1Q 2019 EARNINGS PRESENTATION April 25, 2019
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 Litigation Reform Act of 1995, as amended. Company’s Such forward-looking statements are based on information presently available to the management and are current only as of the date made. Actual results could also differ materially from those anticipated as a result of a number of factors, including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. For those reasons, undue reliance should not be placed on any forward-looking statement. The Company assumes no duty or obligation to update or revise any forward-looking statement, although it may do so from time to time as management believes is warranted or as may be required by applicable securities law. Any such updates or revisions may be made by filing reports with the U.S. Securities and Exchange Commission, through the issuance of press releases or by other methods of public disclosure. 2
WERNER OVERVIEW, 1Q 2019 HIGHLIGHTS Derek Leathers President and Chief Executive Officer
WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider 2018 Revenues by Segment Headquarters Omaha, NE 2% Truckload Transportation Services (TTS) 21% Market Cap 1 $2.5B Werner Logistics Schools/Other 77% Dedicated 4,560 Fleet Size 1 2018 Revenues by Vertical 2018 Revenues by Customer One-Way 3,385 Top 50 Customers Fleet Size 1 Top 5 32% Retail 52% Associates 2 13,450 Top 10 45% Food & Beverage 18% Top 25 60% Manuf./Ind. 18% Dividend 1.0% Top 50 Yield 1 Logistics/Other 74% 12% 1 As of 4/22/19 for Market Cap and Dividend Yield, and as of 3/31/19 for Dedicated Fleet Size and One-Way Truckload Fleet Size. 4 2 Associates as of 3/31/19 includes approximately 12,860 employees and 590 independent contractor drivers
WE ARE TRANSFORMING WERNER INTO A STRONGER PERFORMING AND BETTER POSITIONED COMPANY Jun Jun Launched 5 T’s Launched 5 T’s Strategy Strategy Aug Apr C.L. Werner , founder, Apr Aug Announced new Reduction in reassumed CEO role Announced new metrics- Increased CapEx to: C.L. Werner , metrics-based average fleet age May based management • Lower fleet age, enhance Derek Leathers , President Derek Leathers named performance pay program founder, reassumed management accomplished; 2019 May and COO, takes on increased President and CEO truck features CEO role performance pay capex reduced to responsibility Reinvested in owned driver Derek Leathers program • Strengthen terminal normalized level Continued large CapEx and training school network Increased CapEx to: Derek Leathers , named President network Implemented balanced fleet age reduction during • Lower fleet age, President and COO, and CEO Reinvested in Balanced portfolio • Enhance IT revenue portfolio initiative challenging freight market Expanded Dedicated fleet takes on increased owned driver between Dedicated, enhance truck responsibility Continued large training school One-Way Truckload features CapEx and fleet age network and Logistics to • Strengthen Implemented reduction during improve the terminal network balanced revenue challenging freight Expanded consistency of our • Enhance IT portfolio initiative market Dedicated fleet financial results 2015 2016 2017 2018 2019 5
1Q 2019 HIGHLIGHTS ▪ Revenues increased 6% to $596M ▪ GAAP EPS increased 34% to $0.51 1Q19 Financial ▪ Adj. EPS increased 37% to $0.52 Highlights ▪ Adj. operating income increased 40% to $49.2M ▪ Adj. operating margin improved ~200 bps to 8.2% ▪ Freight demand for our One-Way Truckload fleet was seasonally better than normal in 1Q19, but not as strong as the unusually strong 1Q18 Strategic Updates ▪ At 3/31/19, 7,945 total tractors in TTS, up 560 YoY and 125 sequentially and Other Developments ▪ We effectively managed winter weather challenges that resulted in lower costs and higher margin performance in the quarter compared to 1Q18 6
TOTAL COMPANY AND SEGMENT FINANCIAL RESULTS John Steele Executive Vice President, Treasurer and Chief Financial Officer
1Q 2019 FINANCIAL PERFORMANCE ($M) Total Revenues Adjusted Operating Income Adjusted EPS and Operating Margin $800 20.0% $790 $780 $770 $760 $750 $70.0 $740 $730 $720 18.0% $710 $700 $690 $596 $680 $670 $660 $650 $563 $640 $60.0 16.0% $630 $620 $610 $49.2 $600 $590 $580 $570 $560 14.0% $550 $0.52 $540 $50.0 $530 $520 $510 $500 $490 $480 12.0% $470 $460 $35.1 $450 $440 $430 8.2% $40.0 $0.38 $420 $410 $400 10.0% $390 $380 $370 $360 $350 6.2% $340 $330 $320 $30.0 8.0% $310 $300 $290 $280 $270 $260 $250 $240 6.0% $230 $220 $210 $20.0 $200 $190 $180 $170 $160 4.0% $150 $140 $130 $120 $110 $10.0 $100 $90 $80 2.0% $70 $60 $50 $40 $30 $20 $10 $0 $0.0 0.0% $0.00 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 ▪ 6% total revenues growth ▪ 40% Adj. operating income growth ▪ 37% Adj. EPS growth ▪ +2.8% TTS revenues per truck per ▪ Adj. TTS operating margin ▪ Adj. TTS contributed Adj. EPS week 1 improved 180 bps growth of $0.11 ▪ +6.2% TTS average trucks ▪ Logistics operating margin grew ▪ Logistics contributed Adj. EPS 170 bps growth of $0.02 ▪ Continued to invest in our professional drivers; driver pay increase of nearly 9% per company mile 8 1 Net of fuel surcharge revenues
TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 1Q18 1Q19 Change YoY TTS RPTPW 1 +2.8%. One-Way TL RPTPW 1 +2.8%, ▪ Revenues ($M) $431.6 $462.9 7% including 6.5% higher One-Way TL RPTM 1 TTS RPTPW 1 increases and operating margin expansion Adj. Op. Income ($M) $33.4 $44.1 32% ▪ led to $10.7M Adj. operating income growth Adj. Op. Margin 7.7% 9.5% 180 bps 8 consecutive quarters of improvement in adjusted TTS ▪ operating margin, net of fuel Adj. OR, net FSC 1 91.0% 89.1% (190) bps Dedicated increased to 57% of TTS Fleet in Adjusted TTS Operating Margin, Net of Fuel 1Q19 from 42% in 1Q09 15.9% 13.6% 13.6% 11.7% ▪ Diversification strategy is 10.9% 10.2% 9.5% 9.0% working 43% ▪ Balanced portfolio has 57% positioned Werner to perform well in various 0.0% market scenarios 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Dedicated 350 370 240 200 340 410 420 190 One-way Truckload YOY Change (BPS) 9 1 Net of fuel surcharge revenues
TTS 2 FLEET METRICS Dedicated Truckload Trucking Revenues 1 ($M) Revenues / Tractor / Week 1 Average Tractors 4,530 $250 $218 4,019 $3,694 $3,564 $186 $200 $150 $100 $50 $- 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 One-Way Truckload Trucking Revenues 1 ($M) Revenues / Tractor / Week 1 Average Tractors $250 $4,127 $4,016 $180 $178 $200 3,408 3,357 $150 $100 $50 $0 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1 Net of fuel surcharge revenues 10 2 TTS consists of the Dedicated and One-Way Truckload fleets
WERNER LOGISTICS RESULTS 1Q18 1Q19 Change YoY A good, but less robust freight market led to fewer project $117.4 $117.4 0% ▪ Revenues ($M) freight opportunities, lower spot rates and winter weather challenges, which kept revenues flat YOY 14.6% 17.3% 270 bps Gross Margin Continued investments in logistics technology enabled our ▪ team to more effectively source capacity and increase $2.8 $4.7 71% Op. Income ($M) productivity which led to improved gross margin and operating margin 2.3% 4.0% 170 bps Op. Margin % Change in Gross Margin $ % Change in Operating Margin $ 43% 37% 36% 262% 257% 19% 145% 10% 71% -10% 0.0% 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 -100 50 150 240 270 -80 190 240 350 170 -100.0% YOY Change (BPS) YOY Change (BPS) 11
BUSINESS UPDATE AND FINANCIAL OUTLOOK Derek Leathers President and Chief Executive Officer
FIVE T’S STRATEGY EXECUTION 01 ▪ Reduced tractor age to 1.8 years; maintain at or near this level Tractors going forward 02 Trailers ▪ Reduced trailer age to 4.1 years, lowest level since the year 2000 ▪ Despite an extremely competitive driver market, reduced driver 03 Talent turnover to the second-lowest 1Q level in the last 20 years ▪ Upgraded and expanded our terminal network to improve driver 04 Terminals training, safety, equipment maintenance and throughput ▪ Upgrading and modernizing our IT infrastructure and data security; expanding driver mobility by strengthening our Drive Werner app 05 Technology and developing a new in-cab technology solution; enhancing our logistics applications software to improve real-time execution and decision making. Best in Class Customer Service 13
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