Slide 1: 2Q 2020 Earnings Presentation
2Q 2020 EARNINGS PRESENTATION July 29, 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, 2Q 2020 Highlights
WERNER OVERVIEW, 2Q 2020 HIGHLIGHTS Derek Leathers President and Chief Executive Officer
Slide 4: Werner Overview
WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider Omaha, NE $3.1B 4,535 3,115 12,315 0.8% Headquarters Market Cap1 Dedicated One-Way Associates2 Dividend Yield1 Fleet Size1 Fleet Size1 2019 Revenues by Segment 2019 Revenues by Vertical 2019 Revenues by Customer 3% Top 50
Slide 5: 2Q 2020 Highlights
2Q 2020 HIGHLIGHTS ▪ Revenues decreased 9% to $569M 2Q20 ▪ GAAP EPS declined 9% to $0.56 Financial ▪ Adjusted EPS decreased 2% to $0.62 Highlights ▪ Adjusted operating income declined 3% to $57.7M ▪ Adjusted operating margin increased 70 bps to 10.1% ▪ One-Way Truckload and Logistics freight demand
Slide 6: Total Company and Segment Financial Results
TOTAL COMPANY AND SEGMENT FINANCIAL RESULTS John Steele EVP, Treasurer and Chief Financial Officer
Slide 7: 2Q 2020 Financial Performance
2Q 2020 FINANCIAL PERFORMANCE Total Revenues ($M) Adjusted Operating Income ($M) Adjusted EPS and Operating Margin $800 20.0% $790 $780 $770 $760 $750 $70.0 $740 $730 $720 18.0% $628 $59.2 $710 $57.7 $700 $690 $680 $670 $660 $569 $650 $0.63 $640 $60.0 16.0% $0.62 $630 $620 $610 $600 $590 $580 $570 $
Slide 8: Truckload Transportation Services (TTS) 2Q Results
TRUCKLOAD TRANSPORTATION SERVICES (TTS) 2Q RESULTS 2Q19 2Q20 ∆ YoY Revenues ($M) $480.0 $445.1 (7)% Adjusted Op. Income ($M) $52.4 $56.1 7% Adjusted Op. Margin 10.9% 12.6% 170 bps Adjusted OR, net FSC 87.4% 86.3% (110) bps Commentary ▪ TTS RPTPW +1.1% ▪ Revenues reduction primarily due to lower fuel
Slide 9: TTS 2Q Fleet Metrics
TTS1 2Q FLEET METRICS Dedicated Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $260 4,558 4,613 $239 $3,833 $3,983 $240 $227 $220 $200 $180 $160 $140 $120 $100 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 One-Way Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $
Slide 10: Werner Logistics 2Q Results
WERNER LOGISTICS 2Q RESULTS 2Q19 2Q20 ∆ YoY Revenues ($M) $130.9 $110.2 (16)% Gross Margin 16.1% 15.7% (40) bps Operating Income ($M) $5.2 $3.1 (39)% Operating Margin 4.0% 2.8% (120) bps COMMENTARY ▪ Truckload Logistics revenues (60% of total Logistics revenues) declined by 24% in 2Q20 amid a softer
Slide 11: Update on Business / COVID-19 & Financial Outlook
UPDATE ON BUSINESS / COVID-19 & FINANCIAL OUTLOOK Derek Leathers President and Chief Executive Officer
Slide 12: Successfully Executing Our T's Strategy
SUCCESSFULLY EXECUTING OUR 5 T’S STRATEGY ▪ Modern truck fleet at 2.0 years average age 01 Trucks ▪ Intend to keep our truck age new ▪ New trailer fleet at 4.1 years average age 02 Trailers ▪ Intend to keep our trailer age new ▪ Remain committed to our rigorous hiring and retention processes to 03 T
Slide 13: Werner Has Taken Decisive Actions to Navigate the COVID-19 Pandemic
WERNER HAS TAKEN DECISIVE ACTIONS TO NAVIGATE THE COVID-19 PANDEMIC Execution Agility ✓ Proactively adapting and adjusting our approach to address rapid changes resulting from COVID-19. ✓ Our crisis management plans, as well as our business continuity safeguards, are designed to adapt to the changin
Slide 14: Diversified Portfolio of Services with Exposure to 'Essential' End Markets
DIVERSIFIED PORTFOLIO OF SERVICES WITH EXPOSURE TO ‘ESSENTIAL’ END MARKETS Total Company1 28% 11% 7% 18% 8% 16% 12% Discount Retail Home Consumer Food and Other Manufacturing / Logistics / Improvement Pkg. Beverage Retail Industrial Other Retail Goods Accounts for 64% of Portfolio Breakdown by Busin
Slide 15: Balance Sheet and Liquidity Update
BALANCE SHEET AND LIQUIDITY UPDATE As of June 30, 2020 Available Cash $65M Total Debt Outstanding $175M Stockholders’ Equity $1.1B1 Total Net Debt Outstanding to LTM EBITDA 0.2x1 Credit Capacity and Liquidity Two Bank Credit Agreements that Expire in May 20242 $500M Less: Standby Letters of Credit (
Slide 16: Strong FCF Generation, Expected to Continue
STRONG FCF GENERATION, EXPECTED TO CONTINUE COMMENTARY ($M) ▪ 2020 Net CapEx expected to be in $430 $427 the range of $260M to $300M; over $418 the long-term, targeting Net CapEx at 11-13% of annual revenues $349 $310 ▪ Investment focused on maintaining $283 $284 a new fleet, strengthening our termi
Slide 17: 2020 Guidance Metrics and Assumptions
2020 GUIDANCE METRICS AND ASSUMPTIONS PRIOR CURRENT ANNUAL 2Q20 ANNUAL 2020 GUIDANCE GUIDANCE ACTUAL GUIDANCE (AS OF 4/28/20) (AS OF 6/30/20) (AS OF 7/29/20) COMMENTARY TTS Truck Growth Dedicated fleet startups in 2H20, from Y/E 2019 to Y/E (5)% to 0% (4)% (3)% to (1)% social distancing continues at
Slide 18: Q&A
Q&A
Slide 19: Invest With Us
INVEST WITH US Consistent Balanced Financially and Committed and We are a execution of 5 portfolio with operationally tenured stronger, T’s business exposure to well-positioned management better- strategy has diverse end- to capitalize on team prepared positioned created markets unique to take Werne
Slide 20: Appendix
APPENDIX
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Operating revenues $ 568,959 $ 627,533 $ 1,161,662 $ 1,223,650 Operating expenses 516,141 569,091 1,077,778 1,117,189 Operating income 52,818
Slide 22: For More Information, Visit werner.com
FOR MORE INFORMATION, VISIT WERNER.COM