Werner Enterprises (NASDAQ: WERN) posts FirstFleet deal and pro forma results
Filing Impact
Filing Sentiment
Form Type
8-K/A
Rhea-AI Filing Summary
Werner Enterprises, Inc. filed an amended report to add full financial statements for its acquisition of FirstEnterprises, Inc. (FirstFleet) and pro forma combined results. Werner acquired 100% of FirstFleet’s equity interests on January 27, 2026.
FirstFleet generated $631.98 million in revenue and $10.49 million in net income for the year ended March 30, 2025. Werner paid $245.0 million, including a maximum $35.0 million earnout, plus $37.8 million for related real estate, funded with cash, its revolving credit facility and assumed leases.
Positive
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Insights
Werner adds detailed FirstFleet financials and pro forma impact.
Werner Enterprises now provides audited and interim financials for FirstEnterprises/FirstFleet, plus pro forma statements showing the combined company as if the deal closed earlier. The cash purchase totals $245.0 million, including a contingent earnout up to $35.0 million, plus $37.8 million for real estate.
The provisional purchase price allocation assigns $175.6 million to property and equipment and $22.6 million to customer relationships, with additional $15.3 million to goodwill. Pro forma 2025 combined operating revenues are $3.59 billion, while depreciation, amortization and interest rise due to fair value step-ups and acquisition financing.
FirstFleet contributed standalone revenue of $631.98 million and net income of $10.49 million for its 2025 fiscal year, indicating a sizable dedicated contract carriage and logistics platform. The acquisition accounting, including earnout valuation and lease assumptions, remains provisional and may be updated within one year of the closing date.
8-K Event Classification
Item 9.01 — Financial Statements and Exhibits
1 item
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
FirstEnterprises FY2025 Revenue: $631,981,405
FirstEnterprises FY2025 Net Income: $10,491,548
Cash purchase price: $245.0 million
+5 more
8 metrics
FirstEnterprises FY2025 Revenue
$631,981,405
Revenue for year ended March 30, 2025
FirstEnterprises FY2025 Net Income
$10,491,548
Net income for year ended March 30, 2025
Cash purchase price
$245.0 million
Equity purchase consideration including up to $35.0M earnout
Real estate purchase
$37.8 million
Real estate properties acquired from FirstFleet
Provisional purchase price
$220.623 million
Fair value of consideration allocated in purchase accounting
Property and equipment FV
$175.573 million
Fair value assigned to property and equipment acquired
Customer relationships intangible
$22.6 million
Fair value of customer relationship intangibles, 10-year life
Pro forma combined revenue 2025
$3,592,489,000
Werner plus FirstFleet operating revenues, year ended Dec. 31, 2025
Key Terms
earnout, right-of-use assets, current expected credit losses, noncontrolling interest, +2 more
6 terms
earnout financial
"includes an earnout payment not to exceed $35 million"
An earnout is a financial agreement in which part of the purchase price for a business is paid later, based on the company's future performance. It acts like a bonus system, where sellers earn extra money if the business hits certain goals, aligning their interests with the buyer’s success. Investors pay attention to earnouts because they influence the total deal value and can affect the company's future financial health.
right-of-use assets financial
"Finance lease right-of-use assets, net 92,195,375 Operating lease right-of-use assets, net"
Right-of-use assets are the rights a company gains to use a physical space or equipment under a lease agreement. They are recorded as assets on the company's balance sheet, reflecting the value of future benefits from the leased item. For investors, these assets provide a clearer picture of a company's obligations and resources related to leasing arrangements, helping to assess its financial health and operational commitments.
current expected credit losses financial
"often referred to as the CECL model, or current expected credit losses"
An accounting rule that requires lenders and creditors to estimate and record expected loan losses up front, based on current information and reasonable forecasts, rather than waiting until losses actually occur. Think of it as a bank setting aside a rainy-day fund based on the weather report instead of only after storms hit; for investors this affects reported profits, reserves and capital levels and can change perceptions of a firm’s financial strength.
noncontrolling interest financial
"Noncontrolling interest 3,367,257 Total stockholders' equity"
The portion of a business owned by investors other than the controlling owner when one company has control of another; it represents outside shareholders’ share of the subsidiary’s assets and profits. For investors, it matters because those outside claims reduce the amount of profit and net assets attributable to the parent owner — similar to saying part of a pizza belongs to someone else — and thus affects earnings, book value and valuation.
multi-period excess earnings method financial
"using the multi-period excess earnings method for customer relationships"
pro forma condensed combined financial statements financial
"UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF WERNER ENTERPRISES, INC."
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
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. ☐
Explanatory Note
As previously reported in a Current Report on Form 8-K filed on January 28, 2026 (the “Initial Filing”), on January 27, 2026, Werner Enterprises, Inc. (the "Company"), a Nebraska corporation, acquired 100% of the equity interests of FirstEnterprises, Inc. ("FirstFleet"), headquartered in Murfreesboro, Tennessee.
This Amendment No. 1 amends the Initial Filing to include the financial statements of FirstFleet and the pro forma financial information required by Item 9.01 of Form 8-K.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses or funds acquired.
The audited consolidated financial statements of FirstFleet as of and for the fiscal year ended March 31, 2025, notes related thereto and the related Independent Auditor's Report, are filed as Exhibit 99.1 hereto and incorporated herein by reference.
The consolidated financial statements of FirstFleet as of and for the nine month periods ended December 31, 2025 and 2024 (unaudited), notes related thereto, are filed as Exhibit 99.2 hereto and incorporated herein by reference.
(b) Pro forma financial information.
The following unaudited Pro Forma Condensed Combined Financial Information of the Company is filed herewith as Exhibit 99.3 to this Amendment No. 1 and incorporated by reference into this Item 9.01(b):
•Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2025.
•Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31, 2025.
•Notes to the Unaudited Pro Forma Condensed Combined Financial Information.
(d) Exhibits.
10.1 | Stock Purchase Agreement, dated January 27, 2026, by and among the Company, Mary B. Wilson, Gary L. Wilson Family Trust, Gary L. Wilson GST-Exempt Family Trust, and Wilson Children 2020 GST-Exempt Trust | |||||||
23.1 | Consent of Carr, Riggs & Ingram, LLC | |||||||
99.1 | Audited Consolidated Financial Statements of FirstEnterprises, Inc. as of and for the fiscal year ended March 31, 2025, notes related thereto, and Independent Auditor's Report | |||||||
99.2 | Consolidated Financial Statements of FirstEnterprises, Inc. as of and for the nine month periods ended December 31, 2025 and 2024 (unaudited), and notes related thereto | |||||||
99.3 | Unaudited Pro Forma Condensed Combined Balance Sheet of Werner Enterprises, Inc. as of December 31, 2025 and Unaudited Pro Forma Condensed Combined Statement of Income of Werner Enterprises, Inc. for the fiscal year ended December 31, 2025 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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: April 14, 2026 | By: | /s/ Christopher D. Wikoff | |||||||||
| Christopher D. Wikoff | |||||||||||
| Executive Vice President, Treasurer and Chief Financial Officer | |||||||||||
Date: April 14, 2026 | By: | /s/ Alan G. Colson | |||||||||
| Alan G. Colson | |||||||||||
| Vice President, Controller and Principal Accounting Officer | |||||||||||
INDEPENDENT AUDITOR’S REPORT To the Board of Directors of FirstEnterprises, Inc. Opinion We have audited the accompanying consolidated financial statements of FirstEnterprises, Inc. and subsidiaries which comprise the consolidated balance sheet as of March 30, 2025, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of FirstEnterprises, Inc. and subsidiaries as of March 30, 2025, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audits of the Financial Statements section of our report. We are required to be independent of FirstEnterprises, Inc. and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about FirstEnterprises, Inc.’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued. Exhibit 99.1 -2- Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements, including omissions, are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements. In performing an audit in accordance with generally accepted auditing standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of FirstEnterprises, Inc.’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about FirstEnterprises, Inc.’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. /s/ Carr, Riggs & Ingram, LLC Cookeville, Tennessee April 13, 2026 FirstEnterprises, Inc. Consolidated Balance Sheet The accompanying notes are an integral part of these consolidated financial statements. - 3 - March 30, 2025 Assets Current assets Cash and cash equivalents 903$ Accounts receivable, net 77,516,803 Other current assets 10,171,376 Total current assets 87,689,082 Property and equipment, net 124,015,183 Finance lease right-of-use assets, net 92,195,375 Operating lease right-of-use assets, net 94,019,895 Other assets 9,794,921 Total assets 407,714,456$ Liabilities and Stockholders' Equity Current liabilities Accounts payable 9,239,181$ Accrued expenses 14,251,184 Claims and insurance accruals 33,505,153 Current maturities of operating lease liabilities 36,263,653 Current maturities of finance lease liabilities 27,864,440 Total current liabilities 121,123,611 Note payable 3,821,570 Deferred tax liability 12,046,000 Operating lease liabilities, less current maturities 58,902,105 Finance lease liabilities, less current maturities 51,574,012 Other liabilities 14,121,364 Total liabilities 261,588,662 Stockholders' equity Common stock - no par value, 200,000 shares authorized, 10,100 shares issued and 10,000 shares outstanding 200 Treasury stock, 100 shares at cost (14,000,000) Retained earnings 156,758,337 Noncontrolling interest 3,367,257 Total stockholders' equity 146,125,794 Total liabilities and stockholders' equity 407,714,456$ FirstEnterprises, Inc. Consolidated Statement of Income The accompanying notes are an integral part of these consolidated financial statements. - 4 - March 30, For the year ended 2025 Revenue 631,981,405$ Operating expenses Wages and benefits 270,335,947 Fuel and operating supplies 144,088,719 Claims and insurance 78,378,786 Depreciation and amortization 44,620,961 Gains on disposals of property and equipment (2,075,820) Rent and lease expense 47,399,266 General supplies and other operating expenses 11,393,566 Operating taxes and licenses 8,942,671 Purchased transportation 7,673,079 Communications and utilities 4,767,716 Total operating expenses 615,524,891 Operating profit 16,456,514 Other income (expense) Interest expense (3,447,166) Income before income taxes 13,009,348 Provision for income taxes 2,517,800 Net income 10,491,548 Less net income attributable to noncontrolling interest (2,828,094) Net income attributable to FirstEnterprises, Inc. 7,663,454$
FirstEnterprises, Inc. Consolidated Statement of Changes in Stockholders’ Equity The accompanying notes are an integral part of these consolidated financial statements. - 5 - Common Treasury Retained Noncontrolling Stock Stock Earnings Interest Total Balance at March 31, 2024 200$ (14,000,000)$ 149,094,883$ 4,724,416$ 139,819,499$ Distributions to noncontrolling interest - - - (4,185,253) (4,185,253) Net income - - 7,663,454 2,828,094 10,491,548 Balance at March 30, 2025 200$ (14,000,000)$ 156,758,337$ 3,367,257$ 146,125,794$ For the year ended March 30, 2025 FirstEnterprises, Inc. Consolidated Statement of Cash Flows The accompanying notes are an integral part of these consolidated financial statements. - 6 - March 30, For the year ended 2025 Operating Activities Net income 10,491,548$ Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: Depreciation and amortization 44,620,961 Amortization of operating lease right-of-use assets 35,228,185 Provision for credit losses (832,000) Gain on equipment disposal (2,075,820) Deferred tax expense (3,332,000) Changes in operating assets and liabilities: Accounts receivable 8,333,967 Other current assets 2,221,298 Accounts payable (524,395) Accrued expenses (1,839,879) Claims and insurance accruals 7,085,136 Operating lease liabilities (34,650,929) Other liabilities 2,419,021 Net cash provided by operating activities 67,145,093 Investing Activities Purchases of property and equipment (33,062,109) Proceeds from sale of equipment 15,902,736 Change in other assets (674,435) Net cash used in investing activities (17,833,808) Financing Activities Distributions to noncontrolling interest (4,185,253) Paydowns on credit agreement (204,055,369) Draws on credit agreement 187,740,971 Principal payments on finance lease liabilities (28,822,881) Net cash used in financing activities (49,322,532) Net change in cash and cash equivalents (11,247) Cash and cash equivalents at beginning of year 12,150 Cash and cash equivalents at end of year 903$ (Continued) FirstEnterprises, Inc. Consolidated Statement of Cash Flows (Continued) The accompanying notes are an integral part of these consolidated financial statements. - 7 - March 30, For the year ended 2025 Supplemental disclosures of cash flow information: Cash paid during the year for: Interest 3,447,166$ Income taxes 6,848,887$ Supplemental disclosures of non-cash transactions: Lease liabilities arising from obtaining right-of-use assets Operating leases 17,306,791$ FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 8 - Note 1: DESCRIPTION OF THE BUSINESS FirstEnterprises, Inc. and its subsidiaries (collectively, the “Company”) is primarily engaged in the business of providing transportation and supply chain management. FirstFleet, Inc., Interactive Logistics, Inc. and FirstFinance and Properties, Inc. are all wholly owned subsidiaries of FirstEnterprises, Inc. FirstFleet, Inc. is a contract carrier which provides transportation services under contract with various shippers. The freight is primarily moved by company operated equipment; however, the Company contracts with other carriers to transport a portion of the freight. Interactive Logistics, Inc. provides brokerage services within the transportation industry. FirstFinance and Properties, Inc. owns all of the voting units of First Enterprise Properties, LLC which provides facilities for lease to FirstFleet, Inc. The non-voting units of First Enterprise Properties, LLC are held by a related party and are recorded as a noncontrolling interest in the accompanying consolidated financial statements. Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of FirstEnterprises, Inc., its wholly-owned subsidiaries, and a real estate partnership (see Note 1). The Company consolidates an entity if the Company has a controlling financial interest in the entity. All significant intercompany balances and transactions have been eliminated. The Company accounts for noncontrolling interest in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company reports noncontrolling interests in subsidiaries as equity in the consolidated financial statements, and discloses separately income or loss attributable to controlling and noncontrolling interests. Basis of Accounting The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Financial Accounting Standards Board (FASB) provides authoritative guidance regarding U.S. GAAP through the Accounting Standards Codification (ASC) and related Accounting Standards Updates (ASUs). Fiscal Year The Company’s fiscal year ends on the closest Sunday on or before March 31. The year ended March 30, 2025 consisted of 52 weeks.
FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 9 - Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Use of Estimates The preparation of U.S. GAAP financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Estimates that are particularly susceptible to significant change in the near term are related to the valuation of self-insurance claims, litigation claims and the allowance for credit losses. Cash and Cash Equivalents Cash and cash equivalents include cash and all highly-liquid debt instruments with an original maturity of 90 days or less. Accounts Receivable Accounts receivable represent amounts owed to the Company which are expected to be collected within twelve months and are presented in the consolidated balance sheet net of the allowance for credit losses. Allowance for Credit Losses Management evaluates its receivables on an ongoing basis by analyzing customer relationships and previous payment histories. The allowance for credit losses is management’s best estimate of the amount of probable credit losses in the existing accounts based on current market conditions. Historically, losses on uncollectible accounts have been within management’s expectations. The allowance for credit losses is reviewed on a periodic basis to ensure there is sufficient reserve to cover any potential credit losses. When receivables are considered uncollectible, they are charged against the allowance for credit losses. Collections on accounts previously written off are included in income as received. The allowance for credit losses was $948,991 at March 30, 2025. Other Current Assets Other current assets include prepaid expenses, refundable income taxes, tires, fuel and parts inventories. Property and Equipment Land is carried at cost and all other property and equipment is stated at cost less accumulated depreciation. Expenditures for additions, major renewals, and betterments are capitalized and repairs and maintenance are charged to operations as incurred. Depreciation expense is recognized over the estimated useful lives of the property and equipment using the straight-line method. FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 10 - Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment (Continued) Leasehold improvements are amortized over the shorter of the estimated useful life or remaining term of the lease. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount of the asset, an impairment loss is recognized. Long-lived assets and certain intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Claims and Insurance Accruals Claims and insurance accruals, both current and long-term, reflect the estimated total settlement costs of claims for workers’ compensation, health, cargo loss and damage, vehicle liability and physical damage. The Company is primarily self-insured for these losses and related liabilities but does carry insurance with third-party insurance carriers. Management periodically reviews the Company’s risk exposure and insurance coverage applicable to those risks and believes that sufficient insurance coverage is maintained. These costs are included in claims and insurance expense, except for workers’ compensation, which is included in wages and benefits. The liabilities are included in claims and insurance reserves based on estimates of claims incurred. Liabilities for unsettled claims and claims incurred but not yet reported are actuarially determined with respect to workers’ compensation, health and vehicle liability claims as of March 30, 2025. Liabilities for all other coverages are estimated based on management’s evaluation of the nature and severity of individual claims and past experience. The Company’s liability for claims and insurance totaled $41,375,153 at March 30, 2025. The long-term portions of these reserves was $7,870,000 at March 30, 2025 and are included in “Other liabilities” on the accompanying consolidated balance sheet. Revenue Recognition The Company recognizes revenue based upon when transportation and related services have been completed in accordance with the bill of lading (“BOL”) and contractual agreements with customers. Generally, performance obligations begin when the Company receives a BOL or an order from a customer and are satisfied when the delivery of a shipment is completed. FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 11 - Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Recognition (Continued) Revenue is recognized for performance obligations under customer contracts at a point in time in accordance with the Accounting Standards Codification (“ASC”) 606. The average transit time to complete a shipment is substantially less than 24 hours. Billing for transportation services normally occurs after completion of the service and payment is generally due within 45 days after the invoice date. Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts for financial reporting purposes and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. The consolidated tax provision of the controlled group is allocated to the members based on their respective share of pretax income. Tax positions are recognized only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax position is recorded. The Company is subject to routine audits by taxing jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended March 31, 2022 through 2025. The Company files multiple state tax returns with varying statutes of limitations. Interest Interest costs are charged to expense as incurred. Leases The Company leases certain equipment under noncancelable leases. The Company determines if a contract or arrangement contains a lease at inception. Leases are classified as finance or operating, with the classification affecting the pattern and classification of expense recognition over the lease term. A lease is classified as a finance lease if any of the following criteria are met: (i) ownership of the underlying asset transfers to the Company by the end of the lease term; (ii) the lease contains an option to purchase the underlying asset that the Company is reasonably expected to exercise; (iii) the lease term is for a major part of the remaining economic life of the underlying asset; (iv) the present value of the sum of lease payments and any residual value guaranteed by the Company equals or exceeds substantially all of the fair value of the underlying asset; or (v) the underlying asset is of a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 12 - Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Leases (Continued) term. A lease that does not meet any of the criteria to be classified as a finance lease is classified as an operating lease. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities in the consolidated balance sheet. Finance leases are included in finance lease right-of-use (ROU) assets and finance lease liabilities in the consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Management uses a risk-free rate or the implied interest rate within the lease based on the information available at the commencement date in determining the present value of lease payments for operating and finance ROU assets. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Subsequent Events Management has evaluated subsequent events through the date that the consolidated financial statements were available to be issued, April 13, 2026. See Note 11 for relevant disclosures. No subsequent events occurring after this date have been evaluated for inclusion in these consolidated financial statements. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is often referred to as the CECL model, or current expected credit losses. Among other things, the amendments in the ASU require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted ASU 2016- 13 on March 27, 2023. The impact of the adoption was not considered material to the consolidated financial statements and primarily resulted in enhanced disclosures only.
FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 13 - Note 3: CONCENTRATIONS Revenue from four customers represents approximately 88% of total revenue for the year ended March 30, 2025. At March 30, 2025, the Company had approximately 86% of its accounts receivable due from four customers. To reduce risk, the Company routinely assesses the financial strength of its customers and, as a consequence, believes that its accounts receivable credit risk exposure is limited. Note 4: PROPERTY AND EQUIPMENT The components of property and equipment at March 30, 2025, are as follows: Estimated Useful March 30, Lives (in years) 2025 Land 7,560,915$ Buildings and improvements 5-30 30,491,738 Revenue equipment 5-12 208,155,298 Equipment 3-8 6,865,122 Construction in progress 696,105 253,769,178 Less: accumulated depreciation (129,753,995) Total 124,015,183$ Depreciation expense for the year ended March 30, 2025 approximated $29,975,000. Note 5: ACCRUED EXPENSES The components of accrued expenses at March 30, 2025 are as follows: March 30, 2025 Accrued salaries and wages 12,127,614$ Accrued income taxes 363,241 Other accrued taxes 1,760,329 14,251,184$ FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 14 - Note 6: NOTE PAYABLE The Company has a credit agreement with a financial institution which was amended and extended subsequent to year end. The maximum commitment on the credit agreement is $55,000,000 or less depending on the calculated borrowing base for the year ended March 30, 2025. The total committed balance under the credit agreement is calculated by combining line of credit borrowings and irrevocable letters of credit issued. The credit agreement bears interest at 5.6% as of March 30, 2025 and is secured by accounts receivable, certain equipment and cash accounts of the Company. The outstanding balance as of March 30, 2025 was $3,821,570. The current credit agreement now expires on October 28, 2028. The remaining unfunded portion of the current borrowing base set forth in the credit agreement at March 30, 2025 was approximately $24,872,000. Certain financial covenants are imposed by the credit agreement. The Company is in compliance with all of the financial covenants. Annual maturities of the note payable are as follows: For the years ending March 30, 2026 -$ 2027 - 2028 - 2029 3,821,570 Total 3,821,570 Less current maturities - Note payable balance 3,821,570$ Note 7: COMMITMENTS AND CONTINGENCIES Lease Commitments The Company has various property and equipment leases which expire at various dates through November 2030. The components of total lease cost were as follows for the year ended March 30, 2025: March 30, For the year ended 2025 Operating lease cost 43,928,009$ Short-term lease cost 3,471,257$ Finance lease cost Amortization of right-of-use asset 14,645,766$ Interest on lease liabilities 2,574,929 Total finance lease cost 17,220,695$ FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 15 - Note 7: COMMITMENTS AND CONTINGENCIES (Continued) The following table shows supplemental information related to leases for the year ended March 30, 2025: March 30, For the year ended 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 34,650,929$ Operating cash flows from finance leases 17,220,695$ Financing cash flows from finance leases 28,822,881$ The following table shows the weighted average lease term and weighted average discount rate related to leases as of March 30, 2025: March 30, For the year ended 2025 Weighted average remaining lease term Operating leases 2.5 years Finance leases 2.1 years Weighted average discount rate Operating leases 4.29% Finance leases 2.83% Future minimum lease payments under non-cancellable leases as of March 30, 2025, were as follows: Operating Finance For the years ending March 30, Leases Leases 2026 39,530,835$ 29,393,421$ 2027 34,163,604 26,980,372 2028 18,615,337 12,557,623 2029 7,105,805 7,478,301 2030 2,194,429 4,520,969 Thereafter - 5,098,649 Total future minimum lease payments 101,610,010 86,029,335 Less imputed interest (6,444,252) (6,590,883) Present value of lease liabilities 95,165,758 79,438,452 Less current maturities (36,263,653) (27,864,440) Lease liabilities 58,902,105$ 51,574,012$ FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 16 - Note 7: COMMITMENTS AND CONTINGENCIES (Continued) The Company has established various irrevocable letters of credit with the beneficiaries being various insurance companies. Letters of credit outstanding at March 30, 2025 were $26,306,000. The Company is subject to legal proceedings and claims that arise in the ordinary course of its business. Some of these may be covered in whole or in part by insurance. Management believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable and estimable losses and that the ultimate outcome of these actions will not have a material adverse effect on the consolidated financial position of the Company. Note 8: INCOME TAXES The Company’s provision for income taxes consists of the following: March 30, For the year ended 2025 Current tax expense Federal 4,713,200$ State 1,136,600 5,849,800 Deferred tax expense Federal (2,693,000) State (639,000) (3,332,000) Total 2,517,800$ The provision for income taxes differs from that computed by applying federal and state statutory rates to income before income tax expense due to income from First Enterprise Properties, LLC not being subject to federal income tax. The components of the net deferred tax liability are as follows: March 30, 2025 Allowance for credit losses 240,000$ Financial statement reserves not deductible 57,662,000 Depreciation of property and equipment (69,948,000) Net deferred tax liability (12,046,000)$
FirstEnterprises, Inc. Notes to Consolidated Financial Statements - 17 - Note 8: INCOME TAXES (Continued) Valuation Allowance on Deferred Tax Asset Realization of deferred tax assets is dependent upon generating sufficient taxable income prior to their expiration. Management anticipates full realization of the deferred tax assets, therefore, no valuation allowance has been recorded at March 30, 2025. Note 9: DEFERRED COMPENSATION PLAN The Company has salary deferral agreements covering certain employees. The total deferred salary payable under these agreements was $6,251,364 for the year ended March 30, 2025, and these agreements are primarily funded by life insurance policies. Deferred compensation expense was approximately $313,000 for the year ended March 30, 2025. The deferred salary payable is included in other liabilities in the consolidated balance sheet. Note 10: EMPLOYEE BENEFIT PLAN The Company sponsors a 401(k) plan that covers all employees with 30 days of service that have attained the age of 21. Covered employees make elective salary deferrals subject to the limitations set forth by law. The Company matches a portion of the employee deferrals. The Company expensed contributions to the plan in the amount of $1,138,000 for the year ended March 30, 2025. Note 11: SUBSEQUENT EVENT On January 27, 2026, the Company’s stockholders agreed to the acquisition of the Company through entry into a Stock Purchase Agreement and a Real Estate Purchase Agreement with Werner Enterprises, Inc. The aggregate purchase price was approximately $283 million, which includes an earnout payment not to exceed $35 million. The acquisition of the Company was completed on January 27, 2026, pursuant to the terms of the Stock Purchase Agreement and Real Estate Purchase Agreement.
Exhibit 99.2
FIRSTENTERPRISES, INC.
Consolidated Financial Statements
as of and for the Nine Month Periods Ended
December 31, 2025 and 2024 (Unaudited)
FIRSTENTERPRISES, INC.
TABLE OF CONTENTS
| Consolidated Financial Statements (Unaudited) | Page | ||||
| Consolidated Balance Sheets | 1 | ||||
| Consolidated Statements of Income | 2 | ||||
| Consolidated Statements of Changes in Stockholders’ Equity | 3 | ||||
| Consolidated Statements of Cash Flows | 4 | ||||
| Notes to Consolidated Financial Statements | 5 | ||||
FIRSTENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| December 31, | |||||||||||
| (In thousands, except per share amounts) | 2025 | 2024 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | — | $ | — | |||||||
| Accounts receivable, net | 78,188 | 74,673 | |||||||||
| Other current assets | 13,922 | 14,461 | |||||||||
| Total current assets | 92,110 | 89,134 | |||||||||
| Property and equipment, net | 120,382 | 120,170 | |||||||||
| Finance lease right-of-use assets, net | 72,194 | 97,725 | |||||||||
| Operating lease right-of-use assets, net | 75,067 | 101,466 | |||||||||
| Other assets | 11,715 | 10,912 | |||||||||
| Total assets | $ | 371,468 | $ | 419,407 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 9,272 | $ | 7,417 | |||||||
| Accrued expenses | 9,236 | 14,535 | |||||||||
| Claims and insurance accruals | 21,518 | 25,269 | |||||||||
| Current maturities of operating lease liabilities | 35,880 | 36,731 | |||||||||
| Current maturities of finance lease liabilities | 27,811 | 25,569 | |||||||||
| Total current liabilities | 103,717 | 109,521 | |||||||||
| Notes payable | 14,039 | 5,705 | |||||||||
| Deferred tax liability | 12,909 | 15,378 | |||||||||
| Operating lease liabilities, less current maturities | 40,849 | 66,039 | |||||||||
| Finance lease liabilities, less current maturities | 32,101 | 60,031 | |||||||||
| Other liabilities | 15,106 | 12,395 | |||||||||
| Total liabilities | 218,721 | 269,069 | |||||||||
| Stockholders’ equity | |||||||||||
| Common stock - no par value, 200,000 shares authorized, 10,100 shares issued and 10,000 shares outstanding | — | — | |||||||||
| Treasury stock, 100 shares at cost | (14,000) | (14,000) | |||||||||
| Retained earnings | 163,124 | 159,056 | |||||||||
| Noncontrolling interest | 3,623 | 5,282 | |||||||||
| Total stockholders’ equity | 152,747 | 150,338 | |||||||||
| Total liabilities and stockholders’ equity | $ | 371,468 | $ | 419,407 | |||||||
See Notes to Consolidated Financial Statements (Unaudited).
1
FIRSTENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Nine-Months Ended December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Revenues | $ | 465,142 | $ | 479,030 | |||||||
| Operating expenses | |||||||||||
| Wages and benefits | 200,217 | 204,118 | |||||||||
| Fuel and operating supplies | 104,506 | 109,241 | |||||||||
| Claims and insurance | 54,337 | 53,574 | |||||||||
| Depreciation and amortization | 33,975 | 33,562 | |||||||||
| Gains on disposals of property and equipment | (4,707) | (1,553) | |||||||||
| Rent and lease expense | 33,375 | 36,158 | |||||||||
| General supplies and other operating expenses | 8,209 | 8,959 | |||||||||
| Operating taxes and licenses | 5,663 | 7,075 | |||||||||
| Purchased transportation | 10,672 | 5,648 | |||||||||
| Communications and utilities | 3,578 | 3,572 | |||||||||
| Total operating expenses | 449,825 | 460,354 | |||||||||
| Operating profit | 15,317 | 18,676 | |||||||||
| Other (income) expense | |||||||||||
| Interest expense | 2,750 | 2,898 | |||||||||
| Income before income taxes | 12,567 | 15,778 | |||||||||
| Provision for income taxes | 2,090 | 3,710 | |||||||||
| Net income | 10,477 | 12,068 | |||||||||
| Less net income attributable to noncontrolling interest | (4,111) | (2,107) | |||||||||
| Net income attributable to FirstEnterprises, Inc. | $ | 6,366 | $ | 9,961 | |||||||
See Notes to Consolidated Financial Statements (Unaudited).
2
FIRSTENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Nine Months Ended December 31, 2025 | |||||||||||||||||||||||||||||
| (In thousands) | Common Stock | Treasury Stock | Retained Earnings | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||
| BALANCE, March 31, 2025 | $ | — | $ | (14,000) | $ | 156,758 | $ | 3,367 | $ | 146,125 | |||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | (3,855) | (3,855) | ||||||||||||||||||||||||
| Net Income | — | — | 6,366 | 4,111 | 10,477 | ||||||||||||||||||||||||
| BALANCE, December 31, 2025 | $ | — | $ | (14,000) | $ | 163,124 | $ | 3,623 | $ | 152,747 | |||||||||||||||||||
| Nine Months Ended December 31, 2024 | |||||||||||||||||||||||||||||
| (In thousands) | Common Stock | Treasury Stock | Retained Earnings | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||
| BALANCE, March 31, 2024 | $ | — | $ | (14,000) | $ | 149,095 | $ | 4,724 | $ | 139,819 | |||||||||||||||||||
| Distribution to noncontrolling interest | — | — | — | (1,549) | (1,549) | ||||||||||||||||||||||||
| Net Income | — | — | 9,961 | 2,107 | 12,068 | ||||||||||||||||||||||||
| BALANCE, December 31, 2024 | $ | — | $ | (14,000) | $ | 159,056 | $ | 5,282 | $ | 150,338 | |||||||||||||||||||
See Notes to Consolidated Financial Statements (Unaudited).
| | ||
| | ||
3
FIRSTENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months Ended December 31, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Operating Activities | |||||||||||
| Net income (loss) | $ | 10,477 | $ | 12,068 | |||||||
| Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by operating activities: | |||||||||||
| Depreciation and amortization | 33,975 | 33,562 | |||||||||
| Amortization of operating lease right-of-use assets | 30,654 | 33,557 | |||||||||
| Provision for credit losses | 815 | 135 | |||||||||
| Gain on equipment disposal | (4,707) | (1,553) | |||||||||
| Deferred tax expense | 863 | — | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (1,487) | 10,211 | |||||||||
| Other current assets | (3,751) | (2,069) | |||||||||
| Accounts payable | 33 | (2,347) | |||||||||
| Accrued expenses | (5,016) | (1,557) | |||||||||
| Claims and insurance accruals | (11,987) | (1,151) | |||||||||
| Operating lease liabilities | (18,053) | (28,986) | |||||||||
| Other current liabilities | 985 | 693 | |||||||||
| Net cash provided by operating activities | 32,801 | 52,563 | |||||||||
| Investing Activities | |||||||||||
| Purchases of property and equipment | (41,714) | (48,075) | |||||||||
| Proceeds from sale of equipment | 23,942 | 32,114 | |||||||||
| Change in other assets | (1,920) | (1,792) | |||||||||
| Net cash provided by (used in) investing activities | (19,692) | (17,753) | |||||||||
| Financing Activities | |||||||||||
| Distributions to noncontrolling interest | (3,855) | (1,549) | |||||||||
| Paydowns on credit agreement | (162,023) | (181,403) | |||||||||
| Draws on credit agreement | 172,241 | 166,980 | |||||||||
| Principal payments on finance lease liabilities | (19,473) | (18,850) | |||||||||
| Net cash used in financing activities | (13,110) | (34,822) | |||||||||
| Net change in cash and cash equivalents | (1) | (12) | |||||||||
| Cash and cash equivalents at beginning of year | 1 | 12 | |||||||||
| Cash and cash equivalents at end of year | $ | — | $ | — | |||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash paid during the year for: | |||||||||||
| Interest | $ | 2,831 | $ | 2,980 | |||||||
| Income taxes | $ | 1,655 | $ | 6,242 | |||||||
| Supplemental disclosures of non-cash transactions: | |||||||||||
| Lease liabilities arising from obtaining right-of-use assets | |||||||||||
| Operating leases | $ | 9,456 | $ | 23,565 | |||||||
| Finance leases | $ | — | $ | — | |||||||
See Notes to Consolidated Financial Statements (Unaudited).
4
FIRSTENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: DESCRIPTION OF THE BUSINESS
FirstEnterprises, Inc. and its subsidiaries (collectively, the “Company”) is primarily engaged in the business of providing transportation and supply chain management. FirstFleet, Inc., Interactive Logistics, Inc. and FirstFinance and Properties, Inc. are all wholly owned subsidiaries of FirstEnterprises, Inc. FirstFleet, Inc. is a contract carrier which provides transportation services under contract with various shippers. The freight is primarily moved by company operated equipment; however, the Company contracts with other carriers to transport a portion of the freight. Interactive Logistics, Inc. provides brokerage services within the transportation industry. FirstFinance and Properties, Inc. owns all of the voting units of First Enterprise Properties, LLC which provides facilities for lease to FirstFleet, Inc. The non-voting units of First Enterprise Properties, LLC are held by a related party and are recorded as a noncontrolling interest in the accompanying consolidated financial statements.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of First Enterprises, Inc., its wholly-owned subsidiaries, and a real estate partnership (see Note 1). The Company consolidates an entity if the Company has a controlling financial interest in the entity. All significant intercompany balances and transactions have been eliminated. The Company accounts for noncontrolling interest in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company reports noncontrolling interests in subsidiaries as equity in the consolidated financial statements, and discloses separately income or loss attributable to controlling and noncontrolling interests.
Basis of Accounting
The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Financial Accounting Standards Board (FASB) provides authoritative guidance regarding U.S. GAAP through the Accounting Standards Codification (ASC) and related Accounting Standards Updates (ASUs).
Fiscal Year
The Company’s fiscal year presented in these financial statements are for the period April 1 through December 31, 2024 and 2025.
Use of Estimates
The preparation of U.S. GAAP financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Estimates that are particularly susceptible to significant change in the near term are related to the valuation of self-insurance claims, litigation claims and the allowance for credit losses.
Cash and Cash Equivalents
Cash and cash equivalents include cash and all highly-liquid debt instruments with an original maturity of 90 days or less.
Accounts Receivable
Accounts receivable represent amounts owed to the Company which are expected to be collected within twelve months and are presented in the consolidated balance sheets net of the allowance for credit losses.
Allowance for Credit Losses
Management evaluates its receivables on an ongoing basis by analyzing customer relationships and previous payment histories. The allowance for credit losses is management’s best estimate of the amount of probable credit losses in the existing accounts
5
based on current market conditions. Historically, losses on uncollectible accounts have been within management’s expectations. The allowance for credit losses is reviewed on a periodic basis to ensure there is sufficient reserve to cover any potential credit losses. When receivables are considered uncollectible, they are charged against the allowance for credit losses. Collections on accounts previously written off are included in income as received. The allowance for credit losses was $0.1 million and $1.9 million at December 31, 2025 and December 31, 2024, respectively.
Other Current Assets
Other current assets include prepaid expenses, refundable income taxes, tires, fuel and parts inventories.
Property and Equipment
Land is carried at cost and all other property and equipment is stated at cost less accumulated depreciation. Expenditures for additions, major renewals, and betterments are capitalized and repairs and maintenance are charged to operations as incurred. Depreciation expense is recognized over the estimated useful lives of the property and equipment using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated useful life or remaining term of the lease.
Impairment of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying amount of the asset, an impairment loss is recognized. Long-lived assets and certain intangible assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.
Claims and Insurance Accruals
Claims and insurance accruals, both current and long-term, reflect the estimated total settlement costs of claims for workers’ compensation, health, cargo loss and damage, vehicle liability and physical damage. The Company is primarily self-insured for these losses and related liabilities but does carry insurance with third-party insurance carriers. Management periodically reviews the Company’s risk exposure and insurance coverage applicable to those risks and believes that sufficient insurance coverage is maintained. These costs are included in claims and insurance expense, except for workers’ compensation, which is included in wages and benefits. The liabilities are included in claims and insurance reserves based on estimates of claims incurred. Liabilities for unsettled claims and claims incurred but not yet reported are actuarially determined with respect to workers’ compensation, health and vehicle liability claims as of March 30, 2025. Liabilities for all other coverages are estimated based on management’s evaluation of the nature and severity of individual claims and past experience. The Company’s liability for claims and insurance totaled $29.4 million and $31.3 million at December 31, 2025 and December 31, 2024, respectively. The long-term portions of these reserves were $7.9 million and $6.0 million at December 31, 2025 and December 31, 2024, respectively, and are included in “Other liabilities” on the accompanying consolidated balance sheets.
Revenue Recognition
The Company recognizes revenue based upon when transportation and related services have been completed in accordance with the bill of lading (“BOL”) and contractual agreements with customers. Generally, performance obligations begin when the Company receives a BOL or an order from a customer and are satisfied when the delivery of a shipment is completed. Revenue is recognized for performance obligations under customer contracts at a point in time in accordance with the ASC 606. The average transit time to complete a shipment is substantially less than 24 hours. Billing for transportation services normally occurs after completion of the service and payment is generally due within 45 days after the invoice date.
Income Taxes
Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts for financial reporting purposes and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. The consolidated tax provision of the controlled group is allocated to the members based on their respective share of pretax income. Tax positions are recognized only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax position is recorded. The Company is subject to routine audits by taxing jurisdictions. The Company is currently open to audit under the statute of limitations by the Internal
6
Revenue Service for the years ended December 31, 2022 through 2025. The Company files multiple state tax returns with varying statutes of limitations.
Interest
Interest costs are charged to expense as incurred.
Leases
The Company leases certain equipment under noncancelable leases. The Company determines if a contract or arrangement contains a lease at inception. Leases are classified as finance or operating, with the classification affecting the pattern and classification of expense recognition over the lease term. A lease is classified as a finance lease if any of the following criteria are met: (i) ownership of the underlying asset transfers to the Company by the end of the lease term; (ii) the lease contains an
option to purchase the underlying asset that the Company is reasonably expected to exercise; (iii) the lease term is for a major part of the remaining economic life of the underlying asset; (iv) the present value of the sum of lease payments and any residual value guaranteed by the Company equals or exceeds substantially all of the fair value of the underlying asset; or (v) the underlying asset is of a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease that does not meet any of the criteria to be classified as a finance lease is classified as an operating lease. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities in the consolidated balance sheets. Finance leases are included in finance lease right-of-use (ROU) assets and finance lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Management uses a risk-free rate or the implied interest rate within the lease based on the information available at the commencement date in determining the present value of lease payments for operating and finance ROU assets. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Subsequent Events
On January 27, 2026, Werner Enterprises, Inc. (“Werner”) acquired 100% of the equity interests of the Company for $245 million cash, which includes a maximum $35 million earnout based on gross revenue net of fuel surcharge for the period April 1, 2026, through March 31, 2027. The transaction was funded using cash on hand and Werner’s existing revolving credit facility. During closing, Werner assumed approximately $57.0 million of finance leases and paid the Company’s outstanding note payable balance of $9.6 million. Under a separate agreement, Werner also acquired real estate properties from the Company for $37.8 million.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is often referred to as the CECL model, or current expected credit losses. Among other things, the amendments in the ASU require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The Company adopted ASU 2016-13 on March 27, 2023. The impact of the adoption was not considered material to the consolidated financial statements and primarily resulted in enhanced disclosures only.
Reclassifications
Certain reclassifications were made to prior year balances to conform with current year presentation.
7
Note 3: CONCENTRATIONS
Revenue from four customers represents approximately 87% and 89% of total revenue for the nine months ended December 31, 2025 and December 31, 2024, respectively. At December 31, 2025 and December 31, 2024, the Company had approximately 90% and 89% of its accounts receivable due from four and three customers, respectively. To reduce risk, the Company routinely assesses the financial strength of its customers and, as a consequence, believes that its accounts receivable credit risk exposure is limited.
Note 4: PROPERTY AND EQUIPMENT
The components of property and equipment at December 31, 2025 and December 31, 2024, are as follows (in thousands):
| Estimated Useful Lives (in years) | December 31, 2025 | December 31, 2024 | |||||||||||||||
| Land | $ | 6,576 | $ | 6,762 | |||||||||||||
| Buildings and improvements | 5-30 | 30,743 | 31,291 | ||||||||||||||
| Revenue equipment | 5-12 | 198,469 | 183,327 | ||||||||||||||
| Equipment | 3-8 | 23,903 | 22,740 | ||||||||||||||
| Construction in process | — | 453 | |||||||||||||||
| Less: accumulated depreciation | (139,309) | (124,403) | |||||||||||||||
| Total | $ | 120,382 | $ | 120,170 | |||||||||||||
Note 5: ACCRUED EXPENSES
The components of accrued expenses at December 31, 2025 and December 31, 2024 are as follows (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Accrued salaries and wages | $ | 7,150 | $ | 11,776 | |||||||
| Accrued income taxes | 407 | — | |||||||||
| Other accrued taxes | 1,679 | 2,759 | |||||||||
| $ | 9,236 | $ | 14,535 | ||||||||
Note 6: NOTE PAYABLE
The Company has a credit agreement with a financial institution which was amended and extended subsequent to year end. The maximum commitment on the credit agreement is $55.0 million or less depending on the calculated borrowing base for the year ended December 31, 2025. The total committed balance under the credit agreement is calculated by combining line of credit borrowings and irrevocable letters of credit issued. The credit agreement bears interest at 5.1% as of December 31, 2025 and is secured by accounts receivable, certain equipment and cash accounts of the Company. The outstanding balances as of December 31, 2025 and December 31, 2024 were $14.0 million and $5.7 million, respectively. The current credit agreement now expires on October 28, 2028. The remaining unfunded portion of the current borrowing base set forth in the credit agreement at December 31, 2025 was approximately $14.7 million. Certain financial covenants are imposed by the credit agreement. The Company is in compliance with all of the financial covenants.
8
Annual maturities of the note payable are as follows as of December 31, 2025 (in thousands):
| 2026 | $ | — | |||
| 2027 | — | ||||
| 2028 | — | ||||
| 2029 | 14,039 | ||||
| Total | 14,039 | ||||
| Less current maturities | — | ||||
| Note payable balance | $ | 14,039 | |||
Note 7: COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company has various property and equipment leases which expire at various dates through November 2030. The components of total lease cost were as follows for the nine months ended December 31, 2025 and December 31, 2024 (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Operating lease cost | $ | 30,871 | $ | 33,423 | |||||||
| Short-term lease cost | $ | 2,504 | $ | 2,735 | |||||||
| Finance lease cost | |||||||||||
| Amortization of right-of-use asset | $ | 9,266 | $ | 11,325 | |||||||
| Interest on lease liabilities | 1,465 | 1,992 | |||||||||
| Total finance lease cost | $ | 10,731 | $ | 13,317 | |||||||
The following table shows supplemental information related to leases for the nine months ended December 31, 2025 and December 31, 2024 (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | 30,654 | $ | 33,557 | |||||||
| Operating cash flows from finance leases | $ | 10,730 | $ | 13,317 | |||||||
| Financing cash flows from finance leases | $ | 19,473 | $ | 18,850 | |||||||
The following table shows the weighted average lease term and weighted average discount rate related to leases as of December 31, 2025 and December 31, 2024:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted average remaining lease term | |||||||||||
| Operating leases | 2.5 years | 3.0 years | |||||||||
| Finance leases | 2.2 years | 2.8 years | |||||||||
| Weighted average discount rate | |||||||||||
| Operating leases | 4.6 | % | 4.6 | % | |||||||
| Finance leases | 2.8 | % | 2.8 | % | |||||||
9
Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows (in thousands):
| For the years ended | Operating Leases | Finance Leases | |||||||||
| 2026 | $ | 9,617 | $ | 6,806 | |||||||
| 2027 | 34,148 | 26,942 | |||||||||
| 2028 | 19,699 | 12,549 | |||||||||
| 2029 | 8,570 | 7,478 | |||||||||
| 2030 | 8,570 | 4,521 | |||||||||
| Thereafter | 593 | 5,099 | |||||||||
| Total future minimum lease payments | 81,197 | 63,395 | |||||||||
| Less imputed interest | (4,468) | (3,483) | |||||||||
| Present value of lease liabilities | 76,729 | 59,912 | |||||||||
| Less current maturities | (35,880) | (27,811) | |||||||||
| Lease liabilities | $ | 40,849 | $ | 32,101 | |||||||
The Company has established various irrevocable letters of credit with the beneficiaries being various insurance companies. Letters of credit outstanding at December 31, 2025 were $26.3 million.
The Company is subject to legal proceedings and claims that arise in the ordinary course of its business. Some of these may be covered in whole or in part by insurance. Management believes that adequate provisions for resolution of all contingencies, claims and pending litigation have been made for probable and estimable losses and that the ultimate outcome of these actions will not have a material adverse effect on the consolidated financial position of the Company.
Note 8: INCOME TAXES
The Company’s provision for income taxes consists of the following (in thousands):
| For the nine months ended | December 31, 2025 | December 31, 2024 | |||||||||
| Current tax expense | |||||||||||
| Federal | $ | 4,868 | $ | 3,775 | |||||||
| State | 1,377 | 1,258 | |||||||||
| 6,245 | 5,033 | ||||||||||
| Deferred tax expense | |||||||||||
| Federal | (3,516) | (1,221) | |||||||||
| State | (639) | (102) | |||||||||
| (4,155) | (1,323) | ||||||||||
| Total | $ | 2,090 | $ | 3,710 | |||||||
The provision for income taxes differs from that computed by applying federal and state statutory rates to income before income tax expense due to income from First Enterprise Properties, LLC not being subject to federal income tax.
The components of the net deferred tax liability are as follows (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Allowance for credit losses | $ | 240 | $ | 440 | |||||||
| Financial statement reserves not deductible | 57,622 | 66,855 | |||||||||
| Depreciation of property and equipment | (70,771) | (82,673) | |||||||||
| Net deferred tax liability | $ | (12,909) | $ | (15,378) | |||||||
10
Valuation Allowance on Deferred Tax Asset
Realization of deferred tax assets is dependent upon generating sufficient taxable income prior to their expiration. Management anticipates full realization of the deferred tax assets, therefore, no valuation allowance has been recorded at December 31, 2025 or December 31, 2024.
Note 9: DEFERRED COMPENSATION PLAN
The Company has salary deferral agreements covering certain employees. The total deferred salary payable under these agreements was $7.2 million and $6.4 million at December 31, 2025 and December 31, 2024, respectively, and these agreements are primarily funded by life insurance policies. Deferred compensation expense was approximately $0.2 million for the nine months ended December 31, 2025 and December 31, 2024. The deferred salary payable is included in other liabilities in the consolidated balance sheets.
Note 10: EMPLOYEE BENEFIT PLAN
The Company sponsors a 401(k) plan that covers all employees with 30 days of service that have attained the age of 21. Covered employees make elective salary deferrals subject to the limitations set forth by law. The Company matches a portion of the employee deferrals. The Company expensed contributions to the plan in the amount of $0.9 million and $0.8 million for the nine months ended December 31, 2025 and December 31, 2024, respectively.
11
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS OF WERNER ENTERPRISES, INC.
On January 27, 2026, Werner Enterprises, Inc. (the “Company” or “Werner”) acquired 100% of the equity interests of FirstEnterprises, Inc. ("FirstFleet"), a Tennessee corporation, pursuant to a Stock Purchase Agreement by and among the Company, Mary B. Wilson, Gary L. Wilson Family Trust, Gary L. Wilson GST-Exempt Family Trust, and Wilson Children 2020 GST-Exempt Trust. The Company acquired FirstFleet for $245.0 million, including a maximum $35.0 million earnout, based on gross revenue net of fuel surcharge for the period April 1, 2026, through March 31, 2027. Under a separate agreement, the Company also acquired real estate properties from FirstFleet for $37.8 million. The Company funded these transactions using its cash on hand, existing revolving credit facility and assumed capital leases. The purchase price allocated from this purchase is $220.6 million which values the earnout at $30 million and is net of the assumption of $57.1 million of capital lease liabilities.
The following unaudited pro forma Condensed Combined Balance Sheet (the “Pro forma Balance Sheet”) and the unaudited pro forma Condensed Combined Statement of Comprehensive Income (the “Pro forma Statement of Comprehensive Income” and together with the Pro forma Balance Sheet, the “Statements”), are based on the Company’s historical consolidated financial statements and FirstFleet’s historical combined financial statements as adjusted to give effect to the acquisition and the related financing transaction. The Pro forma Statement of Comprehensive Income for the year ended December 31, 2025 gives effect to these transactions as if they had occurred on January 1, 2025. The Pro forma Balance Sheet as of December 31, 2025 gives effect to these transactions as if they had occurred on December 31, 2025.
The historical consolidated financial information has been adjusted in the Statements to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the Pro forma Statement of Comprehensive Income, expected to have a continuing impact on the combined results following the acquisition. Due to the timing of the acquisition, the Statements, including the pro forma adjustments, are based on a provisional purchase price allocation which includes estimates of the fair value of assets acquired and liabilities assumed as of the date of the acquisition. The determination of estimated fair values requires management to make significant estimates and assumptions based on currently available information. The Company believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed; however, these provisional estimates are preliminary and may be adjusted upon the availability of new information regarding facts and circumstances which existed at the date of the acquisition. The Company expects to finalize the valuation of assets and liabilities as soon as practicable, but not later than one year from the acquisition date.
The Statements are provided for illustrative purposes only. The Statements are not necessarily indicative of what the combined company’s financial condition or results of operations actually would have been had the acquisition been completed as of the date indicated and do not purport to project the future financial condition and operating results of the combined company. The Pro forma Statement of Comprehensive Income does not reflect potential revenue enhancements, cost savings or operating synergies that the Company expects to realize after the acquisition. In addition, the Pro forma Statement of Income does not reflect one-time restructuring or non-recurring integration costs which may be incurred by the Company in connection with the acquisition.
The Statements should be read in conjunction with the accompanying notes. In addition, the Statements were based on and should be read in conjunction with:
•the historical audited consolidated financial statements of the Company as of and for the year ended December 31, 2025, and the related notes included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 26, 2026;
•the historical audited consolidated financial statements of FirstFleet as of and for the fiscal year ended March 31, 2025, and the related notes included in this Current Report on Form 8-K/A as Exhibit 99.1;
•the historical unaudited consolidated financial statements of FirstFleet as of and for the nine month periods ended December 31, 2025 and 2024, and the related notes included in this Current Report on Form 8-K/A as Exhibit 99.2.
WERNER ENTERPRISES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2025
| (In thousands) | Werner Historical | FirstFleet Historical After Reclassifications (Note 2) | Pro Forma Adjustments | Reference | Werner and FirstFleet Combined | ||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 59,922 | $ | — | $ | 132,600 | 4(e) | $ | 15,135 | ||||||||||||||||||||
| (177,387) | (3) | ||||||||||||||||||||||||||||
| Accounts receivable, trade, less allowance | 394,933 | 78,188 | (950) | 4(a) | 472,171 | ||||||||||||||||||||||||
| Other receivables | 20,398 | — | — | 20,398 | |||||||||||||||||||||||||
| Inventories and supplies | 12,104 | 1,934 | — | 14,038 | |||||||||||||||||||||||||
| Prepaid expenses | 57,184 | 8,857 | — | 66,041 | |||||||||||||||||||||||||
| Assets held for sale | 32,643 | — | — | 32,643 | |||||||||||||||||||||||||
| Other current assets | 35,665 | 3,131 | — | 38,796 | |||||||||||||||||||||||||
| Total current assets | 612,849 | 92,110 | (45,737) | 659,222 | |||||||||||||||||||||||||
| Property and equipment, at cost | 2,901,984 | 259,691 | (84,118) | 4(a) | 3,077,557 | ||||||||||||||||||||||||
| Less – accumulated depreciation | 1,111,480 | 139,309 | (139,309) | 4(a) | 1,111,480 | ||||||||||||||||||||||||
| Property and equipment, net | 1,790,504 | 120,382 | 55,191 | 1,966,077 | |||||||||||||||||||||||||
| Goodwill | 129,104 | — | 15,340 | 4(a) | 144,444 | ||||||||||||||||||||||||
| Intangible assets, net | 44,603 | — | 22,600 | 4(a) 4(d) | 67,203 | ||||||||||||||||||||||||
| Finance lease right-of-use assets, net | — | 72,194 | (11,556) | 4(a) | 60,638 | ||||||||||||||||||||||||
| Operating lease right-of-use assets, net | 39,703 | 75,067 | 2,272 | 4(a) | 117,042 | ||||||||||||||||||||||||
| Other non-current assets | 271,911 | 11,715 | (10,876) | 4(a) | 272,750 | ||||||||||||||||||||||||
| Total assets | $ | 2,888,674 | $ | 371,468 | $ | 27,234 | $ | 3,287,376 | |||||||||||||||||||||
| LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||||||||
| Accounts payable | $ | 95,084 | $ | 9,272 | $ | — | $ | 104,356 | |||||||||||||||||||||
| Insurance and claims accruals | 99,827 | 21,518 | 19,600 | 4(a) | 140,945 | ||||||||||||||||||||||||
| Accrued payroll | 51,442 | 7,150 | (24,835) | 4(a) | 33,757 | ||||||||||||||||||||||||
| Accrued expenses | 16,199 | 2,086 | — | 18,285 | |||||||||||||||||||||||||
| Current maturities of operating lease liabilities | 15,451 | 35,880 | — | 51,331 | |||||||||||||||||||||||||
| Current maturities of finance lease liabilities | — | 27,811 | — | 27,811 | |||||||||||||||||||||||||
| Other current liabilities | 36,781 | — | 13,236 | (3) | 50,400 | ||||||||||||||||||||||||
| 383 | 4(f) | ||||||||||||||||||||||||||||
| Total current liabilities | 314,784 | 103,717 | 8,384 | 426,885 | |||||||||||||||||||||||||
| Long-term debt, net of current portion | 752,000 | 14,039 | (14,039) | 4(a) | 884,600 | ||||||||||||||||||||||||
| 132,600 | 4(e) | ||||||||||||||||||||||||||||
| Operating lease liabilities, less current maturities | 26,470 | 40,849 | — | 67,319 | |||||||||||||||||||||||||
| Finance lease liabilities, less current maturities | — | 32,101 | — | 32,101 | |||||||||||||||||||||||||
| Other long-term liabilities | 26,080 | 7,236 | (7,240) | 4(a) | 56,076 | ||||||||||||||||||||||||
| — | 30,000 | (3) | |||||||||||||||||||||||||||
| Insurance and claims accruals, net of current portion | 112,126 | 7,870 | — | 119,996 | |||||||||||||||||||||||||
| Deferred income taxes | 266,209 | 12,909 | — | 279,118 | |||||||||||||||||||||||||
| Total liabilities | 1,497,669 | 218,721 | 149,705 | 1,866,095 | |||||||||||||||||||||||||
| Commitments and contingencies | |||||||||||||||||||||||||||||
| Temporary equity - redeemable noncontrolling interest | 28,113 | 3,623 | (3,623) | 4(g) | 28,113 | ||||||||||||||||||||||||
| (In thousands) | Werner Historical | FirstFleet Historical After Reclassifications (Note 2) | Pro Forma Adjustments | Reference | Werner and FirstFleet Combined | ||||||||||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||||||||||||||
| Common stock | 805 | — | — | 805 | |||||||||||||||||||||||||
| Paid-in capital | 144,641 | — | — | 144,641 | |||||||||||||||||||||||||
| Retained earnings | 1,904,572 | 163,124 | (163,124) | 4(g) | 1,934,848 | ||||||||||||||||||||||||
| 30,659 | 4(a) | ||||||||||||||||||||||||||||
| (383) | 4(f) | ||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (16,075) | — | — | (16,075) | |||||||||||||||||||||||||
| Treasury stock, at cost | (671,051) | (14,000) | 14,000 | 4(g) | (671,051) | ||||||||||||||||||||||||
| Total stockholders’ equity | 1,362,892 | 149,124 | (118,848) | 1,393,168 | |||||||||||||||||||||||||
| Total liabilities, temporary equity and stockholders’ equity | $ | 2,888,674 | $ | 371,468 | $ | 27,234 | $ | 3,287,376 | |||||||||||||||||||||
WERNER ENTERPRISES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2025
| (In thousands, except per share amounts) | Werner Historical | FirstFleet Historical After Reclassifications (Note 2) | Pro Forma Adjustments | Reference | Werner and FirstFleet Combined | ||||||||||||||||||||||||
| Operating revenues | $ | 2,974,396 | $ | 618,093 | $ | — | $ | 3,592,489 | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Salaries, wages and benefits | 1,000,825 | 265,300 | (2,700) | 4(b) | 1,263,425 | ||||||||||||||||||||||||
| Fuel | 247,801 | 87,661 | — | 335,462 | |||||||||||||||||||||||||
| Supplies and maintenance | 248,212 | 52,832 | — | 301,044 | |||||||||||||||||||||||||
| Taxes and licenses | 90,472 | 7,531 | — | 98,003 | |||||||||||||||||||||||||
| Insurance and claims | 115,993 | 79,141 | — | 195,134 | |||||||||||||||||||||||||
| Depreciation and amortization | 286,321 | 45,034 | 1,921 | 4(c) | 335,536 | ||||||||||||||||||||||||
| 2,260 | 4(d) | ||||||||||||||||||||||||||||
| Rent and purchased transportation | 902,825 | 57,314 | — | 960,139 | |||||||||||||||||||||||||
| Communications and utilities | 15,863 | 4,873 | — | 20,736 | |||||||||||||||||||||||||
| Restructuring and impairment | 44,225 | — | — | 44,225 | |||||||||||||||||||||||||
| Other | 10,202 | 5,311 | (383) | 4(f) | 15,130 | ||||||||||||||||||||||||
| Total operating expenses | 2,962,739 | 604,997 | 1,098 | 3,568,834 | |||||||||||||||||||||||||
| Operating income | 11,657 | 13,096 | (1,098) | 23,655 | |||||||||||||||||||||||||
| Other expense (income): | |||||||||||||||||||||||||||||
| Interest expense | 39,053 | 3,299 | 6,160 | 4(e) | 48,512 | ||||||||||||||||||||||||
| Interest income | (5,634) | — | — | (5,634) | |||||||||||||||||||||||||
| Loss on investments in equity securities | 68 | — | — | 68 | |||||||||||||||||||||||||
| Earnings from equity method investment | (656) | — | — | (656) | |||||||||||||||||||||||||
| Other | (385) | — | — | (385) | |||||||||||||||||||||||||
| Total other expense, net | 32,446 | 3,299 | 6,160 | 41,905 | |||||||||||||||||||||||||
| Income (loss) before income taxes | (20,789) | 9,797 | (7,258) | (18,250) | |||||||||||||||||||||||||
| Income tax expense | 2,209 | 898 | (250) | 4(i) | 2,857 | ||||||||||||||||||||||||
| Net income (loss) | (22,998) | 8,899 | (7,008) | (21,107) | |||||||||||||||||||||||||
| Net loss (income) attributable to noncontrolling interest | 8,599 | (4,830) | 4,830 | 4(h) | 8,599 | ||||||||||||||||||||||||
| Net income (loss) attributable to Werner | $ | (14,399) | $ | 4,069 | $ | (2,178) | $ | (12,508) | |||||||||||||||||||||
| Loss per share: | |||||||||||||||||||||||||||||
| Basic | $ | (0.24) | $ | (0.21) | |||||||||||||||||||||||||
| Diluted | $ | (0.24) | $ | (0.21) | |||||||||||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 60,607 | 60,607 | |||||||||||||||||||||||||||
| Diluted | 60,607 | 60,607 | |||||||||||||||||||||||||||
NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(1) BASIS OF PRESENTATION
The Statements are based on the Company’s historical consolidated financial statements and FirstFleet’s historical consolidated financial statements after giving effect to the acquisition, the related financing transactions and the assumptions and adjustments described in the notes herein. Certain financial statement line items included in FirstFleet’s historical presentation have been reclassified in order to conform to the Company’s financial statement line item presentation as described in Note 2 to the Statements.
The Statements have been prepared using the acquisition method of accounting under U.S. generally accepted accounting principles (“GAAP”). Under these accounting standards, the total purchase price was calculated as described in Note 3 to the Statements, and the assets acquired and the liabilities assumed have been presented at their estimated fair values.
(2) RECLASSIFICATION ADJUSTMENTS
Refer to the table below for a summary of reclassification adjustments made to conform the presentation of the FirstFleet Historical Balance Sheet with that of the Werner’s Historical Balance Sheet (in thousands):
| December 31, 2025 | ||||||||||||||||||||||||||
| FirstFleet Historical Balance Sheet Line Item | Werner Historical Balance Sheet Line Item | FirstFleet Balance | Reclassification | FirstFleet Reclassified Balance | ||||||||||||||||||||||
| Cash and cash equivalents | Cash and cash equivalents | $ | — | $ | — | $ | — | |||||||||||||||||||
| Accounts receivable, net | Accounts receivable, trade, less allowance | 78,188 | — | 78,188 | ||||||||||||||||||||||
| Other receivables | — | — | — | |||||||||||||||||||||||
| Inventories and supplies | — | 1,934 | (1) | 1,934 | ||||||||||||||||||||||
| Prepaid expenses | — | 8,857 | (2) | 8,857 | ||||||||||||||||||||||
| Other current assets | Other current assets | 13,922 | (10,791) | (1) (2) | 3,131 | |||||||||||||||||||||
| Property and equipment, at cost | — | 259,691 | (3) | 259,691 | ||||||||||||||||||||||
| Accumulated depreciation | — | (139,309) | (4) | (139,309) | ||||||||||||||||||||||
| Property and equipment, net | 120,382 | (120,382) | (3) (4) | — | ||||||||||||||||||||||
| Finance lease right-of-use assets, net | Finance lease right-of-use assets, net | 72,194 | — | 72,194 | ||||||||||||||||||||||
| Operating lease right-of-use assets, net | Operating lease right-of-use assets, net | 75,067 | — | 75,067 | ||||||||||||||||||||||
| Goodwill | — | — | — | |||||||||||||||||||||||
| Intangible assets, net | — | — | — | |||||||||||||||||||||||
| Other assets | Other non-current assets | 11,715 | — | 11,715 | ||||||||||||||||||||||
| Accounts payable | Accounts payable | 9,272 | — | 9,272 | ||||||||||||||||||||||
| Claims and insurance accruals | Insurance and claims accruals | 21,518 | — | 21,518 | ||||||||||||||||||||||
| Accrued payroll | — | 7,150 | (5) | 7,150 | ||||||||||||||||||||||
| Accrued expenses | Accrued expenses | 9,236 | (7,150) | (5) | 2,086 | |||||||||||||||||||||
| Other current liabilities | — | — | — | |||||||||||||||||||||||
| Current maturities of operating lease liabilities | Current maturities of operating lease liabilities | 35,880 | — | 35,880 | ||||||||||||||||||||||
| Current maturities of finance lease liabilities | Current maturities of finance lease liabilities | 27,811 | — | 27,811 | ||||||||||||||||||||||
| Long-term debt, net of current portion | — | 14,039 | (6) | 14,039 | ||||||||||||||||||||||
| Notes payable | 14,039 | (14,039) | (6) | — | ||||||||||||||||||||||
| Other liabilities | Other long-term liabilities | 15,106 | (7,870) | (7) | 7,236 | |||||||||||||||||||||
| Operating lease liabilities, less current maturities | Operating lease liabilities, less current maturities | 40,849 | — | 40,849 | ||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| FirstFleet Historical Balance Sheet Line Item | Werner Historical Balance Sheet Line Item | FirstFleet Balance | Reclassification | FirstFleet Reclassified Balance | ||||||||||||||||||||||
| Finance lease liabilities, less current maturities | Finance lease liabilities, less current maturities | 32,101 | — | 32,101 | ||||||||||||||||||||||
| Insurance and claims accruals, net of current portion | — | 7,870 | (7) | 7,870 | ||||||||||||||||||||||
| Deferred tax liability | Deferred income taxes | 12,909 | — | 12,909 | ||||||||||||||||||||||
| Commitments and contingencies | — | — | — | |||||||||||||||||||||||
| Temporary equity - redeemable noncontrolling interest | 3,623 | — | 3,623 | |||||||||||||||||||||||
| Common stock | — | — | — | |||||||||||||||||||||||
| Paid-in capital | — | — | — | |||||||||||||||||||||||
| Retained earnings | 163,124 | — | 163,124 | |||||||||||||||||||||||
| Accumulated other comprehensive loss | — | — | — | |||||||||||||||||||||||
| Treasury stock, at cost | (14,000) | — | (14,000) | |||||||||||||||||||||||
(1) Reclassification of $1,934 of other current assets to inventories and supplies.
(2) Reclassification of $8,857 of other current assets to prepaid expenses.
(3) Reclassification of $259,691 of property and equipment, net to property and equipment, at cost.
(4) Reclassification of $139,309 of property and equipment, net to accumulated depreciation.
(5) Reclassification of $7,150 of accrued expenses to accrued payroll.
(6) Reclassification of $14,039 of notes payable to long-term debt, net of current portion.
(7) Reclassification of $7,870 of other liabilities to insurance and claims accruals, net of current portion.
Refer to the table below for a summary of reclassification adjustments made to conform the presentation of the FirstFleet Historical Statement of Income with that of the Werner’s Historical Statement of Income (in thousands):
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||
| FirstFleet Historical Statement of Income Line Item | Werner Historical Statement of Income Line Item | FirstFleet Balance | Reclassification | FirstFleet Reclassified Balance | ||||||||||||||||||||||
| Revenue | Operating revenues | 618,093 | — | 618,093 | ||||||||||||||||||||||
| Wages and benefits | Salaries, wages and benefits | 265,300 | — | 265,300 | ||||||||||||||||||||||
| Fuel | — | 87,661 | (1) | 87,661 | ||||||||||||||||||||||
| Supplies and maintenance | — | 52,832 | (2) | 52,832 | ||||||||||||||||||||||
| Fuel and operating supplies | 140,493 | (140,493) | (1) (2) | — | ||||||||||||||||||||||
| Operating taxes and licenses | Taxes and licenses | 7,531 | — | 7,531 | ||||||||||||||||||||||
| Claims and insurance | Insurance and claims | 79,141 | — | 79,141 | ||||||||||||||||||||||
| Depreciation and amortization | Depreciation and amortization | 45,034 | — | 45,034 | ||||||||||||||||||||||
| Rent and lease expense | Rent and purchased transportation | 44,616 | 12,698 | (3) | 57,314 | |||||||||||||||||||||
| Purchased transportation | 12,698 | (12,698) | (3) | — | ||||||||||||||||||||||
| Communications and utilities | Communications and utilities | 4,873 | — | 4,873 | ||||||||||||||||||||||
| Restructuring and impairment | — | — | — | |||||||||||||||||||||||
| Other | — | 5,311 | (4) | 5,311 | ||||||||||||||||||||||
| Gain on disposals of property and equipment | (5,229) | 5,229 | (4) (5) | — | ||||||||||||||||||||||
| General supplies and other operating expenses | 10,540 | (10,540) | (5) | — | ||||||||||||||||||||||
| Interest expense | Interest expense | 3,299 | — | 3,299 | ||||||||||||||||||||||
| Interest income | — | — | — | |||||||||||||||||||||||
| Loss on investments in equity securities | — | — | — | |||||||||||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||
| FirstFleet Historical Statement of Income Line Item | Werner Historical Statement of Income Line Item | FirstFleet Balance | Reclassification | FirstFleet Reclassified Balance | ||||||||||||||||||||||
| Earnings from equity method investment | — | — | — | |||||||||||||||||||||||
| Other | — | — | — | |||||||||||||||||||||||
| Provision for income taxes | Income tax expense | 898 | — | 898 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest | Net loss attributable to noncontrolling interest | (4,830) | — | (4,830) | ||||||||||||||||||||||
(1) Reclassification of $87,661 of fuel and operating supplies to fuel.
(2) Reclassification of $52,832 of fuel and operating supplies to supplies and maintenance.
(3) Reclassification of $12,698 of purchased transportation to rent and purchased transportation.
(4) Reclassification of $5,229 of gain on disposals of property and equipment to other.
(5) Reclassification of $10,540 of general supplies and other operating expenses to other.
(3) PROVISIONAL PURCHASE PRICE ALLOCATION
The provisional purchase price has been allocated to the tangible and intangible assets and liabilities of FirstFleet based on their estimated fair values. The amounts and components of the provisional purchase price are presented in the table below (in thousands):
The provisional purchase price allocation for FirstFleet is summarized as follows (in thousands):
| Provisional Purchase Price | |||||
Cash consideration paid at closing | $ | 177,387 | |||
Contingent consideration arrangement | 30,000 | ||||
| Deferred cash payments | 13,236 | ||||
Total provisional purchase price (fair value of consideration) | $ | 220,623 | |||
| Provisional Purchase Price Allocation (a) | ||||||||
| Accounts receivable, trade, less allowance | $ | 77,250 | ||||||
| Inventories and supplies | 1,927 | |||||||
| Prepaid expenses | 8,007 | |||||||
| Other current assets | 3,130 | |||||||
| Property and equipment, at cost | 175,573 | |||||||
| Accumulated depreciation | — | |||||||
| Goodwill | 15,340 | |||||||
| Intangible assets | 22,600 | |||||||
| Finance lease right-of-use assets, net | 57,195 | |||||||
| Operating lease right-of-use assets, net | 74,230 | |||||||
| Other non-current assets | 873 | |||||||
| Total assets acquired | 436,125 | |||||||
| Accounts payable | 10,464 | |||||||
| Insurance and claims accruals | 34,028 | |||||||
| Accrued payroll | 16,035 | |||||||
| Accrued expenses | 2,721 | |||||||
| Current maturities of operating lease liabilities | 35,627 | |||||||
| Current maturities of finance lease liabilities | 26,900 | |||||||
| Other current liabilities | 50 | |||||||
| Provisional Purchase Price Allocation (a) | ||||||||
| Long-term debt, net of current portion | — | |||||||
| Operating lease liabilities, less current maturities | 38,602 | |||||||
| Finance lease liabilities, less current maturities | 30,296 | |||||||
| Other long-term liabilities | — | |||||||
| Insurance and claims accruals, net of current portion | 7,870 | |||||||
| Deferred income taxes | 12,909 | |||||||
| Total liabilities assumed | 215,502 | |||||||
| Total provisional purchase price allocated | $ | 220,623 | ||||||
(1) FirstFleet historical balances as of December 31, 2025, after giving effect to reclassifications. See Note 2 for reclassification details.
(4) PRO FORMA ADJUSTMENTS
Adjustments under the heading “Pro Forma Adjustments” in the accompanying Statements represent the following:
(a) Reflects the recording of the acquisition under the acquisition method of accounting. The total provisional purchase price has been allocated to the tangible and intangible assets and liabilities of FirstFleet based on their estimated fair values. The amounts and components of the provisional purchase price, along with the provisional allocation of the purchase price are presented in Note 3.
(b) Reflects payroll removed for employees who were part of business operations not subject to the purchase agreement.
(c) The Company has preliminarily allocated $175.6 million of the purchase price to property and equipment. The estimated fair values of property and equipment were determined, with the assistance of an independent third-party valuation firm, using the cost approach supported where available by observable market data, which includes consideration of functional and economic obsolescence. The Company estimated the weighted average useful lives of the assets based on the current condition and expected future use of the assets.
The following table summarizes the major classes of property and equipment and the respective weighted-average estimated useful lives using a straight-line method of depreciation and amortization (in thousands):
| Estimated Fair Value | Weighted- Average Estimated Useful Life (Years) | Year Ended December 31, 2025 Depreciation and Amortization Expense | |||||||||||||||
| Land | $ | 16,155 | N/A | N/A | |||||||||||||
| Buildings and improvements | 21,597 | 30.0 | 720 | ||||||||||||||
Revenue equipment | 130,585 | 2.9 | 45,029 | ||||||||||||||
Service equipment and other | 7,236 | 6.0 | 1,206 | ||||||||||||||
| $ | 175,573 | 46,955 | |||||||||||||||
| Less: FirstFleet’s historical depreciation and amortization expense | (45,034) | ||||||||||||||||
Pro forma adjustment | $ | 1,921 | |||||||||||||||
A hypothetical change of 10% in the valuation of property and equipment would result in a corresponding increase or decrease in depreciation and amortization expense of $4.7 million for the year ended December 31, 2025. Any changes to the initial fair value estimates will be recorded as adjustments to property and equipment with the residual amounts allocated to goodwill.
(d) The Company has preliminarily allocated $22.6 million of the purchase price to intangible assets, consisting of customer relationships. The estimated fair values of intangible assets were determined, with the assistance of an independent third-party valuation firm, using the multi-period excess earnings method for customer relationships. The method is a form of the income approach, which requires a forecast of all the expected future cash flows.
The following table summarizes the intangible assets and the respective weighted-average estimated amortization period (in thousands):
| Estimated Fair Value | Weighted- Average Estimated Useful Life (Years) | Year Ended December 31, 2025 Amortization Expense | |||||||||||||||
| Customer relationships | $ | 22,600 | 10.0 | $ | 2,260 | ||||||||||||
Pro forma adjustments | $ | 22,600 | 2,260 | ||||||||||||||
A hypothetical change of 10% in the valuation of intangible assets would result in a corresponding increase or decrease in amortization expense of $0.2 million for the year ended December 31, 2025. Any changes to the initial fair value estimates will be recorded as adjustments to intangible assets with the residual amounts allocated to goodwill.
(e) The Company borrowed $132.6 million under its existing unsecured credit facility to fund a portion of the cash consideration paid in the acquisition. In connection with the completion of the acquisition, the note payable owed by FirstFleet was repaid by the Company.
The following table summarizes the net increase to interest expense resulting from the additional debt incurred to finance a portion of the cash consideration paid in the acquisition, less the effects of repaying FirstFleet’s note payable and deferred compensation plan in connection with the completion of the acquisition (in thousands):
| Year Ended December 31, 2025 | |||||
Interest expense for the revolving credit facility borrowing | $ | 7,147 | |||
Elimination of interest expense for FirstFleet’s note payable | (277) | ||||
Elimination of interest expense for FirstFleet’s deferred compensation plan | (710) | ||||
Pro forma adjustments | $ | 6,160 | |||
The interest expense for the year ended December 31, 2025 was calculated using an estimated interest rate of 5.39%, which represents the actual aggregate effective interest rate on the Company’s unsecured credit facility as of December 31, 2025. The variable interest rate on the unsecured credit facility is based on one-month Term Secured Overnight Financing Rate, plus a margin. A hypothetical 1/8 percent increase or decrease in the annual interest rate would result in a charge in the pre-tax interest expense of $0.2 million for the year ended December 31, 2025.
(f) Reflects $0.4 million of liabilities recorded for the Company’s estimated transaction costs directly attributable to the acquisition. These estimated transaction costs, which are directly attributable to the acquisition, are not reflected in the Pro Forma Statement of Income, as these costs will not have an ongoing impact.
(g) The historical equity accounts, including the temporary equity - redeemable noncontrolling interest, for FirstFleet were eliminated as a result of the acquisition.
(h) Reflects the removal of the reduction of net income attributable to noncontrolling interest. The Company acquired real estate properties from the noncontrolling interest of FirstFleet under a separate agreement which was used to generate the net income attributable to noncontrolling interest.
(i) Reflects 25.5% effective tax rate applied to pro forma adjustments and historical FirstFleet net income.
FAQ
How much did Werner Enterprises (WERN) pay to acquire FirstEnterprises/FirstFleet?
Werner acquired FirstEnterprises, Inc. for $245.0 million in cash, including a maximum $35.0 million earnout tied to revenue from April 1, 2026 through March 31, 2027. Under a separate agreement, Werner also bought related real estate for an additional $37.8 million.
What were FirstEnterprises/FirstFleet’s most recent annual financial results before Werner’s acquisition (WERN)?
For the year ended March 30, 2025, FirstEnterprises generated $631.98 million in revenue and $10.49 million in net income. Net income attributable to the company was $7.66 million, with the remainder attributable to noncontrolling interests, reflecting its transportation and supply chain operations.
How large is FirstEnterprises/FirstFleet in Werner’s pro forma 2025 revenue base (WERN)?
On a pro forma basis for 2025, Werner’s operating revenues are $3.59 billion, including FirstFleet’s $618.09 million of operating revenues. This shows FirstFleet as a meaningful contributor to the combined company’s scale within dedicated transportation and related logistics services.
What key assets did Werner (WERN) recognize from the FirstFleet acquisition?
Werner preliminarily allocated $175.57 million to property and equipment and $22.60 million to customer relationship intangibles, plus $15.34 million to goodwill. It also recognized finance and operating lease right-of-use assets, reflecting FirstFleet’s leased equipment and facilities portfolio.
How was the FirstFleet acquisition financed by Werner Enterprises (WERN)?
Werner funded the FirstFleet acquisition using its cash on hand, its existing revolving credit facility, and assumed approximately $57.0 million of finance leases. Pro forma adjustments show an additional $6.16 million of annual interest expense linked to the incremental borrowing to complete the transaction.
What is the structure of the earnout in Werner’s (WERN) FirstFleet deal?
The transaction includes an earnout payment up to $35.0 million, based on gross revenue net of fuel surcharge for April 1, 2026 through March 31, 2027. For accounting, Werner currently values this contingent consideration at $30.0 million within the provisional purchase price allocation.