Werner Enterprises, Inc. (Nasdaq: WERN), a premier transportation
and logistics provider, today reported results for the fourth
quarter and year ended December 31, 2021.
“Our fourth quarter results demonstrated
meaningful progress and strong operational performance in both our
truckload and logistics segments,” said Derek J. Leathers,
Chairman, President and Chief Executive Officer. “Despite severe
capacity challenges across our industry, we grew our truckload
fleet and our logistics business with expanded capacity solutions
to better serve our winning customers during fourth quarter.
“I am very proud of our Werner team for keeping
America moving with a laser focus on our core values including
safety first, while providing exceptional customer service. I am
confident Werner is strategically positioned with a superior team
to achieve sustainable performance improvement going forward.”
Total revenues for the quarter were $765.2
million, an increase of $144.9 million compared to the prior- year
quarter, due primarily to Truckload Transportation Services
revenues growth of $88.2 million and Logistics revenues growth of
$54.9 million.
Operating income of $98.5 million increased
$17.0 million, or 21%, while operating margin of 12.9% decreased 20
basis points. On a non-GAAP basis, adjusted operating income of
$101.1 million increased $18.4 million, or 22%. Adjusted operating
margin of 13.2% declined 10 basis points from 13.3% for the same
quarter last year, due primarily to significant growth in Logistics
(a higher return on assets and lower margin business segment).
Operating income in the Truckload Transportation
Services segment increased $9.6 million due to higher freight rates
and gains on sale of equipment, offset by inflationary cost
increases for driver pay and benefits, driver sourcing, equipment
maintenance, and insurance and claims. Werner Logistics operating
income increased $9.1 million resulting from improved revenue
growth and an expanded operating margin.
Interest expense of $1.6 million increased from
$0.6 million due to higher average borrowings. The effective income
tax rate during the quarter was 23.0%, compared to 25.4% in fourth
quarter 2020.
During fourth quarter 2021, our strategic
minority equity investments in autonomous technology companies had
market valuation changes resulting in higher non-operating income
in fourth quarter 2021 of $4.0 million, or $0.05 per share.
Net income attributable to Werner of $76.8
million increased 27%. On a non-GAAP basis, adjusted net income
attributable to Werner of $75.6 million increased 23%. Diluted
earnings per share (“EPS”) for the quarter of $1.15 increased 31%.
On a non-GAAP basis, adjusted diluted EPS of $1.13 increased
27%.
Key Consolidated Financial
Metrics
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
(In thousands, except per
share amounts) |
|
2021 |
|
|
|
2020 |
|
|
Y/Y Change |
|
|
2021 |
|
|
|
2020 |
|
|
Y/Y Change |
Total revenues |
$ |
765,221 |
|
|
$ |
620,302 |
|
|
23 |
% |
|
$ |
2,734,372 |
|
|
$ |
2,372,178 |
|
|
15 |
% |
Truckload Transportation
Services revenues |
|
563,227 |
|
|
|
475,037 |
|
|
19 |
% |
|
|
2,045,073 |
|
|
|
1,843,209 |
|
|
11 |
% |
Werner Logistics revenues |
|
184,967 |
|
|
|
130,113 |
|
|
42 |
% |
|
|
622,461 |
|
|
|
469,791 |
|
|
32 |
% |
Operating income |
|
98,488 |
|
|
|
81,451 |
|
|
21 |
% |
|
|
309,146 |
|
|
|
227,438 |
|
|
36 |
% |
Operating margin |
|
12.9 |
% |
|
|
13.1 |
% |
|
(20) bps |
|
|
|
11.3 |
% |
|
|
9.6 |
% |
|
170 bps |
|
Net income attributable to
Werner |
|
76,767 |
|
|
|
60,556 |
|
|
27 |
% |
|
|
259,052 |
|
|
|
169,078 |
|
|
53 |
% |
Diluted earnings per
share |
|
1.15 |
|
|
|
0.88 |
|
|
31 |
% |
|
|
3.82 |
|
|
|
2.44 |
|
|
57 |
% |
Adjusted operating income
(1) |
|
101,098 |
|
|
|
82,710 |
|
|
22 |
% |
|
|
316,777 |
|
|
|
241,945 |
|
|
31 |
% |
Adjusted operating margin
(1) |
|
13.2 |
% |
|
|
13.3 |
% |
|
(10) bps |
|
|
|
11.6 |
% |
|
|
10.2 |
% |
|
140 bps |
|
Adjusted net income
attributable to Werner (1) |
|
75,624 |
|
|
|
61,494 |
|
|
23 |
% |
|
|
234,280 |
|
|
|
179,886 |
|
|
30 |
% |
Adjusted diluted earnings per
share (1) |
|
1.13 |
|
|
|
0.89 |
|
|
27 |
% |
|
|
3.45 |
|
|
|
2.59 |
|
|
33 |
% |
(1) See attached Reconciliation of Non-GAAP
Financial Measures - Consolidated.
Update on NEHDS Logistics, LLC
Acquisition
On November 22, 2021, Werner acquired a 100%
equity ownership interest in NEHDS Logistics, LLC (“NEHDS”) for a
purchase price of $64 million, which includes a $4 million earnout.
NEHDS, based in Monroe, Connecticut, is a growing final mile home
delivery provider for big and bulky products with access to a
network of 400 final mile delivery trucks serving customers
primarily in the Northeast and Midwest U.S. markets. NEHDS achieved
annual revenues of $71.4 million for the twelve months ended
September 30, 2021, and produced an average annual revenue growth
rate of 27% for the three years then ended. NEHDS financial results
for the last six weeks of fourth quarter 2021 were strong and are
included in the Werner Logistics segment. NEHDS and Werner
Logistics are combining their final mile businesses as Werner Final
Mile. Integration activities are proceeding on schedule.
Truckload Transportation Services (TTS)
Segment
- Revenues of $563.2 million
increased $88.2 million
- Operating income of $88.2 million
increased $9.6 million; non-GAAP adjusted operating income of $90.0
million increased $10.2 million
- Operating margin of 15.7% decreased
80 basis points from 16.5%; non-GAAP adjusted operating margin of
16.0% decreased 80 basis points from 16.8%
- Non-GAAP adjusted operating margin,
net of fuel, of 18.2% remained flat
- Average segment trucks in service
totaled 8,313, an increase of 523 trucks year over year, or
6.7%
- Dedicated unit trucks at quarter
end totaled 5,235 or 63% of the total TTS segment fleet, compared
to 4,945 trucks, or 63%, a year ago
- 5.5% increase in TTS average
revenues per truck per week
In our Dedicated and One-Way Truckload fleets,
freight demand remained strong during fourth quarter 2021. Freight
demand has continued to be strong so far in first quarter 2022.
During fourth quarter, TTS company truck miles increased by
approximately 0.6 million miles year over year, and independent
contractor miles decreased by approximately 5.3 million miles.
Comparisons of key financial metrics for the TTS
segment, including operating ratios (actual and net of fuel
surcharge revenues), are shown in the table below.
Key Truckload Transportation Services
Segment Financial Metrics
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
(In thousands) |
|
2021 |
|
|
|
2020 |
|
|
Y/Y Change |
|
|
2021 |
|
|
|
2020 |
|
|
Y/Y Change |
Trucking revenues, net of fuel surcharge |
$ |
488,593 |
|
|
$ |
434,127 |
|
|
13 |
% |
|
$ |
1,789,148 |
|
|
$ |
1,667,394 |
|
|
7 |
% |
Trucking fuel surcharge
revenues |
|
68,501 |
|
|
|
36,563 |
|
|
87 |
% |
|
|
234,164 |
|
|
|
158,611 |
|
|
48 |
% |
Non-trucking and other
revenues |
|
6,133 |
|
|
|
4,347 |
|
|
41 |
% |
|
|
21,761 |
|
|
|
17,204 |
|
|
26 |
% |
Total revenues |
$ |
563,227 |
|
|
$ |
475,037 |
|
|
19 |
% |
|
$ |
2,045,073 |
|
|
$ |
1,843,209 |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
$ |
88,231 |
|
|
$ |
78,613 |
|
|
12 |
% |
|
$ |
281,823 |
|
|
$ |
222,007 |
|
|
27 |
% |
Operating margin |
|
15.7 |
% |
|
|
16.5 |
% |
|
(80) bps |
|
|
|
13.8 |
% |
|
|
12.0 |
% |
|
180 bps |
|
Operating ratio |
|
84.3 |
% |
|
|
83.5 |
% |
|
80 bps |
|
|
|
86.2 |
% |
|
|
88.0 |
% |
|
(180) bps |
|
Adjusted operating income
(1) |
$ |
90,044 |
|
|
$ |
79,872 |
|
|
13 |
% |
|
$ |
288,678 |
|
|
$ |
236,514 |
|
|
22 |
% |
Adjusted operating margin
(1) |
|
16.0 |
% |
|
|
16.8 |
% |
|
(80) bps |
|
|
|
14.1 |
% |
|
|
12.8 |
% |
|
130 bps |
|
Adjusted operating margin, net
of fuel surcharge (1) |
|
18.2 |
% |
|
|
18.2 |
% |
|
— bps |
|
|
|
15.9 |
% |
|
|
14.0 |
% |
|
190 bps |
|
Adjusted operating ratio
(1) |
|
84.0 |
% |
|
|
83.2 |
% |
|
80 bps |
|
|
|
85.9 |
% |
|
|
87.2 |
% |
|
(130) bps |
|
Adjusted operating ratio, net
of fuel surcharge (1) |
|
81.8 |
% |
|
|
81.8 |
% |
|
— bps |
|
|
|
84.1 |
% |
|
|
86.0 |
% |
|
(190) bps |
|
(1) See attached Reconciliation of Non-GAAP
Financial Measures - Truckload Transportation Services (TTS)
Segment.
Werner Logistics Segment
- Revenues of $185.0 million
increased $54.9 million, or 42%
- Operating income of $11.7 million
increased $9.1 million
- Operating margin of 6.3% increased
430 bps
Logistics revenues of $185.0 million increased
42%. Logistics revenues increased 58%, when excluding Werner Global
Logistics (WGL) revenues from fourth quarter 2020. Werner sold WGL
in first quarter 2021.
Truckload Logistics revenues (68% of total
Logistics revenues) increased 58%, driven by a 29% increase in
revenues per shipment and a 23% increase in shipments.
Intermodal revenues (26% of Logistics revenues)
increased 37%, supported by a 35% increase in revenues per shipment
and a 1% increase in shipments.
Final Mile revenues (6% of Logistics revenues)
increased $8.8 million. This includes approximately six weeks of
NEHDS Logistics, LLC which was acquired November 22, 2021.
Logistics operating income improved $9.1 million
in fourth quarter due to revenue growth and an expanded operating
margin percentage in a strong freight market.
Key Werner Logistics Segment Financial
Metrics
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
(In thousands) |
|
2021 |
|
|
|
2020 |
|
|
Y/Y Change |
|
|
2021 |
|
|
|
2020 |
|
|
Y/Y Change |
Total revenues |
$ |
184,967 |
|
|
$ |
130,113 |
|
|
42 |
% |
|
$ |
622,461 |
|
|
$ |
469,791 |
|
|
32 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Purchased transportation expense |
|
155,492 |
|
|
|
113,908 |
|
|
37 |
% |
|
|
535,379 |
|
|
|
407,308 |
|
|
31 |
% |
Other operating expenses |
|
17,753 |
|
|
|
13,572 |
|
|
31 |
% |
|
|
59,209 |
|
|
|
56,478 |
|
|
5 |
% |
Total operating expenses |
|
173,245 |
|
|
|
127,480 |
|
|
36 |
% |
|
|
594,588 |
|
|
|
463,786 |
|
|
28 |
% |
Operating income |
$ |
11,722 |
|
|
$ |
2,633 |
|
|
345 |
% |
|
$ |
27,873 |
|
|
$ |
6,005 |
|
|
364 |
% |
Operating margin |
|
6.3 |
% |
|
|
2.0 |
% |
|
430 bps |
|
|
|
4.5 |
% |
|
|
1.3 |
% |
|
320 bps |
|
Cash Flow and Capital
Allocation
Cash flow from operations in fourth quarter 2021
was $79.5 million compared to $99.5 million in fourth quarter 2020,
an decrease of 20%. 2021 cash flow from operations was $332.8
million compared to $445.9 million in 2020.
Net capital expenditures in fourth quarter 2021
were $30.3 million compared to $79.0 million in fourth quarter
2020, a decrease of 62%. 2021 net capital expenditures were $193.0
million compared to $266.2 million in 2020. We plan to continue to
invest in new trucks and trailers and our terminals to improve our
driver experience, optimize operational efficiency and more
effectively manage our maintenance, safety and fuel costs. The
average ages of our truck and trailer fleets were 2.2 years and 4.5
years, respectively, as of December 31, 2021.
Gains on sales of equipment in fourth quarter
2021 were $21.2 million, or $0.24 per share, compared to $4.0
million, or $0.04 per share, in fourth quarter 2020. Year over
year, we sold fewer trucks and trailers and realized substantially
higher average gains per truck and trailer due to the significantly
improved pricing market for our used equipment. Gains on sales of
assets are reflected as a reduction of Other Operating Expenses in
our income statement.
During the quarter, we repurchased 1,118,345
shares of common stock for a total cost of $51.2 million, or an
average price of $45.76 per share. As of December 31, 2021, we had
5.0 million shares remaining under our share repurchase
authorization.
As of December 31, 2021, we had $54 million of
cash and over $1.3 billion of stockholders’ equity. Total debt
outstanding increased $78 million during the quarter to $428
million at December 31, 2021. After considering letters of credit
issued, we had available liquidity consisting of cash and available
borrowing capacity as of December 31, 2021 of $169 million.
2021 and 2022 Guidance Metrics and
Assumptions
The following table summarizes (1) our 2021
guidance and assumptions compared to actual results and (2)
introduces our 2022 guidance and assumptions:
2021 and 2022 Guidance |
Guidance(as of 10/28/21) |
Actual(as of 12/31/21) |
2022Guidance(as of
2/3/22) |
Commentary |
TTS truck growth from BoY to EoY |
3% to 5%(annual) |
7%(2021) |
2% to 5%(annual) |
Subject to driver availability and timing of delivery of new trucks
from OEM’s |
Net capital expenditures |
$250M to $275M(annual) |
$193.0M(2021) |
$275M to $325M(annual) |
Subject to timing of delivery of new trucks from OEM’s |
TTS Guidance |
|
|
|
|
Dedicated RPTPW* growth |
1% to 2%(4Q21 vs 4Q20) |
5.2%(4Q21 vs. 4Q20) |
3% to 5%(annual) |
Expect strong rate levels partially mitigated by lower miles per
truck |
One-Way Truckload RPTM* growth |
17% to 19%(4Q21 vs. 4Q20) |
19.2%(4Q21 vs. 4Q20) |
16% to 19%(1H22 vs. 1H21) |
Strong contractual rate increases and elevated spot rates combined
with fleet mix changes |
Assumptions |
|
|
|
|
Effective income tax rate |
24.5% to 25.5%(annual) |
23.0%(4Q21) |
24.5% to 25.5%(annual) |
|
Truck ageTrailer age |
2.2 years4.4 years |
2.2 years4.5 years |
2.2 years4.8 years |
Reinvesting to maintain young fleet advantage, subject to timing of
deliveries from OEM’s |
* Net of fuel surcharge
revenues
Call Information
Werner Enterprises, Inc. will conduct a
conference call to discuss fourth quarter 2021 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 werner.com in the “Investors” section under “News
& Events” and then “Events Calendar.” To participate in the
conference call, please dial (844) 701-1165 (domestic) or (412)
317-5498 (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 February 3, 2022 at approximately 6:00 p.m. CT through
March 3, 2022 by dialing (877) 344-7529 (domestic) or (412)
317-0088 (international) and using the access code 4012420. A
replay of the webcast will also be available at werner.com in the
“Investors” section under “News & Events” and then “Events
Calendar.”
About Werner Enterprises
Werner Enterprises, Inc. (Nasdaq: WERN) delivers
superior truckload transportation and logistics services to
customers across the United States, Mexico and Canada. With 2021
revenues of $2.7 billion, an industry-leading modern truck and
trailer fleet, over 13,500 talented associates and our innovative
Werner EDGE technology, we are an essential solutions provider for
customers who value the integrity of their supply chain and require
safe and exceptional on-time service. Werner provides Dedicated and
One-Way Truckload services as well as Logistics services that
include truckload brokerage, freight management, intermodal and
final mile. As an industry leader, Werner is deeply committed to
promoting sustainability and supporting diversity, equity and
inclusion.
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, 2020 and subsequently filed Quarterly Reports on Form 10-Q.
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 (“SEC”),
through the issuance of press releases or by other methods of
public disclosure.
Contact:John J. SteeleExecutive Vice President,
Treasurerand Chief Financial Officer(402) 894-3036
Source: Werner Enterprises, Inc.
Consolidated Financial
Information
INCOME STATEMENT |
(Unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
2021 |
|
|
|
2020 |
|
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
|
$ |
|
% |
Operating revenues |
$ |
765,221 |
|
|
100.0 |
|
|
$ |
620,302 |
|
|
100.0 |
|
$ |
2,734,372 |
|
|
100.0 |
|
|
$ |
2,372,178 |
|
|
100.0 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
245,814 |
|
|
32.1 |
|
|
|
197,718 |
|
|
31.9 |
|
|
895,012 |
|
|
32.7 |
|
|
|
795,847 |
|
|
33.6 |
|
Fuel |
|
71,833 |
|
|
9.4 |
|
|
|
39,743 |
|
|
6.4 |
|
|
245,866 |
|
|
9.0 |
|
|
|
157,124 |
|
|
6.6 |
|
Supplies and maintenance |
|
54,073 |
|
|
7.1 |
|
|
|
42,763 |
|
|
6.9 |
|
|
206,701 |
|
|
7.6 |
|
|
|
175,842 |
|
|
7.4 |
|
Taxes and licenses |
|
24,699 |
|
|
3.2 |
|
|
|
24,911 |
|
|
4.0 |
|
|
96,095 |
|
|
3.5 |
|
|
|
95,746 |
|
|
4.0 |
|
Insurance and claims |
|
28,161 |
|
|
3.7 |
|
|
|
24,656 |
|
|
4.0 |
|
|
98,658 |
|
|
3.6 |
|
|
|
109,816 |
|
|
4.6 |
|
Depreciation and amortization |
|
71,269 |
|
|
9.3 |
|
|
|
63,799 |
|
|
10.3 |
|
|
267,700 |
|
|
9.8 |
|
|
|
263,286 |
|
|
11.1 |
|
Rent and purchased transportation |
|
182,685 |
|
|
23.9 |
|
|
|
140,195 |
|
|
22.6 |
|
|
641,159 |
|
|
23.4 |
|
|
|
519,184 |
|
|
21.9 |
|
Communications and utilities |
|
3,507 |
|
|
0.4 |
|
|
|
3,333 |
|
|
0.5 |
|
|
13,460 |
|
|
0.5 |
|
|
|
14,474 |
|
|
0.6 |
|
Other |
|
(15,308 |
) |
|
(2.0 |
) |
|
|
1,733 |
|
|
0.3 |
|
|
(39,425 |
) |
|
(1.4 |
) |
|
|
13,421 |
|
|
0.6 |
|
Total operating expenses |
|
666,733 |
|
|
87.1 |
|
|
|
538,851 |
|
|
86.9 |
|
|
2,425,226 |
|
|
88.7 |
|
|
|
2,144,740 |
|
|
90.4 |
|
Operating income |
|
98,488 |
|
|
12.9 |
|
|
|
81,451 |
|
|
13.1 |
|
|
309,146 |
|
|
11.3 |
|
|
|
227,438 |
|
|
9.6 |
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
1,600 |
|
|
0.2 |
|
|
|
576 |
|
|
— |
|
|
4,423 |
|
|
0.2 |
|
|
|
4,215 |
|
|
0.2 |
|
Interest income |
|
(293 |
) |
|
— |
|
|
|
(308 |
) |
|
— |
|
|
(1,211 |
) |
|
(0.1 |
) |
|
|
(1,634 |
) |
|
(0.1 |
) |
Gain on investments in equity securities, net |
|
(4,036 |
) |
|
(0.5 |
) |
|
|
— |
|
|
— |
|
|
(40,317 |
) |
|
(1.5 |
) |
|
|
— |
|
|
— |
|
Other |
|
90 |
|
|
— |
|
|
|
40 |
|
|
— |
|
|
236 |
|
|
— |
|
|
|
163 |
|
|
— |
|
Total other expense (income) |
|
(2,639 |
) |
|
(0.3 |
) |
|
|
308 |
|
|
— |
|
|
(36,869 |
) |
|
(1.4 |
) |
|
|
2,744 |
|
|
0.1 |
|
Income before income
taxes |
|
101,127 |
|
|
13.2 |
|
|
|
81,143 |
|
|
13.1 |
|
|
346,015 |
|
|
12.7 |
|
|
|
224,694 |
|
|
9.5 |
|
Income tax expense |
|
23,262 |
|
|
3.0 |
|
|
|
20,587 |
|
|
3.3 |
|
|
84,537 |
|
|
3.1 |
|
|
|
55,616 |
|
|
2.4 |
|
Net income |
|
77,865 |
|
|
10.2 |
|
|
|
60,556 |
|
|
9.8 |
|
|
261,478 |
|
|
9.6 |
|
|
|
169,078 |
|
|
7.1 |
|
Net income attributable to
noncontrolling interest |
|
(1,098 |
) |
|
(0.2 |
) |
|
|
— |
|
|
— |
|
|
(2,426 |
) |
|
(0.1 |
) |
|
|
— |
|
|
— |
|
Net income attributable to Werner |
$ |
76,767 |
|
|
10.0 |
|
|
$ |
60,556 |
|
|
9.8 |
|
$ |
259,052 |
|
|
9.5 |
|
|
$ |
169,078 |
|
|
7.1 |
|
Diluted shares
outstanding |
|
66,850 |
|
|
|
|
|
69,052 |
|
|
|
|
|
67,855 |
|
|
|
|
|
69,427 |
|
|
|
Diluted earnings per
share |
$ |
1.15 |
|
|
|
|
$ |
0.88 |
|
|
|
|
$ |
3.82 |
|
|
|
|
$ |
2.44 |
|
|
|
|
CONDENSED BALANCE SHEET |
(In thousands, except share amounts) |
|
|
|
|
|
December 31,2021 |
|
December 31,2020 |
|
(Unaudited) |
|
|
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
54,196 |
|
|
$ |
29,334 |
|
Accounts receivable, trade, less allowance of $9,169 and $8,686,
respectively |
|
460,518 |
|
|
|
341,104 |
|
Other receivables |
|
24,449 |
|
|
|
23,491 |
|
Inventories and supplies |
|
11,140 |
|
|
|
12,062 |
|
Prepaid taxes, licenses and permits |
|
17,549 |
|
|
|
17,231 |
|
Other current assets |
|
49,572 |
|
|
|
33,694 |
|
Total current assets |
|
617,424 |
|
|
|
456,916 |
|
Property and equipment |
|
2,557,825 |
|
|
|
2,405,335 |
|
Less – accumulated
depreciation |
|
944,582 |
|
|
|
862,077 |
|
Property and equipment, net |
|
1,613,243 |
|
|
|
1,543,258 |
|
Goodwill |
|
74,618 |
|
|
|
— |
|
Intangible assets, net |
|
55,315 |
|
|
|
— |
|
Other non-current assets
(1) |
|
229,324 |
|
|
|
156,502 |
|
Total assets |
$ |
2,589,924 |
|
|
$ |
2,156,676 |
|
|
|
|
|
LIABILITIES, TEMPORARY
EQUITY AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
93,987 |
|
|
$ |
83,263 |
|
Current portion of long-term debt |
|
5,000 |
|
|
|
25,000 |
|
Insurance and claims accruals |
|
72,594 |
|
|
|
76,917 |
|
Accrued payroll |
|
44,333 |
|
|
|
35,594 |
|
Accrued expenses |
|
28,758 |
|
|
|
25,032 |
|
Other current liabilities |
|
24,975 |
|
|
|
28,208 |
|
Total current liabilities |
|
269,647 |
|
|
|
274,014 |
|
Long-term debt, net of current
portion |
|
422,500 |
|
|
|
175,000 |
|
Other long-term
liabilities |
|
43,314 |
|
|
|
43,114 |
|
Insurance and claims accruals,
net of current portion (1) |
|
237,220 |
|
|
|
231,638 |
|
Deferred income taxes |
|
253,746 |
|
|
|
237,870 |
|
Total liabilities |
|
1,226,427 |
|
|
|
961,636 |
|
Temporary equity - redeemable
noncontrolling interest |
|
35,947 |
|
|
|
— |
|
Stockholders’ equity: |
|
|
|
Common stock, $.01 par value, 200,000,000 shares authorized;
80,533,536 |
|
|
|
shares issued; 65,790,112 and 67,931,726 shares outstanding,
respectively |
|
805 |
|
|
|
805 |
|
Paid-in capital |
|
121,904 |
|
|
|
116,039 |
|
Retained earnings |
|
1,667,104 |
|
|
|
1,438,916 |
|
Accumulated other comprehensive loss |
|
(20,604 |
) |
|
|
(22,833 |
) |
Treasury stock, at cost; 14,743,424 and 12,601,810 shares,
respectively |
|
(441,659 |
) |
|
|
(337,887 |
) |
Total stockholders’ equity |
|
1,327,550 |
|
|
|
1,195,040 |
|
Total liabilities, temporary
equity and stockholders’ equity |
$ |
2,589,924 |
|
|
$ |
2,156,676 |
|
(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 December
31, 2021 and 2020.
|
SUPPLEMENTAL INFORMATION |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Capital expenditures, net |
$ |
30,319 |
|
|
$ |
78,978 |
|
|
$ |
193,049 |
|
|
$ |
266,241 |
|
Cash flow from operations |
|
79,475 |
|
|
|
99,513 |
|
|
|
332,819 |
|
|
|
445,909 |
|
Return on assets
(annualized) |
|
12.2 |
% |
|
|
11.2 |
% |
|
|
11.2 |
% |
|
|
8.0 |
% |
Return on equity
(annualized) |
|
23.0 |
% |
|
|
20.3 |
% |
|
|
20.4 |
% |
|
|
14.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Financial and Operating
Statistics Information
SEGMENT INFORMATION |
(Unaudited) |
(In thousands) |
|
|
|
|
|
|
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues |
|
|
|
|
|
|
|
Truckload Transportation
Services |
$ |
563,227 |
|
|
$ |
475,037 |
|
|
$ |
2,045,073 |
|
|
$ |
1,843,209 |
|
Werner Logistics |
|
184,967 |
|
|
|
130,113 |
|
|
|
622,461 |
|
|
|
469,791 |
|
Other (1) |
|
16,980 |
|
|
|
14,737 |
|
|
|
66,108 |
|
|
|
57,276 |
|
Corporate |
|
407 |
|
|
|
467 |
|
|
|
1,629 |
|
|
|
2,009 |
|
Subtotal |
|
765,581 |
|
|
|
620,354 |
|
|
|
2,735,271 |
|
|
|
2,372,285 |
|
Inter-segment eliminations
(2) |
|
(360 |
) |
|
|
(52 |
) |
|
|
(899 |
) |
|
|
(107 |
) |
Total |
$ |
765,221 |
|
|
$ |
620,302 |
|
|
$ |
2,734,372 |
|
|
$ |
2,372,178 |
|
Operating Income |
|
|
|
|
|
|
|
Truckload Transportation
Services |
$ |
88,231 |
|
|
$ |
78,613 |
|
|
$ |
281,823 |
|
|
$ |
222,007 |
|
Werner Logistics |
|
11,722 |
|
|
|
2,633 |
|
|
|
27,873 |
|
|
|
6,005 |
|
Other (1) |
|
1,012 |
|
|
|
907 |
|
|
|
4,947 |
|
|
|
3,839 |
|
Corporate |
|
(2,477 |
) |
|
|
(702 |
) |
|
|
(5,497 |
) |
|
|
(4,413 |
) |
Total |
$ |
98,488 |
|
|
$ |
81,451 |
|
|
$ |
309,146 |
|
|
$ |
227,438 |
|
(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 EndedDecember 31, |
|
|
|
Year Ended December 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
% Chg |
|
|
2021 |
|
|
|
2020 |
|
|
% Chg |
Truckload
Transportation Services segment |
|
|
|
|
|
|
|
|
|
|
|
Average trucks in service |
|
8,313 |
|
|
|
7,790 |
|
|
6.7 |
% |
|
|
7,982 |
|
|
|
7,757 |
|
|
2.9 |
% |
Average revenues per truck per
week (1) |
$ |
4,521 |
|
|
$ |
4,287 |
|
|
5.5 |
% |
|
$ |
4,311 |
|
|
$ |
4,134 |
|
|
4.3 |
% |
Total trucks (at quarter
end) |
|
|
|
|
|
|
|
|
|
|
|
Company |
|
8,050 |
|
|
|
7,390 |
|
|
8.9 |
% |
|
|
8,050 |
|
|
|
7,390 |
|
|
8.9 |
% |
Independent contractor |
|
290 |
|
|
|
440 |
|
|
(34.1 |
)% |
|
|
290 |
|
|
|
440 |
|
|
(34.1 |
)% |
Total trucks |
|
8,340 |
|
|
|
7,830 |
|
|
6.5 |
% |
|
|
8,340 |
|
|
|
7,830 |
|
|
6.5 |
% |
Total trailers (at quarter
end) |
|
25,760 |
|
|
|
23,125 |
|
|
11.4 |
% |
|
|
25,760 |
|
|
|
23,125 |
|
|
11.4 |
% |
One-Way
Truckload |
|
|
|
|
|
|
|
|
|
|
|
Trucking revenues, net of fuel
surcharge (in 000’s) |
$ |
197,346 |
|
|
$ |
176,014 |
|
|
12.1 |
% |
|
$ |
710,673 |
|
|
$ |
694,868 |
|
|
2.3 |
% |
Average trucks in service |
|
3,088 |
|
|
|
2,918 |
|
|
5.8 |
% |
|
|
2,942 |
|
|
|
3,096 |
|
|
(5.0 |
)% |
Total trucks (at quarter
end) |
|
3,105 |
|
|
|
2,885 |
|
|
7.6 |
% |
|
|
3,105 |
|
|
|
2,885 |
|
|
7.6 |
% |
Average percentage of empty
miles |
|
11.76 |
% |
|
|
11.69 |
% |
|
0.6 |
% |
|
|
11.25 |
% |
|
|
12.06 |
% |
|
(6.7 |
)% |
Average revenues per truck per
week (1) |
$ |
4,916 |
|
|
$ |
4,638 |
|
|
6.0 |
% |
|
$ |
4,645 |
|
|
$ |
4,315 |
|
|
7.6 |
% |
Average % change YOY in
revenues per total mile (1) |
|
19.2 |
% |
|
|
6.9 |
% |
|
|
|
|
17.3 |
% |
|
|
0.9 |
% |
|
|
Average % change YOY in total
miles per truck per week |
|
(11.1 |
)% |
|
|
0.3 |
% |
|
|
|
|
(8.2 |
)% |
|
|
1.6 |
% |
|
|
Average completed trip length
in miles (loaded) |
|
715 |
|
|
|
869 |
|
|
(17.7 |
)% |
|
|
786 |
|
|
|
852 |
|
|
(7.7 |
)% |
Dedicated |
|
|
|
|
|
|
|
|
|
|
|
Trucking revenues, net of fuel
surcharge (in 000’s) |
$ |
291,244 |
|
|
$ |
258,113 |
|
|
12.8 |
% |
|
$ |
1,078,475 |
|
|
$ |
972,526 |
|
|
10.9 |
% |
Average trucks in service |
|
5,225 |
|
|
|
4,872 |
|
|
7.2 |
% |
|
|
5,040 |
|
|
|
4,661 |
|
|
8.1 |
% |
Total trucks (at quarter
end) |
|
5,235 |
|
|
|
4,945 |
|
|
5.9 |
% |
|
|
5,235 |
|
|
|
4,945 |
|
|
5.9 |
% |
Average revenues per truck per
week (1) |
$ |
4,287 |
|
|
$ |
4,075 |
|
|
5.2 |
% |
|
$ |
4,116 |
|
|
$ |
4,012 |
|
|
2.6 |
% |
Werner Logistics
segment |
|
|
|
|
|
|
|
|
|
|
|
Average trucks in service |
|
49 |
|
|
|
31 |
|
|
58.1 |
% |
|
|
41 |
|
|
|
31 |
|
|
32.3 |
% |
Total trucks (at quarter
end) |
|
55 |
|
|
|
31 |
|
|
77.4 |
% |
|
|
55 |
|
|
|
31 |
|
|
77.4 |
% |
Total trailers (at quarter
end) |
|
1,465 |
|
|
|
1,275 |
|
|
14.9 |
% |
|
|
1,465 |
|
|
|
1,275 |
|
|
14.9 |
% |
(1) Net of fuel surcharge revenues
Non-GAAP Financial Measures and
Reconciliations
To supplement our financial results presented in
accordance with generally accepted accounting principles in the
United States of America (“GAAP”), we provide certain non-GAAP
financial measures as defined by the SEC Regulation G, including
non-GAAP adjusted operating income; non-GAAP adjusted operating
margin; non-GAAP adjusted operating margin, net of fuel surcharge;
non-GAAP adjusted net income attributable to Werner; non-GAAP
adjusted diluted earnings per share; non-GAAP adjusted operating
expenses; non-GAAP adjusted operating expenses, net of fuel
surcharge; non-GAAP adjusted operating ratio; and non-GAAP adjusted
operating ratio, net of fuel surcharge. We believe these non-GAAP
financial measures provide a more useful comparison of our
performance from period to period because they exclude the effect
of items that, in our opinion, do not reflect our core operating
performance. Our non-GAAP financial measures are not meant to be
considered in isolation or as substitutes for their comparable GAAP
measures and should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
There are limitations to using non-GAAP financial measures.
Although we believe that they improve comparability in analyzing
our period to period performance, they could limit comparability to
other companies in our industry if those companies define these
measures differently. Because of these limitations, our non-GAAP
financial measures should not be considered measures of income
generated by our business. Management compensates for these
limitations by primarily relying on GAAP results and using non-GAAP
financial measures on a supplemental basis.
The following tables present reconciliations of
each non-GAAP financial measure to its most directly comparable
GAAP financial measure as required by SEC Regulation G. In
addition, information regarding each of the excluded items as well
as our reasons for excluding them from our non-GAAP results is
provided below.
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED |
(unaudited) |
(In thousands, except per share amounts) |
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Non-GAAP Adjusted
Operating Income and Non-GAAP Adjusted Operating
Margin (1) |
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
Operating income and operating margin – (GAAP) |
$ |
98,488 |
|
12.9 |
% |
|
$ |
81,451 |
|
13.1 |
% |
|
$ |
309,146 |
|
|
11.3 |
% |
|
$ |
227,438 |
|
9.6 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
1,321 |
|
0.1 |
% |
|
|
1,259 |
|
0.2 |
% |
|
|
5,137 |
|
|
0.2 |
% |
|
|
4,893 |
|
0.2 |
% |
Acquisition expenses (3) |
|
630 |
|
0.1 |
% |
|
|
— |
|
— |
% |
|
|
1,622 |
|
|
0.1 |
% |
|
|
— |
|
— |
% |
Gain on sale of Werner Global Logistics (4) |
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
(1,013 |
) |
|
(0.1 |
)% |
|
|
— |
|
— |
% |
Depreciation (5) |
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
9,614 |
|
0.4 |
% |
Amortization of intangible assets (6) |
|
659 |
|
0.1 |
% |
|
|
— |
|
— |
% |
|
|
1,885 |
|
|
0.1 |
% |
|
|
— |
|
— |
% |
Non-GAAP adjusted operating
income and non-GAAP adjusted operating margin |
$ |
101,098 |
|
13.2 |
% |
|
$ |
82,710 |
|
13.3 |
% |
|
$ |
316,777 |
|
|
11.6 |
% |
|
$ |
241,945 |
|
10.2 |
% |
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Non-GAAP Adjusted Net
Income Attributable to Werner and
Non-GAAP Adjusted Diluted EPS
(1) |
$ |
|
Diluted EPS |
|
$ |
|
Diluted EPS |
|
$ |
|
Diluted EPS |
|
$ |
|
Diluted EPS |
Net income attributable to Werner and diluted EPS – (GAAP) |
$ |
76,767 |
|
|
$ |
1.15 |
|
|
$ |
60,556 |
|
|
$ |
0.88 |
|
|
$ |
259,052 |
|
|
$ |
3.82 |
|
|
$ |
169,078 |
|
|
$ |
2.44 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
1,321 |
|
|
|
0.02 |
|
|
|
1,259 |
|
|
|
0.02 |
|
|
|
5,137 |
|
|
|
0.08 |
|
|
|
4,893 |
|
|
|
0.07 |
|
Acquisition expenses (3) |
|
630 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
1,622 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
Gain on sale of Werner Global Logistics (4) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,013 |
) |
|
|
(0.02 |
) |
|
|
— |
|
|
|
— |
|
Depreciation (5) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,614 |
|
|
|
0.14 |
|
Amortization of intangible assets, net of amount attributable to
noncontrolling interest (6) |
|
560 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
1,541 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
Gain on investments in equity securities, net (7) |
|
(4,036 |
) |
|
|
(0.06 |
) |
|
|
— |
|
|
|
— |
|
|
|
(40,317 |
) |
|
|
(0.59 |
) |
|
|
— |
|
|
|
— |
|
Income tax effect of above adjustments (8) |
|
382 |
|
|
|
— |
|
|
|
(321 |
) |
|
|
(0.01 |
) |
|
|
8,258 |
|
|
|
0.12 |
|
|
|
(3,699 |
) |
|
|
(0.06 |
) |
Non-GAAP adjusted net income
attributable to Werner and non-GAAP adjusted diluted EPS |
$ |
75,624 |
|
|
$ |
1.13 |
|
|
$ |
61,494 |
|
|
$ |
0.89 |
|
|
$ |
234,280 |
|
|
$ |
3.45 |
|
|
$ |
179,886 |
|
|
$ |
2.59 |
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD
TRANSPORTATION SERVICES (TTS) SEGMENT |
(unaudited) |
(In thousands) |
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Non-GAAP Adjusted
Operating Income and Non-GAAP Adjusted Operating
Margin (1) |
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
Operating income and operating margin – (GAAP) |
$ |
88,231 |
|
15.7 |
% |
|
$ |
78,613 |
|
16.5 |
% |
|
$ |
281,823 |
|
13.8 |
% |
|
$ |
222,007 |
|
12.0 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
. |
|
|
|
|
|
|
Insurance and claims (2) |
|
1,321 |
|
0.2 |
% |
|
|
1,259 |
|
0.3 |
% |
|
|
5,137 |
|
0.2 |
% |
|
|
4,893 |
|
0.3 |
% |
Depreciation (5) |
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
— |
|
— |
% |
|
|
9,614 |
|
0.5 |
% |
Amortization of intangible assets (6) |
|
492 |
|
0.1 |
% |
|
|
— |
|
— |
% |
|
|
1,718 |
|
0.1 |
% |
|
|
— |
|
— |
% |
Non-GAAP adjusted operating
income and non-GAAP adjusted operating margin |
$ |
90,044 |
|
16.0 |
% |
|
$ |
79,872 |
|
16.8 |
% |
|
$ |
288,678 |
|
14.1 |
% |
|
$ |
236,514 |
|
12.8 |
% |
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Non-GAAP Adjusted
Operating Expenses and Non-GAAP Adjusted Operating
Ratio (1) |
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
|
$ |
|
% of Op. Rev. |
Operating expenses and operating ratio – (GAAP) |
$ |
474,996 |
|
|
84.3 |
% |
|
$ |
396,424 |
|
|
83.5 |
% |
|
$ |
1,763,250 |
|
|
86.2 |
% |
|
$ |
1,621,202 |
|
|
88.0 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
(1,321 |
) |
|
(0.2 |
)% |
|
|
(1,259 |
) |
|
(0.3 |
)% |
|
|
(5,137 |
) |
|
(0.2 |
)% |
|
|
(4,893 |
) |
|
(0.3 |
)% |
Depreciation (5) |
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
|
(9,614 |
) |
|
(0.5 |
)% |
Amortization of intangible assets (6) |
|
(492 |
) |
|
(0.1 |
)% |
|
|
— |
|
|
— |
% |
|
|
(1,718 |
) |
|
(0.1 |
)% |
|
|
— |
|
|
— |
% |
Non-GAAP adjusted operating
expenses and non-GAAP adjusted operating ratio |
$ |
473,183 |
|
|
84.0 |
% |
|
$ |
395,165 |
|
|
83.2 |
% |
|
$ |
1,756,395 |
|
|
85.9 |
% |
|
$ |
1,606,695 |
|
|
87.2 |
% |
|
|
|
|
|
Three Months EndedDecember 31, |
|
Year Ended December 31, |
Non-GAAP Adjusted Operating Expenses, Net of Fuel
Surcharge; Non-GAAP Adjusted Operating Margin, Net
of Fuel Surcharge; and Non-GAAP Adjusted Operating
Ratio, Net of Fuel Surcharge (1) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
$ |
|
$ |
|
$ |
|
$ |
Operating revenues –
(GAAP) |
$ |
563,227 |
|
|
$ |
475,037 |
|
|
$ |
2,045,073 |
|
|
$ |
1,843,209 |
|
Less: Trucking fuel surcharge
(9) |
|
(68,501 |
) |
|
|
(36,563 |
) |
|
|
(234,164 |
) |
|
|
(158,611 |
) |
Operating revenues, net of fuel surcharge – (Non-GAAP) |
|
494,726 |
|
|
|
438,474 |
|
|
|
1,810,909 |
|
|
|
1,684,598 |
|
Operating expenses –
(GAAP) |
|
474,996 |
|
|
|
396,424 |
|
|
|
1,763,250 |
|
|
|
1,621,202 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Trucking fuel surcharge (9) |
|
(68,501 |
) |
|
|
(36,563 |
) |
|
|
(234,164 |
) |
|
|
(158,611 |
) |
Insurance and claims (2) |
|
(1,321 |
) |
|
|
(1,259 |
) |
|
|
(5,137 |
) |
|
|
(4,893 |
) |
Depreciation (5) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,614 |
) |
Amortization of intangible assets (6) |
|
(492 |
) |
|
|
— |
|
|
|
(1,718 |
) |
|
|
— |
|
Non-GAAP adjusted operating
expenses, net of fuel surcharge |
|
404,682 |
|
|
|
358,602 |
|
|
|
1,522,231 |
|
|
|
1,448,084 |
|
Non-GAAP adjusted operating
income |
$ |
90,044 |
|
|
$ |
79,872 |
|
|
$ |
288,678 |
|
|
$ |
236,514 |
|
Non-GAAP adjusted operating
margin, net of fuel surcharge |
|
18.2 |
% |
|
|
18.2 |
% |
|
|
15.9 |
% |
|
|
14.0 |
% |
Non-GAAP adjusted operating
ratio, net of fuel surcharge |
|
81.8 |
% |
|
|
81.8 |
% |
|
|
84.1 |
% |
|
|
86.0 |
% |
(1) Non-GAAP adjusted operating income; non-GAAP
adjusted operating margin; non-GAAP adjusted operating margin, net
of fuel surcharge; non-GAAP adjusted net income attributable to
Werner; non-GAAP adjusted diluted earnings per share; non-GAAP
adjusted operating expenses; non-GAAP adjusted operating expenses,
net of fuel surcharge; non-GAAP adjusted operating ratio; and
non-GAAP adjusted operating ratio, net of fuel surcharge should be
considered in addition to, rather than as substitutes for, GAAP
operating income; GAAP operating margin; GAAP net income
attributable to Werner; GAAP diluted earnings per share; GAAP
operating expenses; and GAAP operating ratio, which are their most
directly comparable GAAP financial measures.
(2) During 2021 and 2020, we accrued pre-tax
insurance and claims expense for interest related to a previously
disclosed excess adverse jury verdict rendered on May 17, 2018 in a
lawsuit arising from a December 2014 accident. The Company is
appealing this verdict. 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. Interest
is accrued at $0.4 million per month until such time as the outcome
of our appeal is finalized. 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.
(3) During 2021, we incurred legal and
professional fees related to our acquisitions of ECM and NEHDS.
Acquisition-related expenses are excluded as management believes
these costs are not representative of the costs of managing our
on-going business. The expenses are included within other operating
expenses in our Income Statement and in Corporate operating income
in our Segment Information table.
(4) During first quarter 2021, we sold Werner
Global Logistics (“WGL”) freight forwarding services for
international ocean and air shipments to Scan Global Logistics
Group, which resulted in the pre-tax gain on sale. Management
believes excluding the effect of this unusual and infrequent item
provides a more useful comparison of our performance from period to
period. This item is included in our Werner Logistics segment in
our Segment Information table.
(5) During first quarter 2020, we changed the
estimated life of certain trucks expected to be sold in 2020 to
more rapidly depreciate these trucks to their estimated residual
values due to the weak used truck market. These trucks continued to
depreciate at the same higher rate per truck, until all were sold.
Management believes excluding the effect of this unusual and
infrequent item provides a more useful comparison of our
performance from period to period. This item is included in our
Truckload Transportation Services segment in our Segment
Information table.
(6) Amortization expense related to intangible
assets acquired in the ECM and NEHDS acquisitions is excluded
because management does not believe it is indicative of our core
operating performance. Amortization expense for ECM and NEHDS is
included in our Truckload Transportation Services and Werner
Logistics segments, respectively, in our Segment Information
table.
(7) Represents non-operating mark-to-market
adjustments for gains/losses on our minority equity investments,
which we account for under ASC 321, Investments - Equity
Securities. We record changes in the value of our investments in
equity securities in other expense (income) in our Income
Statement. Management believes excluding the effect of gains/losses
on our investments in equity securities provides a more useful
comparison of our performance from period to period.
(8) The income tax effect of the non-GAAP
adjustments is calculated using the incremental income tax rate
excluding discrete items, and the income tax effect for 2021 has
been updated to reflect the annual incremental income tax rate.
(9) Fluctuating fuel prices and fuel surcharge
revenues impact the total company operating ratio and the TTS
segment operating ratio when fuel surcharges are reported on a
gross basis as revenues versus netting the fuel surcharges against
fuel expenses. Management believes netting fuel surcharge revenues,
which are generally a more volatile source of revenue, against fuel
expenses provides a more consistent basis for comparing the results
of operations from period to period.
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