Werner Enterprises announces large special dividend

The $3.75 payout per share on WERN’s 69.9 million common shares outstanding amounts to approximately $262 million.

“Today’s announcement demonstrates Werner’s commitment to returning capital and creating value for our shareholders through our long history of dividends and stock repurchases. Our strong balance sheet and new financing arrangements provide flexibility to allow us to continue to reinvest in our business and return capital to further drive shareholder value,” said Werner’s President and Chief Executive Officer Derek J. Leathers.

The company showed cash and equivalents of $64.7 million on its balance sheet in its first quarter 2019 10-Q filing with the U.S. Securities and Exchange Commission.

WERN also announced that its board approved a new stock repurchase program for the repurchase of up to 5 million shares of common stock. This approval replaces the prior repurchase program which had roughly 2 million shares remaining for repurchase.

WERN announced that it has entered into two new five-year, unsecured revolving credit facilities totaling $500 million which replaces three credit facilities with $325 million of borrowing capacity the company previously held. WERN has $125 million in total outstanding debt currently and plans to use its new credit facilities to fund the special dividend. The company said that it will still have $150 million in borrowing capacity remaining to fund capital expenditures, share repurchases and working capital after accounting for its current debt and the payment of dividends. Additionally, WERN reiterated its commentary from its April 25, 2019 first quarter earnings call in which it said that it expects to generate more than $100 million in free cash flow (cash flow from operations less net capital expenditures) in 2019.

It’s worth noting that WERN does not have a history of making acquisitions, which leaves share repurchases and dividends as the primary methods of returning cash flow generated to its shareholders. Further, the company operates a truck fleet with an average age of 1.8 years, which is in-line with large well-capitalized fleets and well below the industry average tractor age.

WERN’s board also declared a regular quarterly cash dividend of $0.09 per common share.