8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 18, 2006

_____________________________________________________________________

KNIGHT TRANSPORTATION, INC.

(Exact name of registrant as specified in its charter)

Arizona	000-24946	86-0649974
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5601 W. Buckeye Road, Phoenix, AZ	85043
(Address of principal executive offices)	(Zip Code)

(602) 269-2000

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02	Results of Operations and Financial Condition.
	On Wednesday, October 18, 2006, Knight Transportation, Inc., an Arizona corporation (the "Company"), issued a press release (the "Press Release") announcing its financial results for the quarter and nine months ended September 30, 2006. A copy of the Press Release is attached to this report as Exhibit 99.1. The information contained in this report under Items 2.02 and 9.01 and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information in this report and the exhibit hereto may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are made based on the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results or events may differ from those anticipated by forward-looking statements. Please refer to various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission for information concerning risks, uncertainties, and other factors that may affect future results.
Item 9.01	Financial Statements and Exhibits.
	(c)   Exhibits.
	EXHIBIT NUMBER	EXHIBIT DESCRIPTION
	99.1	Knight Transportation, Inc. press release announcing financial results for the quarter and nine months ended September 30, 2006

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KNIGHT TRANSPORTATION, INC.
Date: October 19, 2006	By:	/s/ David A. Jackson
		David A. Jackson
		Chief Financial Officer

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EXHIBIT INDEX

EXHIBIT NUMBER	EXHIBIT DESCRIPTION
99.1	Knight Transportation, Inc. press release announcing financial results for the quarter and nine months ended September 30, 2006

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EX-99.1

Exhibit 99.1

For Immediate Release

Phoenix, Arizona - October 18, 2006

Contact:

David Jackson, CFO

(602) 269-2000

Knight Transportation Posts Record Revenue and Net Income for the Third Quarter of 2006

Knight Transportation, Inc. (NYSE: KNX) announced today its financial results for the quarter and year-to-date ended September 30, 2006.

For the quarter, total revenue increased 19.5%, to $174.7 million from $146.2 million for the same quarter of 2005. Revenue, before fuel surcharge, increased 15.1%, to $146.6 million from $127.4 million for the same quarter of 2005. Net income increased 22.0 %, to $18.9 million from $15.5 million for the same period of 2005. Net income per diluted share increased to $0.22 from $0.18 for the same period of 2005. Excluding equity-based compensation expense for the third quarter 2006, net income increased 25.8%, to $19.5 million from $15.5 million for the same period of 2005, when equity-based compensation was not required to be expensed.

Year-to-date, total revenue increased 21.7%, to $489.5 million from $402.2 million for the same period of 2005. Revenue, before fuel surcharge, increased 16.2%, to $416.3 million from $358.2 million for the same period of 2005. Net income increased 22.3%, to $52.8 million from $43.2 million for the same period of 2005. Net income per diluted share increased to $0.61 from $0.50 for the same period of 2005. Excluding equity-based compensation expense for the nine months ended September 30, 2006, net income increased 25.9%, to $54.4 million from $43.2 million for the same period of 2005, when equity-based compensation was not required to be expensed.

The company previously announced a cash dividend of $.02 per share to shareholders of record on September 8, 2006, which was paid on September 29, 2006.

On October 12, 2006, Knight Transportation was named to Forbes Magazine's list of the "200 Best Small Companies in America " for the twelfth consecutive year.

Chairman and Chief Executive Officer, Kevin P. Knight, in commenting on the quarter said, "This quarter represented the 47th consecutive quarter, since going public, that Knight Transportation generated higher year-over-year operating income. Our operating ratio was 79.1%, a 130 basis point improvement over the third quarter of 2005. Our net income, as a percentage of revenue before fuel surcharge, was 12.9%, which was the best 3rd quarter in our history and a 50 basis point improvement over the same quarter in 2005. Our team achieved these results despite 68 basis points of negative impact on the operating ratio from non-cash expensing of equity compensation during the quarter.

"Revenue growth continued during the quarter and was driven by a combination of fleet expansion and increased revenue per mile. In the quarter we opened our 24^th dry van truckload service center in Boise, Idaho.

"For the third quarter, average freight revenue per tractor per week remained essentially constant at $3,154 compared with $3,159 during a very strong freight quarter in 2005. Average revenue per loaded mile, before fuel surcharges, increased 7.6%, while non-revenue miles increased by a percentage point with a shorter average length of haul. Average miles per tractor decreased 6.4% as compared to the same period of 2005. Adjusting for the one less business day in the third quarter 2006 (63) compared to third quarter 2005 (64), average miles per tractor would have decreased 4.9%. The decrease in utilization is also attributed to a less robust freight environment, more stringent hours of service regulations, and a shortened length of haul.

"Continued positive results in fuel surcharge recovery and used equipment sales, as well as our constant focus on cost controls, more than overcame expense increases relating to recording equity based compensation expense, increased driver compensation, prices of revenue equipment, and declining fuel efficiency due to emissions control regulations.

"The 2006 periods include our initial adoption of the accounting standard which requires expensing of equity based compensation such as stock options. At Knight Transportation we have a broad based stock option program in which approximately one-third of our total employees participate. The third quarter and first nine months of 2006 included approximately $1.0 million and $2.6 million, respectively, of non-cash equity-based compensation expense recorded, while such expense was not recorded in 2005.

"For the quarter, we invested $30.7 million in net capital expenditures. At September 30, 2006, our balance sheet reflected $17.1 million in cash and short-term investments, zero debt, and $406.4 million in shareholders' equity.

"Looking forward, we intend to continue to execute our business model that is focused on industry-leading growth and profitability. This will not be easy in the current environment. However, with our network of 24 dry van and 3 refrigerated service centers to support company growth efforts nationwide, we are optimistic about our opportunity. We also will continue to evaluate the market for acquisition opportunities that make sense within our disciplined operating framework. Our base expectation for the medium to longer term is to grow our fleet between ten and fifteen percent annually. We will evaluate that base goal and may adjust it up or down periodically based on factors such as freight demand, driver availability, and acquisitions. "

The Company will hold a conference call on October 19, 4PM ET, to further discuss its results of operations for the quarter ended September 30, 2006. The dial in number for this conference call is 1-866-550-6338.

Knight Transportation, Inc is a truckload carrier offering dry van, refrigerated, and brokerage services to customers through a network of service centers located throughout the United States. As "Your Hometown National Carrier, " Knight strives to offer customers and drivers personal service and attention through each service center, while offering integrated freight transportation nationwide and beyond through the scale of one of North America's largest trucking companies. The principal types of freight we transport include consumer staples, retail, paper products, packaging/plastics, manufacturing, and import/export commodities.

INCOME STATEMENT DATA:	Three Months Ended September 30,				Nine Months Ended September 30,
	(Unaudited, in thousands, except per share amounts)
	2006		2005		2006		2005
REVENUE:
Revenue, before fuel surcharge	$	146,555	$	127,444	$	416,266	$	358,241
Fuel surcharge		28,117		18,744		73,225		43,996
TOTAL REVENUE		174,672		146,188		489,491		402,237
OPERATING EXPENSES:
Salaries, wages and benefits		49,467		41,934		140,530		118,047
Fuel expense - gross		45,528		37,051		124,775		93,084
Operations and maintenance		9,277		9,067		26,991		24,869
Insurance and claims		6,929		4,916		18,791		17,221
Operating taxes and licenses		3,423		3,112		10,015		9,006
Communications		1,397		1,009		4,134		2,936
Depreciation and amortization		15,449		13,328		45,041		38,423
Lease expense - revenue equipment		106		67		323		67
Purchased transportation		10,871		8,585		28,609		22,196
Miscellaneous operating expenses		1,616		2,107		3,646		5,415
		144,063		121,176		402,855		331,264
Income From Operations		30,609		25,012		86,636		70,973
Other income		-		551		-		551
Interest income		301		188		878		442
		301		739		878		993
Income Before Income Taxes		30,910		25,751		87,514		71,966
INCOME TAXES		12,060		10,300		34,710		28,800
NET INCOME	$	18,850	$	15,451	$	52,804	$	43,166
Net Income Per Share
- Basic	$	0.22	$	0.18	$	0.62	$	0.51
- Diluted	$	0.22	$	0.18	$	0.61	$	0.50
Weighted Average Shares Outstanding
- Basic		85,895		85,298		85,823		85,215
- Diluted		86,922		86,744		87,077		86,715

BALANCE SHEET DATA:
	9/30/2006		12/31/2005
ASSETS	(Unaudited, in thousands)
Cash and cash equivalents	$	10,668	$	18,809
Short term investment		6,463		2,278
Restricted cash		-		211
Accounts receivable, net		84,004		79,848
Notes receivable, net		270		241
Other Assets		9,095		3,355
Prepaid expenses		7,683		7,156
Deferred tax asset		8,190		8,533
Total Current Assets		126,373		120,431
Property and equipment, net		403,497		352,339
Notes receivable, long-term		407		344
Goodwill		8,439		8,119
Other assets and restricted cash		5,218		2,594
Total Assets	$	543,934	$	483,827
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	12,389	$	7,464
Accrued payroll		6,524		5,452
Accrued liabilities		16,283		13,307
Dividends payable		-		1,713
Other current liabilities		-		211
Claims accrual		23,214		26,155
Total Current Liabilities		58,410		54,302
Deferred Income Taxes		79,155		76,597
Total Liabilities		137,565		130,899
Common stock		860		857
Additional paid-in capital		92,936		87,148
Retained earnings		312,573		264,923
Total Shareholders' Equity		406,369		352,928
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	543,934	$	483,827

	Three Months Ended September 30,								Nine Months Ended September 30,
	2006			2005					2006			2005
	(Unaudited)			(Unaudited)					(Unaudited)			(Unaudited)
OPERATING STATISTICS							% Change								% Change
Average Revenue Per Loaded Mile*	$	1.766		$	1.642			7.6%	$	1.713		$	1.633			4.9%
Average Revenue Per Total Mile*	$	1.546		$	1.451			6.5%	$	1.503		$	1.439			4.4%
Empty Mile Factor		12.5	%		11.6	%		7.8%		12.2	%		11.9	%		2.5%
Average Miles Per Tractor		26,510			28,308			-6.4%		80,292			84,012			-4.4%
Average Length of Haul		551			582			-5.3%		561			571			-1.8%
Operating Ratio**		79.1	%		80.4	%				79.2	%		80.2	%
Average Tractors - Total		3,463			3,078			12.5%		3,371			2,945			14.5%
Tractors - End of Quarter:
Company		3,346			2,926					3,346			2,926
Owner - Operator		232			241					232			241
		3,578			3,167					3,578			3,167
Trailers - End of Quarter		8,188			7,749					8,188			7,749
Net Capital Expenditures (in thousands)	$	30,682		$	28,452				$	88,098		$	66,048
Cash Flow From Operations (in thousands)	$	24,669		$	9,032				$	86,367		$	62,317

*

Excludes fuel surcharge.

**

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. Revenue from fuel surcharge is available on the accompanying statements of income. 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.

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 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:Dave Jackson, CFO, at (602) 269-2000

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