Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q2 2022 Earnings Presentation
26 slides from Knight-swift Transportation's earnings presentation, Jul 20, 2022
Slide 1: Knight-Swift Transportation Holdings
KNIGI SUE TRANSPORTATIO ISWIFTg KNIGHT * SWIFT* AAA COOPER* BARR-NUNN e ABILENE ® MME
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 2022 Comparative Results
KNX Q2 2022 Comparative Results Continued strong performance despite changing freight market Total Revenue Revenue xFSC Operating Income Adj. Operating Inc. 1 + 49.1% + 39.7% + 70.5% + 66.1% 1,695 326 340 1,961 1,213 In millions In millions 1,316 191 205 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 Net I
Slide 4: Segment Overview
Segment Overview Revenue and income growth in all segments Truckload Less-than-Truckload Q2 2022 Revenue Diversification Q2 2022 YTD 2022 Q2 2022 YTD 2022 Revenue xFSR 2 $ 981.5M $ 1,923.0M Revenue xFSR $ 224.2M $ 438.9M Truckload 981.5 57.3 % Adjusted Op Income 1 $ 206.6M $ 412.1M Adjusted Op Incom
Slide 5: Operating Performance - Truckload
Operating Performance - Truckload Fourth consecutive quarter with an Adjusted Operating Ratio1 in the 70's • 22.4% year-over-year improvement in Adjusted Truckload Financial Metrics Operating Income1 Q2 2022 Q2 2021 Change 1 • 78.9% Adjusted Operating Ratio in Q2 2022 compared (Dollars in thousands)
Slide 6: Operating Performance - LTL
Operating Performance - LTL Both revenue and cost synergies ahead of plan LTL Financial Metrics • 78.7% Adjusted Operating Ratio1 in Q2 2022 • $47.8M of Adjusted Operating Income1 Q2 2022 (Dollars in thousands) • 10.5% increase in LTL Revenue xFSC per shipment compared to proforma Q2 2021 Revenue xF
Slide 7: Operating Performance - Logistics
Operating Performance - Logistics Continued load count growth with high demand for power-only services • 205.0% increase in Adjusted Operating Income1 to Logistics Financial Metrics $44.1M with minimal capital investment Q2 2022 Q2 2021 Change (Dollars in thousands) • 48.2% increase in load count de
Slide 8: Operating Performance - Intermodal
Operating Performance - Intermodal Positioned for load volume growth in back half of 2022 Intermodal Financial Metrics • 143.8% year-over-year improvement in Operating Income Q2 2022 Q2 2021 Change (Dollars in thousands) • 89.3% operating ratio during Q2 2022 compared Revenue ex intersegment $132,85
Slide 9: Tapping into New Growth Verticals while Diversifying
Tapping into New Growth Verticals while Diversifying Revenue is on pace to nearly quadruple since 2019 Q2 Non-Reportable Performance: Non Reportable Revenue and Operating Income Trends • 91.8% increase in revenue to $128.1M $600M $60M • 614.6% Increase in operating income to $17.8M $480M $30M Since
Slide 10: Diversification Leading to Consistent Performance
Diversification Leading to Consistent Performance Building a durable company as we improve core Truckload business while expanding less asset intensive services and growing an LTL network Percent of Adjusted Operating Income 1 Rolling 4 Quarter Adjusted EPS 100% $6.00 80% $5.00 $4.00 60% $3.00 40% $
Slide 11: Capital Allocation
Capital Allocation Strong free cash flow provides flexibility in capital deployment Year-to-Date 2022: 1 TTM Free Cash Flow 2018 - Q2 2022 • Generated Free Cash Flow1 of $528.7M and $1,097.8M TTM $1,250M • Increased dividend 20% to $0.12 $1,000M generating a total return to shareholders of $39.7M $7
Slide 12: KNX Creating Value for Shareholders
KNX Creating Value for Shareholders Internal investments and acquisitions have driven a 2Q Return on Net Tangible Assets 1 of 24.8% • Growing less asset intensive business 30% $1,000 ◦ Power Only ◦ Logistics ◦ Iron Services 25% $800 ◦ Warehousing ◦ • Acquiring businesses and improving results 20% $6
Slide 13: Market Outlook 2nd Half 2022
Market Outlook 2nd Half 2022 • Overall consumer demand moderates • Continued decline in non-contract opportunities • Less visibility on peak season surge • Strong demand for trailer pools continue • Depressed spot rates combined with higher fuel, maintenance and equipment costs disincentivize new en
Slide 14: 2022 Guidance
2022 Guidance Raising EPS Outlook; Focus on long-standing excellence in execution Expected Adjusted EPS for the full year 2022 now $5.30 - $5.45, an increase from $5.20 - $5.40 last quarter Full Year Guidance Assumptions • Rates inflect negatively year over year late in the third quarter and into th
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Operating Income and Adjusted Operating Ratio 1 2 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 1,961,131 $ 1,315,701 $ 3,788,120 $ 2,538,715 Total operating expenses (1,635,353
Slide 17: 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 The reported results do not include the results of o
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 2 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, 2022 2021 2022 2021 (Dollars in thousands, except per share data) GAAP: Net income attributable to Knight-Swift $ 219,492 $ 152,804 $ 427,829 $ 282
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 2 (Unaudited) Quarter-to-Date June 30, Year-to-Date June 30, 2022 2021 2022 2021 GAAP: Earnings per diluted share $ 1.35 $ 0.92 $ 2.60 $ 1.69 Adjusted for: Income tax expense attributable to Knight-Swift 0.44
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, Truckload Segment 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 1,188,809 $ 985,858 $ 2,269,340 $ 1,948,805 Total operati
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, LTL Segment 2 2022 2022 GAAP Presentation (Dollars in thousands) Total revenue $ 283,847 $ 538,972 Total operating expenses (240,080) (468,828) Operatin
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, Logistics Segment 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 248,662 $ 166,737 $ 530,701 $ 285,624 Total operating exp
Slide 23: 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 2022 2021 2022 2021 GAAP Presentation (Dollars in thousands) Total revenue $ 132,871 $ 115,378 $ 242,093 $ 222,444 Total operating ex
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Return on Net Tangible Assets 1 (Unaudited) June 30, 2022 2021 (Dollars in thousands) Total Assets $ 10,714,878 $ 8,682,459 Adjusted for: Intangible assets, net (1,798,668) (1,403,483) Goodwill (3,518,589) (2,971,023) Tangible Assets $ 5,397,621 $ 4,307,953 Total Liabilities
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Income Before Income Taxes and Adjusted Net Income 1 2 (Unaudited) Year-to-Date Year-to-Date Year-to-Date TTM June 30, 2022 December 31, 2021 June 30, 2021 June 30, 2022 (Dollars in thousands) GAAP: Net income attributable to Knight-Swift $ 427,829 743,388 282,594 88
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Free Cash Flow 1 (Unaudited) Year-to-Date Year-to-Date Year-to-Date TTM June 30, 2022 December 31, 2021 June 30, 2021 June 30, 2022 GAAP: Cash flows from operations $ 719,984 $ 1,190,153 $ 459,504 $ 1,450,633 Adjusted for: Proceeds from sale of property and equipment, includi
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