Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Swift Transportation — BB&T Capital Markets Transportation Conference 2013
35 slides from Knight-swift Transportation's conference presentation, Feb 13, 2013
Slide 1: Swift Transportation 2013
Swift Transportation 2013 Swift Confidential & Proprietary
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer This presentation, including documents which are incorporated by reference and accompanying comments, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but
Slide 3: The Four Era's of Swift Transportation
The Four Era’s of Swift Transportation The Evolutionary The Growth Period The Transformation The Results Period Period 1991-2006 Period 2012-2017 1966-1990 2007-2011 (and beyond) • Founded • Privatization - Debt • Profitable Revenue • 1990 IPO • Flatbed • Recession Growth • 20%+ Revenue CAGR • Refri
Slide 4: Total Revenue and Earnings 1990-2012
Total Revenue and Earnings 1990-2012 ($ mm) Swift Transportation Op Revenue(1) $4,000 Swift’s 3,400 3,334 3,494 biggest and 3,197 3,210 3,265 2,826 2,930 $3,000 most 2,571 profitable 2,398 2,112 2,101 year ever! $2,000 1,259 1,061 $1,000 873 714 458 562 366 156 190 233 277 $0 1990 1991 1992 1993 199
Slide 5: The Three Pillars of Value Creation
The Three Pillars of Value Creation Profitable Revenue Growth Improved Asset Utilization Continuous Improvement (Cost Control & Profitability) Strengthen and grow core Maximize use of drivers Four Disciplines of Execution customer relationships by cross available hours (Plus 1) (4DX) selling suite o
Slide 6: U.S. Freight Transportation Market
U.S. Freight Transportation Market 1 2010 - $694B 2022 - $1,152B Rail Pipeline Rail Pipeline Air Private Water Air Water Intermodal 5.7% Intermodal 4.7% 4.0% Truckload 1.6% 1.6% 3.4% 1.4% 2.7% 36.2% Rail Private Carload Rail Truckload 6.5% 38.6% Carload 5.8% LTL 5.8% 4.3% CAGR LTL 7.0% For-Hire Truc
Slide 7: Extensive Transportation Service Offerings
Extensive Transportation Service Offerings Demonstrated ability to provide total transportation solutions with a comprehensive suite of services and equipment offerings 100% of Swift’s Top 20 customers utilize multiple service offerings Transportation Solutions Equipment Selection Dry Van Temp. Heav
Slide 8: Growth Opportunities with Existing Customers
Growth Opportunities with Existing Customers ($ Billions) 3.9% YOY Growth $5.45 10.3% YOY Growth 4.0% YOY Growth 4.9% YOY Growth 4.2% YOY Growth $1.78 $1.41 $1.29 8.7% YOY $1.02 Growth 22.3% YOY Growth $0.34 $0.21 Customer A Customer B Customer C Customer D Customer E Customer F Customer G Transport
Slide 9: Mexico & Canada Border Crossing Loads
Mexico & Canada Border Crossing Loads (Millions) 6.0 5.0 4.0 3.0 5.490 5.170 2.0 1.0 0.115 0.019 0.0 Mexico * Canada ^ Total Trucking Border Crossings Swift Crossings *Mexico crossing information from Laredo Development Foundation ^Canada crossing information from Stats Can , an agency within the Fe
Slide 10: Intermodal & Logistic Opportunities
Intermodal & Logistic Opportunities (Millions) ($ Billions) 8.0 $175 7.0 $150 6.0 $125 5.0 $100 4.0 7.054 $159.9 $75 3.0 $50 2.0 1.0 $25 0.145 0.0 $0 Intermodal * Logistics ^ Total Intermodal Load Counts Total North American 3PL Revenue Swift Load Count Swift Logistics Revenue *Intermodal informatio
Slide 11: Growth by Service Offering
Growth by Service Offering Trucking Dedicated Intermodal Logistics 2006 1990 Trucking Trucking 2017 Dedicated Intermodal 2012 Trucking Dedicated Intermodal Logistics Expansion in asset light would drive RONA, cash flow and debt reduction Swift Confidential & Proprietary 11
Slide 12: Nationwide Terminal Network
Nationwide Terminal Network (3) (2) Nationwide terminal network allows us to be close to our customers on a regional basis and our driver’s homes Swift Confidential & Proprietary 12
Slide 13: Density of Network
Density of Network Swift Confidential & Proprietary 13
Slide 14: Weekly Revenue per Truck xFSR 2007-2012
Weekly Revenue per Truck xFSR 2007-2012 $3,400 Best in Class $3,500 $3,200 $3,158 ˜ $2,997 $3,000 $2,866 $2,916 $2,879 $2,800 $2,660 $2,600 8.2% 4.1% 5.4% 1.7% $2,400 $2,200 (8.8%) $2,000 2007 2008 2009 2010 2011 2012 Wkly Trucking Rev / Tractor YOY Growth Rate Continuous improvement for 4 years, bu
Slide 15: Value for Swift - Creating Shareholder Value
Value for Swift * Increase our RONA by 1% annual CAGR for each of the next 5 years Targeting EPS Growth Reduce our leverage of 20% for 2012 and ratio to roughly 1.5X 15% CAGR from by 2017 2013-2017 Creating Shareholder Value *Goals shared in our May 2012 Investor/Analyst Day Swift Confidential & Pro
Slide 16: Financial Summary
Financial Summary Swift Confidential & Proprietary 16
Slide 17: Full Year 2012 Consolidated Metrics
Full Year 2012 Consolidated Metrics Total Revenue Revenue xFSR ($ Millions) ($ Millions) $3,600 $3,000 $3,493.2 $2,803.0 $3,400 $3,333.9 $2,800 $2,679.8 $3,200 $2,600 $2,500.6 $3,000 $2,929.7 $2,400 13.8% 7.2% 4.8% 4.6% $2,800 $2,200 $2,600 $2,000 2010 2011 2012 2010 2011 2012 Total Revenue YOY Grow
Slide 18: Full Year 2012 Truckload Segment Metrics
Full Year 2012 Truckload Segment Metrics ($ Millions) Revenue xFSR Adjusted Operating Ratio $2,000 90% $1,844.2 $1,798.7 $1,800 $1,748.4 88% $1,600 $1,400 88.9% 86% 87.9% 5.5% -2.5% 86.3% $1,200 $1,000 84% 2010 2011 2012 2010 2011 2012 Revenue xFSR YOY Growth Rate Weekly Revenue xFSR per Tractor Dea
Slide 19: Full Year 2012 Dedicated Segment Metrics
Full Year 2012 Dedicated Segment Metrics Revenue xFSR ($ Millions) Adjusted Operating Ratio $600 $589.9 90% $550 88% $513.4 86% $500 84% 87.5% $450.1 14.1% 14.9% 86.4% $450 85.2% 82% $400 80% 2010 2011 2012 2010 2011 2012 Revenue xFSR YOY Growth Rate Average Truck Count 3,361 Weekly Revenue xFSR per
Slide 20: Full Year 2012 Intermodal Segment Metrics
Full Year 2012 Intermodal Segment Metrics Revenue xFSR ($ Millions) Adjusted Operating Ratio $300 $263.2 104% 102.6% Increase is primarily $250 100% due to one insurance claim associated with $200 $187.7 400 to a dray accident which $177.3 96% 440 bps increased the Adjusted 40.2% 98.3% Operating Rat
Slide 21: Operating Leverage
Operating Leverage Achievable operating improvements result in significant increases to the bottom line Miles Per Tractor Per Week (1) Rate Per Mile (1) Deadhead Miles Percentage (1) ($MM) ($MM) ($MM) $60.0 $55.5 $80.0 $72.0 $70.0 (Incremental Operating Income) $60.5 (Incremental Operating Income) (
Slide 22: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio Net Debt & Leverage Ratio ($ Millions) $2,750 2,601 2,499 $2,500 $2,250 6.35 $2,000 6.16 1,919 $1,750 1,705 1,669 1,633 1,601 $1,500 1,427 3.86 $1,250 3.17 3.05 2.91 2.97 2.78 $1,000 2008 2009 2010 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Net Debt Leverage Ratio Continuing to
Slide 23: Swift Transportation Co., Inc. Stock Price Performance
Swift Transportation Co., Inc. Stock Price Performance Swift Transportation Co., Inc.’s (1) stock performed better than Berkshire Hathaway during the first time it was publicly traded ― Swift Stock Price CAGR – From June 1990 IPO through May 2007 Going Private transaction (2) – 18.2% ― BRKA over sam
Slide 24: Value for Swift - Creating Shareholder Value
Value for Swift * Increase our RONA by 1% annual CAGR for each of the next 5 years Targeting EPS Growth Reduce our leverage of 20% for 2012 and ratio to roughly 1.5X 15% CAGR from by 2017 2013-2017 Creating Shareholder Value *Goals shared in our May 2012 Investor/Analyst Day Swift Confidential & Pro
Slide 25: Appendix
Appendix Swift Confidential & Proprietary 25
Slide 26: 2012 Revenue by Industry
2012 Revenue by Industry Housing/ Building Other 3.4% Automotive 4.6% 6.0% Manufacturing 5.4% Consumer Products 10.7% Food & Beverage 22.4% Retail 15.9% Transportation & Logistics 6.7% Discount Retail 17.6% Paper Products 7.3% Swift Confidential & Proprietary 26
Slide 27: Q4 2012 Truckload Segment Metrics
Q4 2012 Truckload Segment Metrics Revenue xFSR Adjusted Operating Ratio ($ Millions) $500 86% $480 85% $465.7 $457.0 $453.8 84% $460 83% $440 85.2% 85.0% 82% -0.7% 2.6% 83.3% $420 81% $400 80% 2010 2011 2012 2010 2011 2012 Revenue xFSR YOY Growth Rate Deadhead % Weekly Revenue xFSR per Tractor 12.0%
Slide 28: Q4 2012 Dedicated Segment Metrics
Q4 2012 Dedicated Segment Metrics Revenue xFSR Adjusted Operating Ratio ($ Millions) $160 86% $152.2 $150 $143.0 85% $140 84% $130 83% 85.1% $120 $117.3 21.9% 82% 84.3% 6.4% 83.0% $110 81% $100 80% 2010 2011 2012 2010 2011 2012 Revenue xFSR YOY Growth Rate Average Truck Count Weekly Revenue xFSR per
Slide 29: Q4 2012 Intermodal Segment Metrics
Q4 2012 Intermodal Segment Metrics Revenue xFSR 104% Adjusted Operating Ratio ($ Millions) $76.8 100.6% $80 100% $58.0 $60 Increase is primarily $48.2 96% due to one insurance claim associated with a 550to dray accident which $40 32.4% 92% 660 bps increased the Adjusted 20.3% 95.1% 95.0% Operating R
Slide 30: Full Year Adjusted Operating Ratio Reconciliation
Full Year Adjusted Operating Ratio Reconciliation 2010 2011 2012 Operating revenue 2,929,723 3,333,908 3,493,182 Less: Fuel surcharge revenue (429,155) (654,119) (690,192) Revenue excluding fuel surcharge revenue 2,500,568 2,679,789 2,802,990 Operating expense 2,686,668 3,027,895 3,171,136 Adjusted
Slide 31: Full Year Adjusted EBITDA Reconciliation
Full Year Adjusted EBITDA Reconciliation 2010 2011 2012 Net income (loss) (125,413) 90,550 114,589 Adjusted for: Depreciation and amortization of property and equipment 206,279 204,173 199,829 Amortization of intangibles 20,472 18,258 16,925 Interest expense 251,129 145,973 118,091 Derivative intere
Slide 32: Full Year Adjusted EPS Calculations
Full Year Adjusted EPS Calculations 2010 2011 2012 Diluted earnings (loss) per share $ (1.98) $ 0.65 $ 0.82 Adjusted for: Income tax (benefit) expense (0.69) 0.42 0.44 Income (loss) before income taxes (2.67) 1.07 1.26 Non-cash impairments 0.02 - 0.02 Non-cash impairments - Nonoperating assets - - 0
Slide 33: Q4 Adjusted Operating Ratio Reconciliation
Q4 Adjusted Operating Ratio Reconciliation 2010 2011 2012 Operating revenue 780,427 860,723 922,619 Less: Fuel surcharge revenue (118,816) (165,449) (182,723) Revenue excluding fuel surcharge revenue 661,611 695,274 739,896 Operating expense 703,854 763,703 815,509 Adjusted for: Fuel surcharge reven
Slide 34: Q4 Adjusted EBITDA Reconciliation
Q4 Adjusted EBITDA Reconciliation 2010 2011 2012 Net income (loss) (48,314) 36,812 46,850 Adjusted for: Depreciation and amortization of property and equipment 49,830 51,204 49,758 Amortization of intangibles 4,840 4,405 4,204 Interest expense 61,670 35,212 27,613 Derivative interest expense 11,430
Slide 35: Q4 Adjusted EPS Calculations
Q4 Adjusted EPS Calculations 2010 2011 2012 Diluted earnings (loss) per share $ (0.95) $ 0.26 $ 0.34 Adjusted for: Income tax (benefit) expense 0.18 0.16 0.20 Income (loss) before income taxes (0.78) 0.43 0.54 Non-cash impairments 0.32 - 0.02 Non-cash impairments - Nonoperating assets - - 0.04 Accel
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