Exhibit 99.1
WERNER ENTERPRISES, INC.
14507 Frontier Road
P. O. Box 45308
Omaha, Nebraska 68145
FOR IMMEDIATE RELEASE Contacts: John J. Steele
- --------------------- Executive Vice President, Treasurer and
Chief Financial Officer
(402) 894-3036
Robert E. Synowicki, Jr.
Executive Vice President and
Chief Information Officer
(402) 894-3350
WERNER ENTERPRISES REPORTS GROWTH IN FIRST QUARTER 2010 REVENUES AND
EARNINGS
Omaha, Nebraska, April 19, 2010:
- -------------------------------
Werner Enterprises, Inc. (NASDAQ:WERN), one of the nation's largest
transportation and logistics companies, reported revenues and earnings
for the first quarter ended March 31, 2010.
Revenues increased 8% to $425.1 million in first quarter 2010
compared to $394.5 million in first quarter 2009. Trucking revenues,
excluding fuel surcharges, decreased 1% to $303.7 million in first
quarter 2010 compared to $308.0 million in first quarter 2009. Value
Added Services ("VAS") revenues increased 29% to $61.4 million in first
quarter 2010 compared to $47.5 million in first quarter 2009. Earnings
per diluted share increased 56% to 15 cents per share in first quarter
2010 compared to 10 cents per share in first quarter 2009.
In first quarter 2010, our daily pre-books (ratio of loads to
trucks) in our one-way truckload fleets were significantly better than
first quarter 2009, which was one of the weakest freight quarters in the
last twenty years. Our daily number of accepted loads in first quarter
2010 was also better than first quarter 2009, 2008 and 2007 and trended
similar to first quarter 2006. As a result of improved load counts,
pricing for our spot market business in one-way truckload (a small
percentage of our total revenue base) improved significantly during
first quarter 2010. Pricing for the much larger book of contractual
business remains competitive but is clearly beginning to improve. We
are in the early stages of upgrading our freight mix and are becoming
more selective with our freight choices. We intend to keep our fleet
size constant at approximately 7,300 trucks for the foreseeable future
and focus on improving our returns on assets and invested capital with
the goal of raising our revenue per mile and equipment utilization,
while also maintaining the cost improvements we achieved over the past
year.
We believe that more of the recent improvement in the freight
market can be attributed to decreasing supply than rising demand. We
have observed an increase in the size and quantity of carrier failures
in recent months. Gradually improving demand is also helping, and we
anticipate that steady improvement will continue as we progress
throughout 2010.
We managed through some near term cost challenges in first quarter
2010. The extreme weather conditions that occurred during January and
February 2010 negatively impacted our miles per truck, increased our
maintenance costs, and lowered our miles per gallon ("mpg") due to
increased engine idling. In addition, the significant year-over-year
increase in the price of fuel negatively impacted results. Increased
unemployment taxes resulting from states raising their unemployment tax
rates reduced earnings by one cent per share in first quarter 2010
compared to first quarter 2009.
Werner continues to diversify its business model with the goal of a
balanced portfolio of One-Way Truckload (which includes the Regional,
medium-to-long-haul Van and Expedited fleets), Dedicated and Logistics.
The Company's specialized services division, primarily Dedicated, grew
150 trucks during the quarter to 3,450 trucks as a result of new
customer business awards.
Diesel fuel prices were 72 cents a gallon higher in first quarter
2010 than in first quarter 2009, and were 8 cents per gallon higher than
fourth quarter 2009. For the first 19 days of April, the average diesel
fuel price per gallon was 84 cents higher than the average diesel fuel
price per gallon in the same period of 2009 and 71 cents higher than in
second quarter 2009.
The Company's fuel management programs continued to yield positive
results, despite challenging winter weather conditions for part of the
quarter. Due strictly to mpg improvements from our fuel management
programs, Werner purchased 0.9 million fewer gallons of diesel fuel in
first quarter 2010 compared to first quarter 2009. This fuel savings
alone reduced the Company's carbon emissions in first quarter 2010
compared to first quarter 2009 by over 10,000 tons. First quarter 2010
marked the twelfth consecutive quarter of fuel mpg improvement on a
year-over-year basis.
In mid-2009, the Company intensified its focus and investment in
its safety program, which continued to yield improved insurance and
claims results. Cost per mile declined 21% to 8.0 cents in first
quarter 2010 compared to 10.1 cents in first quarter 2009. The Company
experienced both a lower frequency and severity of claims and improved
loss development on older claims in first quarter 2010 compared to first
quarter 2009.
The Company realized gains on sales of assets of $1.1 million in
first quarter 2010 compared to $0.7 million in first quarter 2009 and
$1.3 million in fourth quarter 2009, primarily from trucks and trailers
sold by Werner's wholly-owned subsidiary, Fleet Truck Sales. Buyer
demand for used trucks remains low, but we believe the market has
stabilized. 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, Werner continues to develop its non-asset-based VAS
segment. VAS includes Brokerage, Freight Management, Intermodal and
Werner Global Logistics (international).
Value Added Services (amounts in 000's) 1Q10 1Q09
- --------------------------------------- --------------- ---------------
Revenues $61,400 100.0% $47,473 100.0%
Rent and purchased transportation expense 51,949 84.6 39,438 83.1
------- -------
Gross margin 9,451 15.4 8,035 16.9
Other operating expenses 6,367 10.4 6,302 13.3
------- -------
Operating income $3,084 5.0 $1,733 3.6
======= =======
The following table shows the change in shipment volume and average
revenue (excluding logistics fee revenue) per shipment for all VAS
shipments.
1Q10 1Q09 Difference % Change
-------- -------- ---------- --------
Total VAS shipments 66,825 54,515 12,310 23%
Less: Non-committed shipments to
Truckload segment (26,311) (19,637) (6,674) 34%
-------- -------- ----------
Net VAS shipments 40,514 34,878 5,636 16%
======== ======== ==========
Average revenue per shipment $1,309 $1,279 $30 2%
======== ======== ==========
In first quarter 2010, VAS revenues increased 29%, gross margin
dollars increased 18% and operating income increased 78% compared to
first quarter 2009. Brokerage revenues in first quarter 2010 increased
28% compared to first quarter 2009 due to an increased volume of
shipments, while gross margin dollars grew at a lower percentage rate
due to the higher cost of carrier capacity. Brokerage operating income
in first quarter 2010 increased 48% compared to first quarter 2009 due
to increased productivity in the brokerage network. Intermodal revenues
increased, gross margin percentage did not change, and operating results
improved. Werner Global Logistics revenues and operating income
increased significantly during first quarter 2010 compared to first
quarter 2009 while the gross margin percentage decreased slightly. The
higher revenues and operating income are due to an increase in the
volume of international shipments related to a specific international
project.
Comparisons of the operating ratios (net of fuel surcharge
revenues) for the Truckload segment and VAS segment for first quarters
2010 and 2009 are shown below.
Operating Ratios 1Q10 1Q09 Difference
- ---------------- ------- ------- ----------
Truckload Transportation Services 95.2% 97.1% (1.9)%
Value Added Services 95.0 96.4 (1.4)
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 2010 and first quarter 2009 are 96.0% and 97.4%,
respectively, when fuel surcharge revenues are reported as revenues
instead of a reduction of operating expenses.
During 2010, Werner Enterprises was pleased to receive two
recognition awards. First, Werner Enterprises was named by Fortune as
one of the World's Most Admired Companies. The ranking was based on
results from a survey that rated companies in nine key areas:
innovation, people management, use of corporate assets, social
responsibility, quality of management, financial soundness, long-term
investment, quality of product/services and global competitiveness.
Second, Werner Enterprises was named by Forbes to the list of 100 Most
Trustworthy Companies, ranking second in the mid-cap category. Werner
was chosen for demonstrating transparent and conservative accounting
practices and solid corporate governance and management, as ranked by
Audit Integrity, an independent financial analytics company. We
recognize and appreciate our employees for helping us earn these
prestigious awards.
The Company's financial position remains strong. The Company ended
the quarter with no debt and $73.1 million of cash.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
3/31/10 Revenues 3/31/09 Revenues
----------- ----------- ----------- -----------
Operating revenues $425,075 100.0 $394,508 100.0
----------- ----------- ----------- -----------
Operating expenses:
Salaries, wages and benefits 128,334 30.2 134,186 34.0
Fuel 73,881 17.4 51,610 13.1
Supplies and maintenance 37,676 8.9 37,897 9.6
Taxes and licenses 23,457 5.5 24,395 6.2
Insurance and claims 16,838 3.9 21,665 5.5
Depreciation 38,285 9.0 40,094 10.1
Rent and purchased transportation 84,685 19.9 68,593 17.4
Communications and utilities 3,749 0.9 4,402 1.1
Other (94) (0.0) 410 0.1
----------- ----------- ----------- -----------
Total operating expenses 406,811 95.7 383,252 97.1
----------- ----------- ----------- -----------
Operating income 18,264 4.3 11,256 2.9
----------- ----------- ----------- -----------
Other expense (income):
Interest expense 9 0.0 76 0.0
Interest income (337) (0.1) (489) (0.1)
Other (11) (0.0) (272) (0.0)
----------- ----------- ----------- -----------
Total other expense (income) (339) (0.1) (685) (0.1)
----------- ----------- ----------- -----------
Income before income taxes 18,603 4.4 11,941 3.0
Income taxes 7,767 1.9 5,045 1.3
----------- ----------- ----------- -----------
Net income $10,836 2.5 $6,896 1.7
=========== =========== =========== ===========
Diluted shares outstanding 72,545 71,944
=========== ===========
Diluted earnings per share $.15 $.10
=========== ===========
OPERATING STATISTICS
Quarter Ended Quarter Ended
3/31/10 % Change 3/31/09
------------- -------- -------------
Trucking revenues, net of fuel surcharge (1) $303,668 -1.4% $307,976
Trucking fuel surcharge revenues (1) 55,059 58.9% 34,653
Non-trucking revenues, including VAS (1) 63,188 29.8% 48,669
Other operating revenues (1) 3,160 -1.6% 3,210
------------- -------------
Operating revenues (1) $425,075 7.7% $394,508
============= =============
Average monthly miles per tractor 9,769 2.3% 9,550
Average revenues per total mile (2) $1.437 -0.1% $1.438
Average revenues per loaded mile (2) $1.629 -2.0% $1.662
Average percentage of empty miles 11.80% -12.6% 13.50%
Average trip length in miles (loaded) 456 -2.8% 469
Total miles (loaded and empty) (1) 211,315 -1.3% 214,170
Average tractors in service 7,211 -3.5% 7,475
Average revenues per tractor per week (2) $3,239 2.2% $3,169
Capital expenditures, net (1) $10,874 $43,592
Cash flow from operations (1) $64,962 $76,605
Return on assets (annualized) 3.7% 2.2%
Total tractors (at quarter end)
Company 6,575 6,675
Independent contractor 675 700
------------- -------------
Total tractors 7,250 7,375
Total trailers (truck and intermodal, quarter end) 23,730 24,885
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
3/31/10 12/31/09
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $73,059 $18,430
Accounts receivable, trade, less allowance
of $9,330 and $9,167, respectively 184,102 180,740
Other receivables 22,668 10,366
Inventories and supplies 12,832 12,725
Prepaid taxes, licenses and permits 11,319 14,628
Current deferred income taxes 24,869 24,808
Other current assets 22,906 22,807
------------- -------------
Total current assets 351,755 284,504
------------- -------------
Property and equipment 1,542,422 1,580,711
Less - accumulated depreciation 707,946 708,809
------------- -------------
Property and equipment, net 834,476 871,902
------------- -------------
Other non-current assets 16,585 16,603
------------- -------------
$1,202,816 $1,173,009
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $51,813 $47,056
Insurance and claims accruals 66,502 65,667
Accrued payroll 24,602 17,567
Income taxes payable 11,912 -
Other current liabilities 18,192 16,451
------------- -------------
Total current liabilities 173,021 146,741
------------- -------------
Other long-term liabilities 9,053 8,760
Insurance and claims accruals,
net of current portion 114,500 113,500
Deferred income taxes 190,137 199,358
Stockholders' equity:
Common stock, $.01 par value, 200,000,000
shares authorized; 80,533,536 shares
issued; 72,073,121 and 71,896,512 shares
outstanding, respectively 805 805
Paid-in capital 92,222 92,389
Retained earnings 786,123 778,890
Accumulated other comprehensive loss (4,378) (5,556)
Treasury stock, at cost; 8,460,415 and
8,637,024 shares, respectively (158,667) (161,878)
------------- -------------
Total stockholders' equity 716,105 704,650
------------- -------------
$1,202,816 $1,173,009
============= =============
Werner Enterprises, Inc. was founded in 1956 and is a premier
transportation and logistics company, with coverage throughout North
America, Asia, Europe, South America, Africa and Australia. Werner
maintains its global headquarters in Omaha, Nebraska and maintains
offices in the United States, Canada, Mexico, China and Australia.
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 may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended. Such forward-
looking statements are based on information presently available to the
Company's management and are current only as of the date made. 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, 2009. For those reasons, undue reliance should not be
placed on any such forward-looking statement. 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 or as may be required by applicable securities law. Any such
updates or revisions may be made by filing reports with the U.S.
Securities and Exchange Commission, through the issuance of press
releases or by other methods of public disclosure.