Finance

Werner Enterprises Reports First Quarter 2017 Revenues and Earnings

OMAHA, Neb., April 20, 2017 (GLOBE NEWSWIRE) — Werner Enterprises, Inc. (NASDAQ:WERN), one of the nation’s largest transportation and logistics companies, reported revenues and earnings for the first quarter ended March 31, 2017. Earnings per diluted share were $0.22 for first quarter 2017 compared to earnings per diluted share of $0.28 for first quarter 2016.Freight demand in our One-Way Truckload fleet was seasonally softer in January with weaker trends from late January 2017 to late February 2017. In March 2017, our freight volume trend was more encouraging, as freight improved to more normal seasonal levels consistent with the same period in 2016. Freight volumes thus far in April 2017 in One-Way Truckload have been better than the same period in April 2016.Average revenues per tractor per week increased 0.2% in first quarter 2017 compared to first quarter 2016 due to a 1.0% increase in average revenues per total mile and a 0.8% decrease in average miles per truck. During second and third quarter of 2016, to take advantage of a strengthening Dedicated market, we moved trucks from One-Way Truckload, lessening the need to find freight for trucks in the more challenged one-way truckload market. The shifting of trucks to shorter-haul Dedicated from longer-haul One-Way Truckload had a favorable impact on revenue per total mile and an unfavorable impact on miles per truck.In first quarter 2017, we averaged 7,199 trucks in service in the Truckload segment and 62 intermodal drayage trucks in the Werner Logistics segment. We ended first quarter 2017 with 7,180 trucks in the Truckload segment, a year-over-year decrease of 150 trucks and a sequential increase of 80 trucks. Our Dedicated unit ended first quarter 2017 with 3,710 trucks (or 52% of our total Truckload segment fleet) compared to 3,640 trucks at the end of first quarter 2016.We are nearing completion of a significant reinvestment in our fleet to reduce the average age of our trucks and trailers. Our investment in newer trucks and trailers improves our driver experience, raises operational efficiency and helps us to better manage our maintenance, safety and fuel costs. The average age of our truck fleet was 1.8 years as of March 31, 2017. Net capital expenditures in first quarter 2017 were $14.6 million compared to $101.6 million in first quarter 2016. For the full year of 2017, we expect net capital expenditures to be in the range of $200 million to $250 million, which is substantially lower than the $430 million of net capital expenditures in 2016.The driver recruiting market remains challenging. Several ongoing market factors persist including a declining number of, and increased competition for, driver training school graduates, a low national unemployment rate, aging truck driver demographics and increased truck safety regulations. We proactively took many significant actions in 2016 to strengthen our driver recruiting and retention to make Werner the preferred choice for the best drivers, including raising driver pay, lowering the age of our truck fleet, installing safety and training features on all new trucks and investing in our driver training schools. Our driver turnover rate once again improved, achieving the lowest first quarter rate in 18 years.Gains on sales of assets were $1.4 million in first quarter 2017. This compares to gains on sales of assets of $3.4 million in first quarter 2016, which included a $0.6 million real estate gain. In first quarter 2017, we sold fewer trucks and more trailers than in first quarter 2016. We realized slightly higher average gains per truck and lower average gains per trailer in first quarter 2017 compared to first quarter 2016. The used truck pricing market remained difficult in first quarter 2017 due to a higher than normal supply of used trucks in the market and low buyer demand. Gains on sales of assets are reflected as a reduction of Other Operating Expenses in our income statement.As previously disclosed, in fourth quarter 2016, due to the weak used truck market, we reduced the estimated life of certain trucks to more rapidly depreciate the trucks to their residual values. This change resulted in additional depreciation expense in fourth quarter 2016 of $4.1 million and in first quarter 2017 of $2.6 million. We expect additional depreciation expense for these trucks to continue to decline in second quarter 2017 as the remaining trucks are sold.Diesel fuel prices were 53 cents per gallon higher in first quarter 2017 than in first quarter 2016 and were 5 cents per gallon higher than in fourth quarter 2016. For the first 20 days of April 2017, the average diesel fuel price per gallon was 45 cents higher than the average diesel fuel price per gallon in the same period of 2016 and 25 cents higher than in second quarter 2016. The components of our 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).To provide shippers with additional sources of managed capacity and network analysis, we continue to develop our non-asset based Werner Logistics segment. Werner Logistics includes Brokerage, Freight Management, Intermodal and Werner Global Logistics (International).       

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