WERN - Werner Enterprises Reports Second Quarter 2019 Results

July, 25 2019 04:05 PM Werner Enterprises Inc.

Second Quarter 2019 Highlights (all metrics compared to second quarter 2018 unless otherwise noted)

Total revenues of $627.5 million, up $8.4 million, or 1%
Operating income of $58.4 million, up 15%; non-GAAP adjusted operating income of $59.2 million, up 1%
Operating margin of 9.3%, up 110 basis points (bps); non-GAAP adjusted operating margin of 9.4%, down 10 bps
Diluted EPS of $0.62, up 17%; non-GAAP adjusted diluted EPS of $0.63, up 3%

OMAHA, Neb., July 25, 2019 (GLOBE NEWSWIRE) -- Werner Enterprises, Inc. (NASDAQ: WERN), one of the nation’s largest transportation and logistics companies, today reported financial results for second quarter ended June 30, 2019.

Total revenues for the quarter increased 1% to $627.5 million versus the prior year quarter, primarily attributable to dedicated fleet expansion, higher contractual rates, and lane mix changes.

Operating income of $58.4 million increased $7.7 million, or 15%. Operating margin of 9.3% increased 110 basis points due to revenue increases that exceeded cost increases, which benefited from a newer fleet and low driver turnover, as well as the $11.3 million accrual of insurance and claims expense in second quarter 2018 related to a previously disclosed May 2018 jury verdict. On a non-GAAP basis, adjusted operating income of $59.2 million increased $0.7 million, or 1%. Adjusted operating margin of 9.4% declined 10 basis points from 9.5% for the same quarter last year.

Interest expense of $1.4 million was $0.9 million higher than the same quarter a year ago due primarily to additional borrowings to pay a $261.1 million special dividend in June 2019. The effective income tax rate during the quarter was 25.2% compared to a 24.8% effective income tax rate in second quarter 2018.

Net income of $43.3 million increased 13%. On a non-GAAP basis, adjusted net income was $43.9 million compared to $44.1 million for the same quarter last year. Diluted earnings per share (EPS) for the quarter of $0.62 increased 17%. Diluted EPS in second quarter 2019 included a $0.01 per share insurance and claims accrual for interest on a previously disclosed May 2018 jury verdict that we are appealing. On a non-GAAP basis, adjusted EPS of $0.63 increased 3% from $0.61 for second quarter 2018. Diluted EPS in second quarter 2018 included a $0.12 per share accrual of insurance and claims expense (including interest) related to the same May 2018 jury verdict. During second quarter 2018, we also realized a $0.04 gain on the sale of real estate.

“We are very pleased to report adjusted earnings per share growth of 3%, despite comparing to a very strong second quarter 2018 that produced 90% adjusted earnings growth due to unusually strong freight demand and pricing,” said Derek J. Leathers, President and Chief Executive Officer. “The strength of our diversified portfolio, our new truck and trailer fleet, increasingly experienced drivers and our committed Werner team led to our superior performance.”

Key Consolidated Financial Metrics


Three Months Ended June 30,

Six Months Ended June 30,
(In thousands, except per share amounts)
2019

2018

Y/Y Change

2019

2018

Y/Y Change
Total revenues
$
627,533


$
619,130


1
%

$
1,223,650


$
1,181,814


4
%
Trucking revenues, net of fuel surcharge
411,460


395,094


4
%

809,151


759,282


7
%
Werner Logistics revenues
130,883


134,012


(2
) %

248,253


251,432


(1
) %
Operating income
58,442


50,783


15
%

106,461


85,898


24
%
Operating margin
9.3
%

8.2
%

110
bps

8.7
%

7.3
%

140
bps
Net income
43,318


38,264


13
%

79,404


66,071


20
%
Diluted earnings per share
0.62


0.53


17
%

1.13


0.91


24
%












Adjusted operating income ⁽¹⁾
59,209


58,538


1
%

108,378


93,653


16
%
Adjusted operating margin ⁽¹⁾
9.4
%

9.5
%

(10
) bps

8.9
%

7.9
%

100
bps
Adjusted net income ⁽¹⁾
43,891


44,069


—
%

80,837


71,876


12
%
Adjusted diluted earnings per share ⁽¹⁾
0.63


0.61


3
%

1.15


0.99


16
%

(1) See GAAP to non-GAAP reconciliation schedule.

Other Noteworthy Development

As previously noted, we are appealing a large adverse jury verdict rendered in May 2018. As such, we accrued $0.8 million of insurance and claims expense, or $0.01 per share, during the second quarter of 2019 for post-judgment interest related to this jury verdict. Interest is accrued at $0.4 million per month until such time as the outcome of our appeal is finalized, excluding months where the plaintiffs have requested an extension of time to respond to our appeal. To-date the plaintiffs have requested extensions for the months of June and July 2019.

Truckload Transportation Services (TTS) Segment

Revenues of $480.0 million increased $9.7 million, or 2%
Operating income of $51.7 million increased $8.2 million, or 19%; non-GAAP adjusted operating income of $52.4 million decreased $2.2 million, or 4%
Operating margin of 10.8% increased 160 basis points from 9.2%; non-GAAP adjusted operating margin of 10.9% decreased 70 basis points from 11.6%
Average segment trucks in service totaled 7,937, an increase of 389 trucks year over year
Dedicated unit trucks at quarter end totaled 4,580, or 58% of the total TTS segment fleet, compared to 4,380 trucks, or 57%, a year ago

Revenues increased 2% due to a 5.2% increase in average trucks in service, partially offset by a 1.0% decrease in average revenues per truck and a $5.5 million decrease in fuel surcharge revenues. The average revenues per truck decrease was due primarily to a decrease in average miles per truck, partially offset by an increase in average revenues per total mile. The increase in average revenues per total mile was due primarily to higher contractual rates, dedicated fleet expansion and lane mix changes. The following factors all contributed to lower average miles per truck: (i) a below average seasonal freight market in second quarter 2019 compared to an unusually strong seasonal freight market in second quarter 2018, (ii) growth in Dedicated which has lower miles per truck and a shorter length of haul (iii) fewer team driver trucks and (iv) southern U.S. border security crossing delays affecting about one quarter of our One-Way Truckload revenues.

During the second quarter, freight demand in our One-Way Truckload fleet was seasonally below average and well below the unusually strong freight demand of second quarter 2018, which was aided by two December 2017 mandates. Tax reform incentives strengthened second quarter 2018 freight volumes while the electronic hours of service requirement limited truck and driver capacity in second quarter 2018.

Due to growth in company trucks and a decline in independent contractor trucks during the quarter, company truck miles increased by approximately 4.8 million miles and independent contractor miles decreased by approximately 0.2 million miles.

Comparisons of key financial metrics for the TTS segment, including operating ratios (actual and net of fuel surcharge revenues of $62.5 million and $68.0 million in second quarters 2019 and 2018, respectively, and $120.7 million and $128.8 million in the year-to-date 2019 and 2018 periods, respectively), are shown below. Fluctuating fuel prices and fuel surcharge revenues impact the total company operating ratio and the TTS 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.

Key Truckload Transportation Services Segment Financial Metrics


Three Months Ended June 30,

Six Months Ended June 30,
(In thousands)
2019

2018

Y/Y Change

2019

2018

Y/Y Change
Total revenues
$
479,959


$
470,277


2
%

$
942,850


$
901,833


5
%
Operating income
51,665


43,432


19
%

94,618


76,854


23
%
Operating margin
10.8
%

9.2
%

160
bps

10.0
%

8.5
%

150
bps
Operating ratio
89.2
%

90.8
%

(160
) bps

90.0
%

91.5
%

(150
) bps












Adjusted operating income
52,432


54,682


(4
) %

96,535


88,104


10
%
Adjusted operating margin
10.9
%

11.6
%

(70
) bps

10.2
%

9.8
%

40
bps
Adjusted operating ratio
89.1
%

88.4
%

70
bps

89.8
%

90.2
%

(40
) bps
Adjusted operating ratio, net of fuel surcharge
87.4
%

86.4
%

100
bps

88.3
%

88.6
%

(30
) bps

Werner Logistics Segment

Revenues of $130.9 million decreased $3.1 million or 2%
Gross margin of 16.1% increased 40 bps
Operating income of $5.2 million decreased $0.4 million, or 7%
Operating margin of 4.0% decreased 20 bps

Revenues in second quarter 2019 decreased year over year due to fewer project freight opportunities, significantly lower year-over-year spot pricing trends and lower volumes in second quarter 2019. Logistics revenues improved sequentially in second quarter 2019 compared to first quarter 2019 by $13.5 million. Logistics revenues improved sequentially in second quarter 2018 by $16.6 million compared to first quarter 2018.

The gross margin percentage increased 40 bps to 16.1% due primarily to contractual pricing and improved capacity procurement in Truckload Logistics (formerly our Brokerage and Freight Management units within Werner Logistics). Our operating margin decreased 20 bps to 4.0% as other operating expenses grew 2% compared to gross profit which was flat.

Key Werner Logistics Segment Financial Metrics


Three Months Ended June 30,

Six Months Ended June 30,
(In thousands)
2019

2018

Y/Y Change

2019

2018

Y/Y Change
Total revenues
$
130,883


$
134,012


(2
) %

$
248,253


$
251,432


(1
) %
Rent and purchased transportation expense
109,836


112,918


(3
) %

206,856


213,194


(3
) %
Gross profit
21,047


21,094


—
%

41,397


38,238


8
%
Other operating expenses
15,865


15,492


2
%

31,504


29,879


5
%
Operating income
5,182


5,602


(7
) %

9,893


8,359


18
%
Gross margin
16.1
%

15.7
%

40
bps

16.7
%

15.2
%

150
bps
Operating margin
4.0
%

4.2
%

(20
) bps

4.0
%

3.3
%

70
bps

Cash Flow and Capital Allocation

Cash flow from operations in second quarter 2019 was $81.6 million compared to $82.6 million in second quarter 2018, a decrease of 1%.

Net capital expenditures in second quarter 2019 were $79.0 million compared to $119.3 million in second quarter 2018, a decrease of 34%. Net capital expenditures have returned to normalized levels in 2019 after achieving our desired fleet age. We continue to invest in new trucks and trailers and our terminals to improve our driver experience, increase operational efficiency and more effectively manage our maintenance, safety and fuel costs. As a result of our continued investment, the average age of our truck fleet remains low by industry standards and decreased to 1.8 years as of June 30, 2019 compared to 1.9 years as of June 30, 2018.

Gains on sales of equipment were $4.5 million, or $0.05 per share, compared to $5.1 million, or $0.05 per share in the prior-year quarter. In second quarter 2018, we also had a $3.5 million gain on the sale of real estate, or $0.04 per share. Year over year, we sold 7% fewer trucks and 17% fewer trailers, and we realized higher average gains per truck and lower average gains per trailer. Pricing in the market for our used trucks and trailers began to moderate in the latter part of second quarter 2019. As a reminder, gains on sales of assets are reflected as a reduction of Other Operating Expenses in our income statement.

During the quarter, we repurchased 700,000 shares of common stock for a total cost of $21.8 million, or an average price of $31.08 per share. As of June 30, 2019, we had 4.3 million shares remaining under our new share repurchase authorization approved by the Board of Directors in May 2019.

In May 2019, we entered into new five-year, unsecured revolving credit facilities with Wells Fargo Bank, N.A. and BMO Harris Bank, N.A., replacing the previous credit facilities with both lenders. We had $390 million of debt outstanding as of June 30, 2019, and after considering letters of credit issued, had available remaining borrowing capacity of over $150 million. In early July 2019, we fixed the interest rate for $150 million of our debt that was outstanding as of June 30, 2019 at an average interest rate of 2.34% through May 2024.

As of June 30, 2019, we had $46 million of cash and over $1 billion of stockholders’ equity, after paying a $261 million special dividend in June 2019.

2019 Guidance Metrics

The following table summarizes our updated 2019 guidance and assumptions:

2019 Outlook

Assumptions

Effective tax rate

25% to 26%

Truck and trailer age

We intend to maintain the average age of our truck and trailer fleet at or near current levels of 1.8 and 4.1 years

Updated Guidance

TTS truck growth

3% to 5%
Growth from year-end 2018 expected to be primarily in Dedicated and occur in the first three quarters of 2019 in the low end of the range; expect approximately 100 truck growth in third quarter 2019 and no truck growth in fourth quarter 2019

Gains on sales of equipment

$18 million to $20 million
Gains on sales of equipment in 2019 are expected to moderate in the second half of 2019; currently expect to be in the low end of the range

Net capital expenditures

$275 million to $300 million
Currently expect to be in the low end of the range

One-Way Truckload
revenues per total mile
2019 vs. 2018

(3%) to 0%
Percent change to moderate during each remaining quarter of 2019 due to significant rate increases and project activity in the last two quarters of 2018

New Guidance

Interest expense

$2.7 million

Estimated third quarter 2019 interest expense based on current debt levels and current interest rates (variable and fixed)

Conference Call Information

Werner Enterprises, Inc. will conduct a conference call to discuss second quarter 2019 earnings today beginning at 4:00 p.m. CT. The news release, live webcast of the earnings conference call, and accompanying slide presentation will be available at www.werner.com in the “Investors” section under “Webcasts & Presentations.” To participate on the conference call, please dial (877) 317-6789 (domestic) or (412) 317-6789 (international). Please mention to the operator that you are dialing in for the Werner Enterprises call.

A replay of the conference call will be available on July 25, 2019 at approximately 6:00 p.m. CT through August 25, 2019 by dialing (877) 344-7529 (domestic) or (855) 669-9658 (Canada) or (412) 317-0088 (international) and using the access code 10129121. A replay of the webcast will also be available at www.werner.com in the “Investors” section under “Webcasts & Presentations.”

About Werner Enterprises

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 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 expedited van; and temperature-controlled. The Werner Logistics portfolio includes truck brokerage, freight management, intermodal, international and final mile services. International services are provided through Werner’s domestic and global subsidiary companies and include ocean, air and ground transportation; freight forwarding; and customs brokerage.

Werner Enterprises, Inc.’s common stock trades on The NASDAQ Global Select Market^SM 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, 2018.

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.

Contact:
John J. Steele
Executive Vice President, Treasurer
and Chief Financial Officer
(402) 894-3036

Source: Werner Enterprises, Inc.


INCOME STATEMENT

(Unaudited)

(In thousands, except per share amounts)











Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

$

%

$

%

$

%

$

%
Operating revenues
$
627,533


100.0


$
619,130


100.0


1,223,650


100.0


$
1,181,814


100.0

Operating expenses:















Salaries, wages and benefits
206,001


32.8


196,115


31.7


408,800


33.4


378,909


32.1

Fuel
61,064


9.7


65,665


10.6


117,202


9.6


124,697


10.5

Supplies and maintenance
44,371


7.1


45,681


7.4


90,056


7.4


91,420


7.7

Taxes and licenses
23,643


3.8


22,651


3.7


46,544


3.8


45,144


3.8

Insurance and claims
20,992


3.4


30,689


4.9


43,701


3.6


51,847


4.4

Depreciation
61,437


9.8


56,551


9.1


122,196


10.0


112,057


9.5

Rent and purchased transportation
146,176


23.3


151,433


24.5


279,012


22.8


287,355


24.3

Communications and utilities
3,903


0.6


3,928


0.6


7,914


0.6


8,035


0.7

Other
1,504


0.2


(4,366
)

(0.7
)

1,764


0.1


(3,548
)

(0.3
)
Total operating expenses
569,091


90.7


568,347


91.8


1,117,189


91.3


1,095,916


92.7

Operating income
58,442


9.3


50,783


8.2


106,461


8.7


85,898


7.3









































































Other expense (income):









Interest expense
1,429


0.2


490


0.1


2,287


0.2


972


0.1

Interest income
(989
)

(0.1
)

(693
)

(0.1
)

(1,892
)

(0.2
)

(1,433
)

(0.1
)
Other
58


—


78


—


(58
)

—


131


—

Total other expense (income)
498


0.1


(125
)

—


337


—


(330
)

—

Income before income taxes
57,944


9.2


50,908


8.2


106,124


8.7


86,228


7.3

Income tax expense
14,626


2.3


12,644


2.0


26,720


2.2


20,157


1.7

Net income
$
43,318


6.9


$
38,264


6.2


$
79,404


6.5


$
66,071


5.6

















Diluted shares outstanding
69,893




72,376




70,229




72,522



Diluted earnings per share
$
0.62




$
0.53




1.13




$
0.91


GAAP TO NON-GAAP RECONCILIATION

(Unaudited)

(In thousands, except per share amounts)









Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Operating revenues
$
627,533


$
619,130


$
1,223,650


$
1,181,814









Operating expenses
569,091


568,347


1,117,189


1,095,916

Adjusted for:







Insurance and claims ⁽¹⁾
(767
)

(11,250
)

(1,917
)

(11,250
)
Gain on sale of real estate ⁽²⁾
—


3,495


—


3,495

Adjusted operating expenses
568,324


560,592


1,115,272


1,088,161

Adjusted operating income ⁽³⁾
59,209


58,538


108,378


93,653

Total other expense (income)
498


(125
)

337


(330
)
Adjusted income before income taxes
58,711


58,663


108,041


93,983

Adjusted income tax expense
14,820


14,594


27,204


22,107

Adjusted net income ⁽³⁾
43,891


44,069


80,837


71,876

Diluted shares outstanding
69,893


72,376


70,229


72,522

Adjusted diluted earnings per share ⁽³⁾
$
0.63


$
0.61


$
1.15


$
0.99

(1) During second quarter 2019, we accrued $767 of pre-tax insurance and claims expense for post-judgment interest and during second quarter 2018, we accrued $11,250 of pre-tax insurance and claims expense (including interest of $1,300) related to a previously disclosed excess adverse jury verdict rendered on May 17, 2018 in a lawsuit arising from a December 2014 accident. Additional information about the accident was included in our Current Report on Form 8-K dated May 17, 2018. Under our insurance policies in effect on the date of this accident, our maximum liability for this accident is $10.0 million (plus pre-judgment and post-judgment interest) with premium-based insurance coverage that exceeds the jury verdict amount. The Company is appealing this verdict. Management believes excluding the effect of this item provides a more useful comparison of our performance from period to period. This item is included in the Truckload Transportation Services segment in our Segment Information table.

(2) During second quarter 2018, we sold a parcel of real estate which resulted in a $3,495 pre-tax gain on sale. This item is included in our Segment Information table in “Corporate” operating income.

(3) Our definition of the non-GAAP measures adjusted operating income, adjusted net income and adjusted diluted earnings per share begins with (a) operating expenses, the most comparable GAAP measure. We subtract the insurance and claims jury verdict expense accrual and related interest and subtract the gain on sale of real estate from (a) to arrive at adjusted operating expenses, which we subtract from operating revenues to arrive at (b) adjusted operating income. We subtract (c) total other expense (income) from (b) adjusted operating income to arrive at (d) adjusted income before income taxes. We calculate adjusted income tax expense (benefit) by applying the incremental income tax rate excluding discrete items to the net pre-tax adjustments and adding this additional income tax to actual income tax expense. We then subtract adjusted income tax expense from adjusted income before income taxes to arrive at adjusted net income. The adjusted net income is divided by the diluted shares outstanding to calculate the adjusted diluted earnings per share.


SEGMENT INFORMATION

(Unaudited)

(In thousands)







Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Revenues







Truckload Transportation Services
$
479,959


$
470,277


$
942,850


$
901,833

Werner Logistics
130,883


134,012


248,253


251,432

Other ⁽¹⁾
16,096


14,422


31,568


27,681

Corporate
629


631


1,218


1,538

Subtotal
627,567


619,342


1,223,889


1,182,484

Inter-segment eliminations ⁽²⁾
(34
)

(212
)

(239
)

(670
)
Total
$
627,533


$
619,130


$
1,223,650


$
1,181,814









Operating Income







Truckload Transportation Services
$
51,665


$
43,432


$
94,618


$
76,854

Werner Logistics
5,182


5,602


9,893


8,359

Other ⁽¹⁾
2,293


243


3,472


(143
)
Corporate
(698
)

1,506


(1,522
)

828

Total
$
58,442


$
50,783


$
106,461


$
85,898

(1) Other includes our driver training schools, transportation-related activities such as third-party equipment maintenance and equipment leasing, and other business activities.

(2) Inter-segment eliminations represent transactions between reporting segments that are eliminated in consolidation.


OPERATING STATISTICS BY SEGMENT

(Unaudited)









Three Months Ended June 30,



Six Months Ended June 30,



2019

2018

% Change

2019

2018

% Change
Truckload Transportation Services segment











Average tractors in service
7,937


7,548


5.2
%

7,912


7,488


5.7
%
Average revenues per tractor per week⁽¹⁾
$
3,988


$
4,027


(1.0
)%

$
3,934


$
3,900


0.9
%
Total tractors (at quarter end)











Company
7,350


7,075


3.9
%

7,350


7,075


3.9
%
Independent contractor
585


625


(6.4
)%

585


625


(6.4
)%
Total tractors
7,935


7,700


3.1
%

7,935


7,700


3.1
%
Total trailers (at quarter end)
23,235


22,870


1.6
%

23,235


22,870


1.6
%












One-Way Truckload











Trucking revenues, net of fuel surcharge (in 000’s)
$
184,279


$
193,080


(4.6
)%

$
364,413


$
371,046


(1.8
)%
Average tractors in service
3,379


3,329


1.5
%

3,368


3,369


—
%
Total tractors (at quarter end)
3,355


3,320


1.1
%

3,355


3,320


1.1
%
Average percentage of empty miles
12.18
%

10.94
%

11.3
%

11.90
%

11.08
%

7.4
%
Average revenues per tractor per week ⁽¹⁾
$
4,195


$
4,461


(6.0
)%

$
4,161


$
4,236


(1.8
)%
Average % change YOY in revenues per total mile ⁽¹⁾
(2.7
)%

15.6
%



1.8
%

13.5
%


Average % change YOY in total miles per tractor per week
(3.4
)%

0.4
%



(3.4
)%

0.3
%


Average completed trip length in miles (loaded)
834


828


0.7
%

844


824


2.4
%












Dedicated











Trucking revenues, net of fuel surcharge (in 000’s)
$
227,181


$
202,014


12.5
%

$
444,738


$
388,236


14.6
%
Average tractors in service
4,558


4,219


8.0
%

4,544


4,119


10.3
%
Total tractors (at quarter end)
4,580


4,380


4.6
%

4,580


4,380


4.6
%
Average revenues per tractor per week ⁽¹⁾
$
3,833


$
3,683


4.1
%

$
3,764


$
3,625


3.8
%












Werner Logistics segment











Average tractors in service
37


40


(7.5
)%

38


42


(9.5
)%
Total tractors (at quarter end)
35


43


(18.6
)%

35


43


(18.6
)%
Total trailers (at quarter end)
1,670


1,620


3.1
%

1,670


1,620


3.1
%

(1) Net of fuel surcharge revenues


SUPPLEMENTAL INFORMATION

(Unaudited)

(In thousands)







Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018
Capital expenditures, net
$
78,989


$
119,329


$
162,353


$
174,835

Cash flow from operations
81,567


82,589


220,336


182,451

Return on assets (annualized)
8.2
%

8.2
%

7.5
%

7.2
%
Return on equity (annualized)
15.0
%

12.6
%

13.2
%

10.9
%


CONDENSED BALANCE SHEET

(In thousands, except share amounts)





June 30, 2019

December 31, 2018

(Unaudited)






ASSETS



Current assets:



Cash and cash equivalents
$
46,420


$
33,930

Accounts receivable, trade, less allowance of $8,409 and $8,613, respectively
331,239


337,927

Other receivables
23,635


26,545

Inventories and supplies
10,282


10,060

Prepaid taxes, licenses and permits
8,008


16,619

Other current assets
33,717


31,577

Total current assets
453,301


456,658





Property and equipment
2,312,594


2,247,577

Less – accumulated depreciation
787,214


760,015

Property and equipment, net
1,525,380


1,487,562





Other non-current assets ⁽¹⁾
149,936


139,284

Total assets
$
2,128,617


$
2,083,504





LIABILITIES AND STOCKHOLDERS’ EQUITY



Current liabilities:



Accounts payable
$
92,713


$
97,781

Current portion of long-term debt
—


75,000

Insurance and claims accruals
70,483


67,304

Accrued payroll
37,432


40,271

Other current liabilities
27,942


30,004

Total current liabilities
228,570


310,360





Long-term debt, net of current portion
390,000


50,000

Other long-term liabilities
17,424


10,911

Insurance and claims accruals, net of current portion ⁽¹⁾
225,997


214,030

Deferred income taxes
234,282


233,450





Stockholders’ equity:



Common stock, $.01 par value, 200,000,000 shares authorized; 80,533,536



shares issued; 69,195,003 and 70,441,973 shares outstanding, respectively
805


805

Paid-in capital
110,102


107,455

Retained earnings
1,219,529


1,413,746

Accumulated other comprehensive loss
(15,140
)

(16,073
)
Treasury stock, at cost; 11,338,533 and 10,091,563 shares, respectively
(282,952
)

(241,180
)
Total stockholders’ equity
1,032,344


1,264,753

Total liabilities and stockholders’ equity
$
2,128,617


$
2,083,504

(1) Under the terms of our insurance policies, we are the primary obligor of the damage award in the previously mentioned adverse jury verdict, and as such, we have recorded a $79.2 million receivable from our third party insurance providers in other non-current assets and a corresponding liability of the same amount in the long-term portion of insurance and claims accruals in the unaudited condensed balance sheets as of June 30, 2019 and December 31, 2018.

Company Name:	Werner Enterprises Inc.
Stock Symbol:	WERN
Market:	NASDAQ
Website:	werner.com

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