Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — Q1 2024 Earnings Presentation
28 slides from Werner Enterprises's earnings presentation, Apr 30, 2024
Slide 1: 1Q24 Earnings Presentation
1Q24 EARNINGS PRESENTATION April 30, 2024 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 2,230 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 5,0804 DEDICATED > 93% DEDICATED CUSTOMER 2,7304 ONE-WAY TRUCKLOAD $2.2B1 1.2%1 13,9002 7,8104 TTS
Slide 5: 1Q24 Financial Highlights
1Q24 FINANCIAL HIGHLIGHTS 1Q24 Y/Y Change HIGHLIGHTS Revenues $769M (8)% • Dedicated segment continued to display resiliency; growing revenue per truck 24 of 25 quarters GAAP EPS $0.10 • Further engineering of the One-Way fleet resulted in 11% (82)% growth in miles per truck Y/Y; mid-single digit RP
Slide 6: DRIVE Strategy Supports 2024 Priorities
DRIVESM STRATEGY SUPPORTS 2024 PRIORITIES WERNER DRIVESM BUILDING ON 5Ts AND SHAPING OUR FUTURE DRIVING GROWTH IN CORE BUSINESS • Returning TTS adjusted operating income margin to within our long-term range of 12-17% by year-end • Growing Dedicated revenue in 2H24 • Expanding One-Way Utility, Power
Slide 7: 2024 Updated Market Outlook
2024 UPDATED MARKET OUTLOOK • Inventory levels have normalized, and destocking appears largely complete, limited signs of normal restocking, expect more normal seasonality as the year progresses • Spot freight rates flat to slightly higher in 2Q24, then improving throughout 2H24 • Carriers continue
Slide 8: Financial Results
FINANCIAL RESULTS CHRIS WIKOFF Executive Vice President, Treasurer and Chief Financial Officer
Slide 9: 1Q24 Results
1Q24 RESULTS ADJUSTED OPERATING INCOME1 ($M) TOTAL REVENUES ($M) AND ADJUSTED OPERATING MARGIN1 ADJUSTED EPS1 $833 20. 0% $12 0.0 18. 0% $11 0.0 $10 0.0 $86.2 16. 0% $1. 20 $90 .0 $80 .0 14. 0% $1. 00 $0.96 $57.5 12. 0% $70 .0 $0.60 $0. 80 10. 0% $769 $60 .0 $765 $50 .0 11.3% 8.0 % $0. 60 $40 .0 6.0
Slide 10: 1Q24 Truckload Transportation Services (TTS) Results
1Q24 TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 1Q22 1Q23 1Q24 1Q24 vs. 1Q23 Revenues ($M) $558.4 $588.3 $551.1 (6)% Revenues, net FSC ($M) $478.6 $500.0 $478.1 (4)% Adjusted Operating Income1 ($M) $78.3 $53.7 $22.7 (58)% Adjusted Operating Margin1, 2 16.4% 10.7% 4.7% (600) bps Adjusted Operati
Slide 11: TTS Fleet Metrics Update
TTS1 FLEET METRICS UPDATE TRUCKING REVENUES2 ($M) AVERAGE TRUCKS REVENUES / TRUCK / WEEK2 DEDICATED TRUCKLOAD $310 $301 5,370 $4,247 $4,441 $4,497 $286 5,174 5,149 1Q22 1Q23 1Q24 1Q22 1Q23 1Q24 1Q22 1Q23 1Q24 ONE-WAY TRUCKLOAD $19 0 $187 $183 $4,690 $4,661 $18 5 3,191 $4,414 3,064 $18 0 2,786 $17 5
Slide 12: 1Q24 Werner Logistics Results
1Q24 WERNER LOGISTICS RESULTS 1Q22 1Q23 1Q24 1Q24 vs. 1Q23 Revenues ($M) $189.0 $228.7 $202.5 (11)% Revenues, less purchased $31.5 $40.2 $30.0 (25)% transportation expense ($M)1 Adjusted Operating Income ($M)1 $9.2 $6.4 $(1.2) (119)% Adjusted Operating Margin1 4.9% 2.8% (0.6)% (340) bps Y/Y COMMENTA
Slide 13: Actions in Place to Generate Additional Cost Savings in 2024
ACTIONS IN PLACE TO GENERATE ADDITIONAL COST SAVINGS IN 2024 $40M+ COST CONTAINMENT 2024 Target FOCUS & DISCIPLINE 2023 $40M+ Projected • $80M-$90M savings over 2- Savings year period (2023 + 2024) • 60% structural and sustainable $12M • Initiatives aimed to mitigate Savings Achieved inflationary co
Slide 14: Strong Capital & Cash Flow Generation
STRONG CAPITAL & CASH FLOW GENERATION CASH FLOW LIQUIDITY1 ($ millions) ($ millions) $474 $446 $449 Cash, $427 $409 $60 $333 $318 $284 $266 $193 $619 $180 Total Liquidity $140 $131 $143 Available $66 Credit, $559 2019 2020 2021 2022 2023 2 Op. CF Net CapEx FCF SOLID CASH FLOW & LIQUIDITY • Solid qua
Slide 15: Flexible Debt and Low Leverage
FLEXIBLE DEBT AND LOW LEVERAGE DEBT MATURITY SCHEDULE NET DEBT TO LTM EBITDA1 ($ millions) 1.2x 1.2x $510 1.0x 0.6x 0.3x $88 2024 2025 2026 2027 2028 12/31/20 12/31/21 12/31/22 12/31/23 3/31/24 HEALTHY BALANCE SHEET • $598M Debt; down $94M Y/Y ($537M Net Debt) • 62% effectively-fixed rate debt • Lon
Slide 16: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION PRIORITIES CAPEX REINVESTMENT FOR GROWTH Strategic Reinvestment for Long-Term Growth 2024 Net CapEx Priorities: • Reinvestments to maintain low-age, safe and modern trucks and trailers • Returning to historical dollar range, following elevated spend in 2023 • Growth in
Slide 17: 2024 Guidance Metrics and Assumptions
2024 GUIDANCE METRICS AND ASSUMPTIONS Prior Guidance Actual 2024 Guidance (as of 2/6/24) (as of 3/31/24) (as of 4/30/24) 2024 GUIDANCE TTS Truck Count from BoY to EoY (3)% to 0% (2)% (6)% to (3)% (annual) (1Q24) (annual) Net Capital Expenditures $260M to $310M $19M $250M to $300M (annual) (1Q24) (an
Slide 18: Appendix
APPENDIX
Slide 19: 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 20: 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 1H24 but then gradually increases throughout the ye
Slide 21: 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 Income and Non-GAAP Adjusted Operating Margin (1) Quarter Ended March 31, 2022 2023 2024 % of Op. % of Op. % of Op. $ Rev. $ Rev. $ Rev. Operating income and
Slide 22: 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 March 31, 2022 2023 2024 $ $ $ Operating revenues — (GAAP) $ 764,605 $ 832,714 $ 769,080 Non-GAAP adjustment
Slide 23: Reconciliation of Non-GAAP Financial Measures – Consolidated
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – CONSOLIDATED (Unaudited) (In thousands, except per share amounts) Non-GAAP Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA); Non-GAAP Net Debt; and Non-GAAP Net Debt to EBITDA Ratio (1), (9) LTM Year Ended December 31, March 31,
Slide 24: Reconciliation of Non-GAAP Financial Measures – TTS Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT (Unaudited) (In thousands) Non-GAAP Adjusted Operating Income and Non-GAAP Adjusted Operating Margin (1) Quarter Ended March 31, 2022 2023 2024 % of Op. % of Op. % of Op. $ Rev. $ Rev. $ Rev. Operating in
Slide 25: Reconciliation of Non-GAAP Financial Measures – TTS Segment (Continued)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – TRUCKLOAD TRANSPORTATION SERVICES (TTS) SEGMENT (Continued) (Unaudited) (In thousands) Non-GAAP Adjusted Operating Revenues, Net of Fuel Surcharge; Non-GAAP Adjusted Operating Expenses, Net of Fuel Surcharge; Non-GAAP Adjusted Operating Margin, Net of
Slide 26: Reconciliation of Non-GAAP Financial Measures – Werner Logistics Segment
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES – WERNER LOGISTICS SEGMENT (Unaudited) (In thousands) Non-GAAP Adjusted Operating Revenues, Less Purchased Transportation Expense (1) Quarter Ended March 31, 2022 2023 2024 $ $ $ Operating revenues — (GAAP) $ 189,008 $ 228,669 $ 202,482 Non-GAAP adjustme
Slide 27: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (1) Non-GAAP adjusted operating income; non-GAAP adjusted operating margin; non-GAAP adjusted operating margin, net of fuel surcharge; non-GAAP adjusted net income attributable to Werner; non-GAAP adjusted diluted earnings per share; non-GAAP free cash f
Slide 28: For More Information, Visit Werner.com
FOR MORE INFORMATION, VISIT WERNER.COM