Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q3 2022 Earnings Presentation
26 slides from Knight-swift Transportation's earnings presentation, Oct 19, 2022
Slide 1: Third Quarter 2022
KNIGHT TRANSPORTATION ISWIET™ KNIGHT * SWIFT*® AAA COOPER* BARR-NUNNeABILENE*® MME Third Quarter 2022
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: KNX Q3 2022 Comparative Results
KNX Q3 2022 Comparative Results Continued growth with strong margins Total Revenue Revenue xFSC Operating Income Adj. Operating Inc. 1 + 15.5% + 9.2% (1.7%) (1.4%) 1,897 1,642 1,650 1,511 283 270 265 279 In millions In millions 3Q21 3Q22 3Q21 3Q22 3Q21 3Q22 3Q21 3Q22 Net Income Adj. Net Income 1 Ear
Slide 4: Segment Overview
Segment Overview Significant contributions from each segment Truckload Less-than-Truckload Q3 2022 Revenue Diversification Q3 2022 YTD 2022 Q3 2022 YTD 2022 Revenue xFSR 2 $ 967.8M $ 2,890.8M Revenue xFSR $ 224.4M $ 663.3M Truckload 981.5 57.3 % Adjusted Op Income 1 $ 176.1M $ 588.2M Adjusted Op Inc
Slide 5: Operating Performance - Truckload
Operating Performance - Truckload Truckload continuing to generate industry leading margins • 81.8% Adjusted Operating Ratio1 in Q3 2022 compared Truckload Financial Metrics to 77.8% the previous year Q3 2022 Q3 2021 Change • 14.9% year-over-year decrease in Adjusted Operating (Dollars in thousands)
Slide 6: Operating Performance - LTL
Operating Performance - LTL Delivering sustainable results as we continue to advance integration plans • 84.5% Adjusted Operating Ratio1 in Q3 2022 LTL Financial Metrics • $34.9M of Adjusted Operating Income1 Q3 2022 Q3 2021 Change • 9.3% increase in LTL Revenue xFSC per shipment (Dollars in thousan
Slide 7: Operating Performance - Logistics
Operating Performance - Logistics Expansive trailer network fueling power-only services load count growth • 86.8% Adjusted Operating Ratio1 during the quarter, an Logistics Financial Metrics 80 basis point improvement from the prior year Q3 2022 Q3 2021 Change • 20.9% Gross margin for Q3 representin
Slide 8: Operating Performance - Intermodal
Operating Performance - Intermodal Growing Revenue and Margin Intermodal Financial Metrics • 16.0% increase in Revenue excluding intersegment transactions Q3 2022 Q3 2021 Change (Dollars in thousands) • 34.5 % year-over-year improvement in Operating Income Revenue ex intersegment $130,777 $112,754 1
Slide 9: Tapping into New Growth Verticals while Diversifying
Tapping into New Growth Verticals while Diversifying Revenue is on pace to nearly quadruple since 2019 Q3 Non-Reportable Performance: Non Reportable Revenue and Operating Income Trends • 56.0% increase in revenue to $139.4M $75M • 96.6% Increase in operating income to $18.5M $500M $50M Since 2019: $
Slide 10: Diversification Leading to Consistent Performance
Diversification Leading to Consistent Performance Continued focus on growing LTL network and less asset intensive services while leveraging core Truckload business Percent of Adjusted Operating Income 1 Rolling 4 Quarter Adjusted EPS 100% $6.00 $5.50 $5.00 80% $4.50 $4.00 60% $3.50 $3.00 40% $2.50 $
Slide 11: Capital Allocation
Capital Allocation Strong free cash flow provides flexibility in capital deployment Year-to-Date 2022: 1 TTM Free Cash Flow 2018 - Q3 2022 • Generated Free Cash Flow1 of $742.5M year-to-date 2022 and $1,029.2M TTM $1,500M $1,250M • Increased dividend 20% to $0.12 generating a total return to shareho
Slide 12: KNX Creating Value for Shareholders
KNX Creating Value for Shareholders Internal investments and acquisitions have driven a 3Q Return on Net Tangible Assets 1 of 22.4% • Growing less asset intensive business 40% $1,000 ◦ Power Only ◦ Logistics ◦ Iron Services 30% $800 ◦ Warehousing • Acquiring businesses and improving results $600 ◦ S
Slide 13: Market Outlook Q4 2022
Market Outlook Q4 2022 • Overall consumer demand moderates • Minimal non-contract opportunities • Muted peak season • Strong demand continues for trailer pools • Small carriers continue to exit as a result of lower spot rates and significantly higher operating costs • LTL demand remains stable with
Slide 14: 2022 Guidance
2022 Guidance Revising EPS Outlook; Focus on long-standing excellence in execution Expected Adjusted EPS for the full year 2022 now $5.17 - $5.22, a decrease from $5.30 - $5.45 last quarter Q4 2022 Guidance Assumptions • Rates inflect negatively year-over-year as the moderating spot market yields le
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio 1 2 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 1,896,839 $ 1,642,445 $ 5,684,959 $ 4,181,160 Total operating expenses
Slide 17: 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 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 2 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, 2022 2021 2022 2021 (Dollars in thousands, except per share data) GAAP: Net income attributable to Knight-Swift $ 194,795 $ 206,178 $ 622
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 2 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, 2022 2021 2022 2021 GAAP: Earnings per diluted share $ 1.21 $ 1.23 $ 3.80 $ 2.93 Adjusted for: Income tax expense attributable to Knight-
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, Truckload Segment 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 1,160,735 $ 1,041,332 $ 3,430,075 $ 2,990,137 T
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, LTL Segment 2 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 278,615 $ 191,906 $ 817,587 $ 191,906 Total operati
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, Logistics Segment 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 210,673 $ 226,338 $ 741,374 $ 511,962 Total ope
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date September 30, Year-to-Date September 30, Intermodal Segment 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 130,777 $ 112,801 $ 372,870 $ 335,245 Total op
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Return on Net Tangible Assets 1 (Unaudited) September 30, 2022 2021 (Dollars in thousands) Total Assets $ 10,747,367 $ 10,354,982 Adjusted for: Intangible assets, net (1,782,452) (1,793,924) Goodwill (3,518,589) (3,461,898) Tangible Assets $ 5,446,326 $ 5,099,160 Total Liabil
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Income Before Income Taxes and Adjusted Net Income 1 2 (Unaudited) Year-to-Date Year-to-Date Year-to-Date TTM September 30, 2022 December 31, 2021 September 30, 2021 September 30, 2022 (Dollars in thousands) GAAP: Net income attributable to Knight-Swift $ 622,624 743
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Free Cash Flow 1 (Unaudited) Year-to-Date Year-to-Date Year-to-Date TTM September 30, 2022 December 31, 2021 September 30, 2021 September 30, 2022 GAAP: Cash flows from operations $ 1,099,195 $ 1,190,153 $ 817,524 $ 1,471,824 Adjusted for: Proceeds from sale of property and e
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