Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Swift Transportation — Baird's 2013 Industrial Conference
30 slides from Knight-swift Transportation's conference presentation, Nov 5, 2013
Slide 1: Swift Transportation November 2013
Swift Transportation November 2013 Swift Confidential & Proprietary
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer This presentation, including documents which are incorporated by reference and accompanying comments, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but
Slide 3: Transportation Industry & Swift
Transportation Industry & Swift Swift Confidential & Proprietary 3
Slide 4: Swift Transportation at a glance
Swift Transportation at a glance Multi-faceted $4 billion transportation solution provider Largest fleet of truckload equipment in North America • 17,000+ tractors, 57,000+ trailers, 8,700+ intermodal containers 35+ major terminals spanning the continent; allows us to be close to our customers and o
Slide 5: Swift Transportation at a glance
Swift Transportation at a glance 8,700+ 17,000+ 57,000+ 35 Major Intermodal Tractors Trailers Terminals containers Leading Market Position Swift has the largest fleet of truckload equipment in North America Swift Confidential & Proprietary 5
Slide 6: U.S. Freight Transportation Market
U.S. Freight Transportation Market 1 “Truckload will remain the most efficient mode of transportation” - American Trucking Association U.S. Truckload Market is highly fragmented: Opportunity to gain share Notes: 1. Based on 2012 domestic revenue data published by the American Trucking Association 2.
Slide 7: Nationwide Terminal Network
Nationwide Terminal Network (3) (2) Nationwide terminal network allows us to be close to our customers on a regional basis and our driver’s homes 7
Slide 8: Extensive Transportation Service Offerings
Extensive Transportation Service Offerings Demonstrated ability to provide total transportation solutions with a comprehensive suite of services and equipment offerings 100% of Swift’s Top 20 customers utilize multiple service offerings Transportation Solutions Equipment Selection Dry Van Temp. Flat
Slide 9: 2013 and Beyond- The Vision
2013 and Beyond- The Vision The Evolutionary The Growth Period The Transformation The Results Period Period 1991-2006 Period 2012-2017 1966-1990 2007-2011 (and beyond) • Founded • Privatization - Debt • Profitable Revenue • 1990 IPO • Flatbed • Recession Growth • 20%+ Revenue CAGR • Refrigerated • S
Slide 10: The Three Pillars of Value Creation
The Three Pillars of Value Creation Profitable Revenue Growth Improved Asset Utilization Continuous Improvement (Cost Control & Profitability) Strengthen and grow core Maximize use of drivers Four Disciplines of Execution customer relationships by cross available hours (Plus 1, HOS) (4DX) selling su
Slide 11: Total Revenue and Earnings 1990-2013
Total Revenue and Earnings 1990-2013 Total Revenue (1) (2) (6) (4) Combined Swift & Central Adjusted Operating Income (5) (2) (3)(6) (4) Impressive Revenue and Adj. Op Income CAGR’s over last 4 years Combined Swift & Central (1) Includes fuel surcharge (2) Reflects full year impact of M.S. Carriers
Slide 12: Central Refrigerated Acquisition
Central Refrigerated Acquisition Swift Confidential & Proprietary 12
Slide 13: Central Refrigerated "At a Glance"
Central Refrigerated “At a Glance” REVENUE Swift acquired 100% of Central Refrigerated on August 6, ($ in millions) (y-o-y growth) 2013 for total implied enterprise value of $225 million $485 $504 $500 $447 30% $189 million in cash and assumption of $36 million in $400 $373 $349 capital lease ob
Slide 14: Strategic Fit
Strategic Fit 2012 CENTRAL REFRIGERATED REVENUE MIX ($485 MILLION) REFRIGERATED SERVICE OVERLAP Brokerage / Intermodal Other - 10% SWIFT CENTRAL REF 4% OTR Refrigerated Over the Road (OTR) / Irregular Route Dedicated 63% Refrigerated Dedicated Fleet 23% Intermodal Brokerage PF 2012 SWI
Slide 15: Financial Summary
Financial Summary Swift Confidential & Proprietary 15
Slide 16: Consolidated Results
Consolidated Results Revenue xFSR (1) (2) (1) (2) Adjusted Operating Ratio Combined Combined Swift & Swift & Central Central Combined Swift & Central Combined Swift & Central (3) (4) (3) (4) Growth accelerating; Operating ratio improvements masked by mix changes (1) See GAAP to Non-GAAP reconciliati
Slide 17: Adjusted Operating Ratio Trends by Segment
Adjusted Operating Ratio Trends by Segment 90.0% (1) (2) 90.0% Truckload (1) (2) Dedicated 88.9% 88.6% 89.0% 87.9% 88.0% 88.0% 87.5% 88.0% 87.4% 86.4% 87.0% 86.3% 86.0% 85.6% 85.2% 86.0% 85.0% 84.0% 84.0% 83.0% 82.0% 2010 2011 2012 YTD Q3'12 YTD Q3'13 2010 2011 2012 YTD Q3'12 YTD Q3'13 (1) (2) 105.0
Slide 18: Creating Value for Swift * Creating Shareholder Value
Creating Value for Swift * Increase our RONA by 1% annual CAGR for each of the next 5 years Targeting EPS Growth Reduce our leverage of 20% for 2012 and ratio to roughly 1.5X 15% CAGR from by 2017 2013-2017 Creating Shareholder Value *Goals shared in our May 2012 Investor/Analyst Day Swift Confident
Slide 19: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio Net Debt & Leverage Ratio Continuing to deliver on our commitment to reduce debt; targeting post-transaction leverage ratio ~2.5x by year-end Swift Confidential & Proprietary 19
Slide 20: Consolidated Adjusted EPS
Consolidated Adjusted EPS (1) (2) Adjusted EPS Combined Combined Swift & Swift & Central Central Strong adjusted EPS growth; exceeding previously outlined targets (1) See GAAP to Non-GAAP reconciliation for diluted EPS to Adjusted EPS in the Annual Report on Form 10-K for the year ended December 31,
Slide 21: Creating Value for Swift * Creating Shareholder Value
Creating Value for Swift * Increase our RONA by 1% annual CAGR for each of the next 5 years Targeting EPS Growth Reduce our leverage of 20% for 2012 and ratio to roughly 1.5X 15% CAGR from by 2017 2013-2017 Creating Shareholder Value *Goals shared in our May 2012 Investor/Analyst Day Swift Confident
Slide 22: Appendix
Appendix Swift Confidential & Proprietary 22
Slide 23: Combined Swift and Central Refrigerated reconciliation table
Combined Swift and Central Refrigerated reconciliation table LTM September 30, 2013 Central Swift Refrigerated Transportation Transportation, Intercompany Swift & Central Company Inc. Elimination Entries Combined Operating revenue $ 3,573,446 $ 518,538 $ (1,618) $ 4,090,366 Less: Fuel surcharge reve
Slide 24: Central Refrigerated reconciliation table
Central Refrigerated reconciliation table YTD December 31, LTM YTD YTD 2010 2011 2012 September 30, 2013 September 30, 2013 September 30, 2012 (Unaudited) (Unaudited) (Unaudited) Operating revenue $ 372,837 $ 447,204 $ 484,665 $ 518,538 $ 393,094 $ 359,213 Less: Fuel surcharge revenue 61,104 96,084
Slide 25: Central Refrigerated EBITDA(R) reconciliation
Central Refrigerated EBITDA(R) reconciliation YTD December 31, LTM September 30, 2009 2010 2011 2012 2013 (Unaudited) Net income $ 2,572 $ 9,024 $ 12,196 $ 25,499 $ 22,743 Adjusted for: Depreciation and amortization 7,707 8,860 13,925 19,010 17,678 Interest expense 2,801 2,457 4,008 3,958 3,513 Inco
Slide 26: Combined Swift and Central Refrigerated Adj. EPS reconciliation
Combined Swift and Central Refrigerated Adj. EPS reconciliation YTD September 30, 2012 2013 Swift Transportation Company Adjusted EPS, as reported (a) $ 0.62 $ 0.80 Adjusted for: Impact of Central Refrigerated to Adjusted EPS (b) 0.08 0.07 Combined Adjusted EPS $ 0.70 $ 0.87 (a) As reported in the Q
Slide 27: Combined Swift and Central Refrigerated reconciliation table
Combined Swift and Central Refrigerated reconciliation table LTM June 30, 2013 Central Swift Refrigerated Eliminations of Transportation Transportation, Intercompany Swift & Central Company Inc. Transactions Combined (Unaudited) Operating revenue $ 3,548,611 $ 504,053 $ (1,157) $ 4,051,507 Less: Fue
Slide 28: Central Refrigerated reconciliation table
Central Refrigerated reconciliation table YTD December 31, LTM June 30, YTD June 30, YTD June 30, 2010 2011 2012 2013 2013 2012 (Unaudited) (Unaudited) (Unaudited) Operating revenue $ 372,837 $ 447,204 $ 484,665 $ 504,053 $ 256,614 $ 237,226 Less: Fuel surcharge revenue 61,104 96,084 104,322 105,219
Slide 29: Central Refrigerated EBITDA(R) reconciliation
Central Refrigerated EBITDA(R) reconciliation YTD December 31, LTM June 30, 2009 2010 2011 2012 2013 (Unaudited) Net income $ 2,572 $ 9,024 $ 12,196 $ 25,499 $ 27,528 Adjusted for: Depreciation and amortization 7,707 8,860 13,925 19,010 18,324 Interest expense 2,801 2,457 4,008 3,958 3,649 Income ta
Slide 30: Combined Swift and Central Refrigerated Adj. EPS reconciliation
Combined Swift and Central Refrigerated Adj. EPS reconciliation YTD June 30, 2012 2013 (Unaudited) Swift Transportation Company Adjusted EPS, as reported (a) $ 0.41 $ 0.52 Adjusted for: Impact of Central Refrigerated to Adjusted EPS (b) 0.05 0.06 Combined Adjusted EPS $ 0.46 $ 0.58 (a) As reported i
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