Werner Enterprises Announces Second Quarter 2000 Operating Revenues and Earnings
20 July 2000
Werner Enterprises Announces Second Quarter 2000 Operating Revenues and Earnings
OMAHA, Neb. - Werner Enterprises, Inc. (Werner), one of the nation's largest truckload transportation companies, today reported operating revenues and earnings for the second quarter ended June 30, 2000. Operating revenues for second quarter increased 18% to a record $307.2 million compared to $260.6 million for the quarter ended June 30, 1999. Earnings per share decreased to $.27 per share compared to $.37 per share in second quarter 1999, due primarily to the high cost of fuel and a weak market for the sale of used trucks."The current operating environment for truckload carriers is challenging," said Chairman and Chief Executive Officer, Clarence (C.L.) Werner. "On May 18, 2000, we announced that higher fuel prices and the weak used truck market were affecting second quarter earnings. We have temporarily slowed our fleet growth and are focusing on margin improvement. Despite a slightly softer freight market during second quarter 2000 compared to second quarter 1999, we maintained our average miles per tractor and our low empty mile percentage. We have also had success raising our freight rates."
Fuel prices remained at levels approaching a ten-year high during second quarter 2000. While the Company has made substantial progress improving the percentage reimbursement from customers for the higher cost of fuel, earnings were reduced in second quarter 2000 for the net impact of higher fuel costs. Werner also incurs fuel costs for empty miles between freight shipments, out-of-route miles caused in part by driver home time needs, truck idling, and reimbursements to owner operator drivers. During second quarter, the used truck market weakened due to increased inventories of new and used trucks in the marketplace and other factors. As a result, the number of trucks sold by the Company and the average gain per truck sold was lower during second quarter 2000. Earnings were reduced during second quarter 2000 by approximately 10 cents per share due to the impact of fuel prices and the used truck market.
"Werner Enterprises is committed to improving earnings growth and shareholder value. The current challenges facing the truckload industry are tremendous opportunities for our Company. Our size, superior service, advanced technology, financial strength and experienced management team provide Werner Enterprises with distinct competitive advantages. We are excited and optimistic about the future of our Company," said C.L. Werner.
Werner is one of six large transportation companies that merged their logistics business units into a commonly owned, Internet-based logistics company, Transplace.com. On July 13, 2000, Transplace.com announced that operations commenced as scheduled on July 1, 2000. All six founding carriers completed the conversion of their logistics businesses effective on that date. This transaction was effected by Werner and each of the five other founding carriers contributing their transportation logistics business, related intangible assets, and $5 million of cash. Therefore, the revenues and expenses for Werner's logistics business will no longer be shown in the Company's income statements as operating revenues and operating expenses (primarily rent and purchased transportation expense), respectively, beginning with third quarter 2000. Werner will account for its approximate 15% investment in Transplace.com using the equity method of accounting. Thus, Werner will accrue its percentage share of the earnings of Transplace.com in its income statement as a non-operating item. Werner's logistics business, which will be transferred to Transplace.com, accounted for approximately 4% of total revenues in second quarter 2000.
INCOME STATEMENT DATA
(Unaudited)
(In thousands)
Quarter % of Quarter % of
Ended Operating Ended Operating
6/30/00 Revenues 6/30/99 Revenues
--------- --------- --------- ---------
Operating revenues $307,242 100.0 $260,646 100.0
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Operating expenses:
Salaries, wages and benefits 107,540 35.0 95,246 36.5
Fuel 31,839 10.4 18,211 7.0
Supplies and maintenance 26,327 8.6 21,025 8.1
Taxes and licenses 22,186 7.2 19,838 7.6
Insurance and claims 8,224 2.7 7,881 3.0
Depreciation 26,794 8.7 24,656 9.5
Rent and purchased
transportation 59,338 19.3 43,856 16.8
Communications and utilities 3,475 1.1 3,411 1.3
Other (899) (0.3) (3,169) (1.2)
--------- --------- --------- ---------
Total operating expenses 284,824 92.7 230,955 88.6
--------- --------- --------- ---------
Operating income 22,418 7.3 29,691 11.4
--------- --------- --------- ---------
Other expense (income):
Interest expense 1,978 0.6 1,645 0.6
Interest income (625) (0.2) (343) (0.1)
Other 235 0.1 40 0.0
--------- --------- --------- ---------
Total other expense 1,588 0.5 1,342 0.5
--------- --------- --------- ---------
Income before income taxes 20,830 6.8 28,349 10.9
Income taxes 7,915 2.6 10,773 4.1
--------- --------- --------- ---------
Net income $12,915 4.2 $17,576 6.7
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Diluted shares outstanding 47,304 47,627
========= =========
Diluted earnings per share $.27 $.37
========= =========
6 Months % of 6 Months % of
Ended Operating Ended Operating
6/30/00 Revenues 6/30/99 Revenues
--------- --------- --------- ---------
Operating revenues $598,621 100.0 $501,626 100.0
--------- --------- --------- ---------
Operating expenses:
Salaries, wages and benefits 210,852 35.2 184,567 36.8
Fuel 63,048 10.5 32,219 6.4
Supplies and maintenance 51,639 8.6 41,163 8.2
Taxes and licenses 43,648 7.3 39,604 7.9
Insurance and claims 15,204 2.5 17,271 3.4
Depreciation 53,115 8.9 48,191 9.6
Rent and purchased
transportation 116,365 19.4 86,183 17.2
Communications and utilities 7,161 1.2 6,510 1.3
Other (3,364) (0.6) (5,016) (1.0)
--------- --------- --------- ---------
Total operating expenses 557,668 93.2 450,692 89.8
--------- --------- --------- ---------
Operating income 40,953 6.8 50,934 10.2
--------- --------- --------- ---------
Other expense (income):
Interest expense 4,213 0.7 2,843 0.6
Interest income (1,072) (0.2) (673) (0.1)
Other 340 0.1 57 0.0
--------- --------- --------- ---------
Total other expense 3,481 0.6 2,227 0.5
--------- --------- --------- ---------
Income before income taxes 37,472 6.3 48,707 9.7
Income taxes 14,239 2.4 18,509 3.7
--------- --------- --------- ---------
Net income $23,233 3.9 $30,198 6.0
========= ========= ========= =========
Diluted shares outstanding 47,277 47,599
========= =========
Diluted earnings per share $.49 $.63
========= =========
BALANCE SHEET DATA
(Unaudited)
(In thousands)
As of As of
6/30/00 12/31/99
---------- ------------
Current assets $196,030 $188,827
Total assets $893,406 $896,879
Current liabilities $97,796 $121,206 (a)
Long-term debt $115,000 $120,000
Stockholders' equity $513,901 $494,772
(a) Current liabilities include $25 million of short-term debt at
December 31, 1999.
Werner Enterprises is a full-service transportation company providing truckload 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 7,325 trucks and 19,200 trailers.
Werner Enterprises' common stock is traded on The Nasdaq Stock Market under the symbol WERN.