Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Q4 2020 Earnings Presentation
24 slides from Knight-swift Transportation's earnings presentation, Jan 27, 2021
Slide 1: KNX 4Q20 Earnings Presentation
Exhibit 99.2 KNX 4Q20 Earnings Presentation
Slide 2: Disclosure
2 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 stateme
Slide 3: Disclosure
3 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 wit
Slide 4: KNX Overview
4 KNX Overview Trucking Q4 '20 FY 2020 Revenue (ex. fuel surcharge and intersegment transactions) $ 940.9 M $ 3,480.6 M Adjusted Operating Ratio 1 79.3 % 83.0 % • 13,374 irregular route tractors, 5,099 dedicated tractors, and 57,644 combined trailers • Dry Van, Refrigerated, Dedicated, Flatbed, Dray
Slide 5: Fourth Quarter 2020 Comparative Results
5 Fourth Quarter 2020 Comparative Results Adjustments • $11.5M in Q4 2020 and $10.7M in Q4 2019 of amortization expense from mergers and acquisitions • $6.7M in Q4 2020 related to a change in fair value of deferred earnout related to the acquisition of a warehousing company • $4.1M in Q4 2020 and $1
Slide 6: Operating Performance – Trucking
6 Operating Performance – Trucking • 9.2% growth in Revenue xFSC • 79.3% Adjusted Operating Ratio in Q4 2020 compared to 86.2% the previous year • 63.9% year-over-year improvement in Adjusted Operating Income • 74.1% Swift Truckload Adjusted Operating Ratio • 78.9% Knight Trucking Adjusted Operating
Slide 7: Rolling 4 Qtr Difference in Knight Trucking and Swift Truckload
7 Rolling 4 Qtr Total % D iff er en ce = S w ift A dj O R - K ni gh t A dj O R Rolling 4 Qtr Difference in Knight Trucking and Swift Truckload Adjusted Operating Ratios 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 (2.0)% —% 2.0% 4.0% 6.0% 8
Slide 8: Operating Performance – Logistics
8 Operating Performance – Logistics • 34.8% increase in Revenue • 87.5% increase in Operating income • 91.2% Adjusted Operating Ratio during Q4 2020 compared to 93.0% during the prior year • 16.4% Brokerage Gross Margin during the quarter compared with 15.5% the prior year • 50.8% increase in Broker
Slide 9: Digital Freight Platform
9 Digital Freight Platform • 3rd party carrier platform went live Spring of 2020 • 20% of Q4 2020 Logistics volume executed using Select • Over 5,000 carriers were digitally matched with loads in Q4 2020 • Provides shippers with the ability to fully leverage available capacity across our asset and a
Slide 10: Operating Performance – Intermodal
10 Operating Performance – Intermodal • 2.8% increase in Revenue • 94.8% Operating Ratio during Q4 2020 compared with 99.5% the prior year • 2.4% year-over-year increase in average revenue per load. • 0.4% increase in load counts from Q4 2019 • Sequentially, load counts increased 8.4% and Operating
Slide 11: Focus on Sustainability
Focus on Sustainability Short-Term Goal (Intensity Based) Long-Term Goal (Intensity Based) Reduce CO Reduce CO2 emissions per mile by 50% by 2035 " KKNIGHT JU) Swirr Wh TRANSPORTATION
Slide 12: Market Outlook FY 2021
12 Market Outlook FY 2021 • We expect the strong freight conditions to continue into 2021 • Inventory restocking and strong demand will support a favorable environment into 2021 • Low double digit contract rate increases in 2021 • The challenge of sourcing and retaining drivers will continue and lea
Slide 13: 2021 Guidance
13 2021 Guidance Expected Adjusted EPS for the full year 2021 of $3.20 - $3.40 Guidance Assumptions • Contract rate improvements in the low double digits in 2021 • Miles per truck will be flat to slightly negative year-over-year • Stable tractor count • Double digit revenue growth in Logistics • Dou
Slide 14: Appendix
Appendix ‘4 KKNIGHT J) Swirr TRANSPORTATION
Slide 15: Non-GAAP Reconciliation Adjusted Operating Income and Operating Ratio
15 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date December 31, Year-to-Date December 31, 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 1,277,961 $ 1,196,810 $ 4,673,863 $ 4,843,950 T
Slide 16: Non-GAAP Reconciliation Adjusted Operating Income and Operating Ratio (footnotes)
16 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio 1 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 intan
Slide 17: Non-GAAP Reconciliation Adjusted Net Income Attributable to Knight-Swift
17 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 Quarter-to-Date December 31, Year-to-Date December 31, 2020 2019 2020 2019 (Dollars in thousands, except per share data) GAAP: Net income attributable to Knight-Swift $
Slide 18: Non-GAAP Reconciliation Adjusted EPS
18 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 Quarter-to-Date December 31, Year-to-Date December 31, 2020 2019 2020 2019 GAAP: Earnings per diluted share $ 0.84 $ 0.39 $ 2.40 $ 1.80 Adjusted for: Income tax expense
Slide 19: Non-GAAP Reconciliation Trucking Segment
19 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date December 31, Year-to-Date December 31, Trucking Segment 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 1,011,719 $ 972,826 $
Slide 20: Non-GAAP Reconciliation Logistics Segment
20 Non-GAAP Reconciliation Quarter-to-Date December 31, Year-to-Date December 31, Logistics Segment 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 127,521 $ 94,894 $ 375,841 $ 352,988 Total operating expenses (116,511) (89,021) (355,596) (331,119) Operating income $ 11,
Slide 21: Non-GAAP Reconciliation Intermodal Segment
21 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Segment Adjusted Operating Income and Adjusted Operating Ratio 1 Quarter-to-Date December 31, Year-to-Date December 31, Intermodal Segment 2020 2019 2020 2019 GAAP Presentation (Dollars in thousands) Total revenue $ 115,052 $ 111,967 $
Slide 22: Non-GAAP Reconciliation Return on Net Tangible Assets
22 Non-GAAP Reconciliation Non-GAAP Reconciliation (Unaudited): Return on Net Tangible Assets 1 December 31, 2020 2019 (Dollars in thousands) Total Assets $ 8,468,002 $ 8,281,732 Adjusted for: Intangible assets, net (1,389,245) (1,379,459) Goodwill (2,922,964) (2,918,992) Tangible Assets $ 4,155,793
Slide 23: Net Leverage and Leverage Ratio Non-GAAP Reconciliation
23 Non-GAAP Reconciliation (Unaudited): Net Leverage and Leverage Ratio 1 2 Non-GAAP Reconciliation December 31, 2020 (Dollars in thousands) Term loan $ 300,000 Revolving line of credit 210,000 Accounts receivable securitization 214,000 Other secured debt and finance leases 190,826 Total face value
Slide 24: EBITDA and Adjusted EBITDA Non-GAAP Reconciliation
24 1 Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP EBITDA and Adjusted EBITDA. 2 Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Income Before Income Taxes and Adjusted Net Income – footnote 4. 3 "Other non-cash gains
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