-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QXL10HlY1DG7+3uEyPPwylH4hwy6Ox6OI73Y4kJxWONmEyuDrivqXFskh0kC4HJy rpMYidHKReBXta+XE8oNfA== 0000793074-95-000012.txt : 19951119 0000793074-95-000012.hdr.sgml : 19951119 ACCESSION NUMBER: 0000793074-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WERNER ENTERPRISES INC CENTRAL INDEX KEY: 0000793074 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 470648386 STATE OF INCORPORATION: NE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14690 FILM NUMBER: 95591790 BUSINESS ADDRESS: STREET 1: P O BOX 37308 STREET 2: P O BOX 37308 CITY: OMAHA STATE: NE ZIP: 68137 BUSINESS PHONE: 4028956640 10-Q 1 WERNER ENTERPRISES, INC. 10-Q 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 September 30, 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 October 31, 1995, 25,160,716 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 and nine-month periods ended September 30, 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 September 30, 1995 and 1994 ................. Page 3 Consolidated Statements of Income for the Nine Months Ended September 30, 1995 and 1994 .................. Page 4 Consolidated Condensed Balance Sheets as of September 30, 1995 and December 31, 1994 ....................... Page 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1995 and 1994 .................. Page 6 Notes to Consolidated Financial Statements as of September 30, 1995 ....................................... Page 7 2 WERNER ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended (Amounts in thousands, except per share data) September 30 1995 1994 (Unaudited) Operating revenues $150,303 $134,614 Operating expenses: Salaries, wages and benefits 54,252 47,514 Fuel 11,803 10,741 Supplies and maintenance 12,766 12,521 Taxes and licenses 12,485 11,095 Insurance and claims 6,520 4,134 Depreciation 15,418 13,650 Rent and purchased transportation 19,480 16,363 Communications and utilities 1,992 2,356 Other (1,422) (836) Total operating expenses 133,294 117,538 Operating income 17,009 17,076 Other expense (income): Interest expense 672 162 Interest income (291) (168) Other 30 54 Total other expense 411 48 Income before income taxes 16,598 17,028 Income taxes 6,473 6,641 Net income $ 10,125 $ 10,387 Average common shares outstanding 25,159 25,296 Earnings per share $ .40 $ .41
3 WERNER ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended (Amounts in thousands, except per share data) September 30 1995 1994 (Unaudited) Operating revenues $426,062 $380,230 Operating expenses: Salaries, wages and benefits 155,851 135,299 Fuel 34,435 30,774 Supplies and maintenance 38,029 33,694 Taxes and licenses 36,940 32,994 Insurance and claims 15,722 12,968 Depreciation 45,595 38,978 Rent and purchased transportation 53,866 45,971 Communications and utilities 6,210 7,189 Other (4,573) (1,815) Total operating expenses 382,075 336,052 Operating income 43,987 44,178 Other expense (income): Interest expense 1,661 414 Interest income (744) (432) Other 95 137 Total other expense 1,012 119 Income before income taxes 42,975 44,059 Income taxes 16,760 17,110 Net income $ 26,215 $ 26,949 Average common shares outstanding 25,173 25,320 Earnings per share $ 1.04 $ 1.06
4 WERNER ENTERPRISES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands) September 30 December 31 1995 1994 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 15,541 $ 11,660 Accounts receivable, net 63,776 52,522 Prepaid taxes, licenses and permits 3,435 7,826 Other current assets 15,783 16,168 Total current assets 98,535 88,176 Property and equipment 520,013 479,289 Less - accumulated depreciation 119,829 113,828 Property and equipment, net 400,184 365,461 $498,719 $453,637 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 19,330 $ 18,564 Insurance and claims accruals 22,115 15,642 Accrued payroll 8,698 9,888 Income taxes payable 4,905 5,659 Other current liabilities 8,527 7,534 Total current liabilities 63,575 57,287 Long-term debt 40,000 30,000 Insurance and claims accruals 22,000 21,300 Other long-term liabilities 2,736 3,136 Deferred income taxes 71,021 65,500 Stockholders' equity 299,387 276,414 $498,719 $453,637
5 WERNER ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended (In thousands) September 30 1995 1994 (Unaudited) Cash flows from operating activities: Net income $26,215 $26,949 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 45,595 38,978 Deferred income taxes 5,521 4,108 Gain on disposal of operating equipment (5,324) (2,423) Tax benefit from exercise of stock options - 98 Long-term liabilities 300 946 Changes in certain working capital items: Accounts receivable, net (11,254) (10,801) Prepaid expenses and other current assets 4,776 672 Accounts payable 766 631 Accrued payroll (1,190) 2,115 Other current liabilities 6,588 7,071 Net cash provided by operating activities 71,993 68,344 Cash flows from investing activities: Additions to property and equipment (102,771) (100,439) Retirements of property and equipment 27,777 25,643 Net cash used in investing activities (74,994) (74,796) Cash flows from financing activities: Proceeds from issuance of long-term debt 10,000 20,000 Repayments of capitalized lease obligations - (4,552) Dividends on common stock (2,140) (2,027) Repurchases of common stock (1,013) (1,265) Stock options exercised 35 105 Net cash provided by financing activities 6,882 12,261 Net increase in cash and cash equivalents 3,881 5,809 Cash and cash equivalents, beginning of period 11,660 9,815 Cash and cash equivalents, end of period $15,541 $15,624 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 2,625 $ 356 Income taxes 10,944 7,748
6 WERNER ENTERPRISES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Commitments As of September 30, 1995, the Company has committed to capital expenditures of approximately $25,000,000 (net cost, after revenue equipment trade-in allowances of approximately $29,000,000). (2) Change in Estimate The Company periodically reviews its estimates related to the useful lives and salvage values of its revenue equipment. Effective April 1, 1995, the Company changed, on a prospective basis, the estimated salvage value for certain trailers. This change was to reflect market changes in the value of used equipment and lower trailer utilization due to a higher trailer to tractor ratio. The change resulted in a decrease in depreciation expense of approximately $1,800,000 and an increase in net income of approximately $1,100,000 ($.04 per share) for the nine months ended September 30, 1995. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Financial Condition: During the nine months ended September 30, 1995, the Company generated cash flow from operations of $72.0 million and made long-term borrowings of $10 million, which enabled the Company to make net property additions, primarily revenue equipment, of $75.0 million, pay common stock dividends of $2.1 million and repurchase Company common stock of $1.0 million. The Company's long-term debt to equity ratio at September 30, 1995 was 13.4%, compared with 10.9% at December 31, 1994. Results of Operations: Three Months Ended September 30, 1995 and 1994 Operating revenues increased 12% for the three months ended September 30, 1995, compared to the same period of the prior year. The average number of tractors increased by 10%, primarily due to expansion in the long-haul van and dedicated fleet markets. Revenue per loaded mile was comparable to the same period of the previous year. Tractor utilization (total miles per tractor) was slightly higher, primarily due to increased empty miles resulting from softer freight demand. Increased revenues from intermodal and other third-party transportation services also contributed to the overall increase in operating revenues. Operating expenses, expressed as a percentage of operating revenues, were 88.7% for the three months ended September 30, 1995, compared to 87.3% for the three months ended September 30, 1994. Salaries, wages and benefits increased from 35.3% of revenues to 36.1% of revenues due primarily to increased employee health benefit costs and the retention of more experienced, higher paid drivers. Fuel prices were comparable to the third quarter of 1994. Supplies and maintenance decreased from 9.3% to 8.5% of revenues primarily due to decreased driver advertising and tire expenses. Insurance and claims increased from 3.1% to 4.3% of revenues primarily as a result of unfavorable claims experience. Depreciation increased from 10.1% to 10.3% of revenues due primarily to the November 1994 purchase of satellite tracking equipment which was previously leased (and previously included in communications and utilities), and an increase in the trailer to tractor ratio from 2.4 to 1 at September 30, 1994 to 2.5 to 1 at September 30, 1995. The increase in the trailer to tractor ratio is the result of providing additional trailers to improve customer service and tractor productivity. A decrease in the average length of haul also contributed to the increased trailer to tractor ratio. These increases were partially offset by the effect of a change in the estimated salvage value for certain trailers. (See Note 2 to Consolidated Financial Statements.) Rent and purchased transportation increased from 12.2% to 13.0% of revenues due primarily to an increase in the use of intermodal and other third-party transportation services. Communications and utilities decreased from 1.7% to 1.3% of revenues, due primarily to the purchase of the satellite tracking equipment which had been leased previously. Other operating expenses decreased from (.6%) to (.9%) of revenues due mainly to an increase in gains realized on the sale of revenue equipment to third parties. 8 Interest expense increased from .1% to .5% of revenues due to an increase in the average outstanding amount of long-term borrowings. The Company's effective income tax rate (income taxes as a percentage of income before income taxes) was 39.0% for the three-month periods ended September 30, 1995 and 1994. Nine Months Ended September 30, 1995 and 1994 Operating revenues increased by 12% for the nine months ended September 30, 1995, compared to the same period of the previous year. The average number of tractors increased 8%, while revenue per loaded mile increased 2%. Increased revenues from intermodal and other third-party transportation services also contributed to the overall increase in operating revenues. Operating expenses, expressed as a percentage of operating revenues, increased to 89.7% for the nine months ended September 30, 1995, compared to 88.4% for the same period of 1994. Salaries, wages and benefits increased from 35.6% to 36.6% of revenues, primarily due to a 2 cent per mile driver pay increase effective May 1, 1994, the retention of more experienced, higher paid drivers, and increased employee health benefit costs, partially offset by a reduction in the estimated liability for accrued driver payroll of $2,400,000 during the first quarter of 1995. Supplies and maintenance was comparable as a percentage of revenues to the same period of 1994, as increased third-party loading and unloading costs were offset by decreased driver advertising and tire expenses. Fuel costs were comparable to the 1994 period. Insurance and claims increased from 3.4% to 3.7% of revenues due primarily to unfavorable claims experience. Depreciation increased from 10.2% to 10.7% of revenues due primarily to the November 1994 purchase of satellite tracking equipment which had previously been leased, and the increased trailer to tractor ratio, partially offset by the effect of a change in the estimated salvage value for certain trailers. (See Note 2 to Consolidated Financial Statements.) Rent and purchased transportation increased from 12.1% to 12.6% of revenues due primarily to an increase in the use of intermodal and other third-party transportation services. Communications and utilities decreased primarily due to the purchase of previously leased satellite tracking equipment. Other operating expenses decreased from (.5%) to (1.1%) of revenues mainly due to increased gains realized on the sale of revenue equipment to third parties. Interest expense increased from .1% to .4% of revenues due to an increase in the average outstanding amount of long-term borrowings. The Company's effective income tax rate was 39.0% for the nine months ended September 30, 1995, compared to 38.8% for the same period of 1994. 9 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 11 of sequentially numbered pages (b) Reports on Form 8-K - None 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: November 14, 1995 By:/s/Robert E. Synowicki Robert E. Synowicki Vice President, Treasurer and Chief Financial Officer Date: November 14, 1995 By:/s/John J. Steele John J. Steele Vice President - Controller and Secretary 10 EX-27 2
5 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 15,541 0 63,776 0 0 98,535 520,013 119,829 498,719 63,575 0 258 0 0 299,129 498,719 426,062 426,062 0 382,075 (649) 0 1,661 42,975 16,760 26,215 0 0 0 26,215 1.04 1.04
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