SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended Commission file number
May 31, 1994 0-14690
WERNER ENTERPRISES, INC.
(Exact name of registrant as specified in its charter.)
NEBRASKA 47-0648386
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
INTERSTATE 80 & HIGHWAY 50
POST OFFICE BOX 37308
OMAHA, NEBRASKA 68137 (402)895-6640
(Address of principal (Zip Code) (registrant's telephone number)
executive offices)
Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
As of June 30, 1994, 25,334,016 shares of the registrant's common stock, par
value $.01 per share, were outstanding.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The interim consolidated financial statements contained herein reflect all
adjustments which, in the opinion of management, are necessary for a fair
statement of the financial condition and results of operations for the periods
presented. They have been prepared in accordance with the instructions to Form
10-Q and do not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.
Operating results for the three-month period ended May 31, 1994 are not
necessarily indicative of the results that may be expected for the year ending
February 28, 1995. In the opinion of management, the information set forth in
the accompanying consolidated condensed balance sheets is fairly stated in all
material respects in relation to the consolidated balance sheets from which it
has been derived.
These interim consolidated financial statements should be read in conjunction
with the Company's latest annual report (which is incorporated by reference in
the Form 10-K for the fiscal year ended February 28, 1994).
Consolidated Statements of Income for the
Three Months Ended May 31, 1994 and 1993 ....................... Page 3
Consolidated Condensed Balance Sheets as of
May 31, 1994 and February 28, 1994.............................. Page 4
Consolidated Statements of Cash Flows for the
Three Months Ended May 31, 1994 and 1993........................ Page 5
Notes to Consolidated Financial Statements
as of May 31, 1994.............................................. Page 6
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(Amounts in thousands, except per share data) May 31
1994 1993
(Unaudited)
Operating revenues $126,899 $101,228
Operating expenses:
Salaries, wages and benefits 45,201 36,467
Fuel 10,083 10,417
Supplies and maintenance 10,994 9,204
Taxes and licenses 11,204 9,066
Insurance and claims 4,508 3,751
Depreciation 12,694 10,694
Rent and purchased transportation 15,434 7,868
Communications and utilities 2,435 1,940
Other (638) (204)
Total operating expenses 111,915 89,203
Operating income 14,984 12,025
Other expense (income):
Interest expense 136 450
Interest income (138) (81)
Other 57 35
Total other expense 55 404
Income before income taxes 14,929 11,621
Income taxes 5,822 4,100
Net income $ 9,107 $ 7,521
Average common shares outstanding 25,334 22,886
Earnings per share $ .36 $.33
<FN>
3
WERNER ENTERPRISES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands) May 31 February 28
1994 1994
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 9,670 $ 10,833
Accounts receivable, net 48,759 45,681
Prepaid expenses and other current assets 21,513 22,068
Total current assets 79,942 78,582
Property and equipment 421,160 399,129
Less - accumulated depreciation 102,636 97,282
Property and equipment, net 318,524 301,847
$398,466 $380,429
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,993 $ 13,825
Accrued payroll 10,549 9,115
Current maturities of
capitalized lease obligations 2,066 4,310
Income taxes payable 7,692 3,189
Other current liabilities 20,825 21,243
Total current liabilities 60,125 51,682
Insurance and claims accruals 21,200 21,200
Other long-term liabilities 3,136 3,136
Deferred income taxes 56,220 55,100
Stockholders' equity 257,785 249,311
$398,466 $380,429
<FN>
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
(In thousands) May 31
1994 1993
(Unaudited)
Cash flows from operating activities:
Net income $ 9,107 $ 7,521
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 12,694 10,694
Deferred income taxes 1,120 556
Gain on disposal of operating equipment (853) (677)
Tax benefit from exercise of stock options - 43
Changes in certain working capital items:
Accounts receivable, net (3,078) (2,923)
Prepaid expenses and other current assets 555 2,421
Accounts payable 5,168 (11,589)
Accrued payroll 1,434 485
Other current liabilities 4,085 3,492
Net cash provided by operating activities 30,232 10,023
Cash flows from investing activities:
Additions to property and equipment (34,390) (25,765)
Retirements of property and equipment 5,872 5,448
Net cash used in investing activities (28,518) (20,317)
Cash flows from financing activities:
Short-term borrowing - 10,000
Repayments of capitalized lease
obligations (2,244) (676)
Dividends on common stock (633) (458)
Stock options exercised - 65
Net cash provided by (used in)
financing activities (2,877) 8,931
Net decrease in cash and cash equivalents (1,163) (1,363)
Cash and cash equivalents, beginning of period 10,833 6,441
Cash and cash equivalents, end of period $ 9,670 $ 5,078
<FN>
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 136 $ 423
Income taxes 199 (1,154)
<FN>
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WERNER ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Commitments
As of May 31, 1994, the Company has committed to capital expenditures of
approximately $61,000,000 (net cost, after revenue equipment trade-in allowances
of approximately $21,000,000).
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition:
During the three months ended May 31, 1994, cash flow from operations
generated $30.2 million, which enabled the Company to make net property
additions of $28.5 million, repay capitalized lease obligations of $2.2
million and pay common stock dividends of $.6 million.
The Company's long-term debt obligations to equity ratio at February 28,
1994 and at May 31, 1994 was 0%.
Results of Operations:
Three Months Ended May 31, 1994 and 1993
Operating revenues increased 25% in the three months ended May 31, 1994,
compared to the same period in the prior year. The average number of
tractors increased by 21%. Revenue per mile increased 3.6% while tractor
utilization (miles per tractor) was almost unchanged. The increase in the
average number of tractors primarily reflects the Company's continued growth
in the regional, dedicated and temperature controlled markets as customer
demand remains strong. The revenue per mile increase was the result of the
Company's continued expansion into markets where the average revenue per mile
is higher and the average miles per trip are less and as a result of rate
increases obtained by the Company.
Operating expenses, expressed as a percentage of operating revenues,
were 88.2% for the three months ended May 31, 1994, compared to 88.1% for the
three months ended May 31, 1993. Salaries, wages and benefits decreased from
36.0% of revenues to 35.6% of revenues due primarily to an increase in the
percentage of owner-operator tractors compared to company-owned or controlled
tractors, offset partially by an increase in driver pay due to a 2 cent per
mile driver pay increase effective May 1, 1994 and the retention of more
experienced, higher paid drivers. Owner-operators are independent contractors
under contract with the Company and are responsible for such costs as their
own salaries, wages and benefits; fuel; supplies and maintenance, taxes and
licenses and depreciation. Owner-operator costs are included in the rent and
purchased transportation expense category. Fuel decreased from 10.3% of
revenues to 7.9% of revenues as a result of lower fuel prices, improved fuel
efficiency, and an increase in the percentage of owner-operator tractors.
Supplies and maintenance decreased from 9.1% of revenues to 8.7% of revenues
due to the increase in the percentage of owner-operator tractors. Taxes and
licenses decreased from 8.9% of revenues to 8.8% of revenues due to an
increase in the percentage of owner-operator tractors, offset by an increase
in the Federal diesel fuel tax rate of 4.3 cents per gallon which became
effective October 1, 1993. Depreciation decreased from 10.6% of revenues to
10.0% of revenues due to the increase in the percentage of owner-operator
tractors, offset partially by an increase in the trailer to tractor ratio.
The increase in the trailer to tractor ratio provides additional trailers and
improved service for customers. Other operating expenses decreased from
(.2)% of revenues to (.5)% of revenues due to an increase in gains realized
on the sale of revenue equipment.
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Rent and purchased transportation increased from 7.8% of revenues to
12.2% of revenues due to an increase in the percentage of owner-operator
tractors as compared to company-owned or controlled tractors. The average
number of owner-operator tractors for the quarter ended May 31, 1994 was 560
compared to an average of 340 for the quarter ended May 31, 1993.
The Company's effective income tax rate (income tax expense divided by
income before income taxes) increased to 39.0% for the three months ended May
31, 1994, compared to 35.3% for the three months ended May 31, 1993. This
increase in the effective income tax rate was due primarily to the Federal
income tax rate increase enacted August 10, 1993, and the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" effective March 1, 1993, which resulted in a $200,000 reduction of
income tax expense during the quarter ended May 31, 1993.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of Werner Enterprises, Inc. was held
on June 21, 1994, for the purpose of electing a board of directors and voting
on the proposals described below. Proxies for the meeting were solicited
pursuant to Section 14(a) of the Securities Exchange Act of 1934 and there
was no solicitation in opposition to management's solicitations. All of the
nominees for directors as listed in the proxy were elected.
The Company's proposal to amend the Company's Articles of Incorporation
to authorize the establishment of up to three classes of directors was
approved by the following vote:
Shares Shares Shares
Voted Voted Voted
"FOR" "AGAINST" "ABSTAIN"
17,269,401 6,795,069 26,215
The Company's proposal to amend the Company's Stock Option Plan as set
forth in the Proxy Statement for Annual Meeting of Stockholders, June 21,
1994, was approved by the following vote:
Shares Shares Shares
Voted Voted Voted
"FOR" "AGAINST" "ABSTAIN"
23,297,963 736,733 127,510
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Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
3(i) Articles of Amendment to Articles of Incorporation
of Werner Enterprises, Inc.
3(ii) Revised and Amended By-Laws of Werner Enterprises,
Inc.
10 Amended and Restated Stock Option Plan of Werner
Enterprises, Inc.
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for
the quarter ended May 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WERNER ENTERPRISES, INC.
Date: July 13, 1994 By:/s/Robert E. Synowicki, Jr.
Robert E. Synowicki, Jr.,
Vice President of Finance, Treasurer and
Chief Financial Officer
Date: July 13, 1994 By:/s/John J. Steele
John J. Steele
Secretary and Controller
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