Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — Stifel 2020 Transportation & Logistics Conference
18 slides from Werner Enterprises's conference presentation, Feb 11, 2020
Slide 1: Stifel 2020 Transportation & Logistics Conference
STIFEL 2020 TRANSPORTATION & LOGISTICS CONFERENCE February 11, 2020
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
WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider 2019 Revenues by Segment Headquarters Omaha, NE 3% Truckload Transportation Services (TTS) 3 20% Market Cap1 $2.6B Werner Logistics Driver Training Schools and Other 77% Dedicated 4,630 Fleet Size1 One-Way 2019 Revenues b
Slide 4: Comprehensive, Customer Focused Solutions
COMPREHENSIVE, CUSTOMER FOCUSED SOLUTIONS 4,630 Trucks (58%) 3,370 Trucks (42%) ▪ Brokerage ▪ DC to store replenishment ▪ Dry Van ▪ Freight Management ▪ Engineered fleets ▪ Expedited ▪ Intermodal ▪ Private fleet conversion ▪ Cross Border ▪ Global ▪ Specialty equipment ▪ Temp Control ▪ Final Mile 4
Slide 5: Five T's Strategy Execution
FIVE T’S STRATEGY EXECUTION 01 Trucks ▪ Truck age increased slightly to 1.9 years 02 Trailers ▪ Trailer age maintained at 4.0 years ▪ Utilizing performance pay and metrics to drive performance and 03 Talent attract/retain high performing talent ▪ Upgraded and expanded our terminal network to improve
Slide 6: 4Q19 and Full Year 2019 Highlights
4Q19 AND FULL YEAR 2019 HIGHLIGHTS ▪ Revenues decreased 4% to $622M 4Q19 ▪ GAAP EPS decreased 9% to $0.70 Financial ▪ Adj. EPS decreased 11% to $0.67 Highlights ▪ Adj. operating income decreased 14% to $63.4M ▪ Adj. operating margin decreased 120 bps to 10.2% ▪ Revenues increased $6M to $2,464M ▪ GA
Slide 7: 4Q 2019 Financial Performance
4Q 2019 FINANCIAL PERFORMANCE Total Revenues ($M) Adjusted Operating Income ($M) Adjusted EPS and Operating Margin $80 0 $73.6 20. 0% $79 0 $78 0 $77 0 $76 0 $63.4 $0.75 $75 0 $70 .0 $74 0 $73 0 $646 $72 0 18. 0% $71 0 $622 $70 0 $69 0 $68 0 $0.67 $67 0 $66 0 $65 0 $64 0 $60 .0 16. 0% $63 0 $62 0 $6
Slide 8: Full Year 2019 Financial Performance
FULL YEAR 2019 FINANCIAL PERFORMANCE Total Revenues ($M) Adjusted Operating Income ($M) Adjusted EPS and Operating Margin $3, 000 $2, 990 $2, 980 $2, 970 $2, 960 $25 0.0 $24 0.0 $228.6 $225.9 20. 0% $2.39 $2, 950 $2.38 $2, 940 $2, 930 $2, 920 $23 0.0 $2, 910 $2, 900 $2, 890 $2, 880 $2, 870 $2, 860 1
Slide 9: Truckload Transportation Services (TTS) Results
TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS Change 4Q18 4Q19 YoY Revenues ($M) $494.7 $486.6 (2)% ▪ TTS RPTPW (1.8%); due to lower miles per truck offset partially by slightly higher RPTM Adj. Op. Income ($M) $68.0 $60.4 (11)% ▪ Strength and operational execution of Dedicated fleet (58% of total
Slide 10: TTS Fleet Metrics Update
TTS1 FLEET METRICS UPDATE Dedicated Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $1,0 00 $914 4,593 4,472 4,693 4,277 $3,827 $3,888 $90 0 $817 $3,673 $3,703 $80 0 $70 0 $60 0 $50 0 $40 0 $30 0 $215 $237 $20 0 $10 0 $- 2018 2019 4Q18 4Q19 2018 2019 4Q18 4Q19 2018 2019 4Q1
Slide 11: Werner Logistics Results
WERNER LOGISTICS RESULTS Change 4Q18 4Q19 YoY Revenues ($M) $137.2 $120.1 (12)% ▪ Truckload Logistics (65% of total) had a 12% revenues decline due to a softer freight market and increased market competition Gross Margin 16.8% 15.3% (150) bps ▪ Fewer transactional opportunities and increased market
Slide 12: Strong FCF Generation in 2019, Expected to Continue
STRONG FCF GENERATION IN 2019, EXPECTED TO CONTINUE ($M) $430 $427 $418 ▪ 2020 Net CapEx expected to be in $370 $351 $349 the range of $260M to $300M; over the long term, targeting Net CapEx $310 at 11-13% of gross revenues $283 $284 ▪ Investment in 2019 focused on $199 continued IT modernization, $
Slide 13: Effectively Navigating the Last 2 TL Cycles After Implementing the 5 T's Strategy
WERN: EFFECTIVELY NAVIGATING THE LAST 2 TL CYCLES AFTER IMPLEMENTING THE 5 T’S STRATEGY IN THE 15/16 CYCLE Adjusted EPS growth Down Up Down Cycle Cycle Cycle 2015/2016 2017/2018 2018/2019 WERN (36%) 87% 0% KNX(1) (10%) 90% (15%) SNDR (4%) 65% (20%) HTLD (19%) 70% 1% (1) KNX/SWFT for 2015 and 2016 da
Slide 14: 2020 Guidance
2020 GUIDANCE 2020 GUIDANCE COMMENTS TTS Truck Growth from With flat to slightly lower truck count in 1H 2020 (3%) to 1% Year-End 2019 due to current market conditions Equipment gains expected to be lower in 2020 than Gains on Sales of Equipment $6M to $12M 2019 due to softer used equipment market a
Slide 15: Summary – Invest With Us
SUMMARY – INVEST WITH US We have Heavy capex New fleet, Long-term We are a balanced our period behind us; updated terminal margin and stronger, better revenue portfolio current capex network, return positioned toward more normalized; free enhanced fleet expectations company than we consistent cash f
Slide 16: Appendix
WERNER WE KEEP AMERICA MOvinge APPENDIX
Slide 17: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Operating revenues $ 621,787 $ 646,365 $ 2,463,701 $ 2,457,914 Operating expenses 556,133 571,434 2,238,229 2,233,699 Adjusted for: Insuran
Slide 18: For more information visit Werner.com
WERNE WE KEEP AMERICA MOvinge For more information visit Werner.com | LY fin} S|
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