Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — Q1 2023 Earnings Presentation
30 slides from Werner Enterprises's earnings presentation, May 3, 2023
Slide 1: 1Q23 Earnings Presentation
1Q23 EARNINGS PRESENTATION MAY 3, 2023 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: Meet Werner CFO, Chris Wikoff
MEET WERNER CFO, CHRIS WIKOFF 20+ Years of Experience Werner is a premier transportation in Finance Leadership and and logistics company and I look Business Transformation forward to building on an already • Previously served as EVP and Treasurer of West Technology Group, where he was strong foundat
Slide 4: Werner Overview (WERN)
WERNER OVERVIEW (WERN) 67 YEARS IN BUSINESS OMAHA, NE HEADQUARTERS 15% 15% WERNER COMPANY DRIVERS WERNER COMPANY WHO ARE WOMEN (DOUBLE DRIVERS WITH MILITARY THE INDUSTRY AVERAGE) EXPERIENCE QUALIFIED 70,000+ CARRIER LOGISTICS $2.9B1 1.2%1 14,4562 RELATIONSHIPS MARKET CAP DIVIDEND YIELD ASSOCIATES 2,
Slide 5: 1Q 2023 Highlights
1Q 2023 HIGHLIGHTS 1Q23 vs. 1Q22 ADJUSTED EPS1 $1.20 $4.50 Qtr Adj EPS Revenues +9% to $833M $0.96 $4.00 $1.00 4 Qtr Rolling Adj EPS GAAP EPS (32)% to $0.55 $0.80 $0.68 $3.50 $0.60 $3.00 Adjusted EPS1 (37)% to $0.60 $0.60 $2.50 (33)% to $57.5M $0.40 Adj. operating income1 $2.00 $0.20 $1.50 Adj. TTS
Slide 6: Business Overview
BUSINESS OVERVIEW
Slide 7: Revenues Snapshot
REVENUES SNAPSHOT DURABLE TTS FLEET 5,3451 3,1301 8,4751 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% $3.3B Manufacturing & 17% Top 10 46% TOTAL 74% Industrial REVENUES Food & 15% Beve
Slide 8: Stability and Durability of Dedicated Fleet
STABILITY AND DURABILITY OF DEDICATED FLEET 2022 DEDICATED REVENUES BY VERTICAL Growing Business Segment Within TTS Discount Retail 41% • Dedicated has grown from 46% of TTS fleet in 2009 to 53% in 2016 to 63% in 2022 Other Retail 23% • Over 95% customer retention rate Food & Beverage 16% Stable Cus
Slide 9: Growing Logistics Segment Adding to Improved Business Resiliency and Vertical Mix
GROWING LOGISTICS SEGMENT ADDING TO IMPROVED BUSINESS RESILIENCY AND VERTICAL MIX REVENUES COMPOSITION Consolidated Logistics GROWING LOGISTICS SEGMENT 2% • Werner’s Logistics business represented 27% of 10% 12% consolidated revenues in 1Q23, up from 24% in 2022 27% 21% • On a trailing twelve-month
Slide 10: 1Q 2023 Results
1Q 2023 RESULTS TOTAL REVENUES ($M) ADJUSTED OPERATING INCOME1 ($M) ADJUSTED EPS1 AND ADJUSTED OPERATING MARGIN1 $833 $765 $12 0.0 25. 0% $0.96 $11 0.0 $616 $10 0.0 $86.2 20. 0% $90 .0 $80 .0 $62.7 $0.68 $0.60 15. 0% $70 .0 $60 .0 $57.5 $50 .0 10. 0% $40 .0 $30 .0 10.2% 11.3% 6.9% 5.0 % $20 .0 $10 .
Slide 11: 1Q 2023 Truckload Transportation Services (TTS) Results
1Q 2023 TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 1Q21 1Q22 1Q23 1Q23 vs. 1Q22 Revenues ($M) $462.9 $558.4 $588.3 5% Adjusted Operating Income1 ($M) $58.9 $78.3 $53.7 (31)% Adjusted Operating Margin1, 2 14.2% 16.4% 10.7% (570) bps Adjusted Operating Ratio1, 2 85.8% 83.6% 89.3% 570 bps YoY COMM
Slide 12: TTS Fleet Metrics Update
TTS1 FLEET METRICS UPDATE TRUCKING REVENUES2 ($M) AVERAGE TRUCKS REVENUES / TRUCK / WEEK2 DEDICATED TRUCKLOAD $310 5,370 $4,247 $4,441 $286 4,934 5,174 $3,957 $254 1Q21 1Q22 1Q23 1Q21 1Q22 1Q23 1Q21 1Q22 1Q23 ONE-WAY TRUCKLOAD $25 0 $187 $183 $4,690 $4,414 $20 0 3,064 3,191 $4,224 $157 2,856 $15 0 $
Slide 13: 1Q 2023 Werner Logistics Results
1Q 2023 WERNER LOGISTICS RESULTS 1Q21 1Q22 1Q23 1Q23 vs. 1Q22 Revenues ($M) $137.9 $189.0 $228.7 21% Revenues, less purchased $17.3 $31.5 $40.2 28% transportation expense ($M) Adjusted Operating Income ($M)1 $3.6 $9.2 $6.4 (31)% Adjusted Operating Margin1 2.6% 4.9% 2.8% (210) bps YoY COMMENTARY (1Q2
Slide 14: Strong Balance Sheet
STRONG BALANCE SHEET1 HEALTHY BALANCE SHEET DEBT MATURITY SCHEDULE PROVIDES OPTIONALITY $600 Total Credit Capacity* $1,105M $88 Debt $691M $3 2023 2024 2025 2026 2027 Unused Credit Capacity $414M Cash $130M Liquidity $544M NET DEBT TO LTM EBITDA 1.0x 0.9x Net Debt $561M 0.6x 0.6x 0.3x 12/31/19 12/31
Slide 15: Robust FCF Generation
ROBUST FCF GENERATION ($M) $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 $193 $180 • Long-term, targeting Net CapEx at 11-13% of $143 $140 annual revenues $131 $69 2018 2019 2020 2021 2022 CF N
Slide 16: 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 17: Werner Drive: Building on 5Ts and Shaping Our Future
WERNER DRIVESM BUILDING ON 5Ts AND SHAPING OUR FUTURE • Rolled out MasterMind TMS in truckload logistics, focusing on optimizing the platform to drive operational improvements • Lowered accident frequency with 1Q YoY improvement in DOT reportable accidents, following 10-year low DOT preventable acci
Slide 18: 2023 Guidance Metrics and Assumptions
2023 GUIDANCE METRICS AND ASSUMPTIONS PRIOR GUIDANCE ACTUAL 2023 GUIDANCE COMMENTARY (As of 2/7/23) (As of 3/31/23) (As of 5/3/23) 2022 GUIDANCE 1% to 4% (1)% (2)% to1% Adjusting fleet size to adapt to a TTS truck growth from BoY to EoY (annual) (1Q23) (annual) softer freight market $350M to $400M $
Slide 19: 2023 Updated Market Outlook and Modeling Assumptions
2023 UPDATED MARKET OUTLOOK AND MODELING ASSUMPTIONS MARKET OUTLOOK MODELING ASSUMPTIONS • Freight demand steady in Dedicated and weak in One-Way and • Annual net interest expense increases by $20M in 2023 with Logistics in 2Q and 3Q, then improving in 4Q higher interest rates for variable rate debt
Slide 20: Q&A
Q&A
Slide 21: Driving Shareholder Value
DRIVING SHAREHOLDER VALUE Balanced to navigate 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 Mexico cross-border, engineered lanes, team e
Slide 22: Reconciliation of Non-GAAP Financial Measures – Consolidated
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (Unaudited) (In thousands, except per share amounts) 22
Slide 23: Reconciliation of Non-GAAP Financial Measures – Consolidated (continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (continued) (Unaudited) (In thousands, except per share amounts) 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 – 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