Werner Enterprises, Inc.

Good afternoon and welcome to the Werner Enterprises first quarter 2022 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to John Steele, Warner CFO. Please go ahead.

Earlier this afternoon, we issued our earnings release with our first quarter results. The release, along with the slide presentation, are available in the investor section of our website at Warner.com. Today's webcast is being recorded and will be available for replay beginning later this evening. Before we begin, please direct your attention to the disclosure statement on slide two of the presentation, as well as the disclaimers in our earnings release related to forward-looking statements. Today's remarks contain forward-looking statements that may involve risks, uncertainties, and other factors that could cause actual results to differ materially. Additionally, the company reports results using non-GAAP measures, which it believes provide additional information for investors to help facilitate the comparison of past and present performance. A reconciliation to the most directly comparable GAAP measures is included in the tables attached to the earnings release and in the appendix of the slide presentation. Now I will turn the conference over to Derek Leathers, our Chairman, President, and CEO.

Thank you, John, and good afternoon. We appreciate you joining our call today. I'm excited to share another quarter of excellent financial results. I'm very proud of our Warner team for achieving strong top and bottom line growth in the first quarter for both our truckload and logistics segments. First, let's move to slide four to level set our business. Truckload Transportation Services, or TTS, has over 8,200 trucks with a fleet mix of 63% dedicated and 37% one-way truckload. Warner has a consumer-oriented freight base with over three-quarters of our revenues in the retail and food and beverage verticals. Within the nearly 60% of our business that is retail, Warner focuses on discount retailers and home improvement with name brand customers that have extremely high on-time delivery expectations. These winning customers are growing their market share and Warner continues to grow with them. Three of our top five customers are discount retailers that perform well in economic markets when consumers place even higher priorities for value. The other two customers in our top five are industry-leading home improvement and beverage companies. Five of our top 11 customers are in discount retail or food and beverage, and they ship consumer non-durable goods with repeatable freight that is less sensitive to changes in the business cycle compared to durable goods. As validation of our superior service performance during the last year, Warner was honored to receive Carrier of the Year awards from four of our top five customers and seven of our top 15. Let's move to slide five for a summary of our financial performance. For first quarter, Revenues increased 24% to $765 million. Adjusted EPS grew 40% to $0.96 a share. And adjusted operating income rose 37% to $86.2 million. For the seventh consecutive quarter, we achieved record quarterly adjusted EPS. Dedicated is our largest business unit within TTS. Dedicated has nearly 5,200 trucks and achieved 5% truck growth year over year. Dedicated continues to thrive and grow with strong demand from our long-term core customers. We consistently deliver high service and engineered solutions to meet their complex shipping requirements. And we continue to have a good pipeline of dedicated bid activity with new and existing customers. One Way Truckload has roughly 3,000 trucks and grew its fleet by 7% year over year. One Way Truckload experienced strong freight demand in January and February. which then moderated a bit in March, but still ranks very good relative to our historical March freight trends. Warner Logistics continues to execute on its strategic plans and produced another strong quarter with significant growth in revenues and operating income. Economic uncertainties are increasing with inflation, interest rate tightening, and the effects of the war in Ukraine, including higher fuel prices. Our business model is well positioned to adapt, perform, and even prosper in disruptive markets. During first quarter, procuring new trucks and trailers has been challenging, and we were not able to receive our full allotment. We are having frequent discussions with the OEMs to plan and coordinate our new truck deliveries, based on the very difficult challenges they are dealing with for semiconductor chips, component parts, labor, and other issues. We are ensuring we get our full allotment of new trucks to minimize the impact on maintenance, production, service, and improve driver satisfaction. In first quarter, the used equipment pricing market remained very strong, and our fleet sales team performed well. We sold fewer trucks and trailers than we did a year ago due to the OEM challenges. Equipment gains were $20.5 million in first quarter compared to $21.2 million in fourth quarter and $10.5 million in first quarter a year ago. On the cost side, inflationary pressures are challenging, particularly for driver and non-driver compensation, equipment maintenance, and insurance and claims. We're effectively managing these costs without compromising the highest level of safety and service for our customers. Now, I'd like to turn the call over to John to discuss our financial results in more detail. John?