US Xpress Enterprises — Merger or Acquisition (March 2023)
15 slides from US Xpress Enterprises's merger presentation, Mar 21, 2023
Slide 1: Knight-Swift Agrees to Acquire U.S. Xpress
AGREES TO ACQUIRE March 21, 2023
Slide 2: Forward-Looking Statements
2 This communication contains “forward - looking statements,” within the meaning of Section 27 A of the Securities Act of 1933 , Section 21 E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 that provides a safe harbor for forward - looking statements,
Slide 3: Non-GAAP Financial Data
3 Non - GAAP Financial Data This presentation includes statements regarding Knight - Swift management’s general expectations regarding Knight - Swift’s future adjusted earnings per share (“Adjusted EPS”), adjusted operating ratio (“Adjusted OR”), adjusted earnings before interest, taxes, depreciatio
Slide 4: Additional Information
4 Additional Information This communication is being made in respect of the proposed acquisition by Knight - Swift of U . S . Xpress . A meeting of the stockholders of U . S . Xpress will be held to seek stockholder approval in connection with the proposed acquisition . U . S . Xpress will file with
Slide 5: About U.S. Xpress
5 • Founded in 1985 • Headquartered in Chattanooga, Tennessee • #7 on 2022 Transport Topics list of Top Truckload/Dedicated carriers • Operations include OTR, Dedicated, and Brokerage • Operates 14 Terminals and 30 drop yards nationally • Approximately 7,200 Tractors and 14,400 Trailers at 12/31/202
Slide 6: Deal Summary: Purchase Price, Rollover Shares and Adjusted EPS Accretion
6 ADJUSTED EPS ACCRETION • Enterprise value of $808mm (1) • Assume outstanding balance sheet debt $484mm as of 12/31/2022 • Purchase outstanding shares at $6.15 per share, $324mm • Cash paid to U.S. Xpress stockholders at closing ~$291mm • Rollover Shares valued at ~$33mm ($6.15 per share) at closin
Slide 7: Deal Summary - Continued
7 • U.S. Xpress will continue as a separate brand with separate operations similar to prior KNX acquisitions • At closing, the Fullers along with Eric Peterson, CFO, will transition out of their executive officer roles while remaining available to ensure a smooth transition • At closing, Tim H arrin
Slide 8: Transaction Rationale: Growth, Scale, Management, Capital Deployment
8 GROWTH • The parts of the USX business with most room for improvement align well with KNX strengths • Proven Knight - Swift plan gives line of sight to high - 80’s adjusted operating ratio and mid - teens returns by 2026 • Over time, TL business is expected to perform similarly to KNX’s other TL b
Slide 9: Adjusted Operating Ratio in the High 80's Drives Mid-Teens Return
9 Adjusted Operating Ratio in the high 80’s will result in a mid - teens return on invested capital Over - the - Road TL ~$750mm Historically unprofitable business Business performance high - 80’s OR level, pursuing KNX TL business 3 Year Milestone Segment Total Transportation (1) ~$300mm Profitable
Slide 10: Pro Forma Leverage
10 (1) Net Leverage is on - balance sheet debt net of unrestricted cash and cash equivalents at the balance sheet date and is calcula ted in accordance with the provisions of Knight - Swift's senior credit facility. (2) The lease adjustment for 2017 is management's estimate of the right - of - use a
Slide 11: Prior Merger Success
11 • Merger with Swift has been highly successful and provides a general guideline of what we expect to achieve with U.S. Xpress • Swift Truckload Adjusted Operating Margins improved from approximately 7% in 2017 to greater than 20% in 2022 • In 2022, the U.S. Xpress Truckload Adjusted Operating Mar
Slide 12: Key Takeaways
12 Truckload remains a key component of our business • Adding of one of the largest and most well - known brands in the industry, with unique turnaround opportunity • KNX has extensive trucking knowledge with proven record of strong operating performance • Truckload generates significant free cash f
Slide 13: Appendix
APPENDIX KNIGHT V7) SWIFT TRANSPORTATION KNIGHT*SWIFT*AAA COOPER* ABILENE +BARR-NUNN > MME
Slide 14: Pro Forma Debt and Leverage as of December 31, 2022
14 As of December 31, 2022 KNX USX Pro forma Adjustments 2 Proforma (Dollars in thousands) Term loans $ 1,000,000 $ — $ — $ 1,000,000 Revolving line of credit 43,000 96,200 291,000 430,200 Accounts receivable securitization 419,000 — — 419,000 Revenue equipment installment notes — 346,352 — 346,352
Slide 15: EBITDA and Adjusted EBITDA
15 Year - to - Date December 31, 2022 KNX USX Proforma (Dollars in thousands) GAAP: Net income $ 771,325 $ (43,988) $ 727,337 Adjusted for: Depreciation and amortization of property and equipment 594,981 82,289 677,270 Amortization of intangibles 64,843 — 64,843 Interest expense 50,803 19,054 69,857
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