Knight Transportation Reports Second Quarter 2013 Revenue and Earnings

Knight Transportation Reports Second Quarter 2013 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 second quarter ended June 30, 2013.

Key financial highlights for the second quarter and first half of 2013 and 2012 were as follows:

   

Three Months Ended June 30,
(dollars in thousands, except per share data)

   

Six Months Ended June 30,
(dollars in thousands, except per share data)

2013  2012  

% Change

2013  2012  

% Change

Total revenue$244,783$236,268

3.6%

 

$480,183$455,8005.3%
Revenue, excluding trucking fuel surcharge$200,104$188,838

6.0%

 

$389,704$364,4376.9%
GAAP operating income$31,925$32,103

-0.6%

 

$57,469$51,93710.7%
Adjusted operating incomeNANANA$57,469$

55,918

(1)

2.8%
GAAP net income$18,939$19,289

-1.8%

 

$34,122$29,83514.4%
Adjusted net incomeNANANA$34,122$

33,729

(1)

1.2%
GAAP earnings per diluted share$0.24$0.24

-2.1%

 

$0.43$0.3714.1%
Adjusted earnings per diluted shareNANANA$0.43$

0.42

(1)

1.0%
 

(1)The 1st quarter of 2012 included a $4.0 million non-cash charge ($3.9 million after tax) for stock option acceleration. See GAAP to Non-GAAP reconciliation schedule. GAAP and Non-GAAP measurements for 2013 are identical.

 

The company previously announced a quarterly cash dividend of $0.06 per share to shareholders of record on June 7, 2013, which was paid on June 28, 2013.

Kevin Knight, Chairman and Chief Executive Officer, commented on the quarter, ''We have continued to expand our market share in our wide range of truckload logistic services in a challenging operating and economic environment. Our consolidated revenue, before trucking fuel surcharge, increased 6.0% on a year over year basis. Our non-asset service offerings lead the way with revenue growth of 64.2%, and now make up approximately 20.0% of our total revenue before trucking fuel surcharge. Compared to the same quarter last year, our revenue per loaded mile, net of fuel surcharge, increased just less than 1.0% while our length of haul and miles per tractor were virtually flat. We experienced an improvement in our revenue per tractor compared to the same quarter last year, while operating income was essentially unchanged.''

The following chart reflects the year-over-year operating ratio and revenue comparison for our asset based businesses and our non-asset based businesses for the second quarter and first half of 2013 and 2012.

      
Three Months Ended June 30,Six Months Ended June 30,
 
Operating ratios(2)   

Revenue change,
excluding
trucking fuel
surcharge

Operating ratios(2)   

Revenue change,
excluding
trucking fuel
surcharge

2013  2012 2013  2012 
Asset based81.7%81.1%-2.5%83.5%83.2%-0.6%
Non-asset based93.6%96.0%64.2%93.2%95.3%61.7%
 
Consolidated84.0%83.0%6.0%85.3%84.7%6.9%
 

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

 

Our asset based businesses continued to operate at a high level of profitability and efficiency. Our non-asset based businesses continued to produce strong revenue growth along with improved margins, when compared to the same quarter last year. Our businesses continue to complement each other and enable us to provide our customers with truckload services that are efficient and valuable to their supply chain needs.

The industry continues to be faced with a shortage of high quality driving associates. Sourcing and retaining high quality drivers is paramount to our success in improving the productivity of our assets. We believe our decentralized regional service centers provide a ''hometown'' feel that affords us a significant advantage in recruiting, retaining, and developing driving associates. We have also continued to invest in our driver development and training programs to source driving associates and develop them into Knight company drivers. As a result, our driver turnover continues to compare favorably to what we believe to be the industry average.

The DOE national average diesel fuel price decreased 1.3% when compared to the second 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 lessening the environmental impact of our operations.

Our average tractor count for the quarter decreased 107 trucks, year-over-year, to 3,963 tractors. Our tractor fleet remains one of the most modern fleets in the industry with an average age of 2.1 years. Our gain on sale of revenue equipment in the second quarter of 2013 was $1.6 million, down from $2.2 million in the second quarter of 2012.

We have returned $78.5 million to our shareholders in the form of quarterly dividends over the twenty-four-month period ending June 30, 2013. We ended the quarter with $0.7 million of cash and $517.4 million of shareholders' equity. Year-to-date our net capital expenditures are $17.8 million compared to $56.5 million for the same period last year, while our cash flow from operations is $72.3 million compared to $62.4 million. This has resulted in significantly more free cash flow and has allowed us to repay $54.0 of our outstanding debt year-to-date.

The company will hold a conference call on July 24, 2013, at 4:30 PM EDT, to further discuss its results of operations for the quarter ended June 30, 2013. 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, ''Second Quarter 2013 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.

      
INCOME STATEMENT DATA:Three Months Ended June 30,Six Months Ended June 30,
(Unaudited, in thousands, except per share amounts)
    

2013

2012

2013

2012

REVENUE:
Revenue, before fuel surcharge$200,104$188,838$389,704$364,437
Fuel surcharge 44,679    47,430  90,479    91,363 
TOTAL REVENUE 244,783    236,268  480,183    455,800 
 
OPERATING EXPENSES:
Salaries, wages and benefits56,80759,089114,461120,045
Fuel expense - gross52,73956,612108,432113,923
Operations and maintenance15,91915,07831,82828,815
Insurance and claims7,2958,28114,45015,926
Operating taxes and licenses3,9853,9737,8938,075
Communications1,2001,2712,3722,666
Depreciation and amortization21,08920,93342,59741,305
Purchased transportation49,88336,06492,67567,924
Miscellaneous operating expenses 3,941    2,864  8,006    5,184 
 212,858    204,165  422,714    403,863 
        
Income From Operations 31,925    32,103  57,469    51,937 
 
 
Interest income96108205221
Interest expense(77)(114)(219)(242)
Other income (expense) (168)   197  53    394 
Income before income taxes31,77632,29457,50852,310
INCOME TAXES 12,712    12,924  23,010    22,280 
Net Income19,06419,37034,49830,030
Net income attributable to noncontrolling interest (125)   (81) (376)   (195)
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION$18,939   $19,289 $34,122   $29,835 
 
Basic Earnings Per Share$0.24$0.24$0.43$0.37
Diluted Earnings Per Share$0.24$0.24$0.43$0.37
 
Weighted Average Shares Outstanding - Basic79,95479,68679,89879,609
Weighted Average Shares Outstanding - Diluted80,29680,07680,20980,045
 
BALANCE SHEET DATA:

06/30/13

12/31/12

ASSETS(Unaudited, in thousands)
Cash and cash equivalents$747$5,684
Trade receivables, net of allowance for doubtful accounts109,671102,553
Notes receivable, net of allowance for doubtful accounts749791
Related party notes and interest receivable1,6632,814
Prepaid expenses11,37117,035
Assets held for sale
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