Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q3 2020 Earnings Presentation
22 slides from Knight-swift Transportation's earnings presentation, Oct 21, 2020
Slide 1: KNX 3Q20 Earnings Presentation
Exhibit 99.2 KNX 3Q20 Earnings Presentation
Slide 2: Disclosure
Disclosure This presentation, including documents incorporated herein by reference, will 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. Such forward- looking statement
Slide 3: Disclosure
Disclosure On September 8, 2017, pursuant to the Agreement and Plan of Merger, dated as of April 9, 2017, by Swift Transportation Company (“Swift”), Bishop Merger Sub, Inc., a direct wholly owned subsidiary of Swift, (“Merger Sub”), and Knight Transportation, Inc. (“Knight”), Merger Sub merged with
Slide 4: KNX Overview
KNX Overview Q3 '20 YTD 2020 Revenue (ex. fuel surcharge and intersegment transactions) $ 902.6 M $ 2,539.7 M Trucking Adjusted Operating Ratio 1 81.3 % 84.3 % • 13,446 irregular route tractors, 5,018 dedicated tractors, and 58,310 combined trailers • Dry Van, Refrigerated, Dedicated, Flatbed, Draya
Slide 5: Third Quarter 2020 Comparative Results
Third Quarter 2020 Comparative Results Knight-Swift Consolidated Q3 '20 Q3 '19 Change (Dollars in thousands, except per share data) Total revenue $ 1,210,406 $ 1,200,522 0.8 % Revenue xFSC $ 1,137,313 $ 1,090,210 4.3 % Operating income $ 165,461 $ 102,953 60.7 % Adj. Operating Income 1 $ 183,094 $ 1
Slide 6: Operating Performance – Trucking
Operating Performance – Trucking Trucking Financial Metrics • 81.3% Adjusted Operating Ratio in Q3 Q3 '20 Q3 '19 Change 2020 compared to 87.5% the previous (Dollars in thousands) year Revenue xFSC $902,592 $876,385 3.0 % Operating income $168,781 $109,409 54.3 % • 54.3% year-over-year improvement in
Slide 7: Parity Achieved
Adjusted Operating Ratio Parity Achieved Rolling 4 Qtr Difference in Knight Trucking and Swift Truckload Adjusted Operating Ratios1 10.0% 8.0% 6.0% 4.0% 2.0% —% % Difference = Swift Adj OR - Knight (2.0)% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Slide 8: Operating Performance – Logistics
Operating Performance – Logistics • Tightening capacity put pressure on Logistics Financial Metrics margins Q3 '20 Q3 '19 Change • Load counts and margin (Dollars in thousands) strengthened through the quarter Revenue ex intersegment $96,237 $83,631 15.1 % • 97.4% Adjusted Operating Ratio Operating
Slide 9: Operating Performance – Intermodal
Operating Performance – Intermodal • Improving market conditions Intermodal Financial Metrics • 99.7% Operating Ratio during Q3 2020 compared with Q3 '20 Q3 '19 Change 102.4% the prior year (Dollars in thousands) Revenue ex intersegment $98,808 $108,758 (9.1 %) • 3.7% year-over-year decrease in aver
Slide 10: Market Outlook Q4 2020 and FY 2021
Market Outlook Q4 2020 and FY 2021 • We expect the strong freight conditions to continue • Inventory restocking and strong demand will support a favorable environment into 2021 • Low double digit contract rate increases in 2021 • The challenge of sourcing and retaining drivers will continue and lead
Slide 11: 2020 Guidance
2020 Guidance Expected Adjusted EPS for the full year 2020 of $2.68 - $2.72 Expected Adjusted EPS for the full year 2021 of $3.20 - $3.40 Guidance Assumptions • Contract rate improvements in the low double digits in 2021 • Miles per truck will be flat to slightly positive year-over-year • Modest tra
Slide 12: Appendix
Appendix 2 KKNIGHT JU) Swirr TRANSPORTATION
Slide 13: Adjusted Operating Income and Operating Ratio
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date September 30, Year-to-Date September 30, 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 1,210,406 $ 1,200,522 $ 3,395,902 $ 3,647,140 To
Slide 14: Adjusted Net Income Attributable to Knight-Swift
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 Quarter-to-Date September 30, Year-to-Date September 30, 2020 2019 2020 2019 (Dollars In thousands) GAAP: Net income attributable to Knight-Swift $ 122,058 $ 74,619 $ 267,
Slide 15: Adjusted EPS Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 Quarter-to-Date September 30, Year-to-Date September 30, 2020 2019 2020 2019 GAAP: Earnings per diluted share $ 0.71 $ 0.44 $ 1.57 $ 1.40 Adjusted for: Income tax expense
Slide 16: Segment Adjusted Operating Income – Trucking
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date September 30, Year-to-Date September 30, Trucking Segment 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 975,881 $ 986,768 $ 2,7
Slide 17: Segment Adjusted Operating Income – Logistics
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date September 30, Year-to-Date September 30, Logistics Segment 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 99,018 $ 86,213 $ 248,
Slide 18: Segment Adjusted Operating Income – Intermodal
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date September 30, Year-to-Date September 30, Intermodal Segment 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 98,859 $ 108,937 $ 27
Slide 19: Return on Net Tangible Assets
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Return on Net Tangible Assets 1 September 30, 2020 2019 (Dollars in thousands) Total assets $ 8,501,361 $ 8,322,225 Adjusted for: Intangible assets, net (1,400,719) (1,391,157) Goodwill (2,922,967) (2,918,995) Tangible Assets $ 4,177,675 $
Slide 20: Adjusted Income Before Income Taxes and Adjusted Net Income
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Income Before Income Taxes and Adjusted Net Income 1 Year-to-Date Year-to-Date Year-to-Date TTM September 30, December 31, September 30, September 30, 2020 2019 2019 2020 (Dollars in thousands) GAAP: Net income attributable to Kni
Slide 21: Net Leverage and Leverage Ratio
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Net Leverage and Leverage Ratio 1 2 September 30, (Dollars2020 in thousands) Term loan $ 365,000 Revolving line of credit 170,000 Accounts receivable securitization 202,000 Other secured debt and finance leases 144,908 Total face value of
Slide 22: EBITDA and Adjusted EBITDA
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") and Adjusted EBITDA 1 Year-to-Date Year-to-Date Year-to-Date TTM September 30, 2020 December 31, 2019 September 30, 2019 September 30, 2020 (Dollars in thousands) GA
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