News Details

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, 2014.

Key financial highlights for the first quarter of 2014 and 2013 were as follows:

The company previously announced a quarterly cash dividend of $0.06 per share to shareholders of record on March 7, 2014, which was paid on March 28, 2014.

Kevin Knight, Chairman and Chief Executive Officer, commented on the quarter, ''We are pleased with our success in growing our revenue and improving our operating margin. During the quarter we experienced greater demand for our capacity as well as a stronger used equipment market. Our improved performance was a result of our focus on improving production, recruiting and developing driving associates, providing industry-leading service, intensifying our cost control efforts, and realizing the benefits of a solid used equipment market.

''Revenue per tractor increased 5.1%, year over year, as a result of a 4.9% improvement in revenue per loaded mile, a 4.2% increase in our length of haul, a 140 basis point improvement in our non-paid empty mile percentage, and a 1.3% decrease in miles per tractor. In the first quarter of 2014 our trucking businesses improved their operating ratio to 82.0% from 85.3% in the same quarter last year. Our brokerage business continues to grow rapidly and increased revenue 94.4%, increased gross margin 91.2%, and increased operating income 89.2%, when compared to the same quarter last year. As the trucking environment remains strong, we feel well positioned to continue to execute our model and bring needed capacity to our customers, quality careers to our driving associates, and superior returns to our shareholders.''

The following chart reflects the financial performance of our trucking (asset based) and our logistics (non-asset based) businesses for the first quarter of 2014 and 2013.

In the first quarter, operating income in our trucking businesses improved 25.3% while our revenue, excluding trucking fuel surcharge, grew 2.6%. We experienced this growth despite operating 2.2% fewer average tractors, year over year. Our specific efforts to improve yield, strengthen our network, and drive operational efficiencies have yielded positive results. We experienced a 4.2% longer length of haul and reduced our non-paid empty mile percentage to an all-time low 9.6%. The industry continues to be faced with multiple inflationary pressures, including rising driver pay, increased regulation, additional maintenance cost associated with the 2010 EPA emission engines, and rising equipment cost. We continue to intensify our cost control efforts in order to manage these pressures.

Our brokerage business continues to show meaningful growth as we gain market share, source additional capacity, and strategically align our service offering with the supply chain needs of our customers. Our other businesses within our logistics segment, including our intermodal and sourcing businesses, underperformed during the first quarter, which contributed to the deterioration in our year over year operating ratio for the logistics segment. The operating ratio in our intermodal business deteriorated 630 basis points when compared to the same quarter last year, however, improved 160 basis points sequentially from fourth quarter 2013. We expect continued improvement in this business and to return to profitability within the next two quarters.

Developing and retaining high quality drivers continue to challenge the industry and are critical to improving the productivity of our assets, providing industry leading customer service, and growing our fleet. Our driver development and training program remains a primary focus area for our management team, and we feel well positioned to continue to make progress in the coming quarters.

The DOE national average diesel fuel price decreased 1.6% 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 reducing the environmental impact of our operations.

Our tractor fleet remains one of the most modern fleets in the industry with an average age of 1.9 years. The used equipment market showed signs of strength during the quarter and resulted in gain on sale of revenue equipment in the first quarter of 2014 of $4.3 million, compared to $1.4 million in the first quarter of 2013.

We have returned $78.7 million to our shareholders in the form of quarterly dividends over the two years ended March 31, 2014. We paid down $26.0 million of borrowing under our revolving credit facility during the quarter, ending with $12.0 million of long term debt, and $574.8 million of shareholders' equity. Our first quarter 2014 net capital expenditures were $5.7 million while our cash flow from operations was $36.5 million. As of March 31, 2014 we did not have any tractor or trailers held under operating leases.

The company will hold a conference call on April 23, 2014, at 4:30 PM EDT, to further discuss its results of operations for the quarter ended March 31, 2014. 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 2014 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.