Core Insights - Werner Enterprises reported a revenue of $712.11 million for the quarter ended March 2025, reflecting a decline of 7.4% year-over-year and a surprise of -4.65% compared to the Zacks Consensus Estimate of $746.81 million [1] - The company's EPS was -$0.12, a significant drop from $0.14 in the same quarter last year, resulting in an EPS surprise of -200.00% against the consensus estimate of $0.12 [1] Financial Performance Metrics - The operating ratio for Truckload Transportation Services was reported at 100.2%, exceeding the three-analyst average estimate of 96.5% [4] - Average trucks in service for Dedicated services were 4,783, below the two-analyst average estimate of 5,044 [4] - Year-over-year revenue change for One-Way Truckload in total miles per truck per week was -3.5%, compared to an estimated -0.5% by two analysts [4] - Revenues from Werner Logistics were $195.56 million, lower than the three-analyst average estimate of $204.15 million, marking a year-over-year decline of -3.4% [4] - Truckload Transportation Services reported revenues of $501.88 million, which was below the $530.15 million average estimate, representing an 8.9% year-over-year decline [4] - Trucking revenues, net of fuel surcharge, were $433.07 million, compared to the average estimate of $458.51 million, indicating a -7.8% change year-over-year [4] - Non-trucking and other revenues increased by 35.1% year-over-year, reaching $11.16 million, surpassing the average estimate of $9.90 million [4] - Dedicated trucking revenues, net of fuel surcharge, were $278.65 million, below the average estimate of $299.14 million, reflecting a -7.4% year-over-year change [4] - One-Way Truckload trucking revenues, net of fuel surcharge, were $154.42 million, compared to the estimated $164.13 million, showing an -8.5% change year-over-year [4] Stock Performance - Over the past month, shares of Werner have returned -4.3%, while the Zacks S&P 500 composite experienced a -0.8% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

1Q25 EARNINGS PRESENTATION April 29, 2025 1 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. Such forward-looking statements are based on information presently available to the Company's management and are current only as ...

Company Performance - Werner Enterprises reported a quarterly loss of $0.12 per share, matching the Zacks Consensus Estimate, and down from earnings of $0.14 per share a year ago, indicating an earnings surprise of -200% [1] - The company posted revenues of $712.11 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.65% and down from $769.08 million year-over-year [2] - Over the last four quarters, Werner has not surpassed consensus EPS or revenue estimates [2] Stock Outlook - Werner shares have declined approximately 21.9% since the beginning of the year, compared to a -6% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.27 on revenues of $779.05 million, and for the current fiscal year, it is $1.11 on revenues of $3.13 billion [7] Industry Context - The Transportation - Truck industry, to which Werner belongs, is currently in the bottom 5% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Werner's stock performance [5][6]

Financial Data and Key Metrics Changes - Revenues decreased by 7% year-over-year, with adjusted EPS at negative $0.12, down $0.25 from the previous year [6][23] - Adjusted operating margin was negative 0.3%, and adjusted TTS operating margin was 0.4% net of fuel surcharges [6][23] - Operating cash flow was $29 million for the quarter, representing 4% of total revenue, with free cash flow at $37 million or 5% of total revenues [32] Business Line Data and Key Metrics Changes - Truckload Transportation Services (TTS) total revenue was $502 million, down 9%, with revenues net of fuel surcharges declining 7% to $444 million [24] - Dedicated revenue net of fuel was $279 million, down 7%, representing 64% of TTS trucking revenues [25] - One Way Truckload revenue net of fuel was $154 million, a decrease of 9%, with revenue per truck per week decreasing 3.2% [27] Market Data and Key Metrics Changes - Approximately 10% of total revenues are from cross-border Mexico shipments, with a strong presence in manufacturing, industrial, and food and beverage products [19][20] - The retail vertical accounted for 62% of revenues in 2024, with stable volumes observed across discount retail customers [21] Company Strategy and Development Direction - The company is focused on three priorities: driving growth in core business, operational excellence, and capital efficiency [13][16] - The dedicated business is expected to benefit from supply chain uncertainty in 2025, with a strong pipeline of new contracts [9] - The company plans to increase its cost savings target for 2025 from $25 million to $40 million, aiming for a more cost-efficient operating model [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that first-quarter results did not meet expectations due to elevated insurance costs, extreme weather, and IT spending [5][6] - The company remains optimistic about long-term growth despite current challenges, citing structural improvements and strategic investments [40] - Management highlighted the importance of legislative reform to address nuclear verdicts and insurance claims, which continue to pressure results [58][61] Other Important Information - The company closed a new $300 million credit facility, increasing liquidity to $777 million, up nearly 70% from year-end [32][34] - The average age of the truck and trailer fleet at the end of the first quarter was 2.2 and 5.4 years, respectively [38] Q&A Session Summary Question: Discussion on dedicated margins versus OTR - Management indicated that dedicated margins typically outperform one-way margins, with recent wins expected to improve overall network health [44][46] Question: Insurance concerns and potential resolutions - Management emphasized the need for tort reform and legislative changes to mitigate the impact of nuclear verdicts on insurance costs [57][58] Question: Market capacity and demand issues - Management noted that while demand indicators were strong, tariff uncertainty and network disruptions have created challenges, but they expect capacity attrition to accelerate [66][68] Question: Volume exposure to overseas imports - Approximately 10% of one-way volume is exposed to the West Coast, with management expressing optimism about the resilience of retail customers despite uncertainties [74][80] Question: Performance of recent acquisitions - Management acknowledged that while acquisitions have not yet leveraged expected operating efficiencies, they remain optimistic about customer acceptance and growth [82][84]

Financial Performance - Total revenues for Q1 2025 were $712.1 million, a decrease of $57.0 million, or 7%, compared to Q1 2024[5] - Operating loss for the quarter was $5.8 million, compared to an operating income of $15.6 million in the prior year, representing a decline of 137%[5] - Adjusted operating loss was $1.8 million, a decrease of $20.4 million from the prior year's adjusted operating income of $18.6 million[5] - Net loss attributable to Werner was $10.1 million, compared to a net income of $6.3 million in the prior year, marking a 260% decline[8] - Cash flow from operations decreased by 67% to $29.4 million compared to $88.6 million in Q1 2024[18] - Operating revenues for Q1 2025 were $712.1 million, a decrease of 7.4% from $769.1 million in Q1 2024[29] - Net loss attributable to Werner for Q1 2025 was $10.1 million, compared to a net income of $6.3 million in Q1 2024[29] - Operating income for Q1 2025 was a loss of $5.8 million, down from an operating income of $15.6 million in Q1 2024[29] - Cash flow from operations decreased to $29.4 million in Q1 2025 from $88.6 million in Q1 2024[33] Revenue Breakdown - Truckload Transportation Services (TTS) revenues decreased by $49.3 million, or 9%, to $501.9 million, while Logistics revenues declined by $6.9 million, or 3%, to $195.6 million[9] - Truckload Transportation Services revenue fell to $501.9 million in Q1 2025, down 9% from $551.1 million in Q1 2024[35] - Werner Logistics revenue decreased to $195.6 million in Q1 2025, down 3.9% from $202.5 million in Q1 2024[35] - Trucking revenues, net of fuel surcharge, declined by 8.5% to $154,421,000 in Q1 2025 compared to $168,837,000 in Q1 2024[38] - Non-GAAP adjusted operating revenues, net of fuel surcharge, decreased to $654,474,000 in Q1 2025 from $696,097,000 in Q1 2024[42] Operational Metrics - Average revenues per truck per week for TTS decreased by 1.4% year over year, with a customer retention rate of 87%[12] - Average revenues per truck per week fell by 1.4% to $4,493 in Q1 2025 from $4,555 in Q1 2024[38] - Average trucks in service decreased by 6.6% to 7,415 in Q1 2025 from 7,935 in Q1 2024[38] - Total trailers at quarter end decreased by 9.8% to 24,930 in Q1 2025 from 27,650 in Q1 2024[38] - Average percentage of empty miles increased to 16.01% in Q1 2025 from 14.90% in Q1 2024[38] Expenses and Liabilities - Total operating expenses for Q1 2025 were $717.9 million, an increase from $753.5 million in Q1 2024[29] - As of March 31, 2025, total debt outstanding was $640 million, an increase from $598 million a year earlier[22] - Current assets as of March 31, 2025, were $538.7 million, slightly down from $541.8 million at the end of 2024[31] - Total liabilities decreased to $1.51 billion as of March 31, 2025, from $1.56 billion at the end of 2024[31] Tax and Investment - The effective income tax rate for Q1 2025 was 23.7%, down from 32.9% in Q1 2024[6] - The company reported gains on strategic investments of $0.1 million, compared to losses of $0.3 million in the prior year[7] Non-GAAP Adjustments - Non-GAAP adjusted operating income for Q1 2025 was a loss of $1,803,000, down from an income of $18,591,000 in Q1 2024[42] - Non-GAAP adjusted operating margin for the Truckload Transportation Services segment was 0.4% in Q1 2025, down from 4.1% in Q1 2024[43] - Non-GAAP adjusted operating income for the Werner Logistics segment improved to $674,000 in Q1 2025 from a loss of $1,180,000 in Q1 2024[46] - The income tax effect of non-GAAP adjustments is calculated using the updated annual incremental income tax rate for 2024[51] Other Considerations - The company accrued pre-tax insurance and claims expense of $0.5 million per month related to a jury verdict from a December 2014 accident, with a maximum liability of $10.0 million[47] - Amortization expense related to intangible assets from business acquisitions is excluded from core operating performance metrics[48] - Non-operating mark-to-market adjustments for minority equity investments are excluded to provide a clearer comparison of performance[49] - Earnings/losses from equity method investments are excluded from performance metrics for better comparability[50] - Fluctuating fuel prices and fuel surcharge revenues impact the total company operating ratio, with management favoring netting fuel surcharge revenues against fuel expenses for consistency[52] - Excluding purchased transportation expense from Werner Logistics operating revenues provides a clearer measurement of service sourcing and sales capabilities[53]

Financial Performance - Operating revenues for the year ended December 31, 2024, were $3,030,258, a decrease of 7.7% compared to $3,283,499 in 2023[193]. - Net income attributable to Werner for 2024 was $34,233, down 69.5% from $112,382 in 2023[193]. - Comprehensive income attributable to Werner for 2024 was $25,480, down from $113,990 in 2023[196]. - Net income for 2024 was $33,570,000, down from $112,290,000 in 2023, representing a decrease of about 70%[201]. - Basic earnings per share for 2024 were $0.55, down from $1.77 in 2023, a decline of 68.9%[230]. - Total consolidated revenues for the year ended December 31, 2024, were $3.030 billion, a decrease from $3.283 billion in 2023[314][315]. Operating Expenses - Total operating expenses decreased to $2,964,110 in 2024 from $3,107,083 in 2023, reflecting a reduction of 4.6%[193]. - Fuel expenses decreased significantly to $275,413 in 2024 from $345,001 in 2023, a reduction of 20.2%[193]. - Operating expenses for the reportable segments were $2,891,439, with significant costs in salaries, wages, and benefits totaling $990,060[317]. Assets and Liabilities - Total current assets decreased from $634,628,000 in 2023 to $541,773,000 in 2024, a decline of approximately 14.6%[199]. - Total liabilities decreased slightly from $1,590,990,000 in 2023 to $1,558,361,000 in 2024, a decrease of about 2%[199]. - Total stockholders' equity decreased from $1,528,339,000 in 2023 to $1,455,932,000 in 2024, a decline of about 4.7%[199]. - Outstanding debt totaled $650.0 million as of December 31, 2024, slightly up from $648.8 million in 2023[280]. Cash Flow - Net cash provided by operating activities was $329,734,000 in 2024, down from $474,366,000 in 2023, a decline of approximately 30.5%[201]. - Cash and cash equivalents decreased from $61,723,000 in 2023 to $40,752,000 in 2024, a reduction of approximately 34%[201]. Customer Concentration - The company's ten largest customers accounted for 48% of total revenues in 2024, with Dollar General being the largest customer at 11% of total revenues[207]. - The largest customer, Dollar General, accounted for 11% of total revenues in 2024, down from 14% in 2022[320]. Acquisitions - The company acquired ReedTMS for a total purchase price of $108.6 million, with an additional cash payment of $1.5 million based on performance goals achieved[235]. - The acquisition of Baylor was completed for $89.0 million, with potential future contingent earnout payments ranging from $0 to $15.0 million based on performance[237]. Equity and Stock Repurchase - The company repurchased $67,069,000 of common stock in 2024, compared to no repurchases in 2023[201]. - Dividends on common stock increased slightly from $34,208,000 in 2023 to $35,066,000 in 2024[201]. - Dividends on common stock increased to $0.56 per share in 2024 from $0.55 per share in 2023, totaling $34,843,000 in dividends paid[203]. Foreign Currency and Translation - Foreign currency translation losses were $7.4 million for the year ended December 31, 2024, compared to gains of $6.1 million in 2023[176]. - Comprehensive income for the year ended December 31, 2024, included foreign currency translation adjustment losses of $17.4 million[231]. Debt and Interest - The interest expense increased to $39,212 in 2024 from $33,535 in 2023, an increase of 16.1%[193]. - The company had $355.0 million of variable interest rate debt outstanding at December 31, 2024, with an effective interest rate fixed at 5.97%[177]. Segment Performance - Truckload Transportation Services revenue was $2,138.3 million in 2024, down from $2,310.8 million in 2023, reflecting a decline of 7.4%[239]. - Werner Logistics revenue decreased to $831.3 million in 2024 from $910.4 million in 2023, a decline of 8.7%[239]. - The reportable segment operating income for Truckload Transportation Services in 2024 was $75.166 million, while Werner Logistics reported an operating loss of $881,000[314]. Other Financial Metrics - Non-cash equity compensation expense for 2024 was $8,856,000, reflecting an increase from previous years[203]. - The company recognized a net interest expense of $129 thousand in 2024, up from $70 thousand in 2023[286]. - The total unrecognized compensation cost related to non-vested equity compensation awards was approximately $10.4 million as of December 31, 2024[289].

Core Insights - Werner Enterprises, Inc. (WERN) reported disappointing fourth-quarter 2024 results, with earnings and revenues falling short of the Zacks Consensus Estimate, leading to a significant year-over-year decline in earnings per share (EPS) and total revenues [1][2]. Financial Performance - Quarterly EPS was 8 cents, missing the Zacks Consensus Estimate of 21 cents, and representing a 79.4% decline year-over-year [1]. - Total revenues amounted to $754.7 million, below the Zacks Consensus Estimate of $772 million, and decreased by 8.2% year-over-year [2]. - Truckload Transportation Services (TTS) revenues decreased by $52.8 million or 9%, while Logistics revenues fell by $13.8 million or 6% [2]. - Adjusted operating income was $12.2 million, down 69% year-over-year, with an adjusted operating margin of 1.6%, a decline of 320 basis points from the previous year [2]. Segment Analysis - TTS segment revenues decreased by 9% year-over-year to $527.3 million, primarily due to lower fuel surcharge revenues [3]. - Adjusted operating income for the TTS segment was $14.6 million, a 61% decline year-over-year, impacted by unfavorable claims development and a smaller fleet size [3]. - Logistics revenues totaled $213.2 million, down 6% year-over-year, with adjusted operating income declining 21% to $2.39 million [4]. Liquidity and Capital Expenditures - As of December 31, 2024, cash and cash equivalents were $40.75 million, down from $54.66 million in the prior quarter [5]. - Long-term debt decreased to $630 million from $690 million in the previous quarter [5]. - The company generated $71 million in cash from operations, with net capital expenditures of $28.7 million during the fourth quarter [5]. Share Repurchase and Future Outlook - WERN did not repurchase any shares in the fourth quarter of 2024, with 3.9 million shares remaining under its repurchase authorization [6]. - For 2025, the company anticipates TTS truck growth to improve between 1-5%, with net capital expenditures projected at $185-$235 million [7]. - The company expects dedicated revenues per truck per week to grow from breakeven to 3% in 2025, and one-way Truckload revenues per total mile to improve by 1-4% [7].

Financial Data and Key Metrics Changes - In Q4 2024, revenues totaled $755 million, down 8% year-over-year [30] - Adjusted EPS was $0.08, a decrease of $0.31 compared to the previous year [30] - Adjusted operating margin was 1.6%, a decrease of 320 basis points [30] Business Line Data and Key Metrics Changes - Truckload Transportation Services (TTS) revenue for the quarter was $527 million, down 9% [31] - TTS adjusted operating income was $14.6 million, 61% lower year-over-year [32] - Logistics revenue was $213 million, representing 28% of total revenues, down 6% year-over-year but up 3% sequentially [43] Market Data and Key Metrics Changes - One-way rates improved over 300 basis points year-over-year [36] - Average fleet size for TTS was 7,495 trucks, down 7% year-over-year [38] - Dedicated revenue per truck per week increased 1.1%, growing 27% of the last 28 quarters [39] Company Strategy and Development Direction - The company is focused on driving growth in core business, operational excellence, and capital efficiency [20][24] - The strategy includes expanding TTS and logistics operating income margins, increasing one-way rates, and growing the dedicated fleet [20] - The company anticipates a challenging but improving environment as it enters 2025 [11][24] Management's Comments on Operating Environment and Future Outlook - Management noted that the freight recession has persisted, but there are signs of improvement, including higher spot rates and strong customer sentiment [8][10] - The company expects truckload fundamentals to gradually improve throughout 2025, with rates trending positively [25][26] - Management emphasized the importance of controlling costs and maintaining operational excellence to navigate the current environment [12][21] Other Important Information - The company achieved over $50 million in cost savings in 2024, offsetting rate and inflationary pressures [46] - Free cash flow for the full year was $95 million, up 44% year-over-year [50] - The company has a strong balance sheet with $41 million in cash and cash equivalents and $460 million in total liquidity [50] Q&A Session Summary Question: Insights on Mexico's tariff situation - Management indicated ongoing conversations with shippers regarding tariff threats, noting that there hasn't been significant change in shipping patterns [72][74] - The company's exposure to Mexico is slightly above 10% of total revenues, encompassing various segments [79][80] Question: Attractiveness of dedicated services - Management highlighted a robust pipeline for dedicated opportunities, emphasizing the importance of selecting true dedicated contracts that ensure high retention rates [90][91] Question: Pricing trends and rate increases - Management reported a year-over-year increase of just over 3% in one-way rates, indicating a positive trend in pricing discipline [96][97] - Customer sentiment is improving, with more willingness to engage in rate adjustments [100] Question: Margin trajectory and operating ratio - Management acknowledged that Q1 is typically a tougher quarter, with expectations of a 35% to 40% drop in operating income from Q4 to Q1 [142] - The focus remains on maintaining production improvements and enhancing service quality to support margin recovery [136][140]

Core Insights - Werner Enterprises reported a revenue of $754.68 million for the quarter ended December 2024, reflecting a year-over-year decline of 8.2% and an EPS of $0.08 compared to $0.39 a year ago, indicating significant underperformance against Wall Street expectations [1] - The reported revenue was 2.24% below the Zacks Consensus Estimate of $772 million, and the EPS was 61.90% lower than the consensus estimate of $0.21 [1] Financial Performance Metrics - The operating ratio for Truckload Transportation Services was reported at 97.8%, exceeding the average estimate of 94.5% based on three analysts [4] - Average trucks in service for Dedicated services were 4,836, surpassing the average estimate of 4,750 based on two analysts [4] - Year-over-year revenue per total mile for One-Way Truckload increased by 3.3%, compared to the average estimate of 2.4% [4] - Year-over-year total miles per truck per week for One-Way Truckload increased by 1.7%, below the estimated 3.3% [4] Revenue Breakdown - Revenues from Werner Logistics were $213.17 million, lower than the average estimate of $221.67 million, representing a year-over-year decline of 6.1% [4] - Truckload Transportation Services reported trucking fuel surcharge revenues of $57.57 million, below the average estimate of $64.69 million, marking a year-over-year decline of 32% [4] - Total revenues for Truckload Transportation Services were $527.30 million, slightly below the estimated $533 million, reflecting a year-over-year decrease of 9.1% [4] - Trucking revenues, net of fuel surcharge, were $458.70 million, close to the average estimate of $459.78 million, indicating a year-over-year decline of 5.9% [4] - Non-trucking and other revenues were $11.03 million, exceeding the estimate of $8.53 million, showing a year-over-year increase of 37.7% [4] - Other revenues were $17.34 million, below the estimate of $19.75 million, representing a year-over-year decline of 8.6% [4] - Dedicated trucking revenues, net of fuel surcharge, were $288.80 million, slightly above the estimate of $284.63 million, reflecting a year-over-year decline of 6.6% [4] - One-Way Truckload trucking revenues, net of fuel surcharge, were $169.90 million, below the estimate of $173.94 million, indicating a year-over-year decline of 4.6% [4]

4Q24 AND FULL YEAR 2024 EARNINGS PRESENTATION FEBRUARY 6, 2025 BUSINESS OVERVIEW DEREK LEATHERS 1 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. Such forward-looking statements are based on information presently availab ...