Slide 1: 1Q 2020 Earnings Presentation
1Q 2020 EARNINGS PRESENTATION April 28, 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, 1Q 2020 Highlights
WERNER OVERVIEW, 1Q 2020 HIGHLIGHTS Derek Leathers President and Chief Executive Officer
Slide 4: Werner Overview
WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider Omaha, NE $2.8B 4,685 3,150 12,994 0.9% 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: 1Q 2020 Highlights
1Q 2020 HIGHLIGHTS Revenues decreased 1% to $593M 1Q20 GAAP EPS declined 35% to $0.33 Financial Adjusted EPS decreased 24% to $0.40 Highlights Adjusted operating income declined 24% to $37.3M Adjusted operating margin decreased 190 bps to 6.3% One-Way Truckload freight demand in January
Slide 6: Total Company and Segment Financial Results
TOTAL COMPANY AND SEGMENT FINANCIAL RESULTS John Steele EVP, Treasurer and Chief Financial Officer
Slide 7: 1Q 2020 Financial Performance
1Q 2020 FINANCIAL PERFORMANCE Total Revenues ($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% $710 $700 $596 $690 $593 $680 $670 $660 $650 $640 $60.0 16.0% $630 $49.2 $620 $610 $600 $590 $580 $570 $0.52 $560 14.0% $5
Slide 8: Truckload Transportation Services (TTS) Results
TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 1Q19 1Q20 ∆ YoY Revenues ($M) $462.9 $464.9 0% Adjusted Op. Income ($M) $44.1 $35.3 (20)% Adjusted Op. Margin 9.5% 7.6% (190) bps Adjusted OR, net FSC 89.1% 91.5% 240 bps COMMENTARY TTS RPTPW (+3.2%); due primarily to higher miles per truck and to a
Slide 9: TTS Fleet Metrics Update
TTS1 FLEET METRICS UPDATE Dedicated Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $240 $231 4,530 4,591 $220 $218 $3,694 $3,874 $200 $180 $160 $140 $120 $100 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 One-Way Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $1
Slide 10: Werner Logistics Results
WERNER LOGISTICS RESULTS 1Q19 1Q20 ∆ YoY Revenues ($M) $117.4 $112.2 (4)% Gross Margin 17.3% 14.5% (280) bps Operating Income ($M) $4.7 $1.1 (77)% Operating Margin 4.0% 1.0% (300) bps COMMENTARY Transactional brokerage volumes were challenged in 1Q20 due to a slowing freight economy and the compet
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: Five T's Strategy Execution in a COVID-19 Economy
FIVE T’S STRATEGY EXECUTION IN A COVID-19 ECONOMY Truck age increased slightly from 1.9 to 2.0 years. Intend to keep our 01 Trucks truck age as new as possible. Truck age may be impacted by timing of OEM plant re-openings following plant shutdowns that started in April. 02 Trailer age increased
Slide 13: COVID-19 Preparedness Update
COVID-19 PREPAREDNESS UPDATE Transportation is designated by the U.S. government as an essential industry for keeping the U.S. supply chain moving during COVID-19. Werner drivers and non-driver associates take tremendous pride in this important responsibility. The morale of our associates remains
Slide 14: Revenues by Vertical – 1Q20
REVENUES BY VERTICAL – 1Q20 Top 100 Customers Account for 85% of Revenues Total Company 27% 11% 7% 17% 8% 18% 12% Discount Home Improvement Consumer Food and Other Manufacturing / Logistics / Retail Retail Pkg. Goods Beverage Retail Industrial Other Accounts for 62% of Portfolio Breakdown by Busines
Slide 15: Customer Risk Review | COVID-19
CUSTOMER RISK REVIEW | COVID-191 Industry Risk Financial Risk Based on credit rating agency views on sector-by- Based on financial performance, net debt to EBITDA, sector COVID-19 risk (Moody’s, S&P Global) liquidity, size and other factors 7% 16% 11% 6% 78% 82% Lower Risk Moderate Risk Higher
Slide 16: Balance Sheet and Liquidity Update
BALANCE SHEET AND LIQUIDITY UPDATE As of March 31, 2020 Available Cash $72M Total Debt Outstanding $250M1 Stockholders’ Equity $1.1B2 Total Net Debt Outstanding to LTM EBITDA 0.4x1,2 Credit Capacity and Liquidity Two Bank Credit Agreements that Expire in May 2024 $500M One Bank Credit Agreement that
Slide 17: Strong FCF Generation, Expected to Continue
STRONG FCF GENERATION, EXPECTED TO CONTINUE COMMENTARY ($M) 2020 Net CapEx expected to be in $430 $427 the range of $260M to $300M; $418 lower new truck purchases (-$46M) mostly offset by lower used truck $349 sales at expected lower prices $310 (-$42M); over the long-term, $283 $284 targeting Net
Slide 18: 2020 Guidance Metrics and Assumptions
2020 GUIDANCE METRICS AND ASSUMPTIONS PRIOR CURRENT ANNUAL 1Q20 ANNUAL 2020 GUIDANCE GUIDANCE ACTUAL GUIDANCE (AS OF 2/5/20) (AS OF 3/31/20) (AS OF 4/28/20) COMMENTARY TTS Truck Growth (3)% to 1% (2)% (5)% to 0% - from Year-End 2019 Demand very low in used truck Gains on Sales of Withdrawing $6M to
Slide 19: Q&A
Q&A
Slide 20: 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 21: Appendix
APPENDIX
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended March 31, 2020 2019 Operating revenues $ 592,703 $ 596,117 Operating expenses 561,637 548,098 Adjusted for: (1) Insurance and claims (1,198) (1,150) (2) Depreciation (5,014) - Adjusted operating e
Slide 23: For More Information, Visit werner.com
FOR MORE INFORMATION, VISIT WERNER.COM