exhibit99.htm

Knight Transportation Reports Revenue and Net Income for the Fourth Quarter Ended December 31, 2009

Knight Transportation (NYSE: KNX), one of North America’s largest truckload carriers, reported revenue and earnings for the fourth quarter ended December 31, 2009. Highlights included:

·	Revenue before fuel surcharge increased 0.2% to $143.9 million, compared to $143.6 million in the fourth quarter of 2008.

·	Diluted earnings per share of $0.16 from $0.19 in the fourth quarter of 2008.

·	Net income of $13.1 million, a decrease of 18.6% compared to $16.1 million in the fourth quarter of 2008.

For the quarter, revenue before fuel surcharge increased 0.2% to $143.9 million compared to $143.6 million in the fourth quarter of 2008. Total revenue decreased 4.0%, to $167.8 million from $174.8 million for the same quarter of 2008 due primarily to decreased fuel surcharge revenue as the U.S. average cost of diesel fuel per gallon during the fourth quarter of 2009 was $2.74 compared to $2.93 in the fourth quarter of 2008. Net income decreased 18.6% to $13.1 million from $16.1 million for the same period of 2008. Net income per diluted share for the quarter was $0.16, compared to $0.19 for the same period of 2008, primarily as a result of increased fuel expense net of fuel surcharge.

For the year, revenue before fuel surcharge decreased 4.0%, to $571.5 million from $595.6 million for the year of 2008. Net income decreased 10.1% to $50.6 million from $56.3 million for the year of 2008. Net income per diluted share was $0.60 compared to $0.66 for the previous year.

The company previously announced a quarterly cash dividend of $0.05 per share to shareholders of record on December 4, 2009, which was paid on December 23, 2009.

Chairman and Chief Executive Officer, Kevin P. Knight, offered the following comments:

“Although near-term challenges in the truckload industry remain, we are encouraged with the year-over-year improvement of our miles per tractor and the 10.6% increase in our total loads hauled for the fourth quarter as compared to the same period a year ago. Miles per tractor in the fourth quarter increased 2.1%, as compared to the same period last year. Throughout 2009, the year-over-year negative difference in miles per tractor narrowed as the year progressed until now being positive for the first time in many quarters. Although significant improvement in miles per tractor is needed before rivaling the levels experienced a few years ago, we believe that our improvement in miles per tractor, especially without major reductions in our tractor count, is evidence that we are in the early stages of a turnaround in the truckload freight market. Nevertheless, residual consequences remain from the oversupply of capacity in 2006, combined with the subsequent economic slowdown, and continue to manifest themselves through the year-over-year decline in revenue per mile. Revenue per total mile before fuel surcharge decreased 2.2% from the same period a year ago.

“In the fourth quarter, equipment productivity, as measured by average revenue before fuel surcharge per tractor in the quarter, was nearly flat with a decrease of 0.1% from the year-ago period. In 2009, the year-over-year difference in revenue before fuel surcharge per tractor in the fourth quarter compared favorably when

compared sequentially to the declines of -4.5% in the third quarter, -8.1% in the second quarter, and -4.7% in the first quarter, when each quarter is compared to the same period last year. Our non-paid empty mile percentage decreased by 6.5% to 11.5% from 12.3% in the year-ago period. Our average length of haul decreased 8.0% to 458 miles from 498 miles in the same period last year.

“Net fuel expense has been significantly volatile over the past two years due to severe fluctuations in the price of diesel fuel. This volatility has gone from a meaningful benefit in the end of 2008 and early 2009 to a detriment in the more recent quarters.

“On a consolidated basis, Knight Transportation produced an operating ratio (operating expenses, net of fuel surcharge, as a percentage of revenue before fuel surcharge) of 85.4% in the fourth quarter of this year compared to 81.2% in the same period last year. Knight Dry Van generated an operating ratio of 85.0%. Knight Refrigerated generated an operating ratio of 85.2%. Knight Brokerage generated an operating ratio of 92.8%. We have made the decision to maintain our fleet size for longer-term strategy rather than short-term benefit that would have likely improved our near-term operating ratio.

“We continue to be reminded of how challenging the current truckload environment is with the news of trucking company failures, despite having been in the seasonally stronger part of the year. We expect the challenging truckload market to yield opportunities to continue to capture market share over time. We believe we are well positioned to navigate the challenges of the current environment and thrive as the market improves when truckload capacity decreases and/or freight demand modestly increases.

“We continue to remain focused on refining our operating model to create additional efficiencies, offering customers a high level of service through our network of service centers and branches, and preparing for growth opportunities that will enhance the returns for our shareholders over time. We continue to actively evaluate strategic opportunities that can create value for our stakeholders without undue risk. We have significant financial flexibility and a strong balance sheet, with $520.0 million of stockholders’ equity, $97.8 million in cash and short-term investments, and zero debt at December 31, 2009.

“In the quarter, our gain on the sale of equipment increased to $694,000 from $258,000 for the same period last year. We continue to operate a relatively young fleet of late-model equipment that consists primarily of tractors equipped with 2007 U.S. EPA emission-compliant engines. Our service center network allows us to efficiently maintain this equipment. In 2010, we plan to continue a similar trade cycle and adopt the even cleaner burning engines which have just become available.”

The company will hold a conference call on January 27, 5:30 PM EDT, to further discuss its results of operations for the quarter ended December 31, 2009. The dial-in number for this conference call is 1-866-793-1299. 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://investors.knighttrans.com/presentations, “Fourth Quarter 2009 Conference Call Presentation.”

Knight Transportation, Inc. is a truckload carrier offering dry van, refrigerated, intermodal and brokerage services to customers through a network of service centers and branches located throughout the United States serving North America. 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 Dec 31,					Twelve Months Ended Dec 31,
	(Unaudited, in thousands, except per share amounts)

	2009		2008			2009		2008
REVENUE:
Revenue, before fuel surcharge	$	143,916	$	143,576		$	571,496	$	595,563
Fuel surcharge		23,874		31,183			80,225		171,372
TOTAL REVENUE		167,790		174,759			651,721		766,935

OPERATING EXPENSES:
Salaries, wages and benefits		48,471		52,479			198,815		210,939
Fuel expense - gross		38,965		40,762			140,385		237,893
Operations and maintenance		10,882		10,752			42,826		42,195
Insurance and claims		5,954		5,165			22,087		26,113
Operating taxes and licenses		2,690		3,639			13,450		14,941
Communications		1,254		1,505			5,407		5,873
Depreciation and amortization		17,920		18,087			71,444		69,821
Lease expense - revenue equipment		-		-			-		90
Purchased transportation		17,683		10,674			61,802		51,463
Miscellaneous operating expenses		2,943		4,727			13,509		14,949
		146,762		147,790			569,725		674,277
Income From Operations		21,028		26,969			81,996		92,658

Interest income		454		460			1,534		1,236
Other income/(expense)		-		(12	)		365		194

Income Before Income Taxes		21,482		27,417			83,895		94,088
INCOME TAXES		8,338		11,278			33,332		37,827

NET INCOME	$	13,144	$	16,139		$	50,563	$	56,261
Net Income Per Share
- Basic	$	0.16	$	0.19		$	0.61	$	0.66
- Diluted	$	0.16	$	0.19		$	0.60	$	0.66
Weighted Average Shares Outstanding
- Basic		83,273		84,356			83,230		85,342
- Diluted		83,780		84,685			83,632		85,846

BALANCE SHEET DATA:
						12/31/09		12/31/08
ASSETS						(Unaudited, in thousands)
Cash and cash equivalents						$	30,812	$	22,027
Short term investments							66,942		31,877
Accounts receivable, net							73,430		70,810
Notes receivable, net							4,361		159
Assets held for sale and other current assets							15,829		13,258
Prepaid expenses							7,323		7,108
Income tax receivable							-		774
Current deferred tax asset							5,755		6,480
Total Current Assets							204,452		152,493

Property and equipment, net							461,039		472,228
Notes receivable, long-term							2,906		674
Goodwill							10,333		10,353
Intangible assets, net							114		176
Long-term deferred tax assets							-		5,877
Other assets and restricted cash							7,629		5,139

Total Assets						$	686,473	$	646,940

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable						$	14,022	$	6,195
Accrued payroll and purchased transportation							6,170		7,432
Accrued liabilities							11,199		6,273
Claims accrual - current portion							14,298		15,239
Dividend Payable							70		-
Total Current Liabilities							45,759		35,139

Claims accrual - long-term portion							12,421		15,236
Deferred income taxes							108,135		112,661
Total Long-term Liabilities							120,556		127,897

Total Liabilities							166,315		163,036

Common stock							833		834
Additional paid-in capital							115,348		108,885
Retained earnings							403,977		374,185
Total Shareholders' Equity							520,158		483,904

Total Liabilities and Shareholders' Equity						$	686,473	$	646,940




	Three Months Ended Dec 31,							Twelve Months Ended Dec 31,

	2009		2008						2009			2008
	(Unaudited)	(Unaudited)						(Unaudited)			(Unaudited)

OPERATING STATISTICS					%									%
					Change									Change
Average Revenue Per Tractor*	$35,990	$	36,014			-0.1	%	$	143,560		$	150,543		-4.6%

Non-paid Empty Mile Percent	11.5%		12.3	%		-6.5	%		11.9	%		11.8	%	0.8%

Average Length of Haul	458		498			-8.0	%		470			518		-9.3%

Operating Ratio**	85.4%		81.2	%					85.7	%		84.4	%

Average Tractors - Total	3,751		3,815			-1.7	%		3,744			3,770		-0.7%

Tractors - End of Quarter:
Company	3,407		3,514						3,407			3,514
Owner - Operator	329		185						329			185
	3,736		3,699						3,736			3,699

Trailers - End of Quarter	8,595		9,155						8,595			9,155

Net Capital Expenditures (in thousands)	($42)	$	31,966					$	55,704		$	81,282

Adjusted Cash Flow From Operations Excluding Change in Short-term Investments (in thousands)***	$30,873	$	52,650					$	121,964		$	165,695

* Includes dry van and refrigerated revenue excluding fuel surcharge, brokerage 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. 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.

*** Adjusted cash flow from operations of $30,873 for the quarter ended Dec 31, 2009 does not include $2,420 decrease in short-term trading investments, and adjusted cash flow from operations of $52,650 for the comparative quarter ended Dec 31, 2008 does not include $3,850 increase in short-term trading investments. These are the reconciling items needed to tie back to cashflow from operations.

*** Adjusted cash flow from operations of $121,964 for the twelve month period ended Dec 31, 2009 does not include $35,065 increase in short-term trading investments, and adjusted cash flow from operations of $165,695 for the comparative twelve month period ended Dec 31, 2008 does not include $24,257 increase in short-term trading investments. These are the reconciling items needed to tie back to cashflow from operations.

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