News Details

OMAHA, Neb.--(BUSINESS WIRE)--Apr. 22, 2015-- Werner Enterprises, Inc. (NASDAQ: WERN), one of the nation's largest transportation and logistics companies, reported improved revenues and earnings for the first quarter ended March 31, 2015.

Summarized financial results for first quarter 2015 compared to first quarter 2014 are as follows (dollars in thousands, except per share data):

Freight demand demonstrated consistent strength in first quarter 2015, resulting in one of the better first quarter freight markets in the last six years. Our average daily freight pre-books (as measured by our morning percentage of loads available to trucks available in our One-Way Truckload network, which includes medium-to-long-haul Van, Expedited and short-haul Regional fleets) were stronger than a normal first quarter based on seasonality. Freight demand showed increasingly positive momentum, as expected, from January to February to March 2015. In first quarter 2014, there was widespread severe winter weather in the first two months of 2014 which caused significant freight disruption and weather-related costs. Once the weather improved in March 2014, there was an unusual spike in freight demand for several weeks resulting from clearing the backlog of freight shipments. Freight demand remains firm for the first three weeks of April 2015.

A strengthening economy combined with constrained truck capacity is contributing to improved freight demand. Truck capacity is challenged by an extremely competitive driver recruiting market and heightened regulatory cost increases for truck ownership and safety; we expect this favorable trend will continue.

Average revenues per tractor per week, net of fuel surcharge, increased 5.5% in first quarter 2015 compared to first quarter 2014. Continued focus on securing driver friendly, highly productive freight and improved freight selection using our proprietary freight optimization system enabled us to raise our average miles per truck by 2.0% compared to first quarter 2014. Average revenues per total mile, net of fuel surcharge, increased 3.5% in first quarter 2015 compared to first quarter 2014.

We are making continued progress implementing sustainable rate increases with our customers. These efforts are ongoing as we move forward in 2015 and work to recoup the cost increases associated with more expensive equipment, a shrinking supply of qualified drivers and an increasingly challenging regulatory environment. Strategic customers understand the collective capacity and service challenges facing our company and our industry and are increasingly supportive of Werner's ongoing initiatives to provide sustainable transportation solutions in support of their supply chain needs.

In first quarter 2015, we averaged 7,013 trucks in service in the Truckload segment and 50 intermodal drayage trucks in the VAS segment. On the strength of improved driver recruiting and retention in March 2015, we ended first quarter 2015 with 7,110 trucks in the Truckload segment. Our Specialized Services unit, primarily Dedicated, ended the quarter with 3,680 trucks (or 52% of our total Truckload segment fleet).

Diesel fuel prices were $1.30 per gallon lower in first quarter 2015 than in first quarter 2014 and were 67 cents per gallon lower than in fourth quarter 2014. For the first 21 days of April 2015, the average diesel fuel price per gallon was $1.31 lower than the average diesel fuel price per gallon in the same period of 2014 and $1.26 lower than in second quarter 2014. The components of the Company's total fuel cost consist of and are recorded in our income statement as follows: (i) Fuel (fuel expense for company trucks excluding federal and state fuel taxes); (ii) Taxes and Licenses (federal and state fuel taxes); and (iii) Rent and Purchased Transportation (fuel component of our independent contractor costs, including the base cost of fuel and additional fuel surcharge reimbursement for costs exceeding the fuel base).

We continue to invest in equipment solutions to improve the safety, operational efficiency and fuel miles per gallon of our fleet. We increased our capital expenditures in the second half of 2014 and first quarter 2015 to lower the average age of our truck fleet and attained an average age of 2.1 years as of March 31, 2015. Net capital expenditures in first quarter 2015 were $84.9 million. We estimate net capital expenditures for 2015 to be in the range of $275 to $325 million, which we expect will enable us to further reduce the average age of our truck fleet to under two years. We remain committed to investing in a best in class fleet for the benefit of our customers, our drivers and the Werner brand.

The driver recruiting market remained very challenging during first quarter 2015. Several difficult market factors persist including a declining number of, and increased competition for, driver training school graduates, a gradually declining national unemployment rate, aging truck driver demographics and increased truck safety regulations. Beginning with the second half of 2014, many large truckload carriers, including Werner, increased driver pay rates per mile and achieved mileage productivity improvements. This led to lower driver turnover and a more competitive driver recruiting market.

Gains on sales of assets were $5.5 million in first quarter 2015. This compares to gains on sales of assets of $4.6 million in first quarter 2014 and $5.0 million in fourth quarter 2014. In first quarter 2015, we realized lower average gains per truck and higher average gains per trailer and sold more trucks and trailers than in first quarter 2014. Gains on sales of assets are reflected as a reduction of Other Operating Expenses in our income statement.

To provide shippers with additional sources of managed capacity and network analysis, we continue to develop our non-asset-based VAS segment. VAS includes Brokerage, Freight Management, Intermodal and Werner Global Logistics (International).

In first quarter 2015, VAS revenues increased $5.7 million or 7%, and operating income dollars increased by 32%, compared to first quarter 2014. Our on-going efforts to address customer pricing, contractual and operational issues within VAS are beginning to impact results. Although the VAS gross margin percentage in first quarter 2015 of 14.3% was lower than the gross margin percentage of 14.8% in first quarter 2014, it improved sequentially from the 13.6% gross margin percentage in fourth quarter 2014. VAS operating income percentage for first quarter 2015 of 2.7% was better than both the 2.2% for first quarter 2014 and the 2.4% for fourth quarter 2014.

Comparisons of the operating ratios for the Truckload segment (net of fuel surcharge revenues of $56.4 million and $87.0 million in first quarters 2015 and 2014, respectively) and the VAS segment are shown below.

Fluctuating fuel prices and fuel surcharge collections impact the total company operating ratio and the Truckload segment's operating ratio when fuel surcharges are reported on a gross basis as revenues versus netting against fuel expenses. Eliminating fuel surcharge revenues, which are generally a more volatile source of revenue, provides a more consistent basis for comparing the results of operations from period to period. The Truckload segment's operating ratios for first quarter 2015 and first quarter 2014 are 90.8% and 94.8%, respectively, when fuel surcharge revenues are reported as revenues instead of a reduction of operating expenses.

Our financial position remains strong. As of March 31, 2015, we had $75.0 million of debt outstanding and $854.8 million of stockholders' equity.

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

(1) Net of fuel surcharge revenues.

Werner Enterprises, Inc. was founded in 1956 and is a premier transportation and logistics company, with coverage throughout North America, Asia, Europe, South America, Africa and Australia. Werner maintains its global headquarters in Omaha, Nebraska and maintains offices in the United States, Canada, Mexico, China and Australia. Werner is among the five largest truckload carriers in the United States, with a diversified portfolio of transportation services that includes dedicated van, temperature-controlled and flatbed; medium-to-long-haul, regional and local van; and expedited services. Werner's Value Added Services portfolio includes freight management, truck brokerage, intermodal, and international 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, 2014.

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.

Source: Werner Enterprises, Inc.

Werner Enterprises, Inc.
John J. Steele, 402-894-3036
Executive Vice President, Treasurer and
Chief Financial Officer