Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q3 2018 Earnings Presentation
25 slides from Knight-swift Transportation's earnings presentation, Oct 24, 2018
Slide 1: KNX 3Q 2018 Earnings Presentation
Exhibit 99.2 KNX 3Q 2018 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 Trucking ~ 80% of Revenue Asset Light ~ 20% of Revenue • Dry Van, Refrigerated, Dedicated, Flatbed, • Knight Logistics and Swift Logistics Drayage, and Expedited product offerings • $420M in annual revenue (ttm) • Includes contiguous U.S., Mexico, and Canada • Q3 year over year revenue
Slide 5: Third Quarter 2018 Results
Third Quarter 2018 Results (1) (dollars in thousands, except per share data) Quarter Ended September 30, 2018 2017 Change Total Revenue $1,346,611 $521,608 158.2% Revenue xFSC $1,188,743 $469,683 153.1% Operating Income $144,280 $5,811 2,382.9% Adj. Operating Income (2) $156,543 $44,020 255.6% Net I
Slide 6: Third Quarter 2018 Results
Third Quarter 2018 Results Year-to-date Revenue xFSC growth of 2% and Adjusted Operating Income growth of 133% 2018 Rev xFSC by Quarter 2018 Adj. Op Income by Quarter (2) $1,400 $170 $1,200 $150 Millions Millions $1,000 $130 $110 $800 $90 $600 $70 $400 $50 $30 $200 $10 $- $(10) 1Q17 1Q18 2Q17 2Q18 3
Slide 7: Significant Margin Improvements in Each Segment
Significant Margin Improvements in Each Segment Trucking Adjusted Operating Ratio (1) 3Q18 3Q17(2) Change Knight Trucking 77.8% 85.9% -810 bps Swift Truckload 84.5% 95.1% -1,060 bps Swift Dedicated 84.9% 94.6% -970 bps Swift Refrigerated 95.6% 102.4% -680 bps Combined 84.9% 94.5% -960 bps (1) See GA
Slide 8: Operating Performance – Trucking
Operating Performance – Trucking Revenue, excluding trucking fsc (dollars in thousands) 3Q18 3Q17(2) Change Combined across the Trucking Knight Trucking $256,496 $195,763 31.0% Segments: Swift Truckload $347,455 $427,914 -18.8% • Adjusted Operating Income Swift Dedicated $144,370 $146,377 -1.4% grew
Slide 9: Swift Fleet Stabilized, Significantly More Profitable
Swift Fleet Stabilized, Significantly More Profitable Swift Ending Tractor Count 3Q18 2Q18 Change • Truck count remained flat from the Truckload 7,190 7,155 0.5% end of Q2 through the end of Q3 Dedicated 3,396 3,352 1.3% • Currently have 7 consecutive weeks Refrigerated 3,477 3,586 -3.0% of positive
Slide 10: Operating Performance – Asset Light
Operating Performance – Asset Light Adjusted Operating Ratio (1)(2) 3Q18 3Q17 Change • Combined we had 34% year over Knight Logistics 90.0% 93.5% -350 bps year growth in revenue excluding Swift Logistics 94.4% 103.3% -890 bps trucking fsc with improvements in Intermodal 90.9% 99.1% -820 bps all area
Slide 11: Creating Value for Shareholders
Creating Value for Shareholders Year-to-date 2018 we have: x • Generated $229 million of free cash flow • Repurchased $100 million of shares under $250 million authorization • Acquired Abilene Motor Express (annual revenue of $100 million) • Paid out $32 million in dividends • Reduced net debt by $1
Slide 12: Q4 2018 & Q1 2019 Guidance
Q4 2018 & Q1 2019 Guidance • Updating the range for the fourth quarter 2018 expected Adjusted EPS from $0.68 - $0.72 to $0.71 - $0.75 • Expected Adjusted EPS for the first quarter 2019 of $0.50 - $0.54 Guidance Assumptions • Truck count to remain stable • Rates improving sequentially into Q4 • Q4 se
Slide 13: Appendix
Appendix 13
Slide 14: Non-GAAP Reconciliation (Unaudited)
Non-GAAP Reconciliation ‘Non-GAAP Reconciliation (Unaudite Adjusted Operating Income and Adjusted Operating Rati Quarter t-Date September 30 Year-to Date September 30, 218 207 208 27 GAAP Presentation (Dollars in thousands) Total revenue $1,346.611 $ 521,608 $3,949,426 $ 1,066,033, Total operating e
Slide 15: Regulation G reconciliation footnotes
Non-GAAP Reconciliation (1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non- GAAP Adjusted Operating Ratio. (2) For information regarding comparability of the reported results due to mergers and acquisitions, refer to footnote
Slide 16: Non-GAAP Reconciliation: Adjusted Net Income and Adjusted EPS
Non-GAAP Reconciliation ‘Non-GAAP Reconciliation (Unaudited): Adjusted Net Income Attributable to Knigt wift and Adjusted EPS? Quarter 4o-Dae September 30 Yearto-Date September 30 ae aT ae mT (Datars ousonds) GAAP: Netincome attributable to Knight Swift $ 105881 $ 3.881 $ 267,508 $ 36,728 Adjusted f
Slide 17: Regulation G reconciliation footnotes
Non-GAAP Reconciliation (1) Pursuant to the requirements of Regulation G, these tables reconcile consolidated GAAP net income attributable to Knight- Swift to non-GAAP consolidated Adjusted net income attributable to Knight-Swift and consolidated GAAP diluted earnings per share to non-GAAP consolida
Slide 18: Adjusted Operating Income and Adjusted Operating Ratio
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio Knight, Swift, and Combined Quarter Ended March 31, 2018 Quarter Ended March 31, 2017 GAAP Presentation (Dollars i thousands) Total revenue $ 320747 $ 950,385 $4,271,192 $ 271,182 $ 963,831 $1,235,013 Total operating expe
Slide 19: Non-GAAP Reconciliation (Unaudited)
Non-GAAP Reconciliation ‘Non-GAAP Reconciliation (Unaudited) GAAP Presentation Total revenue Total operating expenses Operating income Operating ratio Non-GAAP Presentation Total revenue Fuel surcharge Revenue, excluding fuel surcharge Total operating expenses Adjusted for: Fuel surcharge ‘Amortizat
Slide 20: Regulation G reconciliation footnotes
Non-GAAP Reconciliation Oo) ) @) (4) © Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non-GAAP Adjusted Operating Ratio. ‘The Swift Historical Information has not been prepared in accordance with the rules of the Securities and E
Slide 21: Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio Knight, Swit GAAP Presentation Total revenue Total operating expenses Operating income Operating ratio Non-GAAP Presentation Total revenue Fuel surcharge Revenue, excluding fuel surcharge Total ope
Slide 22: Regulation G reconciliation footnotes
Non-GAAP Reconciliation (1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non-GAAP Adjusted Operating Ratio. (2) The Swift Historical Information has not been prepared in accordance with the rules of the Securities and Exchange
Slide 23: GAAP Presentation
Non-GAAP Reconciliation GAAP Presentation Total revenue Total operating expenses Operating income Operating ratio Non-GAAP Presentation Total revenue Fuel surcharge Intersegment transactions Revenue, excluding fuel ‘surcharge and intersegment transactions Total operating expenses ‘Adjusted for: Fuel
Slide 24: Regulation G reconciliation footnotes
Non-GAAP Reconciliation (1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non-GAAP Adjusted Operating Ratio. (2) The Swift Historical Information has not been prepared in accordance with the rules of the Securities and Exchange
Slide 25: Adjusted Operating Income and Ratio: Asset Light Segments
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio Asset Light Segments Quarter to-Oate September 30, 2018 Quartero-Date September 30,2017 Knight Swit nnermogat ombined intermouat ambineg Uboisies Logistics Assertion Logit Asset ant GAAP Presentation {Doras thousands) Tot
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