Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Merger or Acquisition (March 2023)
15 slides from Knight-swift Transportation's merger presentation, Mar 21, 2023
Slide 1: Knight Swift Agrees to Acquire U.S. Xpress
Knight Swift Agrees to Acquire U.S. Xpress March 21, 2023
Slide 2: Disclosure
Disclosure This communication contains “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 that provides a safe harbor for forward-looking statements
Slide 3: Non-GAAP Financial Data
Non-GAAP Financial Data This presentation includes statements regarding Knight-Swift management’s general expectations regarding Knight-Swift’s future adjusted earnings per share (“Adjusted EPS”), adjusted operating ratio (“Adjusted OR”), adjusted earnings before interest, taxes, depreciation, and a
Slide 4: Additional Information
Additional Information This communication is being made in respect of the proposed acquisition by Knight-Swift of U.S. Xpress. A meeting of the stockholders of U.S. Xpress will be held to seek stockholder approval in connection with the proposed acquisition. U.S. Xpress will file with the Securities
Slide 5: U.S. Xpress Overview
Founded in 1985 Headquartered in Chattanooga, Tennessee #7 on 2022 Transport Topics list of Top Truckload/Dedicated carriers Operations include OTR, Dedicated, and Brokerage Operates 14 Terminals and 30 drop yards nationally Approximately 7,200 Tractors and 14,400 Trailers at 12/31/2022 About 7,900
Slide 6: Deal Summary
Deal Summary PURCHASE PRICE Enterprise value of $808mm (1) Assume outstanding balance sheet debt $484mm as of 12/31/2022 Purchase outstanding shares at $6.15 per share, $324mm Cash paid to U.S. Xpress stockholders at closing ~$291mm Rollover Shares valued at ~$33mm ($6.15 per share) at closing with
Slide 7: Deal Summary – Continued
Deal Summary – Continued TIMING Expected to close late second quarter / early third quarter of 2023 GOVERNANCE U.S. Xpress will continue as a separate brand with separate operations similar to prior KNX acquisitions At closing, the Fullers along with Eric Peterson, CFO, will transition out of their
Slide 8: Compelling Strategic Rationale
Compelling Strategic Rationale SCALE Transaction provides economies of scale Combined company’s truckload fleet will have ~25,000 tractors and 93,000 trailers Rare opportunity to acquire company of this scale, in a sector where we have proven competence GROWTH Limited opportunity for organic growth
Slide 9: Go Forward Plan / Business Evolution
Go Forward Plan / Business Evolution Bolster the U.S. Xpress brand through operational and financial improvements Segment Current State Strategy 3 Year Milestone Dedicated ~$800mm Business operating above KNX OR target for segment Share best practices, customer introduction, and cost synergies Busin
Slide 10: Debt and Leverage
Debt and Leverage Pro-forma combined leverage ratio estimated at 1.7 on 12/31/2022 Combined balance sheet debt and operating leases expected to be ~ $3.0B after close KNX assuming ~$484mm of debt and finance leases KNX incurring additional debt of $291mm at close, excluding cash acquired, transactio
Slide 11: Prior Merger Success
Prior Merger Success Merger with Swift has been highly successful and provides a general guideline of what we expect to achieve with U.S. Xpress Swift Truckload Adjusted Operating Margins improved from approximately 7% in 2017 to greater than 20% in 2022 In 2022, the U.S. Xpress Truckload Adjusted O
Slide 12: Key Takeaways
Key Takeaways Truckload remains a key component of our business Adding of one of the largest and most well-known brands in the industry, with unique turnaround opportunity KNX has extensive trucking knowledge with proven record of strong operating performance Truckload generates significant free cas
Slide 13: Appendix
APPENDIX KKNIGHT 7) SWIFT TRANSPORTATION KNIGHT *SWIFT*AAA COOPER* ABILENE *BARR-NUNN © MME
Slide 14: Non-GAAP Reconciliation: Net Leverage and Leverage Ratio
Non-GAAP Reconciliation Net Leverage and Leverage Ratio 1 (Unaudited) As of December 31, 2022 KNX USX Pro forma Adjustments 2 Proforma (Dollars in thousands) Term loans $1,000,000 $— $ — $ 1,000,000 Revolving line of credit 43,000 96,200 291,000 430,200 Accounts receivable securitization 419,000 — —
Slide 15: Non-GAAP Reconciliation: EBITDA and Adjusted EBITDA
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA 1 (Unaudited) Year-to-Date December 31, 2022 KNX USX Proforma (Dollars in thousands) GAAP: Net income $771,325 $(43,988) $727,337 Adjusted for: Depreciation and amortization of property and equipment 594,981 82,289 677,270 Amortization of intangible
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