wern-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


[Mark			one]
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-14690

WERNER ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Nebraska

47-0648386

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

14507 Frontier Road

Post Office Box 45308

Omaha

Nebraska

68145-0308

(Address of principal executive offices)

(Zip Code)

(402) 895-6640

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 Par Value

WERN

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2021, 67,918,148 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.


		PAGE
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements:	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2021 and 2020	4
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2021 and 2020	5
	Consolidated Condensed Balance Sheets as of March 31, 2021 and December 31, 2020	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	7
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020	8
	Notes to Consolidated Financial Statements (Unaudited) as of March 31, 2021	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II – OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	29


	Three Months Ended March 31,
(In thousands, except per share amounts)	2021		2020
	(Unaudited)
Operating revenues	$	616,446	$	592,703
Operating expenses:
Salaries, wages and benefits	204,853		205,997
Fuel	50,838		48,771
Supplies and maintenance	46,147		45,721
Taxes and licenses	23,233		22,850
Insurance and claims	22,056		36,064
Depreciation	63,951		68,837
Rent and purchased transportation	146,493		126,442
Communications and utilities	3,022		3,808
Other	(6,618)		3,147
Total operating expenses	553,975		561,637
Operating income	62,471		31,066
Other expense (income):
Interest expense	838		1,591
Interest income	(297)		(626)
Other	42		45
Total other expense (income)	583		1,010
Income before income taxes	61,888		30,056
Income taxes	15,396		6,998
Net income	$	46,492	$	23,058
Earnings per share:
Basic	$	0.68	$	0.33
Diluted	$	0.68	$	0.33

Weighted-average common shares outstanding:
Basic	67,932		69,253
Diluted	68,223		69,609


	Three Months Ended March 31,
(In thousands)	2021		2020
	(Unaudited)
Net income	$	46,492	$	23,058
Other comprehensive income (loss):
Foreign currency translation adjustments	(1,568)		(9,893)
Change in fair value of interest rate swaps, net of tax	1,303		(5,597)
Other comprehensive income (loss)	(265)		(15,490)
Comprehensive income	$	46,227	$	7,568


(In thousands, except share amounts)	March 31, 2021		December 31, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	83,130	$	29,334
Accounts receivable, trade, less allowance of $8,897 and $8,686, respectively	347,902		341,104
Other receivables	44,363		23,491
Inventories and supplies	11,919		12,062
Prepaid taxes, licenses and permits	12,876		17,231
Other current assets	32,719		33,694
Total current assets	532,909		456,916
Property and equipment	2,410,791		2,405,335
Less – accumulated depreciation	873,449		862,077
Property and equipment, net	1,537,342		1,543,258
Other non-current assets	159,275		156,502
Total assets	$	2,229,526	$	2,156,676
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	113,064	$	83,263
Current portion of long-term debt	—		25,000
Insurance and claims accruals	91,097		76,917
Accrued payroll	41,912		35,594

Accrued expenses	25,350		25,032
Income taxes payable	19,226		7,824
Other current liabilities	17,112		20,384
Total current liabilities	307,761		274,014
Long-term debt, net of current portion	175,000		175,000
Other long-term liabilities	41,485		43,114
Insurance and claims accruals, net of current portion	235,850		231,638

Deferred income taxes	241,700		237,870
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares
issued; 67,918,148 and 67,931,726 shares outstanding, respectively	805		805
Paid-in capital	114,588		116,039
Retained earnings	1,478,616		1,438,916
Accumulated other comprehensive loss	(23,098)		(22,833)
Treasury stock, at cost; 12,615,388 and 12,601,810 shares, respectively	(343,181)		(337,887)
Total stockholders’ equity	1,227,730		1,195,040
Total liabilities and stockholders’ equity	$	2,229,526	$	2,156,676


(In thousands, except share and per share amounts)	Common Stock		Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Stockholders’ Equity
	(Unaudited)
BALANCE, December 31, 2020	$	805	$	116,039	$	1,438,916	$	(22,833)	$	(337,887)	$	1,195,040
Comprehensive income	—		—		46,492		(265)		—		46,227
Purchases of 130,446 shares of common stock	—		—		—		—		(5,507)		(5,507)
Dividends on common stock ($0.10 per share)	—		—		(6,792)		—		—		(6,792)
Equity compensation activity, 116,868 shares	—		(3,953)		—		—		213		(3,740)
Non-cash equity compensation expense	—		2,502		—		—		—		2,502
BALANCE, March 31, 2021	$	805	$	114,588	$	1,478,616	$	(23,098)	$	(343,181)	$	1,227,730


BALANCE, December 31, 2019	$	805	$	112,649	$	1,294,608	$	(14,728)	$	(282,326)	$	1,111,008
Comprehensive income	—		—		23,058		(15,490)		—		7,568
Purchases of 282,992 shares of common stock	—		—		—		—		(8,798)		(8,798)
Dividends on common stock ($0.09 per share)	—		—		(6,218)		—		—		(6,218)
Equity compensation activity, 125,203 shares	—		(4,360)		—		—		430		(3,930)
Non-cash equity compensation expense	—		2,406		—		—		—		2,406
BALANCE, March 31, 2020	$	805	$	110,695	$	1,311,448	$	(30,218)	$	(290,694)	$	1,102,036


(In thousands)	March 31, 2021
Maturity of Lease Liabilities
2021 (remaining)	$	2,806
2022	2,934
2023	1,910
2024	1,507
2025	969
Thereafter	473
Total undiscounted operating lease payments	$	10,599
Less: Imputed interest	(633)
Present value of operating lease liabilities	$	9,966

Balance Sheet Classification
Right-of-use assets (recorded in other non-current assets)	$	9,506

Current lease liabilities (recorded in other current liabilities)	$	3,408
Long-term lease liabilities (recorded in other long-term liabilities)	6,558
Total operating lease liabilities	$	9,966

Other Information
Weighted-average remaining lease term for operating leases	3.70 years
Weighted-average discount rate for operating leases	3.30		%


	Number of Restricted Awards (in thousands)	Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	367	$	35.78
Granted	114	41.30
Vested	(107)	34.96
Forfeited	(2)	35.53
Nonvested at end of period	372	37.70


	Number of Performance Awards (in thousands)	Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	262	$	32.96
Granted	74	40.93
Vested	(100)	33.04
Forfeited	—	—
Nonvested at end of period	236	35.42


	Three Months Ended March 31,
	2021		2020
Truckload Transportation Services	$	462,949	$	464,863
Werner Logistics	137,853		112,164
Inter-segment eliminations	(134)		(11)
Transportation services	600,668		577,016
Other revenues	15,778		15,687
Total revenues	$	616,446	$	592,703


	Three Months Ended March 31,
	2021		2020
Restricted awards:
Pre-tax compensation expense	$	1,549	$	1,398
Tax benefit	395		356
Restricted stock expense, net of tax	$	1,154	$	1,042
Performance awards:
Pre-tax compensation expense	$	946	$	1,010
Tax benefit	241		258
Performance award expense, net of tax	$	705	$	752


	Three Months Ended March 31,
	2021		2020
Revenues
Truckload Transportation Services	$	462,949	$	464,863
Werner Logistics	137,853		112,164
Other	15,399		15,068
Corporate	379		619
Subtotal	616,580		592,714
Inter-segment eliminations	(134)		(11)
Total	$	616,446	$	592,703

SEC Form 10-Q filed by Werner Enterprises, Inc.