Werner Enterprises Inc 8-K, filed Jul 1, 2021
Werner Enterprises Inc (WERN)
8-K
2021-07-01
For: 2021-06-30
View Original
Added on
April 12, 2026
About this 8-K
Werner Enterprises Inc filed this 8-K on July 1, 2021, reporting on events of June 30, 2021.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
| , | ||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(402 ) 895-6640
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The information set forth in Item 2.03 of this current report on Form 8-K is incorporated by reference herein.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On June 30, 2021, Werner Enterprises, Inc. (“Werner” or the “Company”), as borrower, amended its existing credit agreement, dated May 14, 2019, with BMO Harris Bank N.A. (“BMO Harris”), as lender (the “Credit Agreement”). The Credit Agreement provides the Company with a $200 million unsecured revolving line of credit and expires on May 14, 2024.
The first amendment to the Credit Agreement (the “Amendment”), dated June 30, 2021, adds an unsecured fixed-rate term loan commitment not to exceed a principal amount of $100 million and increases the Company’s borrowing capacity with BMO Harris from $200 million to $300 million. The outstanding principal balance of the term loan shall bear interest at a fixed rate of 1.28 percent (1.28%). Commencing on September 30, 2021, the Company must make principal payments of $1,250,000 on the last day of March, June, September and December in each year, with a final payment of principal and interest then outstanding being due and payable on May 14, 2024.
On June 30, 2021, the Company borrowed $100 million pursuant to the term loan. As of June 30, 2021, the Company was in compliance with all applicable financial covenants under the Credit Agreement.
The foregoing descriptions of the Credit Agreement and Amendment do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Credit Agreement and the Amendment. The Amendment will be filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2021. (Pursuant to General Instruction B.3 to Form 8-K, the information regarding the Credit Agreement contained in Note 5 of the Notes to Consolidated Financial Statements (Unaudited) included in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2021, the information disclosed under Item 2.03 of the Company’s Current Report on Form 8-K dated May 14, 2019, and full text of the Credit Agreement filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019 are incorporated by reference herein.)
ITEM 8.01. ALL OTHER EVENTS.
On July 1, 2021, Werner acquired an 80% equity ownership stake in ECM Transport Group (“ECM”), with an exclusive option to purchase the remaining 20% from ECM’s founder and president after a period of five years following transaction close. A copy of the press release announcing the acquisition is filed as Exhibit 99.1 to this Form 8-K.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
| 101 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). | |||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. | |||||||
Forward-Looking Statements
This current report on Form 8-K and exhibits may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on information presently available to Werner’s management and are current only as of the date made. Actual results could also differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in Werner’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the period ended March 31, 2021. For those reasons, undue reliance should not be placed on any forward-looking statement. Werner assumes no duty or obligation to update or revise any forward-looking statement, although it may do so from time to time as management believes is warranted or as may be required by applicable securities law. Any such updates or revisions may be made by the registrant by filing reports with the U.S. Securities and Exchange Commission, through the issuance of press releases or by other methods of public disclosure.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WERNER ENTERPRISES, INC. | |||||||||||
Date: July 1, 2021 | By: | /s/ John J. Steele | |||||||||
| John J. Steele | |||||||||||
| Executive Vice President, Treasurer and Chief Financial Officer | |||||||||||
Date: July 1, 2021 | By: | /s/ James L. Johnson | |||||||||
| James L. Johnson | |||||||||||
| Executive Vice President, Chief Accounting Officer and Corporate Secretary | |||||||||||
Exhibit 99.1
Werner Enterprises Acquires Elite Regional Truckload Carriers ECM Transport Group
•Expands terminal, fleet and driver footprint in the strategic Mid-Atlantic, Ohio and Northeast regions
•Boosts fleet by more than 6%; increases coverage for regional short-haul freight in these geographic markets
•Combines similar customer-centric cultures, both Werner and ECM are focused on the highest standards of safety and on-time service
•ECM achieved 2020 revenues of $108 million, with an operating margin of 19.8%; expected to be accretive to adjusted EPS in year one
OMAHA, Neb., July 1, 2021 -- Werner Enterprises, Inc. (Nasdaq: WERN), one of the nation’s largest transportation and logistics companies, today announced it has signed a definitive agreement and closed on the acquisition of an 80% equity ownership stake in ECM Transport Group (“ECM”) for a purchase price of $142.4 million and retains an exclusive option to buy the remaining 20% of ECM Transport Group after a period of five years. With 2020 revenues of $108 million, ECM consists of ECM Transport and Motor Carrier Services of Pennsylvania who are elite regional truckload carriers that operate nearly 500 trucks and 2,000 trailers in their network of 8 terminals and 18 drop yard facilities.
“The addition of ECM’s skilled drivers, non-driver associates and terminal network strengthens our portfolio by adding short-haul expertise in a segment in which consumer demand and supply chain needs are growing,” said Derek Leathers, Chairman, President and Chief Executive Officer. “This transaction delivers on our ‘5 Ts + S’ strategy and will position us for further growth as we capitalize on positive market dynamics for the remainder of 2021 and beyond. We expect this transaction to be accretive in year one and anticipate cost synergies through integrated management of our combined fleet.”
Strategic and Financial Benefits
Expands footprint in the strategic Mid-Atlantic, Ohio and Northeast regions
•Complementary to Werner’s existing terminal footprint
•Increased exposure to the 200 to 300 mile length of haul segment, in support of expected continued demand growth
Adds high-quality talent and increases Werner’s fleet size by over 6%
•Addition of over 500 highly-skilled, tenured drivers in a constrained labor market
•Fleet of nearly 500 trucks and 2,000 trailers
•Extremely low driver turnover
•Synergies expected through combined management of fleet
Werner Enterprises, Inc. - Release of July 1, 2021
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Combines similar cultures focused on safety and customer service excellence
•Highest standards of driver training and safe operations
•Continuous investment in technology and IT infrastructure to enhance on-time delivery performance
•Shared values of picking winning customers with high expectations, establishing long-term mutual service and revenue objectives, and delivering best-in-class performance to stabilize volume and minimize churn
•Existing ECM leadership (including founder and President Ed Meier), drivers and non-driver associates will remain in place and we are retaining the ECM brand to ensure smooth integration and high driver retention
•ECM will operate as a standalone business unit within Werner and their financial results will be reported in Werner’s One-Way Truckload unit within Truckload Transportation Services
Leathers continued, “Both companies believe deeply that our professional drivers are the backbone of our organizations. We look forward to welcoming the ECM team and working together to create additional value for our customers and shareholders.”
“We are excited to join the Werner team and look forward to continued growth as we leverage our collective strengths to serve our existing and new customers at even higher levels. We are standing by our existing customers and will continue to provide them with excellent service. Werner shares our passion for delivering value and continually creating personal and professional opportunities for our accomplished team of professional drivers and non-driver associates,” said Ed Meier, President of ECM.
Transaction Financing and Terms
Werner financed the transaction through a combination of cash on hand, existing credit facilities and a new $100 million fixed-rate term loan maturing in May 2024 with BMO Harris Bank N.A., one of Werner’s two lead banks. Closing for the acquisition was completed today. The remaining 20% ownership interest in ECM Transport Group will be retained by Ed Meier, founder and President of ECM. As previously mentioned, Werner Enterprises retains an exclusive option to buy the remaining 20% of ECM Transport Group after a period of five years.
Conference Call Information
Werner Enterprises, Inc. will conduct a conference call to discuss the acquisition Friday July 2, 2021 beginning at 8:00 a.m. CT. The news release, live webcast of the conference call, and accompanying slide presentation will be available at www.werner.com in the “Investors” section under “News & Events” and then “Webcasts & Presentations.” To participate in the conference call, please dial (844) 701-1165 (domestic) or (412) 317-5498 (international). Please mention to the operator that you are dialing in for the Werner Enterprises call. A replay of the conference call will be available on July 2, 2021 in the evening through August 2, 2021 by dialing (877) 344-7529 (domestic) or (412) 317-0088 (international) and using the access code 10158045. A replay of the webcast will also be available at www.werner.com in the “Investors” section under “News & Events” and then “Webcasts & Presentations.”
About Werner Enterprises
Werner Enterprises, Inc. (Nasdaq: WERN) delivers superior truckload transportation and logistics services to customers across the United States, Mexico and Canada. With 2020 revenues of $2.4 billion, an industry-leading modern truck and trailer fleet, nearly 13,000 talented associates and our innovative Werner Edge technology, we are an essential solutions provider for customers who value the integrity of their supply chain and require safe and exceptional on-time service. Werner provides Dedicated and One-Way Truckload services as well as Logistics services that include truckload brokerage, freight management, intermodal and final mile. As an industry leader, Werner is deeply committed to promoting sustainability and supporting diversity, equity and inclusion.
Werner Enterprises, Inc. - Release of July 1, 2021
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About ECM Transport Group
ECM Transport Group (“ECM”), consists of ECM Transport, with approximately 450 trucks and headquartered in Cheswick, PA, and Motor Carrier Services of Pennsylvania, headquartered in Northwood, Ohio with approximately 50 trucks. They have been providing truckload services for over 30 years. Initially founded as a traditional truckload carrier, ECM has diversified itself as a transportation solutions provider and technology innovator, committed to delivering unique, high-value and customized solutions to its customers. ECM has a network of 8 terminals and 18 drop yards throughout the Mid-Atlantic, Ohio and Northeast regions.
Advisors
Koley Jessen P.C., L.L.O. served as legal counsel to Werner Enterprises. Saul Ewing Arnstein & Lehr LLP served as counsel to ECM Transport Group.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward looking statements are based on information presently available to the Company’s management and are current only as of the date made. Actual results could also differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the period ended March 31, 2021.
For those reasons, undue reliance should not be placed on any forward-looking statement. The Company assumes no duty or obligation to update or revise any forward-looking statement, although it may do so from time to time as management believes is warranted or as may be required by applicable securities law. Any such updates or revisions may be made by filing reports with the U.S. Securities and Exchange Commission, through the issuance of press releases or by other methods of public disclosure.
Contact:
John J. Steele
Executive Vice President, Treasurer
and Chief Financial Officer
(402) 894-3036
Source: Werner Enterprises, Inc.