Slide 1: 4Q22 and Full Year 2022 Earnings Presentation
4Q22 AND FULL YEAR 2022 EARNINGS PRESENTATION 1
Slide 2: Disclosure Statement
DISCLOSURE STATEMENT This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Lit
Slide 3: Werner Overview (WERN)
WERNER OVERVIEW (WERN) 67 YEARS IN BUSINESS OMAHA, NE HEADQUARTERS 15% 15% % OF WERNER COMPANY WERNER COMPANY DRIVERS WHO ARE WOMEN DRIVERS WITH MILITARY (DOUBLE THE INDUSTRY AVERAGE) EXPERIENCE QUALIFIED 70,000+ CARRIER LOGISTICS RELATIONSHIPS $3.1B1 1.0% 14,5951 MARKET CAP DIVIDEND YIELD ASSOCIATE
Slide 4: 4Q 2022 and 2022 Financial Highlights
4Q 2022 AND 2022 FINANCIAL HIGHLIGHTS STRATEGIC UPDATES AND 4Q22 vs. 4Q21 2022 vs. 2021 NOTABLE DEVELOPMENTS Revenues +13% to $861M +20% to $3.3B • Record annual adjusted EPS GAAP EPS (18)% to $0.94 (2)% to $3.74 • Solid freight demand in Dedicated and seasonally weaker Adjusted EPS1 (13)% to $0.99
Slide 5: Business Overview
BUSINESS OVERVIEW
Slide 6: Werner Drive: Building on 5Ts and Shaping Our Future
WERNER DRIVE SM Building on 5Ts and Shaping Our Future 6
Slide 7: 2022 Revenues Snapshot
2022 REVENUES SNAPSHOT DURABLE TTS FLEET 5,4501 3,1501 8,6001 DEDICATED ONE-WAY TRUCKLOAD TTS TRUCKS 2022 Revenues by Segment 2022 Revenues by Vertical 2022 Revenues by Customer Top 50 Customers 2% Retail 60% Top 5 35% 24% $3.3B Manufacturing & 17% Top 10 46% TOTAL 74% Industrial REVENUES Food & 15%
Slide 8: 4Q 2022 Results
4Q 2022 RESULTS TOTAL REVENUES ($M) ADJUSTED OPERATING INCOME1 ($M) ADJUSTED EPS1 AND ADJUSTED OPERATING MARGIN1 25.0% $1.20 $1.13 $4.50 $861 $101.1 $120.0 Qtr Adj EPS $0.99 $765 $89.9 $4.00 $110.0 $1.00 $0.89 $82.7 4 Qtr Rolling Adj EPS $100.0 20.0% $620 $3.50 $90.0 $80.0 $0.80 15.0% $3.00 $0.60 $7
Slide 9: 4Q22 Truckload Transportation Services (TTS) Results
4Q22 TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 4Q20 4Q21 4Q22 4Q22 vs. 4Q21 Revenues ($M) $475.0 $563.2 $634.8 13% Adjusted Operating Income1 ($M) $79.9 $90.0 $83.1 (8)% Adjusted Operating Margin1, 2 18.2% 18.2% 15.8% (240) bps Adjusted Operating Ratio1, 2 81.8% 81.8% 84.2% 240 bps YoY COMMENT
Slide 10: TTS Fleet Metrics Update
TTS1 FLEET METRICS UPDATE TRUCKING REVENUES2 ($M) AVERAGE TRUCKS REVENUES / TRUCK / WEEK2 DEDICATED TRUCKLOAD $1,217 5,417 $973 $1,078 4,872 5,225 4,661 5,040 5,284 $4,075 $4,287 $4,501 $4,012 $4,116 $4,428 $258 $291 $317 4Q20 4Q21 4Q22 2020 2021 2022 4Q20 4Q21 4Q22 2020 2021 2022 4Q20 4Q21 4Q22 202
Slide 11: 4Q22 Werner Logistics Results
4Q22 WERNER LOGISTICS RESULTS 4Q20 4Q21 4Q22 4Q22 vs. 4Q21 Revenues ($M) $130.1 $185.0 $213.5 15% Revenues, less purchased $16.2 $29.5 $39.0 32% transportation expense ($M) Adjusted Operating Income ($M)1 $2.6 $11.9 $8.0 (32)% Adjusted Operating Margin1 2.0% 6.4% 3.8% (260) bps YoY COMMENTARY (4Q22
Slide 12: Innovation
INNOVATION ADAPTING TO A DYNAMIC SUPPLY CHAIN THROUGH ENTERPRISE-WIDE TECHNOLOGY TRANSFORMATION ‘CLOUD FIRST, CLOUD NOW’ ADVANTAGE FUTURE Transform Systems, Processes and Teams Invest In Our Differentiation, Driver, Shipper and Carrier A Culture of Innovation • Modernizing tech stack by implementing
Slide 13: Werner Values
WERNER VALUES • Recorded the lowest DOT preventable accident rate per million miles at Werner in the last 10 years • Achieved the lowest work injury rate in the last 17 years • Drove leadership changes at the Board level over the last two years (5 of 9 board seats changed since Nov. 2020), resulting
Slide 14: Recent Progress of Our ESG Initiatives
RECENT PROGRESS OF OUR ESG INITIATIVES 4Q 2022 • Investing in numerous new technologies including but not limited to EVs (receiving the first two of 10 eCascadia trucks in 1Q23), ICE hydrogen truck and new CNG engines • Entered into a partnership with Cummins, Navistar and DOE on a Hydrogen Fuel Cel
Slide 15: Strong Balance Sheet
STRONG BALANCE SHEET HEALTHY BALANCE SHEET PROVIDES OPTIONALITY DEBT MATURITY SCHEDULE $600 Total Credit Capacity* $1,110M $88 Debt $694M $6 2022 2023 2024 2025 2026 2027 Unused Credit Capacity $416M Cash $107M Liquidity $523M NET DEBT TO LTM EBITDA 1.0x Net Debt $587M 0.6x 0.6x 0.3x 0.2x 2018 2019
Slide 16: Robust FCF Generation
ROBUST FCF GENERATION ($1M) $446 $449 $418 $427 COMMENTARY $349 $333 $318 • FCF generation of $131M in 2022 $284 $266 • 2023 Net CapEx expected to be in the range of $350M to $400M; over the long-term, targeting $193 Net CapEx at 11-13% of annual revenues $180 $143 $140 $131 $69 2018 2019 2020 2021
Slide 17: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION PRIORITIES CAPITAL ALLOCATION HISTORY Continual and Consistent Investment in the Business 2018-2022 • Reinvestments in new, feature-rich trucks and trailers, including the latest safety technology, that extend sustainable competitive advantages for customers and driver
Slide 18: Recent M&A Strengthens Portfolio Durability
RECENT M&A STRENGTHENS PORTFOLIO DURABILITY ANNUAL REVENUES ACQUISITION DATE (At Time of Acquisition) STRATEGIC BENEFITS • Expanded terminal, fleet, and driver footprint in the strategic Mid-Atlantic and Ohio, Northeast regions 7/1/21 $108M1 • Added over 500 skilled drivers, nearly 500 trucks, 2,000
Slide 19: Introducing 2023 Guidance
INTRODUCING 2023 GUIDANCE PRIOR GUIDANCE 2022 ACTUAL 2023 NEW GUIDANCE COMMENTARY (As of 11/2/22) (As of 12/31/22) (As of 2/7/23) 2022 GUIDANCE 3% to 5% 3% 1% to 4% Majority of 2023 growth planned for TTS truck growth from BoY to EoY (annual) (2022) (annual) Dedicated and back half weighted $300M to
Slide 20: 2023 Market Outlook and Modeling Assumptions
2023 MARKET OUTLOOK AND MODELING ASSUMPTIONS 2023 MARKET OUTLOOK MODELING ASSUMPTIONS • Freight demand steady in Dedicated and softer than normal in One- • Annual interest expense increases by $20M in 2023 with higher Way and Logistics, especially in 1H23, then improving in 2H23 interest rates on va
Slide 21: Q&A
Q&A
Slide 22: Invest With Us
INVEST WITH US • Positioned to navigate the dynamic truckload freight market • Large, stable and growing Dedicated fleet with winning customers, superior on-time service and a passionate driver force • Diversified One-Way fleet with strategic focus on MX cross-border, engineered lanes, team expedite
Slide 23: Reconciliation of Non-GAAP Financial Measures – Consolidated
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (Unaudited) (In thousands) 23
Slide 24: Reconciliation of Non-GAAP Financial Measures – Consolidated (continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (continued) (Unaudited) (In thousands, except per share amounts) 24
Slide 25: Reconciliation of Non-GAAP Financial Measures – Consolidated (continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (continued) (Unaudited) (In thousands, except per share amounts) 25
Slide 26: Reconciliation of Non-GAAP Financial Measures – Consolidated (continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (continued) (Unaudited) (In thousands, except per share amounts) 26
Slide 27: Reconciliation of Non-GAAP Financial Measures – Consolidated (continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (continued) (Unaudited) (In thousands, except per share amounts) 27
Slide 28: Reconciliation of Non-GAAP Financial Measures – TTS Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT (Unaudited) (In thousands) 28
Slide 29: Reconciliation of Non-GAAP Financial Measures – TTS Segment (continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT (continued) (Unaudited) (In thousands) 29
Slide 30: Reconciliation of Non-GAAP Financial Measures – Werner Logistics Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – WERNER LOGISTICS SEGMENT (Unaudited) (In thousands) 30
Slide 31: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 31
Slide 32: Thank You
THANK YOU FOR MORE INFORMATION, VISIT WERNER.COM