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
March 31, 1995 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 April 30, 1995, 25,162,616 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 March 31, 1995 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 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 year ended December 31, 1994).
Consolidated Statements of Income for the
Three Months Ended March 31, 1995 and 1994 ...................... Page 3
Consolidated Condensed Balance Sheets as of
March 31, 1995 and December 31, 1994 ............................ Page 4
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1995 and 1994 ...................... Page 5
Notes to Consolidated Financial Statements
as of March 31, 1995 ............................................ Page 6
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(Amounts in thousands, except per share data) March 31
1995 1994
(Unaudited)
Operating revenues $132,434 $115,993
Operating expenses:
Salaries, wages and benefits 47,361 41,394
Fuel 10,841 9,577
Supplies and maintenance 12,795 10,336
Taxes and licenses 12,129 10,849
Insurance and claims 4,493 4,300
Depreciation 15,271 12,354
Rent and purchased transportation 16,451 13,666
Communications and utilities 2,082 2,371
Other (1,587) (520)
Total operating expenses 119,836 104,327
Operating income 12,598 11,666
Other expense (income):
Interest expense 493 128
Interest income (241) (140)
Other 31 30
Total other expense 283 18
Income before income taxes 12,315 11,648
Income taxes 4,803 4,470
Net income $ 7,512 $ 7,178
Average common shares outstanding 25,198 25,331
Earnings per share $ .30 $.28
<FN>
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WERNER ENTERPRISES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands) March 31 December 31
1995 1994
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 8,071 $ 11,660
Accounts receivable, net 48,625 52,522
Prepaid expenses and other current assets 22,780 23,994
Total current assets 79,476 88,176
Property and equipment 492,792 479,289
Less - accumulated depreciation 116,131 113,828
Property and equipment, net 376,661 365,461
$456,137 $453,637
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,763 $ 18,564
Accrued payroll 8,887 9,888
Income taxes payable 5,517 5,659
Other current liabilities 24,624 23,176
Total current liabilities 52,791 57,287
Long-term debt 30,000 30,000
Insurance and claims accruals 20,300 21,300
Other long-term liabilities 3,136 3,136
Deferred income taxes 67,655 65,500
Stockholders' equity 282,255 276,414
$456,137 $453,637
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WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
(In thousands) March 31
1995 1994
(Unaudited)
Cash flows from operating activities:
Net income $ 7,512 $ 7,178
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 15,271 12,354
Deferred income taxes 2,155 1,677
Gain on disposal of operating equipment (1,909) (709)
Tax benefit from exercise of stock options - 98
Other long-term liabilities (1,000) 946
Changes in certain working capital items:
Accounts receivable, net 3,897 732
Prepaid expenses and other current assets 1,214 602
Accounts payable (4,801) (4,054)
Accrued payroll (1,001) 200
Other current liabilities 1,181 40
Net cash provided by operating activities 22,519 19,064
Cash flows from investing activities:
Additions to property and equipment (34,866) (18,816)
Retirements of property and equipment 10,304 5,211
Net cash used in investing activities (24,562) (13,605)
Cash flows from financing activities:
Repayments of capitalized lease
obligations - (2,364)
Dividends on common stock (630) (760)
Repurchases of common stock (923) -
Stock options exercised 7 97
Net cash used in financing activities (1,546) (3,027)
Net increase (decrease) in cash and cash equivalents (3,589) 2,432
Cash and cash equivalents, beginning of period 11,660 9,815
Cash and cash equivalents, end of period $ 8,071 $12,247
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 460 $ 128
Income taxes 2,812 2,713
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WERNER ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Commitments
As of March 31, 1995, the Company has committed to capital expenditures
of approximately $55,000,000 (net cost, after revenue equipment trade-in
allowances of approximately $34,000,000).
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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 March 31, 1995, the Company generated cash
flow from operations of $22.5 million, which enabled the Company to make net
property additions, primarily revenue equipment, of $24.6 million, pay common
stock dividends of $.6 million and repurchase Company common stock of $.9
million.
The Company's long-term debt to equity ratio at March 31, 1995 was
10.6%, compared with 10.9% at December 31, 1994.
Results of Operations:
Three Months Ended March 31, 1995 and 1994
Operating revenues increased 14% in the three months ended March 31,
1995, compared to the same period in the prior year. The average number of
tractors increased by 8%. Revenue per loaded mile increased 4% while tractor
utilization (total miles per tractor) was also somewhat higher. The increase
in the average number of tractors was primarily due to expansion in the long-
haul van, regional and dedicated markets. The revenue per mile increase was
primarily the result of rate increases obtained by the Company and the
continued expansion into markets where the average revenue per mile is
typically higher and the average miles per trip are normally lower. The
increased tractor utilization was due to increased empty miles resulting from
softer freight demand. Operating revenues also increased due to an increase
in intermodal services.
Operating expenses, expressed as a percentage of operating revenues,
were 90.5% for the three months ended March 31, 1995, compared to 89.9% for
the three months ended March 31, 1994. Salaries, wages and benefits
increased from 35.7% of revenues to 35.8% of revenues due primarily to a 2
cent per mile driver pay increase effective May 1, 1994 and other driver pay
increases, offset by a reduction in the estimated liability for accrued
driver payroll of $2,400,000 during the first quarter of 1995. Fuel costs
were comparable to the first quarter of 1994. Supplies and maintenance
increased from 8.9% of revenues to 9.7% of revenues due, in part, to
increased costs related to third-party loadings and unloadings, driver
advertising and tolls. Insurance and claims decreased from 3.7% of revenues
to 3.4% of revenues as a result of favorable claims development.
Depreciation increased from 10.6% of revenues to 11.5% of revenues due to the
November 1994 purchase of satellite tracking equipment which was previously
leased (and included in Communications and utilities), and an increase in the
trailer to tractor ratio from 2.3 to 1 at March 31, 1994 to 2.6 to 1 at March
31, 1995. The increase in the trailer to tractor ratio is the result of
providing additional trailers to improve customer service and tractor
productivity. The decrease in the average length of haul also contributed to
the increased trailer to tractor ratio. Rent and purchased transportation
increased from 11.8% of revenues to 12.4% of revenues due primarily to an
increase in the use of intermodal and other third-party transportation
services. Communications and utilities decreased from 2.0% of revenues to
1.6% of revenues, due to the purchase of the satellite tracking equipment
which had been leased previously.
7
Other operating expenses decreased from (.4%) of revenues to (1.2%) of
revenues due to an increase in gains realized on the sale of revenue
equipment to third parties.
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
March 31, 1995, compared to 38.4% for the three months ended March 31, 1994.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Page Number or Incorporated
Number Description by Reference to
10 Amended and Restated Exhibit 10 to the Company's
Stock Option Plan report on Form 10-Q for the
quarter ended May 31, 1994
27 Financial Data Schedule Page 10 of sequentially
numbered pages
(b) Reports on Form 8-K - None
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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: May 10, 1995 By:/s/Robert E. Synowicki
Robert E. Synowicki, Vice
President, Treasurer and
Chief Financial Officer
Date: May 10, 1995 By:/s/John J. Steele
John J. Steele
Vice President - Controller
and Secretary
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