(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | |||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
ITEM 7.01 | REGULATION FD DISCLOSURE |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
Exhibit | Description | |
Exhibit 104 | Cover Page Interactive Data File |
Knight-Swift Transportation Holdings Inc. | |||||
(Registrant) | |||||
Date: | April 22, 2020 | /s/ Adam W. Miller | |||
Adam W. Miller | |||||
Chief Financial Officer |
Exhibit 99.1 |
Knight-Swift Transportation Holdings Inc. Reports First Quarter 2020 Revenue and Earnings |
Key Financial Highlights |
Quarter Ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands, except per share data) | ||||||||||
Total revenue | $ | 1,124,798 | $ | 1,204,535 | (6.6 | %) | ||||
Revenue, excluding trucking fuel surcharge ¹ | $ | 1,027,095 | $ | 1,096,956 | (6.4 | %) | ||||
Operating income | $ | 102,119 | $ | 116,299 | (12.2 | %) | ||||
Adjusted Operating Income ² | $ | 116,788 | $ | 126,992 | (8.0 | %) | ||||
Net income attributable to Knight-Swift | $ | 65,426 | $ | 87,938 | (25.6 | %) | ||||
Adjusted Net Income Attributable to Knight-Swift ² | $ | 76,205 | $ | 96,181 | (20.8 | %) | ||||
Earnings per diluted share | $ | 0.38 | $ | 0.51 | (25.5 | %) | ||||
Adjusted EPS ² | $ | 0.44 | $ | 0.55 | (20.0 | %) | ||||
1 | See Note 1 to the Condensed Consolidated Statements of Comprehensive Income in the schedules following this release. |
2 | See GAAP to non-GAAP reconciliation in the schedules following this release. |
![]() | 2 |
Segment Financial Performance |
Quarter Ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Revenue, excluding fuel surcharge and intersegment transactions | $ | 821,084 | $ | 865,630 | (5.1 | %) | ||||
Operating income | $ | 107,334 | $ | 115,175 | (6.8 | %) | ||||
Adjusted Operating Income ¹ | $ | 110,805 | $ | 115,524 | (4.1 | %) | ||||
Operating ratio | 88.3 | % | 88.2 | % | 10 | bps | ||||
Adjusted Operating Ratio ¹ | 86.5 | % | 86.7 | % | (20 | bps) | ||||
1 | See GAAP to non-GAAP reconciliation in the schedules following this release. |
Quarter Ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Revenue, excluding intersegment transactions | $ | 76,757 | $ | 87,191 | (12.0 | %) | ||||
Operating income | $ | 3,719 | $ | 7,283 | (48.9 | %) | ||||
Operating ratio | 95.3 | % | 91.8 | % | 350 | bps | ||||
Adjusted Operating Ratio ¹ | 95.2 | % | 91.6 | % | 360 | bps | ||||
1 | See GAAP to non-GAAP reconciliation in the schedules following this release. |
![]() | 3 |
Quarter Ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Revenue, excluding intersegment transactions | $ | 94,622 | $ | 115,677 | (18.2 | %) | ||||
Operating (loss) income | $ | (2,737 | ) | $ | 2,361 | (215.9 | %) | |||
Adjusted Operating (Loss) Income ¹ | $ | (2,689 | ) | $ | 2,361 | (213.9 | ) % | |||
Operating ratio | 102.9 | % | 98.0 | % | 490 | bps | ||||
Adjusted Operating Ratio ¹ | 102.8 | % | 98.0 | % | 480 | bps | ||||
1 | See GAAP to non-GAAP reconciliation in the schedules following this release. |
Quarter Ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
(Dollars in thousands) | ||||||||||
Total revenue | $ | 46,242 | $ | 37,764 | 22.4 | % | ||||
Operating loss | $ | (6,197 | ) | $ | (8,520 | ) | (27.3 | %) | ||
![]() | 4 |
Consolidated Liquidity, Capital Resources, and Earnings Guidance |
Quarter Ended March 31, | |||||||||||
2020 | 2019 | Change | |||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 155,343 | $ | 243,452 | $ | (88,109 | ) | ||||
Net cash used in investing activities | (125,582 | ) | (44,721 | ) | (80,861 | ) | |||||
Net cash used in financing activities | (71,885 | ) | (217,784 | ) | 145,899 | ||||||
Net decrease in cash, restricted cash, and equivalents ¹ | $ | (42,124 | ) | $ | (19,053 | ) | $ | (23,071 | ) | ||
Net capital expenditures | $ | (75,675 | ) | $ | (49,119 | ) | $ | (26,556 | ) | ||
1 | "Net decrease in cash, restricted cash, and equivalents" is derived from changes within "Cash and cash equivalents," "Cash and cash equivalents – restricted," and the long-term portion of restricted cash included in "Other long-term assets" in the condensed consolidated balance sheets. |
![]() | 5 |
Other Information |
About Knight-Swift |
Investor Relations Contact Information |
Forward-Looking Statements |
• | any projections of or guidance regarding earnings, earnings per share, Adjusted EPS, revenues, cash flows, dividends, capital expenditures, or other financial items, |
• | expectations regarding future demand, truckload capacity, and the overall freight and economic environment, |
• | the impacts of the COVID-19 global pandemic, |
• | future dividends, |
• | intentions regarding refinancing the company's term loan, including the timing thereof, |
• | future effective tax rates, |
• | future performance of our reportable segments, including cost structure and load volumes within our Intermodal segment, |
• | future capital structure, capital allocation, and growth strategies and opportunities, and |
• | future capital expenditures, including funding of capital expenditures. |
![]() | 6 |
Financial Statements |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) |
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
(In thousands, except per share data) | |||||||
Revenue: | |||||||
Revenue, excluding trucking fuel surcharge ¹ | $ | 1,027,095 | $ | 1,096,956 | |||
Trucking fuel surcharge ¹ | 97,703 | 107,579 | |||||
Total revenue | 1,124,798 | 1,204,535 | |||||
Operating expenses: | |||||||
Salaries, wages, and benefits | 354,833 | 363,855 | |||||
Fuel | 121,855 | 138,439 | |||||
Operations and maintenance | 68,404 | 79,760 | |||||
Insurance and claims | 54,280 | 50,136 | |||||
Operating taxes and licenses | 22,169 | 21,803 | |||||
Communications | 4,874 | 5,083 | |||||
Depreciation and amortization of property and equipment | 110,221 | 100,937 | |||||
Amortization of intangibles | 11,474 | 10,693 | |||||
Rental expense | 25,375 | 35,545 | |||||
Purchased transportation | 225,276 | 269,349 | |||||
Impairments | 902 | — | |||||
Miscellaneous operating expenses | 23,016 | 12,636 | |||||
Total operating expenses | 1,022,679 | 1,088,236 | |||||
Operating income | 102,119 | 116,299 | |||||
Other (expenses) income: | |||||||
Interest income | 832 | 1,016 | |||||
Interest expense | (6,107 | ) | (7,348 | ) | |||
Other (expenses) income, net | (6,507 | ) | 6,139 | ||||
Total other (expenses) income, net | (11,782 | ) | (193 | ) | |||
Income before income taxes | 90,337 | 116,106 | |||||
Income tax expense | 24,554 | 27,923 | |||||
Net income | 65,783 | 88,183 | |||||
Net income attributable to noncontrolling interest | (357 | ) | (245 | ) | |||
Net income attributable to Knight-Swift | $ | 65,426 | $ | 87,938 | |||
Earnings per share: | |||||||
Basic | $ | 0.38 | $ | 0.51 | |||
Diluted | $ | 0.38 | $ | 0.51 | |||
Dividends declared per share: | $ | 0.08 | $ | 0.06 | |||
Weighted average shares outstanding: | |||||||
Basic | 170,617 | 172,971 | |||||
Diluted | 171,282 | 173,608 |
1 | Beginning in the second quarter of 2019, the Company presents fuel surcharge revenue generated within only its Trucking segment within "Trucking fuel surcharge" in the Condensed Consolidated Statements of Comprehensive Income. Fuel surcharge revenue generated within the remaining segments is included in "Revenue, excluding trucking fuel surcharge." Prior period amounts have been reclassified to align with the current period presentation. |
![]() | 7 |
Condensed Consolidated Balance Sheets (Unaudited) |
March 31, 2020 | December 31, 2019 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 119,132 | $ | 159,722 | |||
Cash and cash equivalents – restricted | 39,812 | 41,331 | |||||
Restricted investments, held-to-maturity, amortized cost | 8,836 | 8,912 | |||||
Trade receivables, net of allowance for doubtful accounts of $19,304 and $18,178, respectively | 521,976 | 518,547 | |||||
Contract balance – revenue in transit | 13,239 | 12,696 | |||||
Prepaid expenses | 59,134 | 62,160 | |||||
Assets held for sale | 37,986 | 41,786 | |||||
Income tax receivable | 12,646 | 17,026 | |||||
Other current assets | 25,681 | 27,848 | |||||
Total current assets | 838,442 | 890,028 | |||||
Property and equipment, net | 2,873,170 | 2,850,720 | |||||
Operating lease right-of-use assets | 159,283 | 169,425 | |||||
Goodwill | 2,923,382 | 2,918,992 | |||||
Intangible assets, net | 1,423,666 | 1,379,459 | |||||
Other long-term assets | 70,380 | 73,108 | |||||
Total assets | $ | 8,288,323 | $ | 8,281,732 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 168,018 | $ | 99,194 | |||
Accrued payroll and purchased transportation | 112,396 | 110,065 | |||||
Accrued liabilities | 87,480 | 175,222 | |||||
Claims accruals – current portion | 158,962 | 150,805 | |||||
Finance lease liabilities and long-term debt – current portion ¹ | 377,201 | 377,651 | |||||
Operating lease liabilities – current portion | 75,224 | 80,101 | |||||
Total current liabilities | 979,281 | 993,038 | |||||
Revolving line of credit | 294,000 | 279,000 | |||||
Finance lease liabilities – less current portion | 55,679 | 57,383 | |||||
Operating lease liabilities – less current portion | 89,683 | 96,160 | |||||
Accounts receivable securitization | 179,801 | 204,762 | |||||
Claims accruals – less current portion | 188,912 | 196,912 | |||||
Deferred tax liabilities | 785,588 | 771,719 | |||||
Other long-term liabilities | 25,055 | 14,455 | |||||
Total liabilities | 2,597,999 | 2,613,429 | |||||
Stockholders’ equity: | |||||||
Common stock | 1,698 | 1,707 | |||||
Additional paid-in capital | 4,275,834 | 4,269,043 | |||||
Retained earnings | 1,410,527 | 1,395,465 | |||||
Total Knight-Swift stockholders' equity | 5,688,059 | 5,666,215 | |||||
Noncontrolling interest | 2,265 | 2,088 | |||||
Total stockholders’ equity | 5,690,324 | 5,668,303 | |||||
Total liabilities and stockholders’ equity | $ | 8,288,323 | $ | 8,281,732 |
1 | The Term Loan is due October 2, 2020. The Company intends to refinance prior to the due date. |
![]() | 8 |
Segment Operating Statistics (Unaudited) |
Quarter Ended March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
Trucking | ||||||||||
Average revenue per tractor ¹ | $ | 44,474 | $ | 45,718 | (2.7 | %) | ||||
Non-paid empty miles percentage | 12.8 | % | 12.9 | % | (10 | bps) | ||||
Average length of haul (miles) | 428 | 429 | (0.2 | %) | ||||||
Miles per tractor | 22,568 | 22,523 | 0.2 | % | ||||||
Average tractors | 18,462 | 18,934 | (2.5 | %) | ||||||
Average trailers | 57,716 | 58,934 | (2.1 | %) | ||||||
Logistics | ||||||||||
Revenue per load – Brokerage only ² | $ | 1,378 | $ | 1,432 | (3.8 | %) | ||||
Gross margin – Brokerage only | 14.7 | % | 17.8 | % | (310 | bps) | ||||
Intermodal | ||||||||||
Average revenue per load ² | $ | 2,314 | $ | 2,456 | (5.8 | %) | ||||
Load count | 40,889 | 47,109 | (13.2 | %) | ||||||
Average tractors | 601 | 693 | (13.3 | %) | ||||||
Average containers | 9,856 | 9,866 | (0.1 | %) | ||||||
1 | Computed with revenue, excluding fuel surcharge and intersegment transactions |
2 | Computed with revenue, excluding intersegment transactions |
![]() | 9 |
Non-GAAP Financial Measures and Reconciliations |
Non-GAAP Reconciliation (Unaudited): |
Adjusted Operating Income and Adjusted Operating Ratio 1 |
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
GAAP Presentation | (Dollars in thousands) | ||||||
Total revenue | $ | 1,124,798 | $ | 1,204,535 | |||
Total operating expenses | (1,022,679 | ) | (1,088,236 | ) | |||
Operating income | $ | 102,119 | $ | 116,299 | |||
Operating ratio | 90.9 | % | 90.3 | % | |||
Non-GAAP Presentation | |||||||
Total revenue | $ | 1,124,798 | $ | 1,204,535 | |||
Trucking fuel surcharge | (97,703 | ) | (107,579 | ) | |||
Revenue, excluding trucking fuel surcharge | 1,027,095 | 1,096,956 | |||||
Total operating expenses | 1,022,679 | 1,088,236 | |||||
Adjusted for: | |||||||
Trucking fuel surcharge | (97,703 | ) | (107,579 | ) | |||
Amortization of intangibles ² | (11,474 | ) | (10,693 | ) | |||
Impairments ³ | (902 | ) | — | ||||
COVID-19 incremental costs 4 | (2,293 | ) | — | ||||
Adjusted Operating Expenses | 910,307 | 969,964 | |||||
Adjusted Operating Income | $ | 116,788 | $ | 126,992 | |||
Adjusted Operating Ratio | 88.6 | % | 88.4 | % | |||
![]() | 10 |
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 amortization expense relating to intangible assets identified in the 2017 Merger and other acquisitions. |
3 | "Impairments" primarily reflects the non-cash impairment of trailer tracking equipment. |
4 | "COVID-19 incremental costs" reflects costs incurred during the first quarter of 2020 that were directly attributable to the pandemic and were incremental to those incurred prior to the outbreak. These include payroll premiums paid to our drivers and shop mechanics, additional disinfectants and cleaning supplies, and various other pandemic-specific items. The costs are clearly separable from our normal business operations and are not expected to recur once the pandemic subsides. |
Non-GAAP Reconciliation (Unaudited): |
Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS 1 |
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
(Dollars In thousands) | |||||||
GAAP: Net income attributable to Knight-Swift | $ | 65,426 | $ | 87,938 | |||
Adjusted for: | |||||||
Income tax expense attributable to Knight-Swift | 24,554 | 27,923 | |||||
Income before income taxes attributable to Knight-Swift | 89,980 | 115,861 | |||||
Amortization of intangibles ² | 11,474 | 10,693 | |||||
Impairments ³ | 902 | — | |||||
COVID-19 incremental costs 4 | 2,293 | — | |||||
Adjusted income before income taxes | 104,649 | 126,554 | |||||
Provision for income tax expense at effective rate | (28,444 | ) | (30,373 | ) | |||
Non-GAAP: Adjusted Net Income Attributable to Knight-Swift | $ | 76,205 | $ | 96,181 | |||
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
GAAP: Earnings per diluted share | $ | 0.38 | $ | 0.51 | |||
Adjusted for: | |||||||
Income tax expense attributable to Knight-Swift | 0.14 | 0.16 | |||||
Income before income taxes attributable to Knight-Swift | 0.53 | 0.67 | |||||
Amortization of intangibles ² | 0.07 | 0.06 | |||||
Impairments ³ | 0.01 | — | |||||
COVID-19 incremental costs 4 | 0.01 | — | |||||
Adjusted income before income taxes | 0.61 | 0.73 | |||||
Provision for income tax expense at effective rate | (0.17 | ) | (0.17 | ) | |||
Non-GAAP: Adjusted EPS | $ | 0.44 | $ | 0.55 | |||
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 consolidated Adjusted EPS. |
2 | Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio – footnote 2. |
3 | Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio – footnote 3. |
4 | Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio – footnote 4. |
![]() | 11 |
Non-GAAP Reconciliation (Unaudited): |
Segment Adjusted Operating Income and Adjusted Operating Ratio ¹ |
Quarter Ended March 31, | |||||||
Trucking Segment | 2020 | 2019 | |||||
GAAP Presentation | (Dollars in thousands) | ||||||
Total revenue | $ | 919,061 | $ | 973,245 | |||
Total operating expenses | (811,727 | ) | (858,070 | ) | |||
Operating income | $ | 107,334 | $ | 115,175 | |||
Operating ratio | 88.3 | % | 88.2 | % | |||
Non-GAAP Presentation | |||||||
Total revenue | $ | 919,061 | $ | 973,245 | |||
Fuel surcharge | (97,703 | ) | (107,579 | ) | |||
Intersegment transactions | (274 | ) | (36 | ) | |||
Revenue, excluding fuel surcharge and intersegment transactions | 821,084 | 865,630 | |||||
Total operating expenses | 811,727 | 858,070 | |||||
Adjusted for: | |||||||
Fuel surcharge | (97,703 | ) | (107,579 | ) | |||
Intersegment transactions | (274 | ) | (36 | ) | |||
Amortization of intangibles ² | (324 | ) | (349 | ) | |||
Impairments ³ | (902 | ) | — | ||||
COVID-19 incremental costs 4 | (2,245 | ) | — | ||||
Adjusted Operating Expenses | 710,279 | 750,106 | |||||
Adjusted Operating Income | $ | 110,805 | $ | 115,524 | |||
Adjusted Operating Ratio | 86.5 | % | 86.7 | % | |||
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 amortization expense relating to intangible assets identified in historical Knight acquisitions. |
3 | Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio – footnote 3. |
4 | Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio – footnote 4. |
![]() | 12 |
Non-GAAP Reconciliation (Unaudited): |
Segment Adjusted Operating Income and Adjusted Operating Ratio — Continued ¹ |
Quarter Ended March 31, | |||||||
Logistics Segment | 2020 | 2019 | |||||
GAAP Presentation | (Dollars in thousands) | ||||||
Total revenue | $ | 79,198 | $ | 88,952 | |||
Total operating expenses | (75,479 | ) | (81,669 | ) | |||
Operating income | $ | 3,719 | $ | 7,283 | |||
Operating ratio | 95.3 | % | 91.8 | % | |||
Non-GAAP Presentation | |||||||
Total revenue | $ | 79,198 | $ | 88,952 | |||
Intersegment transactions | (2,441 | ) | (1,761 | ) | |||
Revenue, excluding intersegment transactions | 76,757 | 87,191 | |||||
Total operating expenses | 75,479 | 81,669 | |||||
Adjusted for: | |||||||
Intersegment transactions | (2,441 | ) | (1,761 | ) | |||
Adjusted Operating Expenses | 73,038 | 79,908 | |||||
Adjusted Operating Income | $ | 3,719 | $ | 7,283 | |||
Adjusted Operating Ratio | 95.2 | % | 91.6 | % | |||
Quarter Ended March 31, | |||||||
Intermodal Segment | 2020 | 2019 | |||||
GAAP Presentation | (Dollars in thousands) | ||||||
Total revenue | $ | 94,731 | $ | 116,367 | |||
Total operating expenses | (97,468 | ) | (114,006 | ) | |||
Operating (loss) income | $ | (2,737 | ) | $ | 2,361 | ||
Operating ratio | 102.9 | % | 98.0 | % | |||
Non-GAAP Presentation | |||||||
Total revenue | $ | 94,731 | $ | 116,367 | |||
Intersegment transactions | (109 | ) | (690 | ) | |||
Revenue, excluding intersegment transactions | 94,622 | 115,677 | |||||
Total operating expenses | 97,468 | 114,006 | |||||
Adjusted for: | |||||||
Intersegment transactions | (109 | ) | (690 | ) | |||
COVID-19 incremental costs ² | (48 | ) | — | ||||
Adjusted Operating Expenses | 97,311 | 113,316 | |||||
Adjusted Operating (Loss) Income | $ | (2,689 | ) | $ | 2,361 | ||
Adjusted Operating Ratio | 102.8 | % | 98.0 | % | |||
1 | Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating ratio to consolidated non-GAAP Adjusted Operating Ratio. |
2 | Refer to Non-GAAP Reconciliation (Unaudited): Adjusted Operating Income and Adjusted Operating Ratio – footnote 4. |
![]() | 13 |
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