-----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, Ru3yA7PIqejhOjBZHp6scMrLW7mvE5YALPGRPo7//YgkXGntOZ9WtSQAYhGiO0WX jcAM4biZUz+fjE5tpwQXrA== 0000793074-10-000035.txt : 20101019 0000793074-10-000035.hdr.sgml : 20101019 20101019120645 ACCESSION NUMBER: 0000793074-10-000035 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20101018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20101019 DATE AS OF CHANGE: 20101019 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: 101129733 BUSINESS ADDRESS: STREET 1: 14507 FRONTIER ROAD CITY: OMAHA STATE: NE ZIP: 68138 BUSINESS PHONE: 4028956640 MAIL ADDRESS: STREET 1: P.O. BOX 45308 CITY: OMAHA STATE: NE ZIP: 68145 8-K 1 wern8k101810.txt WERNER ENTERPRISES, INC. 8-K 10/18/10 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): October 18, 2010 ------------------- 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 October 18, 2010, the registrant issued a press release regarding, among other things, its revenues and earnings for the third quarter ended September 30, 2010. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K. In accordance with General Instruction B.2 to the Form 8-K, the information under this Item 2.02 and the press release exhibit to this Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section 18, nor shall such information and exhibit be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended (the "Securities Act"), unless the registrant expressly states that such information and exhibit are to be considered "filed" under the Exchange Act or incorporates such information and exhibit by specific reference in an Exchange Act or Securities Act filing. The press release furnished as Exhibit 99.1 to this Form 8-K may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act 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 registrant'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 registrant's Annual Report on Form 10-K for the year ended December 31, 2009. For those reasons, undue reliance should not be placed on any forward-looking statement. The registrant 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. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. -------- 99.1 Press release issued by the registrant on October 18, 2010, "Werner Enterprises Reports Improved Third Quarter 2010 Revenues and Earnings". 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: October 19, 2010 By: /s/ John J. Steele ------------------- ------------------------------ John J. Steele Executive Vice President, Treasurer and Chief Financial Officer Date: October 19, 2010 By: /s/ James L. Johnson ------------------- ------------------------------ James L. Johnson Executive Vice President, Chief Accounting Officer and Corporate Secretary EX-99.1 2 wern3q10.txt WERNER ENTERPRISES, INC. 8-K 10/18/10 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 Robert E. Synowicki, Jr. Executive Vice President and Chief Information Officer (402) 894-3350 WERNER ENTERPRISES REPORTS IMPROVED THIRD QUARTER 2010 REVENUES AND EARNINGS Omaha, Nebraska, October 18, 2010: - --------------------------------- Werner Enterprises, Inc. (NASDAQ: WERN), one of the nation's largest transportation and logistics companies, reported improved revenues and earnings for the third quarter ended September 30, 2010. Summarized financial results for third quarter 2010 compared to third quarter 2009 are as follows (dollars in thousands, except per share data):
Quarter Quarter Ended Ended % 9/30/10 9/30/09 Change -------------------------------- Total revenues $463,262 $429,273 8% Trucking revenues, net of fuel surcharge $329,200 $319,291 3% Value Added Services ("VAS") revenues $64,683 $57,685 12% Operating income $40,145 $32,805 22% Net income $24,158 $18,992 27% Earnings per diluted share $0.33 $0.26 26%
Freight market trends continued to be good in third quarter 2010 and were better than those in third quarter 2009; however, they were not as strong as second quarter 2010. Freight trends thus far in October have softened from the third quarter 2010, although we believe the larger shippers in our network may be shifting freight shipment volumes to large carriers in an effort to secure capacity going into 2011. The softening seems to be driven more by smaller company shippers being more cautious with their inventory and overall volume projections. Our average revenues per total mile increased 4.2% in third quarter 2010 compared to third quarter 2009 due to rising contractual pricing, higher spot market rates and fewer empty miles. We believe that capacity is not being added in the truckload industry because of challenges such as tightened equipment financing standards, levered balance sheets, increased government regulations, and other factors. We remain committed to maintaining our total truck count flat at approximately 7,300 trucks. Our primary objectives are to expand our margins and improve our returns on assets, equity and capital, while staying true to our expanded portfolio of services for our customers. We continue to diversify our business model with the goal of a balanced portfolio of revenues comprised of One-Way Truckload (which includes the Regional, medium-to-long-haul Van and Expedited fleets), Dedicated and Logistics (VAS). The specialized services unit, primarily Dedicated, ended the quarter with 3,600 trucks (or 49% of our total fleet). Diesel fuel prices were 31 cents per gallon higher in third quarter 2010 than in third quarter 2009, and were five cents per gallon lower than in second quarter 2010. For the first 18 days of October 2010, the average diesel fuel price per gallon was 43 cents higher than the average diesel fuel price per gallon in the same period of 2009 and 32 cents higher than in fourth quarter 2009. The driver recruiting and retention market became more competitive in second quarter 2010, and that trend continued in third quarter 2010. Generally, higher national unemployment rates aid our recruiting and retention efforts. We believe, however, that an improved freight market, extended unemployment benefit payment programs and anticipated trucking industry safety regulations are tightening driver supply. During third quarter 2010, we implemented proactive measures that successfully improved our driver recruitment and retention despite the competitive driver market. While we are not immune to changes in the driver market, we continue to believe our position in the current market is better than that of many competitors because over 70% of our driving jobs are in more attractive, shorter-haul Regional and Dedicated fleet operations that enable these drivers to get home more frequently. The entire Werner team remains focused on and committed to improving our safety record. Our current quarter results validate that team commitment. Insurance and claims costs per mile declined 19% to 7.3 cents in third quarter 2010 compared to 9.0 cents in third quarter 2009. We experienced a significantly lower severity of claims and a slightly lower frequency of claims in third quarter 2010 compared to third quarter 2009. We remain committed to our focus on safety and to reducing our insurance and claims costs. Gains on sales of assets were $1.4 million in third quarter 2010 compared to $0.9 million in third quarter 2009 and $0.5 million in second quarter 2010. The market for the sale of used trucks and trailers began to improve in third quarter 2010 compared to second quarter 2010, and we realized higher average gains per truck and trailer sold. Gains on sales are reflected as a reduction of Other Operating Expenses in our income statement. We have begun buying new trucks with 2010-standard engines to replace older trucks we sell or trade. 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. As a result, we expect our net capital expenditures for 2010 to be in the range of $110.0 million to $130.0 million, an increase from our prior range of $90.0 million to $120.0 million. To provide shippers with additional sources of managed capacity and network analysis, we continue to develop the non-asset-based VAS segment. VAS includes Brokerage, Freight Management, Intermodal and Werner Global Logistics (International).
Quarter Ended Quarter Ended Value Added Services (amounts in 000's) 9/30/10 9/30/09 - --------------------------------------- ----------------- ----------------- Revenues $64,683 100.0% $57,685 100.0% Rent and purchased transportation expense 55,032 85.1 47,840 82.9 -------- -------- Gross margin 9,651 14.9 9,845 17.1 Other operating expenses 6,838 10.6 6,040 10.5 -------- -------- Operating income $2,813 4.3 $3,805 6.6 ======== ======== Nine Months Ended Nine Months Ended 9/30/10 9/30/09 ----------------- ----------------- Revenues $191,149 100.0% $155,627 100.0% Rent and purchased transportation expense 163,014 85.3 129,119 83.0 -------- -------- Gross margin 28,135 14.7 26,508 17.0 Other operating expenses 19,892 10.4 18,179 11.7 -------- -------- Operating income $8,243 4.3 $8,329 5.3 ======== ========
The following table shows the change in shipment volume and average revenue (excluding logistics fee revenue) per shipment for all VAS shipments.
Quarter Quarter Ended Ended 9/30/10 9/30/09 Difference % Change ------- ------- ---------- -------- Total VAS shipments 63,709 64,679 (970) (1)% Less: Non-committed shipments to Truckload segment (20,436) (25,290) 4,854 (19)% ------- ------- ---------- Net VAS shipments 43,273 39,389 3,884 10% ======= ======= ========== Average revenue per shipment $1,372 $1,325 $47 4% ======= ======= ==========
In third quarter 2010, VAS revenues increased 12%, gross margin dollars decreased 2% and operating income dollars decreased 26% compared to third quarter 2009. Brokerage revenues in third quarter 2010 increased 16% compared to third quarter 2009 due to an increased volume of shipments and higher average revenue per shipment. Brokerage gross margin dollars grew at a lower percentage rate, and the gross margin percentage decreased 130 basis points due to the higher cost of carrier capacity compared to third quarter 2009; however, the Brokerage gross margin percentage improved sequentially from second quarter 2010 to third quarter 2010 by 70 basis points. Brokerage operating income dollars in third quarter 2010 increased 2% compared to third quarter 2009 due to the lower gross margin percentage. Intermodal revenues, gross margin percentage, and operating results improved. Werner Global Logistics revenues increased during third quarter 2010 compared to third quarter 2009 while the gross margin percentage and operating results decreased significantly due to a decrease in the number of higher margin shipments related to several international projects that ended during the latter part of second quarter 2010. Compared to second quarter 2010, Werner Global Logistics revenues, gross margin percentage and operating results showed improvement. Comparisons of the operating ratios (net of fuel surcharge revenues) for the Truckload segment and VAS segment for third quarters 2010 and 2009 and year-to-date 2010 and 2009 are shown below.
Quarter Quarter Ended Ended Operating Ratios 9/30/10 9/30/09 Difference - ---------------- ------- ------- ---------- Truckload Transportation Services 88.8% 90.5% (1.7)% Value Added Services 95.7 93.4 2.3 Nine Nine Months Months Ended Ended 9/30/10 9/30/09 Difference ------- ------- ---------- Truckload Transportation Services 91.3% 93.8% (2.5)% Value Added Services 95.7 94.7 1.0
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 third quarter 2010 and third quarter 2009 are 90.6% and 91.8%, respectively, and for year-to-date 2010 and 2009 are 92.7% and 94.5%, respectively, when fuel surcharge revenues are reported as revenues instead of a reduction of operating expenses. Our financial position remains strong. We ended third quarter 2010 with no debt and $94.8 million of cash. Stockholder's equity is $763.3 million. Net capital expenditures for the nine months ended September 30, 2010 were $83.1 million.
INCOME STATEMENT DATA (Unaudited) (In thousands, except per share amounts) Quarter % of Quarter % of Ended Operating Ended Operating 9/30/10 Revenues 9/30/09 Revenues -------- --------- -------- --------- Operating revenues $463,262 100.0 $429,273 100.0 -------- --------- -------- --------- Operating expenses: Salaries, wages and benefits 134,255 29.0 130,885 30.5 Fuel 75,986 16.4 66,001 15.4 Supplies and maintenance 40,730 8.8 34,403 8.0 Taxes and licenses 23,197 5.0 23,665 5.5 Insurance and claims 15,998 3.4 20,016 4.7 Depreciation 37,092 8.0 37,708 8.8 Rent and purchased transportation 91,795 19.8 79,948 18.6 Communications and utilities 4,013 0.9 3,841 0.9 Other 51 0.0 1 0.0 -------- --------- -------- --------- Total operating expenses 423,117 91.3 396,468 92.4 -------- --------- -------- --------- Operating income 40,145 8.7 32,805 7.6 -------- --------- -------- --------- Other expense (income): Interest expense 5 0.0 3 0.0 Interest income (432) (0.1) (418) (0.1) Other (84) (0.0) (100) 0.0 -------- --------- -------- --------- Total other expense (income) (511) (0.1) (515) (0.1) -------- --------- -------- --------- Income before income taxes 40,656 8.8 33,320 7.7 Income taxes 16,498 3.6 14,328 3.3 -------- --------- -------- --------- Net income $24,158 5.2 $18,992 4.4 ======== ========= ======== ========= Diluted shares outstanding 72,922 72,110 ======== ======== Diluted earnings per share $.33 $.26 ======== ======== OPERATING STATISTICS Quarter Ended Quarter Ended 9/30/10 % Change 9/30/09 ------------- ---------- ------------- Trucking revenues, net of fuel surcharge (1) $329,200 3.1% $319,291 Trucking fuel surcharge revenues (1) 63,271 27.9% 49,477 Non-trucking revenues, including VAS (1) 67,593 15.5% 58,499 Other operating revenues (1) 3,198 59.4% 2,006 ------------- ------------- Operating revenues (1) $463,262 7.9% $429,273 ============= ============= Average monthly miles per tractor 10,085 -1.0% 10,184 Average revenues per total mile (2) $1.500 4.2% $1.440 Average revenues per loaded mile (2) $1.690 3.2% $1.637 Average percentage of empty miles 11.29% -6.0% 12.01% Average trip length in miles (loaded) 432 -6.7% 463 Total miles (loaded and empty) (1) 219,527 -1.0% 221,675 Average tractors in service 7,256 0.0% 7,256 Average revenues per tractor per week (2) $3,490 3.1% $3,385 Capital expenditures, net (1) $30,782 $50,004 Cash flow from operations (1) $43,831 $68,956 Return on assets (annualized) 7.8% 6.0% Total tractors (at quarter end) Company 6,660 6,635 Owner-operator 690 690 ------------- ------------- Total tractors 7,350 7,325 Total trailers (truck and intermodal, quarter end) 24,060 24,310
(1) Amounts in thousands. (2) Net of fuel surcharge revenues.
INCOME STATEMENT DATA (Unaudited) (In thousands, except per share amounts) Nine Months % of Nine Months % of Ended Operating Ended Operating 9/30/10 Revenues 9/30/09 Revenues ----------- --------- ----------- --------- Operating revenues $1,351,806 100.0 $1,226,832 100.0 ----------- --------- ----------- --------- Operating expenses: Salaries, wages and benefits 396,892 29.4 393,456 32.1 Fuel 228,319 16.9 174,777 14.2 Supplies and maintenance 117,418 8.7 105,627 8.6 Taxes and licenses 70,214 5.2 72,022 5.9 Insurance and claims 51,705 3.8 64,272 5.2 Depreciation 112,848 8.3 117,016 9.5 Rent and purchased transportation 268,361 19.9 220,276 18.0 Communications and utilities 11,256 0.8 12,232 1.0 Other 838 0.1 1,083 0.1 ----------- --------- ----------- --------- Total operating expenses 1,257,851 93.1 1,160,761 94.6 ----------- --------- ----------- --------- Operating income 93,955 6.9 66,071 5.4 ----------- --------- ----------- --------- Other expense (income): Interest expense 17 0.0 82 0.0 Interest income (1,124) (0.1) (1,344) (0.1) Other (128) (0.0) (352) (0.0) ----------- --------- ----------- --------- Total other expense (income) (1,235) (0.1) (1,614) (0.1) ----------- --------- ----------- --------- Income before income taxes 95,190 7.0 67,685 5.5 Income taxes 39,266 2.9 29,105 2.4 ----------- --------- ----------- --------- Net income $55,924 4.1 $38,580 3.1 =========== ========= =========== ========= Diluted shares outstanding 72,747 72,027 =========== =========== Diluted earnings per share $.77 $.54 =========== =========== OPERATING STATISTICS Nine Months Nine Months Ended 9/30/10 % Change Ended 9/30/09 ------------- -------- ------------- Trucking revenues, net of fuel surcharge (1) $959,386 2.4% $937,333 Trucking fuel surcharge revenues (1) 184,575 50.5% 122,636 Non-trucking revenues, including VAS (1) 197,623 24.6% 158,614 Other operating revenues (1) 10,222 23.9% 8,249 ------------- ------------- Operating revenues (1) $1,351,806 10.2% $1,226,832 ============= ============= Average monthly miles per tractor 10,026 1.6% 9,866 Average revenues per total mile (2) $1.469 2.1% $1.439 Average revenues per loaded mile (2) $1.660 0.6% $1.650 Average percentage of empty miles 11.51% -9.8% 12.76% Average trip length in miles (loaded) 446 -3.7% 463 Total miles (loaded and empty) (1) 652,981 0.3% 651,257 Average tractors in service 7,237 -1.3% 7,334 Average revenues per tractor per week (2) $3,399 3.7% $3,277 Capital expenditures, net (1) $83,097 $76,749 Cash flow from operations (1) $155,247 $169,306 Return on assets (annualized) 6.1% 4.1% Total tractors (at quarter end) Company 6,660 6,635 Owner-operator 690 690 ------------- ------------- Total tractors 7,350 7,325 Total trailers (truck and intermodal, quarter end) 24,060 24,310
(1) Amounts in thousands. (2) Net of fuel surcharge revenues.
BALANCE SHEET DATA (In thousands, except share amounts) 9/30/10 12/31/09 ---------- ---------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $94,848 $18,430 Accounts receivable, trade, less allowance of $9,203 and $9,167, respectively 201,485 180,740 Other receivables 9,302 10,366 Inventories and supplies 12,828 12,725 Prepaid taxes, licenses and permits 6,412 14,628 Income taxes receivable 14,726 3,991 Current deferred income taxes 24,701 24,808 Other current assets 25,876 18,816 ---------- ---------- Total current assets 390,178 284,504 ---------- ---------- Property and equipment 1,577,453 1,580,711 Less - accumulated depreciation 731,055 708,809 ---------- ---------- Property and equipment, net 846,398 871,902 ---------- ---------- Other non-current assets 11,737 16,603 ---------- ---------- $1,248,313 $1,173,009 ========== ========== LIABILITIES AND STOCKHOLDERS'EQUITY Current liabilities: Accounts payable $59,185 $47,056 Insurance and claims accruals 63,370 65,667 Accrued payroll 23,288 17,567 Other current liabilities 16,635 16,451 ---------- ---------- Total current liabilities 162,478 146,741 ---------- ---------- Other long-term liabilities 9,551 8,760 Insurance and claims accruals, net of current portion 117,750 113,500 Deferred income taxes 195,280 199,358 Stockholders' equity: Common stock, $.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 72,627,998 and 71,896,512 shares outstanding, respectively 805 805 Paid-in capital 91,359 92,389 Retained earnings 823,961 778,890 Accumulated other comprehensive loss (4,071) (5,556) Treasury stock, at cost; 7,905,538 and 8,637,024 shares, respectively (148,800) (161,878) ---------- ---------- Total stockholders' equity 763,254 704,650 ---------- ---------- $1,248,313 $1,173,009 ========== ==========
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. 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, 2009. 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. -----END PRIVACY-ENHANCED MESSAGE-----