Knight Transportation Inc. (NYSE:KNX) Q1 2018 Earnings Conference Call Transcript

Apr 25, 2018 • 04:30 pm ET

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Knight Transportation Inc. (NYSE:KNX) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Vincent, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Knight-Swift Transportation First Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. Speakers for today's call will be Dave Jackson, President and CEO; Kevin Knight, Executive Chairman; and Adam Miller, CFO. Mr. Miller, the meeting is now yours.

Executive
Adam Miller

Thank you, Vincent. And good afternoon, everyone and thank you for joining the call. We have slides to accompany this call posted on our investor

website, which is investor.knight-swift.com/events. So first off, we'd like to welcome you to the Knight-Swift Transportation First Quarter 2018 Earnings Call. Our call is scheduled to go until 5:30 pm eastern time and will be structured similar to our calls in the past. Following our commentary, we hope to answer as many questions as time will allow. If we're not able to get your question due to time restriction, you may call 602-606-6349. During this call, we plan to cover topics and any questions specific to the results of the first quarter and provide our future outlook on the market. The rules for questions are one question per participant. If there's a follow up question, we invite you to get back in the queue to ask your question. To begin, I'll first refer you to the disclosures on Slides 2 and 3 of the presentation. I'll also read the following.This conference call and presentation may contain forward-looking statements made by the Company that involve risks, assumptions and uncertainties that are difficult to predict. Investors are directed to the information contained in item 1A risk factors or part one of the Company's annual report on Form 10-K filed with the United States SEC for a discussion of the risks that may affect the Company's future operating results. Actual results may differ.

We'll now move to Slide 4, and discuss the results of the first quarter. The table on Slide 4 compares first quarter revenue and earnings results on a year-over-year basis. An important item to note, however, is that due to the accounting requirements associated with the merger transaction, the 2017 figures represent only Knight Transportation's historically reported results. Due to this unique circumstance, year-over-year comparisons at the consolidated level are less meaningful. Later in the presentation, we'll provide more context around the year-over-year results. GAAP earnings per diluted share for the first quarter of 2018 were $0.39. Our adjusted EPS, which excludes $10.3 million or $8.3 million after-tax of amortization expense related to the merger came in at $0.44. Our effective tax rate in the quarter was 21.2% compared to 35.3% in the prior year, primarily due to the Tax Cuts and Jobs Act that was passed towards the end of 2017. On a go-forward basis, we expect a normalized tax rate of approximately 25%.

Now on to Slide 5. We've provided a three-year comparison of revenue, excluding fuel surcharge and adjusted operating income. In this comparison,