-----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, NHCDH5Qhsxg5v1OICnaYlfYKtaXwvwIfmIndpOWOf0nN96RvTbGDF+Y9+VlSiYZ7 9XqfxKt4pB7Ze2OL/uukrg== 0000793074-04-000002.txt : 20040128 0000793074-04-000002.hdr.sgml : 20040128 20040127174501 ACCESSION NUMBER: 0000793074-04-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040122 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040128 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14690 FILM NUMBER: 04547363 BUSINESS ADDRESS: STREET 1: 14507 FRONTIER ROAD STREET 2: P O BOX 45308 CITY: OMAHA STATE: NE ZIP: 68145 BUSINESS PHONE: 4028956640 8-K 1 wern8k012204.txt WERNER ENTERPRISES, INC. 8K 01/22/04 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 22, 2004 ---------------- WERNER ENTERPRISES, INC. (Exact name of registrant as specified in its charter) NEBRASKA 0-14690 47-0648386 (State or other jurisdiction of (Commission File (IRS Employer incorporation or organization) Number) Identification No.) 14507 FRONTIER ROAD POST OFFICE BOX 45308 OMAHA, NEBRASKA 68145 (402)895-6640 (Address of principal (Zip Code) (Registrant's telephone number) executive offices) ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Exhibit 99.1 News release issued by the registrant on January 22, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On January 22, 2004, the registrant issued a news release announcing its operating revenues and earnings for the fourth quarter and year ended December 31, 2003. A copy of the news release is included as an exhibit to this Form 8-K. 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 hereunto duly authorized. WERNER ENTERPRISES, INC. Date: January 27, 2004 By: /s/ John J. Steele ---------------------- ------------------------ John J. Steele Vice President, Treasurer and Chief Financial Officer Date: January 27, 2004 By: /s/ James L. Johnson ---------------------- ------------------------ James L. Johnson Vice President, Controller and Corporate Secretary EX-99 3 wern4q03.txt WERNER ENTERPRISES, INC. 8K 01/22/04 WERNER ENTERPRISES, INC. 14507 Frontier Road P. O. Box 45308 Omaha, Nebraska 68145 FOR IMMEDIATE RELEASE Contact: Robert E. Synowicki, Jr. - --------------------- Executive Vice President and Chief Information Officer (402) 894-3000 John J. Steele Vice President, Treasurer and Chief Financial Officer (402) 894-3036 WERNER ENTERPRISES REPORTS NINTH CONSECUTIVE QUARTER OF HIGHER OPERATING REVENUES AND EARNINGS Omaha, Nebraska, January 22, 2004: - --------------------------------- Werner Enterprises, Inc. (Nasdaq: WERN-news), one of the nation's largest truckload transportation companies, reported its ninth consecutive year-over-year quarter of higher operating revenues and earnings for the fourth quarter ended December 31, 2003. Operating revenues increased 8% to $380.2 million compared to $352.4 million in fourth quarter 2002. Net income increased 22% to $21.5 million compared to $17.6 million in fourth quarter 2002. Earnings per share for fourth quarter 2003 were $.26 per share, or 22% higher than the $.22 per share earned in fourth quarter 2002. For the year, operating revenues of $1.458 billion in 2003 were 9% higher than $1.341 billion in 2002. Net income increased 20% to $73.7 million in 2003, compared to $61.6 million in 2002. Earnings per share increased 19% to $.90 per share in 2003, compared to $.76 per share in 2002. "During fourth quarter, demand for our services was stronger than fourth quarter a year ago," said Chairman and Chief Executive Officer Clarence (C.L.) Werner. "Freight demand from several of our retail and consumer products customers improved compared to the same period a year ago. In addition, freight demand for the first three weeks of January 2004 has been stronger than the weaker demand of the same period a year ago. I anticipate we will continue to see tightened truckload capacity in 2004 due to a more challenging driver market and the impact of the new hours of service rules. We are continuing to execute our plan of limited fleet growth and remain focused on improving our operating margin." On January 4, the new federal regulations that govern driver hours of service (HOS) became effective. These are the most significant changes to the HOS regulations in over 60 years. Beginning last October, Werner Enterprises started testing the HOS with a large number of its drivers using its proprietary Paperless Log System software that (1) monitors driver hours on a real-time basis and (2) preplans the assignment of shipments to drivers based on their available driving hours. This testing, combined with a comprehensive driver-training program, helped to fully prepare the Company for the HOS changes. The new HOS may create different operational issues for most truckload carriers that use paper-based HOS recordkeeping systems. These carriers depend on the driver's declaration of available driving hours at the time of dispatch and the driver's knowledge of the new HOS rules. These systems are not proactive, but are reactive. They rely on the carrier's after-the-fact comparison of driver reported hours to actual hours using various time-dated receipts or documents. Measuring the overall impact of the HOS changes is very preliminary at this time since the new regulations have been effective for only a little more than two weeks. Our initial data suggests that our average miles per truck for the first two weeks compared to the same two weeks a year ago may be slightly lower due to the HOS changes. The Company believes it is minimizing the impact on miles per truck through proactive planning using its Paperless Log System and by working closely with customers to reduce delay time. Effective January 2004, the Company increased its accessorial charges to customers for multiple stop shipments and its rates for equipment detention. Werner also raised its driver stop pay and is implementing pay changes to drivers for delay time due to equipment detention. The market for recruiting drivers became more difficult in fourth quarter 2003. For the last two years, the owner-operator driver market has been challenging. In recent months, the market for recruiting qualified drivers tightened. The Company continues to have success recruiting drivers from driver training schools. In addition to the driver stop pay and detention pay changes described above, the Company also increased mileage bonus pay for Van solo drivers effective July 2003. Average fuel prices in fourth quarter 2003 were 5 cents a gallon, or 5%, higher than fourth quarter 2002. To lessen the effect of fluctuating fuel prices on the Company's margins, Werner collects fuel surcharge revenues from its customers. These surcharge programs, which automatically adjust as fuel prices change, continued in effect. Fuel surcharge revenues were $14.5 million in fourth quarter 2003 compared to $12.1 million in fourth quarter 2002. Fuel expense, net of fuel surcharge revenues, in fourth quarter 2003 had no impact on earnings per share compared to fourth quarter 2002. Fuel surcharges were $61.4 million in 2003 compared to $29.1 million in 2002. Fuel expense, net of fuel surcharge revenues, in 2003 also had no impact on earnings per share compared to 2002. For the first three weeks of January 2004, fuel prices were 8 cents a gallon, or 9%, higher than the same period in January 2003. Werner Enterprises is continuing ongoing testing of the EPA- compliant truck engines, in particular the Caterpillar ACERT engines and the Detroit Diesel EGR engines. As of December 31, 2003, approximately 10% of the Company's fleet consisted of trucks with these engines. To date, the Company's testing indicates that the fuel mile per gallon (mpg) degradation is a reduction of approximately 0.3 mpg to 0.5 mpg. Also, depreciation expense will increase due to the higher cost of the new engines. The average age of the Company's truck fleet remains among the newest in the industry at 1.6 years as of December 31, 2003. To allow time for continued testing of the new trucks with EPA-compliant engines, the Company has decided to extend the age of a portion of its trucks scheduled to be sold or traded during 2004. Gains on sales of equipment, primarily trucks, are reflected as a reduction of Other Operating Expenses in the Company's income statement and amounted to a gain of $2.6 million in fourth quarter 2003 compared to a gain of $1.7 million in fourth quarter 2002. Gains increased due to a higher average sales price, and gain, per truck in fourth quarter 2003. During first quarter 2004, the Company is expanding its Fleet Truck Sales network from 15 locations to 16 locations. Fleet Truck Sales, one of the largest class 8 truck sales entities in the United States, has been in operation since 1992 and is a continuing resource for the Company to remarket its used trucks. Werner grew its dedicated fleet from about one-quarter of its total truck fleet in fourth quarter 2002 to about one-third of its total truck fleet in fourth quarter 2003. Much of this growth occurred in fourth quarter 2003. Since the Company's overall truck fleet increased only slightly, the growth in the dedicated fleet was offset by a reduction in the Company's medium-to-long haul van fleet. Dedicated fleet business tends to have lower miles per trip, a higher empty mile percentage, a higher rate per loaded mile, and lower miles per truck per month. The growth in dedicated business has had a corresponding effect on these same operating statistics for the entire Company. The Company's operating statistics are reported in the accompanying financial results. During the latter part of 2003 and continuing into 2004, the Company expanded its brokerage and intermodal service offerings by adding senior management and developing new computer systems. This business model is similar to the one the Company used in developing its Mexico division which grew from zero revenue in 1999 to one of the five largest U.S. cross-border carriers in 3 1/2 years. The growth in brokerage and intermodal is expected to help increase the Company's non- trucking revenues in 2004. These less asset-intensive businesses are expected to have a lower operating margin and a higher return on assets than the Company's truckload business. In fourth quarter 2002, the Company sold a portion of its ownership interest in Transplace, a leading provider of transportation logistics services. The Company realized earnings of one cent per share in fourth quarter 2002 from this transaction. During fourth quarter 2003, the Company purchased 280,000 shares of its common stock at an average price of $17.71 per share, for a total of $5.0 million. The Company's financial position remains strong. Werner Enterprises became debt-free in December as its only remaining debt of $20 million was repaid. Werner has no truck or trailer operating leases and, therefore, has no off-balance-sheet debt. Due to the debt repayment, annual truck licensing, and stock repurchases, the company's cash position declined from $125.8 million at September 30, 2003 to $101.4 million at December 31, 2003. Cash flow from operations of $207.5 million in 2003 was lower than $226.3 million in 2002 due to lower truck purchases in 2003. This caused lower 2003 tax depreciation and a smaller payable for trucks received at year-end. These two items related to lower truck purchases reduced cash flow from operations by $64.4 million in 2003 compared to 2002. Stockholders' equity has grown to $709.1 million, or $8.90 per share. The Company's continuing goal is to improve its annual operating margin to 10% or better before increasing the Company's fleet growth rate.
INCOME STATEMENT DATA (Unaudited) (In thousands, except per share amounts) Quarter % of Quarter % of Ended Operating Ended Operating 12/31/03 Revenues 12/31/02 Revenues -------- -------- -------- -------- Operating revenues $380,234 100.0 $352,380 100.0 -------- -------- -------- -------- Operating expenses: Salaries, wages and benefits 131,509 34.6 128,093 36.4 Fuel 40,213 10.6 37,406 10.6 Supplies and maintenance 32,644 8.6 30,006 8.5 Taxes and licenses 27,030 7.1 25,788 7.3 Insurance and claims 17,564 4.6 13,560 3.8 Depreciation 35,758 9.4 32,347 9.2 Rent and purchased transportation 58,024 15.2 54,019 15.3 Communications and utilities 4,165 1.1 3,837 1.1 Other (890) (0.2) (551) (0.1) -------- -------- -------- -------- Total operating expenses 346,017 91.0 324,505 92.1 -------- -------- -------- -------- Operating income 34,217 9.0 27,875 7.9 -------- -------- -------- -------- Other expense (income): Interest expense 232 0.0 541 0.1 Interest income (487) (0.1) (436) (0.1) Other 44 0.0 (454) (0.1) -------- -------- -------- -------- Total other expense (income) (211) (0.1) (349) (0.1) -------- -------- -------- -------- Income before income taxes 34,428 9.1 28,224 8.0 Income taxes 12,915 3.4 10,585 3.0 -------- -------- -------- -------- Net income $21,513 5.7 $17,639 5.0 ======== ======== ======== ======== Diluted shares outstanding 81,554 81,565 ======== ======== Diluted earnings per share $.26 $.22 ======== ======== OPERATING STATISTICS (Quarter Ended December 31) % Change ---------- Average monthly miles per tractor 10,129 (1.1%) 10,238 Average revenues per total mile (1) $1.306 3.9% $1.257 Average revenues per loaded mile (1) $1.470 5.8% $1.390 Average percentage of empty miles 11.14% 16.4% 9.57% Average tractors in service 8,356 2.6% 8,145 Average revenues per truck per week (1) $3,053 2.8% $2,969 Non-trucking revenues (in thousands) $34,101 32.1% $25,822 Capital expenditures, net $47,944 $84,291 Cash flow from operations $49,727 $48,479 Total tractors (at quarter end) Company 7,430 7,180 Owner-operator 920 1,020 ------- ------- Total tractors 8,350 8,200 Total trailers (at quarter end) 22,800 20,880
(1) Net of fuel surcharge revenues.
INCOME STATEMENT DATA (In thousands, except per share amounts) Year % of Year % of Ended Operating Ended Operating 12/31/03 Revenues 12/31/02 Revenues ---------- -------- ---------- -------- Operating revenues $1,457,766 100.0 $1,341,456 100.0 ---------- -------- ---------- -------- Operating expenses: Salaries, wages and benefits 513,551 35.2 486,315 36.3 Fuel 160,465 11.0 125,189 9.3 Supplies and maintenance 123,680 8.5 119,972 8.9 Taxes and licenses 104,392 7.2 98,741 7.4 Insurance and claims 73,032 5.0 51,192 3.8 Depreciation 135,168 9.3 121,702 9.1 Rent and purchased transportation 215,463 14.8 222,571 16.6 Communications and utilities 16,480 1.1 14,808 1.1 Other (1,969) (0.2) 1,512 0.1 ---------- -------- ---------- -------- Total operating expenses 1,340,262 91.9 1,242,002 92.6 ---------- -------- ---------- -------- Operating income 117,504 8.1 99,454 7.4 ---------- -------- ---------- -------- Other expense (income): Interest expense 1,099 0.1 2,857 0.2 Interest income (1,699) (0.1) (2,340) (0.2) Other 128 0.0 333 0.0 ---------- -------- ---------- -------- Total other expense (income) (472) 0.0 850 0.0 ---------- -------- ---------- -------- Income before income taxes 117,976 8.1 98,604 7.4 Income taxes 44,249 3.0 36,977 2.8 ---------- -------- ---------- -------- Net income $73,727 5.1 $61,627 4.6 ========== ======== ========== ======== Diluted shares outstanding 81,668 81,522 ========== ========== Diluted earnings per share $.90 $.76 ========== ========== OPERATING STATISTICS (Year Ended December 31) % Change ---------- Average monthly miles per tractor 10,143 (1.4%) 10,290 Average revenues per total mile (1) $1.277 3.4% $1.235 Average revenues per loaded mile (1) $1.431 4.8% $1.366 Average percentage of empty miles 10.77% 12.3% 9.59% Average miles per trip (loaded) 627 (7.0%) 674 Average tractors in service 8,282 3.9% 7,971 Average revenues per truck per week (1) $2,988 1.9% $2,932 Non-trucking revenues (in thousands) $109,521 12.8% $97,130 Capital expenditures, net $103,597 $237,790 Cash flow from operations $207,474 $226,271 Total tractors (at year end) Company 7,430 7,180 Owner-operator 920 1,020 -------- -------- Total tractors 8,350 8,200 Total trailers (at year end) 22,800 20,880
(1) Net of fuel surcharge revenues.
BALANCE SHEET DATA (In thousands) 12/31/03 12/31/02 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $101,409 $29,885 Accounts receivable, trade, less allowance of $6,043 and $4,459, respectively 152,461 131,889 Other receivables 8,892 10,335 Inventories and supplies 9,877 9,777 Prepaid taxes, licenses and permits 14,957 13,535 Income taxes receivable - 9,811 Other current assets 17,691 14,317 ---------- ---------- Total current assets 305,287 219,549 ---------- ---------- Property and equipment 1,261,252 1,212,488 Less - accumulated depreciation 455,565 380,221 ---------- ---------- Property and equipment, net 805,687 832,267 ---------- ---------- Other non-current assets 10,553 11,062 ---------- ---------- $1,121,527 $1,062,878 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $40,903 $50,546 Current portion of long-term debt - 20,000 Insurance and claims accruals 55,201 47,358 Accrued payroll 15,828 18,374 Current deferred income taxes 15,151 17,710 Other current liabilities 15,392 11,885 ---------- ---------- Total current liabilities 142,475 165,873 ---------- ---------- Insurance and claims accruals, net of current portion 71,301 47,801 Deferred income taxes 198,640 201,561 Stockholders' equity: Common stock, $.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 79,714,271 and 79,726,180 shares outstanding, respectively 805 805 Paid-in capital 108,706 107,366 Retained earnings 614,011 547,467 Accumulated other comprehensive loss (837) (216) Treasury stock, at cost; 819,265 and 807,356 shares, respectively (13,574) (7,779) ---------- ---------- Total stockholders' equity 709,111 647,643 ---------- ---------- $1,121,527 $1,062,878 ========== ==========
Werner Enterprises is a full-service transportation company providing truckload and logistics services throughout the 48 states, portions of Canada and Mexico. C.L. Werner founded the Company in 1956. Werner is one of the nation's largest truckload carriers with a fleet of 8,350 trucks and 22,800 trailers. Werner Enterprises' common stock is traded on The Nasdaq Stock Market under the symbol WERN. The Werner Enterprises web site address is www.werner.com. Note: This press release contains forward-looking statements, which are based on information currently available. Actual results could differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2002. The Company assumes no obligation to update any forward-looking statement to the extent it becomes aware that it will not be achieved for any reason. -----END PRIVACY-ENHANCED MESSAGE-----