Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q2 2023 Earnings Presentation
23 slides from Knight-swift Transportation's earnings presentation, Jul 20, 2023
Slide 1: Second Quarter 2023 Earnings
Second Quarter 2023 Earnings
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. Such forward-looking statements
Slide 3: KNX Q2 2023 Comparative Results
KNX Q2 2023 Comparative Results Significant pressure on margins amid extended demand softness Total Revenue Revenue xFSC Operating Income Adj. Operating Inc. 1 (20.8%) (17.9%) (71.1%) (66.3%) 1,695 326 340 1,961 1,390 In millions In millions 1,553 94 115 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 2Q22 2Q23 Net I
Slide 4: Segment Overview
Segment Overview Less pressure on volume and price in LTL than in other businesses Truckload Less-than-Truckload Q2 2023 Revenue Diversification Q2 2023 YTD Q2 2023 Q2 2023 YTD Q2 2023 Revenue xFSC 2 $ 829.4M $ 1,695.4M Revenue xFSC $ 228.6M $ 442.5M Adjusted Op Income 1 $ 68.2M $ 184.5M Adjusted Op
Slide 5: Operating Performance - Truckload
Operating Performance - Truckload Historic price declines weigh on results Truckload Financial Metrics • 91.8% Adjusted Operating Ratio1 in Q2 2023 compared to 78.9% the previous year Q2 2023 Q2 2022 Change • Largest truckload trailer fleet continues to grow and now (Dollars in thousands) nearly 80,
Slide 6: Operating Performance - LTL
Operating Performance - LTL Continued strong performance, poised for growth • 85.1% Adjusted Operating Ratio1 in Q2 2023 LTL Financial Metrics • $34.2M of Adjusted Operating Income1 Q2 2023 Q2 2022 Change (Dollars in thousands) • Shipments per day bottomed in April and built throughout Revenue xFSC
Slide 7: Operating Performance - Logistics
Operating Performance - Logistics Solid margins despite significant volume declines Logistics Financial Metrics • 91.6% Adjusted Operating Ratio1 during the quarter • 19.4% Gross margin Q2 2023 Q2 2022 Change (Dollars in thousands) • 35.0% YoY decrease in load count as demand remains soft Revenue ex
Slide 8: Operating Performance - Intermodal
Operating Performance - Intermodal Competitive truckload market adds to demand weakness Intermodal Financial Metrics • 106.4% operating ratio during Q2 2023 compared with 89.3% the prior year Q2 2023 Q2 2022 Change (Dollars in thousands) • 24.5% year-over-year decrease in average revenue per load Re
Slide 9: Operating Performance - Non-Reportable
Operating Performance - Non-Reportable Early signs of progress in shifting business exposure Q2 Non-Reportable Performance: Non-Reportable Financial Metrics • 1.6% increase in revenue to $130.1M Q2 2023 Q2 2022 Change (Dollars in thousands) • ($7.1M) in operating loss Revenue $130,110 $128,112 1.6 %
Slide 10: Capital Allocation
Capital Allocation Taking steps in pursuit of long-term opportunities Year to Date 2023 • Generated Free Cash Flow1 of $303.1M YTD • Increased dividend 17% to $0.56 per share annualized, generating return of capital to shareholders of $45.9M YTD Capital Deployment Strategic Investments to improve re
Slide 11: U.S. Xpress - Miles of Opportunity
U.S. Xpress - Miles of Opportunity Acquisition closed July 1st, teams fully engaged to improve performance Unprofitable at acquisition, plan in place & work underway to achieve $1 dollar of EPS accretion with high-80's OR by 2026, with further EPS opportunity as OR progress continues Improvement Foc
Slide 12: Market Outlook
Market Outlook • Continued softness in freight demand through the third quarter; modest seasonal uplift in the fourth quarter • Non-contract rates improve modestly after bottoming in Q2 but remain below contract rates through the third quarter while contract rate declines slow sequentially • Capacit
Slide 13: 2023 Guidance Update - Including U.S. Xpress
2023 Guidance Update - Including U.S. Xpress Updated expected Adjusted EPS for 2023 from $3.35 - $3.55 to new range of $2.10 - $2.30 Key Changes Prior Guidance Updated Guidance Commentary • Bids largely complete, with more pressure on TL - Revenue • Overall revenue per mile decreases high single • O
Slide 14: Appendix
Appendix
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, 2023 2022 2023 2022 GAAP Presentation (Dollars in thousands) Total revenue $ 1,552,979 $ 1,961,131 $ 3,189,911 $ 3,788,120 Total operating expenses (1,458,949)
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio (Unaudited) 1 Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non-GAAP Adjusted Operating Ratio. 2 "Amortization of intangibles" reflects the non-cash
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, 2023 2022 2023 2022 (Dollars in thousands, except per share data) GAAP: Net income attributable to Knight-Swift $ 63,326 $ 219,492 $ 167,610 $ 427,82
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, 2023 2022 2023 2022 GAAP: Earnings per diluted share $ 0.39 $ 1.35 $ 1.04 $ 2.60 Adjusted for: Income tax expense attributable to Knight-Swift 0.14 0
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, Truckload Segment 2023 2022 2023 2022 GAAP Presentation (Dollars in thousands) Total revenue $ 953,659 $ 1,188,809 $ 1,965,904 $ 2,269,340 Total operati
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, LTL Segment 2023 2022 2023 2022 GAAP Presentation (Dollars in thousands) Total revenue $ 267,105 $ 283,847 $ 522,409 $ 538,972 Total operating expenses
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, Logistics Segment 2023 2022 2023 2022 GAAP Presentation (Dollars in thousands) Total revenue $ 119,943 $ 248,662 $ 258,226 $ 530,701 Total operating exp
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Segment Adjusted Operating Income and Adjusted Operating Ratio 1 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, Intermodal Segment 2023 2022 2023 2022 GAAP Presentation (Dollars in thousands) Total revenue $ 104,327 $ 132,871 $ 214,899 $ 242,093 Total operating ex
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Free Cash Flow 1 (Unaudited) Year-to-Date June Year-to-Date Year-to-Date June 30, 2023 December 31, 2022 30, 2022 TTM June 30, 2023 GAAP: Cash flows from operations $ 722,190 $ 1,435,853 $ 719,984 $ 1,438,059 Adjusted for: Proceeds from sale of property and equipment, includi
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