Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q4 2019 Earnings Presentation
24 slides from Knight-swift Transportation's earnings presentation, Jan 29, 2020
Slide 1: KNX 4Q19 Earnings Presentation
Exhibit 99.2 KNX 4Q19 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 statements
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 Q4 '19 YTD 2019 Revenue (ex. fuel surcharge and intersegment transactions) $ 861M $ 3,504M Trucking Adjusted Operating Ratio (1) 86.2% 86.5% • 13,348 irregular route tractors, 5,347 dedicated tractors, and 57,857 combined trailers • Dry Van, Refrigerated, Dedicated, Flatbed, Drayage, an
Slide 5: Fourth Quarter 2019 Comparative Results
Fourth Quarter 2019 Comparative Results Knight-Swift Consolidated Q4 '19 Q4 '18 Change (Dollars in thousands, except per share data) Total revenue $ 1,196,810 $ 1,394,640 (14.2 %) Revenue xTrucking FSC $ 1,085,412 $ 1,264,585 (14.2 %) Operating income $ 99,593 $ 206,777 (51.8 %) Adj. Operating Incom
Slide 6: Operating Performance – Trucking
Operating Performance – Trucking Trucking Financial Metrics • 86.2% Adjusted Operating Ratio in Q4 '19 Q4 '18 Change Q4 2019 compared to 80.9% in the (Dollars in thousands) same quarter last year Revenue xFSC $861,428 $969,942 (11.2 %) Operating income $118,393 $183,318 (35.4 %) • 84.2% Swift Truckl
Slide 7: Historical Knight and Swift Adj. O.R. Trend
Historical Knight and Swift Adj. O.R. Trend Rolling 4 Qtr Difference in Knight Trucking and Swift Truckload Adjusted Operating Ratios ¹ 9.0% R O j 8.0% d A t h g 7.0% i n K - 6.0% R O j d A 5.0% t f i w S 4.0% = e c n 3.0% e r e f f i D 2.0% % 1.0% 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2
Slide 8: Operating Performance – Logistics
Operating Performance – Logistics Logistics Financial Metrics Q4 '19 Q4 '18 Change (Dollars in thousands) • 93.0% Adjusted Operating Ratio Revenue ex intersegment $92,757 $132,821 (30.2 %) during Q4 2019 Operating income $5,873 $13,266 (55.7 %) • 15.5% Brokerage Gross Margin Adjusted Operating Incom
Slide 9: Operating Performance – Intermodal
Operating Performance – Intermodal Intermodal Financial Metrics Q4 '19 Q4 '18 Change • Market conditions continuing to (Dollars in thousands) pressure rate and volume Revenue ex intersegment $111,816 $137,472 (18.7 %) • 10.2% reduction in revenue per Operating income $600 $13,156 (95.4 %) load Adjus
Slide 10: Significant Value Creation
Significant Value Creation Current Adjusted Pretax Income ¹ ² Year (in millions) $700 $599M • Knight-Swift $600 $535M $479M $495M $500 continues to $392M generate $400 $313M $300 meaningful $200 income 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 • 12.8% TTM Return on Net Return on Tangible
Slide 11: 2019 Capital Deployment
2019 Capital Deployment • $269.8 million of YTD Free Cash Flow (Cash from Operations less Net Cash Capex) • $111.9 million reduction in operating lease liabilities $840 million Cash From Operations Investments in the Business Shareholder Returns $570 million Net Cash CapEx $87 million Share Repurcha
Slide 12: 2020 Market Outlook
2020 Market Outlook Signs of industry capacity reductions • Significantly less new truck and trailer orders • Increased new truck order cancellations • Weak used equipment market • Transportation failures on the rise • Driver employment trending negative 1st Half of 2020 • Freight market continues t
Slide 13: 2020 Guidance
2020 Guidance • Expected Adjusted EPS for the full year 2020 of $2.00 - $2.15 • Expected Adjusted EPS for the first quarter 2020 of $.35 - $.38 Guidance Assumptions • Revenue per loaded mile will be negative year over year in Q1 and Q2 and inflect positive with low single digit increases in the seco
Slide 14: Appendix
Appendix 14 KKNIGHT JU) Swirr TRANSPORTATION
Slide 15: Adjusted Operating Income and Adjusted Operating Ratio
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio 1 2 Quarter-to-Date December 31, Year-to-Date December 31, 2019 2018 (recast) 2019 2018 (recast) GAAP Presentation (Dollars in thousands) Total revenue $ 1,196,810 $ 1,394,640 $ 4,843,
Slide 16: Adjusted Net Income Attributable to Knight-Swift
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Net Income Attributable to Knight-Swift 1 2 Quarter-to-Date December 31, Year-to-Date December 31, 2019 2018 2019 2018 (Dollars in thousands, except per share data) GAAP: Net income attributable to Knight-Swift $ 67,444 $ 151,696
Slide 17: Adjusted EPS
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted EPS 1 2 Quarter-to-Date December 31, Year-to-Date December 31, 2019 2018 2019 2018 GAAP: Earnings per diluted share $ 0.39 $ 0.86 $ 1.80 $ 2.36 Adjusted for: Income tax expense attributable to Knight-Swift 0.15 0.29 0.60 0.74 Inco
Slide 18: Segment Adjusted Operating Income and Adjusted Operating Ratio – Trucking
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio ¹ ² Quarter-to-Date December 31, Year-to-Date December 31, Trucking Segment 2019 2018 (recast) 2019 2018 (recast) GAAP Presentation (Dollars in thousands) Total revenue $ 972,8
Slide 19: Segment Adjusted Operating Income and Adjusted Operating Ratio – Logistics
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio ¹ ² Quarter-to-Date December 31, Year-to-Date December 31, Logistics Segment 2019 2018 (recast) 2019 2018 (recast) GAAP Presentation (Dollars in thousands) Total revenue $ 94,8
Slide 20: Segment Adjusted Operating Income and Adjusted Operating Ratio – Intermodal
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio ¹ ² Quarter-to-Date December 31, Year-to-Date December 31, Intermodal Segment 2019 2018 (recast) 2019 2018 (recast) GAAP Presentation (Dollars in thousands) Total revenue $ 111
Slide 21: Return on Net Tangible Assets
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Return on Net Tangible Assets 1 2 December 31, 2019 2018 2017 2016 2015 2014 2013 (Dollars in thousands) Total Assets Consolidated: Post-merger $ 8,281,732 $ 7,911,885 $ 7,683,442 $ — $ — $ — $ — Knight: Pre-merger — — — 1,078,525 1,120,23
Slide 22: Return on Net Tangible Assets
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Return on Net Tangible Assets 1 2 December 31, 2019 2018 2017 2016 2015 2014 2013 (Dollars in thousands) Total Liabilities Consolidated: Post-merger $ 2,613,429 $ 2,449,166 $ 2,443,072 $ — $ — $ — $ — Knight: Pre-merger — — — 289,794 379,8
Slide 23: Adjusted Income Before Income Taxes and Adjusted Net Income - Knight, Swift and Combined
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Income Before Income Taxes and Adjusted Net Income - Knight, Swift and Combined 1 2 Knight Swift Combined Year-to-Date December 31, Year-to-Date December 31, Year-to-Date December 31, 2017 2016 2015 2014 2017 2016 2015 2014 2017 2
Slide 24: Adjusted Leverage Ratio
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Leverage Ratio 1 Year-to-Date December 31, 2019 ($ in thousands) GAAP: Net income attributable to Knight-Swift $ 310,178 Adjusted for: Income tax expense 103,798 Interest expense 29,433 Depreciation and amortization of property an
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