Werner Enterprises(WERN) - 2025 Q1 - Quarterly Results

Financial Performance - Total revenues for Q1 2025 were $712.1 million, a decrease of $57.0 million, or 7%, compared to Q1 2024[5] - Operating loss for the quarter was $5.8 million, compared to an operating income of $15.6 million in the prior year, representing a decline of 137%[5] - Adjusted operating loss was $1.8 million, a decrease of $20.4 million from the prior year's adjusted operating income of $18.6 million[5] - Net loss attributable to Werner was $10.1 million, compared to a net income of $6.3 million in the prior year, marking a 260% decline[8] - Cash flow from operations decreased by 67% to $29.4 million compared to $88.6 million in Q1 2024[18] - Operating revenues for Q1 2025 were $712.1 million, a decrease of 7.4% from $769.1 million in Q1 2024[29] - Net loss attributable to Werner for Q1 2025 was $10.1 million, compared to a net income of $6.3 million in Q1 2024[29] - Operating income for Q1 2025 was a loss of $5.8 million, down from an operating income of $15.6 million in Q1 2024[29] - Cash flow from operations decreased to $29.4 million in Q1 2025 from $88.6 million in Q1 2024[33] Revenue Breakdown - Truckload Transportation Services (TTS) revenues decreased by $49.3 million, or 9%, to $501.9 million, while Logistics revenues declined by $6.9 million, or 3%, to $195.6 million[9] - Truckload Transportation Services revenue fell to $501.9 million in Q1 2025, down 9% from $551.1 million in Q1 2024[35] - Werner Logistics revenue decreased to $195.6 million in Q1 2025, down 3.9% from $202.5 million in Q1 2024[35] - Trucking revenues, net of fuel surcharge, declined by 8.5% to $154,421,000 in Q1 2025 compared to $168,837,000 in Q1 2024[38] - Non-GAAP adjusted operating revenues, net of fuel surcharge, decreased to $654,474,000 in Q1 2025 from $696,097,000 in Q1 2024[42] Operational Metrics - Average revenues per truck per week for TTS decreased by 1.4% year over year, with a customer retention rate of 87%[12] - Average revenues per truck per week fell by 1.4% to $4,493 in Q1 2025 from $4,555 in Q1 2024[38] - Average trucks in service decreased by 6.6% to 7,415 in Q1 2025 from 7,935 in Q1 2024[38] - Total trailers at quarter end decreased by 9.8% to 24,930 in Q1 2025 from 27,650 in Q1 2024[38] - Average percentage of empty miles increased to 16.01% in Q1 2025 from 14.90% in Q1 2024[38] Expenses and Liabilities - Total operating expenses for Q1 2025 were $717.9 million, an increase from $753.5 million in Q1 2024[29] - As of March 31, 2025, total debt outstanding was $640 million, an increase from $598 million a year earlier[22] - Current assets as of March 31, 2025, were $538.7 million, slightly down from $541.8 million at the end of 2024[31] - Total liabilities decreased to $1.51 billion as of March 31, 2025, from $1.56 billion at the end of 2024[31] Tax and Investment - The effective income tax rate for Q1 2025 was 23.7%, down from 32.9% in Q1 2024[6] - The company reported gains on strategic investments of $0.1 million, compared to losses of $0.3 million in the prior year[7] Non-GAAP Adjustments - Non-GAAP adjusted operating income for Q1 2025 was a loss of $1,803,000, down from an income of $18,591,000 in Q1 2024[42] - Non-GAAP adjusted operating margin for the Truckload Transportation Services segment was 0.4% in Q1 2025, down from 4.1% in Q1 2024[43] - Non-GAAP adjusted operating income for the Werner Logistics segment improved to $674,000 in Q1 2025 from a loss of $1,180,000 in Q1 2024[46] - The income tax effect of non-GAAP adjustments is calculated using the updated annual incremental income tax rate for 2024[51] Other Considerations - The company accrued pre-tax insurance and claims expense of $0.5 million per month related to a jury verdict from a December 2014 accident, with a maximum liability of $10.0 million[47] - Amortization expense related to intangible assets from business acquisitions is excluded from core operating performance metrics[48] - Non-operating mark-to-market adjustments for minority equity investments are excluded to provide a clearer comparison of performance[49] - Earnings/losses from equity method investments are excluded from performance metrics for better comparability[50] - Fluctuating fuel prices and fuel surcharge revenues impact the total company operating ratio, with management favoring netting fuel surcharge revenues against fuel expenses for consistency[52] - Excluding purchased transportation expense from Werner Logistics operating revenues provides a clearer measurement of service sourcing and sales capabilities[53]