Knight Transportation 8-K Fourth Quarter Financial Results

Exhibit 99.1

For Immediate Release

Phoenix, Arizona - January 19, 20 05

Contacts:Kevin P. Knight, Chairman & CEO

 Dave Jackson, CFO

(602) 269-2000

Knight Transportation Announces

Fourth Quarter Financial Results

Knight Transportation, Inc. (NYSE: KNX) announced today its financial results for the quarter and twelve months ended December 31, 2004.

For the quarter ended December 31, 2004, total revenue increased 40.7%, to $126.8 million from $90.1 million for the same quarter of 2003. Revenue, before fuel surcharge, increased 32.3%, to $115.2 million from $87.1 million for the same quarter of 2003. Net income increased 46.2%, to $14.6 million from $10.0 million for the same quarter of 2003. Net income per diluted share increased to $0.25 from $0.17 for the same quarter in 2003.

For the twelve months ended December 31, 2004, total revenue increased 30.1%, to $442.3 million from $340.1 million for the same period of 2003. Revenue, before fuel surcharge, increased 26.0%, to $411.7 million from $326.9 million for the same period of 2003. Net income increased 35.0% to $47.9 million from $35.5 million for the same period of 2003. Earnings per diluted share increased to $0.83 from $0.62 for the same period of 2003.

Chairman and Chief Executive Officer Kevin P. Knight had the following comments: "Knight Transportation registered another quarter of record revenue and earnings as we continued to execute our operating model focused on leading growth and profitability. We were especially pleased with revenue growth of over 32% before fuel surcharge and over 40% including fuel surcharge. In addition, even with industry-leading growth and significant fuel, driver pay and other cost pressures facing our industry, we improved our margins. Our operating ratio (operating expenses, net of fuel surcharge as a percentage of revenue, before fuel surcharge) improved by more than 180 basis points to 78.9%, and our net income was 12.7% of revenue, before fuel surcharge, which is the best in our history as a public company. We achieved these re sults through a combination of expanding our fleet, significant rate increases, greater productivity from our trucks, and a never-ending mission of cost-control.

Our growth came from expansion of our fleet and higher revenue per tractor. Our average tractors operating in the fourth quarter were up over 17% year over year, our average freight revenue per loaded and total mile, before surcharges, were up 11.5% and 10.2%, respectively. Our average miles per tractor were up 2.3% and our average length of haul was up 6.7%.

During the year, we continued our long-running strategy of growth through new operations centers and continued expansion at existing operations centers. In February we opened our Las Vegas operating center, in June we opened our Eastern Pennsylvania operating center, and in July we opened our Lakeland, FL operating center. We added a total of 400 additional tractors for the year.

We also were successful in our opening of Knight Refrigerated, a wholly owned subsidiary. Our associates at Knight Refrigerated continue to work hard to develop our refrigerated operating model, in preparation for rolling out these services in other parts of the country. Our services have been well received in the temperature-control marketplace, leading to Knight-like financial performance for this subsidiary.

Rapidly escalating fuel prices are a significant challenge for our industry, and our sales and operations associates are working diligently with our customers to mitigate the negative impact of fuel prices. For the quarter, we increased fuel surcharge billings by 280% compared with the same quarter last year. These efforts helped us limit the negative impact of fuel prices.

During the quarter we continued to make significant investments in equipment and facilities to support our growth. We added 77 new tractors, upgraded an additional 45 tractors, and capitalized 97 tractors from early buy out options exercised on operating leases. We reduced our trailer fleet by 16, while upgrading 106 trailers, and we continued to upgrade our terminal network. For the year, we invested $115.7 million in net capital expenditures. At December 31, our strong balance sheet reflected $25.4 million in cash, zero debt, and $291.0 million in shareholders' equity.

This was an eventful year for Knight Transportation. We completed our 10th full year of being a public company with our 40^th straight quarter of year-over-year increases in net income as a public company. In October Knight was named to Forbes Magazine's list of 200 Best Small Companies in America for the 10th consecutive year. In addition, based on our capital position and historical and expected cash flows, we initiated a $.02 per share dividend in December 2004 that we expect to pay quarterly in the future. Finally, on December 30, 2004, we listed our common stock on the New York Stock Exchange under the symbol "KNX." We app reciate the hard work of everyone at Knight Transportation, whose dedication and discipline allowed us to continue to deliver value to our customers, associates, and shareholders in 2004."

Looking forward, we expect the shipping environment to remain favorable based on United States economic growth of approximately three percent or better during 2005 and assuming the strong demand and constrained supply for truckload services continues. We also expect industry-wide trucking capacity to remain constrained for the foreseeable future, mainly due to the limited number of qualified drivers. Against that background, we expect freight rates to increase at least as much as operating costs and that our driver compensation will allow us to continue to attract and retain the quality drivers we need to support our efforts. Based on these expectations, we plan to grow our tractor base by approximately 400 units and to open 3 or 4 more operations centers in 2005.

The Company will hold a conference call on January 20, 4:00 EST, to further discuss its results of operations for the quarter ended December 31, 2004. The dial in number for this conference call is (800) 289-0572.

INCOME STATEMENT DATA:	Three Months Ended December 31,					Twelve Months Ended December 31,
	(Unaudited, in thousands, except per share amounts)
	2004		2003			2004		2003
REVENUE:
Revenue, before fuel surcharge	$	115,196	$	87,070		$	411,717	$	326,856
Fuel surcharge		11,573		3,042			30,571		13,213
TOTAL REVENUE	$	126,769	$	90,112		$	442,288	$	340,069
OPERATING EXPENSES:
Salaries, Wages & Benefits		36,918		27,660			133,822		104,756
Fuel expense-gross		26,058		14,430			85,071		56,573
Operations & Maintenance		7,346		5,180			26,369		20,345
Insurance & Claims		6,341		4,321			22,319		16,558
Operating Taxes & Licenses		2,732		2,391			9,798		9,148
Communications		948		766			3,602		3,002
Depreciation & Amortization		11,820		8,270			40,755		30,066
Lease Expense-Revenue Equipment		145		1,792			3,047		7,635
Purchased Transportation		7,645		6,675			29,342		25,194
Miscellaneous Operating Expenses		2,549		1,808			8,801		7,343
		102,502		73,293			362,926		280,620
Income From Operations		24,267		16,819			79,362		59,449
OTHER INCOME (EXPENSE):
Interest Income		59		142			398		560
Other Expense		-		(330	)		-		(330	)
Interest Expense		-		(334	)		-		(881	)
		59		(522	)		398		(651	)
Income Before Income Taxes		24,326		16,297			79,760		58,798
INCOME TAXES		9,750		6,330			31,900		23,340
NET INCOME	$	14,576	$	9,967		$	47,860	$	35,458
Earnings Per Share:
-Basic	$	0.26	$	0.18		$	0.85	$	0.63
-Diluted	$	0.25	$	0.17		$	0.83	$	0.62
Weighted Average Shares Outstanding:
-Basic		56,598		56,184			56,399		56,015
-Diluted		57,958		57,431			57,639		57,357

BALANCE SHEET DATA:
	12/31/2004		12/31/2003
ASSETS	(Unaudited, in thousands)
Cash and cash equivalents	$	25,357	$	40,550
Accounts receivable, net		58,733		38,751
Notes receivable, net		171		515
Inventories and supplies		2,332		1,336
Prepaid expenses		5,215		7,490
Income tax receivable		3,216		1,761
Deferred tax asset		7,493		5,667
Total Current Assets		102,517		96,070
Property and equipment, net		287,930		212,935
Notes receivable, long-term		77		362
Goodwill		7,504		7,504
Other assets		4,839		4,355
Total Assets	$	402,867	$	321,226
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	5,044	$	3,408
Accrued payroll		4,558		3,448
Accrued liabilities		5,684		4,493
Claims accrual		23,904		14,805
Total Current Liabilities		39,190		26,154
Deferred income taxes		72,660		55,149
Total Liabilities		111,850		81,303
Common Stock		567		563
Additional paid-in capital		82,117		77,754
Retained earnings		208,333		161,606
Total Shareholders' Equity		291,017		239,923
Total Liabilities and Shareholders' Equity	$	402,867	$	321,226

	Three Months Ended December 31,								Twelve Months Ended December 31,
	2004			2003					2004			2003
	(Unaudited)			(Unaudited)					(Unaudited)			(Unaudited)
OPERATING STATISTICS							%								%
							Change								Change
Average Revenue Per Loaded Mile*	$	1.614		$	1.447			11.5%	$	1.546		$	1.437			7.6%
Average Revenue Per Total Mile*	$	1.424		$	1.292			10.2%	$	1.369		$	1.281			6.9%
Empty Mile Factor		11.8	%		10.8	%		9.3%		11.5	%		10.8	%		6.5%
Average Miles Per Tractor		28,692			28,060			2.3%		114,829			112,106			2.4%
Average Length of Haul		577			541			6.7%		556			532			4.5%
Operating Ratio**		78.9	%		80.7	%				80.7	%		81.8	%
Average Tractors-Total		2,797			2,385					2,600			2,266
Tractors-End of Quarter:
Company		2,574			2,165					2,574			2,165
Owner-Operator		244			253					244			253
		2,818			2,418					2,818			2,418
Trailers-End of Quarter		7,126			6,212					7,126			6,212
Net Capital Expenditures (in thousands)	$	23,023		$	17,244				$	115,672		$	70,307
Cash Flow From Operations (in thousands)	$	22,809		$	24,316				$	97,195		$	84,392

*

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.

Knight Transportation, Inc. is a short to medium haul, truckload carrier headquartered in Phoenix, Arizona. The Company serves most of the United States through its regional operations in Phoenix, AZ; Salt Lake City, UT; Portland, OR; Las Vegas, NV; Denver, CO; Kansas City, KS; Indianapolis, IN; Katy, TX; Gulfport, MS; Charlotte, NC; Memphis, TN, Atlanta, GA; Carlisle, PA and Lakeland, FL. The Company transports general commodities, including consumer goods, packaged foodstuffs, paper products, beverage containers, imported and exported commodities and refrigerated goods.

This press release may contain statements that might be considered as forward-looking statements or predictions of future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission.

Contact: Kevin P. Knight, Chairman & CEO or Dave Jackson, CFO, at (602)269-2000