Exhibit 99.1
WERNER ENTERPRISES, INC.
14507 Frontier Road
P. O. Box 45308
Omaha, Nebraska 68145
FOR IMMEDIATE RELEASE Contact: John J. Steele
- --------------------- Executive Vice President, Treasurer and
Chief Financial Officer
(402) 894-3036
WERNER ENTERPRISES REPORTS IMPROVED SECOND QUARTER
2010 REVENUES AND EARNINGS
Omaha, Nebraska, July 21, 2010:
- ------------------------------
Werner Enterprises, Inc. (NASDAQ: WERN) one of the nation's largest
transportation and logistics companies, reported revenues and earnings
for the second quarter ended June 30, 2010. Highlights for second
quarter 2010 were:
* Operating revenues of $463.5 million, a 15% increase from second
quarter 2009.
* Trucking revenues, net of fuel surcharges, of $326.5 million, a 5%
increase from second quarter 2009.
* Value Added Services ("VAS") revenues of $65.1 million, a 29%
increase from second quarter of 2009.
* Operating ratio of 92.3%, a 220 basis points improvement from the
second quarter 2009 operating ratio of 94.5%.
* Earnings per diluted share of 29 cents, a 63% increase compared to
18 cents per diluted share in second quarter 2009.
Our freight shipment load counts continued to strengthen throughout
each month of second quarter 2010, in addition to the load count growth
that occurred in February and March 2010. Daily loads accepted in our
one-way truckload division in second quarter 2010 were better than
second quarter 2009, 2008 and 2007 and trended similar to second quarter
2006 levels. We remain committed to maintaining our total truck count
flat at approximately 7,300 trucks and are focusing on improving our
returns on assets, equity and capital. The improved freight market
conditions and our proactive fleet management decisions enabled us to be
more selective with our freight choices, resulting in improved miles per
truck, fewer empty miles, and a better rate per mile.
In addition to improved freight selection, much higher spot pricing
and some contractual rate increases contributed to our rate per total
mile improvement. Further contractual rate increases are expected in
the second half of 2010.
During second quarter 2010, we achieved the following operational
accomplishments:
* Average revenues per total mile increased 2.2% compared to second
quarter 2009 and increased 2.3% sequentially from first quarter
2010.
* Average monthly miles per tractor increased 3.5% compared to second
quarter 2009 and increased 4.6% sequentially from first quarter
2010.
* Average percentage of empty miles declined 135 basis points to
11.45% compared to second quarter 2009 and declined 35 basis points
sequentially from first quarter 2010.
* Total VAS shipments increased 19% compared to second quarter 2009
and increased 5% sequentially from first quarter 2010.
As we noted last quarter, we continue to believe that more of the
improvement in the freight market over the last six months can be
attributed to a decreasing supply of truck capacity rather than rising
demand, however both factors are helping the freight market improve.
Inventory restocking also appeared to improve demand in recent months,
particularly with many of our large retail customers. Our brokerage
data suggests that carrier failures have begun to slow in recent weeks
due to an improving freight market. However, we believe that many
carriers are aging their fleets due to the rising cost of new trucks and
inadequate rates. In addition, we believe the challenges of complying
with increased government regulations and a lack of available equipment
financing are proving difficult for smaller, private carriers.
We continue to diversify our business model with the goal of a
balanced portfolio of revenues comprised of One-Way Truckload (which
includes the Regional, medium-to-long-haul Van and Expedited fleets),
Dedicated and Logistics (VAS). The specialized services unit, primarily
Dedicated, continued its growth during second quarter 2010, ending the
quarter with 3,500 trucks (or 49% of our total fleet).
Diesel fuel prices were 60 cents per gallon higher in second
quarter 2010 than in second quarter 2009, and were 11 cents per gallon
higher than in first quarter 2010. For the first 21 days of July, the
average diesel fuel price per gallon was 39 cents higher than the
average diesel fuel price per gallon in the same period of 2009 and 24
cents higher than in third quarter 2009.
The driver market became more competitive in second quarter 2010,
due in part to the improved freight market and modified safety
regulations anticipated to become effective later this year for drivers
and trucking companies. While we are not immune to changes in the
driver market, our position in the market today is better than in prior
improving freight cycles, because today over 70% of our driving jobs are
in more attractive, shorter-haul Regional and Dedicated fleet operations
that enable these drivers to get home more frequently.
Our intensified focus and investment in our safety program
continues to result in improved insurance and claims costs. Insurance
and claims costs per mile declined 19% to 8.5 cents in second quarter
2010 compared to 10.5 cents in second quarter 2009. We experienced both
a lower frequency and severity of claims and improved loss development
on older claims in second quarter 2010 compared to second quarter 2009.
Gains on sales of assets were $0.5 million in second quarter 2010
compared to $0.4 million in second quarter 2009 and $1.1 million in
first quarter 2010. The market for the sale of used trucks and trailers
remains stable, but has not improved. Gains on sales are reflected as a
reduction of Other Operating Expenses in our income statement.
Because of the ongoing cost increases for new trucks and the weak
used truck market, we are extending the replacement cycle for company-
owned tractors. The average odometer miles of our company truck fleet
has increased 14% from June 30, 2009 to June 30, 2010, and we expect the
average miles may increase beyond current levels. The increased average
miles results in higher maintenance costs, including maintenance that is
not covered by warranty. Supplies and maintenance costs increased from
15.5 cents per mile in second quarter 2009 to 17.6 cents per mile in
second quarter 2010 partially due to the increase in the average miles
of the company truck fleet. Extending the replacement cycle avoids
higher depreciation from the more expensive trucks and offsets a portion
of the increased maintenance costs.
To provide shippers with additional sources of managed capacity and
network analysis, we continue to develop the non-asset-based VAS
segment. VAS includes Brokerage, Freight Management, Intermodal and
Werner Global Logistics (International).
Value Added Services (amounts in 000's) 2Q10 2Q09
- --------------------------------------- ---------------- ----------------
Revenues $65,066 100.0% $50,469 100.0%
Rent and purchased transportation expense 56,033 86.1 41,841 82.9
------- -------
Gross margin 9,033 13.9 8,628 17.1
Other operating expenses 6,687 10.3 5,837 11.6
------- -------
Operating income $2,346 3.6 $2,791 5.5
======= =======
The following table shows the change in shipment volume and average
revenue (excluding logistics fee revenue) per shipment for all VAS
shipments.
2Q10 2Q09 Difference % Change
------- ------- ---------- --------
Total VAS shipments 69,978 58,843 11,135 19%
Less: Non-committed shipments
to Truckload segment (26,514) (22,708) (3,806) 17%
------- ------- ----------
Net VAS shipments 43,464 36,135 7,329 20%
======= ======= ==========
Average revenue per shipment $1,332 $1,299 $33 3%
======= ======= ==========
In second quarter 2010, VAS revenues increased 29%, gross margin
dollars increased 5% and operating income dollars decreased 16% compared
to second quarter 2009. Brokerage revenues in second quarter 2010
increased 29% compared to second quarter 2009 due to an increased volume
of shipments and higher average revenue per shipment. Brokerage gross
margin dollars grew at a lower percentage rate, and the gross margin
percentage decreased 225 basis points due to the higher cost of carrier
capacity. Brokerage operating income dollars in second quarter 2010
increased 5% compared to second quarter 2009 due to the lower gross
margin percentage. Intermodal revenues, gross margin percentage, and
operating results improved. Werner Global Logistics revenues increased
significantly during second quarter 2010 compared to second quarter 2009
while the gross margin percentage and operating results decreased.
Compared to first quarter 2010, Werner Global Logistics revenues, gross
margin percentage and operating results declined due to a decrease in
the number of higher margin shipments related to several international
projects that ended during the latter part of second quarter 2010.
Comparisons of the operating ratios (net of fuel surcharge
revenues) for the Truckload segment and VAS segment for second quarters
2010 and 2009 and year-to-date 2010 and 2009 are shown below.
Operating Ratios 2Q10 2Q09 Difference
- ---------------- ------- ------- ----------
Truckload Transportation Services 90.2% 93.9% (3.7)%
Value Added Services 96.4 94.5 1.9
YTD10 YTD09 Difference
------- ------- ----------
Truckload Transportation Services 92.6% 95.5% (2.9)%
Value Added Services 95.7 95.4 0.3
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
second quarter 2010 and second quarter 2009 are 91.9% and 94.6%,
respectively, and for year-to-date 2010 and 2009 are 93.8% and 96.0%,
respectively, when fuel surcharge revenues are reported as revenues
instead of a reduction of operating expenses.
Our financial position remains strong. We ended second quarter
2010 with no debt and $79.2 million of cash. Stockholder's equity is
$736.9 million. Net capital expenditures for the six months ended June
30, 2010 were $52.3 million. We expect our net capital expenditures
(primarily revenue equipment) to be in the range of $90.0 million to
$120.0 million in 2010.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
6/30/10 Revenues 6/30/09 Revenues
----------- ----------- ----------- -----------
Operating revenues $463,469 100.0 $403,051 100.0
----------- ----------- ----------- -----------
Operating expenses:
Salaries, wages and benefits 134,303 29.0 128,385 31.8
Fuel 78,452 16.9 57,166 14.2
Supplies and maintenance 39,012 8.4 33,327 8.3
Taxes and licenses 23,560 5.1 23,962 5.9
Insurance and claims 18,869 4.1 22,591 5.6
Depreciation 37,471 8.1 39,214 9.7
Rent and purchased transportation 91,881 19.8 71,735 17.8
Communications and utilities 3,494 0.7 3,989 1.0
Other 881 0.2 672 0.2
----------- ----------- ----------- -----------
Total operating expenses 427,923 92.3 381,041 94.5
----------- ----------- ----------- -----------
Operating income 35,546 7.7 22,010 5.5
----------- ----------- ----------- -----------
Other expense (income):
Interest expense 3 0.0 3 0.0
Interest income (355) (0.0) (437) (0.0)
Other (33) (0.0) 20 0.0
----------- ----------- ----------- -----------
Total other expense (income) (385) (0.0) (414) (0.0)
----------- ----------- ----------- -----------
Income before income taxes 35,931 7.7 22,424 5.5
Income taxes 15,001 3.2 9,732 2.4
----------- ----------- ----------- -----------
Net income $20,930 4.5 $12,692 3.1
=========== =========== =========== ===========
Diluted shares outstanding 72,767 72,010
=========== ===========
Diluted earnings per share $.29 $.18
=========== ===========
OPERATING STATISTICS
Quarter Ended Quarter Ended
6/30/10 % Change 6/30/09
------------- -------- -------------
Trucking revenues, net of fuel surcharge (1) $326,518 5.3% $310,066
Trucking fuel surcharge revenues (1) 66,245 72.0% 38,506
Non-trucking revenues, including VAS (1) 66,842 29.9% 51,446
Other operating revenues (1) 3,864 27.4% 3,033
------------- -------------
Operating revenues (1) $463,469 15.0% $403,051
============= =============
Average monthly miles per tractor 10,222 3.5% 9,874
Average revenues per total mile (2) $1.470 2.2% $1.439
Average revenues per loaded mile (2) $1.660 0.5% $1.651
Average percentage of empty miles 11.45% -10.5% 12.80%
Average trip length in miles (loaded) 452 -0.9% 456
Total miles (loaded and empty) (1) 222,139 3.1% 215,412
Average tractors in service 7,244 -0.4% 7,272
Average revenues per tractor per week (2) $3,467 5.7% $3,280
Capital expenditures, net (1) $41,441 $(16,847)
Cash flow from operations (1) $46,454 $23,745
Return on assets (annualized) 6.9% 4.1%
Total tractors (at quarter end)
Company 6,515 6,615
Owner-operator 695 670
------------- -------------
Total tractors 7,210 7,285
Total trailers (truck and intermodal, quarter end) 23,900 24,515
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Six Months % of Six Months % of
Ended Operating Ended Operating
6/30/10 Revenues 6/30/09 Revenues
----------- ----------- ----------- -----------
Operating revenues $888,544 100.0 $797,559 100.0
----------- ----------- ----------- -----------
Operating expenses:
Salaries, wages and benefits 262,637 29.6 262,571 32.9
Fuel 152,333 17.1 108,776 13.6
Supplies and maintenance 76,688 8.6 71,224 8.9
Taxes and licenses 47,017 5.3 48,357 6.1
Insurance and claims 35,707 4.0 44,256 5.6
Depreciation 75,756 8.5 79,308 9.9
Rent and purchased transportation 176,566 19.9 140,328 17.6
Communications and utilities 7,243 0.8 8,391 1.1
Other 787 0.1 1,082 0.1
----------- ----------- ----------- -----------
Total operating expenses 834,734 93.9 764,293 95.8
----------- ----------- ----------- -----------
Operating income 53,810 6.1 33,266 4.2
----------- ----------- ----------- -----------
Other expense (income):
Interest expense 12 0.0 79 0.0
Interest income (692) (0.0) (926) (0.1)
Other (44) (0.0) (252) (0.0)
----------- ----------- ----------- -----------
Total other expense (income) (724) (0.0) (1,099) (0.1)
----------- ----------- ----------- -----------
Income before income taxes 54,534 6.1 34,365 4.3
Income taxes 22,768 2.5 14,777 1.8
----------- ----------- ----------- -----------
Net income $31,766 3.6 $19,588 2.5
=========== =========== =========== ===========
Diluted shares outstanding 72,658 71,962
=========== ===========
Diluted earnings per share $.44 $.27
=========== ===========
OPERATING STATISTICS
YTD 10 % Change YTD 09
------------- -------- -------------
Trucking revenues, net of fuel surcharge (1) $630,186 2.0% $618,042
Trucking fuel surcharge revenues (1) 121,304 65.8% 73,159
Non-trucking revenues, including VAS (1) 130,030 29.9% 100,115
Other operating revenues (1) 7,024 12.5% 6,243
------------- -------------
Operating revenues (1) $888,544 11.4% $797,559
============= =============
Average monthly miles per tractor 9,996 2.9% 9,710
Average revenues per total mile (2) $1.454 1.0% $1.439
Average revenues per loaded mile (2) $1.645 -0.7% $1.656
Average percentage of empty miles 11.62% -11.6% 13.15%
Average trip length in miles (loaded) 454 -1.9% 463
Total miles (loaded and empty) (1) 433,454 0.9% 429,582
Average tractors in service 7,227 -2.0% 7,374
Average revenues per tractor per week (2) $3,353 4.0% $3,224
Capital expenditures, net (1) $52,315 $26,745
Cash flow from operations (1) $111,416 $100,350
Return on assets (annualized) 5.3% 3.1%
Total tractors (at quarter end)
Company 6,515 6,615
Owner-operator 695 670
------------- -------------
Total tractors 7,210 7,285
Total trailers (truck and intermodal, quarter end) 23,900 24,515
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
6/30/10 12/31/09
----------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $79,193 $18,430
Accounts receivable, trade, less
allowance of $9,260 and $9,167,
respectively 191,805 180,740
Other receivables 10,033 10,366
Inventories and supplies 12,847 12,725
Prepaid taxes, licenses and permits 6,989 14,628
Current deferred income taxes 25,526 24,808
Other current assets 21,692 22,807
----------- -----------
Total current assets 348,085 284,504
----------- -----------
Property and equipment 1,563,148 1,580,711
Less - accumulated depreciation 713,193 708,809
----------- -----------
Property and equipment, net 849,955 871,902
----------- -----------
Other non-current assets 11,932 16,603
----------- -----------
$1,209,972 $1,173,009
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $53,922 $47,056
Insurance and claims accruals 61,381 65,667
Accrued payroll 28,187 17,567
Other current liabilities 20,688 16,451
----------- -----------
Total current liabilities 164,178 146,741
----------- -----------
Other long-term liabilities 9,085 8,760
Insurance and claims accruals,
net of current portion 116,500 113,500
Deferred income taxes 183,295 199,358
Stockholders' equity:
Common stock, $.01 par value,
200,000,000 shares authorized;
80,533,536 shares issued;
72,348,496 and 71,896,512 shares
outstanding, respectively 805 805
Paid-in capital 91,581 92,389
Retained earnings 803,435 778,890
Accumulated other comprehensive loss (5,129) (5,556)
Treasury stock, at cost; 8,185,040
and 8,637,024 shares, respectively (153,778) (161,878)
----------- -----------
Total stockholders' equity 736,914 704,650
----------- -----------
$1,209,972 $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.
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
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.