wern-20240630

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 June 30, 2024


☐			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 August 1, 2024, 61,807,803 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

Table of Contents

WERNER ENTERPRISES, INC.

INDEX


		PAGE
PART I – FINANCIAL INFORMATION
	Cautionary Note Regarding Forward-Looking Statements	3
Item 1.	Financial Statements:	4
	Consolidated Statements of Income for the Three and Six Months Ended June 3 0 , 2024 and 2023	4
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 3 0 , 2024 and 2023	5
	Consolidated Condensed Balance Sheets as of J une 3 0 , 2024 and December 31, 2023	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2024 and 2023	7
	Consolidated Statements of Stockholders’ Equity and Temporary Equity - Redeemable Noncontrolling Interest for the Three and Six Months Ended June 3 0 , 2024 and 2023	8
	Notes to Consolidated Financial Statements (Unaudited) as of June 3 0 , 2024	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	29
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

Table of Contents

PART I

FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements:

This Quarterly Report on Form 10-Q contains historical information and forward-looking statements based on information currently available to our management. The forward-looking statements in this report, including those made in Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of Part I, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These safe harbor provisions encourage reporting companies to provide prospective information to investors. Forward-looking statements can be identified by the use of certain words, such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project” and other similar terms and language. We believe the forward-looking statements are reasonable based on currently available information. However, forward-looking statements involve risks, uncertainties and assumptions, whether known or unknown, that could cause our actual results, business, financial condition and cash flows to differ materially from those anticipated in the forward-looking statements. A discussion of important factors relating to forward-looking statements is included in Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). Readers should not unduly rely on the forward-looking statements included in this Form 10-Q because such statements speak only to the date they were made. Unless otherwise required by applicable securities laws, we undertake no obligation or duty to update or revise any forward-looking statements contained herein to reflect subsequent events or circumstances or the occurrence of unanticipated events.

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Item 1. Financial Statements.

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share amounts)	2024		2023		2024		2023
Operating revenues	$	760,798	$	811,096	$	1,529,878	$	1,643,810
Operating expenses:
Salaries, wages and benefits	259,754		266,373		525,157		534,688
Fuel	71,998		77,740		149,620		169,154
Supplies and maintenance	61,988		64,964		123,763		133,189
Taxes and licenses	25,494		25,408		50,658		50,833
Insurance and claims	31,897		36,806		68,259		73,291
Depreciation and amortization	72,672		74,898		146,942		149,211
Rent and purchased transportation	210,417		217,086		414,342		437,310
Communications and utilities	4,127		4,669		8,833		9,402
Other	2,840		(4,046)		7,105		(13,852)
Total operating expenses	741,187		763,898		1,494,679		1,543,226
Operating income	19,611		47,198		35,199		100,584
Other expense (income):
Interest expense	9,043		8,139		16,991		16,055
Interest income	(1,786)		(1,899)		(3,471)		(3,451)
Loss (gain) on investments in equity securities, net	52		(79)		190		2
Loss from equity method investment	141		844		274		844
Other	30		86		(231)		93
Total other expense, net	7,480		7,091		13,753		13,543
Income before income taxes	12,131		40,107		21,446		87,041
Income tax expense	2,931		10,087		5,998		21,487
Net income	9,200		30,020		15,448		65,554
Net loss (income) attributable to noncontrolling interest	265		(139)		329		(449)
Net income attributable to Werner	$	9,465	$	29,881	$	15,777	$	65,105
Earnings per share:
Basic	$	0.15	$	0.47	$	0.25	$	1.03
Diluted	$	0.15	$	0.47	$	0.25	$	1.02
Weighted-average common shares outstanding:
Basic	62,706		63,384		63,089		63,345
Diluted	62,860		63,687		63,291		63,689

See Notes to Consolidated Financial Statements (Unaudited).

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WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Net income	$	9,200	$	30,020	$	15,448	$	65,554
Other comprehensive income (loss):
Foreign currency translation adjustments	(4,087)		2,742		(3,585)		5,743
Change in fair value of interest rate swaps, net of tax	(1,252)		(101)		(1,136)		(1,074)
Other comprehensive income (loss)	(5,339)		2,641		(4,721)		4,669
Comprehensive income	3,861		32,661		10,727		70,223
Comprehensive loss (income) attributable to noncontrolling interest	265		(139)		329		(449)
Comprehensive income attributable to Werner	$	4,126	$	32,522	$	11,056	$	69,774

See Notes to Consolidated Financial Statements (Unaudited).

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WERNER ENTERPRISES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS


(In thousands, except share amounts)	June 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	70,448	$	61,723
Accounts receivable, trade, less allowance of $8,022 and $9,337, respectively	409,986		444,944
Other receivables	28,092		25,479
Inventories and supplies	16,286		18,077
Prepaid taxes, licenses and permits	7,895		16,505
Other current assets	44,959		67,900
Total current assets	577,666		634,628
Property and equipment, at cost	2,952,295		2,951,654
Less – accumulated depreciation	992,128		978,698
Property and equipment, net	1,960,167		1,972,956
Goodwill	129,104		129,104
Intangible assets, net	81,442		86,477
Other non-current assets	345,191		334,771
Total assets	$	3,093,570	$	3,157,936
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities:

Accounts payable	$	142,161	$	135,990
Current portion of long-term debt	10,000		2,500
Insurance and claims accruals	85,224		81,794
Accrued payroll	52,453		50,549

Accrued expenses	22,506		30,282
Other current liabilities	30,115		29,470
Total current liabilities	342,459		330,585
Long-term debt, net of current portion	660,000		646,250
Other long-term liabilities	62,355		54,275
Insurance and claims accruals, net of current portion	227,115		239,700

Deferred income taxes	308,136		320,180
Total liabilities	1,600,065		1,590,990
Commitments and contingencies
Temporary equity - redeemable noncontrolling interest	38,278		38,607
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 61,807,803 and 63,444,681 shares outstanding, respectively	805		805
Paid-in capital	134,769		134,894
Retained earnings	1,951,631		1,953,385
Accumulated other comprehensive loss	(14,405)		(9,684)
Treasury stock, at cost; 18,725,733 and 17,088,855 shares, respectively	(617,573)		(551,061)
Total stockholders’ equity	1,455,227		1,528,339
Total liabilities, temporary equity and stockholders’ equity	$	3,093,570	$	3,157,936

See Notes to Consolidated Financial Statements (Unaudited).

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WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

SEC Form 10-Q filed by Werner Enterprises Inc.