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
WERNER ENTERPRISES REPORTS IMPROVED FOURTH QUARTER AND ANNUAL 2011
REVENUES AND EARNINGS
Omaha, Nebraska, January 26, 2012:
---------------------------------
Werner Enterprises, Inc. (NASDAQ: WERN), one of the nation's
largest transportation and logistics companies, reported improved
revenues and earnings for the fourth quarter and year ended December 31,
2011 compared to the same periods of 2010.
Summarized financial results for fourth quarter and year 2011
compared to fourth quarter and year 2010 are as follows (dollars in
thousands, except per share data):
4Q11 4Q10 % Change 2011 2010 % Change
-------- -------- -------- ---------- ---------- --------
Total revenues $507,937 $463,214 10% $2,002,850 $1,815,020 10%
Trucking revenues, net
of fuel surcharge $329,110 $327,682 0% $1,310,612 $1,287,068 2%
Value Added Services
("VAS") revenues $79,674 $59,834 33% $291,109 $250,983 16%
Operating income $49,399 $40,627 22% $173,674 $134,582 29%
Net income $29,368 $24,115 22% $102,757 $80,039 28%
Earnings per diluted
share $0.40 $0.33 21% $1.40 $1.10 28%
Werner Enterprises achieved annual earnings in excess of $100
million for the first time in our history. Fourth quarter 2011 was the
eighth consecutive quarter in which Werner achieved year-over-year
earnings growth in excess of 20%. We are very appreciative of our
customers' support and sincerely thank all of our associates for their
dedication, commitment and hard work in passing this mile marker on the
road to improving results. With a comprehensive portfolio of superior
service offerings, a newer truck fleet, an outstanding team of
associates and a strong financial position, we are excited about the
prospects for 2012 and beyond.
Fourth quarter 2011 freight demand (as measured by our daily
morning ratio of loads to trucks in our one-way truckload network) was
better than fourth quarter 2010 and showed more traditional seasonal
trends. Our freight demand progressively improved from September to
December, before the normal seasonal decline which began during the
second week of December. Our morning loads-to-trucks ratio was balanced
for fourth quarter 2011 with a seasonal positive strengthening in
November and early December. 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.
Average revenues per total mile, net of fuel surcharge, increased
4.6% in fourth quarter 2011 compared to fourth quarter 2010.
Contractual rate increases, an improved freight mix and better surge
pricing were the primary reasons for the rate improvement. Several
larger sized seasonal projects in fourth quarter 2011 also aided the
increase in our revenue per total mile. We continue to be successful in
this tightening capacity environment by working jointly with our
customers to secure sustainable transportation solutions across all
modes.
We remain committed to maintaining our truck count at approximately
7,300 trucks. In the last six months, our truck count has operated
slightly below this level due to the increasingly challenging driver
market. 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 upgrade their aging truck fleets
which led to increased replacement purchases of new and later-model used
trucks in 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, the average cost of
new trucks purchased in 2011 is approximately 30% higher than the
average cost of trucks being sold in 2011.
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
3,475 trucks (or 48% of our total fleet).
Diesel fuel prices were 63 cents per gallon higher in fourth
quarter 2011 than in fourth quarter 2010 and were 2 cents per gallon
lower than in third quarter 2011. For the first 26 days of January
2012, the average diesel fuel price per gallon was 41 cents higher than
the average diesel fuel price per gallon in the same period of 2011 and
14 cents higher than in first quarter 2011.
The driver recruiting and retention market became more challenging
during fourth quarter 2011. Assuming the domestic economy strengthens
in 2012, we anticipate the driver market will become even more
challenging in 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 $4.8 million in fourth quarter 2011
compared to $2.8 million in fourth quarter 2010 and $6.0 million in
third 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
over 140,000 tons. Our net capital expenditures in 2011 were $232.2
million. We expect our net capital expenditures in 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 expect to further reduce our
company truck fleet age to approximately 2.1 years by 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).
4Q11 4Q10 2011 2010
Value Added Services ------------- -------------- --------------- ---------------
(amounts in 000's) $ % $ % $ % $ %
-------------------- ------------- -------------- --------------- ---------------
Revenues $79,674 100.0 $59,834 100.0 $291,109 100.0 $250,983 100.0
Rent and purchased
transportation expense 65,829 82.6 50,553 84.5 244,194 83.9 213,567 85.1
------- ------- -------- --------
Gross margin 13,845 17.4 9,281 15.5 46,915 16.1 37,416 14.9
Other operating expenses 8,012 10.1 6,519 10.9 29,879 10.2 26,411 10.5
------- ------- -------- --------
Operating income $5,833 7.3 $2,762 4.6 $17,036 5.9 $11,005 4.4
======= ======= ======== ========
The following table shows the change in shipment volume and average
revenue (excluding logistics fee revenue) per shipment for all VAS
shipments.
% %
4Q11 4Q10 Difference Change 2011 2010 Difference Change
------ ------ ---------- ------ ------- ------- ---------- ------
Total VAS shipments 67,666 60,884 6,782 11% 254,926 261,396 (6,470) (2)%
Less: Non-committed
shipments to Truckload
segment 20,337 20,499 (162) (1)% 78,842 93,760 (14,918) (16)%
------ ------ ---------- ------- ------- ----------
Net VAS shipments 47,329 40,385 6,944 17% 176,084 167,636 8,448 5%
====== ====== ========== ======= ======= ==========
Average revenue
per shipment $1,554 $1,376 $178 13% $1,536 $1,346 $190 14%
====== ====== ========== ======= ======= ==========
In fourth quarter 2011, VAS revenues increased 33%, gross margin
dollars increased 49% and operating income dollars increased 111%
compared to fourth quarter 2010.
Brokerage revenues in fourth quarter 2011 increased 19% compared to
fourth quarter 2010 due to a 9% increase in shipment volume and a 10%
increase in average revenue per shipment. Brokerage gross margin
dollars and gross margin percentage increased both year-over-year and
sequentially. Intermodal revenues increased 75%, and Intermodal
operating income increased by an even higher percentage, comparing
fourth quarter 2011 to fourth quarter 2010. Werner Global Logistics
revenues increased 52% and operating results improved significantly in
fourth quarter 2011 compared to fourth quarter 2010.
Comparisons of the operating ratios (net of fuel surcharge
revenues) for the Truckload segment and VAS segment for fourth quarters
and full years 2011 and 2010 are shown below.
Operating Ratios 4Q11 4Q10 Difference 2011 2010 Difference
---------------- ----- ----- ---------- ----- ----- ----------
Truckload Transportation Services 87.1% 88.4% (1.3)% 88.1% 90.6% (2.5)%
Value Added Services 92.7 95.4 (2.7) 94.1 95.6 (1.5)
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
fourth quarter 2011 and fourth quarter 2010 are 89.9% and 90.4%,
respectively, and for 2011 and 2010 are 90.7% and 92.1%, respectively,
when fuel surcharge revenues are reported as revenues instead of a
reduction of operating expenses.
Our financial position remains strong. We ended 2011 with no debt,
$12.4 million of cash, and stockholders' equity of $725.1 million, after
paying a $36.4 million special dividend to shareholders in December
2011.
INCOME STATEMENT DATA
(Unaudited)
(In thousands, except per share amounts)
Quarter % of Quarter % of
Ended Operating Ended Operating
12/31/11 Revenues 12/31/10 Revenues
-------- --------- -------- ---------
Operating revenues $507,937 100.0 $463,214 100.0
-------- --------- -------- ---------
Operating expenses:
Salaries, wages and benefits 136,253 26.8 130,684 28.2
Fuel 100,695 19.8 85,199 18.4
Supplies and maintenance 40,778 8.0 38,525 8.3
Taxes and licenses 22,545 4.5 23,804 5.1
Insurance and claims 17,329 3.4 18,286 4.0
Depreciation 39,473 7.8 39,394 8.5
Rent and purchased transportation 100,289 19.8 84,287 18.2
Communications and utilities 3,569 0.7 3,867 0.8
Other (2,393) (0.5) (1,459) (0.3)
-------- --------- -------- ---------
Total operating expenses 458,538 90.3 422,587 91.2
-------- --------- -------- ---------
Operating income 49,399 9.7 40,627 8.8
-------- --------- -------- ---------
Other expense (income):
Interest expense 42 0.0 30 0.0
Interest income (421) (0.1) (412) (0.1)
Other (210) (0.0) (38) (0.0)
-------- --------- -------- ---------
Total other expense (income) (589) (0.1) (420) (0.1)
-------- --------- -------- ---------
Income before income taxes 49,988 9.8 41,047 8.9
Income taxes 20,620 4.0 16,932 3.7
-------- --------- -------- ---------
Net income $29,368 5.8 $24,115 5.2
======== ========= ======== =========
Diluted shares outstanding 73,289 72,989
======== ========
Diluted earnings per share $0.40 $0.33
======== ========
OPERATING STATISTICS
Quarter Ended Quarter Ended
12/31/11 % Change 12/31/10
------------- -------- -------------
Trucking revenues, net of fuel surcharge (1) $329,110 0.4% $327,682
Trucking fuel surcharge revenues (1) 92,598 31.9% 70,189
Non-trucking revenues, including VAS (1) 82,047 32.3% 62,005
Other operating revenues (1) 4,182 25.3% 3,338
------------- -------------
Operating revenues (1) $507,937 9.7% $463,214
============= =============
Average monthly miles per tractor 9,713 -2.6% 9,970
Average revenues per total mile (2) $1.570 4.6% $1.501
Average revenues per loaded mile (2) $1.781 5.4% $1.690
Average percentage of empty miles 11.83% 5.7% 11.19%
Average trip length in miles (loaded) 435 -1.6% 442
Total miles (loaded and empty) (1) 209,612 -4.0% 218,309
Average tractors in service 7,194 -1.4% 7,299
Average revenues per tractor per week (2) $3,519 1.9% $3,453
Capital expenditures, net (1) $78,598 $35,936
Cash flow from operations (1) $64,141 $73,236
Return on assets (annualized) 9.1% 7.8%
Total tractors (at quarter end)
Company 6,600 6,595
Independent contractor 600 680
------------- -------------
Total tractors 7,200 7,275
Total trailers (truck and intermodal,
quarter end) 23,045 23,850
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
INCOME STATEMENT DATA
(In thousands, except per share amounts)
Year % of Year % of
Ended Operating Ended Operating
12/31/11 Revenues 12/31/10 Revenues
---------- --------- ---------- ---------
Operating revenues $2,002,850 100.0 $1,815,020 100.0
---------- --------- ---------- ---------
Operating expenses:
Salaries, wages and benefits 536,509 26.8 527,576 29.1
Fuel 412,905 20.6 313,518 17.3
Supplies and maintenance 169,386 8.5 155,943 8.6
Taxes and licenses 92,917 4.6 94,018 5.2
Insurance and claims 67,523 3.4 69,991 3.8
Depreciation 158,634 7.9 152,242 8.4
Rent and purchased transportation 387,472 19.3 352,648 19.4
Communications and utilities 15,181 0.8 15,123 0.8
Other (11,351) (0.6) (621) 0.0
---------- --------- ---------- ---------
Total operating expenses 1,829,176 91.3 1,680,438 92.6
---------- --------- ---------- ---------
Operating income 173,674 8.7 134,582 7.4
---------- --------- ---------- ---------
Other expense (income):
Interest expense 85 0.0 47 0.0
Interest income (1,448) (0.0) (1,536) (0.1)
Other 131 (0.0) (166) (0.0)
---------- --------- ---------- ---------
Total other expense (income) (1,232) (0.0) (1,655) (0.1)
---------- --------- ---------- ---------
Income before income taxes 174,906 8.7 136,237 7.5
Income taxes 72,149 3.6 56,198 3.1
---------- --------- ---------- ---------
Net income $102,757 5.1 $80,039 4.4
========== ========= ========== =========
Diluted shares outstanding 73,225 72,807
========== ==========
Diluted earnings per share $1.40 $1.10
========== ==========
OPERATING STATISTICS
Year Year
Ended Ended
12/31/11 % Change 12/31/10
---------- -------- ----------
Trucking revenues, net of fuel surcharge (1) $1,310,612 1.8% $1,287,068
Trucking fuel surcharge revenues (1) 373,384 46.6% 254,764
Non-trucking revenues, including VAS (1) 301,772 16.2% 259,628
Other operating revenues (1) 17,082 26.0% 13,560
---------- ----------
Operating revenues (1) $2,002,850 10.3% $1,815,020
========== ==========
Average monthly miles per tractor 9,840 -1.7% 10,012
Average revenues per total mile (2) $1.533 3.8% $1.477
Average revenues per loaded mile (2) $1.736 4.1% $1.668
Average percentage of empty miles 11.71% 2.4% 11.43%
Average trip length in miles (loaded) 442 -0.7% 445
Total miles (loaded and empty) (1) 855,180 -1.8% 871,290
Average tractors in service 7,242 -0.1% 7,252
Average revenues per tractor per week (2) $3,480 2.0% $3,413
Capital expenditures, net (1) $232,198 $119,033
Cash flow from operations (1) $264,480 $228,483
Return on assets (annualized) 8.3% 6.6%
Total tractors (at quarter end)
Company 6,600 6,595
Independent contractor 600 680
---------- ----------
Total tractors 7,200 7,275
Total trailers (truck and intermodal,
quarter end) 23,045 23,850
(1) Amounts in thousands.
(2) Net of fuel surcharge revenues.
BALANCE SHEET DATA
(In thousands, except share amounts)
12/31/11 12/31/10
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $12,412 $13,966
Accounts receivable, trade, less allowance of
$10,154 and $9,484, respectively 218,712 190,264
Other receivables 9,213 10,431
Inventories and supplies 30,212 16,868
Prepaid taxes, licenses and permits 15,094 14,934
Current deferred income taxes 25,805 27,829
Other current assets 29,883 23,407
---------- ----------
Total current assets 341,331 297,699
---------- ----------
Property and equipment 1,625,008 1,549,637
Less - accumulated depreciation 682,872 708,582
---------- ----------
Property and equipment, net 942,136 841,055
---------- ----------
Other non-current assets 18,949 12,798
---------- ----------
$1,302,416 $1,151,552
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued in excess of cash balances $6,671 $0
Accounts payable 93,486 57,708
Insurance and claims accruals 62,681 71,857
Accrued payroll 19,483 18,838
Other current liabilities 16,504 20,037
---------- ----------
Total current liabilities 198,825 168,440
---------- ----------
Other long-term liabilities 14,194 10,380
Insurance and claims accruals, net of current portion 121,250 113,250
Deferred income taxes 243,000 190,507
Stockholders' equity:
Common stock, $.01 par value, 200,000,000 shares
authorized; 80,533,536 shares issued; 72,847,576
and 72,644,998 shares outstanding, respectively 805 805
Paid-in capital 94,396 91,872
Retained earnings 779,994 728,216
Accumulated other comprehensive loss (5,170) (3,420)
Treasury stock, at cost; 7,685,960 and 7,888,538
shares, respectively (144,878) (148,498)
---------- ----------
Total stockholders' equity 725,147 668,975
---------- ----------
$1,302,416 $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.
