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 FIRST QUARTER 2012 REVENUES AND
EARNINGS
Omaha, Nebraska, April 18, 2012:
-------------------------------
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, 2012.
Summarized financial results for first quarter 2012 compared to
first quarter 2011 are as follows (dollars in thousands, except per
share data):
1Q12 1Q11 % Change
-------- -------- --------
Total revenues $498,376 $469,429 6%
Trucking revenues, net
of fuel surcharge $321,226 $316,447 2%
Value Added Services
("VAS") revenues $76,754 $63,573 21%
Operating income $35,402 $27,442 29%
Net income $21,245 $16,293 30%
Earnings per diluted share $0.29 $0.22 30%
Werner Enterprises achieved 30% earnings growth in first quarter
2012 compared to first quarter 2011, the ninth consecutive quarter in
which Werner attained year-over-year earnings growth in excess of 20%.
We owe these strong results to the continued excellence, dedication and
commitment of our 12,000 Werner associates and to our loyal customers.
First quarter 2012 freight demand (as measured by our daily morning
ratio of loads to trucks in our One-Way Truckload network) exhibited
typical seasonal freight trends and gradually improved from January to
February to March. Freight trends in first quarter 2012 were more
steady and balanced throughout the U.S. geographic network compared to
first quarter 2011. Unusually mild winter weather throughout much of
the U.S. in first quarter 2012 compared favorably to more severe winter
weather trends in first quarter 2011. This had a modest positive impact
on operational efficiency and certain operating costs in first quarter
2012 compared to first quarter 2011. To date in April 2012, we are
experiencing normal seasonal freight improvement compared to March 2012.
We continue to believe that favorable truckload demand trends are caused
to a greater degree by supply side constraints limiting truckload
capacity, as compared to growing demand generated by increased economic
activity.
Pent-up freight demand from severe winter storms in the first five
weeks of first quarter 2011 contributed to unusually strong customer
demand for truck capacity in the latter part of first quarter 2011.
This resulted in higher spot market rates and significant customer
capacity charges for repositioning trucks and providing trucks above
committed levels, both of which aided in improving revenue per total
mile in first quarter 2011. As a result, average revenues per total
mile, net of fuel surcharge, increased 2.6% in first quarter 2012
compared to first quarter 2011. Due in part to certain large seasonal
projects in fourth quarter 2011 that did not continue into the
seasonally softer first quarter 2012, our average revenues per total
mile declined 1.8% sequentially, when comparing first quarter 2012 to
fourth quarter 2011. Contractual rate increase awards year to date in
2012 are similar to percentage increases in the same period of 2011. We
continue to be successful in this tightening capacity environment by
working jointly with our customers to secure sustainable transportation
solutions across all modes.
In the last half of 2011, we operated slightly below our fleet goal
of 7,300 trucks due to the more challenging driver market, and we ended
2011 with 7,200 trucks. Our entire team worked closely together to
increase our truck count to the 7,300 level, and we achieved this during
the final week of first quarter 2012. We intend to maintain our fleet
size at approximately this level. Our primary objectives continue to be
expanding our operating margin percentage and improving our returns on
assets, equity and invested capital, while staying true to our broad
transportation services portfolio.
Capacity in our industry remains constrained by economic, safety
and regulatory factors. From 2007 to 2010, the number of new class 8
trucks built was well below historical replacement levels for our
industry. This led to the oldest average industry truck age in 40
years. Carriers were compelled to begin upgrading their aging truck
fleets, which led to increased replacement purchases of new and later-
model used trucks during 2011. However, we do not believe that industry
fleet growth is occurring, as some carriers are already struggling to
finance the replacement truck upgrade due to the large pricing gap
between the significantly increased costs of EPA-compliant new trucks
compared to the lower value of record-old trucks. For example, for a
newer fleet such as ours, the average cost of the new trucks we
purchased in first quarter 2012 was approximately 30% higher than the
original purchase price of our used trucks sold in first quarter 2012.
We continue to diversify our business model with the goal of
achieving a balanced portfolio of revenues comprised of One-Way
Truckload (which includes the Regional, medium-to-long-haul Van and
Expedited fleets), Specialized Services and Logistics (VAS). Our
Specialized Services unit, primarily Dedicated, ended the quarter with
3,525 trucks (or 48% of our total fleet).
Diesel fuel prices were 30 cents per gallon higher in first quarter
2012 than in first quarter 2011 and were 13 cents per gallon higher than
in fourth quarter 2011. For the first 18 days of April 2012, the
average diesel fuel price per gallon was 4 cents lower than the average
diesel fuel price per gallon in the same period of 2011 and 10 cents
higher than in second quarter 2011.
The driver recruiting and retention market remained challenging in
first quarter 2012 and was comparable to the driver market in fourth
quarter 2011. Assuming the domestic economy strengthens, we anticipate
the driver market will become more challenging as we progress through
2012. While historically higher national unemployment rates have aided
our driver recruiting and retention efforts, we believe that an improved
freight market, extended unemployment benefit payment programs, a
reduction in available truck driving school graduates and changing
industry safety regulations are tightening driver supply. While we are
not immune to fluctuations in the driver market, we continue to believe
we are in a better position in the current market than many competitors
because over 70% of our driving jobs are 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 assets were $4.7 million in first quarter 2012
compared to $4.8 million in both first quarter 2011 and fourth quarter
2011. The market for the sale of used trucks and trailers remains
strong. Gains on sales are reflected as a reduction of Other Operating
Expenses in our income statement.
We continue to buy new trucks to replace older trucks we sell or
trade. We continue to invest in environmentally friendly equipment
solutions such as more aerodynamic truck features, idle reduction
systems, tire inflation systems and trailer skirts. Over the last three
years, Werner Enterprises has reduced its annual carbon footprint by
almost 150,000 tons. Our net capital expenditures in first quarter 2012
were $83 million. We expect our net capital expenditures for the full
year 2012 to be in a range of $160 million to $210 million. During
2011, we reduced the average age of our company truck fleet from 2.8
years at December 31, 2010 to 2.4 years at December 31, 2011. We
reduced our average truck age to 2.3 years as of March 31, 2012 and
expect to further reduce our average truck age to approximately 2.1
years as of December 31, 2012. We remain committed to the ongoing
investment required to maintain a best-in-class fleet while focusing on
the lowest operating cost model for our customers.
To provide shippers with additional sources of managed capacity and
network analysis, we continue to develop our non-asset-based VAS
segment. VAS includes Brokerage, Freight Management, Intermodal and
Werner Global Logistics (International).
Value Added Services
(amounts in 000's) 1Q12 1Q11
-------------------- --------------- ---------------
Revenues $76,754 100.0% $63,573 100.0%
Rent and purchased
transportation expense 65,263 85.0 53,332 83.9
------- -------
Gross margin 11,491 15.0 10,241 16.1
Other operating expenses 7,505 9.8 6,831 10.7
------- -------
Operating income $3,986 5.2 $3,410 5.4
======= =======
The following table shows the change in shipment volume and average
revenue (excluding logistics fee revenue) per shipment for all VAS
shipments.
1Q12 1Q11 Difference % Change
------ ------ ---------- --------
Total VAS shipments 66,820 59,436 7,384 12%
Less: Non-committed
shipments to Truckload
segment 19,157 18,405 752 4%
------ ------ ----------
Net VAS shipments 47,663 41,031 6,632 16%
====== ====== ==========
Average revenue per
shipment $1,523 $1,470 $53 4%
====== ====== ==========
In first quarter 2012, VAS revenues increased $13.2 million or 21%,
gross margin dollars increased 12% and operating income dollars
increased 17% compared to first quarter 2011. Compared to fourth
quarter 2011, VAS revenues, gross margin dollars and operating income
dollars decreased in first quarter 2012. These decreases were the
result of large special projects that occurred during fourth quarter
2011. As VAS revenues grow, large projects will have less of an impact
on the quarter-to-quarter comparison of VAS results.
Brokerage revenues in first quarter 2012 increased 13% compared to
first quarter 2011 due to a 3% increase in shipment volume and a 10%
increase in average revenue per shipment. Brokerage gross margin
percentage and operating income percentage both increased year-over-
year. Intermodal revenues increased 46%, and Intermodal gross margin
and operating income both increased by an even higher percentage,
comparing first quarter 2012 to first quarter 2011. Werner Global
Logistics revenues increased 40% in first quarter 2012 compared to first
quarter 2011.
Comparisons of the operating ratios (net of fuel surcharge
revenues) for the Truckload segment and VAS segment for first quarters
2012 and 2011 are shown below.
Operating Ratios 1Q12 1Q11 Difference
---------------- ----- ----- ----------
Truckload Transportation Services 90.3% 92.4% (2.1)%
Value Added Services 94.8 94.6 0.2
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 2012 and first quarter 2011 are 92.5% and 94.0%,
respectively, when fuel surcharge revenues are reported as revenues
instead of a reduction of operating expenses.
Our financial position remains strong. As of March 31, 2012 we had
no debt and $745.2 million of stockholders' equity.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
3/31/12 Revenues 3/31/11 Revenues
----------- ----------- ----------- -----------
Operating revenues $498,376 100.0 $469,429 100.0
----------- ----------- ----------- -----------
Operating expenses:
Salaries, wages and benefits 133,848 26.9 132,863 28.3
Fuel 102,937 20.6 97,931 20.9
Supplies and maintenance 41,837 8.4 41,189 8.8
Taxes and licenses 22,532 4.5 23,026 4.9
Insurance and claims 19,224 3.9 18,060 3.8
Depreciation 40,671 8.1 39,718 8.5
Rent and purchased transportation 100,510 20.2 88,497 18.9
Communications and utilities 3,819 0.8 3,923 0.8
Other (2,404) (0.5) (3,220) (0.7)
----------- ----------- ----------- -----------
Total operating expenses 462,974 92.9 441,987 94.2
----------- ----------- ----------- -----------
Operating income 35,402 7.1 27,442 5.8
----------- ----------- ----------- -----------
Other expense (income):
Interest expense 142 0.0 28 0.0
Interest income (422) (0.1) (345) (0.1)
Other (24) (0.0) 26 0.0
----------- ----------- ----------- -----------
Total other expense (income) (304) (0.1) (291) (0.1)
----------- ----------- ----------- -----------
Income before income taxes 35,706 7.2 27,733 5.9
Income taxes 14,461 2.9 11,440 2.4
----------- ----------- ----------- -----------
Net income $21,245 4.3 $16,293 3.5
=========== =========== =========== ===========
Diluted shares outstanding 73,390 73,138
=========== ===========
Diluted earnings per share $0.29 $0.22
=========== ===========
OPERATING STATISTICS
Quarter Ended Quarter Ended
3/31/12 % Change 3/31/11
------------- -------- -------------
Trucking revenues, net of fuel surcharge (1) $321,226 1.5% $316,447
Trucking fuel surcharge revenues (1) 93,207 11.9% 83,273
Non-trucking revenues, including VAS (1) 79,783 20.6% 66,165
Other operating revenues (1) 4,160 17.4% 3,544
------------- -------------
Operating revenues (1) $498,376 6.2% $469,429
============= =============
Average monthly miles per tractor 9,660 -0.5% 9,705
Average revenues per total mile (2) $1.541 2.6% $1.502
Average revenues per loaded mile (2) $1.748 3.2% $1.693
Average percentage of empty miles 11.88% 5.5% 11.26%
Average trip length in miles (loaded) 432 -4.0% 450
Total miles (loaded and empty) (1) 208,507 -1.0% 210,634
Average tractors in service 7,195 -0.6% 7,235
Average revenues per tractor per week (2) $3,434 2.1% $3,364
Capital expenditures, net (1) $82,549 $20,054
Cash flow from operations (1) $83,999 $53,800
Return on assets (annualized) 6.4% 5.6%
Total tractors (at quarter end)
Company 6,685 6,645
Independent contractor 615 655
------------- -------------
Total tractors 7,300 7,300
Total trailers (truck and intermodal, quarter end) 23,165 23,530
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
3/31/12 12/31/11
------------- -------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $12,072 $12,412
Accounts receivable, trade, less allowance
of $10,243 and $10,154, respectively 213,201 218,712
Other receivables 9,374 9,213
Inventories and supplies 27,983 30,212
Prepaid taxes, licenses and permits 11,171 15,094
Current deferred income taxes 25,514 25,805
Other current assets 18,878 29,883
------------- -------------
Total current assets 318,193 341,331
------------- -------------
Property and equipment 1,673,961 1,625,008
Less - accumulated depreciation 689,686 682,872
------------- -------------
Property and equipment, net 984,275 942,136
------------- -------------
Other non-current assets 21,955 18,949
------------- -------------
$1,324,423 $1,302,416
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued in excess of cash balances $7,407 $6,671
Accounts payable 87,914 93,486
Insurance and claims accruals 59,512 62,681
Accrued payroll 22,676 19,483
Other current liabilities 24,286 16,504
------------- -------------
Total current liabilities 201,795 198,825
------------- -------------
Other long-term liabilities 14,901 14,194
Insurance and claims accruals,
net of current portion 122,750 121,250
Deferred income taxes 239,736 243,000
Stockholders' equity:
Common stock, $.01 par value, 200,000,000
shares authorized; 80,533,536 shares
issued; 72,857,376 and 72,847,576 shares
outstanding, respectively 805 805
Paid-in capital 95,524 94,396
Retained earnings 797,596 779,994
Accumulated other comprehensive loss (3,985) (5,170)
Treasury stock, at cost; 7,676,160 and
7,685,960 shares, respectively (144,699) (144,878)
------------- -------------
Total stockholders' equity 745,241 725,147
------------- -------------
$1,324,423 $1,302,416
============= =============
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 van; temperature-controlled and flatbed; medium-to-
long-haul, regional and local van; and expedited 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,
2011. 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.