Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q1 2024 Earnings Presentation
23 slides from Knight-swift Transportation's earnings presentation, Apr 24, 2024
Slide 1: First Quarter 2024 Earnings
First Quarter 2024 Earnings A KNIGHT-SWIFT
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: Q1 2024 Comparative Results
Q1 2024 Comparative Results Challenging and oversupplied Truckload industry endures; LTL remains resilient Total Revenue Revenue xFSC Operating Income Adj. Operating Inc. 1 Third-Party Insurance Business Impact 11.3% 11.2% (85.8%) (68.5%) • $19.5M operating loss in Q1 2024 1,822 1,637 1,613 ◦ Negati
Slide 4: Q1 2024 Segment Overview
Q1 2024 Segment Overview LTL segment provides income stability while Truckload navigates challenging market Revenue Adjusted Op Adjusted Q1 2024 Revenue Diversification xFSC2 Income1 OR1 ~16,600 irregular route and Truckload $1,094.1M $29.1M 97.3% ~6,700 dedicated tractors LTL 15% Less-than- 122 Ser
Slide 5: Operating Performance - Truckload
Operating Performance - Truckload Ongoing price pressure and weather disruptions weighed on operating margin Truckload Financial Metrics Q1 2024 Q1 2023 Change • 97.3% Adjusted Operating Ratio1 in Q1 2024 compared to (Dollars in millions) 86.6% the previous year Revenue xFSC $1,094.1 $866.0 26.3 % •
Slide 6: Operating Performance - Less-Than-Truckload
Operating Performance - Less-Than-Truckload Continuing to invest in building a nationwide LTL network LTL Financial Metrics Q1 2024 Q1 2023 Change • 90.0% Adjusted Operating Ratio1 in Q1 2024 (Dollars in millions) ◦ Weather disruptions and additional labor costs as we Revenue xFSC $241.0 $213.9 12.6
Slide 7: Operating Performance - Logistics
Operating Performance - Logistics Volume softness from the difficult market and freight diversion to our Truckload business Logistics Financial Metrics Q1 2024 Q1 2023 Change • 97.1% Adjusted Operating Ratio1 during the quarter (Dollars in millions) • 16.8% Gross margin, 300 bps decrease from prior
Slide 8: Operating Performance - Intermodal
Operating Performance - Intermodal Intermodal market remains challenged by soft demand and competitive truck alternatives Intermodal Financial Metrics Q1 2024 Q1 2023 Change • 105.6% operating ratio during Q1 2024 compared with 95.4% (Dollars in millions) the prior year Revenue ex intersegment $88.0
Slide 9: Operating Performance - All Other Segments
Operating Performance - All Other Segments Third-party insurance ceases operations, other businesses remain stable All Other Financial Metrics Q1 2024 Q1 2023 Change • Revenue decline largely as a result of winding down our (Dollars in millions) third-party insurance program Revenue $85.1 $142.0 (40
Slide 10: Earnings Power Through The Cycles
Earnings Power Through The Cycles We expect to deliver industry-leading truckload margins regardless of cycle Uniquely positioned to meaningfully improve Typical Cycles Current Cycle margins and cash flow when the market inflects Mid twenties margin during peak 1. Distinctive scale, networks, and br
Slide 11: Earnings Power Through The Cycles - LTL and Logistics
Earnings Power Through The Cycles Growing a nationwide LTL network and improving less asset-intensive businesses Less-Than-Truckload - Growing business while expanding margins • Significant truckload free cash flow funds organic and inorganic LTL investments as we build a national network • Employ d
Slide 12: Capital Deployment
Capital Deployment Strong free cash flow, prudent capital structure, and disciplined capital allocation drive long-term value for all stakeholders Prudent capital structure • Target optimal leverage position of 1.00 to 1.25 turns of EBITDA • Strong balance sheet provides flexibility to invest throug
Slide 13: EPS Guidance
EPS Guidance Expect Adjusted EPS to be in the range of $0.26 - $0.30 in Q2 and $0.31 - $0.35 in Q3 Guidance Assumptions • Revenue up slightly sequentially into Q2, then up sequentially in 3Q; OR mid-90's in Q2 and Q3 • U.S. Xpress revenue up sequentially low-single digit in Q2, then up mid-single di
Slide 14: Appendix
Appendix A KNIGHT-SWIFT
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio 1 2 (Unaudited) Quarter Ended March 31, 2024 2023 GAAP Presentation (Dollars in thousands) Total revenue $ 1,822,467 $ 1,636,932 Total operating expenses (1,801,912) (1,492,145) Operating income $ 20,555 $ 144,787 Operati
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio (Unaudited) 1 Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non-GAAP Adjusted Operating Ratio. 2 The reported results do not include the results of o
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 2 (Unaudited) Quarter Ended March 31, 2024 2023 (Dollars in thousands, except per share data) GAAP: Net (loss) income attributable to Knight-Swift $ (2,635) $ 104,284 Adjusted for: Income tax (benefit) expens
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 2 (Unaudited) Quarter Ended March 31, 2024 2023 GAAP: (Loss) earnings per diluted share $ (0.02) $ 0.64 Adjusted for: Income tax (benefit) expense attributable to Knight-Swift (0.02) 0.20 (Loss) income before
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter Ended March 31, 2 Truckload Segment 2024 2023 GAAP Presentation (Dollars in thousands) Total revenue $ 1,263,015 $ 1,012,245 Total operating expenses (1,239,868) (896,346) Operating income $
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter Ended March 31, LTL Segment 2024 2023 GAAP Presentation (Dollars in thousands) Total revenue $ 282,122 $ 255,304 Total operating expenses (261,835) (228,722) Operating income $ 20,287 $ 26,58
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter Ended March 31, Logistics Segment 2024 2023 GAAP Presentation (Dollars in thousands) Total revenue $ 126,729 $ 138,283 Total operating expenses (124,256) (125,463) Operating income $ 2,473 $
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter Ended March 31, Intermodal Segment 2024 2023 GAAP Presentation (Dollars in thousands) Total revenue $ 87,985 $ 110,572 Total operating expenses (92,893) (105,470) Operating (loss) income $ (4
Slide 23: Leadership Transition
Leadership Transition Adam Miller Andrew Hess Chief Executive Officer Chief Financial Officer • 20+ years of transportation, leadership, and • Experienced finance leader with proven track finance experience with deep understanding of record in driving financial rigor, cost management, Company cultur
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