Knight Transportation Reports Second Quarter 2013 Revenue and Earnings

  Knight Transportation Reports Second Quarter 2013 Revenue and Earnings

Business Wire

PHOENIX -- July 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 second quarter ended June 30, 2013.

Key financial highlights for the second quarter and first half of 2013 and
2012 were as follows:

                Three Months Ended June 30,               Six Months Ended June 30,
             (dollars in thousands, except per      (dollars in thousands, except per share
                share data)                               data)
                2013        2012        %             2013        2012             %
                                            Change                                         Change
Total           $ 244,783     $ 236,268     3.6%         $ 480,183     $ 455,800          5.3  %
revenue
Revenue,
excluding
trucking        $ 200,104     $ 188,838     6.0%         $ 389,704     $ 364,437          6.9  %
fuel
surcharge
GAAP
operating       $ 31,925      $ 32,103      -0.6%        $ 57,469      $ 51,937           10.7 %
income
Adjusted
operating       NA            NA            NA            $ 57,469      $ 55,918  ^(1)     2.8  %
income
GAAP net        $ 18,939      $ 19,289      -1.8%        $ 34,122      $ 29,835           14.4 %
income
Adjusted
net             NA            NA            NA            $ 34,122      $ 33,729  ^(1)     1.2  %
income
GAAP
earnings
per             $ 0.24        $ 0.24        -2.1%        $ 0.43        $ 0.37             14.1 %
diluted
share
Adjusted
earnings
per             NA            NA            NA            $ 0.43        $ 0.42    ^(1)     1.0  %
diluted
share
                                                                                           

^(1) [The 1st quarter of 2012 included a $4.0 million non-cash charge ($3.9
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 June 7, 2013, which was paid on June 28, 2013.

Kevin Knight, Chairman and Chief Executive Officer, commented on the quarter,
''We have continued to expand our market share in our wide range of truckload
logistic services in a challenging operating and economic environment. Our
consolidated revenue, before trucking fuel surcharge, increased 6.0% on a year
over year basis. Our non-asset service offerings lead the way with revenue
growth of 64.2%, and now make up approximately 20.0% of our total revenue
before trucking fuel surcharge. Compared to the same quarter last year, our
revenue per loaded mile, net of fuel surcharge, increased just less than 1.0%
while our length of haul and miles per tractor were virtually flat. We
experienced an improvement in our revenue per tractor compared to the same
quarter last year, while operating income was essentially unchanged.''

The following chart reflects the year-over-year operating ratio and revenue
comparison for our asset based businesses and our non-asset based businesses
for the second quarter and first half of 2013 and 2012.

                                                  
                   Three Months Ended June 30,           Six Months Ended June 30,
                                                         
                                         Revenue                               Revenue
                                         change,                               change,
                   Operating          excluding       Operating          excluding
                   ratios^(2)            trucking        ratios^(2)            trucking
                                         fuel                                  fuel
                                         surcharge                             surcharge
                   2013    2012                       2013    2012        
Asset based        81.7%     81.1%       -2.5%           83.5%     83.2%       -0.6%
Non-asset          93.6%     96.0%       64.2%           93.2%     95.3%       61.7%
based
                                                                               
Consolidated       84.0%     83.0%       6.0%            85.3%     84.7%       6.9%
                                                                               

^(2)[Operating ratio is defined as total operating expenses, net of trucking
fuel surcharge, as a percentage of revenue before trucking fuel surcharge.]


Our asset based businesses continued to operate at a high level of
profitability and efficiency. Our non-asset based businesses continued to
produce strong revenue growth along with improved margins, when compared to
the same quarter last year. Our businesses continue to complement each other
and enable us to provide our customers with truckload services that are
efficient and valuable to their supply chain needs.

The industry continues to be faced with a shortage of high quality driving
associates. Sourcing and retaining high quality drivers is paramount to our
success in improving the productivity of our assets. We believe our
decentralized regional service centers provide a ''hometown'' feel that
affords us a significant advantage in recruiting, retaining, and developing
driving associates. We have also continued to invest in our driver development
and training programs to source driving associates and develop them into
Knight company drivers. 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 decreased 1.3% when compared to the
second 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 lessening the environmental impact of our operations.

Our average tractor count for the quarter decreased 107 trucks,
year-over-year, to 3,963 tractors. Our tractor fleet remains one of the most
modern fleets in the industry with an average age of 2.1 years. Our gain on
sale of revenue equipment in the second quarter of 2013 was $1.6 million, down
from $2.2 million in the second quarter of 2012.

We have returned $78.5 million to our shareholders in the form of quarterly
dividends over the twenty-four-month period ending June 30, 2013. We ended the
quarter with $0.7 million of cash and $517.4 million of shareholders' equity.
Year-to-date our net capital expenditures are $17.8 million compared to $56.5
million for the same period last year, while our cash flow from operations is
$72.3 million compared to $62.4 million. This has resulted in significantly
more free cash flow and has allowed us to repay $54.0 of our outstanding debt
year-to-date.

The company will hold a conference call on July 24, 2013, at 4:30 PM EDT, to
further discuss its results of operations for the quarter ended June 30, 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, ''Second
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 contracts 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            Three Months Ended June 30,       Six Months Ended June 30,
DATA:
                     (Unaudited, in thousands, except per share amounts)
                                                                  
                     2013            2012              2013            2012
REVENUE:
Revenue,
before fuel          $ 200,104       $ 188,838         $ 389,704       $ 364,437
surcharge
Fuel surcharge        44,679      47,430          90,479      91,363  
TOTAL REVENUE         244,783     236,268         480,183     455,800 
                                                                       
OPERATING
EXPENSES:
Salaries,
wages and              56,807          59,089            114,461         120,045
benefits
Fuel expense -         52,739          56,612            108,432         113,923
gross
Operations and         15,919          15,078            31,828          28,815
maintenance
Insurance and          7,295           8,281             14,450          15,926
claims
Operating
taxes and              3,985           3,973             7,893           8,075
licenses
Communications         1,200           1,271             2,372           2,666
Depreciation
and                    21,089          20,933            42,597          41,305
amortization
Purchased              49,883          36,064            92,675          67,924
transportation
Miscellaneous
operating             3,941       2,864           8,006       5,184   
expenses
                      212,858     204,165         422,714     403,863 
                                                                
Income From           31,925      32,103          57,469      51,937  
Operations
                                                                       
                                                                       
Interest               96              108               205             221
income
Interest               (77     )       (114    )         (219    )       (242    )
expense
Other income          (168    )    197             53          394     
(expense)
Income before          31,776          32,294            57,508          52,310
income taxes
INCOME TAXES          12,712      12,924          23,010      22,280  
Net Income             19,064          19,370            34,498          30,030
Net income
attributable
to                    (125    )    (81     )        (376    )    (195    )
noncontrolling
interest
NET INCOME
ATTRIBUTABLE         $ 18,939     $ 19,289         $ 34,122     $ 29,835  
TO KNIGHT
TRANSPORTATION
                                                                       
Basic Earnings       $ 0.24          $ 0.24            $ 0.43          $ 0.37
Per Share
Diluted
Earnings Per         $ 0.24          $ 0.24            $ 0.43          $ 0.37
Share
                                                                       
Weighted
Average Shares         79,954          79,686            79,898          79,609
Outstanding -
Basic
Weighted
Average Shares         80,296          80,076            80,209          80,045
Outstanding -
Diluted
                                                                       
BALANCE SHEET
DATA:
                                                       06/30/13        12/31/12
ASSETS                                                 (Unaudited, in thousands)
Cash and cash                                          $ 747           $ 5,684
equivalents
Trade
receivables,
net of                                                   109,671         102,553
allowance for
doubtful
accounts
Notes
receivable,
net of                                                   749             791
allowance for
doubtful
accounts
Related party
notes and                                                1,663           2,814
interest
receivable
Prepaid                                                  11,371          17,035
expenses
Assets held                                              14,119          18,362
for sale
Other current                                            10,944          12,449
assets
Current
deferred tax                                            4,239       3,409   
assets
Total Current                                           153,503     163,097 
Assets
                                                                       
Property and                                             569,620         584,064
equipment, net
Notes
receivable,                                              3,267           3,692
long-term
Goodwill                                                 10,266          10,276
Other assets
and restricted                                          22,036      21,383  
cash
                                                                       
Total Assets                                           $ 758,692    $ 782,512 
                                                                       
LIABILITIES
AND
SHAREHOLDERS'
EQUITY
Accounts                                               $ 20,892        $ 11,281
payable
Accrued
payroll and                                              11,241          10,489
purchased
transportation
Accrued                                                  13,288          16,020
liabilities
Claims accrual
- current                                                15,563          15,892
portion
Dividend
payable -                                               152         141     
current
portion
Total Current                                            61,136          53,823
Liabilities
                                                                       
Claims accrual
- long-term                                              9,741           10,340
portion
Long-term
dividend
payable and                                              2,369           2,638
other
liabilities
Deferred tax                                             141,367         144,871
liabilities
Long-term debt                                          26,000      80,000  
Total
Long-term                                                179,477         237,849
Liabilities
                                                                       
Total                                                   240,613     291,672 
Liabilities
                                                                       
Common stock                                             800             798
Additional
paid-in                                                  146,213         142,837
capital
Accumulated
other                                                    (251    )       (302    )
comprehensive
loss
Retained                                                370,680     346,899 
earnings
Total Knight
Transportation                                           517,442         490,232
Shareholders'
Equity
Noncontrolling                                          637         608     
interest
Total
Shareholders'                                           518,079     490,840 
Equity
Total
Liabilities
and                                                    $ 758,692    $ 782,512 
Shareholders'
Equity
                                                                       
                                                                       

                                                                          
                   Three Months Ended                    Six Months Ended June
                   June 30,                              30,
                   2013       2012         %         2013       2012         %
                                             Change                                Change
OPERATING          (Unaudited)                           (Unaudited)
STATISTICS
                                                                                  
Average
Revenue Per        $ 40,523     $ 40,459     0.2%        $ 79,069     $ 79,519     -0.6%
Tractor*
                                                                                   
Non-paid
Empty Mile           10.8%        10.1%      6.9%          10.9%        10.4%      4.8%
Percent
                                                                                   
Average
Length of            482          485        -0.6%         481          482        -0.2%
Haul
                                                                                   
Operating            84.0%        83.0%                    85.3%        84.7%
Ratio**
                                                                                   
Average
Tractors -           3,963        4,070                    4,020        4,024
Total
                                                                                   
Trailers -
End of               9,401        9,118                    9,401        9,118
Quarter
                                                                                   
Net Capital
Expenditures       $ 19,580     $ 32,184                 $ 17,822     $ 56,474
(in
thousands)
                                                                                   
Cash Flow
From
Operations         $ 31,935     $ 32,155                 $ 72,257     $ 62,410
(in
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 six months ending June 30,
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:           6-30-12        Expense         Adjusted YTD
                                               Recorded in        6-30-12
                                               Q1 - 2012
Total Revenue                $ 455,800                      $  455,800
Total Operating               403,863        (3,981   )           399,882 
Expense
                               51,937                                55,918
                                                                  
Other Income                  373                                 373     
Income before income           52,310                                56,291
taxes
Income taxes                  22,280         87                   22,367  
Net Income                     30,030                                33,924
Net income
attributable to               (195    )                            (195    )
noncontrolling
interest
Net income
attributable to Knight       $ 29,835                            $  33,729  
Transportation
Net Income Per Share
- Basic                      $ 0.37                               $  0.42
- Diluted                    $ 0.37                               $  0.42
Weighted Average
Shares Outstanding
- Basic                        79,609                                79,609
- Diluted                      80,045                                80,045
                                                                  

* 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
 
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