Disclosure Statement

Transcription

1 Global Transportation Conference May 17, 2016

2 Disclosure Statement This presentation includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of These statements are based on Werner Enterprises current plans, and are not guarantees of future performance. They are subject to risk and uncertainties, that could cause actual results, and company plans and objectives, to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties are discussed in the Company s Annual Report, on Form 10-K, filed with the SEC. 1

3 About Werner Enterprises Premium Truckload Transportation and Logistics Services Provider 2015 Revenues: $2.1 B 2015 Net Income: $124 M NASDAQ: WERN Market Cap: $1.8 B Avg Daily Trading Volume (3 mo. 3/16): 831 K 2

4 Intensely Focused on the T s 3

5 Revenue Sources Vertical: % of Revenues* 60% 50% 40% 30% 20% 10% 0% 47% 44% 44% 27% 27% 28% 14% 12% 15% 14% 13% 15% Retail/CP Grocery Products Manuf./Industrial Logistics/Other * Top 50 customers Customers: % of Revenues 100% 80% 60% 40% 20% 0% 74% 74% 76% 61% 60% 63% 45% 41% 40% 24% 25% 27% Top 5 Top 10 Top 25 Top 50 4

6 Domestic Freight Market: Market Share & Growth Opportunities U.S. Freight Transportation Market ($873 Billion) Werner 2015 Revenues ($2.1 Billion) Rail Carload % Pipeline % Water % Rail Intermodal % Air Express % Ground Parcel % Truckload % Private Truck % LTL % * Sources: ATA and Stifel Nicolaus estimates 5

7 Freight Market Update 6

8 Comprehensive Solutions A $400 million asset-backed logistics provider with proven ingenuity. Freight Management Freight Movement Global Implementation Technological Advantages This is where it all begins. Werner provides complete 3PL supply chain solutions across all shipping modes and geographies, from network design through implementation. Transportation Solutions. With an asset-backed network of over 7,400 trucks, over 13,000 alliance carriers and ocean, air and rail companies, Werner provides unsurpassed delivery solutions worldwide. We speak the language. Providing door-to-door services for companies of all sizes and industries as they compete in today s global marketplace, sets us apart from our competition. Online and real-time, all the time. Sophisticated technology tools provide our customers instant visibility across their supply chain, which enables them to better manage their business. 7

9 Werner & Mexico Cross-Border: Growing Strength in Numbers Werner Mexico: Top 3 Mexico CB TL carrier 17 years in market >15% of consolidated revenues (> $300 M) Strong relationships with top Mexican carriers 10% annual revenue growth 2012 to 2015 Over 141,000 MX cross-border shipments annually Manufacturing: MX MFG wages (adjusted for productivity) lower than China MX MFG has a % natural gas pricing energy advantage over China Mexico has more free trade agreements (44) than China (18) 8

10 Fuel Price Trends Price Per Gallon (in $) $5.00 $4.80 $4.60 $4.40 $4.20 $4.00 $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 $1.40 $ *Dept. of Energy (DOE) U.S. national average cash fuel price survey (Nat l avg.) of truck stops used by shippers/carriers for billing fuel surcharges. Fuel price includes fuel taxes. 9

11 Truck Regulatory Capacity Constraints COMPLETED TIMING Electronic Logging Device (ELD) Mandate 12/15 12/17 Safety Fitness Determination NPRM January 2016 Sleep Apnea NPRM March 2016 PENDING Drug/Alcohol Clearinghouse/National Database NPRM May 2016 Speed Limiters on Trucks? Hair Follicle Drug Testing for Drivers? Reconsideration of 34-Hour Restart Rule - HOS? 10

12 Supply - Capacity 60,000 Public Truckload Fleet Capacity 55,000 50,000 45,000 40,000 Including owner operators, capacity at public fleets is 6% below peak 3Q06 levels 35,000 30,000 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Note: Source Key Banc. Includes CGI, CVTI, JBHT, KNX, MRTN, SWFT, USAK, and WERN (excluding acquisitions, if applicable). 11

13 Average Truck Age Werner vs. Industry 7 6 Average Truck Age Average Truck Age - Werner Average Truck Age - Industry Source for Industry Data ACT Research 12

14 Supply Industry Driver Shortage, Truck Driver Demographics AGING TRUCK DRIVER DEMOGRAPHICS DISTRIBUTION OF EMPLOYEES BY AGE GROUP 35% 30% THE AGING TRUCK DRIVER 1994, 2003 & % 30% WERNER DRIVER DEMOGRAPHICS COMPARED TO ALL INDUSTRIES AND TRUCKING INDUSTRY % of Total 25% 20% 15% 10% % of drivers: 45+ yrs % % % of Total 25% 20% 15% 10% 5% 5% 0% Years Years Years Years Years 65+ Years 0% Years Years Years Years Years 65+ Years Source: ATRI, 2013 BLS Census For Industry Data Werner January 2016 All Industries 2013 Trucking Industry

15 Werner Driver Recruiting/Retention Advantages TRUCKS: 1.9 to 1.5 Avg. Age In /31/16) Automatic Manual Transmissions Collision Mitigation Systems TRAILERS: GPS Tracking (35% EOY 2015 to 65% EOY 2016) New Branding TALENT: Raising Driver Pay to Increase Experience Top 50 Military Employer Strengthening Our IT Capabilities TECHNOLOGY: Integrating Truck/Logistics on One Platform Enhancing Logistics Software TERMINALS: Upgrading for a Better Driver Experience Investing in Specific Terminal Locations 14

16 Cash Flow and Cap Ex Millions of Dollars $500 $475 $450 $425 $400 $375 $350 $325 $300 $275 $250 $225 $200 $175 $150 $125 $100 $75 $50 $25 $0 Elevated Cap Ex in 2015 and 2016 primarily to reduce truck age $450 M $400 M Cash Flow from Operations Cap Ex, Net 15

17 Werner Trucks Getting Newer 2.8 8,750 Average Truck Age (Y/E) ,500 8,250 8,000 7,750 7,500 7,250 7,000 6,750 Average Trucks in Service ,500 Average Truck Age (Y/E) Average Trucks in Service 16

18 Rate and Utilization Metrics, Last 13 Quarters RPTPW* TRENDS TRUCK TRENDS RPTPW $4,000 $3,900 $3,800 $3,700 $3,600 $3,500 $3,400 $3,300 $3,200 $3,100 $3,000 1Q 2Q 3Q 4Q Avg. Trucks in Service 7,500 7,400 7,300 7,200 7,100 7,000 6,900 6,800 Q1 Q2 Q3 Q Avg. Miles Per Truck 30,000 29,500 29,000 28,500 28,000 27,500 27,000 MILES PER TRUCK TRENDS Q1 Q2 Q3 Q *Net of fuel surcharge revenues Revenue Perf Total Mile (RPTM) $1.75 $1.70 $1.65 $1.60 $1.55 $1.50 RPTM* TRENDS Q1 Q2 Q3 Q

19 Improving Trucking Operating Margin YOY Change in Basis Points (BP) TL/Ded OI % YOY Change in Basis Points (BP) TL/Dedicated OI % 3Q15 excludes two nonrecurring items totaling $3.9 million. 18

20 Total Company Operating Margin and EPS Trends* OP INC - % OF REVENUES EPS Trends by Quarter $0.55 $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $- * Total Company (Trucking and Logistics) **3Q15 - excludes 3 cents/share for two nonrecurring items. 1Q 2Q 3Q 4Q $0.45 $0.36 $0.35 $0.35 $0.30 $0.29 $0.24 $ $0.51 $0.47** $0.44 $0.32 $

21 EPS Trends $2.00 $1.80 $1.71 $1.60 $1.40 $1.40 $1.40 $1.36 $1.20 $1.00 $0.90 $1.08 $1.22 $1.25 $1.02 $0.94 $1.10 $1.18 $0.80 $0.60 $0.40 $0.20 $0.13 $0.25 $0.27 $0.34 $0.22 $0.22 $0.17 $0.46 $0.46 $0.51 $0.41 $0.61 $0.72 $0.76 $0.61 $0.60 $0.76 $0.79 $

22 WERN Truckload* Operating Margin 15.0% 11.5% 12.0% 9.0% 8.7% 6.8% 5.0% 5.9% 7.9% 9.3% 9.0% 7.2% 9.0% ST Target LT Target * Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expense). 21

23 WERN Targeting a 15% ROE & 9% ROA ROE 11.3% 8.8% 8.1% 7.5% 11.1% 14.5% 13.6% 11.7% 12.4% 14.1% 15.0% ST Target 6.9% 5.4% 5.2% 4.6% 6.6% ROA 8.4% 7.7% 6.5% 7.0% 8.0% 9.0% ST Target 22

24 TRUCKS TRAILERS TALENT TECHNOLOGY TERMINALS Newer trucks with enhanced features Newer trailers with new branding/ GPS tracking Award-Winning Customer Service Driven by Innovation Upgrading facilities THIS IS WERNER 23

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