Knight Transportation Reports Fourth Quarter and Annual 2012 Revenue and Earnings

Knight Transportation Reports Fourth Quarter and Annual 2012 Revenue and Earnings

PHOENIX--(BUSINESS WIRE)-- Knight Transportation, Inc. , one of North America's largest and most diversified truckload transportation companies, today reported revenue and net income for the fourth quarter and full year ended December 31, 2012.

Key financial highlights for the fourth quarter and year were as follows:

Three Months Ended December 31,

(dollars in thousands, except per share data)

Twelve Months Ended December 31,

(dollars in thousands, except per share data)

2012

2011

% Change

2012

2011

% Change

Total revenue

$

242,303

$

224,100

8.1

%

$

936,036

$

866,199

8.1

%

GAAP operating income

$

28,564

$

29,235

-2.3

%

$

108,267

$

100,021

8.2

%

Adjusted operating income(1)

NA

NA

NA

$

112,248

$

100,021

12.2

%

GAAP net income

$

17,698

$

17,469

1.3

%

$

64,117

$

60,248

6.4

%

Adjusted net income(1)

NA

NA

NA

$

68,011

$

60,248

12.9

%

GAAP earning per diluted share

$

0.22

$

0.22

1.0

%

$

0.80

$

0.74

8.9

%

Adjusted earnings per diluted share(1)

NA

NA

NA

$

0.85

$

0.74

15.5

%

(1) See GAAP to Non-GAAP reconciliation schedule


The company previously announced a quarterly cash dividend of $0.06 per share and a special cash dividend of $0.50 to shareholders of record on December 7, 2012, both of which were paid on December 28, 2012.

During the fourth quarter of 2012 we were successful in growing revenue in all parts of our business. Consolidated revenue grew 8.1% for the fourth quarter when compared to the fourth quarter of 2011. The environment in both 2012 and 2011 were similar in terms of growth. The economic environment continued in the lukewarm fashion we have become accustomed to. Thanks to the hard work and dedication of our employees, we were able to produce what we believe to be truckload industry leading revenue growth of 8.1% for the year, which led to 12.2% adjusted operating income growth and 15.5% adjusted earnings per diluted share growth.

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 fourth quarter and full year of 2012 and 2011.

Three Months Ended December 31,

Twelve Months Ended December 31,

Operating ratios(2)

Revenue
growth

Operating ratios(2)

Revenue
growth

2012

2011

2012

2011

Asset based

83.8%

82.7%

5.7%

83.6%

84.6%

6.6%

Non-asset based

94.1%

91.7%

30.0%

94.7%

93.7%

22.2%

Consolidated

85.4%

83.8%

8.1%

85.1%

85.7%

8.1%

(2) Operating ratio is defined as total operating expenses, net of trucking fuel surcharge, as a percentage of revenue before trucking fuel surcharge.

We continue to provide our customers with the truckload services their supply chains rely on. Our investment in providing multiple solutions that are executed with a high level of efficiency and effectiveness has led to, and will continue to lead to, additional revenue opportunities.

The DOE national average diesel fuel price increased 3.8% when compared to the fourth quarter last year. We continue our work towards cost effective, industry leading fuel economy while at the same time meaningfully contributing to environmental improvements.

The driver market remains challenging, yet we are succeeding in attracting and retaining high performing driving associates. We continue to benefit by leveraging our model and the advantages it provides us with our driving associates. As a result, our driver turnover has trended favorably and is well below what we understand to be the industry average.

In July of 2012, Congress passed a bill which included a requirement that the Federal Motor Carrier Safety Administration (FMCSA) issue a rule mandating that all motor carriers engaged in interstate commerce must use electronic on-board recorders (EOBRs) to monitor compliance with hours-of-service regulations. All trucking companies will be required to adopt EOBRs by no later than July 2015. Our entire tractor fleet has been fully equipped with EOBRs for over two years. We believe this mandate will allow the carriers that have already adopted EOBRs to be more competitive in recruiting and retaining driving associates.

Our average tractor count for the quarter increased 5.4%. We invested $34.9 million of net capital expenditures in the fourth quarter, as our tractor fleet remains one of the most modern fleets in the industry with an average age of 1.9 years. Included in the fourth quarter net capital expenditures is a real estate investment in a property in Phoenix, Arizona that will serve as our headquarters. Our gain on sale decreased from $2.5 million in the fourth quarter of 2011 to $2.0 million in the fourth quarter of 2012, as the used equipment market was less robust.

We have returned $155.2 million to our shareholders in the form of quarterly dividends and stock repurchases over the twenty-four-month period ending December 31, 2012. We ended the quarter with $5.7 million of cash, $80.0 million of borrowing under our unsecured revolving credit agreement, and $490.2 million of shareholders' equity.

The company will hold a conference call on January 30, 2013, at 4:30 PM EST, to further discuss its results of operations for the quarter ended December 31, 2012. 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, ''Fourth Quarter 2012 Conference Call Presentation.''

Knight Transportation, Inc. is a provider of multiple truckload transportation 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.

INCOME STATEMENT DATA:

Three Months Ended December 31,

Twelve Months Ended December 31,

(Unaudited, in thousands, except per share amounts)

2012

2011

2012

2011

REVENUE:

Revenue, before fuel surcharge

$

195,164

$

181,001

$

752,151

$

697,286

Fuel surcharge

47,139

43,099

183,885

168,913

TOTAL REVENUE

242,303

224,100

936,036

866,199

OPERATING EXPENSES:

Salaries, wages and benefits

60,046

56,467

238,266

218,686

Fuel expense - gross

56,781

56,968

230,178

226,471

Operations and maintenance

16,954

13,401

61,875

53,714

Insurance and claims

8,429

7,044

32,138

30,072

Operating taxes and licenses

4,180

3,973

16,184

15,212

Communications

1,299

1,437

5,172

5,534

Depreciation and amortization

21,925

19,891

85,056

75,832

Purchased transportation

41,008

33,600

148,022

129,143

Miscellaneous operating expenses

3,117

2,084

10,878

11,514

213,739

194,865

827,769

766,178

Income From Operations

28,564

29,235

108,267

100,021

Interest income

100

131

417

1,068

Interest expense

(100

)

(131

)

(457

)

(180

)

Other income

1,120

271

1,550

279

Income before income taxes

29,684

29,506

109,777

101,188

INCOME TAXES

11,620

11,800

45,014

40,480

Net Income

18,064

17,706

64,763

60,708

Net income attributable to noncontrolling interest

(366

)

(237

)

(646

)

(460

)

NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION

$

17,698

$

17,469

$

64,117

$

60,248

Net Income Per Share

- Basic

$

0.22

$

0.22

$

0.80

$

0.74

- Diluted

$

0.22

$

0.22

$

0.80

$

0.74

Weighted Average Shares Outstanding

- Basic

79,746

79,378

79,673

81,439

- Diluted

79,987

79,706

80,000

81,872

BALANCE SHEET DATA:

12/31/12

12/31/11

ASSETS

(Unaudited, in thousands)

Cash and cash equivalents

$

5,684

$

9,584

Accounts receivable, net

102,553

101,319

Notes receivable, net

791

1,034

Related party notes and interest receivable

2,814

2,868

Prepaid expenses

17,035

10,131

Assets held for sale

18,362

19,416

Other current assets

12,449

9,605

Income tax receivable

-

3,821

Current deferred tax asset

3,409

2,319

Total Current Assets

163,097

160,097

Property and equipment, net

584,064

547,033

Notes receivable, long-term

3,692

3,987

Goodwill

10,276

10,295

Other assets and restricted cash

21,383

16,171