-----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, F9FazGzaSZFlgTtDVwiEfjkZA2UBMG9T2sfH/ZaoOVeOtZDUF0g/Dbq4CBBH6XA+ K/ZPRukVGA3fV6/5Z3kTfQ== 0000793074-07-000077.txt : 20070418 0000793074-07-000077.hdr.sgml : 20070418 20070418114940 ACCESSION NUMBER: 0000793074-07-000077 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070416 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070418 DATE AS OF CHANGE: 20070418 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: 07772718 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 wern8k041607.txt WERNER ENTERPRISES, INC. 8K 4/16/07 UNITED STATES 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): April 16, 2007 ---------------- 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) Number) Identification No.) 14507 FRONTIER ROAD POST OFFICE BOX 45308 OMAHA, NEBRASKA 68145 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (402) 895-6640 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 16, 2007, the registrant issued a news release announcing its operating revenues and earnings for the first quarter ended March 31, 2007. A copy of the news release is included as an exhibit to this Form 8-K. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibit 99.1 News release issued by the registrant on April 16, 2007. 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: April 18, 2007 By: /s/ John J. Steele ---------------- ----------------------------- John J. Steele Executive Vice President, Treasurer and Chief Financial Officer Date: April 18, 2007 By: /s/ James L. Johnson ---------------- ----------------------------- James L. Johnson Senior Vice President, Controller and Corporate Secretary EX-99.1 2 wern1q07.txt WERNER ENTERPRISES, INC. 8K 4/16/07 WERNER ENTERPRISES, INC. 14507 Frontier Road P. O. Box 45308 Omaha, Nebraska 68145 FOR IMMEDIATE RELEASE John J. Steele - --------------------- Executive Vice President, Treasurer and Chief Financial Officer (402) 894-3036 Contact: Robert E. Synowicki, Jr. Executive Vice President and Chief Information Officer (402) 894-3000 WERNER ENTERPRISES REPORTS FIRST QUARTER 2007 REVENUES AND EARNINGS Omaha, Nebraska, April 16, 2007: - ------------------------------- Werner Enterprises, Inc. (NASDAQ:WERN), one of the nation's largest truckload transportation and logistics companies, reported revenues and earnings for the first quarter ended March 31, 2007. Revenues increased 2% to $503.9 million in first quarter 2007 compared to $491.9 million in first quarter 2006. Earnings per share decreased 24% to $.21 per share in first quarter 2007 compared to $.27 in first quarter 2006. An increase in truck capacity and softness in freight demand made for a continued challenging market in first quarter 2007. In addition, rising fuel prices and the effects of significant winter storms placed added pressures on the cost side. January 2007 began with an unusually low level of freight demand. Freight bookings were lower each week in first quarter 2007 compared to the same weeks in each of the prior three years. However, Werner experienced the typical seasonal improvement in freight demand as first quarter 2007 developed from January to March. The softness in the housing and automotive sectors that are not large markets for Werner Enterprises, caused carriers that serve these markets to compete more aggressively in the consumer non-durable markets principally served by the Company. In addition, moderating economic growth and inventory tightening also contributed to lower freight volumes. These factors and the significant increase in truck supply caused by the large truck pre-buy led to a competitive environment in first quarter 2007. The driver market remains challenging, but is less difficult than a year ago. Normally going into the spring season, the driver market is very difficult due to seasonal construction and housing jobs that become available with improving weather conditions. The current weakness in these industries and other factors are helping improve the Company's driver availability. Werner has historically served its partner customers by making available a portion of its 3,000-truck Van solo driver fleet to meet their flex and surge shipment needs, at contractually agreed terms and rates. This fleet, which has the greatest exposure to the spot freight market, faced the most operational challenges during the past several months. To better match freight and trucks and to improve profitability, in March 2007 we began reducing our Van fleet by 250 trucks over a 60-day period. In addition, we are meeting with our partner customers to explain our goal of committing 100% of our Van capacity on a daily basis. In the future, we intend to meet our partner customers' flex and surge shipment needs using the 5,000 qualified carriers managed by our experienced Brokerage team. The ongoing diversification of our service offerings to Dedicated (34% of revenues), Mexico and Canada international revenues (10% of revenues) and logistics through our Value Added Services division (14% of revenues) helped soften the impact of a less favorable freight market in first quarter 2007, while providing increased service offerings to our customers. Werner intends to continue to diversify and grow Dedicated, International and Value Added Services. As planned, the average age of the Company's fleet remained new at 1.49 years as of March 31, 2007. Werner continued to take delivery of new trucks with 2006 engines through most of first quarter 2007. In 2005 and 2006, 170,000 more class 8 trucks than normal were built, or approximately 6% of the class 8 trucks used for business purposes in the United States. Since all class 8 trucks built beginning in April 2007 are required to have the 2007 engines, Werner expects that truck builds will be at very low levels for the next several months. Werner anticipates that the expected significant decline in truck builds in upcoming months will gradually bring class 8 truck supply more in balance with freight demand. Our new fleet will allow us to delay purchases of trucks with the 2007 engines. The Company's wholly-owned subsidiary, Fleet Truck Sales, is one of the largest equipment sales remarketing companies, and has been in business since 1992. Gains on sales of assets, primarily trucks and trailers, decreased to $6.2 million in first quarter 2007 compared to a quarterly record high of $8.8 million in first quarter 2006. As planned, in first quarter 2007 the Company sold fewer trucks but continued to realize solid gains per truck sold, after considering the impact of the softer freight market and higher fuel prices. In first quarter 2007, the Company also continued to sell its oldest van trailers that are fully depreciated and replace them with new trailers. These trailer sales also contributed to equipment gains in both first quarter 2007 and first quarter 2006. The Company expects to continue to sell its oldest van trailers during the remainder of 2007 and continue replacing them with new trailers. The number of trucks planned for sale for each of the remaining three quarters of 2007 is expected to be lower than 2006. Gains on sales are reflected as a reduction of Other Operating Expenses in the Company's income statement. Compared to the same month in the prior year, fuel costs were 10 cents per gallon lower in January 2007, 5 cents per gallon higher in February 2007, and 14 cents per gallon higher in March 2007. Fuel prices continue to rise and averaged 18 cents per gallon higher in the first 16 days of April 2007 compared to the same period in April 2006. In addition, the industry-wide adoption of ultra-low sulfur diesel beginning in fourth quarter 2006 reduced miles per gallon. For first quarter 2007 compared to first quarter 2006, net fuel costs had a two- cent negative impact on earnings per share. The Company includes all of the following items in the calculation of the impact of fuel on earnings for both periods: (1) average fuel price per gallon, (2) fuel reimbursements paid to owner-operator drivers, (3) miles per gallon, and (4) offsetting fuel surcharge revenues from customers. In March 2006, a long-standing customer, APX Logistics, Inc., filed bankruptcy and was subsequently being liquidated with no significant amounts expected to be paid to unsecured creditors. The Company recorded bad debt expense in first quarter 2006 for the full amount owed of $7.2 million. This is reflected as an expense in Other Operating Expenses in the Company's income statement for first quarter 2006. To provide shippers with additional sources of managed capacity and network analysis, the Company is growing its non-asset based Value Added Services (VAS) division. VAS includes brokerage, freight transportation management, intermodal, and Werner Global Logistics international business.
Value Added Services (amounts in 000's) 1Q07 1Q06 - --------------------------------------- --------------- --------------- Revenues $69,877 100.0% $56,171 100.0% Gross margin 7,948 11.4 5,280 9.4 Operating income 2,940 4.2 1,511 2.7
VAS generated 24% revenue growth, 51% gross margin growth, and 95% operating income growth. Brokerage continued to produce strong results with 32% revenue growth and $0.8 million of operating income improvement. Brokerage is generating an annualized revenue run rate of $115 million with a carrier base of approximately 5,000 qualified carriers. Freight Management, our single source logistics solution and largest VAS service offering, produced 9% revenue growth and $0.3 million of operating income improvement. Freight Management continues to secure new VAS business that is generating growth across all Company business units. Intermodal produced 46% revenue growth and $0.3 million of operating income improvement, as we started benefiting from intermodal strategy changes that we implemented during fourth quarter 2006 and first quarter 2007. Our newest VAS division, Werner Global Logistics (WGL), is fully prepared to assist customers with innovative global supply chain solutions. All necessary business licenses have been obtained; our experienced management team is fully staffed and trained in Shanghai, Shenzen and Omaha; and WGL has successfully managed hundreds of international container shipments to date. Customer development efforts are actively in process and WGL is expected to be a positive operating income contributor later this year. WGL is a licensed U.S. NVOCC, U.S. Customs Broker, Class A Freight Forwarder in China, licensed China NVOCC and a TSA approved Indirect Air Carrier. A comparison of the Company's truckload operating ratio, net of fuel surcharge revenues, and VAS operating ratio for first quarters 2007 and 2006 is shown below.
Operating Ratios 1Q07 1Q06 Difference - ---------------- ------ ------ ---------- Truckload Transportation Services 93.6% 90.5% 3.1% Value Added Services 95.8 97.3 -1.5
Higher fuel prices and higher fuel surcharge collections have the effect of increasing the total company operating ratio and the Truckload Transportation Services segment's operating ratio. Eliminating this sometimes volatile source of revenue provides a more consistent basis for comparing the results of operations from period to period. The Truckload Transportation Services segment's operating ratio for first quarter 2007 and first quarter 2006 is 94.5% and 91.9%, respectively, if fuel surcharge revenues are included in revenues and not netted against operating expenses. The Company's financial position remains strong. The Company ended the quarter with $80.0 million of debt after net repayments of $20.0 million in first quarter 2007. Stockholders' equity is $853.6 million, or $11.55 per share. During first quarter 2007, the Company purchased 1.5 million shares of its stock at an average share price of $19.68. The Company has 3.7 million shares remaining and available for repurchase under the current authorization from the board of directors.
INCOME STATEMENT DATA (Unaudited) (In thousands, except per share amounts) Quarter % of Quarter % of Ended Operating Ended Operating 3/31/07 Revenues 3/31/06 Revenues ------------- ---------- ------------- ---------- Operating revenues $503,913 100.0 $491,922 100.0 ------------- ---------- ------------- ---------- Operating expenses: Salaries, wages and benefits 150,521 29.9 146,613 29.8 Fuel 89,085 17.7 88,646 18.0 Supplies and maintenance 39,591 7.9 37,792 7.7 Taxes and licenses 30,163 6.0 29,469 6.0 Insurance and claims 24,205 4.8 19,195 3.9 Depreciation 42,557 8.4 41,101 8.3 Rent and purchased transportation 100,215 19.9 88,019 17.9 Communications and utilities 5,092 1.0 4,895 1.0 Other (4,782) (1.0) (630) (0.1) ------------- ---------- ------------- ---------- Total operating expenses 476,647 94.6 455,100 92.5 ------------- ---------- ------------- ---------- Operating income 27,266 5.4 36,822 7.5 ------------- ---------- ------------- ---------- Other expense (income): Interest expense 1,336 0.3 273 0.1 Interest income (1,051) (0.2) (995) (0.2) Other 72 0.0 41 0.0 ------------- ---------- ------------- ---------- Total other expense (income) 357 0.1 (681) (0.1) ------------- ---------- ------------- ---------- Income before income taxes 26,909 5.3 37,503 7.6 Income taxes 11,241 2.2 15,474 3.1 ------------- ---------- ------------- ---------- Net income $15,668 3.1 $22,029 4.5 ============= ========== ============= ========== Diluted shares outstanding 76,216 80,963 ============= ============= Diluted earnings per share $.21 $.27 ============= ============= OPERATING STATISTICS Quarter Ended Quarter Ended 3/31/07 % Change 3/31/06 ------------- ---------- ------------- Trucking revenues, net of fuel surcharge (1) $366,306 -0.5% $368,256 Trucking fuel surcharge revenues (1) 60,383 -2.4% 61,888 Non-trucking revenues, including VAS (1) 72,951 23.7% 58,980 Other operating revenues (1) 4,273 52.7% 2,798 ------------- ------------- Operating revenues (1) $503,913 2.4% $491,922 ============= ============= Average monthly miles per tractor 9,519 -3.2% 9,834 Average revenues per total mile (2) $1.444 -0.3% $1.448 Average revenues per loaded mile (2) $1.676 0.8% $1.663 Average percentage of empty miles 13.84% 7.2% 12.91% Average trip length in miles (loaded) 572 -2.2% 585 Total miles (loaded and empty) (1) 253,714 -0.2% 254,317 Average tractors in service 8,884 3.1% 8,620 Average revenues per tractor per week (2) $3,172 -3.5% $3,286 Capital expenditures, net (1) $31,564 $7,870 Cash flow from operations (1) $68,056 $103,520 Return on assets (annualized) 4.3% 6.4% Total tractors (at quarter end) Company 7,976 7,820 Owner-operator 824 830 ------------- ------------- Total tractors 8,800 8,650 Total trailers (truck and intermodal, quarter end) 25,160 25,080
(1) Amounts in thousands. (2) Net of fuel surcharge revenues.
BALANCE SHEET DATA (In thousands, except share amounts) 3/31/07 12/31/06 ------------ ------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $17,575 $31,613 Accounts receivable, trade, less allowance of $9,299 and $9,417, respectively 230,459 232,794 Other receivables 14,294 17,933 Inventories and supplies 10,445 10,850 Prepaid taxes, licenses and permits 13,500 18,457 Current deferred income taxes 26,251 25,251 Other current assets 23,305 24,143 ------------ ------------ Total current assets 335,829 361,041 ------------ ------------ Property and equipment 1,690,835 1,687,220 Less - accumulated depreciation 602,288 590,880 ------------ ------------ Property and equipment, net 1,088,547 1,096,340 ------------ ------------ Other non-current assets 20,482 20,792 ------------ ------------ $1,444,858 $1,478,173 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $65,224 $75,821 Insurance and claims accruals 80,885 73,782 Accrued payroll 20,887 21,344 Other current liabilities 28,264 19,963 ------------ ------------ Total current liabilities 195,260 190,910 ------------ ------------ Long-term debt 80,000 100,000 Other long-term liabilities 6,607 999 Insurance and claims accruals, net of current portion 99,500 99,500 Deferred income taxes 209,908 216,413 Stockholders' equity: Common stock, $.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 73,900,461 and 75,339,297 shares outstanding, respectively 805 805 Paid-in capital 105,342 105,193 Retained earnings 874,478 862,403 Accumulated other comprehensive loss (786) (207) Treasury stock, at cost; 6,633,075 and 5,194,239 shares, respectively (126,256) (97,843) ------------ ------------ Total stockholders' equity 853,583 870,351 ------------ ------------ $1,444,858 $1,478,173 ============ ============
Werner Enterprises, Inc. was founded in 1956 and is a premier transportation and logistics company, with coverage throughout the United States, Canada, Mexico and China. Werner maintains its global headquarters in Omaha, Nebraska with offices throughout North America and China. 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. 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 and a TSA approved Indirect Air Carrier. Werner Enterprises' common stock trades on The NASDAQ Global Select MarketSM under the symbol WERN. The Werner website 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 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2006. 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-----