Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q1 2018 Earnings Presentation
22 slides from Knight-swift Transportation's earnings presentation, Apr 25, 2018
Slide 1: 1Q 2018 Earnings Call Presentation
1Q 2018 Earnings Call 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. Forward-looking statements are
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: First Quarter 2018 Results
Adjustments • $10.3M of amortization expense (2017 merger-related intangibles only) First Quarter 2018 Results (1) The reported results do not include the results of operations of Swift Transportation Company (Swift) and its subsidiaries on and prior to the merger with Knight Transportation, Inc. (K
Slide 5: First Quarter 2018 Results
First Quarter 2018 Results 5 (1) The Swift Historical Information has not been prepared in accordance with the rules of the Securities and Exchange Commission, including Article 11 of Regulation S-X, and it therefore does not reflect any of the pro forma adjustments that would be required by Article
Slide 6: Strong Balance Sheet
Strong Balance Sheet • Reduced net debt $107 million from 12/31/17, after purchasing Abilene and first quarter net cash capex of $7 million • Full year net cash capex still expected to be between $525-$575 million • $711 million of unrestricted cash and available liquidity • Shareholder equity of $5
Slide 7: Abilene Motor Express
Abilene Motor Express 7 • Acquired March 16th of 2018 • Operating Ratio in the low 90’s • Approximately $100 million in annual revenue, 400 tractors • Dry van and temperature controlled services • Strategy similar to other acquisitions • Maintain distinct brand • Leverage buying power and other syne
Slide 8: Operating Performance – Knight
Trucking • Average revenue per tractor excluding fuel surcharge increased 17.4% • Miles per truck increased 1.8% • Grew operational truck count by 24 from Q4 2017 (excludes Abilene) Logistics • Brokerage revenue increased 25.2% • Brokerage gross margin improved 30 bps to 14.5% Operating Performance
Slide 9: Operating Performance - Swift
• Seeing benefits in synergy efforts • Continued year-over-year OR improvements in each segment • Improving freight market and expense reduction • Continued challenge with a difficult driver market • Truck count decreased 386 sequentially Operating Performance - Swift (1) See GAAP to non-GAAP reconc
Slide 10: Market Update
Market Update 10 • Improved GDP growth • Continued Driver shortage • ELD mandate • Still expecting contract rates to increase in the high single- digits to low double-digits throughout the year
Slide 11: Execution Strategy
Execution Strategy • Maintaining Knight and Swift distinct brands • Excel at safety and service • Excel at sourcing and developing qualified driving associates • Leverage capabilities of both brands to provide capacity to our markets • Improve yield by actively managing our markets • Achieve synergy
Slide 12: Appendix
Appendix 12
Slide 13: Adjusted Operating Income and Adjusted Operating Ratio
Non-GAAP Reconciliation n Adjusted Operating Income and Adjusted Operating Ratio “ GAAP Presentation Total $s 271,182 Total operating expenses (1,177,388) (248,544) ing income S374 S$ -22.638 Operating ratio 92.6% ‘91.7% Non-GAAP Presentation Total revenue $ 1,271,192 $ 271,182 Fuel surcharge (146,9
Slide 14: GAAP Adjusted Operating Ratio
Non-GAAP Reconciliation qa) GAAP Adjusted Operating Ratio. (2) The reported results do not include the results of operations of Swift and its subsidiaries on and prior to the merger with 16, (3) 1-and includes, calculation of ee ee ee secant fahren ‘We believe the estimates are reasonable but tre su
Slide 15: Adjusted Net Income and Adjusted EPS Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconci ited). Adjusted Net Income Attributable to Knight-Swii and Adjusted EPS“? ® ‘GAAP: Net income attributable to Knight-Switt s Adjusted for: Income tax attributable to Knight-Swift at effective rate Non-GAAP: Adjusted Net Income Attributable to Knight-Swift GAA
Slide 16: Non-GAAP Reconciliation Footnotes
Non-GAAP Reconciliation ) egulation G, a ‘Swift to non-GAAP: cnsoticied "Adjusted net ir ittributable to Knight-Swil ic GAAP diluted earnings per share to non-GAAP — — EPs. (2) Refer to Non- ): Adjusted Operating I (2) (3) Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and A
Slide 17: Segment Adjusted Operating Income and Adjusted Operating Ratio
Non-GAAP Reconciliation ‘Segment Adjusted onanig ae and Adjusted Operating Ratio 7 Knight Trucking Segment GAAP Presentation Total revenue Total operating expenses wurcharge Intersegment transactions Quarter Ended March 31, 2018 (Dollars in thousands) 8 (214,170) 2017 218,690 (198,430) Total operati
Slide 18: Segment Adjusted Operating Income: Knight Logistics
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited). Segment Adjusted Operating Income and Adjusted Operating Ratio re) Knight Logistics Segment GAAP Presentation Total revenue Total ie expenses Operating income CIT ratio Non-GAAP Presentation Total revenue $ 67,177 $ 54,188 Intersegment tra
Slide 19: Non-GAAP Reconciliation 19
Non-GAAP Reconciliation 19
Slide 20: Segment Adjusted Operating Income and Ratio – Continued
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudite! ‘Segment Adjusted Operating Income and Adjusted Operating Ratio — Continued” ‘Swift Transportation Quartor Ended March 31,2018 Swift Truckload Swift intermodal GAAP Presentation —-= Total revenue $s 200,824 $ 104,114 Total operating expenses
Slide 21: Adjusted Operating Income: Swift, Knight, and Combined
Non-GAAP Reconciliation Reconciliation (Unaudited): achesied Opeatig Income and Adjusted Operating Ratio Swift, Knight, and Combined SWIFT KNIGHT KNIGHT-SWIFT COMBINED. ‘Duarte Ended MOTOR TT ‘Dears Ended Morn ‘Quarter Ended March Eco iT En eg Ec en Ea Eg GAAP ‘Dotars in ousands) ‘Doles ia thousands
Slide 22: Non-GAAP Reconciliation 22
Non-GAAP Reconciliation 22
Knight-Swift Transportation Holdings — Q1 2018 Earnings Presentation on 6ix