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 GROWTH IN FIRST QUARTER
2011 REVENUES AND EARNINGS
Omaha, Nebraska, April 20, 2011:
-------------------------------
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, 2011.
Summarized financial results for first quarter 2011 compared to
first quarter 2010 are as follows (dollars in thousands, except per
share data):
1Q11 1Q10 % Change
-------- -------- --------
Total revenues $469,429 $425,075 10%
Trucking revenues, net
of fuel surcharge $316,447 $303,668 4%
Value Added Services
("VAS") revenues $63,573 $61,400 4%
Operating income $27,442 $18,264 50%
Net income $16,293 $10,836 50%
Earnings per diluted share $0.22 $0.15 49%
Despite the recent cost headwinds of three unusually severe winter
storms during the first five weeks of first quarter 2011 and rising
diesel fuel prices during the latter part of first quarter 2011, Werner
Enterprises produced 49% earnings per share growth in first quarter 2011
compared to first quarter 2010.
In first quarter 2011, freight trends in our One-Way Truckload
business improved significantly beginning the second week of February to
levels higher than 2010 and improved further in March. Our Midwest
freight demand was particularly strong, followed closely by most of our
other domestic geographic areas, except for the West which showed less
strength. We are encouraged by recently improving truckload freight
trends, which we believe are caused to a greater degree by industry
capacity constraints than economic recovery.
Our average revenues per total mile increased 4.5% in first quarter
2011 compared to first quarter 2010. This increase was the result of
customer contractual rate increases, freight mix improvement and
unusually strong customer demand for truck capacity in the latter part
of first quarter 2011. This resulted in significant customer capacity
charges for repositioning trucks from other regions and providing
additional trucks above committed levels. We have been very successful
in this tightening capacity environment in working jointly with our
customers to secure sustainable solutions across all modes. We are
committed to maintaining our fleet count at approximately 7,300 trucks.
We remain focused on expanding our operating margin to raise our returns
on assets, equity and invested capital, while staying true to our
expanded portfolio of services for our customers.
The gap between the lower market value of an aged industry truck
fleet and the higher cost of environmentally-friendly new trucks has
never been wider. It is extremely difficult for many carriers to access
the required capital to simply replace their existing truck fleets with
new trucks. As a result, it is anticipated these capital constraints
will restrict industry truck growth and may cause the number of trucks
in the industry to decline.
As noted in detail in our fourth quarter 2010 earnings release, the
most dramatic safety regulatory changes in our company's 55-year history
are all occurring over the next three years. The Compliance Safety
Accountability program, proposed changes to the hours of service
regulations for commercial truck drivers and the proposed required use
of electronic on-board recorders on virtually all trucks are all
expected to reduce, or have the effect of reducing, industry capacity.
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). Our specialized services unit, primarily
Dedicated, ended the quarter with 3,600 trucks (49% of our total fleet).
Average diesel fuel prices were 78 cents per gallon higher in first
quarter 2011 than in first quarter 2010 and were 46 cents per gallon
higher than in fourth quarter 2010. For the first 20 days of April
2011, the average diesel fuel price per gallon was $1.00 higher than the
average diesel fuel price per gallon in the same period of 2010 and
$1.11 higher than in second quarter 2010. Diesel fuel prices have risen
significantly since the last week of February 2011 compared to the
falling prices in second quarter 2010. When fuel prices rise rapidly, a
negative earnings lag occurs because the cost of fuel rises immediately
and the market indexes used to determine fuel surcharges increase at a
slower pace. In a period of declining fuel prices, we generally
experience a temporary favorable earnings effect because the fuel costs
decline at a faster pace than the market indexes used to determine fuel
surcharge collections.
We continue to make meaningful progress improving our fuel miles
per gallon ("mpg") by controlling truck idling and implementing fuel mpg
enhancing equipment changes to our fleet. We continue to invest in
environmentally friendly and fuel-saving equipment solutions such as
aerodynamic trucks, idling reduction systems, tire inflation systems and
trailer skirts to reduce our fuel gallons purchased and improve our fuel
mpg.
The driver recruiting and retention market remains competitive. An
improved freight market, extended unemployment benefit programs,
changing industry safety regulations and reduced financing options for
driving school candidates continue to tighten qualified and student
driver supply. We expect driver market challenges to increase as the
year progresses. We continue to believe our position in the current
driver market is better than that of many competitors because over 70%
of our driving jobs reside in more attractive, shorter-haul Regional and
Dedicated fleet operations that enable us to return these drivers to
their homes on a more frequent and consistent basis.
Gains on sales of equipment were $4.8 million in first quarter 2011
compared to $1.1 million in first quarter 2010 and $2.8 million in
fourth quarter 2010. Our premium used trucks are increasingly more
attractive to fleets that want to upgrade their older trucks without
incurring the higher cost of new trucks. Gains on sales are reflected
as a reduction of Other Operating Expenses in our income statement.
In 2011, we are purchasing trucks with 2010-standard engines to
replace older trucks that we sell or trade. We remain committed to the
ongoing investment required to maintain a best-in-class fleet while
focusing on the lowest-cost operating model for our customers. We
expect to purchase new trucks and trailers for fleet replacement in
2011, with an estimated net capital expenditure of $150 million to $200
million. This compares to net capital expenditures of $119 million in
2010. We expect these purchases to reduce the average age of our
company truck fleet from 2.8 years at the end of 2010 to approximately
2.5 years by the end of 2011.
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) 1Q11 1Q10
-------------------- --------------- ---------------
Revenues $63,573 100.0% $61,400 100.0%
Rent and purchased
transportation expense 53,332 83.9 51,949 84.6
------- -------
Gross margin 10,241 16.1 9,451 15.4
Other operating expenses 6,831 10.7 6,367 10.4
------- -------
Operating income $3,410 5.4 $3,084 5.0
======= =======
The following table shows the change in shipment volume and average
revenue (excluding logistics fee revenue) per shipment for all VAS
shipments.
1Q11 1Q10 Difference % Change
------ ------ ---------- --------
Total VAS shipments 58,246 66,825 (8,579) (13)%
Less: Non-committed
shipments to Truckload
segment 18,405 26,311 (7,906) (30)%
------ ------ ----------
Net VAS shipments 39,841 40,514 (673) (2)%
====== ====== ==========
Average revenue per
shipment $1,500 $1,309 $191 15%
====== ====== ==========
In first quarter 2011, VAS revenues increased 4%, gross margin
dollars increased 8% and operating income dollars increased 11% compared
to first quarter 2010.
Brokerage revenues in first quarter 2011 increased 22% compared to
first quarter 2010 due primarily to increased shipment volume.
Brokerage gross margin dollars increased at the same rate as the gross
margin percentage remained constant year-over-year, and operating income
increased at a higher percentage rate. Sequentially, the Brokerage
gross margin percentage improved to 13.7% in first quarter 2011 from
13.1% in fourth quarter 2010. Intermodal revenues increased 26% while
intermodal gross margins and operating income increased at a higher
percentage rate, comparing first quarter 2011 to first quarter 2010.
Werner Global Logistics revenues declined 39% and operating results also
declined in first quarter 2011 compared to first quarter 2010, but
improved sequentially over fourth quarter 2010. The first quarter 2010
to first quarter 2011 decline is attributed to a decrease in the number
of 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 first quarters
2011 and 2010 are shown below.
Operating Ratios 1Q11 1Q10 Difference
---------------- ----- ----- ----------
Truckload Transportation Services 92.4% 95.2% (2.8)%
Value Added Services 94.6 95.0 (0.4)
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 2011 and first quarter 2010 are 94.0% 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 the quarter with
no debt and $47.6 million of cash.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
3/31/11 Revenues 3/31/10 Revenues
----------- ----------- ----------- -----------
Operating revenues $469,429 100.0 $425,075 100.0
----------- ----------- ----------- -----------
Operating expenses:
Salaries, wages and benefits 132,863 28.3 128,334 30.2
Fuel 97,931 20.9 73,881 17.4
Supplies and maintenance 41,189 8.8 37,676 8.9
Taxes and licenses 23,026 4.9 23,457 5.5
Insurance and claims 18,060 3.8 16,838 3.9
Depreciation 39,718 8.5 38,285 9.0
Rent and purchased transportation 88,497 18.9 84,685 19.9
Communications and utilities 3,923 0.8 3,749 0.9
Other (3,220) (0.7) (94) (0.0)
----------- ----------- ----------- -----------
Total operating expenses 441,987 94.2 406,811 95.7
----------- ----------- ----------- -----------
Operating income 27,442 5.8 18,264 4.3
----------- ----------- ----------- -----------
Other expense (income):
Interest expense 28 0.0 9 0.0
Interest income (345) (0.1) (337) (0.1)
Other 26 0.0 (11) (0.0)
----------- ----------- ----------- -----------
Total other expense (income) (291) (0.1) (339) (0.1)
----------- ----------- ----------- -----------
Income before income taxes 27,733 5.9 18,603 4.4
Income taxes 11,440 2.4 7,767 1.9
----------- ----------- ----------- -----------
Net income $16,293 3.5 $10,836 2.5
=========== =========== =========== ===========
Diluted shares outstanding 73,138 72,545
=========== ===========
Diluted earnings per share $.22 $.15
=========== ===========
OPERATING STATISTICS
Quarter Ended Quarter Ended
3/31/11 % Change 3/31/10
------------- -------- -------------
Trucking revenues, net of fuel surcharge (1) $316,447 4.2% $303,668
Trucking fuel surcharge revenues (1) 83,273 51.2% 55,059
Non-trucking revenues, including VAS (1) 66,165 4.7% 63,188
Other operating revenues (1) 3,544 12.2% 3,160
------------- -------------
Operating revenues (1) $469,429 10.4% $425,075
============= =============
Average monthly miles per tractor 9,705 -0.7% 9,769
Average revenues per total mile (2) $1.502 4.5% $1.437
Average revenues per loaded mile (2) $1.693 3.9% $1.629
Average percentage of empty miles 11.26% -4.6% 11.80%
Average trip length in miles (loaded) 450 -1.3% 456
Total miles (loaded and empty) (1) 210,634 -0.3% 211,315
Average tractors in service 7,235 0.3% 7,211
Average revenues per tractor per week (2) $3,364 3.9% $3,239
Capital expenditures, net (1) $20,054 $10,874
Cash flow from operations (1) $53,800 $64,962
Return on assets (annualized) 5.6% 3.7%
Total tractors (at quarter end)
Company 6,645 6,575
Independent contractor 655 675
------------- -------------
Total tractors 7,300 7,250
Total trailers (truck and intermodal, quarter end) 23,530 23,730
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
3/31/11 12/31/10
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $47,599 $13,966
Accounts receivable, trade, less allowance
of $9,907 and $9,484, respectively 210,565 190,264
Other receivables 10,130 10,431
Inventories and supplies 21,201 16,868
Prepaid taxes, licenses and permits 11,095 14,934
Current deferred income taxes 28,456 27,829
Other current assets 21,842 23,407
------------- -------------
Total current assets 350,888 297,699
------------- -------------
Property and equipment 1,538,017 1,549,637
Less - accumulated depreciation 710,609 708,582
------------- -------------
Property and equipment, net 827,408 841,055
------------- -------------
Other non-current assets 12,151 12,798
------------- -------------
$1,190,447 $1,151,552
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $64,519 $57,708
Insurance and claims accruals 73,443 71,857
Accrued payroll 20,349 18,838
Other current liabilities 19,346 20,037
------------- -------------
Total current liabilities 177,657 168,440
------------- -------------
Other long-term liabilities 10,694 10,380
Insurance and claims accruals,
net of current portion 115,250 113,250
Deferred income taxes 201,841 190,507
Stockholders' equity:
Common stock, $.01 par value, 200,000,000
shares authorized; 80,533,536 shares
issued; 72,768,665 and 72,644,998 shares
outstanding, respectively 805 805
Paid-in capital 92,516 91,872
Retained earnings 740,870 728,216
Accumulated other comprehensive loss (2,872) (3,420)
Treasury stock, at cost; 7,764,871 and
7,888,538 shares, respectively (146,314) (148,498)
------------- -------------
Total stockholders' equity 685,005 668,975
------------- -------------
$1,190,447 $1,151,552
============= =============
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;
expedited; temperature-controlled; and flatbed services. Werner's Value
Added Services portfolio includes freight management, truck brokerage,
intermodal, and international services. International services are
provided through Werner's domestic and global subsidiary companies and
include ocean, air and ground transportation; freight forwarding; and
customs brokerage.
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,
2010. 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.