Attached files
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
Robert E. Synowicki, Jr.
Executive Vice President and
Chief Information Officer
(402) 894-3350
WERNER ENTERPRISES REPORTS IMPROVED THIRD QUARTER
2010 REVENUES AND EARNINGS
Omaha, Nebraska, October 18, 2010:
---------------------------------
Werner Enterprises, Inc. (NASDAQ: WERN), one of the nation's
largest transportation and logistics companies, reported improved
revenues and earnings for the third quarter ended September 30, 2010.
Summarized financial results for third quarter 2010 compared to
third quarter 2009 are as follows (dollars in thousands, except per
share data):
Quarter Quarter
Ended Ended %
9/30/10 9/30/09 Change
--------------------------------
Total revenues $463,262 $429,273 8%
Trucking revenues, net of fuel surcharge $329,200 $319,291 3%
Value Added Services ("VAS") revenues $64,683 $57,685 12%
Operating income $40,145 $32,805 22%
Net income $24,158 $18,992 27%
Earnings per diluted share $0.33 $0.26 26%
Freight market trends continued to be good in third quarter 2010
and were better than those in third quarter 2009; however, they were not
as strong as second quarter 2010. Freight trends thus far in October
have softened from the third quarter 2010, although we believe the
larger shippers in our network may be shifting freight shipment volumes
to large carriers in an effort to secure capacity going into 2011. The
softening seems to be driven more by smaller company shippers being more
cautious with their inventory and overall volume projections.
Our average revenues per total mile increased 4.2% in third quarter
2010 compared to third quarter 2009 due to rising contractual pricing,
higher spot market rates and fewer empty miles. We believe that
capacity is not being added in the truckload industry because of
challenges such as tightened equipment financing standards, levered
balance sheets, increased government regulations, and other factors.
We remain committed to maintaining our total truck count flat at
approximately 7,300 trucks. Our primary objectives are to expand our
margins and improve our returns on assets, equity and capital, while
staying true to our expanded portfolio of services for our customers.
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, ended the quarter with 3,600 trucks (or 49% of our total
fleet).
Diesel fuel prices were 31 cents per gallon higher in third quarter
2010 than in third quarter 2009, and were five cents per gallon lower
than in second quarter 2010. For the first 18 days of October 2010, the
average diesel fuel price per gallon was 43 cents higher than the
average diesel fuel price per gallon in the same period of 2009 and 32
cents higher than in fourth quarter 2009.
The driver recruiting and retention market became more competitive
in second quarter 2010, and that trend continued in third quarter 2010.
Generally, higher national unemployment rates aid our recruiting and
retention efforts. We believe, however, that an improved freight
market, extended unemployment benefit payment programs and anticipated
trucking industry safety regulations are tightening driver supply.
During third quarter 2010, we implemented proactive measures that
successfully improved our driver recruitment and retention despite the
competitive driver market. While we are not immune to changes in the
driver market, we continue to believe our position in the current market
is better than that of many competitors because 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.
The entire Werner team remains focused on and committed to
improving our safety record. Our current quarter results validate that
team commitment. Insurance and claims costs per mile declined 19% to
7.3 cents in third quarter 2010 compared to 9.0 cents in third quarter
2009. We experienced a significantly lower severity of claims and a
slightly lower frequency of claims in third quarter 2010 compared to
third quarter 2009. We remain committed to our focus on safety and to
reducing our insurance and claims costs.
Gains on sales of assets were $1.4 million in third quarter 2010
compared to $0.9 million in third quarter 2009 and $0.5 million in
second quarter 2010. The market for the sale of used trucks and
trailers began to improve in third quarter 2010 compared to second
quarter 2010, and we realized higher average gains per truck and trailer
sold. Gains on sales are reflected as a reduction of Other Operating
Expenses in our income statement.
We have begun buying new trucks with 2010-standard engines to
replace older trucks we sell or trade. 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. As a
result, we expect our net capital expenditures for 2010 to be in the
range of $110.0 million to $130.0 million, an increase from our prior
range of $90.0 million to $120.0 million.
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).
Quarter Ended Quarter Ended
Value Added Services (amounts in 000's) 9/30/10 9/30/09
--------------------------------------- ----------------- -----------------
Revenues $64,683 100.0% $57,685 100.0%
Rent and purchased transportation
expense 55,032 85.1 47,840 82.9
-------- --------
Gross margin 9,651 14.9 9,845 17.1
Other operating expenses 6,838 10.6 6,040 10.5
-------- --------
Operating income $2,813 4.3 $3,805 6.6
======== ========
Nine Months Ended Nine Months Ended
9/30/10 9/30/09
----------------- -----------------
Revenues $191,149 100.0% $155,627 100.0%
Rent and purchased transportation
expense 163,014 85.3 129,119 83.0
-------- --------
Gross margin 28,135 14.7 26,508 17.0
Other operating expenses 19,892 10.4 18,179 11.7
-------- --------
Operating income $8,243 4.3 $8,329 5.3
======== ========
The following table shows the change in shipment volume and average
revenue (excluding logistics fee revenue) per shipment for all VAS
shipments.
Quarter Quarter
Ended Ended
9/30/10 9/30/09 Difference % Change
------- ------- ---------- --------
Total VAS shipments 63,709 64,679 (970) (1)%
Less: Non-committed shipments
to Truckload segment (20,436) (25,290) 4,854 (19)%
------- ------- ----------
Net VAS shipments 43,273 39,389 3,884 10%
======= ======= ==========
Average revenue per shipment $1,372 $1,325 $47 4%
======= ======= ==========
In third quarter 2010, VAS revenues increased 12%, gross margin
dollars decreased 2% and operating income dollars decreased 26% compared
to third quarter 2009. Brokerage revenues in third quarter 2010
increased 16% compared to third 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 130 basis points due to the higher cost of carrier
capacity compared to third quarter 2009; however, the Brokerage gross
margin percentage improved sequentially from second quarter 2010 to
third quarter 2010 by 70 basis points. Brokerage operating income
dollars in third quarter 2010 increased 2% compared to third quarter
2009 due to the lower gross margin percentage. Intermodal revenues,
gross margin percentage, and operating results improved. Werner Global
Logistics revenues increased during third quarter 2010 compared to third
quarter 2009 while the gross margin percentage and operating results
decreased significantly 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. Compared to second quarter
2010, Werner Global Logistics revenues, gross margin percentage and
operating results showed improvement.
Comparisons of the operating ratios (net of fuel surcharge
revenues) for the Truckload segment and VAS segment for third quarters
2010 and 2009 and year-to-date 2010 and 2009 are shown below.
Quarter Quarter
Ended Ended
Operating Ratios 9/30/10 9/30/09 Difference
---------------- ------- ------- ----------
Truckload Transportation Services 88.8% 90.5% (1.7)%
Value Added Services 95.7 93.4 2.3
Nine Nine
Months Months
Ended Ended
9/30/10 9/30/09 Difference
------- ------- ----------
Truckload Transportation Services 91.3% 93.8% (2.5)%
Value Added Services 95.7 94.7 1.0
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
third quarter 2010 and third quarter 2009 are 90.6% and 91.8%,
respectively, and for year-to-date 2010 and 2009 are 92.7% and 94.5%,
respectively, when fuel surcharge revenues are reported as revenues
instead of a reduction of operating expenses.
Our financial position remains strong. We ended third quarter
2010 with no debt and $94.8 million of cash. Stockholder's equity is
$763.3 million. Net capital expenditures for the nine months ended
September 30, 2010 were $83.1 million.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
9/30/10 Revenues 9/30/09 Revenues
-------- --------- -------- ---------
Operating revenues $463,262 100.0 $429,273 100.0
-------- --------- -------- ---------
Operating expenses:
Salaries, wages and
benefits 134,255 29.0 130,885 30.5
Fuel 75,986 16.4 66,001 15.4
Supplies and maintenance 40,730 8.8 34,403 8.0
Taxes and licenses 23,197 5.0 23,665 5.5
Insurance and claims 15,998 3.4 20,016 4.7
Depreciation 37,092 8.0 37,708 8.8
Rent and purchased
transportation 91,795 19.8 79,948 18.6
Communications and
utilities 4,013 0.9 3,841 0.9
Other 51 0.0 1 0.0
-------- --------- -------- ---------
Total operating
expenses 423,117 91.3 396,468 92.4
-------- --------- -------- ---------
Operating income 40,145 8.7 32,805 7.6
-------- --------- -------- ---------
Other expense (income):
Interest expense 5 0.0 3 0.0
Interest income (432) (0.1) (418) (0.1)
Other (84) (0.0) (100) 0.0
-------- --------- -------- ---------
Total other expense
(income) (511) (0.1) (515) (0.1)
-------- --------- -------- ---------
Income before income taxes 40,656 8.8 33,320 7.7
Income taxes 16,498 3.6 14,328 3.3
-------- --------- -------- ---------
Net income $24,158 5.2 $18,992 4.4
======== ========= ======== =========
Diluted shares outstanding 72,922 72,110
======== ========
Diluted earnings per share $.33 $.26
======== ========
OPERATING STATISTICS
Quarter Ended Quarter Ended
9/30/10 % Change 9/30/09
------------- ---------- -------------
Trucking revenues, net of
fuel surcharge (1) $329,200 3.1% $319,291
Trucking fuel surcharge
revenues (1) 63,271 27.9% 49,477
Non-trucking revenues,
including VAS (1) 67,593 15.5% 58,499
Other operating revenues (1) 3,198 59.4% 2,006
------------- -------------
Operating revenues (1) $463,262 7.9% $429,273
============= =============
Average monthly miles per
tractor 10,085 -1.0% 10,184
Average revenues per total
mile (2) $1.500 4.2% $1.440
Average revenues per loaded
mile (2) $1.690 3.2% $1.637
Average percentage of empty
miles 11.29% -6.0% 12.01%
Average trip length in
miles (loaded) 432 -6.7% 463
Total miles (loaded and
empty) (1) 219,527 -1.0% 221,675
Average tractors in service 7,256 0.0% 7,256
Average revenues per
tractor per week (2) $3,490 3.1% $3,385
Capital expenditures, net (1) $30,782 $50,004
Cash flow from operations (1) $43,831 $68,956
Return on assets
(annualized) 7.8% 6.0%
Total tractors (at quarter
end)
Company 6,660 6,635
Owner-operator 690 690
------------- -------------
Total tractors 7,350 7,325
Total trailers (truck and
intermodal, quarter end) 24,060 24,310
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Nine Months % of Nine Months % of
Ended Operating Ended Operating
9/30/10 Revenues 9/30/09 Revenues
----------- --------- ----------- ---------
Operating revenues $1,351,806 100.0 $1,226,832 100.0
----------- --------- ----------- ---------
Operating expenses:
Salaries, wages and
benefits 396,892 29.4 393,456 32.1
Fuel 228,319 16.9 174,777 14.2
Supplies and maintenance 117,418 8.7 105,627 8.6
Taxes and licenses 70,214 5.2 72,022 5.9
Insurance and claims 51,705 3.8 64,272 5.2
Depreciation 112,848 8.3 117,016 9.5
Rent and purchased
transportation 268,361 19.9 220,276 18.0
Communications and
utilities 11,256 0.8 12,232 1.0
Other 838 0.1 1,083 0.1
----------- --------- ----------- ---------
Total operating
expenses 1,257,851 93.1 1,160,761 94.6
----------- --------- ----------- ---------
Operating income 93,955 6.9 66,071 5.4
----------- --------- ----------- ---------
Other expense (income):
Interest expense 17 0.0 82 0.0
Interest income (1,124) (0.1) (1,344) (0.1)
Other (128) (0.0) (352) (0.0)
----------- --------- ----------- ---------
Total other expense
(income) (1,235) (0.1) (1,614) (0.1)
----------- --------- ----------- ---------
Income before income taxes 95,190 7.0 67,685 5.5
Income taxes 39,266 2.9 29,105 2.4
----------- --------- ----------- ---------
Net income $55,924 4.1 $38,580 3.1
=========== ========= =========== =========
Diluted shares outstanding 72,747 72,027
=========== ===========
Diluted earnings per share $.77 $.54
=========== ===========
OPERATING STATISTICS
Nine Months Nine Months
Ended 9/30/10 % Change Ended 9/30/09
------------- -------- -------------
Trucking revenues, net of
fuel surcharge (1) $959,386 2.4% $937,333
Trucking fuel surcharge
revenues (1) 184,575 50.5% 122,636
Non-trucking revenues,
including VAS (1) 197,623 24.6% 158,614
Other operating revenues (1) 10,222 23.9% 8,249
------------- -------------
Operating revenues (1) $1,351,806 10.2% $1,226,832
============= =============
Average monthly miles per
tractor 10,026 1.6% 9,866
Average revenues per total
mile (2) $1.469 2.1% $1.439
Average revenues per loaded
mile (2) $1.660 0.6% $1.650
Average percentage of empty
miles 11.51% -9.8% 12.76%
Average trip length in
miles (loaded) 446 -3.7% 463
Total miles (loaded and
empty) (1) 652,981 0.3% 651,257
Average tractors in service 7,237 -1.3% 7,334
Average revenues per
tractor per week (2) $3,399 3.7% $3,277
Capital expenditures, net (1) $83,097 $76,749
Cash flow from operations (1) $155,247 $169,306
Return on assets
(annualized) 6.1% 4.1%
Total tractors (at quarter
end)
Company 6,660 6,635
Owner-operator 690 690
------------- -------------
Total tractors 7,350 7,325
Total trailers (truck and
intermodal, quarter end) 24,060 24,310
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
9/30/10 12/31/09
---------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $94,848 $18,430
Accounts receivable, trade, less
allowance of $9,203 and $9,167,
respectively 201,485 180,740
Other receivables 9,302 10,366
Inventories and supplies 12,828 12,725
Prepaid taxes, licenses
and permits 6,412 14,628
Income taxes receivable 14,726 3,991
Current deferred income taxes 24,701 24,808
Other current assets 25,876 18,816
---------- ----------
Total current assets 390,178 284,504
---------- ----------
Property and equipment 1,577,453 1,580,711
Less - accumulated depreciation 731,055 708,809
---------- ----------
Property and equipment, net 846,398 871,902
---------- ----------
Other non-current assets 11,737 16,603
---------- ----------
$1,248,313 $1,173,009
========== ==========
LIABILITIES AND STOCKHOLDERS'EQUITY
Current liabilities:
Accounts payable $59,185 $47,056
Insurance and claims accruals 63,370 65,667
Accrued payroll 23,288 17,567
Other current liabilities 16,635 16,451
---------- ----------
Total current liabilities 162,478 146,741
---------- ----------
Other long-term liabilities 9,551 8,760
Insurance and claims accruals,
net of current portion 117,750 113,500
Deferred income taxes 195,280 199,358
Stockholders' equity:
Common stock, $.01 par value,
200,000,000 shares authorized;
80,533,536 shares issued;
72,627,998 and 71,896,512 shares
outstanding, respectively 805 805
Paid-in capital 91,359 92,389
Retained earnings 823,961 778,890
Accumulated other comprehensive
loss (4,071) (5,556)
Treasury stock, at cost; 7,905,538
and 8,637,024 shares,
respectively (148,800) (161,878)
---------- ----------
Total stockholders' equity 763,254 704,650
---------- ----------
$1,248,313 $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
