Werner Enterprises, Inc. (Nasdaq: WERN), a premier transportation
and logistics provider, today reported results for the first
quarter ended March 31, 2022.
“The Werner team once again achieved strong
first quarter results in our Truckload Transportation Services and
Logistics segments,” said Derek J. Leathers, Chairman, President
and Chief Executive Officer. “This was our seventh consecutive
quarter of record quarterly adjusted earnings per share. We are
delivering superior service with valued capacity solutions for our
winning customers. Our durable and resilient business model is
performing well, and Werner is built to thrive over the long-term
regardless of the economic and freight environments.”
Total revenues for the quarter were $764.6
million, an increase of $148.2 million compared to the prior year
quarter, due to Truckload Transportation Services (“TTS”) revenues
growth of $95.5 million and Logistics revenues growth of $51.2
million.
Operating income of $83.5 million increased
$21.0 million, or 34%, while operating margin of 10.9% increased 80
basis points. On a non-GAAP basis, adjusted operating income of
$86.2 million increased $23.5 million, or 37%. Adjusted operating
margin of 11.3% increased 110 basis points from 10.2% for the same
quarter last year.
Operating income in the Truckload Transportation
Services segment increased $18.5 million due to fleet growth,
higher freight rates and increased gains on sale of equipment,
offset by cost increases for driver pay and driver sourcing,
equipment maintenance and insurance and claims. On a non-GAAP
basis, adjusted operating income in TTS increased $19.4 million, or
33%. Werner Logistics operating income increased $4.1 million
resulting from improved revenue growth and an expanded operating
margin. On a non-GAAP basis, adjusted operating income in Logistics
increased $5.6 million, or 158%.
Interest expense of $1.4 million increased from
$0.8 million due to an increase in average debt outstanding,
partially offset by a decrease in the average effective interest
rate incurred on our debt. The effective income tax rate during the
quarter was 24.1%, compared to 24.9% in first quarter 2021.
During first quarter 2022, our strategic
minority equity investments in autonomous technology companies had
market valuation changes causing an unrealized loss on equity
securities, which resulted in lower non-operating income of $9.8
million, or $0.11 per share. Consistent with prior reporting,
market value increases or decreases for these strategic minority
investments are adjusted for determining non-GAAP adjusted net
income and non-GAAP adjusted earnings per share.
Net income attributable to Werner of $53.7
million increased 16%. On a non-GAAP basis, adjusted net income
attributable to Werner of $63.0 million increased 35%. Diluted
earnings per share (“EPS”) for the quarter of $0.82 increased 20%.
On a non-GAAP basis, adjusted diluted EPS of $0.96 increased
40%.
Key Consolidated Financial
Metrics
|
Three Months EndedMarch 31, |
(In thousands, except per
share amounts) |
|
2022 |
|
|
|
2021 |
|
|
Y/Y Change |
Total revenues |
$ |
764,605 |
|
|
$ |
616,446 |
|
|
24 |
% |
Truckload Transportation
Services revenues |
|
558,417 |
|
|
|
462,949 |
|
|
21 |
% |
Werner Logistics revenues |
|
189,008 |
|
|
|
137,853 |
|
|
37 |
% |
Operating income |
|
83,511 |
|
|
|
62,471 |
|
|
34 |
% |
Operating margin |
|
10.9 |
% |
|
|
10.1 |
% |
|
80 bps |
Net income attributable to
Werner |
|
53,749 |
|
|
|
46,492 |
|
|
16 |
% |
Diluted earnings per
share |
|
0.82 |
|
|
|
0.68 |
|
|
20 |
% |
Adjusted operating income
(1) |
|
86,191 |
|
|
|
62,716 |
|
|
37 |
% |
Adjusted operating margin
(1) |
|
11.3 |
% |
|
|
10.2 |
% |
|
110 bps |
Adjusted net income
attributable to Werner (1) |
|
62,984 |
|
|
|
46,676 |
|
|
35 |
% |
Adjusted diluted earnings per
share (1) |
|
0.96 |
|
|
|
0.68 |
|
|
40 |
% |
(1) See attached Reconciliation of Non-GAAP
Financial Measures - Consolidated.
Truckload Transportation Services (TTS)
Segment
- Revenues of $558.4 million
increased $95.5 million
- Operating income of $76.1 million
increased $18.5 million; non-GAAP adjusted operating income of
$78.3 million increased $19.4 million
- Operating margin of 13.6% increased
120 basis points from 12.4%; non-GAAP adjusted operating margin of
14.0% increased 130 basis points from 12.7%
- Non-GAAP adjusted operating margin,
net of fuel, of 16.4% increased 220 basis points from 14.2%
- Average segment trucks in service
totaled 8,238, an increase of 448 trucks year over year, or
5.8%
- Dedicated unit trucks at quarter
end totaled 5,185 or 63% of the total TTS segment fleet, compared
to 4,920 trucks, or 64%, a year ago
- 8.8% increase in TTS average
revenues per truck per week
During first quarter 2022, Dedicated continued
to experience strong freight demand from its customers. One-Way
Truckload experienced customer freight demand during first quarter
2022 that was strong in January and February and moderated in March
from strong to very good, relative to March freight demand over the
last five years. During April, Dedicated freight demand remained
strong and One-Way Truckload demand remained very good.
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 EndedMarch 31, |
(In thousands) |
|
2022 |
|
|
|
2021 |
|
|
Y/Y Change |
Trucking revenues, net of fuel surcharge |
$ |
472,361 |
|
|
$ |
410,652 |
|
|
15 |
% |
Trucking fuel surcharge
revenues |
|
79,815 |
|
|
|
47,459 |
|
|
68 |
% |
Non-trucking and other
revenues |
|
6,241 |
|
|
|
4,838 |
|
|
29 |
% |
Total revenues |
$ |
558,417 |
|
|
$ |
462,949 |
|
|
21 |
% |
|
|
|
|
|
|
Operating income |
$ |
76,093 |
|
|
$ |
57,628 |
|
|
32 |
% |
Operating margin |
|
13.6 |
% |
|
|
12.4 |
% |
|
120 bps |
Operating ratio |
|
86.4 |
% |
|
|
87.6 |
% |
|
(120) bps |
Adjusted operating income
(1) |
$ |
78,273 |
|
|
$ |
58,886 |
|
|
33 |
% |
Adjusted operating margin
(1) |
|
14.0 |
% |
|
|
12.7 |
% |
|
130 bps |
Adjusted operating margin, net
of fuel surcharge (1) |
|
16.4 |
% |
|
|
14.2 |
% |
|
220 bps |
Adjusted operating ratio
(1) |
|
86.0 |
% |
|
|
87.3 |
% |
|
(130) bps |
Adjusted operating ratio, net
of fuel surcharge (1) |
|
83.6 |
% |
|
|
85.8 |
% |
|
(220) bps |
(1) See attached Reconciliation of Non-GAAP
Financial Measures - Truckload Transportation Services (TTS)
Segment.
Werner Logistics Segment
- Revenues of $189.0 million
increased $51.2 million, or 37%
- Operating income of $8.7 million
increased $4.1 million
- Operating margin of 4.6% increased
130 bps
- Non-GAAP adjusted operating margin
of 4.9% increased 230 bps from 2.6%
Logistics revenues of $189.0 million increased
37%. Logistics revenues increased 55%, when excluding Werner Global
Logistics (WGL) revenues from first quarter 2021. Werner sold WGL
in first quarter 2021.
Truckload Logistics revenues (67% of total
Logistics revenues) increased 46%, driven by a 24% increase in
revenues per shipment and a 19% increase in shipments.
Intermodal revenues (23% of Logistics revenues)
increased 29%, supported by a 37% increase in revenues per
shipment, partially offset by a 6% decrease in shipments.
Final Mile revenues (10% of Logistics revenues)
increased $18.1 million, primarily due to growth from the November
NEHDS acquisition.
Logistics adjusted operating income improved
$5.6 million in first quarter due to the 37% revenue growth and 230
bps of operating margin expansion.
Key Werner Logistics Segment Financial
Metrics
|
Three Months EndedMarch 31, |
(In thousands) |
|
2022 |
|
|
|
2021 |
|
|
Y/Y Change |
Total revenues |
$ |
189,008 |
|
|
$ |
137,853 |
|
|
37 |
% |
Operating expenses: |
|
|
|
|
|
Purchased transportation expense |
|
157,521 |
|
|
|
120,527 |
|
|
31 |
% |
Other operating expenses |
|
22,806 |
|
|
|
12,752 |
|
|
79 |
% |
Total operating expenses |
|
180,327 |
|
|
|
133,279 |
|
|
35 |
% |
Operating income |
$ |
8,681 |
|
|
$ |
4,574 |
|
|
90 |
% |
Operating margin |
|
4.6 |
% |
|
|
3.3 |
% |
|
130 bps |
Adjusted operating income
(1) |
$ |
9,181 |
|
|
$ |
3,561 |
|
|
158 |
% |
Adjusted operating margin
(1) |
|
4.9 |
% |
|
|
2.6 |
% |
|
230 bps |
(1) See attached Reconciliation of Non-GAAP
Financial Measures - Werner Logistics Segment.
Cash Flow and Capital Allocation
Cash flow from operations in first quarter 2022
was $155.0 million compared to $135.9 million in first quarter
2021, an increase of 14%.
Net capital expenditures in first quarter 2022
were $37.1 million compared to $37.9 million in first quarter 2021,
a decrease of 2%. 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 2.3 years and 4.6 years, respectively, as
of March 31, 2022.
Gains on sales of equipment in first quarter
2022 were $20.5 million, or $0.23 per share, compared to $10.5
million, or $0.11 per share, in first quarter 2021. 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 845,100
shares of common stock for a total cost of $36.2 million, or an
average price of $42.81 per share. As of March 31, 2022, we had 4.2
million shares remaining under our share repurchase
authorization.
As of March 31, 2022, we had $126 million of
cash and over $1.3 billion of stockholders’ equity. Total debt
outstanding was $426 million at March 31, 2022. After considering
letters of credit issued, we had available liquidity consisting of
cash and available borrowing capacity as of March 31, 2022 of $442
million.
2022 Guidance Metrics and
Assumptions
The following table summarizes our updated 2022
guidance and assumptions:
2022 Guidance |
Prior(as of 2/3/22) |
Actual(as of 3/31/22) |
New(as of 5/3/22) |
Commentary |
TTS truck growth from BoY to EoY |
2% to 5%(annual) |
(1)%(1Q22) |
2% to 5%(annual) |
Subject to driver availability and timing of delivery of new trucks
from OEM’s |
Net capital expenditures |
$275M to $325M(annual) |
$37.1M(1Q22) |
$250M to $300M(annual) |
Subject to timing of delivery of new trucks and trailers from
OEM’s |
TTS Guidance |
|
|
|
|
Dedicated RPTPW* growth |
3% to 5%(annual) |
7.3%(1Q22 vs. 1Q21) |
4% to 6%(annual) |
Strong rate levels partially offset by lower miles per truck |
One-Way Truckload RPTM* growth |
16% to 19%(1H22 vs. 1H21) |
20.8%(1Q22 vs. 1Q21) |
14% to 17%(2Q22 vs. 2Q21) |
Continued strong contractual rate increases, moderating spot rates
combined with fleet mix changes |
Assumptions |
|
|
|
|
Effective income tax rate |
24.5% to 25.5%(annual) |
24.1%(1Q22) |
24.5% to 25.5%(annual) |
|
Truck ageTrailer age |
2.2 years4.8 years |
2.3 years4.6 years |
2.2 years4.8 years |
Subject to availability and timing of delivery of new trucks and
trailers from OEM’s |
* Net of fuel surcharge
revenues
Call Information
Werner Enterprises, Inc. will conduct a
conference call to discuss first quarter 2022 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 May 3, 2022 at approximately 6:00 p.m. CT through June
3, 2022 by dialing (877) 344-7529 (domestic) or (412) 317-0088
(international) and using the access code 4137463. 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, 2021.
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 EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
|
$ |
|
% |
Operating revenues |
$ |
764,605 |
|
|
100.0 |
|
|
$ |
616,446 |
|
|
100.0 |
|
Operating expenses: |
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
241,996 |
|
|
31.6 |
|
|
|
204,853 |
|
|
33.2 |
|
Fuel |
|
88,421 |
|
|
11.6 |
|
|
|
50,838 |
|
|
8.2 |
|
Supplies and maintenance |
|
57,025 |
|
|
7.5 |
|
|
|
46,147 |
|
|
7.5 |
|
Taxes and licenses |
|
23,833 |
|
|
3.1 |
|
|
|
23,233 |
|
|
3.8 |
|
Insurance and claims |
|
27,492 |
|
|
3.6 |
|
|
|
22,056 |
|
|
3.6 |
|
Depreciation and amortization |
|
67,229 |
|
|
8.8 |
|
|
|
63,951 |
|
|
10.4 |
|
Rent and purchased transportation |
|
185,237 |
|
|
24.2 |
|
|
|
146,493 |
|
|
23.8 |
|
Communications and utilities |
|
3,926 |
|
|
0.5 |
|
|
|
3,022 |
|
|
0.5 |
|
Other |
|
(14,065 |
) |
|
(1.8 |
) |
|
|
(6,618 |
) |
|
(1.1 |
) |
Total operating expenses |
|
681,094 |
|
|
89.1 |
|
|
|
553,975 |
|
|
89.9 |
|
Operating income |
|
83,511 |
|
|
10.9 |
|
|
|
62,471 |
|
|
10.1 |
|
Other expense (income): |
|
|
|
|
|
|
|
Interest expense |
|
1,439 |
|
|
0.2 |
|
|
|
838 |
|
|
0.1 |
|
Interest income |
|
(275 |
) |
|
(0.1 |
) |
|
|
(297 |
) |
|
— |
|
Loss on investments in equity securities |
|
9,806 |
|
|
1.3 |
|
|
|
— |
|
|
— |
|
Other |
|
73 |
|
|
— |
|
|
|
42 |
|
|
— |
|
Total other expense (income) |
|
11,043 |
|
|
1.4 |
|
|
|
583 |
|
|
0.1 |
|
Income before income
taxes |
|
72,468 |
|
|
9.5 |
|
|
|
61,888 |
|
|
10.0 |
|
Income tax expense |
|
17,433 |
|
|
2.3 |
|
|
|
15,396 |
|
|
2.5 |
|
Net income |
|
55,035 |
|
|
7.2 |
|
|
|
46,492 |
|
|
7.5 |
|
Net income attributable to noncontrolling interest |
|
(1,286 |
) |
|
(0.2 |
) |
|
|
— |
|
|
— |
|
Net income attributable to
Werner |
$ |
53,749 |
|
|
7.0 |
|
|
$ |
46,492 |
|
|
7.5 |
|
Diluted shares
outstanding |
|
65,878 |
|
|
|
|
|
68,223 |
|
|
|
Diluted earnings per
share |
$ |
0.82 |
|
|
|
|
$ |
0.68 |
|
|
|
|
CONDENSED BALANCE SHEET |
(In thousands, except share amounts) |
|
|
|
|
|
March 31,2022 |
|
December 31,2021 |
|
(Unaudited) |
|
|
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
125,949 |
|
|
$ |
54,196 |
|
Accounts receivable, trade, less allowance of $9,539 and $9,169,
respectively |
|
449,602 |
|
|
|
460,518 |
|
Other receivables |
|
25,907 |
|
|
|
24,449 |
|
Inventories and supplies |
|
12,105 |
|
|
|
11,140 |
|
Prepaid taxes, licenses and permits |
|
13,716 |
|
|
|
17,549 |
|
Other current assets |
|
51,075 |
|
|
|
63,361 |
|
Total current assets |
|
678,354 |
|
|
|
631,213 |
|
Property and equipment |
|
2,600,896 |
|
|
|
2,557,825 |
|
Less – accumulated
depreciation |
|
991,296 |
|
|
|
944,582 |
|
Property and equipment, net |
|
1,609,600 |
|
|
|
1,613,243 |
|
Goodwill |
|
74,404 |
|
|
|
74,618 |
|
Intangible assets, net |
|
53,956 |
|
|
|
55,315 |
|
Other non-current assets
(1) |
|
232,712 |
|
|
|
229,324 |
|
Total assets |
$ |
2,649,026 |
|
|
$ |
2,603,713 |
|
|
|
|
|
LIABILITIES, TEMPORARY
EQUITY AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
113,657 |
|
|
$ |
93,987 |
|
Current portion of long-term debt |
|
5,000 |
|
|
|
5,000 |
|
Insurance and claims accruals |
|
66,818 |
|
|
|
72,594 |
|
Accrued payroll |
|
50,367 |
|
|
|
44,333 |
|
Accrued expenses |
|
30,061 |
|
|
|
28,758 |
|
Other current liabilities |
|
24,368 |
|
|
|
24,011 |
|
Total current liabilities |
|
290,271 |
|
|
|
268,683 |
|
Long-term debt, net of current
portion |
|
421,250 |
|
|
|
422,500 |
|
Other long-term
liabilities |
|
47,757 |
|
|
|
43,314 |
|
Insurance and claims accruals,
net of current portion (1) |
|
241,690 |
|
|
|
237,220 |
|
Deferred income taxes |
|
269,361 |
|
|
|
268,499 |
|
Total liabilities |
|
1,270,329 |
|
|
|
1,240,216 |
|
Temporary equity - redeemable
noncontrolling interest |
|
37,233 |
|
|
|
35,947 |
|
Stockholders’ equity: |
|
|
|
Common stock, $.01 par value, 200,000,000 shares authorized;
80,533,536 |
|
|
|
shares issued; 65,057,763 and 65,790,112 shares outstanding,
respectively |
|
805 |
|
|
|
805 |
|
Paid-in capital |
|
121,157 |
|
|
|
121,904 |
|
Retained earnings |
|
1,713,046 |
|
|
|
1,667,104 |
|
Accumulated other comprehensive loss |
|
(15,820 |
) |
|
|
(20,604 |
) |
Treasury stock, at cost; 15,475,773 and 14,743,424 shares,
respectively |
|
(477,724 |
) |
|
|
(441,659 |
) |
Total stockholders’ equity |
|
1,341,464 |
|
|
|
1,327,550 |
|
Total liabilities, temporary
equity and stockholders’ equity |
$ |
2,649,026 |
|
|
$ |
2,603,713 |
|
(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 March 31,
2022 and December 31, 2021.
|
SUPPLEMENTAL INFORMATION |
(Unaudited) |
(In thousands) |
|
|
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Capital expenditures, net |
$ |
37,074 |
|
|
$ |
37,866 |
|
Cash flow from operations |
|
154,957 |
|
|
|
135,867 |
|
Return on assets
(annualized) |
|
8.4 |
% |
|
|
8.6 |
% |
Return on equity
(annualized) |
|
16.0 |
% |
|
|
15.4 |
% |
|
|
|
|
|
|
|
|
Segment Financial and Operating Statistics
Information
SEGMENT INFORMATION |
(Unaudited) |
(In thousands) |
|
|
|
Three Months EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
|
|
Truckload Transportation
Services |
$ |
558,417 |
|
|
$ |
462,949 |
|
Werner Logistics |
|
189,008 |
|
|
|
137,853 |
|
Other (1) |
|
17,513 |
|
|
|
15,399 |
|
Corporate |
|
389 |
|
|
|
379 |
|
Subtotal |
|
765,327 |
|
|
|
616,580 |
|
Inter-segment eliminations
(2) |
|
(722 |
) |
|
|
(134 |
) |
Total |
$ |
764,605 |
|
|
$ |
616,446 |
|
Operating Income |
|
|
|
Truckload Transportation
Services |
$ |
76,093 |
|
|
$ |
57,628 |
|
Werner Logistics |
|
8,681 |
|
|
|
4,574 |
|
Other (1) |
|
445 |
|
|
|
866 |
|
Corporate |
|
(1,708 |
) |
|
|
(597 |
) |
Total |
$ |
83,511 |
|
|
$ |
62,471 |
|
(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 EndedMarch 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
% Chg |
Truckload
Transportation Services segment |
|
|
|
|
|
Average trucks in service |
|
8,238 |
|
|
|
7,790 |
|
|
5.8 |
% |
Average revenues per truck per
week (1) |
$ |
4,411 |
|
|
$ |
4,055 |
|
|
8.8 |
% |
Total trucks (at quarter
end) |
|
|
|
|
|
Company |
|
7,960 |
|
|
|
7,360 |
|
|
8.2 |
% |
Independent contractor |
|
265 |
|
|
|
375 |
|
|
(29.3)% |
Total trucks |
|
8,225 |
|
|
|
7,735 |
|
|
6.3 |
% |
Total trailers (at quarter
end) |
|
26,185 |
|
|
|
22,710 |
|
|
15.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
One-Way
Truckload |
|
|
|
|
|
Trucking revenues, net of fuel
surcharge (in 000’s) |
$ |
186,760 |
|
|
$ |
156,839 |
|
|
19.1 |
% |
Average trucks in service |
|
3,064 |
|
|
|
2,856 |
|
|
7.3 |
% |
Total trucks (at quarter
end) |
|
3,040 |
|
|
|
2,815 |
|
|
8.0 |
% |
Average percentage of empty
miles |
|
11.75 |
% |
|
|
11.35 |
% |
|
3.5 |
% |
Average revenues per truck per
week (1) |
$ |
4,690 |
|
|
$ |
4,224 |
|
|
11.0 |
% |
Average % change YOY in
revenues per total mile (1) |
|
20.8 |
% |
|
|
9.5 |
% |
|
|
Average % change YOY in total
miles per truck per week |
(8.1)% |
|
(7.7)% |
|
|
Average completed trip length
in miles (loaded) |
|
716 |
|
|
|
853 |
|
|
(16.1)% |
|
|
|
|
|
|
|
|
|
|
Dedicated |
|
|
|
|
|
Trucking revenues, net of fuel
surcharge (in 000’s) |
$ |
285,601 |
|
|
$ |
253,813 |
|
|
12.5 |
% |
Average trucks in service |
|
5,174 |
|
|
|
4,934 |
|
|
4.9 |
% |
Total trucks (at quarter
end) |
|
5,185 |
|
|
|
4,920 |
|
|
5.4 |
% |
Average revenues per truck per
week (1) |
$ |
4,247 |
|
|
$ |
3,957 |
|
|
7.3 |
% |
Werner Logistics
segment |
|
|
|
|
|
Average trucks in service |
|
53 |
|
|
|
39 |
|
|
35.9 |
% |
Total trucks (at quarter
end) |
|
54 |
|
|
|
39 |
|
|
38.5 |
% |
Total trailers (at quarter
end) |
|
1,605 |
|
|
|
1,440 |
|
|
11.5 |
% |
(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
revenues, net of fuel surcharge; 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 March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Non-GAAP Adjusted
Operating Income and Non-GAAP Adjusted Operating
Margin (1) |
|
$ |
|
% ofOp. Rev. |
|
$ |
|
% ofOp. Rev. |
Operating income and operating margin – (GAAP) |
|
$ |
83,511 |
|
10.9 |
% |
|
$ |
62,471 |
|
|
10.1 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
|
1,321 |
|
0.2 |
% |
|
|
1,258 |
|
|
0.2 |
% |
Gain on sale of Werner Global Logistics (3) |
|
|
— |
|
— |
% |
|
|
(1,013 |
) |
|
(0.1)% |
Amortization of intangible assets (4) |
|
|
1,359 |
|
0.2 |
% |
|
|
— |
|
|
— |
% |
Non-GAAP adjusted operating
income and non-GAAP adjusted operating margin |
|
$ |
86,191 |
|
11.3 |
% |
|
$ |
62,716 |
|
|
10.2 |
% |
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Non-GAAP Adjusted Net
Income Attributable to Werner and
Non-GAAP Adjusted Diluted EPS
(1) |
|
$ |
|
Diluted EPS |
|
$ |
|
Diluted EPS |
Net income attributable to Werner and diluted EPS – (GAAP) |
|
$ |
53,749 |
|
|
$ |
0.82 |
|
|
$ |
46,492 |
|
|
$ |
0.68 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
|
1,321 |
|
|
|
0.02 |
|
|
|
1,258 |
|
|
|
0.02 |
|
Gain on sale of Werner Global Logistics (3) |
|
|
— |
|
|
|
— |
|
|
|
(1,013 |
) |
|
|
(0.02 |
) |
Amortization of intangible assets, net of amount attributable to
noncontrolling interest (4) |
|
|
1,187 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
— |
|
Loss on investments in equity securities (5) |
|
|
9,806 |
|
|
|
0.15 |
|
|
|
— |
|
|
|
— |
|
Income tax effect of above adjustments (6) |
|
|
(3,079 |
) |
|
|
(0.05 |
) |
|
|
(61 |
) |
|
|
— |
|
Non-GAAP adjusted net income
attributable to Werner and non-GAAP adjusted diluted EPS |
|
$ |
62,984 |
|
|
$ |
0.96 |
|
|
$ |
46,676 |
|
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES –
TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT(unaudited)(In
thousands)
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Non-GAAP Adjusted
Operating Income and Non-GAAP Adjusted Operating
Margin (1) |
|
$ |
|
% ofOp. Rev. |
|
$ |
|
% ofOp. Rev. |
Operating income and operating margin – (GAAP) |
|
$ |
76,093 |
|
13.6 |
% |
|
$ |
57,628 |
|
12.4 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
|
1,321 |
|
0.2 |
% |
|
|
1,258 |
|
0.3 |
% |
Amortization of intangible assets (4) |
|
|
859 |
|
0.2 |
% |
|
|
— |
|
— |
% |
Non-GAAP adjusted operating
income and non-GAAP adjusted operating margin |
|
$ |
78,273 |
|
14.0 |
% |
|
$ |
58,886 |
|
12.7 |
% |
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Non-GAAP Adjusted
Operating Expenses and Non-GAAP Adjusted Operating
Ratio (1) |
|
$ |
|
% ofOp. Rev. |
|
$ |
|
% ofOp. Rev. |
Operating expenses and operating ratio – (GAAP) |
|
$ |
482,324 |
|
|
86.4 |
% |
|
$ |
405,321 |
|
|
87.6 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Insurance and claims (2) |
|
|
(1,321 |
) |
|
(0.2)% |
|
|
(1,258 |
) |
|
(0.3)% |
Amortization of intangible assets (4) |
|
|
(859 |
) |
|
(0.2)% |
|
|
— |
|
|
— |
% |
Non-GAAP adjusted operating
expenses and non-GAAP adjusted operating ratio |
|
$ |
480,144 |
|
|
86.0 |
% |
|
$ |
404,063 |
|
|
87.3 |
% |
|
|
|
|
|
Three Months EndedMarch 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) |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
$ |
Operating revenues –
(GAAP) |
|
$ |
558,417 |
|
|
$ |
462,949 |
|
Less: Trucking fuel surcharge
(7) |
|
|
(79,815 |
) |
|
|
(47,459 |
) |
Operating revenues, net of fuel surcharge – (Non-GAAP) |
|
|
478,602 |
|
|
|
415,490 |
|
Operating expenses –
(GAAP) |
|
|
482,324 |
|
|
|
405,321 |
|
Non-GAAP adjustments: |
|
|
|
|
Trucking fuel surcharge (7) |
|
|
(79,815 |
) |
|
|
(47,459 |
) |
Insurance and claims (2) |
|
|
(1,321 |
) |
|
|
(1,258 |
) |
Amortization of intangible assets (4) |
|
|
(859 |
) |
|
|
— |
|
Non-GAAP adjusted operating
expenses, net of fuel surcharge |
|
|
400,329 |
|
|
|
356,604 |
|
Non-GAAP adjusted operating
income |
|
$ |
78,273 |
|
|
$ |
58,886 |
|
Non-GAAP adjusted operating
margin, net of fuel surcharge |
|
|
16.4 |
% |
|
|
14.2 |
% |
Non-GAAP adjusted operating
ratio, net of fuel surcharge |
|
|
83.6 |
% |
|
|
85.8 |
% |
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES –
WERNER LOGISTICS SEGMENT(unaudited)(In thousands)
|
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Non-GAAP Adjusted
Operating Income and Non-GAAP Adjusted Operating
Margin (1) |
|
$ |
|
% ofOp. Rev. |
|
$ |
|
% ofOp. Rev. |
Operating income and operating margin – (GAAP) |
|
$ |
8,681 |
|
4.6 |
% |
|
$ |
4,574 |
|
|
3.3 |
% |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Gain on sale of Werner Global Logistics (3) |
|
|
— |
|
— |
% |
|
|
(1,013 |
) |
|
(0.7)% |
Amortization of intangible assets (4) |
|
|
500 |
|
0.3 |
% |
|
|
— |
|
|
— |
% |
Non-GAAP adjusted operating
income and non-GAAP adjusted operating margin |
|
$ |
9,181 |
|
4.9 |
% |
|
$ |
3,561 |
|
|
2.6 |
% |
(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 revenues, net of fuel surcharge; 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 revenues; GAAP operating expenses; and GAAP operating
ratio, which are their most directly comparable GAAP financial
measures.
(2) 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. We
continue to accrue pre-tax insurance and claims expense for
Interest 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 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.
(4) Amortization expense related to intangible
assets acquired in the ECM Associated, LLC (“ECM”) and NEHDS
Logistics, LLC (“NEHDS”) acquisitions on July 1, 2021 and November
22, 2021, respectively, 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.
(5) Represents non-operating mark-to-market
adjustments for unrealized 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.
(6) 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.
(7) 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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