReedTMS Logistics (“ReedTMS”), for a final purchase price of $108.6 million after including the impacts of working capital adjustments, cash acquired, net present value of future insurance payments, and contingent consideration. ReedTMS is an asset-light logistics provider and dedicated truckload carrier that offers a comprehensive suite of freight brokerage and truckload solutions to a diverse customer base. The results of operations for ReedTMS are included in our consolidated financial statements beginning November 5, 2022. Pro forma information for this acquisition is not provided as it did not have a material impact on our consolidated operating results. Baylor On October 1, 2022, we acquired 100% of the equity interests in FAB9, Inc., doing business as Baylor Trucking, Inc. (“Baylor”), for a final purchase price of $89.0 million after including the impacts of working capital adjustments, cash acquired, and contingent consideration. Baylor operates in the east central and south central United States. The results of operations for Baylor are included in our consolidated financial statements beginning October 1, 2022. Pro forma information for this acquisition is not provided as it did not have a material impact on our consolidated operating results. No measurement period adjustments were recorded during the nine months ended September 30, 2023. Purchase Price Allocations We accounted for the ReedTMS and Baylor purchases using the acquisition method of accounting under GAAP. The purchase price of each acquisition has been allocated to the assets acquired and liabilities assumed using market data and valuation techniques. The purchase price allocations for ReedTMS and Baylor were considered final as of June 30, 2023. The following table summarizes the purchase price allocation for ReedTMS, including any adjustments (in thousands): November 5, 2022 Adjustments (1) November 5, 2022 Purchase Price Cash consideration paid $ 116,989 $ — $ 116,989 (2) Cash and cash equivalents acquired (12,120) — (12,120) Contingent consideration arrangement 5,000 (800) 4,200 (3) Working capital surplus (deficiency) (689) 188 (501) Total purchase price (fair value of consideration) 109,180 (612) 108,568 Purchase Price Allocation Current assets 52,531 49 52,580 Property and equipment 35,000 (12,485) 22,515 Intangible assets 12,000 15,300 27,300 Other non-current assets 7,927 (1) 7,926 Total assets acquired 107,458 2,863 110,321 Current liabilities (45,497) (389) (45,886) Other long-term liabilities (5,622) 527 (5,095) Total liabilities assumed (51,119) 138 (50,981) Goodwill $ 52,841 $ (3,613) $ 49,228 (1) The measurement period adjustments were recorded during the three months ended March 31, 2023. No material statement of income effects were identified with these adjustments. (2) Includes $0.9 million related to the net present value of future insurance payments. At closing, $11.5 million of the cash consideration was placed in escrow to secure certain indemnification obligations of the sellers and to cover post-closing adjustments. During the three months ended March 31, 2023, we received $2.1 million from escrow for post-closing adjustments. The remaining balance of the escrow, except for $0.5 million, was returned to the sellers. In exchange, the sellers obtained a $10.0 million Standby Letter of Credit with the Company named as beneficiary. (3) The contingent earnout liability is recorded in other current liabilities on the consolidated condensed balance sheets as of September 30, 2023 and in other long-term liabilities as of December 31, 2022 . For additional information regarding the valuation of the contingent liability, see Note 6 – Fair Value. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue Recognition Revenues are recognized over time as control of the promised services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. The following table presents our revenues disaggregated by revenue source (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Truckload Transportation Services $ 572,195 $ 621,866 $ 1,730,717 $ 1,793,899 Werner Logistics 230,252 187,138 683,470 580,007 Inter-segment eliminations (4,402) (402) (13,185) (1,749) Transportation services 798,045 808,602 2,401,002 2,372,157 Other revenues 19,699 19,004 60,552 56,330 Total revenues $ 817,744 $ 827,606 $ 2,461,554 $ 2,428,487 The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands). Operating revenues for foreign countries include revenues for (i) shipments with an origin or destination in that country and (ii) other services provided in that country. If both the origin and destination are in a foreign country, the revenues are attributed to the country of origin. Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 769,524 $ 765,559 $ 2,317,133 $ 2,247,307 Mexico 38,941 50,681 118,092 145,433 Other 9,279 11,366 26,329 35,747 Total revenues $ 817,744 $ 827,606 $ 2,461,554 $ 2,428,487 Contract Balances and Accounts Receivable A receivable is an unconditional right to consideration and is recognized when shipments have been completed and the related performance obligation has been fully satisfied. At September 30, 2023 and December 31, 2022, the accounts receivable, trade, net, balance was $449.8 million and $518.8 million, respectively. Contract assets represent a conditional right to consideration in exchange for goods or services and are transferred to receivables when the rights become unconditional. At September 30, 2023 and December 31, 2022, the balance of contract assets was $8.2 million and $8.9 million, respectively. We have recognized contract assets within the other current assets financial statement caption on the consolidated condensed balance sheets. These contract assets are considered current assets as they will be settled in less than 12 months. Contract liabilities represent advance consideration received from customers and are recognized as revenues over time as the related performance obligation is satisfied. A t September 30, 2023 and December 31, 2022, t he balance of contract liabilities was $1.2 million and $0.9 million, respectively . The amount of revenues recognized in the nine months ended September 30, 2023 that was included in the December 31, 2022 contract liability balance was $0.9 million. We have recognized contract liabilities within the accounts payable and other current liabilities financial statement captions on the consolidated condensed balance sheets. These contract liabilities are considered current liabilities as they will be settled in less than 12 months. Performance Obligations We have elected to apply the practical expedient in Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts With Customers , to not disclose the value of remaining performance obligations for contracts with an original expected length of one year or less. Remaining performance obligations represent the transaction price allocated to future reporting periods for freight shipments started but not completed at the reporting date that we expect to recognize as revenue in the period subsequent to the reporting date; transit times generally average approximately 3 days. During the nine months ended September 30, 2023 and 2022, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired in business combinations. The following table summarizes changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2023 (in thousands): TTS Werner Logistics Total Balance as of December 31, 2022 $ 53,897 $ 78,820 $ 132,717 Purchase accounting adjustments (1) (7,841) 4,228 (3,613) Balance as of September 30, 2023 $ 46,056 $ 83,048 $ 129,104 (1) The purchase accounting adjustments consist of post-closing adjustments related to net assets assumed in the acquisition of ReedTMS. For additional information regarding these purchase accounting adjustments, see Note 2. The following table presents acquired intangible assets (in thousands): September 30, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 80,200 $ (11,985) $ 68,215 $ 64,900 $ (5,714) $ 59,186 Trade names 24,600 (3,821) 20,779 24,600 (2,284) 22,316 Total intangible assets $ 104,800 $ (15,806) $ 88,994 $ 89,500 $ (7,998) $ 81,502 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases We have entered into operating leases primarily for real estate. The leases have terms which range from 1 year to 18 years, and some include options to renew. Renewal terms are included in the lease term when it is reasonably certain that we will exercise the option to renew. Operating leases are included in other non-current assets, other current liabilities and other long-term liabilities on the consolidated condensed balance sheets. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using our incremental borrowing rate because the rate implicit in each lease is not readily determinable. We have certain contracts for real estate that may contain lease and non-lease components which we have elected to treat as a single lease component. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense is reported in rent and purchased transportation on the consolidated statements of income. The following table presents balance sheet and other operating lease information (dollars in thousands): September 30, 2023 December 31, 2022 Balance Sheet Classification Right-of-use assets (recorded in other non-current assets) $ 36,537 $ 40,963 Current lease liabilities (recorded in other current liabilities) $ 9,059 $ 9,396 Long-term lease liabilities (recorded in other long-term liabilities) 29,160 32,897 Total operating lease liabilities $ 38,219 $ 42,293 Other Information Weighted-average remaining lease term for operating leases 6.30 years 6.43 years Weighted-average discount rate for operating leases 3.6 % 3.3 % The following table presents the maturities of operating lease liabilities as of September 30, 2023 (in thousands): Maturity of Lease Liabilities 2023 (remaining) $ 2,604 2024 9,958 2025 8,046 2026 6,354 2027 4,459 Thereafter 10,884 Total undiscounted operating lease payments $ 42,305 Less: Imputed interest (4,086) Present value of operating lease liabilities $ 38,219 Cash Flows During the nine months ended September 30, 2023 and 2022, right-of-use assets of $3.8 million and $12.4 million, respectively, were recognized as non-cash asset additions that resulted from new operating lease liabilities. Cash paid for amounts included in the present value of operating lease liabilities was $8.4 million and $5.9 million for the nine months ended September 30, 2023 and 2022, respectively, and are included in operating cash flows. Operating Lease Expense Operating lease expense was $5.7 million and $17.8 million for the three and nine months ended September 30, 2023, respectively, and $5.4 million and $15.8 million for the three and nine months ended September 30, 2022, respectively. This expense included $2.8 million and $8.8 million for the three and nine months ended September 30, 2023, respectively, and $2.2 million and $6.6 million for the three and nine months ended September 30, 2022, respectively, for long-term operating leases, with the remainder for variable and short-term lease expense . Lessor Operating Leases We are the lessor of tractors and trailers under operating leases with initial terms of 2 to 10 years. We recognize revenue for such leases on a straight-line basis over the term of the lease. Revenues 2023 (remaining) $ 2,378 2024 4,772 2025 315 2026 324 2027 82 Thereafter — Total $ 7,871 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurement — Definition and Hierarchy ASC 820-10, Fair Value Measurement , defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices in markets that are not active, quoted prices for similar assets and liabilities in active and inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 — Unobservable inputs for the asset or liability, where there is little, if any, observable market activity or data for the asset or liability. In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to our Level 1 assets and liabilities. If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then we use quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology would apply to Level 2 assets and liabilities. The following table presents the fair value hierarchy for our assets and liabilities measured at fair value on a recurring basis (in thousands): Level in Fair Value September 30, 2023 December 31, 2022 Assets: Other non-current assets: Equity securities (1) 1 $ 552 $ 723 Liabilities: Other current liabilities: Contingent consideration associated with acquisitions 3 $ 4,390 $ — Other long-term liabilities: Contingent consideration associated with acquisitions 3 8,793 13,400 Total liabilities $ 13,183 $ 13,400 (1) Represents our investments in autonomous technology companies. For additional information regarding the valuation of these equity securities, see Note 7 – Investments. The following table presents changes in the fair value of our contingent earnout liabilities (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Balance at beginning of period $ 13,028 $ 2,500 $ 13,400 $ 2,500 Measurement period adjustment associated with the acquisition of ReedTMS (1) — — (800) — Change in fair value 155 — 583 — Balance at end of period $ 13,183 $ 2,500 $ 13,183 $ 2,500 (1) The measurement period adjustment was recorded in goodwill on the consolidated condensed balance sheet. The estimated fair values of our contingent consideration arrangements are based upon probability-adjusted inputs for each acquired entity. Additionally, as the liability is stated at present value, the passage of time alone will increase the estimated fair value of the liability each reporting period. Change in fair value is recorded in other operating expenses on the consolidated statements of income. Our ownership interests in Mastery Logistics Systems, Inc. (“MLSI”) and Fleet Defender, Inc. do not have readily determinable fair values and are accounted for using the measurement alternative in ASC 321, Investments - Equity Securities . Our ownership interest in Autotech Fund III, L.P. (“Autotech Fund III”) is accounted for under ASC 323, “ Investments - Equity Method and Joint Ventures .” For additional information regarding the valuation of these investments, see Note 7 – Investments. Fair Value of Financial Instruments Not Recorded at Fair Value Cash and cash equivalents, accounts receivable trade, and accounts payable are short-term in nature and accordingly are carried at amounts that approximate fair value. The carrying amount of our fixed-rate debt not measured at fair value on a recurring basis was $90.0 million and $93.8 million as of September 30, 2023 and December 31, 2022, respectively. The estimated fair value of our fixed-rate debt using the income approach, based on its net present value, discounted at our current borrowing rate, was $86.6 million and $87.2 million as of September 30, 2023 and December 31, 2022, respectively (categorized as Level 2 of the fair value hierarchy). The carrying amount of our variable-rate long-term debt approximates fair value due to the duration of our credit arrangement and the variable interest rate (categorized as Level 2 of the fair value hierarchy). |
Investments
Investments | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments Equity Investments without Readily Determinable Fair Values Our strategic equity investments without readily determinable fair values include MLSI, a transportation management systems company, and Fleet Defender, Inc., a platform cybersecurity company for fleet owners. MLSI is developing a cloud-based transportation management system using MLSI's SaaS technology which we have agreed to license. These investments are being accounted for under ASC 321 using the measurement alternative and are recorded in other noncurrent assets on the consolidated condensed balance sheets. We record changes in the values of these investments based on events that occur that would indicate the values have changed, in loss (gain) on investments in equity securities on the consolidated statements of income. As of September 30, 2023 and December 31, 2022, the value of our investment in MLSI was $89.8 million and $86.8 million, respectively, and the value of our investment in Fleet Defender, Inc. was $250 thousand. The following table summarizes the activity related to our equity investments without readily determinable fair values during the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Investment in equity securities $ 3,000 $ — $ — $ 20,250 Upward adjustments (1) — — — 28,638 (1) During 2022, investments by third-parties resulted in the remeasurements of our investment in MLSI. Our updated investment values were based upon the prices paid by third parties. As of September 30, 2023, cumulative upward adjustments on our equity securities without readily determinable fair values totaled $56.8 million. Equity Investments with Readily Determinable Fair Values We own strategic minority equity investments in autonomous technology companies, which are being accounted for under ASC 321 and are recorded in other noncurrent assets on the consolidated condensed balance sheets. We record changes in the value of these investments, based on the share prices reported by Nasdaq, in loss (gain) on investments in equity securities on the consolidated statements of income. As of September 30, 2023 and December 31, 2022, the value of these investments was $0.6 million and $0.7 million, respectively. For additional information regarding the fair value of these equity investments, see Note 6 – Fair Value. The following table summarizes the activity related to our equity investments with readily determinable fair values during the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Loss (gain) on investments in equity securities, net $ 34 $ (114) $ 36 $ 14,235 Portion of unrealized loss (gain) for the period related to equity securities still held at the reporting date 35 (114) 28 14,235 Equity Method Investment In January 2023, we committed to make a $20.0 million investment in Autotech Fund III (the “Fund”) pursuant to a limited partnership agreement. The Fund is managed by Autotech Ventures, a venture capital firm focused on ground transportation technology. Our interest, which represents an ownership percentage of less than 20%, is being accounted for under ASC 323, “ Investments - Equity Method and Joint Ventures .” As a limited partner, we will make periodic capital contributions toward this total commitment amount. We contributed $2.6 million to the Fund during the nine months ended September 30, 2023. As of September 30, 2023, the value of our investment in the Fund was $1.7 million and is recorded in other noncurrent assets on the |
Notes Receivable
Notes Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Notes Receivable | Notes Receivable We provide financing to some individuals who want to become independent contractors by purchasing a tractor from us and leasing their services to us. We maintain a primary security interest in the tractor until the independent contractor pays the note balance in full. On January 24, 2023, we purchased a $25.0 million subordinated promissory note from MLSI with a maturity date of January 24, 2030. The proceeds of the promissory note may be used by MLSI for working capital and general business purposes, including a limited amount for possible repayment of certain advances. There are no scheduled principal payments due on the MLSI promissory note until the maturity date, and interest accrues at 7.5% compounded annually, with the first accrued interest payment due on January 24, 2028, and at the end of each calendar year thereafter. The independent contractor notes receivable, MLSI subordinated promissory note, and other notes receivable are included in other current assets and other non-current assets in the consolidated condensed balance sheets. The following table presents our notes receivable (in thousands): September 30, 2023 December 31, 2022 Independent contractor notes receivable $ 7,432 $ 8,287 MLSI subordinated promissory note 25,000 — Other notes receivable 7,935 7,921 Notes receivable 40,367 16,208 Less current portion 2,603 2,691 Notes receivable – non-current $ 37,764 $ 13,517 We also provide financing to some individuals who attended our driver training schools. The student notes receivable is included in other receivables and other non-current assets in the consolidated condensed balance sheets. The following table presents our student notes receivable (in thousands): September 30, 2023 December 31, 2022 Student notes receivable $ 64,720 $ 63,351 Allowance for doubtful student notes receivable (22,945) (23,491) Total student notes receivable, net of allowance 41,775 39,860 Less current portion, net of allowance 13,433 12,574 Student notes receivable – non-current $ 28,342 $ 27,286 |
Debt and Credit Facilities
Debt and Credit Facilities | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt and Credit Facilities | Debt and Credit Facilities On December 20, 2022, we entered into a $1.075 billion unsecured credit facility with a group of lenders (the “2022 Credit Agreement”), replacing our previous unsecured credit facility with BMO Harris Bank N.A. (“BMO Harris”), dated May 14, 2019, as amended, and the credit agreement with Wells Fargo Bank, National Association, dated March 25, 2022. The 2022 Credit Agreement is scheduled to mature on December 20, 2027 and has a $100.0 million maximum limit for the aggregate amount of letters of credit issued. Revolving credit loans drawn under the 2022 Credit Agreement bear interest, at our option, at (i) the Base Rate (the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50%, or (c) the one-month Term SOFR plus 1.10%), plus a margin ranging between 0.125% and 0.750%, or (ii) Term SOFR plus 0.10% and a margin ranging between 1.125% and 1.750%. Swingline loans drawn under the 2022 Credit Agreement bear interest at the Base Rate, as defined above, plus a margin ranging between 0.125% and 0.750%. The 2022 Credit Agreement also requires us to pay quarterly (i) a letter of credit commission on the daily amount available to be drawn under such standby letters of credit at rates ranging between 1.125% and 1.750% per annum and (ii) a nonrefundable commitment fee on the average daily unused amount of the commitment at rates ranging between 0.125% and 0.250% per annum. The margin, letter of credit commission, and commitment fee rates are based on our ratio of net funded debt to earnings before interest, income taxes, depreciation and amortization (“EBITDA”). There are no scheduled principal payments due on the 2022 Credit Agreement until the maturity date, and interest is payable in arrears at periodic intervals not to exceed three months. On June 30, 2021, we entered into a $100.0 million unsecured fixed-rate term loan commitment with BMO Harris, with quarterly principal payments of $1.25 million and a final payment of principal and interest due and payable on May 14, 2024 ("BMO Term Loan"). The outstanding principal balance of the BMO Term Loan bears interest at a fixed rate of 1.28%, payable quarterly in arrears. As of September 30, 2023 and December 31, 2022, our outstanding debt totaled $690.0 million and $693.8 million, respectively. As of September 30, 2023, we had an outstanding revolving credit loan balance of $600.0 million under the 2022 Credit Agreement, including (i) $320.0 million at a variable interest rate of 6.67%, (ii) $150.0 million which is effectively fixed at 2.88% with interest rate swap agreements through May 2024, (iii) $40.0 million which is effectively fixed at 6.20% with interest rate swap agreements through July 2025, and (iv) $90.0 million which is effectively fixed at 5.87% with interest rate swap agreements through July 2026. Subsequent to the end of the quarter, in October 2023, we borrowed an additional $15.0 million under our revolving line of credit. The $1.075 billion of borrowing capacity under our 2022 Credit Agreement at September 30, 2023, is further reduced by $51.0 million in stand-by letters of credit under which we are obligated. In addition, as of September 30, 2023, we had $90.0 million outstanding under the BMO Term Loan at a fixed interest rate of 1.28%. Availability of such funds under the current debt agreements is conditional upon various customary terms and covenants. Such covenants include, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of net funded debt to EBITDA and (ii) to exceed a minimum ratio of EBITDA to interest expense. As of September 30, 2023, we were in compliance with these covenants. At September 30, 2023, the aggregate future maturities of long-term debt by year are as follows (in thousands): 2023 (remaining) $ 2,500 2024 87,500 2025 — 2026 — 2027 600,000 Total $ 690,000 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have committed to property and equipment purchases of approximately $94.6 million at September 30, 2023 . We are involved in certain claims and pending litigation, including those described herein, arising in the ordinary course of business. The majority of these claims relate to bodily injury, property damage, cargo and workers’ compensation incurred in the transportation of freight, as well as certain class action litigation related to personnel and employment matters. We accrue for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the knowledge of the facts, management believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on our consolidated financial statements. Moreover, the results of complex legal proceedings are difficult to predict, and our view of these matters may change in the future as the litigation and related events unfold. On May 17, 2018, in Harris County District Court in Houston, Texas, a jury rendered an adverse verdict against the Company in a lawsuit arising from a December 30, 2014 accident between a Werner tractor-trailer and a passenger vehicle. On July 30, 2018, the court entered a final judgment against Werner for $92.0 million, including pre-judgment interest. The Company has premium-based liability insurance to cover the potential outcome from this jury verdict. Under the Company’s insurance policies in effect on the date of this accident, the Company’s maximum liability for this accident is $10.0 million (plus pre-judgment and post-judgment interest) with premium-based coverage that exceeds the jury verdict amount. As a result of this jury verdict, the Company had recorded a liability of $38.3 million as of September 30, 2023, and $34.1 million as of December 31, 2022. Under the terms of the Company’s insurance policies, the Company is the primary obligor of the verdict, and as such, the Company has also recorded a $79.2 million receivable from its third-party insurance providers in other non-current assets and a corresponding liability of the same amount in the long-term portion of insurance and claims accruals in the consolidated condensed balance sheets as of September 30, 2023 and December 31, 2022. The Company pursued an appeal of this verdict, and on May 18, 2023, the Texas Court of Appeals overruled Werner’s appeal and affirmed the trial court’s judgment. The Company has since filed a Petition for Review with the Texas Supreme Court, seeking further review of the Texas Court of Appeals decision. No assurances can be given regarding whether the Texas Supreme Court will accept the Company’s petition to review or the outcome of any such review. We have been involved in class action litigation in the U.S. District Court for the District of Nebraska, in which the plaintiffs allege that we owe drivers for unpaid wages under the Fair Labor Standards Act (“FLSA”) and the Nebraska Wage Payment and Collection Act and that we failed to pay minimum wage per hour for drivers in our Career Track Program, related to short break time and sleeper berth time. The period covered by this class action suit is August 2008 through March 2014. The case was tried to a jury in May 2017, resulting in a verdict of $0.8 million in plaintiffs’ favor on the short break matter and a verdict in our favor on the sleeper berth matter. As a result of various post-trial motions, the court awarded $0.5 million to the plaintiffs for attorney fees and costs. Plaintiffs appealed the post-verdict amounts awarded by the trial court for fees, costs and liquidated damages, and the Company filed a cross appeal on the verdict that was in plaintiffs’ favor. The United States Court of Appeals for the Eighth Circuit denied Plaintiffs’ appeal and granted Werner’s appeal, vacating the judgment in favor of the plaintiffs. The appellate court sent the case back to the trial court for proceedings consistent with the appellate court’s opinion. On June 22, 2020, the trial court denied Plaintiffs’ request for a new trial and entered judgment in favor of the Company, dismissing the case with prejudice. On July 21, 2020, Plaintiffs’ counsel filed a notice of appeal of that dismissal. On August 3, 2022, the Eighth Circuit Court of Appeals vacated the district court’s judgment and remanded the case, for the trial court to determine whether the plaintiffs should be granted a new trial on the short break claim. On January 10, 2023, the trial court denied Plaintiff’s motion for a new trial and entered judgment in Werner’s favor on all claims. As of September 30, 2023, we have an accrual for the jury’s award, attorney fees and costs in the short break matter and had not accrued for the sleeper berth matter. We are also involved in certain class action litigation in which the plaintiffs allege claims for failure to provide meal and rest breaks, unpaid wages, unauthorized deductions and other items. Based on the knowledge of the facts, management does not currently believe the outcome of these class actions is likely to have a material adverse effect on our financial position or results of operations. However, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income attributable to Werner by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to Werner by the weighted average number of common shares outstanding plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock awards. Performance awards are excluded from the calculation of dilutive potential common shares until the threshold performance conditions have been satisfied. There are no differences in the numerators of our computations of basic and diluted earnings per share for any periods presented. The computation of basic and diluted earnings per share is shown below (in thousands, except per share amounts). Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net income attributable to Werner $ 23,704 $ 55,051 $ 88,809 $ 181,090 Weighted average common shares outstanding 63,390 63,386 63,360 64,433 Dilutive effect of stock-based awards 347 396 343 386 Shares used in computing diluted earnings per share 63,737 63,782 63,703 64,819 Basic earnings per share $ 0.37 $ 0.87 $ 1.40 $ 2.81 Diluted earnings per share $ 0.37 $ 0.86 $ 1.39 $ 2.79 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We have two reportable segments – Truckload Transportation Services (“TTS”) and Werner Logistics. The TTS segment consists of two operating units, Dedicated and One-Way Truckload. These units are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. Dedicated provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, utilizing either dry van or specialized trailers. One-Way Truckload is comprised of the following operating fleets: (i) the medium-to-long-haul van (“Van”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities over irregular routes using dry van trailers, including Mexico cross-border routes; (ii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams; (iii) the regional short-haul (“Regional”) fleet provides comparable truckload van service within geographic regions across the United States; and (iv) the Temperature Controlled fleet provides truckload services for temperature sensitive products over irregular routes utilizing temperature-controlled trailers. Revenues for the TTS segment include a small amount of non-trucking revenues which consist primarily of the intra-Mexico portion of cross-border shipments delivered to or from Mexico where we utilize a third-party capacity provider. The Werner Logistics segment is a non-asset based transportation and logistics provider. Werner Logistics provides services throughout North America and generates the majority of our non-trucking revenues through three operating units. These three Werner Logistics operating units are as follows: (i) Truckload Logistics, which uses contracted carriers to complete shipments for brokerage customers and freight management customers for which we offer a full range of single-source logistics management services and solutions; (ii) the intermodal (“Intermodal”) unit offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; and (iii) Werner Final Mile (“Final Mile”) offers residential and commercial deliveries of large or heavy items using third-party agents, independent contractors, and Company employees with two-person delivery teams operating a liftgate straight truck. We generate other revenues from our driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, and other business activities. None of these operations meets the quantitative reporting thresholds. As a result, these operations are grouped in “Other” in the tables below. “Corporate” includes revenues and expenses that are incidental to our activities and are not attributable to any of our operating segments, including gains and losses on sales of property and equipment not attributable to our operating segments. We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment. Based on our operations, certain revenue-generating assets (primarily tractors and trailers) are interchangeable between segments. Depreciation for these interchangeable assets is allocated to segments based on the actual number of units utilized by the segment during the period. Other depreciation and amortization is allocated to segments based on specific identification or as a percentage of a metric such as average number of tractors. Inter-segment eliminations represent transactions between reporting segments that are eliminated in consolidation. The following tables summarize our segment information (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues by Segment Truckload Transportation Services $ 572,195 $ 621,866 $ 1,730,717 $ 1,793,899 Werner Logistics 230,252 187,138 683,470 580,007 Other 19,212 18,469 59,089 54,928 Corporate 487 535 1,463 1,402 Subtotal 822,146 828,008 2,474,739 2,430,236 Inter-segment eliminations (4,402) (402) (13,185) (1,749) Total $ 817,744 $ 827,606 $ 2,461,554 $ 2,428,487 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating Income (Loss) by Segment Truckload Transportation Services $ 38,846 $ 74,117 $ 134,991 $ 214,214 Werner Logistics 2,012 5,145 11,304 26,316 Other (150) (1,091) 313 (185) Corporate (2,808) (1,910) (8,124) (5,650) Total $ 37,900 $ 76,261 $ 138,484 $ 234,695 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Depreciation and Amortization by Segment Truckload Transportation Services $ 67,819 $ 64,579 $ 202,276 $ 189,283 Werner Logistics 3,682 2,423 11,606 7,042 Other 2,946 2,875 8,733 8,347 Corporate 139 520 1,182 1,425 Total $ 74,586 $ 70,397 $ 223,797 $ 206,097 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income attributable to Werner | $ 23,704 | $ 55,051 | $ 88,809 | $ 181,090 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Rec_2
Basis of Presentation and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of Werner Enterprises, Inc. and its subsidiaries (collectively, the “Company” or “Werner”). Noncontrolling interest on the consolidated condensed balance sheets represents the portion of a consolidated entity in which we do not have a direct equity ownership. In these notes, the terms “we,” “us,” or “our” refer to Werner Enterprises, Inc. and its subsidiaries. All significant intercompany accounts and transactions relating to these entities have been eliminated. These consolidated financial statements have been prepared in accordance with the U.S. Securities and Exchange Commission (SEC) instructions to Form 10-Q and, in the opinion of management, reflect all adjustments, which are all of normal recurring nature, necessary to present fairly the financial condition, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”). These consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements; although in management’s opinion, the disclosures are adequate so that the information presented is not misleading. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. In the opinion of management, the information set forth in the accompanying consolidated condensed balance sheets is fairly stated in all material respects in relation to the consolidated balance sheets from which it has been derived. These consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and accompanying notes contained in our 2022 Form 10-K. |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the purchase price allocation for ReedTMS, including any adjustments (in thousands): November 5, 2022 Adjustments (1) November 5, 2022 Purchase Price Cash consideration paid $ 116,989 $ — $ 116,989 (2) Cash and cash equivalents acquired (12,120) — (12,120) Contingent consideration arrangement 5,000 (800) 4,200 (3) Working capital surplus (deficiency) (689) 188 (501) Total purchase price (fair value of consideration) 109,180 (612) 108,568 Purchase Price Allocation Current assets 52,531 49 52,580 Property and equipment 35,000 (12,485) 22,515 Intangible assets 12,000 15,300 27,300 Other non-current assets 7,927 (1) 7,926 Total assets acquired 107,458 2,863 110,321 Current liabilities (45,497) (389) (45,886) Other long-term liabilities (5,622) 527 (5,095) Total liabilities assumed (51,119) 138 (50,981) Goodwill $ 52,841 $ (3,613) $ 49,228 (1) The measurement period adjustments were recorded during the three months ended March 31, 2023. No material statement of income effects were identified with these adjustments. (2) Includes $0.9 million related to the net present value of future insurance payments. At closing, $11.5 million of the cash consideration was placed in escrow to secure certain indemnification obligations of the sellers and to cover post-closing adjustments. During the three months ended March 31, 2023, we received $2.1 million from escrow for post-closing adjustments. The remaining balance of the escrow, except for $0.5 million, was returned to the sellers. In exchange, the sellers obtained a $10.0 million Standby Letter of Credit with the Company named as beneficiary. (3) The contingent earnout liability is recorded in other current liabilities on the consolidated condensed balance sheets as of September 30, 2023 and in other long-term liabilities as of December 31, 2022 . For additional information regarding the valuation of the contingent liability, see Note 6 – Fair Value. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Revenue Source | The following table presents our revenues disaggregated by revenue source (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Truckload Transportation Services $ 572,195 $ 621,866 $ 1,730,717 $ 1,793,899 Werner Logistics 230,252 187,138 683,470 580,007 Inter-segment eliminations (4,402) (402) (13,185) (1,749) Transportation services 798,045 808,602 2,401,002 2,372,157 Other revenues 19,699 19,004 60,552 56,330 Total revenues $ 817,744 $ 827,606 $ 2,461,554 $ 2,428,487 |
Schedule of Revenue by Geographical Location | The following table presents our revenues disaggregated by geographic areas in which we conduct business (in thousands). Operating revenues for foreign countries include revenues for (i) shipments with an origin or destination in that country and (ii) other services provided in that country. If both the origin and destination are in a foreign country, the revenues are attributed to the country of origin. Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 769,524 $ 765,559 $ 2,317,133 $ 2,247,307 Mexico 38,941 50,681 118,092 145,433 Other 9,279 11,366 26,329 35,747 Total revenues $ 817,744 $ 827,606 $ 2,461,554 $ 2,428,487 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes changes in the carrying amount of goodwill by segment for the nine months ended September 30, 2023 (in thousands): TTS Werner Logistics Total Balance as of December 31, 2022 $ 53,897 $ 78,820 $ 132,717 Purchase accounting adjustments (1) (7,841) 4,228 (3,613) Balance as of September 30, 2023 $ 46,056 $ 83,048 $ 129,104 |
Schedule of Acquired Intangible Assets | The following table presents acquired intangible assets (in thousands): September 30, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 80,200 $ (11,985) $ 68,215 $ 64,900 $ (5,714) $ 59,186 Trade names 24,600 (3,821) 20,779 24,600 (2,284) 22,316 Total intangible assets $ 104,800 $ (15,806) $ 88,994 $ 89,500 $ (7,998) $ 81,502 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Information | The following table presents balance sheet and other operating lease information (dollars in thousands): September 30, 2023 December 31, 2022 Balance Sheet Classification Right-of-use assets (recorded in other non-current assets) $ 36,537 $ 40,963 Current lease liabilities (recorded in other current liabilities) $ 9,059 $ 9,396 Long-term lease liabilities (recorded in other long-term liabilities) 29,160 32,897 Total operating lease liabilities $ 38,219 $ 42,293 Other Information Weighted-average remaining lease term for operating leases 6.30 years 6.43 years Weighted-average discount rate for operating leases 3.6 % 3.3 % |
Schedule of Maturities of Operating Lease Liabilities | The following table presents the maturities of operating lease liabilities as of September 30, 2023 (in thousands): Maturity of Lease Liabilities 2023 (remaining) $ 2,604 2024 9,958 2025 8,046 2026 6,354 2027 4,459 Thereafter 10,884 Total undiscounted operating lease payments $ 42,305 Less: Imputed interest (4,086) Present value of operating lease liabilities $ 38,219 |
Schedule of Lessor Operating Lease Maturities | The following table presents information about the maturities of these operating leases as of September 30, 2023 (in thousands): 2023 (remaining) $ 2,378 2024 4,772 2025 315 2026 324 2027 82 Thereafter — Total $ 7,871 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the fair value hierarchy for our assets and liabilities measured at fair value on a recurring basis (in thousands): Level in Fair Value September 30, 2023 December 31, 2022 Assets: Other non-current assets: Equity securities (1) 1 $ 552 $ 723 Liabilities: Other current liabilities: Contingent consideration associated with acquisitions 3 $ 4,390 $ — Other long-term liabilities: Contingent consideration associated with acquisitions 3 8,793 13,400 Total liabilities $ 13,183 $ 13,400 (1) Represents our investments in autonomous technology companies. For additional information regarding the valuation of these equity securities, see Note 7 – Investments. |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents changes in the fair value of our contingent earnout liabilities (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Balance at beginning of period $ 13,028 $ 2,500 $ 13,400 $ 2,500 Measurement period adjustment associated with the acquisition of ReedTMS (1) — — (800) — Change in fair value 155 — 583 — Balance at end of period $ 13,183 $ 2,500 $ 13,183 $ 2,500 (1) The measurement period adjustment was recorded in goodwill on the consolidated condensed balance sheet. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments without Readily Determinable Fair Value | The following table summarizes the activity related to our equity investments without readily determinable fair values during the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Investment in equity securities $ 3,000 $ — $ — $ 20,250 Upward adjustments (1) — — — 28,638 (1) During 2022, investments by third-parties resulted in the remeasurements of our investment in MLSI. Our updated investment values were based upon the prices paid by third parties. |
Schedule of Investments with Readily Determinable Fair Value | The following table summarizes the activity related to our equity investments with readily determinable fair values during the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Loss (gain) on investments in equity securities, net $ 34 $ (114) $ 36 $ 14,235 Portion of unrealized loss (gain) for the period related to equity securities still held at the reporting date 35 (114) 28 14,235 |
Notes Receivable (Tables)
Notes Receivable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Notes Receivable | The following table presents our notes receivable (in thousands): September 30, 2023 December 31, 2022 Independent contractor notes receivable $ 7,432 $ 8,287 MLSI subordinated promissory note 25,000 — Other notes receivable 7,935 7,921 Notes receivable 40,367 16,208 Less current portion 2,603 2,691 Notes receivable – non-current $ 37,764 $ 13,517 September 30, 2023 December 31, 2022 Student notes receivable $ 64,720 $ 63,351 Allowance for doubtful student notes receivable (22,945) (23,491) Total student notes receivable, net of allowance 41,775 39,860 Less current portion, net of allowance 13,433 12,574 Student notes receivable – non-current $ 28,342 $ 27,286 |
Debt and Credit Facilities (Tab
Debt and Credit Facilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | At September 30, 2023, the aggregate future maturities of long-term debt by year are as follows (in thousands): 2023 (remaining) $ 2,500 2024 87,500 2025 — 2026 — 2027 600,000 Total $ 690,000 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic And Diluted Earnings Per Share | The computation of basic and diluted earnings per share is shown below (in thousands, except per share amounts). Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net income attributable to Werner $ 23,704 $ 55,051 $ 88,809 $ 181,090 Weighted average common shares outstanding 63,390 63,386 63,360 64,433 Dilutive effect of stock-based awards 347 396 343 386 Shares used in computing diluted earnings per share 63,737 63,782 63,703 64,819 Basic earnings per share $ 0.37 $ 0.87 $ 1.40 $ 2.81 Diluted earnings per share $ 0.37 $ 0.86 $ 1.39 $ 2.79 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following tables summarize our segment information (in thousands): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues by Segment Truckload Transportation Services $ 572,195 $ 621,866 $ 1,730,717 $ 1,793,899 Werner Logistics 230,252 187,138 683,470 580,007 Other 19,212 18,469 59,089 54,928 Corporate 487 535 1,463 1,402 Subtotal 822,146 828,008 2,474,739 2,430,236 Inter-segment eliminations (4,402) (402) (13,185) (1,749) Total $ 817,744 $ 827,606 $ 2,461,554 $ 2,428,487 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating Income (Loss) by Segment Truckload Transportation Services $ 38,846 $ 74,117 $ 134,991 $ 214,214 Werner Logistics 2,012 5,145 11,304 26,316 Other (150) (1,091) 313 (185) Corporate (2,808) (1,910) (8,124) (5,650) Total $ 37,900 $ 76,261 $ 138,484 $ 234,695 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Depreciation and Amortization by Segment Truckload Transportation Services $ 67,819 $ 64,579 $ 202,276 $ 189,283 Werner Logistics 3,682 2,423 11,606 7,042 Other 2,946 2,875 8,733 8,347 Corporate 139 520 1,182 1,425 Total $ 74,586 $ 70,397 $ 223,797 $ 206,097 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Nov. 05, 2022 | Oct. 01, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
ReedTMS | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity interests acquired | 100% | |||
Total purchase price (fair value of consideration) | $ 108,600 | $ 108,568 | $ 109,180 | |
Baylor Trucking, Inc. | ||||
Business Acquisition [Line Items] | ||||
Percentage of equity interests acquired | 100% | |||
Total purchase price (fair value of consideration) | $ 89,000 |
Business Acquisitions - Schedul
Business Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 05, 2022 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||||
Contingent consideration arrangement adjustments | $ (800) | $ 0 | |||||
Goodwill | $ 129,104 | 129,104 | $ 132,717 | ||||
Goodwill adjustments | (3,613) | ||||||
ReedTMS | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration paid | 116,989 | 116,989 | |||||
Cash consideration paid adjustments | 0 | ||||||
Cash and cash equivalents acquired | (12,120) | (12,120) | |||||
Cash and cash equivalents acquired adjustments | 0 | ||||||
Contingent consideration arrangement | 4,200 | 5,000 | |||||
Contingent consideration arrangement adjustments | 0 | $ 0 | (800) | $ 0 | |||
Working capital surplus (deficiency) | (501) | (689) | |||||
Working capital surplus (deficiency) adjustments | 188 | ||||||
Total purchase price (fair value of consideration) | $ 108,600 | 108,568 | 109,180 | ||||
Total purchase price (fair value of consideration) adjustments | (612) | ||||||
Current assets | 52,580 | 52,580 | 52,531 | ||||
Current assets adjustments | 49 | ||||||
Property and equipment | 22,515 | 22,515 | 35,000 | ||||
Property and equipment adjustments | (12,485) | ||||||
Intangible assets | 27,300 | 27,300 | 12,000 | ||||
Intangible assets adjustments | 15,300 | ||||||
Other non-current assets | 7,926 | 7,926 | 7,927 | ||||
Other non-current assets adjustments | (1) | ||||||
Total assets acquired | 110,321 | 110,321 | 107,458 | ||||
Total assets acquired adjustments | 2,863 | ||||||
Current liabilities | (45,886) | (45,886) | (45,497) | ||||
Current liabilities adjustments | (389) | ||||||
Other long-term liabilities | (5,095) | (5,095) | (5,622) | ||||
Other long-term liabilities adjustments | 527 | ||||||
Total liabilities assumed | (50,981) | (50,981) | (51,119) | ||||
Total liabilities assumed adjustments | 138 | ||||||
Goodwill | $ 49,228 | 49,228 | $ 52,841 | ||||
Goodwill adjustments | $ (3,613) | ||||||
Net present value of future insurance payments | 900 | ||||||
Escrow deposit | $ 11,500 | ||||||
Escrow post closing adjustments | $ 2,100 | ||||||
Indemnification escrow deposit | 500 | ||||||
Seller obtained letter of credit | $ 10,000 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue by Revenue Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of revenue | ||||
Revenues by Segment | $ 817,744 | $ 827,606 | $ 2,461,554 | $ 2,428,487 |
Inter-segment eliminations | ||||
Disaggregation of revenue | ||||
Revenues by Segment | (4,402) | (402) | (13,185) | (1,749) |
Truckload Transportation Services | Operating Segments | ||||
Disaggregation of revenue | ||||
Revenues by Segment | 572,195 | 621,866 | 1,730,717 | 1,793,899 |
Werner Logistics | Operating Segments | ||||
Disaggregation of revenue | ||||
Revenues by Segment | 230,252 | 187,138 | 683,470 | 580,007 |
Transportation services | ||||
Disaggregation of revenue | ||||
Revenues by Segment | 798,045 | 808,602 | 2,401,002 | 2,372,157 |
Other revenues | ||||
Disaggregation of revenue | ||||
Revenues by Segment | $ 19,699 | $ 19,004 | $ 60,552 | $ 56,330 |
Revenue - Disaggregation of R_2
Revenue - Disaggregation of Revenue by Geographical Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of revenue | ||||
Revenues by Segment | $ 817,744 | $ 827,606 | $ 2,461,554 | $ 2,428,487 |
United States | ||||
Disaggregation of revenue | ||||
Revenues by Segment | 769,524 | 765,559 | 2,317,133 | 2,247,307 |
Mexico | ||||
Disaggregation of revenue | ||||
Revenues by Segment | 38,941 | 50,681 | 118,092 | 145,433 |
Other | ||||
Disaggregation of revenue | ||||
Revenues by Segment | $ 9,279 | $ 11,366 | $ 26,329 | $ 35,747 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, trade, net | $ 449,786 | $ 518,815 |
Contract assets | 8,200 | 8,900 |
Contract liabilities | 1,200 | $ 900 |
Revenue recognized from contract liability during the period | $ 900 | |
Average transit time | 3 days |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Increase (Decrease) in Goodwill [Roll Forward] | |
Beginning balance | $ 132,717 |
Purchase accounting adjustments | (3,613) |
Ending balance | 129,104 |
TTS | |
Increase (Decrease) in Goodwill [Roll Forward] | |
Beginning balance | 53,897 |
Purchase accounting adjustments | (7,841) |
Ending balance | 46,056 |
Werner Logistics | |
Increase (Decrease) in Goodwill [Roll Forward] | |
Beginning balance | 78,820 |
Purchase accounting adjustments | 4,228 |
Ending balance | $ 83,048 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 104,800 | $ 89,500 |
Accumulated Amortization | (15,806) | (7,998) |
Net Carrying Amount | 88,994 | 81,502 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 80,200 | 64,900 |
Accumulated Amortization | (11,985) | (5,714) |
Net Carrying Amount | 68,215 | 59,186 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,600 | 24,600 |
Accumulated Amortization | (3,821) | (2,284) |
Net Carrying Amount | $ 20,779 | $ 22,316 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 2.5 | $ 1.4 | $ 7.8 | $ 4.1 |
Remainder of 2023 | 2.5 | 2.5 | ||
2024 | 10.1 | 10.1 | ||
2025 | 10.1 | 10.1 | ||
2026 | 10.1 | 10.1 | ||
2027 | 10.1 | 10.1 | ||
2028 | $ 10.1 | $ 10.1 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lessee, Lease, Description [Line Items] | ||||
Right-of-use asset recognized as non-cash asset addition | $ 3.8 | $ 12.4 | ||
Cash paid for amounts included in measurement of operating lease liability | 8.4 | 5.9 | ||
Total operating lease expense | $ 5.7 | $ 5.4 | 17.8 | 15.8 |
Long-term operating lease expense | $ 2.8 | $ 2.2 | $ 8.8 | $ 6.6 |
Operating lease, lease income, statement of income or comprehensive income [Extensible Enumeration] | Revenues by Segment | Revenues by Segment | Revenues by Segment | Revenues by Segment |
Operating lease revenues | $ 2.8 | $ 3.3 | $ 8.2 | $ 9.6 |
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating leases remaining term, lessee | 1 year | 1 year | ||
Operating leases remaining term, lessor | 2 years | 2 years | ||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating leases remaining term, lessee | 18 years | 18 years | ||
Operating leases remaining term, lessor | 10 years | 10 years |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balance Sheet Classification | ||
Operating lease, right-of-use asset, Statement of financial position [Extensible Enumeration] | Other non-current assets | Other non-current assets |
Right-of-use assets (recorded in other non-current assets) | $ 36,537 | $ 40,963 |
Operating lease, liability, current, statement of financial position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Current lease liabilities (recorded in other current liabilities) | $ 9,059 | $ 9,396 |
Operating lease, liability, noncurrent, statement of financial position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Long-term lease liabilities (recorded in other long-term liabilities) | $ 29,160 | $ 32,897 |
Total operating lease liabilities | $ 38,219 | $ 42,293 |
Other Information | ||
Weighted-average remaining lease term for operating leases | 6 years 3 months 18 days | 6 years 5 months 4 days |
Weighted-average discount rate for operating leases | 3.60% | 3.30% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Maturity of Lease Liabilities | ||
2023 (remaining) | $ 2,604 | |
2024 | 9,958 | |
2025 | 8,046 | |
2026 | 6,354 | |
2027 | 4,459 | |
Thereafter | 10,884 | |
Total undiscounted operating lease payments | 42,305 | |
Less: Imputed interest | (4,086) | |
Present value of operating lease liabilities | $ 38,219 | $ 42,293 |
Leases - Schedule of Lessor Ope
Leases - Schedule of Lessor Operating Lease Maturities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
2023 (remaining) | $ 2,378 |
2024 | 4,772 |
2025 | 315 |
2026 | 324 |
2027 | 82 |
Thereafter | 0 |
Total | $ 7,871 |
Fair Value - Schedule of Assets
Fair Value - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Liabilities: | ||
Total liabilities | $ 13,183 | $ 13,400 |
Level 1 inputs | Fair Value, Inputs, Level 1 | ||
Assets: | ||
Equity securities | 552 | 723 |
Level 1 inputs | Fair Value, Inputs, Level 3 | Other current liabilities: | ||
Liabilities: | ||
Contingent consideration associated with acquisitions | 4,390 | 0 |
Level 1 inputs | Fair Value, Inputs, Level 3 | Other long-term liabilities: | ||
Liabilities: | ||
Contingent consideration associated with acquisitions | $ 8,793 | $ 13,400 |
Fair Value - Schedule of Change
Fair Value - Schedule of Changes In Fair Value of Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 13,028 | $ 2,500 | $ 13,400 | $ 2,500 |
Measurement period adjustment with the acquisition of ReedTMS | (800) | 0 | ||
Change in fair value | 155 | 0 | 583 | 0 |
Ending balance | 13,183 | 2,500 | 13,183 | 2,500 |
ReedTMS | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Measurement period adjustment with the acquisition of ReedTMS | $ 0 | $ 0 | $ (800) | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) - BMO Term Loan - Unsecured Debt - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Inputs, Level 2 | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Fair value of long term debt | $ 86.6 | $ 87.2 |
Line of Credit | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Term loan | $ 90 | $ 93.8 |
Investments - Schedule of Inves
Investments - Schedule of Investments Without Readily Determinable Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | |||||
Investment in equity securities | $ 3,000 | $ 0 | $ 0 | $ 20,250 | |
Upward adjustments | 0 | $ 0 | 0 | $ 28,638 | |
Cumulative unrealized gain on interest in investment | 56,800 | 56,800 | |||
Mastery Logistics Systems, Inc. | |||||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||||
Investment in equity securities | 89,800 | 89,800 | $ 86,800 | ||
Fleet Defender, Inc. | |||||
Equity Securities without Readily Determinable Fair Value [Line Items] | |||||
Investment in equity securities | $ 250 | $ 250 | $ 250 |
Investments - Schedule of Inv_2
Investments - Schedule of Investments With Readily Determinable Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Equity Securities With Readily Determinable Fair Value [Line Items] | |||||
Loss (gain) on investments in equity securities, net | $ 36 | $ (14,403) | |||
Fair Value, Inputs, Level 1 | Level 1 inputs | |||||
Equity Securities With Readily Determinable Fair Value [Line Items] | |||||
Equity securities | $ 552 | 552 | $ 723 | ||
Loss (gain) on investments in equity securities, net | 34 | $ (114) | 36 | 14,235 | |
Portion of unrealized loss (gain) for the period related to equity securities still held at the reporting date | $ 35 | $ (114) | $ 28 | $ 14,235 |
Investments - Equity Method Inv
Investments - Equity Method Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jan. 31, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investment | $ 2,645 | $ 0 | |||
Loss from equity method investment | $ 110 | $ 0 | $ 954 | $ 0 | |
Autotech Fund III, L.P | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, purchase commitment | $ 20,000 | ||||
Equity method investment, ownership percentage (less than) | 20% | 20% | |||
Payments to acquire equity method investment | $ 2,600 | ||||
Equity method investments | $ 1,700 | 1,700 | |||
Loss from equity method investment | $ 100 | $ 1,000 |
Notes Receivable - Narrative (D
Notes Receivable - Narrative (Details) - USD ($) | 9 Months Ended | ||
Jan. 24, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Receivables [Abstract] | |||
Issuance of notes receivable | $ 25,000,000 | $ 25,000,000 | $ 0 |
Interest accrued | 7.50% |
Notes Receivable - Schedule of
Notes Receivable - Schedule of Notes Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 40,367 | $ 16,208 |
Less current portion | 2,603 | 2,691 |
Notes receivable – non-current | 37,764 | 13,517 |
Independent contractor notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | 7,432 | 8,287 |
MLSI subordinated promissory note | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | 25,000 | 0 |
Other notes receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 7,935 | $ 7,921 |
Notes Receivable - Schedule o_2
Notes Receivable - Schedule of Student Notes Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Student notes receivable | $ 40,367 | $ 16,208 |
Student Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Student notes receivable | 64,720 | 63,351 |
Allowance for doubtful student notes receivable | (22,945) | (23,491) |
Total student notes receivable, net of allowance | 41,775 | 39,860 |
Less current portion, net of allowance | 13,433 | 12,574 |
Student notes receivable – non-current | $ 28,342 | $ 27,286 |
Debt and Credit Facilities - Na
Debt and Credit Facilities - Narrative (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Dec. 20, 2022 | Jun. 30, 2021 | Oct. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||||||
Proceeds from issuance of long-term debt | $ 50,000,000 | $ 250,000,000 | ||||
Revolving Credit Facility | Unsecured Debt | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Proceeds from issuance of long-term debt | $ 15,000,000 | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 1,075,000,000 | |||||
Borrowings outstanding | 690,000,000 | $ 693,800,000 | ||||
Line of credit borrowings outstanding | 600,000,000 | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Unused capacity commitment fee, percentage | 0.125% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Unused capacity commitment fee, percentage | 0.25% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | Federal Funds Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | One-month Term SOFR | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.10% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | One-month Term SOFR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.125% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | One-month Term SOFR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | SOFR | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.10% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | SOFR | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.125% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | SOFR | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | Base Rate | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.125% | |||||
Revolving Credit Facility | 2022 Credit Agreement | Unsecured Debt | Base Rate | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||
Revolving Credit Facility | Variable Rate Revolving Credit Facility | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit borrowings outstanding | $ 320,000,000 | |||||
Line of credit facility, interest rate | 6.67% | |||||
Revolving Credit Facility | 2022 Credit Agreement, Interest Rate Swap, Mature Date At May Two Thousand Twenty Four | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate swap facility, amount | $ 150,000,000 | |||||
Interest rate swap facility, fixed interest | 2.88% | |||||
Revolving Credit Facility | 2022 Credit Agreement, Interest Rate Swap, Mature Date At July Two Thousand Twenty Five | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate swap facility, amount | $ 40,000,000 | |||||
Interest rate swap facility, fixed interest | 6.20% | |||||
Revolving Credit Facility | 2022 Credit Agreement, Interest Rate Swap, Mature Date At July Two Thousand Twenty Six | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate swap facility, amount | $ 90,000,000 | |||||
Interest rate swap facility, fixed interest | 5.87% | |||||
Letter of Credit | 2022 Credit Agreement | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 100,000,000 | |||||
Standby Letters of Credit | 2022 Credit Agreement | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Stand-by letters of credit | $ 51,000,000 | |||||
Standby Letters of Credit | 2022 Credit Agreement | Unsecured Debt | Minimum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commission percentage | 1.125% | |||||
Standby Letters of Credit | 2022 Credit Agreement | Unsecured Debt | Maximum | ||||||
Line of Credit Facility [Line Items] | ||||||
Commission percentage | 1.75% | |||||
Line of Credit | BMO Term Loan | Unsecured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Term loan face amount | $ 100,000,000 | |||||
Periodic payment, principal | $ 1,250,000 | |||||
Term loan interest rate | 1.28% | |||||
Term loan | $ 90,000,000 | $ 93,800,000 |
Debt and Credit Facilities - Sc
Debt and Credit Facilities - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 (remaining) | $ 2,500 |
2024 | 87,500 |
2025 | 0 |
2026 | 0 |
2027 | 600,000 |
Total | $ 690,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Jul. 30, 2018 | May 31, 2017 | Sep. 30, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | ||||
Commitment for property and equipment purchases | $ 94.6 | |||
Loss contingency, damages awarded, value | $ 0.8 | |||
Loss contingency, damages awarded, attorney fees and costs | $ 0.5 | |||
May 17, 2018 Verdict | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages awarded, value | $ 92 | |||
Self insurance retained liability | $ 10 | |||
Loss contingency, estimate of possible loss | 38.3 | $ 34.1 | ||
Loss contingency, accrual, noncurrent | 79.2 | 79.2 | ||
Insurance settlement receivable | $ 79.2 | $ 79.2 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic And Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Werner | $ 23,704 | $ 55,051 | $ 88,809 | $ 181,090 |
Weighted average common shares outstanding (in shares) | 63,390 | 63,386 | 63,360 | 64,433 |
Dilutive effect of stock-based awards (in shares) | 347 | 396 | 343 | 386 |
Shares used in computing diluted earnings per share (in shares) | 63,737 | 63,782 | 63,703 | 64,819 |
Basic earnings per share (in dollars per share) | $ 0.37 | $ 0.87 | $ 1.40 | $ 2.81 |
Diluted earnings per share (in dollars per share) | $ 0.37 | $ 0.86 | $ 1.39 | $ 2.79 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 reporting_unit segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 2 |
Truckload Transportation Services | |
Segment Reporting Information [Line Items] | |
Number of operating units | 2 |
Werner Logistics | |
Segment Reporting Information [Line Items] | |
Number of operating units | 3 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | $ 817,744 | $ 827,606 | $ 2,461,554 | $ 2,428,487 |
Operating Income (Loss) by Segment | 37,900 | 76,261 | 138,484 | 234,695 |
Depreciation and Amortization by Segment | 74,586 | 70,397 | 223,797 | 206,097 |
Subtotal | ||||
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | 822,146 | 828,008 | 2,474,739 | 2,430,236 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | 487 | 535 | 1,463 | 1,402 |
Operating Income (Loss) by Segment | (2,808) | (1,910) | (8,124) | (5,650) |
Depreciation and Amortization by Segment | 139 | 520 | 1,182 | 1,425 |
Inter-segment eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | (4,402) | (402) | (13,185) | (1,749) |
Truckload Transportation Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | 572,195 | 621,866 | 1,730,717 | 1,793,899 |
Operating Income (Loss) by Segment | 38,846 | 74,117 | 134,991 | 214,214 |
Depreciation and Amortization by Segment | 67,819 | 64,579 | 202,276 | 189,283 |
Werner Logistics | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | 230,252 | 187,138 | 683,470 | 580,007 |
Operating Income (Loss) by Segment | 2,012 | 5,145 | 11,304 | 26,316 |
Depreciation and Amortization by Segment | 3,682 | 2,423 | 11,606 | 7,042 |
Other | Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenues by Segment | 19,212 | 18,469 | 59,089 | 54,928 |
Operating Income (Loss) by Segment | (150) | (1,091) | 313 | (185) |
Depreciation and Amortization by Segment | $ 2,946 | $ 2,875 | $ 8,733 | $ 8,347 |