EX-99.1 2 wern4q09.txt WERNER ENTERPRISES, INC. 8-K 1/27/10 Exhibit 99.1 WERNER ENTERPRISES, INC. 14507 Frontier Road P. O. Box 45308 Omaha, Nebraska 68145 FOR IMMEDIATE RELEASE Contacts: 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 FOURTH QUARTER AND ANNUAL 2009 REVENUES AND EARNINGS Omaha, Nebraska, January 27, 2010: --------------------------------- Werner Enterprises, Inc. (NASDAQ:WERN), one of the nation's largest transportation and logistics companies, reported revenues and earnings for the fourth quarter and year ended December 31, 2009. Revenues decreased 10% to $439.6 million in fourth quarter 2009 compared to $490.6 million in fourth quarter 2008. Trucking revenues, excluding fuel surcharges, declined 8% to $319.0 million in fourth quarter 2009 compared to $346.2 million in fourth quarter 2008. Value Added Services ("VAS") revenues increased 1% and were $62.3 million in fourth quarter 2009 compared to $61.9 million in fourth quarter 2008. Earnings per share decreased 4% to 25 cents per share in fourth quarter 2009 compared to 26 cents per share in fourth quarter 2008. For the full year, revenues decreased 23% to $1.666 billion in 2009 compared to $2.166 billion in 2008. Trucking revenues, excluding fuel surcharges, declined 12% to $1.256 billion in 2009 compared to $1.431 billion in 2008. VAS revenues declined 18% and were $217.9 million in 2009 compared to $265.3 million in 2008. Earnings per share declined 17% to 79 cents per share in 2009 compared to 94 cents per share in 2008. Freight shipment volumes continued to firm in fourth quarter 2009. The daily pre-books (ratio of loads to trucks) for the One-Way truckload fleets in fourth quarter 2009 held steady from levels achieved in September 2009. On a year-over-year basis, pre-books were meaningfully stronger in fourth quarter 2009 compared to decelerating pre-books during fourth quarter 2008. Management continues to believe a portion of the Company's strengthening freight demand is caused by shippers acknowledging and adjusting to the increased risk of relying on highly leveraged carriers. Pricing remained competitive, due primarily to the high level of customer bid activity that occurred during the first half of 2009. Much of our pricing on committed business is available for review with customers in the first half of 2010. The Company is planning for a better relative freight pricing market and more freight opportunities in 2010 compared to what transpired in the first half of 2009. Management is cautiously optimistic that the Company will experience gradual improvement in the freight market during 2010. Strong operational achievements and cost control execution mitigated the impact of volume declines on operating results. These include: -Loaded miles per truck grew 2.5% in fourth quarter 2009 compared to fourth quarter 2008. -Empty miles per trip declined 25% to 62 miles in fourth quarter 2009 compared to 82 miles in fourth quarter 2008. -The tractor-to-non-driver ratio, a primary measure of employee productivity, improved 14% to 4.10 in fourth quarter 2009 compared to 3.59 in fourth quarter 2008. -Fuel miles per gallon ("mpg") improved on a year-over-year basis for the eleventh consecutive quarter, rising 2.8% in fourth quarter 2009 compared to fourth quarter 2008. -Insurance and claims costs continued to improve, responding to the safety initiatives implemented in June 2009. Insurance cost per mile declined 23% to 8.7 cents per mile in fourth quarter 2009 compared to 11.3 cents per mile in fourth quarter 2008. -Cost control initiatives throughout the Company helped lower the trucking cost per mile, excluding fuel, in fourth quarter 2009 compared to fourth quarter 2008 by nearly 6 cents a mile. -The Company's VAS division improved its operating income sequentially in each quarter of 2009. The Company would like to thank all of its employees for their hard work and dedication as it faced the challenges of 2009 and positioned Werner Enterprises for the opportunities of 2010. Management believes that excess capacity in the truckload sector continues to be supported by lender leniency that is not ultimately sustainable. There are early signs that trucking company failures are beginning to accelerate. Werner continues to diversify its business model with the goal of a balanced portfolio of One-Way Truckload (which includes the Regional, medium-to-long-haul Van, and Expedited fleets), Dedicated, and Logistics. Within One-Way Truckload, the Company continues to reduce its medium-to-long-haul Van fleet and grow its Regional fleets. The Company's specialized services division, primarily Dedicated, held nearly steady during the quarter in a challenging market at 3,300 trucks. Diesel fuel prices were 5 cents a gallon higher in fourth quarter 2009 than fourth quarter 2008, and were 17 cents a gallon higher than third quarter 2009. Rapidly declining fuel prices in fourth quarter 2008 had a temporary favorable impact on net fuel costs (fuel expense, less fuel surcharge revenues) and earnings. For the first 27 days of January 2010, the average diesel fuel price per gallon was 59 cents higher than the average diesel fuel price per gallon in the same period of 2009 and 72 cents higher than in first quarter 2009. Continued lower fuel prices in the first half of 2009 resulted in a similar temporary favorable impact on net fuel costs and earnings. The Company's fuel mpg program continued to yield positive results. Due strictly to mpg improvements from its fuel management programs, Werner purchased 1.0 million fewer gallons of diesel fuel in fourth quarter 2009 compared to fourth quarter 2008 and 5.5 million fewer gallons in 2009 compared to 2008. This fuel savings alone reduced the Company's carbon emissions by nearly 61,050 tons. The Company realized gains on sales of assets of $1.3 million in fourth quarter 2009 compared to $1.1 million in fourth quarter 2008, primarily from trucks and trailers sold by Werner's wholly-owned subsidiary, Fleet Truck Sales. Buyer demand for used trucks remains low, but seems to have stabilized. Gains on sales are reflected as a reduction of Other Operating Expenses in the Company's income statement. To provide shippers with additional sources of managed capacity and network analysis, Werner continues to develop its non-asset-based VAS segment. VAS includes Brokerage, Freight Management, Intermodal and Werner Global Logistics.
4Q09 4Q08 2009 2008 Value Added Services ------------- -------------- --------------- --------------- (amounts in 000's) $ % $ % $ % $ % -------------------- ------------- -------------- --------------- --------------- Revenues $62,315 100.0 $61,861 100.0 $217,942 100.0 $265,262 100.0 Rent and purchased transportation expense 52,096 83.6 52,140 84.3 181,215 83.1 225,498 85.0 ------- ------- -------- -------- Gross margin 10,219 16.4 9,721 15.7 36,727 16.9 39,764 15.0 Other operating expenses 6,198 9.9 6,821 11.0 24,377 11.2 25,194 9.5 ------- ------- -------- -------- Operating income $4,021 6.5 $2,900 4.7 $12,350 5.7 $14,570 5.5 ======= ======= ======== ========
The following table shows the change in shipment volume and average revenue (excluding logistics fee revenue) per shipment for all VAS shipments:
% % 4Q09 4Q08 Difference Change 2009 2008 Difference Change ------- ------- ---------- ------ ------- ------- ---------- ------ Total VAS shipments 65,249 59,557 5,692 10% 243,286 231,754 11,532 5% Less: Non-committed shipments to Truckload segment (26,190) (20,555) (5,635) 27% (93,825) (71,299) (22,526) 32% ------- ------- ---------- ------- ------- ---------- Net VAS shipments 39,059 39,002 57 0% 149,461 160,455 (10,994) (7)% ======= ======= ========== ======= ======= ========== Average revenue per shipment $1,373 $1,448 ($75) (5)% $1,321 $1,576 ($255) (16)% ======= ======= ========== ======= ======= ==========
VAS revenues, gross margin and operating income rose sequentially for the third consecutive quarter. On a year-over-year basis, Brokerage revenues for fourth quarter 2009 were essentially flat and operating income increased due primarily to a 100 basis point improvement in the gross margin percentage. Intermodal revenues and operating income declined due to an extremely competitive pricing market which reduced gross margins. Werner Global Logistics once again achieved meaningful revenue and operating income improvement. Comparisons of the operating ratios (net of fuel surcharge revenues) for the Truckload segment and VAS segment for fourth quarters and full years 2009 and 2008 are shown below.
Operating Ratios 4Q09 4Q08 Difference 2009 2008 Difference ---------------- ----- ----- ---------- ----- ----- ---------- Truckload Transportation Services 91.7% 92.3% (0.6)% 93.3% 93.4% (0.1)% Value Added Services 93.5 95.3 (1.8) 94.3 94.5 (0.2)
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 2009 and fourth quarter 2008 are 92.9% and 93.7%, respectively, and for the full year 2009 and 2008 are 94.1% and 95.0%, respectively, when fuel surcharge revenues are reported as revenues instead of a reduction of operating expenses. The Company's financial position remains strong. The Company ended the year with no debt and $18.4 million of cash, after paying an $89.9 million special dividend to shareholders in December 2009.
INCOME STATEMENT DATA (Unaudited) (In thousands, except per share amounts) Quarter % of Quarter % of Ended Operating Ended Operating 12/31/09 Revenues 12/31/08 Revenues -------- --------- -------- --------- Operating revenues $439,638 100.0 $490,574 100.0 -------- --------- -------- --------- Operating expenses: Salaries, wages and benefits 129,506 29.4 143,644 29.3 Fuel 72,863 16.6 84,515 17.2 Supplies and maintenance 35,775 8.1 40,188 8.2 Taxes and licenses 24,384 5.5 26,559 5.4 Insurance and claims 19,186 4.4 26,983 5.5 Depreciation 38,299 8.7 42,303 8.6 Rent and purchased transportation 85,578 19.5 90,256 18.4 Communications and utilities 3,624 0.8 4,751 1.0 Other (197) 0.0 748 0.2 -------- --------- -------- --------- Total operating expenses 409,018 93.0 459,947 93.8 -------- --------- -------- --------- Operating income 30,620 7.0 30,627 6.2 -------- --------- -------- --------- Other expense (income): Interest expense 17 0.0 74 0.0 Interest income (435) (0.1) (923) (0.2) Other (114) 0.0 (277) (0.1) -------- --------- -------- --------- Total other expense (income) (532) (0.1) (1,126) (0.3) -------- --------- -------- --------- Income before income taxes 31,152 7.1 31,753 6.5 Income taxes 13,148 3.0 13,106 2.7 -------- --------- -------- --------- Net income $18,004 4.1 $18,647 3.8 ======== ========= ======== ========= Diluted shares outstanding 72,335 71,836 ======== ======== Diluted earnings per share $.25 $.26 ======== ======== OPERATING STATISTICS Quarter Ended Quarter Ended 12/31/09 % Change 12/31/08 ------------- -------- ------------- Trucking revenues, net of fuel surcharge (1) $319,022 -7.8% $346,158 Trucking fuel surcharge revenues (1) 54,108 -29.2% 76,391 Non-trucking revenues, including VAS (1) 63,545 -1.0% 64,197 Other operating revenues (1) 2,963 -22.6% 3,828 ------------- ------------- Operating revenues (1) $439,638 -10.4% $490,574 ============= ============= Average monthly miles per tractor 10,145 0.6% 10,089 Average revenues per total mile (2) $1.440 -0.3% $1.444 Average revenues per loaded mile (2) $1.632 -2.2% $1.669 Average percentage of empty miles 11.82% -12.1% 13.45% Average trip length in miles (loaded) 463 -12.6% 530 Total miles (loaded and empty) (1) 221,599 -7.5% 239,640 Average tractors in service 7,281 -8.0% 7,917 Average revenues per tractor per week (2) $3,370 0.2% $3,363 Capital expenditures, net (1) $22,097 $34,587 Cash flow from operations (1) $25,134 $69,918 Return on assets (annualized) 5.7% 5.4% Total tractors (at quarter end) Company 6,575 7,000 Owner-operator 675 700 ------------- ------------- Total tractors 7,250 7,700 Total trailers (truck and intermodal, quarter end) 23,880 24,940
(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 12/31/09 Revenues 12/31/08 Revenues ---------- --------- ---------- --------- Operating revenues $1,666,470 100.0 $2,165,599 100.0 ---------- --------- ---------- --------- Operating expenses: Salaries, wages and benefits 522,962 31.4 586,035 27.1 Fuel 247,640 14.9 508,594 23.5 Supplies and maintenance 141,402 8.5 163,524 7.6 Taxes and licenses 96,406 5.8 109,443 5.0 Insurance and claims 83,458 5.0 104,349 4.8 Depreciation 155,315 9.3 167,435 7.7 Rent and purchased transportation 305,854 18.4 397,887 18.4 Communications and utilities 15,856 0.9 19,579 0.9 Other 886 0.0 (4,182) (0.2) ---------- --------- ---------- --------- Total operating expenses 1,569,779 94.2 2,052,664 94.8 ---------- --------- ---------- --------- Operating income 96,691 5.8 112,935 5.2 ---------- --------- ---------- --------- Other expense (income): Interest expense 99 0.0 83 0.0 Interest income (1,779) (0.1) (3,972) (0.2) Other (466) 0.0 (198) 0.0 ---------- --------- ---------- --------- Total other expense (income) (2,146) (0.1) (4,087) (0.2) ---------- --------- ---------- --------- Income before income taxes 98,837 5.9 117,022 5.4 Income taxes 42,253 2.5 49,442 2.3 ---------- --------- ---------- --------- Net income $56,584 3.4 $67,580 3.1 ========== ========= ========== ========= Diluted shares outstanding 72,075 71,658 ========== ========== Diluted earnings per share $.79 $.94 ========== ========== OPERATING STATISTICS Year Year Ended Ended 12/31/09 % Change 12/31/08 ---------- -------- ---------- Trucking revenues, net of fuel surcharge (1) $1,256,355 -12.2% $1,430,560 Trucking fuel surcharge revenues (1) 176,744 -60.1% 442,614 Non-trucking revenues, including VAS (1) 222,159 -18.9% 273,896 Other operating revenues (1) 11,212 -39.5% 18,529 ---------- ---------- Operating revenues (1) $1,666,470 -23.0% $2,165,599 ========== ========== Average monthly miles per tractor 9,936 -2.3% 10,165 Average revenues per total mile (2) $1.439 -1.5% $1.461 Average revenues per loaded mile (2) $1.645 -2.4% $1.686 Average percentage of empty miles 12.52% -6.2% 13.35% Average trip length in miles (loaded) 463 -13.9% 538 Total miles (loaded and empty) (1) 872,856 -10.9% 979,211 Average tractors in service 7,321 -8.8% 8,028 Average revenues per tractor per week (2) $3,300 -3.7% $3,427 Capital expenditures, net (1) $98,846 $114,978 Cash flow from operations (1) $194,440 $259,130 Return on assets (annualized) 4.5% 5.0% Total tractors (at quarter end) Company 6,575 7,000 Owner-operator 675 700 ---------- ---------- Total tractors 7,250 7,700 Total trailers (truck and intermodal, quarter end) 23,880 24,940
(1) Amounts in thousands. (2) Net of fuel surcharge revenues.
BALANCE SHEET DATA (In thousands, except share amounts) 12/31/09 12/31/08 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $18,430 $48,624 Accounts receivable, trade, less allowance of $9,167 and $9,555, respectively 180,740 185,936 Other receivables 10,366 18,739 Inventories and supplies 12,725 10,644 Prepaid taxes, licenses and permits 14,628 16,493 Current deferred income taxes 24,808 30,789 Other current assets 22,807 20,659 ---------- ---------- Total current assets 284,504 331,884 ---------- ---------- Property and equipment 1,580,711 1,613,102 Less - accumulated depreciation 708,809 686,463 ---------- ---------- Property and equipment, net 871,902 926,639 ---------- ---------- Other non-current assets 16,603 16,795 ---------- ---------- $1,173,009 $1,275,318 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $47,056 $46,684 Current portion of long-term debt - 30,000 Insurance and claims accruals 65,667 79,830 Accrued payroll 17,567 25,850 Other current liabilities 16,451 19,006 ---------- ---------- Total current liabilities 146,741 201,370 ---------- ---------- Other long-term liabilities 8,760 7,406 Insurance and claims accruals, net of current portion 113,500 120,500 Deferred income taxes 199,358 200,512 Stockholders' equity: Common stock, $.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 71,896,512 and 71,576,267 shares outstanding, respectively 805 805 Paid-in capital 92,389 93,343 Retained earnings 778,890 826,511 Accumulated other comprehensive loss (5,556) (7,146) Treasury stock, at cost; 8,637,024 and 8,957,269 shares, respectively (161,878) (167,983) ---------- ---------- Total stockholders' equity 704,650 745,530 ---------- ---------- $1,173,009 $1,275,318 ========== ==========
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. Note: 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, 2008 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009. For those reasons, undue reliance should not be placed on any such 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.