Slide 1: 4Q23 and Full Year 2023 Earnings Presentation
4Q23 AND FULL YEAR 2023 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: Business Overview
BUSINESS OVERVIEW DEREK LEATHERS Chairman and Chief Executive Officer
Slide 4: Werner Overview (WERN)
WERNER OVERVIEW (WERN) 6TH 68 2,200 TOTAL DRIVERS IN COMPANY YEARS IN OMAHA, NE LARGEST HISTORY WITH ONE MILLION OR MORE SAFE DRIVING BUSINESS HEADQUARTERS DEDICATED CARRIER IN U.S.3 MILES WITH WERNER 5,2654 DEDICATED > 93% DEDICATED CUSTOMER 2,7354 ONE-WAY TRUCKLOAD $2.5B1 1.4%1 14,0692 8,0004 TTS
Slide 5: Werner Drive supported execution of strategic priorities in 2023
WERNER DRIVESM SUPPORTED EXECUTION OF STRATEGIC PRIORITIES IN 2023 Dedicated revenue per truck grew for the 9th year out of last 10, DURABLE and operating margin within long-term TTS target range Executed cost structural changes across organization, RESULTS yielding $43M in savings Disciplined inves
Slide 6: 4Q23 and FY23 Financial Highlights
4Q23 AND FY23 FINANCIAL HIGHLIGHTS 4Q23 2023 YoY Change YoY Change HIGHLIGHTS Revenues $822M $3,283M • Dedicated segment performed as expected; (5)% (-0.2)% growing revenue per truck YoY, and extending growth to seven consecutive years, and nine of the last 10 GAAP EPS $0.37 $1.76 (61)% (53)% • Furt
Slide 7: 2024 Market Outlook
2024 MARKET OUTLOOK • Freight demand steady in Dedicated, seasonally weaker in One-Way and Logistics in early 2024 before improving in 2H24 • Consumers continue to be value conscious on household and discretionary spending • Carriers continue exiting the market in 1H24 with low spot freight rates co
Slide 8: Financial Results
FINANCIAL RESULTS CHRIS WIKOFF Executive Vice President, Treasurer and Chief Financial Officer
Slide 9: 4Q23 Results
4Q23 RESULTS ADJUSTED OPERATING INCOME1 ($M) TOTAL REVENUES ($M) AND ADJUSTED OPERATING MARGIN1 ADJUSTED EPS1 25. 0% $861 $12 0.0 $11 0.0 $101.1 $10 0.0 $89.9 20. 0% $1.13 $822 $0.99 $1. 20 $90 .0 $80 .0 $1. 00 15. 0% $70 .0 $0. 80 $60 .0 $765 $50 .0 13.2% $39.2 10. 0% $0.39 $0. 60 $40 .0 $30 .0 10.
Slide 10: 4Q23 Truckload Transportation Services (TTS) Results
4Q23 TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 4Q21 4Q22 4Q23 4Q23 vs. 4Q22 Revenues ($M) $563.2 $634.8 $580.1 (9)% Revenues, net of fuel surcharges ($M) $494.7 $525.2 $495.4 (6)% Adjusted Operating Income1 ($M) $90.0 $83.1 $37.2 (55)% Adjusted Operating Margin1, 2 18.2% 15.8% 7.5% (830) bps A
Slide 11: TTS Fleet Metrics Update
TTS1 FLEET METRICS UPDATE TRUCKING REVENUES2 ($M) AVERAGE TRUCKS REVENUES / TRUCK / WEEK2 DEDICATED TRUCKLOAD $1,217 $1,236 $1,078 5,225 5,417 5,239 5,040 5,284 5,284 $4,287 $4,501 $4,541 $4,116 $4,428 $4,496 $291 $317 $309 4Q21 4Q22 4Q23 2021 2022 2023 4Q21 4Q22 4Q23 2021 2022 2023 4Q21 4Q22 4Q23 2
Slide 12: 4Q23 Werner Logistics Results
4Q23 WERNER LOGISTICS RESULTS 4Q21 4Q22 4Q23 4Q23 vs. 4Q22 Revenues ($M) $185.0 $213.5 $227.0 6% Revenues, less purchased $29.5 $39.0 $33.8 (13)% transportation expense ($M) Adjusted Operating Income ($M)1 $11.9 $8.0 $3.0 (62)% Adjusted Operating Margin1 6.4% 3.8% 1.3% (250) bps YoY COMMENTARY (4Q23
Slide 13: Cost Savings Program Yields Significant Savings in 2023
COST SAVINGS PROGRAM YIELDS SIGNIFCANT SAVINGS IN 2023 WITH FURTHER REDUCTIONS IDENTIFIED FOR 2024 COST CONTAINMENT Salaries and Wages FOCUS & DISCIPLINE 2023 Driver Turnover and Recruiting $43M Fuel Efficiency • Focused discipline across all Savings Supplies and Maintenance business lines Other • E
Slide 14: Strong Capital & Cash Flow Generation
STRONG CAPITAL & CASH FLOW GENERATION CASH FLOW LIQUIDITY1 ($ millions) ($ millions) $474 $446 $449 $427 $409 Cash, $62 $333 $318 $284 $266 $193 $526 $180 Total Liquidity $140 $131 $143 Available $66 Credit, $464 2019 2020 2021 2022 2023 2 Op. CF Net CapEx FCF SOLID CASH FLOW & LIQUIDITY • Record fu
Slide 15: Historical Spend on Capital Investments
HISTORICAL SPEND ON CAPITAL INVESTMENTS Net Capital Expenditures ($M) and Percent of Revenue DISCIPLINED CAPITAL INVESTMENT $409 2023: $317 $284 $260-$310 • Elevated fleet reinvestment $266 • Lowered average equipment age 11.5% $193 12.5% 11.2% • Improved maintenance expense and reliability 9.6% 202
Slide 16: Flexible Debt and Low Leverage
FLEXIBLE DEBT AND LOW LEVERAGE DEBT MATURITY SCHEDULE NET DEBT TO LTM EBITDA1 ($ millions) $560 1.2x 1.0x 0.6x 0.6x 0.3x $89 2024 2025 2026 2027 2028 2019 2020 2021 2022 2023 HEALTHY BALANCE SHEET • $649M Debt; down $45M YoY ($587M Net Debt) • 57% effectively-fixed rate debt • Long-term, low-cost ca
Slide 17: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION PRIORITIES CAPITAL ALLOCATION HISTORY 2019-2023 Strategic Reinvestment for Long-Term Growth • Reinvestments to maintain low-age, safe and modern trucks and trailers Share • Growth investments, including Technology and Terminals Buybacks 12% Return Value to Shareholders
Slide 18: Introducing 2024 Guidance
INTRODUCING 2024 GUIDANCE 2023 Guidance 2023 Actual 2024 Guidance (as of 11/1/23) (as of 12/31/23) (as of 2/6/24) 2024 GUIDANCE TTS Truck Count from BoY to EoY (5)% to (3)% (7)% (3)% to 0% (annual) (2023) (annual) Net Capital Expenditures $425M to $450M $409M $260M to $310M (annual) (2023) (annual)
Slide 19: Strategic Themes for 2024
STRATEGIC THEMES FOR 2024 1 2 3 DRIVING GROWTH OPERATIONAL DRIVING CAPITAL IN CORE EXCELLENCE AS A EFFICIENCY THROUGH BUSINESSES CORE COMPETENCY PROCESS OPTIMIZATION • Returning TTS adjusted operating • Maintaining resolute focus on safety, • Streamlining business processes income margin to within o
Slide 20: Appendix
APPENDIX
Slide 21: Revenues Snapshot
REVENUES SNAPSHOT 2023 REVENUES 2023 REVENUES 2023 REVENUES BY SEGMENT BY VERTICAL BY CUSTOMER Top 50 Customers 2% Retail 57% Top 5 35% 28% 28% $3.3B Food & TOTAL 20% Top 10 48% REVENUES 70% Beverage 70% Manufacturing Top 25 15% 65% & Industrial Truckload Transportation Services (TTS) Logistics & 8%
Slide 22: 2024 Modeling Assumptions
2024 MODELING ASSUMPTIONS • Annual net interest expense increases $0 to 10M in 2024 from term loan and interest rate swap changes, uncertainty on the timing of Fed easing and debt reduction during the year • Gains on sale of used equipment weakens early in 2024 but then gradually increases throughou
Slide 23: Reconciliation of Non-GAAP Financial Measures – Consolidated
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (Unaudited) (In thousands, except per share amounts) 23
Slide 24: Reconciliation of Non-GAAP Financial Measures – Consolidated
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (Unaudited) (In thousands, except per share amounts) Non-GAAP Adjusted Operating Revenues, Net of Fuel Surcharge (1) Quarter Ended Decem ber 31, 2021 2022 2023 $ $ $ Operating revenues — (GAAP) $ 765,221 $ 861,491 $ 821,945 Non-GAAP adjust
Slide 25: Reconciliation of Non-GAAP Financial Measures – Consolidated
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (Unaudited) (In thousands, except per share amounts) 25
Slide 26: Reconciliation of Non-GAAP Financial Measures – TTS Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT (Unaudited) (In thousands) 26
Slide 27: Reconciliation of Non-GAAP Financial Measures – TTS Segment (Continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT (Continued) (Unaudited) (In thousands) 27
Slide 28: Reconciliation of Non-GAAP Financial Measures – Werner Logistics Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – WERNER LOGISTICS SEGMENT (Unaudited) (In thousands) 28
Slide 29: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 29
Slide 30: Thank You
THANK YOU FOR MORE INFORMATION, VISIT WERNER.COM