EX-99 2 exhibit99.htm EXHIBIT 99 FIRST QUARTER 2007 PRESS RELEASE Exhibit 99 First Quarter 2007 Press Release

For Immediate Release
Phoenix, Arizona - April 18, 2007
Contact:
David Jackson, CFO
(602) 269-2000
 

 
Knight Transportation Posts Record Revenue and Net Income for the First Quarter of 2007

Knight Transportation, Inc. (NYSE: KNX) announced today its financial results for the quarter ended March 31, 2007.

For the quarter, total revenue increased 11.7%, to $166.5 million from $149.1 million for the same quarter of 2006. Revenue, before fuel surcharge, increased 12.0%, to $144.8 million from $129.3 million for the same quarter of 2006. Net income increased 5.0%, to $16.6 million from $15.8 million for the same period of 2006. Net income per diluted share increased to $0.19 from $0.18 for the same period of 2006.

The company previously announced a cash dividend of $.02 per share to shareholders of record on March 9, 2007, which was paid on March 30, 2007.

Chairman and Chief Executive Officer, Kevin P. Knight, offered the following comments, “This quarter represented the 49th consecutive quarter, since going public, that Knight Transportation generated higher year-over-year operating income. Our net income, as a percentage of revenue before fuel surcharge, for this quarter was 11.5%, which represented the third highest first quarter in our history as a public company. Our operating ratio was 81.2%, which represented our third best first quarter operating ratio in our history.

“We are pleased with our double-digit revenue growth considering the current challenging freight environment. Our growth was accomplished through a combination of continued fleet expansion, our asset purchase of Roads West Transportation during the fourth quarter of 2006, and increased revenue per mile. Also our brokerage line of business continues to expand.

"For the quarter, average revenue per loaded mile, before fuel surcharge, increased 4.0%, while non-revenue miles increased by 90 basis points with a 36 mile shorter average length of haul. Average miles per tractor decreased 4.8% as compared to the same period of 2006. The decrease in utilization is attributed primarily to a less robust freight environment and a shortened length of haul.

"Our service center growth continues in 2007 with the addition of four new service centers to date; one dry-van, one refrigerated and two brokerage centers. Our combined network is now 35 service centers strong, which includes 25 dry-van, 4 refrigerated and 6 brokerage centers located throughout the United States. Going forward, we intend to continue to execute our business model of leading growth and profitability, by continuing to grow existing service centers and also new openings. This will not be easy in the current environment, particularly if freight demand remains soft. We also plan to 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 10% and 15% annually and continue to grow our brokerage business. 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.
 

"Our constant efforts to reduce operating costs helped to minimize the overall impact of expense increases relating to driver compensation, prices of revenue equipment, higher cost for ultra low sulfur diesel fuel, and declining fuel efficiency due to emissions control regulations.

“Overall our average tractors increased by 389 to 3,679, an increase of 11.8% from the same period of 2006. For the quarter, we invested $18.9 million in net capital expenditures. At March 31, 2007, our balance sheet reflected $20.2 million in cash and cash equivalents, zero debt, and $442.2 million in shareholders’ equity.”

The Company will hold a conference call on April 19, 4PM ET, to further discuss its results of operations for the quarter ended March 31, 2007. The dial in number for this conference call is 1-866-244-4630.

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 March 31,
  
   
(Unaudited, in thousands, except per share amounts)
  
           
   
2007
  
2006
  
REVENUE:
          
Revenue, before fuel surcharge
  
$
144,825
  
$
129,339
  
Fuel surcharge
    
21,709
   
19,713
 
TOTAL REVENUE
    
166,534
   
149,052
 
               
OPERATING EXPENSES:
              
Salaries, wages and benefits
    
48,840
   
43,201
 
Fuel expense - gross
    
39,634
   
36,022
 
Operations and maintenance
    
9,272
   
9,427
 
Insurance and claims
    
8,006
   
5,754
 
Operating taxes and licenses
    
3,557
   
3,251
 
Communications
    
1,418
   
1,310
 
Depreciation and amortization
    
15,931
   
14,600
 
Lease expense - revenue equipment
    
106
   
109
 
Purchased transportation
    
10,732
   
7,907
 
Miscellaneous operating expenses
    
1,784
   
1,373
 
     
139,280
   
122,954
 
Income From Operations
    
27,254
   
26,098
 
               
 
              
Other income
    
188
   
-
  
Interest income
    
182
   
284
 
     
370
   
284
 
               
Income Before Income Taxes
    
27,624
   
26,382
 
INCOME TAXES
    
11,005
   
10,550
 
               
NET INCOME
  
$
16,619
  
$
15,832
  
Net Income Per Share
              
- Basic
  
$
0.19
  
$
0.18
  
- Diluted
  
$
0.19
  
$
0.18
  
Weighted Average Shares Outstanding
              
- Basic
    
86,173
   
85,752
 
- Diluted
    
87,167
   
87,260
 
 
 
           
BALANCE SHEET DATA:
  
3/31/2007
  
12/31/2006
  
   
 (Unaudited, in thousands)
  
ASSETS
  
 
  
Cash and cash equivalents
  
$
20,150
  
$
1,582
  
Accounts receivable, net
    
82,206
   
85,350
 
Notes receivable, net
    
267
   
341
 
Other current assets
    
15,384
   
16,613
 
Prepaid expenses
    
9,126
   
8,342
 
Deferred tax asset
    
9,117
   
8,759
 
Total Current Assets
    
136,250
   
120,987
 
               
Property and equipment, net
    
433,693
   
433,828
 
Notes receivable, long-term
    
308
   
348
 
Goodwill
    
10,268
   
10,256
 
Intangible assets, net
    
284
   
300
 
Other assets and restricted cash
    
4,836
   
4,500
 
               
Total Assets
  
$
585,639
  
$
570,219
  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Accounts payable
  
$
2,864
  
$
13,077
  
Accrued payroll
    
7,987
   
7,411
 
Accrued liabilities
    
22,991
   
15,184
 
Claims accrual
    
25,371
   
25,926
 
Total Current Liabilities
    
59,213
   
61,598
 
               
Deferred Income Taxes
    
84,240
   
82,526
 
               
Total Liabilities
    
143,453
   
144,124
 
               
Common stock
    
862
   
861
 
Additional paid-in capital
    
95,809
   
94,220
 
Retained earnings
    
345,515
   
331,014
 
Total Shareholders' Equity
    
442,186
   
426,095
 
               
                Total Liabilities and Shareholders' Equity
  
$
585,639
  
$
570,219
  
 
 
     
Three Months Ended March 31,
      
               
   
2007
  
2006
      
   
(Unaudited)
  
(Unaudited)
      
OPERATING STATISTICS
        
% 
  
           
Change
  
Average Revenue Per Loaded Mile*
  
$
1.735
  
$
1.668
    
4.0
%
                     
Average Revenue Per Total Mile*
  
$
1.507
  
$
1.464
    
2.9
%
                     
Empty Mile Factor
    
13.1
%
  
12.2
%
  
7.4
%
                     
Average Miles Per Tractor
    
25,212
    
26,490
    
-4.8
%
                     
Average Length of Haul
    
537
    
573
    
-6.3
%
                     
Operating Ratio**
    
81.2
%
  
79.8
%
      
                     
Average Tractors - Total
    
3,679
    
3,290
    
11.8
%
                     
Tractors - End of Quarter:
                    
    Company
    
3,522
    
3,097
        
    Owner - Operator
    
238
    
228
        
     
3,760
    
3,325
        
                     
Trailers - End of Quarter
    
8,663
   
7,966
       
                     
Net Capital Expenditures (in thousands)
  
$
18,935
  
$
27,168
        
                     
Cash Flow From Operations (in thousands)
  
$
38,036
  
$
39,279
        
 
*
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