Heartland Express, Inc. · NASDAQ:HTLD
Heartland Express — Merger or Acquisition (August 2022)
13 slides from Heartland Express's merger presentation, Aug 22, 2022
Slide 1: Heartland Express to Acquire Contract Freighters Truckload
Heartland Express to Acquire Contract Freighters Truckload August 22, 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains 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 are made pursuant to the safe harbor provi
Slide 3: Compelling strategic rationale – Heartland + CFI
3 Compelling strategic rationale – Heartland + CFI Note: 1 All metrics PF for combination of Heartland, Smith and CFI; 2 Reflects revenue including fuel surcharge; 3 Pro forma for the Smith Transport and CFI acquisitions. Adjusted to include Smith results for the 11 months ended 5/31/2022 as the tra
Slide 4: Transaction overview
4 Transaction overview PURCHASE PRICE ◼ Enterprise value of $525 million, plus cash, minus assumed debt, minus transaction expenses, plus retained pre-closing claims amount, plus or minus a working capital adjustment EXPECTED LEVERAGE ◼ Expected net leverage ratio of 1.25x immediate after closing ◼
Slide 5: CFI at a glance
5 CFI at a glance Key Stats (Est. July 2022 unless otherwise noted) CFI Truckload CFI Temp-Control CFI Logistics Brands Truckload Temp-Control Logistica Primary Services Over-The-Road Temp-Control Mexico: cross-border LTL, in-country TL LTM 6/30/2022 revenue (excl. FSC and eliminations) $409 million
Slide 6: Creating a top player: 2021 truckload revenue
6 2021 truckload revenue ($ millions)1 Creating a top 10 player 3,526 3,374 1,900 1,789 1,568 1,457 607 1,304 1,101 1,000 734 689 607 574 555 526 521 494 474 440 526 189 0 500 1000 1500 2000 2500 3000 3500 #1 #2 #3 #4 #5 #6 #7 PF #8 #9 #10 #11 #12 #14 #15 #17 #18 #19 #20 4,098 3 1,323 2 8th Largest
Slide 7: Uniting two highly complementary networks
WA OR ID MT ND SD MN WY UTNV CA AZ NM CO KS NE IA MO OK TX AR LA MS TN KY IN IL WI MI OH PA NY VT NH ME MA CT RI NJ DE MD DC VA WV NC SC GAAL FL BC BS SO SI CH CO NL TM DG ZA SL NA AG JA CL MI GR MX GJ QT HG DF MO PU TL VE OA CS TB CM QR YU 7 Uniting two highly complementary networks ◼ 80% of existi
Slide 8: Attractive pro forma business profile
8 Attractive pro forma business profile ($ millions) Heartland Express & Millis Transfer & Smith Transport + CFI = Pro Forma Tractors1,2 ~3,200 ~2,350 ~5,550 Average age 1.9 yrs. 2.0 yrs. 2.0 yrs. Trailers1 Average age ~9,800 4.6 yrs. ~8,000 7.0 yrs. ~17,800 5.6 yrs. Revenue by Segment ◼ Truckload ◼
Slide 9: Track record of successful integrations and delivering results
9 Track record of successful integrations and delivering results The Heartland difference Revenue Enhancement Operating ratio improvement Mid-90s Sub-80s At acquisition Today Significant improvement in operating ratio ✓ Network management across consolidated customer and driver base to enhance reven
Slide 10: Delivering best-in-class cash flows and OR through cycle
10 Delivering best-in-class cash flows and OR through cycle 82.9% 81.9% 84.0% 80.2% 78.9%3 2018 2019 2020 2021 LTM 2Q22 Heartland’s Adjusted Operating Ratio1,2 $147 $146 $179 $123 $1193 2018 2019 2020 2021 LTM 2Q22 Heartland’s Operating Cash Flows ($ millions) Note: 1 Operating Ratio calculated as O
Slide 11: Key takeaways
11 Key takeaways Creating a top 10 player in truckload and among the largest based on irregular route, asset-based truckload capacity CFI has strong north- south midwestern corridor and US-Mexico cross-border expertise Consolidated adjusted operating ratio of 85.0% or below within three years after
Slide 12: Appendix
S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L AppendixAppendix
Slide 13: Heartland operating ratio reconciliation
13 Heartland operating ratio reconciliation Heartland historical standalone ($ millions) FY 2018 FY 2019 FY 2020 FY 2021 LTM Q2 2022 Revenue $611 $597 $645 $607 $640 Revenue, excluding fuel surcharge $526 $522 $584 $531 $539 Operating expenses 521 503 552 502 453 Less: fuel surcharge (85) (75) (62)
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