Exhibit 99.1
WERNER ENTERPRISES, INC.
14507 Frontier Road
P. O. Box 45308
Omaha, Nebraska 68145
FOR IMMEDIATE RELEASE John J. Steele
- --------------------- Executive Vice President, Treasurer and
Chief Financial Officer
(402) 894-3036
Contact: Robert E. Synowicki, Jr.
Executive Vice President and
Chief Information Officer
(402) 894-3000
WERNER ENTERPRISES REPORTS FIRST QUARTER 2009 REVENUES AND EARNINGS
Omaha, Nebraska, April 16, 2009:
- ---------------------------------
Werner Enterprises, Inc. (NASDAQ:WERN), one of the nation's largest
truckload transportation and logistics companies, reported revenues and
earnings for the first quarter ended March 31, 2009.
Revenues decreased 23% to $394.5 million in first quarter 2009
compared to $512.8 million in first quarter 2008. Trucking revenues,
excluding trucking fuel surcharges, declined 12% to $308.0 million in
first quarter 2009 compared to $348.4 million in first quarter 2008.
Value Added Services ("VAS") revenues declined 24%, for the reasons
explained in the VAS paragraph on page three, to $47.5 million in first
quarter 2009 compared to $62.2 million in first quarter 2008. Earnings
per diluted share decreased 18% to ten cents per diluted share in first
quarter 2009 compared to twelve cents per diluted share in first quarter
2008.
The already soft freight market weakened further during first
quarter 2009. The recessionary economy combined with many shippers
aggressively reducing their inventories caused a severe slowdown in
freight shipments, particularly in the retail sector which is the
Company's largest industry vertical. The Company proactively adapted to
these challenging market conditions by further reducing its fleet by 4%
during first quarter 2009 (a 150-truck reduction in January and a 175-
truck reduction in March). However, during first quarter 2009, the
decline in freight shipments exceeded the Company's fleet reduction
efforts, which caused a significant decline in the Company's daily pre-
booked percentages of loads to trucks (pre-books). In the last few
days of March 2009 and into the first half of April 2009, freight
volumes began to improve from the very weak levels experienced for most
of first quarter 2009, however freight volumes remain well below the
same period in the prior year.
The Company continues to diversify its business from the medium-to-
long-haul solo driver Van fleet (the "Van" fleet) to Dedicated,
Regional, Expedited, and North America cross-border in the Truckload
Transportation Services ("Truckload") segment and Freight Management,
Intermodal, Brokerage and Werner Global Logistics international in the
VAS segment. This helped soften the impact of the weak freight market
in first quarter 2009, while providing expanded services to our
customers.
Werner remains committed to serving the one-way, longer haul
segment of the truckload market. While we have de-emphasized the lower
asset return, solo driver solution, we continue to grow several other
customer-focused solutions for this market such as using team drivers,
engineered networks of relay trucks, third-party brokerage carriers,
power-only with trucks provided by third-party carriers, and intermodal.
We are not leaving the one-way, longer haul market. We are, however,
changing how we serve our customers in this market with more cost-
effective, better return solutions.
As the economy slowed during the latter part of 2008, management
intensified its efforts to aggressively manage and reduce controllable
costs and identify further efficiencies. Numerous additional cost
savings programs were implemented during first quarter 2009.
The Company continued to improve its fuel miles per gallon ("mpg")
in first quarter 2009 through several initiatives to improve fuel
efficiency ongoing since March 2008. These initiatives include reducing
truck idle time, lowering non-billable miles, increasing the percentage
of aerodynamic, more fuel-efficient trucks in the company truck fleet
and the installation of auxiliary power units ("APU's") in company
trucks. Due strictly to mpg improvements from these fuel saving
initiatives, Werner purchased 2.0 million fewer gallons of diesel fuel
in first quarter 2009 compared to first quarter 2008. This equates to a
reduction of approximately 22,000 tons of carbon dioxide emissions.
Werner intends to continue these and other environmentally conscious
initiatives, including its active participation as a U.S. Environmental
Protection Agency SmartWay Transport Partner.
The Company believes that the weak freight market and the severe
tightening of the credit and financial markets are making it
increasingly more difficult for highly leveraged truckload carriers to
remain in business. An expected increase in trucking company failures
combined with a low level of Class 8 truck builds may gradually improve
the supply and demand balance in the industry over the next few
quarters.
The Company's wholly-owned subsidiary, Fleet Truck Sales, is one
of the largest equipment sales remarketing companies in the U.S., and
has been in business since 1992. Gains on sales of assets, primarily
trucks and trailers, decreased to $0.7 million in first quarter 2009
compared to $3.7 million in first quarter 2008. In first quarter 2009,
the Company realized lower gains per truck and trailer sold. The
Company sold fewer trailers due to the effect of the softer freight
market and experienced lower buyer demand for used trucks due to the
weak spot market for freight. Gains on sales are reflected as a
reduction of Other Operating Expenses in the Company's income statement.
To provide shippers with additional sources of managed capacity and
network analysis, the Company continues to successfully grow its non-
asset based VAS segment. VAS includes Brokerage, Freight Management,
Intermodal, and Werner Global Logistics.
Value Added Services (amounts in 000's) 1Q09 1Q08
- --------------------------------------- ---------------- ---------------
Revenues $47,473 100.0% $62,186 100.0%
Rent and purchased transportation
expense 39,438 83.1 52,679 84.7
------- -------
Gross margin 8,035 16.9 9,507 15.3
Other operating expenses 6,302 13.3 5,840 9.4
------- -------
Operating income $1,733 3.6 $3,667 5.9
======= =======
VAS revenues, gross margins, and operating income declined in first
quarter 2009 compared to first quarter 2008 due to three factors: (1) a
reduction in the average revenue per shipment of 19% due to lower fuel
prices and lower customer rates, (2) shifting significantly more non-
committed shipments, revenues and gross margin from our VAS segment to
our Truckload segment in first quarter 2009 to help cushion the impact
of the very soft freight market on the Truckload segment and (3) a
significantly weaker freight market, which was more than offset by VAS
shipment growth due to new customer business, reduced the number of
industry freight shipments by an estimated 15% to 20%. The following
table shows the change in shipment volume and average revenue (excluding
logistics fee revenue) per shipment for all VAS shipments:
1Q09 1Q08 Difference % Change
------- ------- ---------- --------
Total VAS shipments 54,606 53,087 1,519 3%
Less: Non-committed shipments
to Truckload segment (19,637) (15,554) (4,083) 26%
------- ------- ------
Net VAS shipments 34,969 37,533 (2,564) -7%
======= ======= ======
Average revenue per shipment $1,277 $1,579 ($302) -19%
======= ======= ======
Our Brokerage revenues and gross margins declined due to the
factors described in the paragraph above. Freight Management revenues
declined due to reduced shipments with existing customers. Intermodal
revenues and gross margins declined due to an extremely weak and
competitive intermodal market in first quarter 2009.
A comparison of the operating ratios (net of fuel surcharge
revenues) for the Truckload segment and VAS operating ratios for first
quarters 2009 and 2008 is shown below.
Operating Ratios 1Q09 1Q08 Difference
- ---------------- -------- -------- ------------
Truckload Transportation Services 97.1% 97.4% (0.3)%
Value Added Services 96.4 94.1 2.3
Fluctuating fuel prices and fuel surcharge collections impact the
total company operating ratio and the Truckload segment's operating
ratio when fuel surcharges are reported on a gross basis as revenues
versus netting against fuel expenses. Eliminating fuel surcharge
revenues, which are generally a more volatile source of revenue,
provides a more consistent basis for comparing the results of operations
from period to period. The Truckload segment's operating ratios for
first quarter 2009 and first quarter 2008 are 97.4% and 97.9%,
respectively, when fuel surcharge revenues are reported as revenues
instead of a reduction of operating expenses.
The Company's financial position remains strong. The Company ended
the quarter with no debt and $48.9 million of cash. Stockholders'
equity is $747.6 million, or $10.44 per share. The Company's financial
strength compared to many of its higher leveraged competitors in the
industry is attractive to customers, vendors, and employees.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
3/31/09 Revenues 3/31/08 Revenues
--------- --------- -------- ---------
Operating revenues $394,508 100.0 $512,787 100.0
--------- ----- -------- -----
Operating expenses:
Salaries, wages and
benefits 134,186 34.0 143,187 27.9
Fuel 51,610 13.1 123,836 24.2
Supplies and maintenance 37,897 9.6 40,509 7.9
Taxes and licenses 24,395 6.2 28,265 5.5
Insurance and claims 21,665 5.5 24,732 4.8
Depreciation 40,094 10.1 41,796 8.2
Rent and purchased
transportation 68,593 17.4 94,463 18.4
Communications and
utilities 4,402 1.1 5,239 1.0
Other 410 0.1 (2,658) (0.5)
--------- ----- -------- -----
Total operating
expenses 383,252 97.1 499,369 97.4
--------- ----- -------- -----
Operating income 11,256 2.9 13,418 2.6
--------- ----- -------- -----
Other expense (income):
Interest expense 76 0.0 3 0.0
Interest income (489) (0.1) (1,073) (0.2)
Other (272) (0.0) 51 0.0
--------- ----- -------- -----
Total other expense
(income) (685) (0.1) (1,019) (0.2)
--------- ----- -------- -----
Income before income taxes 11,941 3.0 14,437 2.8
Income taxes 5,045 1.3 6,062 1.2
--------- ----- -------- -----
Net income $6,896 1.7 $8,375 1.6
========= ===== ======== =====
Diluted shares outstanding 71,944 71,377
========= ========
Diluted earnings per share $.10 $.12
========= ========
OPERATING STATISTICS
Quarter Ended Quarter Ended
3/31/09 % Change 3/31/08
------------- -------- -------------
Trucking revenues, net of
fuel surcharge (1) $307,976 -11.6% $348,424
Trucking fuel surcharge
revenues (1) 34,653 -63.8% 95,769
Non-trucking revenues,
including VAS (1) 48,669 -24.1% 64,119
Other operating revenues (1) 3,210 -28.3% 4,475
--------- ---------
Operating revenues (1) $394,508 -23.1% $512,787
========= =========
Average monthly miles per
tractor 9,550 -3.2% 9,868
Average revenues per total
mile (2) $1.438 -1.0% $1.453
Average revenues per loaded
mile (2) $1.662 -1.3% $1.684
Average percentage of empty
miles 13.50% -1.6% 13.72%
Average trip length in
miles (loaded) 469 -13.5% 542
Total miles (loaded and
empty) (1) 214,170 -10.7% 239,744
Average tractors in service 7,475 -7.7% 8,099
Average revenues per
tractor per week (2) $3,169 -4.2% $3,309
Capital expenditures, net (1) $43,592 $25,388
Cash flow from operations (1) $76,605 $80,046
Return on assets
(annualized) 2.2% 2.5%
Total tractors (at quarter
end)
Company 6,675 7,315
Owner-operator 700 765
--------- ---------
Total tractors 7,375 8,080
Total trailers (truck and
intermodal, quarter end) 24,885 24,950
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
3/31/09 12/31/08
----------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $48,883 $48,624
Accounts receivable,trade, less
allowanceof $9,087 and $9,555,
respectively 156,647 185,936
Other receivables 18,420 18,739
Inventories and supplies 11,805 10,644
Prepaid taxes, licenses
and permits 11,872 16,493
Current deferred income taxes 31,749 30,789
Other current assets 14,555 20,659
----------- ----------
Total current assets 293,931 331,884
----------- ----------
Property and equipment 1,618,716 1,613,102
Less - accumulated depreciation 689,663 686,463
----------- ----------
Property and equipment, net 929,053 926,639
----------- ----------
Other non-current assets 16,349 16,795
----------- ----------
$1,239,333 $1,275,318
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $43,690 $46,684
Current portion of long-
term debt - 30,000
Insurance and claims accruals 79,283 79,830
Accrued payroll 25,347 25,850
Other current liabilities 19,682 19,006
----------- ----------
Total current liabilities 168,002 201,370
----------- ----------
Other long-term liabilities 7,485 7,406
Insurance and claims accruals,
net of current portion 118,500 120,500
Deferred income taxes 197,758 200,512
Stockholders' equity:
Common stock, $.01 par value,
200,000,000 shares authorized;
80,533,536 shares issued;
71,576,367 and 71,576,267 shares
outstanding, respectively 805 805
Paid-in capital 93,669 93,343
Retained earnings 829,828 826,511
Accumulated other comprehensive
loss (8,733) (7,146)
Treasury stock, at cost; 8,957,169
and 8,957,269 shares,
respectively (167,981) (167,983)
----------- ----------
Total stockholders' equity 747,588 745,530
----------- ----------
$1,239,333 $1,275,318
=========== ==========
Werner Enterprises, Inc. was founded in 1956 and is a premier
transportation and logistics company, with coverage throughout the
United States, Canada, Mexico, Asia, Europe and South America. Werner
maintains its global headquarters in Omaha, Nebraska and maintains
offices throughout North America and China. Werner is among the five
largest truckload carriers in the United States, with a diversified
portfolio of transportation services that includes dedicated, medium-to-
long-haul, regional and local van capacity, expedited, temperature-
controlled and flatbed services. Werner's Value Added Services portfolio
includes freight management, truck brokerage, intermodal, load/mode and
network optimization and freight forwarding. Werner, through its
subsidiary companies, is a licensed U.S. NVOCC, U.S. Customs Broker,
Class A Freight Forwarder in China, licensed China NVOCC, TSA-approved
Indirect Air Carrier, and IATA Accredited Cargo Agent.
Werner Enterprises, Inc.'s common stock trades on The NASDAQ Global
Select MarketSM under the symbol "WERN". For further information about
Werner, visit the Company's website at www.werner.com.
Note: This press release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-
looking statements are based on information currently available to the
Company's management and are current only as of the date made. For that
reason, undue reliance should not be placed on any such forward-looking
statement. Actual results could also differ materially from those
anticipated as a result of a number of factors, including, but not
limited to, those discussed in the Company's Annual Report on Form 10-K
for the year ended December 31, 2008. The Company assumes no duty or
obligation to update or revise any forward-looking statement, although
it may do so from time to time as management believes is warranted. Any
such updates or revisions may be made by filing reports with the
Securities and Exchange Commission, through the issuance of press
releases or by other methods of public disclosure.