Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q2 2018 Earnings Presentation
23 slides from Knight-swift Transportation's earnings presentation, Jul 25, 2018
Slide 1: 2Q 2018 Earnings Call Presentation
2Q 2018 Earnings Call Presentation 1
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: Second Quarter 2018 Results
Second Quarter 2018 Results (1) (dollars in thousands, except per share data) Quarter Ended June 30, 2018 2017 Change Total Revenue $1,331,683 $273,243 387.4% Revenue xFSC $1,169,748 $247,022 373.5% Operating Income $124,242 $28,410 337.3% Adj. Operating Income (2) $134,929 $32,588 314.0% Net Income
Slide 5: Second Quarter 2018 Results
Second Quarter 2018 Results 2nd Qtr Rev xFSC 2nd Qtr Adj. Operating Income(2) $1,400 $150 +47.1% $1,200 $125 Millions Millions $1,000 $100 $800 $75 $600 $400 $50 $200 $25 $- $- 2Q16 2Q17 2Q18 2Q16 2Q17 2Q18 (1) (1) Knight Swift Pre-Merger Swift Post-Merger Knight Swift Pre-Merger Swift Post-Merger (
Slide 6: Strong Balance Sheet
Strong Balance Sheet • Reduced on-balance sheet net debt $151 million to $744 million since 12/31/17, and made similar progress reducing off-balance sheet debt • Net cash capex of $121 million during the six months ended 6/30/18 • Year to date free cash flow of $255 million • Authorized share repurc
Slide 7: The Leading Truckload Franchise
The Leading Truckload Franchise Knight-Swift Transportation Holdings, Inc. • Proven track record as the most profitable truckload carrier Industry leading OR at Knight over two decades. • Largest decentralized truckload carrier network 50+ years in the making. • Largest irregular-route truckload fle
Slide 8: Operating Performance - Knight
Operating Performance - Knight Adjusted Operating Ratio (1) 2Q18 2Q17 Change • Significant rate improvement in Trucking 77.7% 84.6% -690 bps contract and spot Logistics 94.6% 95.0% -40 bps • Meaningful Operating Ratio Consolidated 81.6% 86.8% -520 bps expansion even with Abilene Revenue, excluding t
Slide 9: Operating Performance - Swift
Operating Performance - Swift Adjusted Operating Ratio (1) 2Q18 2Q17 Change • Meaningful rate improvement Truckload 87.4% 93.0% -560 bps • OR improvement in nearly every Dedicated 85.4% 86.4% -100 bps segment Refrigerated 98.0% 94.7% 330 bps Intermodal 95.6% 98.0% -240 bps • Organization embracing c
Slide 10: Merger Update
Merger Update • Creating a stronger foundation at Swift • 80% of the trucking business (15,300 trucks) is performing well demonstrated by a combined adjusted operating ratio of 83.8% • Refrigerated business is behind expectations, but is being addressed • Intermodal continues to be profitable and ma
Slide 11: Q3 & Q4 Guidance
Q3 & Q4 Guidance • Expected Adjusted EPS for the third quarter 2018 of $0.56 - $0.60 • Expected Adjusted EPS for the fourth quarter 2018 of $0.68 - $0.72 11
Slide 12: Appendix
Appendix ee i
Slide 13: Non-GAAP Reconciliation: Adjusted Operating Income and Ratio
Non-GAAP Reconciliation Non-GAAP Reconci GAAP Presentation Total revenue Total operating expenses Operating income Operating ratio Non-GAAP Presentation Total revenue Fuel surcharge Revenue, excluding fuel surcharge Total operating expenses Adjusted for: Fuel surcharge ‘Amortization of intangibles ®
Slide 14: Regulation G reconciliation notes
Non-GAAP Reconciliation Pursuant to the requirements of Regulation G, this table reconciles GAAP non- GAAP Adjusted Operating Ratio. ‘The reported results do not include the results of operations of Swift and its subsidiaries on and prior to the merger with Knight on September 8, 2017 do not include
Slide 15: Reconciliation (Unaudited)
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited) Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS)? ‘Quarter-to-Date June 30, Year-to-Date June 30, 2048 2007 208 2087 (Dollars In thousands) GAAP: Net income attributable to Knight-Switt $ 91,323 $ 17,970 $ 161,687 $ 32,847
Slide 16: Regulation G reconciliation footnotes
Non-GAAP Reconciliation (1) Pursuant to the requirements of Regulation G, these tables reconcile consolidated GAAP net income attributable to Knight- ‘Swift to non-GAAP consolidated Adjusted net income attributable to Knight-Swift and consolidated GAAP diluted earnings per share to non-GAAP consolid
Slide 17: Adjusted Operating Ratio: Knight Trucking Segment
Non-GAAP Reconciliation usted Operating Ratio? Knight Trucking Segment ‘Quarter to-Date June 30, Year-to-Date June 30, 2078 2097 2078 2017 GAAP Presentation (Dolars in thousands) Total revenue $ 294,699 $ 220323 $ 549,667 $ 439,013 Total operating expenses (238.117) _ (194.561 cs 287) __ (392,991 Op
Slide 18: Knight Logistics Segment
Knight Logistics Segment GAAP Presentation Total revenue Total operating expenses Operating income Operating ratio Non-GAAP Presentation Total revenue Intersegment transactions Revenue, excluding intersegment transactions Total operating expenses Adjusted for. Intersegment transactions Adjusted Oper
Slide 19: Segment reconciliation notes
Non-GAAP Reconciliation Pursuant to the requirements of Regulation G, these tables reconcile segment GAAP operating ratio to segment non-GAAP Adjusted Operating Ratio. The reported results do not include the results of operations of Abilene and its subsidiaries on and prior to the Abilene Acquisitio
Slide 20: Reconciliation (Unaudited): Swift Segments
Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited). Adjusted Operating Income and Adjusted Operating Ratio Swift Segments “” Quarter: ‘Quarter to-Date June 30 2047 ‘Swift Truckload Swift Dedicated pets ines yay Swift Truckload Swift Dedicated — agp Ste Pe GAAP Presentation (Dollars in thous
Slide 21: Regulation G reconciliation footnotes
Non-GAAP Reconciliation (1) Pursuant to Regulation G, this Ratio. Py ie oust aera acres est Seen epee the rules of the Securities and Exchange Commission, ticle 11 of Regulat reflect any of Tot The Sw Histone Intaralon ces nat pape! iondcate the ress That would have been obtained had te Swi and fh m
Slide 22: Non-GAAP Reconciliation: Swift, Knight, and Combined
Non-GAAP Reconciliation ‘Non-GAAP Reconciliation (Unaudited) | Adjusted Operating Income and Adjusted Operating Ratio Swift, Knight, and Combined SWIFT KNIGHT KNIGHT-SWIFT COMBINED ae thousands) Total revenue $ 962,737 $ 993,058 $1,011,854 $ 371,283 $ 273243 $ 276,318 $12,337) $ 1,331,683 $ 1,266,30
Slide 23: Adjusted Operating Ratio notes
Non-GAAP Reconciliation Pursuant Regulation G, P Adjusted Operating Ratio. 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 adj
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