Second Quarter 2019 Highlights (all metrics compared to second quarter 2018 unless otherwise noted)

  • Total revenues of $627.5 million, up $8.4 million, or 1%
  • Operating income of $58.4 million, up 15%; non-GAAP adjusted operating income of $59.2 million, up 1%
  • Operating margin of 9.3%, up 110 basis points (bps); non-GAAP adjusted operating margin of 9.4%, down 10 bps
  • Diluted EPS of $0.62, up 17%; non-GAAP adjusted diluted EPS of $0.63, up 3%

OMAHA, Neb. - Werner Enterprises, Inc. (NASDAQ: WERN), one of the nation’s largest transportation and logistics companies, today reported financial results for second quarter ended June 30, 2019.

Total revenues for the quarter increased 1% to $627.5 million versus the prior year quarter, primarily attributable to dedicated fleet expansion, higher contractual rates, and lane mix changes.

Operating income of $58.4 million increased $7.7 million, or 15%. Operating margin of 9.3% increased 110 basis points due to revenue increases that exceeded cost increases, which benefited from a newer fleet and low driver turnover, as well as the $11.3 million accrual of insurance and claims expense in second quarter 2018 related to a previously disclosed May 2018 jury verdict. On a non-GAAP basis, adjusted operating income of $59.2 million increased $0.7 million, or 1%. Adjusted operating margin of 9.4% declined 10 basis points from 9.5% for the same quarter last year.

Interest expense of $1.4 million was $0.9 million higher than the same quarter a year ago due primarily to additional borrowings to pay a $261.1 million special dividend in June 2019. The effective income tax rate during the quarter was 25.2% compared to a 24.8% effective income tax rate in second quarter 2018.

Net income of $43.3 million increased 13%. On a non-GAAP basis, adjusted net income was $43.9 million  compared to $44.1 million for the same quarter last year. Diluted earnings per share (EPS) for the quarter of $0.62 increased 17%. Diluted EPS in second quarter 2019 included a $0.01 per share insurance and claims accrual for interest on a previously disclosed May 2018 jury verdict that we are appealing. On a non-GAAP basis, adjusted EPS of $0.63 increased 3% from $0.61 for second quarter 2018. Diluted EPS in second quarter 2018 included a $0.12 per share accrual of insurance and claims expense (including interest) related to the same May 2018 jury verdict. During second quarter 2018, we also realized a $0.04 gain on the sale of real estate.

“We are very pleased to report adjusted earnings per share growth of 3%, despite comparing to a very strong second quarter 2018 that produced 90% adjusted earnings growth due to unusually strong freight demand and pricing,” said Derek J. Leathers, President and Chief Executive Officer. “The strength of our diversified portfolio, our new truck and trailer fleet, increasingly experienced drivers and our committed Werner team led to our superior performance.”