Werner Enterprises, Inc. · NASDAQ:WERN

Werner Enterprises — Q4 2019 Earnings Presentation

20 slides from Werner Enterprises's earnings presentation, Feb 5, 2020

1. Slide 1: 4Q19 and Full Year 2019 Earnings Presentation

   4Q19 AND FULL YEAR 2019 EARNINGS PRESENTATION February 5, 2020

2. 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

3. Slide 3: Werner Overview, 4Q19 and Full Year 2019 Highlights

   WERNER OVERVIEW, 4Q19 AND FULL YEAR 2019 HIGHLIGHTS Derek Leathers President and Chief Executive Officer

4. Slide 4: Werner Overview

   WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider 2019 Revenues by Segment Headquarters Omaha, NE 3% Truckload Transportation Services (TTS) 3 20% Market Cap1 $2.6B Werner Logistics Driver Training Schools and Other 77% Dedicated 4,630 Fleet Size1 One-Way 2019 Revenues b

5. Slide 5: 4Q19 and Full Year 2019 Highlights

   4Q19 AND FULL YEAR 2019 HIGHLIGHTS  Revenues decreased 4% to $622M 4Q19  GAAP EPS decreased 9% to $0.70 Financial  Adj. EPS decreased 11% to $0.67 Highlights  Adj. operating income decreased 14% to $63.4M  Adj. operating margin decreased 120 bps to 10.2%  Revenues increased $6M to $2,464M  GA

6. Slide 6: Total Company and Segment Financial Results

   TOTAL COMPANY AND SEGMENT FINANCIAL RESULTS John Steele Executive Vice President, Treasurer and Chief Financial Officer

7. Slide 7: 4Q 2019 Financial Performance

   4Q 2019 FINANCIAL PERFORMANCE Total Revenues ($M) Adjusted Operating Income ($M) Adjusted EPS and Operating Margin $800 $73.6 20.0% $790 $780 $770 $63.4 $0.75 $760 $750 $70.0 $740 $646 $730 $720 18.0% $622 $710 $700 $0.67 $690 $680 $670 $660 $650 $640 $60.0 16.0% $630 $620 $610 $600 $590 $580 $570 1

8. Slide 8: Full Year 2019 Financial Performance

   FULL YEAR 2019 FINANCIAL PERFORMANCE Total Revenues ($M) Adjusted Operating Income ($M) Adjusted EPS and Operating Margin $3,000 $2,990 $250.0 $240.0 $228.6 $225.9 20.0% $2.39 $2,980 $2.38 $2,970 $2,960 $2,950 $2,940 $2,930 $2,920 $230.0 $2,910 $2,900 $2,890 $2,880 $2,870 $2,860 18.0% $2,850 $2,840

9. Slide 9: Truckload Transportation Services (TTS) Results

   TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS Change 4Q18 4Q19 YoY Revenues ($M) $494.7 $486.6 (2)%  TTS RPTPW (1.8%); due to lower miles per truck offset partially by slightly higher RPTM Adj. Op. Income ($M) $68.0 $60.4 (11)%  Strength and operational execution of Dedicated fleet (58% of total

10. Slide 10: TTS Fleet Metrics Update

    TTS1 FLEET METRICS UPDATE Dedicated Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $914 4,593 4,472 4,693 4,277 $1,000 $817 $3,827 $3,703 $3,888 $3,673 $900 $800 $700 $600 $500 $400 $300 $215 $237 $200 $100 $‐ 2018 2019 4Q18 4Q19 2018 2019 4Q18 4Q19 2018 2019 4Q18 4Q19 One

11. Slide 11: Werner Logistics Results

    WERNER LOGISTICS RESULTS Change 4Q18 4Q19 YoY Revenues ($M) $137.2 $120.1 (12)%  Truckload Logistics (65% of total) had a 12% revenues decline due to a softer freight market and increased market competition Gross Margin 16.8% 15.3% (150) bps  Fewer transactional opportunities and increased market

12. Slide 12: Business Update and Financial Outlook

    BUSINESS UPDATE AND FINANCIAL OUTLOOK Derek Leathers President and Chief Executive Officer

13. Slide 13: Five T's Strategy Execution

    FIVE T’S STRATEGY EXECUTION 01 Trucks  Truck age increased slightly to 1.9 years 02 Trailers  Trailer age maintained at 4.0 years 03  Utilizing performance pay and metrics to drive performance and Talent attract/retain high performing talent  Upgraded and expanded our terminal network to improve

14. Slide 14: Strong FCF Generation in 2019, Expected to Continue

    STRONG FCF GENERATION IN 2019, EXPECTED TO CONTINUE ($M) $430 $427 $418  2020 Net CapEx expected to be in $370 $351 $349 the range of $260M to $300M; over the long term, targeting Net CapEx $310 at 11-13% of gross revenues $283 $284  Investment in 2019 focused on $199 continued IT modernization, $

15. Slide 15: 2020 Guidance

    2020 GUIDANCE 2020 GUIDANCE COMMENTS TTS Truck Growth from With flat to slightly lower truck count in 1H 2020 (3%) to 1% Year-End 2019 due to current market conditions Equipment gains expected to be lower in 2020 than Gains on Sales of Equipment $6M to $12M 2019 due to softer used equipment market a

16. Slide 16: Q&A

    WERNER « WE KEEP AMERICA MOViNGe Q&A

17. Slide 17: 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

18. Slide 18: Appendix

    WERNER « WE KEEP AMERICA MOViNGe ~ APPENDIX

19. Slide 19: GAAP to Non-GAAP Reconciliation

    GAAP TO NON-GAAP RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Operating revenues $ 621,787 $ 646,365 $ 2,463,701 $ 2,457,914 Operating expenses 556,133 571,434 2,238,229 2,233,699 Adjusted for: Insuran

20. Slide 20: Werner

    WERNER WE KEEP AMERICA MOViNGe For more information visit Werner.com | fi ¥ fin{ S|

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