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:
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Three Months Ended March 31,
(dollars in thousands, except
per share data)
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2013
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2012
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% Change
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Total revenue
|
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$
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235,400
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$
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219,532
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7.2
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%
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Revenue, excluding trucking fuel surcharge
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$
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189,600
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$
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175,599
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8.0
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%
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GAAP operating income
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$
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25,544
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$
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19,834
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28.8
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%
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Adjusted operating income
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$
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25,544
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$
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23,815
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(1)
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7.3
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%
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GAAP net income
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$
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15,183
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$
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10,546
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44.0
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%
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Adjusted net income
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$
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15,183
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$
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14,440
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(1)
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5.1
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%
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GAAP earnings per diluted share
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$
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0.19
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$
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0.13
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43.8
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%
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Adjusted earnings per diluted share
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$
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0.19
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$
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0.18
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(1)
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5.0
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%
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(1)
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The 2012 quarter 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.
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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 14th 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.
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Three Months Ended March 31,
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Operating ratios(2)
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Revenue
growth
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2013
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2012
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Asset based
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85.3
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%
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85.4
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%
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2.1
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%
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Non-asset based
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92.8
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%
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94.4
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%
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57.9
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%
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Consolidated
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86.5
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%
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86.4
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%
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7.2
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%
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(2)
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Operating ratio is defined as total operating expenses, net
of trucking fuel surcharge, as a percentage of revenue before
trucking fuel surcharge. Operating ratio for 2012 quarter is
calculated using adjusted operating income. See reconciliation
table.
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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 $43.0
million of borrowing under our unsecured revolving credit agreement.
The company will hold a conference call on April 24, 2013, at 4:30 PM
EDT, to further discuss its results of operations for the quarter ended
March 31, 2013. The dial in number for this conference call is
1-855-733-9163. Slides to accompany this call will be posted on the
company’s website and will be available to download prior to the
scheduled conference time. To view the presentation, please visit http://investor.knighttrans.com/events,
''First Quarter 2013 Conference Call Presentation.''
Knight Transportation, Inc. is a provider of multiple truckload
transportation and logistics services using a nationwide network of
service centers in the U.S. to serve customers throughout North America.
In addition to operating one of the country’s largest tractor fleets,
Knight also partners with third-party equipment providers to provide a
broad range of truckload services to its customers while creating
quality driving jobs for our driving associates and successful business
opportunities for owner-operators.
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INCOME STATEMENT DATA:
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Three Months Ended March 31,
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(Unaudited, in thousands, except per share amounts)
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2013
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2012
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REVENUE:
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Revenue, before fuel surcharge
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$
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189,600
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$
|
175,599
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Fuel surcharge
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45,800
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43,933
|
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TOTAL REVENUE
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235,400
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219,532
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OPERATING EXPENSES:
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Salaries, wages and benefits
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57,654
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60,956
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Fuel expense - gross
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55,693
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57,311
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Operations and maintenance
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15,910
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13,737
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Insurance and claims
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7,155
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7,645
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Operating taxes and licenses
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3,908
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4,103
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Communications
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1,172
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|
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|
1,395
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Depreciation and amortization
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21,507
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20,372
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Purchased transportation
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42,792
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|
31,860
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Miscellaneous operating expenses
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4,065
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|
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|
|
2,319
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209,856
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|
|
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|
199,698
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Income From Operations
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25,544
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19,834
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Interest income
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|
109
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|
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|
|
112
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Interest expense
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|
(141
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)
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|
(128
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)
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Other income
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220
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|
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|
197
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Income before income taxes
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25,732
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20,015
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INCOME TAXES
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10,298
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|
9,356
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Net Income
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|
15,434
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|
|
|
|
10,659
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|
|
Net income attributable to noncontrolling interest
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|
(251
|
)
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|
(113
|
)
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|
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION
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|
$
|
15,183
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$
|
10,546
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Net Income Per Share
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- Basic
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$
|
0.19
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$
|
0.13
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- Diluted
|
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|
$
|
0.19
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|
$
|
0.13
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|
Weighted Average Shares Outstanding
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- Basic
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|
|
79,841
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79,531
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|
- Diluted
|
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|
|
80,124
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|
80,046
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BALANCE SHEET DATA:
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|
03/31/13
|
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|
12/31/12
|
|
ASSETS
|
|
|
|
(Unaudited, in thousands)
|
|
Cash and cash equivalents
|
|
|
|
$
|
10,196
|
|
|
|
$
|
5,684
|
|
|
Accounts receivable, net
|
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|
112,576
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|
|
|
|
102,553
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|
|
Notes receivable, net
|
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|
|
739
|
|
|
|
|
791
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|
|
Related party notes and interest receivable
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|
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|
|
2,069
|
|
|
|
|
2,814
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|
|
Prepaid expenses
|
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|
|
|
14,165
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|
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|
17,035
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|
Assets held for sale
|
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|
15,283
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|
18,362
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|
Other current assets
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|
10,368
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|
12,449
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|
Current deferred tax asset
|
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|
|
4,028
|
|
|
|
|
3,409
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|
|
Total Current Assets
|
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|
|
|
169,424
|
|
|
|
|
163,097
|
|
|
|
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|
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|
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|
Property and equipment, net
|
|
|
|
|
563,080
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|
|
|
|
584,064
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|
|
Notes receivable, long-term
|
|
|
|
|
3,146
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|
|
|
|
3,692
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|
|
Goodwill
|
|
|
|
|
10,271
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|
|
|
|
10,276
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|
|
Other assets and restricted cash
|
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|
|
|
21,535
|
|
|
|
|
21,383
|
|
|
Total Long-term Assets
|
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|
|
|
598,032
|
|
|
|
|
619,415
|
|
|
|
|
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|
|
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|
Total Assets
|
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|
|
$
|
767,456
|
|
|
|
$
|
782,512
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|
|
|
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|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
15,383
|
|
|
|
$
|
11,281
|
|
|
Accrued payroll and purchased transportation
|
|
|
|
|
12,718
|
|
|
|
|
10,489
|
|
|
Accrued liabilities
|
|
|
|
|
21,230
|
|
|
|
|
16,020
|
|
|
Claims accrual - current portion
|
|
|
|
|
16,366
|
|
|
|
|
15,892
|
|
|
Dividend payable - current portion
|
|
|
|
|
151
|
|
|
|
|
141
|
|
|
Total Current Liabilities
|
|
|
|
|
65,848
|
|
|
|
|
53,823
|
|
|
|
|
|
|
|
|
|
|
|
Claims accrual - long-term portion
|
|
|
|
|
10,455
|
|
|
|
|
10,340
|
|
|
Long-term dividend payable & other liabilities
|
|
|
|
|
2,384
|
|
|
|
|
2,638
|
|
|
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 comprehensive income/(loss)
|
|
|
|
|
(51
|
)
|
|
|
|
(302
|
)
|
|
Retained earnings
|
|
|
|
|
356,591
|
|
|
|
|
346,899
|
|
|
Total Knight Transportation Shareholders' Equity
|
|
|
|
|
501,828
|
|
|
|
|
490,232
|
|
|
Noncontrolling interest
|
|
|
|
|
699
|
|
|
|
|
608
|
|
|
Total Shareholders' Equity
|
|
|
|
|
502,527
|
|
|
|
|
490,840
|
|
|
Total Liabilities and Shareholders' Equity
|
|
|
|
$
|
767,456
|
|
|
|
$
|
782,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) Expenditures (in thousands)
|
|
|
|
$
|
(1,758
|
)
|
|
|
$
|
24,290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Operations (in thousands)
|
|
|
|
$
|
40,322
|
|
|
|
$
|
30,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 $4 million related to the accelerated vesting
of certain stock options issued prior to 2009, and net of fuel
surcharge, as a percentage of revenue before fuel surcharge. We
measure our revenue, before fuel surcharge, and our operating
expenses, net of fuel surcharge, because we believe that eliminating
this sometimes volatile source of revenue affords a more consistent
basis for comparing our results of operations from period to period.
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The following is a reconciliation of 2012 YTD GAAP Income to
Non-GAAP Income:
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Reconciliation:
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(GAAP) YTD
3-31-12
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* Option
Acceleration
Expense
Recorded
in
Q1 - 2012
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(Non-GAAP)
Adjusted YTD
3-31-12
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Total Revenue
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$
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219,532
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|
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$
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219,532
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Total Operating Expense
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199,698
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(3,981
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)
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|
|
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195,717
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|
|
|
|
|
|
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19,834
|
|
|
|
|
|
|
|
23,815
|
|
|
|
|
|
|
|
|
|
|
|
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Other Income
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|
|
|
|
181
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|
|
|
|
|
|
|
181
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Income before income taxes
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|
|
|
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20,015
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|
|
|
|
|
|
|
23,996
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Income taxes
|
|
|
|
|
9,356
|
|
|
|
87
|
|
|
|
|
9,443
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Net Income
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|
|
|
|
10,659
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|
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|
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|
|
|
14,553
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Net income attributable to noncontrolling interest
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(113
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)
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(113
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)
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Net income attributable to Knight Transportation
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$
|
10,546
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$
|
14,440
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Net Income Per Share
|
|
|
|
|
|
|
|
|
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- Basic
|
|
|
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$
|
0.13
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|
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$
|
0.18
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- Diluted
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|
|
$
|
0.13
|
|
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|
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$
|
0.18
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Weighted Average Shares Outstanding
|
|
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- Basic
|
|
|
|
|
79,531
|
|
|
|
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|
|
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79,531
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- Diluted
|
|
|
|
|
80,046
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|
|
|
|
|
|
|
80,046
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|
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|
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* 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.
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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.
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Knight Transportation, Inc.David A. Jackson, 602-606-6349PresidentorAdam W. Miller, 602-606-6349CFO