Exhibit 99.1
WERNER ENTERPRISES, INC.
14507 Frontier Road
P. O. Box 45308
Omaha, Nebraska 68145
FOR IMMEDIATE RELEASE Contact: Robert E. Synowicki, Jr.
--------------------- Executive Vice President and
Chief Information Officer
(402) 894-3000
John J. Steele
Vice President, Treasurer and
Chief Financial Officer
(402) 894-3036
WERNER ENTERPRISES ANNOUNCES THIRD QUARTER 2001 OPERATING REVENUES AND
EARNINGS
Omaha, Nebraska, October 16, 2001:
---------------------------------
Werner Enterprises, Inc. (Werner), one of the nation's largest
truckload transportation companies, today reported operating revenues
and earnings for the third quarter ended September 30, 2001. Operating
revenues increased 6% to $322.6 million compared to $304.6 million in
third quarter 2000. Net income increased to $12.5 million compared to
$12.3 million in third quarter 2000. Earnings per share for third
quarter 2001 were $.26 per share, equal to the $.26 per share earned in
third quarter 2000.
"I am pleased to report continued improvement of our performance
during one of the most challenging times faced by the truckload industry
in many years," said Chairman and Chief Executive Officer, Clarence
(C.L.) Werner. "Werner Enterprises improved its results by exceeding
net income and matching earnings per share of a year ago. At the same
time, we further strengthened our financial position by becoming
essentially debt-free."
The truckload industry continues to face a combination of negative
trends that are causing weaker carriers to exit the market in record
numbers. The weakened value of used trucks, skyrocketing liability
insurance premium rates, more restrictive equipment lending standards,
and a softer economy are some of these significant trends. Trucking
company failures in 2001 are occurring at a rate more than double the
average annual number of failures during the previous fourteen years.
The pace of trucking capacity exiting the market could accelerate in
2002. Werner Enterprises continues to be well-positioned to meet these
challenges.
Freight demand remained softer during the quarter, compared to the
same quarter a year ago. Werner Enterprises added or replaced freight
to counter the effects of a slowing economy. While we experienced a
small 1% decrease in our average miles per truck, we improved our empty
mile percentage by 4%.
Average diesel fuel prices were 12 cents per gallon lower in third
quarter 2001 compared to the very high prices experienced in third
quarter 2000. Even with the recent decrease in fuel prices, prices
today are significantly higher than average historical fuel price levels
over the past ten years.
With regard to the weak used truck market, several months ago we
renegotiated our trade agreements with our primary truck manufacturer.
We also expanded our nationwide retail truck sales network that has been
a leading seller of used Company trucks for ten years. The buying power
of being a large purchaser of trucks combined with our extensive retail
truck sales network uniquely positions Werner Enterprises to minimize
the impact of a weak used truck market.
For over ten years, we have self-insured and managed virtually all
of our liability insurance claims with qualified Risk Department
professionals. As a result, higher liability insurance rates have had a
less significant effect on Werner Enterprises than many other carriers,
impacting the Company only for catastrophic claim coverage. Werner
Enterprises renewed its annual catastrophic liability insurance coverage
effective August 1, which increased the Company's total insurance and
claims expense by less than 10%. Industry sources have reported that
other carriers have experienced insurance increases of 50% to 100%.
Some carriers are reacting to these cost increases by reducing their
liability insurance coverage to the minimum allowable level of $750,000
per claim.
Over the past year, the Company has reduced its debt by $65 million
and, as of September 30, 2001, our cash position exceeds our only
remaining debt. At the same time, stockholders' equity has grown to
$574 million. The financial strength of Werner Enterprises affords
customers, drivers and non-driver employees the security of knowing that
they are working with a strong company that is well-positioned to
operate successfully in the future.
When the economy first began to soften in third quarter a year ago,
Werner Enterprises slowed its fleet growth to better match truck
capacity with freight demand. At that time, we immediately took steps
to cut controllable costs and improve efficiency through an aggressive
cost management program. This minimized, and continues to minimize, the
impact of a softer economy.
Over the past several months, we met with many of our customers to
explain our concerns regarding the state of the truckload industry. We
explained that truckload returns must improve to justify the continued
investment and risk associated with operating premium equipment and
providing premium service. We have been making tough decisions
regarding the freight we haul and the customers we support with our
truck capacity. Many good and loyal customers have supported us during
these challenging times. In the short term, we plan to hold our fleet
growth until margins improve. There should be opportunities for fleet
growth in the future if the economic environment improves or if a
significant amount of truckload capacity leaves the marketplace.
Over the past fifteen years, inflation grew 60% while truckload
rates increased only 20%. During this time, truckload carriers have
become much more cost efficient. Truckload carriers and customers have
benefited from industry subsidies that are no longer available today.
Inexpensive capital for equipment financing, cheap fuel, guaranteed
truck buy-backs, and low insurance costs are subsidies that kept
truckload carrier costs low in the past. These costs have increased
substantially and have reduced truckload industry returns and margins to
razor-thin levels. Truckload rates must increase to allow carriers to
expand and replace their fleets.
"Werner Enterprises remains committed to improving earnings growth
and shareholder value. The current challenges facing the truckload
industry are tremendous opportunities for our Company. Our size,
excellent service, advanced technology, financial strength, and
experienced workforce provide Werner Enterprises with distinct
competitive advantages. We are excited and optimistic about the future
of our Company," said C.L. Werner.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
9/30/01 Revenues 9/30/00 Revenues
-------- -------- -------- --------
Operating revenues $322,618 100.0 $304,572 100.0
-------- -------- -------- --------
Operating expenses:
Salaries, wages and
benefits 115,020 35.7 109,283 35.9
Fuel 33,560 10.4 35,237 11.6
Supplies and maintenance 31,723 9.8 26,895 8.8
Taxes and licenses 23,529 7.3 22,563 7.4
Insurance and claims 9,866 3.1 9,923 3.3
Depreciation 29,005 9.0 27,811 9.1
Rent and purchased
transportation 54,935 17.0 48,603 16.0
Communications and
utilities 3,277 1.0 3,688 1.2
Other 1,082 0.3 (474) (0.2)
-------- -------- -------- --------
Total operating
expenses 301,997 93.6 283,529 93.1
-------- -------- -------- --------
Operating income 20,621 6.4 21,043 6.9
-------- -------- -------- --------
Other expense (income):
Interest expense 775 0.2 2,043 0.7
Interest income (585) (0.2) (688) (0.2)
Other 506 0.2 (136) (0.1)
-------- -------- -------- --------
Total other expense 696 0.2 1,219 0.4
-------- -------- -------- --------
Income before income taxes 19,925 6.2 19,824 6.5
Income taxes 7,472 2.3 7,533 2.5
-------- -------- -------- --------
Net income $12,453 3.9 $12,291 4.0
======== ======== ======== ========
Diluted shares outstanding 48,265 47,191
======== ========
Diluted earnings per share $.26 $.26
======== ========
OPERATING STATISTICS
(Quarter Ended September 30)
Average monthly miles per
tractor 10,347 10,467
Average revenues per total
mile (1) $1.212 $1.204
Average revenues per loaded
mile (1) $1.341 $1.339
Average percentage of empty
miles 9.62% 10.06%
Average tractors in service 7,735 7,410
Non-trucking revenues (in
thousands) $19,779 $10,792
Total tractors (at quarter
end)
Company 6,615 6,225
Owner-operator 1,135 1,200
-------- --------
Total tractors 7,750 7,425
Total trailers (at quarter
end) 19,800 19,620
(1) Net of fuel surcharge revenues.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Nine Nine
Months % of Months % of
Ended Operating Ended Operating
9/30/01 Revenues 9/30/00 Revenues
-------- -------- -------- --------
Operating revenues $949,972 100.0 $903,193 100.0
-------- -------- -------- --------
Operating expenses:
Salaries, wages and
benefits 338,956 35.7 320,135 35.4
Fuel 104,338 11.0 98,285 10.9
Supplies and maintenance 87,942 9.2 78,534 8.7
Taxes and licenses 69,799 7.3 66,211 7.3
Insurance and claims 31,518 3.3 25,127 2.8
Depreciation 87,108 9.2 80,926 8.9
Rent and purchased
transportation 160,452 16.9 164,968 18.3
Communications and
utilities 10,587 1.1 10,849 1.2
Other 2,659 0.3 (3,838) (0.4)
-------- -------- -------- --------
Total operating
expenses 893,359 94.0 841,197 93.1
-------- -------- -------- --------
Operating income 56,613 6.0 61,996 6.9
-------- -------- -------- --------
Other expense (income):
Interest expense 3,015 0.3 6,256 0.7
Interest income (2,033) (0.2) (1,760) (0.2)
Other 1,232 0.2 204 0.1
-------- -------- -------- --------
Total other expense 2,214 0.3 4,700 0.6
-------- -------- -------- --------
Income before income taxes 54,399 5.7 57,296 6.3
Income taxes 20,400 2.1 21,772 2.4
-------- -------- -------- --------
Net income $33,999 3.6 $35,524 3.9
======== ======== ======== ========
Diluted shares outstanding 47,960 47,260
======== ========
Diluted earnings per share $.71 $.75
======== ========
OPERATING STATISTICS
(Nine Months Ended September 30)
Average monthly miles per
tractor 10,316 10,540
Average revenues per total
mile (1) $1.202 $1.188
Average revenues per loaded
mile (1) $1.336 $1.319
Average percentage of empty
miles 10.02% 9.93%
Average tractors in service 7,676 7,269
Non-trucking revenues (in
thousands) $53,910 $50,752
Total tractors (at quarter
end)
Company 6,615 6,225
Owner-operator 1,135 1,200
-------- --------
Total tractors 7,750 7,425
Total trailers (at quarter
end) 19,800 19,620
(1) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands)
As of As of
9/30/01 12/31/00
-------- --------
(Unaudited)
Cash and cash equivalents $55,640 $25,485
Current assets $229,886 $206,777
Total assets $961,683 $927,207
Current liabilities $117,520 $101,419
Total debt (current and
long-term) $50,000 $105,000
Stockholders' equity $574,186 $536,084
Werner Enterprises is a full-service transportation company
providing truckload services throughout the 48 states, portions of
Canada and Mexico. C.L. Werner founded the Company in 1956. Werner is
one of the nation's largest truckload carriers with a fleet of 7,750
trucks and 19,800 trailers.
Werner Enterprises' common stock is traded on The Nasdaq Stock
Market under the symbol WERN. The Werner Enterprises web site address
is www.werner.com. If you are interested in keeping up to date on the
Company's news releases or SEC filings, you can obtain automatic
Internet e-mail alerts by going to www.werner.com, clicking on Investor
Relations (upper right hand corner), clicking on e-mail alerts (lower
left hand corner), entering your e-mail address, and completing the
registration information.
Note: This press release contains forward-looking statements which
are based on information currently available. Actual results could
differ materially from those anticipated as a result of a number of
factors, including, but not limited to, those discussed in Item 7 of the
Company's Annual Report on Form 10-K for the year ended December 31,
2000. The Company assumes no obligation to update any forward-looking
statement to the extent it becomes aware that it will not be achieved
for any reason.