Knight Transportation Reports Growth in First Quarter 2013 Revenue and Earnings Business Wire PHOENIX -- April 24, 2013 Knight Transportation, Inc. (NYSE: KNX), one of North America’s largest and most diversified truckload transportation companies, today reported revenue and net income for the first quarter ended March 31, 2013. Key financial highlights for the first quarter were as follows: Three Months Ended March 31, (dollars in thousands, except per share data) 2013 2012 % Change Total revenue $ 235,400 $ 219,532 7.2 % Revenue, excluding $ 189,600 $ 175,599 8.0 % trucking fuel surcharge GAAP operating income $ 25,544 $ 19,834 28.8 % Adjusted operating income $ 25,544 $ 23,815 ^(1) 7.3 % GAAP net income $ 15,183 $ 10,546 44.0 % Adjusted net income $ 15,183 $ 14,440 ^(1) 5.1 % GAAP earnings per diluted $ 0.19 $ 0.13 43.8 % share Adjusted earnings per $ 0.19 $ 0.18 ^(1) 5.0 % diluted share [The 2012 quarter included a $4.0 million non-cash charge ($3.9 ^(1) million after tax) for stock option acceleration. See GAAP to Non-GAAP reconciliation schedule. GAAP and Non-GAAP measurements for 2013 are identical.] The company previously announced a quarterly cash dividend of $0.06 per share to shareholders of record on March 1, 2013, which was paid on March 29, 2013. Kevin Knight commented on the quarter, ''Our ability to deliver revenue growth, year over year, for the 14^th consecutive quarter, despite a challenging operating and economic environment, is a testament of our people, the value of our services to our customers, and the company we are building. Several years ago we only provided dry van truckload services. Today we are a company that provides a wide range of truckload logistics services. We are finding the most efficient ways to move loads for our customers.'' During the first quarter of 2013 we continued to grow revenue in each of our businesses. As a result of the sluggish freight environment and a more competitive driver market, miles per tractor were down 1.6% when compared to the same quarter last year. Despite the reduction in utilization, we were able to grow revenue, excluding trucking fuel surcharge, by 8.0% and adjusted operating income by 7.3% when compared to the first quarter of 2012. The following chart reflects the year-over-year operating ratio comparison and revenue growth for our asset based businesses and our non-asset based businesses for the first quarter of 2013 and 2012. Three Months Ended March 31, Operating ratios^(2) Revenue growth 2013 2012 Asset based 85.3 % 85.4 % 2.1 % Non-asset based 92.8 % 94.4 % 57.9 % Consolidated 86.5 % 86.4 % 7.2 % [Operating ratio is defined as total operating expenses, net of trucking fuel surcharge, as a percentage of revenue before ^(2) trucking fuel surcharge. Operating ratio for 2012 quarter is calculated using adjusted operating income. See reconciliation table.] Our asset and non-asset based businesses continue to grow and develop as we continue to provide our customers with truckload services that are efficient and valuable to their supply chain needs. We were especially pleased with the growth in our non-asset based businesses, as these services continue to develop as an integral part of our customer offering and provide both revenue and earnings growth. The market remains challenging for hiring high quality driving associates. We believe the Knight ''system'' of decentralized regional service centers provides a ''hometown'' feel that affords us a significant advantage in recruiting, retaining, and developing driving associates. As a result, our driver turnover continues to compare favorably to what we believe to be the industry average. The DOE national average diesel fuel price increased 1.0% when compared to the first quarter last year. Fuel remains a major cost focus for us as we continue our work towards cost effective, industry leading fuel economy while at the same time meaningfully contributing to environmental improvements. Our average tractor count for the quarter increased year-over-year 2.5% to 4,076 tractors, and declined 2.4% from the fourth quarter of 2012. Our tractor fleet remains one of the most modern fleets in the industry with an average age of 2.0 years. Our gain on sale of revenue equipment in the first quarter of 2013 was $1.4 million, down from $2.7 million in the first quarter of 2012. The Federal Motor Carrier Safety Administration (''FMCSA'') has approved new hours of service rules that are scheduled to go in to effect July 1, 2013, unless delayed. The new rules, if implemented, will result in more restrictive use of the 34 hour restart as well as require a 30 minute break for every eight hours of driving. If these rules are adopted, and our customers are unable to provide more flexibility in terms of pickup and delivery times, it will have a negative effect on productivity and available capacity. We have and will continue to work closely with our customers to help them understand the practical impacts of these changes to driver available hours, and to understand how driver available hours constrains capacity and affects the cost of our services. We have returned $95.9 million to our shareholders in the form of quarterly dividends and stock repurchases over the twenty-four-month period ending March 31, 2013. We ended the quarter with $10.2 million of cash and $501.8 million of shareholders' equity. We also repaid $37.0 million of debt during the quarter, and as of March 31, 2013, had $43.0 million of borrowing under our unsecured revolving credit agreement. The company will hold a conference call on April 24, 2013, at 4:30 PM EDT, to further discuss its results of operations for the quarter ended March 31, 2013. The dial in number for this conference call is 1-855-733-9163. Slides to accompany this call will be posted on the company’s website and will be available to download prior to the scheduled conference time. To view the presentation, please visit http://investor.knighttrans.com/events, ''First Quarter 2013 Conference Call Presentation.'' Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services using a nationwide network of service centers in the U.S. to serve customers throughout North America. In addition to operating one of the country’s largest tractor fleets, Knight also partners with third-party equipment providers to provide a broad range of truckload services to its customers while creating quality driving jobs for our driving associates and successful business opportunities for owner-operators. INCOME STATEMENT DATA: Three Months Ended March 31, (Unaudited, in thousands, except per share amounts) 2013 2012 REVENUE: Revenue, before fuel $ 189,600 $ 175,599 surcharge Fuel surcharge 45,800 43,933 TOTAL REVENUE 235,400 219,532 OPERATING EXPENSES: Salaries, wages and benefits 57,654 60,956 Fuel expense - gross 55,693 57,311 Operations and maintenance 15,910 13,737 Insurance and claims 7,155 7,645 Operating taxes and licenses 3,908 4,103 Communications 1,172 1,395 Depreciation and amortization 21,507 20,372 Purchased transportation 42,792 31,860 Miscellaneous operating 4,065 2,319 expenses 209,856 199,698 Income From Operations 25,544 19,834 Interest income 109 112 Interest expense (141 ) (128 ) Other income 220 197 Income before income taxes 25,732 20,015 INCOME TAXES 10,298 9,356 Net Income 15,434 10,659 Net income attributable to (251 ) (113 ) noncontrolling interest NET INCOME ATTRIBUTABLE TO $ 15,183 $ 10,546 KNIGHT TRANSPORTATION Net Income Per Share - Basic $ 0.19 $ 0.13 - Diluted $ 0.19 $ 0.13 Weighted Average Shares Outstanding - Basic 79,841 79,531 - Diluted 80,124 80,046 BALANCE SHEET DATA: 03/31/13 12/31/12 ASSETS (Unaudited, in thousands) Cash and cash equivalents $ 10,196 $ 5,684 Accounts receivable, net 112,576 102,553 Notes receivable, net 739 791 Related party notes and 2,069 2,814 interest receivable Prepaid expenses 14,165 17,035 Assets held for sale 15,283 18,362 Other current assets 10,368 12,449 Current deferred tax asset 4,028 3,409 Total Current Assets 169,424 163,097 Property and equipment, net 563,080 584,064 Notes receivable, long-term 3,146 3,692 Goodwill 10,271 10,276 Other assets and restricted 21,535 21,383 cash Total Long-term Assets 598,032 619,415 Total Assets $ 767,456 $ 782,512 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 15,383 $ 11,281 Accrued payroll and purchased 12,718 10,489 transportation Accrued liabilities 21,230 16,020 Claims accrual - current 16,366 15,892 portion Dividend payable - current 151 141 portion Total Current Liabilities 65,848 53,823 Claims accrual - long-term 10,455 10,340 portion Long-term dividend payable & 2,384 2,638 other liabilities Deferred income taxes 143,242 144,871 Long-term debt 43,000 80,000 Total Long-term Liabilities 199,081 237,849 Total Liabilities 264,929 291,672 Common stock 799 798 Additional paid-in capital 144,489 142,837 Accumulated other (51 ) (302 ) comprehensive income/(loss) Retained earnings 356,591 346,899 Total Knight Transportation 501,828 490,232 Shareholders' Equity Noncontrolling interest 699 608 Total Shareholders' Equity 502,527 490,840 Total Liabilities and $ 767,456 $ 782,512 Shareholders' Equity Three Months Ended March 31, 2013 2012 (Unaudited) OPERATING STATISTICS % Change Average Revenue Per Tractor* $ 38,573 $ 39,044 -1.2 % Non-paid Empty Mile Percent 11.0% 10.7% 2.8 % Average Length of Haul 480 479 0.2 % Operating Ratio** 86.5% 86.4% Average Tractors - Total 4,076 3,978 Trailers - End of Quarter 9,468 8,878 Net Capital (Proceeds) $ (1,758 ) $ 24,290 Expenditures (in thousands) Cash Flow From Operations (in $ 40,322 $ 30,255 thousands) * Includes dry van, refrigerated, and port services revenue excluding fuel surcharge, brokerage revenue, intermodal revenue, and other revenue. ** Operating ratio as reported in this press release is based upon total operating expenses, net of fuel surcharge, as a percentage of revenue before fuel surcharge. Operating ratio reported for the three months ending March 31, 2012 is based upon total operating expenses, excluding the first quarter 2012 one time non-cash stock compensation charge of $4 million related to the accelerated vesting of certain stock options issued prior to 2009, and net of fuel surcharge, as a percentage of revenue before fuel surcharge. We measure our revenue, before fuel surcharge, and our operating expenses, net of fuel surcharge, because we believe that eliminating this sometimes volatile source of revenue affords a more consistent basis for comparing our results of operations from period to period. The following is a reconciliation of 2012 YTD GAAP Income to Non-GAAP Income: * Option (GAAP) YTD Acceleration (Non-GAAP) Reconciliation: 3-31-12 Expense Adjusted YTD Recorded in 3-31-12 Q1 - 2012 Total Revenue $ 219,532 $ 219,532 Total Operating Expense 199,698 (3,981 ) 195,717 19,834 23,815 Other Income 181 181 Income before income taxes 20,015 23,996 Income taxes 9,356 87 9,443 Net Income 10,659 14,553 Net income attributable to (113 ) (113 ) noncontrolling interest Net income attributable to $ 10,546 $ 14,440 Knight Transportation Net Income Per Share - Basic $ 0.13 $ 0.18 - Diluted $ 0.13 $ 0.18 Weighted Average Shares Outstanding - Basic 79,531 79,531 - Diluted 80,046 80,046 * The first quarter of 2012 included a $4.0 million pretax non-cash stock compensation charge ($3.9 million after tax) relating to the accelerated vesting of certain stock options that had been issued prior to 2009. This press release contains 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. These statements generally may be identified by their use of terms or phrases such as ''expects,'' ''estimates,'' ''anticipates,'' ''projects,'' ''believes,'' ''plans,'' ''intends,'' ''may,'' ''will,'' ''should,'' ''could,'' ''potential,'' ''continue,'' ''future,'' and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Accordingly, actual results may differ from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, stockholder reports, Annual Report on Form 10-K, and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information. Contact: Knight Transportation, Inc. David A. Jackson, 602-606-6349 President or Adam W. Miller, 602-606-6349 CFO
Knight Transportation Reports Growth in First Quarter 2013 Revenue and Earnings
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