Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Swift Transportation — Stifel Nicolaus Transportation and Logistics Conference (February 2016)
34 slides from Knight-swift Transportation's conference presentation, Feb 9, 2016
Slide 1: Swift Transportation First Quarter 2016
Swift Transportation First Quarter 2016
Slide 2: Forward Looking Statement
Forward Looking Statement 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 are not limi
Slide 3: Swift Transportation Overview
Swift Transportation Overview 3
Slide 4: The Swift Difference
The wift Difference • Premier $4.2 billion transportation solution provider in a fragmented industry prime for consolidation • Stability - Founded in 1966 and a history of sustained profitable growth • Size - Capacity solution with the largest fleet of truckload equipment in North America 18,000+ tr
Slide 5: U.S. Freight Transportation Market
U.S. Freight Transportation Market 2015 - $930B ^ 2026 - $1,522B ^ 4.58% CAGR For-Hire Truckload - $341.2B • Swift has the largest for-hire truckload fleet and is still only 1.3% of the market * Excludes Swift ^ Source: Bob Costello – Chief Economist & Senior Vice President American Trucking Associa
Slide 6: Stability – Providing Transportation Solutions for 50 Years
tability – Providing Transportation Solutions for 50 Years 1990-2015 CAGR: 13.5% 1990-2015 CAGR: 13.0 % Note: Acquisitions recorded with pooling of interests or similar accounting treatment reflected for full year in year of acquisition; MS Carriers - 2001, IEL – 2007, and Central Refrigerated – 201
Slide 7: Size – Unsurpassed Capacity
ize – Unsurpassed Capacity (1) 9,150 18,000+ 65,000 40+ Major Intermodal Tractors Trailers Terminals containers Leading Market Position Notes: 1. Fleet comprised of approximately 15,000 tractors driven by company drivers and approximately 4,600 owner-operator tractors Swift has the largest fleet of
Slide 8: Scale – Best in Class Terminal and Freight Network
cale – Best in Class Terminal and Freight Network Swift’s unique footprint puts us closer to our customers and the homes of our drivers Swift Confidential and Proprietary 8
Slide 9: Broad and Unique Suite of Services
Broad and Unique uite of Services Truckload Dedicated Refrigerated Intermodal Dry Van Swift Express One-way Container Dry Van Flatbed Teams Dedicated Trailer Flatbed Heavy Haul Convention Additional Solutions Refrigerated Swift Logistics Leasing & Sales Maintenance Canada Trans-Mex (DC to Store) Bal
Slide 10: Revenue by Service Offering
Revenue by ervice Offering FY 2015 Revenue, net of fuel surcharge: $3.8 Billion Swift Confidential and Proprietary 10
Slide 11: Superior Customers
uperior Customers Aligning with Best in Class Customers for Long-Term Relationships Partnering with blue-chip customers for long-term relationships Swift Confidential and Proprietary 11
Slide 12: Swift's Revenue by Industry
Swift’s Revenue by Industry FY 2015 Revenue, net of fuel surcharge: $3.8 Billion Swift is well-positioned with consumer-based customers Swift Confidential and Proprietary 12
Slide 13: Leading Edge Security and Technology
Leading Edge ecurity and Technology • Load Security - Track and Trace for high value loads • Enhanced tractor safety features • Collision avoidance, lane departure, active brake assist, roll- over stability, critical event reporting, etc. • Cameras – inward and outward facing • Customer portal • Dri
Slide 14: Strong Operating Leverage
trong Operating Leverage Loaded Miles Per Tractor Per Week (1) Rate Per Mile(1) Deadhead Miles Percentage(1) Note: 1. Operating sensitivities calculated on 2016 estimated operating results and variable/fixed cost structure for a consolidation of Swift’s trucking segments (Truckload, Dedicated & Swif
Slide 15: Financial Overview
Financial Overview Swift Confidential and Proprietary 15
Slide 16: Swift's Long Term Financial Goals
Swift’s Long Term Financial Goals* 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 Increasing Shareholder Value *Goals shared in our May 2012 Investor/Analyst Day Objec
Slide 17: Adjusted EPS 2011-2015
Adjusted EPS 2011-2015 (1) (1) (2) (1) 2011 & 2012 are as reported in 2012 10-K and have not been recast for the 2013 CRS acquisition (2) 2013 includes CRS as reported in 2013 10-K Continuing to exceed long-term targets Swift Confidential and Proprietary 17
Slide 18: RONA 2011-2015
RONA 2011-2015 (1) (1) (2) (1) 2011 & 2012 are as reported in 2012 10-K and have not been recast for the 2013 CRS acquisition (2) 2013 includes CRS as reported in 2013 10-K Continuing to exceed long-term targets Swift Confidential and Proprietary 18
Slide 19: Leverage Ratio 2011-2015
Leverage Ratio 2011-2015 Reduce our leverage ratio to roughly 1.5X by 2017 (1) (1) (2) (1) 2011 & 2012 are as reported in 2012 10-K and have not been recast for the 2013 CRS acquisition (2) 2013 includes CRS as reported in 2013 10-K Continuing to achieve long-term targets Swift Confidential and Prop
Slide 20: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio Significant improvement in leverage ratio and financial condition Swift Confidential and Proprietary 20
Slide 21: Cash Flow and Use of Capital
Cash Flow and Use of Capital (1) 2011 & 2012 are as reported in 2012 10-K and have not been recast for the 2013 CRS acquisition (2) 2013 includes CRS as reported in 2013 10-K Consistent strong Free Cash Flow generation Swift Confidential and Proprietary 21
Slide 22: Capital Allocation Strategy
Capital Allocation Strategy • Since December 2010 IPO, capital has been allocated to fleet reinvestment and debt reduction • Swift has successfully reduced leverage (Net Debt / EBITDA) to 1.99x at the end of 2015 to fall within target range of 1x-2x • Refinancings and debt reductions have reduced in
Slide 23: Optimal Capital Structure Curve
Optimal Capital Structure Curve * *Source Morgan Stanley; as of Nov 2, 2015 Nearing optimal leverage level and capital structure based on projected WACC 23 Swift Confidential and Proprietary
Slide 24: Capital Allocation Strategy
Capital Allocation Strategy • Since December 2010 IPO, capital has been allocated to fleet reinvestment and debt reduction • Swift has successfully reduced leverage (Net Debt / EBITDA) to 1.99x at the end of 2015 to fall within target range of 1x-2x • Refinancings and debt reductions have reduced in
Slide 25: Strong Financial Position
Strong Financial Position • $520 million unrestricted liquidity at 12/31/15 • $108 million cash • $412 million availability on working capital facilities • Additional $78 million of cash restricted for payment of claims • Consistent investments in fleet have reduced the average age of core sleeper f
Slide 26: Summary
Summary Swift Confidential and Proprietary 26
Slide 27: Top and Bottom Line Performance
Top and Bottom Line Performance Achieved 8% growth in Adjusted EPS on 7% growth in Revenue xFSR in 2015 Swift Confidential and Proprietary 27
Slide 28: General Economic Themes according to ATA Economist
General Economic Themes according to ATA Economist ^ Source: Bob Costello – Chief Economist & Senior Vice President American Trucking Association – February 8, 2016 Swift Confidential and Proprietary 28
Slide 29: 2016 Economic Outlook
2016 Economic Outlook ^ Source: Bob Costello – Chief Economist & Senior Vice President American Trucking Association – February 8, 2016 Growth in housing starts and consumer spending expected to continue Swift Confidential and Proprietary 29
Slide 30: 2016 Opportunities
2016 Opportunities • Strong consumer spending and housing growth • Aligned with growing customers • Leveraging suite of services with new and existing customers for further growth • Regulation could constrain capacity • Pricing on 2016 renewals on top of roll-over of 4% truckload pricing from 2015 •
Slide 31: Questions
AEA. Questions OF DELIVERING A BETTER LIFE - Ay - YEARS
Slide 32: Appendix
Appendix OF DELIVERING A BETTER LIFE - Ay - YEARS
Slide 33: 2016 Opportunities/Risks
2016 Opportunities/Risks Opportunities Risks • Strong consumer spending and housing • Economic recession growth • Aligned with growing customers • Irrational competitive behavior • Leveraging suite of services with new and • Significant increases in fuel prices existing customers for further growth
Slide 34: RONA Reconciliation
RONA Reconciliation Swift Transportation Company, excluding Central Refrigerated Transportation 12/31/2010 3/31/2011 6/30/2011 9/30/2011 12/31/2011 3/31/2012 6/30/2012 9/30/2012 12/31/2012 Assets Cash and cash equivalents $ 47,494 $ 21,549 $ 44,656 $ 40,177 $ 82,084 $ 47,684 $ 35,515 $ 43,321 $ 53,5