Knight Transportation 8-K Results of Operations and Financial Condition

Exhibit 99

Knight Transportation Reports Revenue and Net Income for the Second Quarter Ended June 30, 2010

Knight Transportation (NYSE: KNX), one of North America’s largest truckload carriers, reported revenue and earnings for the second quarter ended June 30, 2010.  Highlights included:

●   Net income increased 26.0% to $15.8 million.

●   Earnings per share increased 24.7% to $0.19 from $0.15.

●   Total revenue increased 14.4% to $185.4 million.

For the quarter, total revenue increased 14.4% to $185.4 million from $162.1 million for the same quarter of 2009.  Revenue before fuel surcharge increased 7.6% to $155.3 million compared to $144.3 million in the second quarter of 2009.  Net income increased 26.0% to $15.8 million from $12.6 million for the same quarter of 2009.  Net income per diluted share for the quarter was $0.19, compared to $0.15 for the same quarter of 2009.

Year-to-date, total revenue increased 13.0% to $351.1 million from $310.8 million for the same period of 2009.  Revenue before fuel surcharge increased 6.6% to $295.6 million from $277.4 million for the same period of 2009.  Net income increased 15.9% to $28.2 million from $24.3 million in the same period of 2009.  Net income per diluted share was $0.33 compared to $0.29 for the first half of 2009.

The company previously announced an increase to the quarterly cash dividend from $0.05 to $0.06 per share to shareholders of record on June 4, 2010, which was paid on June 25, 2010.

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

“Many of the truckload markets we serve experienced capacity constraints.  Our diversified service offering was able to provide solutions for our customers that address the changes that come with the tightening of truckload capacity.  As a result of demand outpacing available capacity, we experienced improvement in revenue per mile, miles per truck, and average length of haul while decreasing non-paid empty miles.

“The key components of our yield have been improving since the fourth quarter of last year and, as of the second quarter 2010, are now in positive territory.  In the quarter, average revenue per tractor increased 8.0% and average miles per tractor improved 3.7% from the second quarter last year.  Average revenue per total mile increased 4.1% and average revenue per loaded mile increased 2.3% from the second quarter last year.  Non-paid empty miles decreased from 11.7% last year to 10.2% in the quarter.  The average length of haul increased 2.1% to 484 miles from 474 miles in the same period last year.  We are making progress improving our freight mix and improving contract pricing.

“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 83.3% in the second quarter of this year compared to 85.6% in the same period last year.  In the quarter, fuel expense (net of fuel surcharge) was lower, gain on sale of equipment improved, while insurance and claims expense and employee benefit expense were higher, year over year.

“While demand was strong for dry van, refrigerated and port service businesses, our third-party business was more challenging during the second quarter.  Securing sufficient capacity was challenging for our brokerage operations and pressured margins.  We are making adjustments to our rates to allow for the execution of more third-party transactions.

“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 average fleet, including owner operators, grew slightly to 3,753 tractors.  If contract rates and the operating ratio continue to improve, we plan to add 100 to 150 tractors during the second half of 2010.

“We have begun taking delivery of 2010 U.S. EPA emission compliant engines.  These engines represent the cleanest burning diesel engines available.  We invested $32.1 million of net capital expenditures in the quarter as we refreshed our fleet in accordance with our trade cycle.  Year to date, net capital expenditures are $45.3 million.  We ended the quarter with $105.1 million in cash and short term investments, and zero debt. We expect net capital expenditures to be in the range of $70 to $80 million for the year.

 “In this changing environment we continue to be vigilant on improving the efficiency of our low cost operating model and appropriately responding to the changing market conditions.  We believe the results of the second quarter illustrate our ability to respond to changing market conditions as our revenue per tractor and operating ratio both improved simultaneously with the improving truckload market.  Increasing our less capital intensive operations remains a priority and we increased the number of independent contractors with a contract to Knight by 25.8%, year over year.  We expect to grow our revenues in each business as business conditions continue to improve.  We continue to evaluate strategic growth and acquisition opportunities that will enhance the returns for our shareholders over time.  We have significant financial flexibility with our cash position, zero debt, and $544.6 million of stockholders’ equity.

“We have elected to discontinue conducting quarterly conference calls.  We have attempted to adequately address the results of the quarter through the commentary of this press release and accompanying operating statistics and financial statements.”

Knight Transportation, Inc. is a truckload transportation provider offering dry van, refrigerated, intermodal and third-party services to customers through a network of service centers 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 June 30,					Six Months Ended June 30,
	(Unaudited, in thousands, except per share amounts)
	2010			2009		2010		2009
REVENUE:
Revenue, before fuel surcharge	$	155,290		$	144,261	$	295,605	$	277,390
Fuel surcharge		30,118			17,819		55,493		33,409
TOTAL REVENUE		185,408			162,080		351,098		310,799
OPERATING  EXPENSES:
Salaries, wages and benefits		52,381			49,999		100,164		98,302
Fuel expense - gross		43,975			33,579		84,210		62,458
Operations and maintenance		11,554			10,737		22,601		20,725
Insurance and claims		6,582			5,392		12,341		10,709
Operating taxes and licenses		3,567			3,433		6,618		6,995
Communications		1,386			1,350		2,712		2,822
Depreciation and amortization		17,965			17,620		35,931		35,321
Purchased transportation		19,018			15,277		35,804		25,972
Miscellaneous operating expenses		2,984			3,907		6,142		7,261
		159,412			141,294		306,523		270,565
Income From Operations		25,996			20,786		44,575		40,234
Interest income		504			349		939		655
Other income/(expense)		(154	)		-		663		(21	)
Income Before Income Taxes		26,346			21,135		46,177		40,868
INCOME  TAXES		10,538			8,568		18,025		16,558
Net Income		15,808			12,567		28,152		24,310
Net loss attributable to noncontrolling interest		28			-		28		-
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION	$	15,836		$	12,567	$	28,180	$	24,310
Net Income Per Share
- Basic	$	0.19		$	0.15	$	0.34	$	0.29
- Diluted	$	0.19		$	0.15	$	0.33	$	0.29
Weighted Average Shares Outstanding
- Basic		83,499			83,069		83,427		83,165
- Diluted		84,418			83,518		84,272		83,507

BALANCE SHEET DATA:
	06/30/10			12/31/09
ASSETS	(Unaudited, in thousands)
Cash and cash equivalents	$	12,438		$	30,812
Short term investments		92,643			66,942
Accounts receivable, net		80,356			73,327
Notes receivable, net		1,051			520
Related party notes and interest receivable		3,764			3,944
Prepaid expenses		8,652			7,323
Assets held for sale		10,693			12,258
Other current assets		3,957			3,571
Current deferred tax asset		5,786			5,755
Total Current Assets		219,340			204,452
Property and equipment, net		464,040			461,039
Notes receivable, long-term		2,785			2,906
Goodwill		10,323			10,333
Intangible assets, net		83			114
Other assets and restricted cash		7,727			7,629
Total Assets	$	704,298		$	686,473
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	$	4,306		$	14,022
Accrued payroll and purchased transportation		9,924			6,170
Accrued liabilities		16,247			11,199
Claims accrual - current portion		14,036			14,298
Dividend Payable		224			70
Total Current Liabilities		44,737			45,759
Claims accrual - long-term portion		11,926			12,421
Deferred income taxes		103,077			108,135
Total Long-term Liabilities		115,003			120,556
Total Liabilities		159,740			166,315
Commitments and Contingencies
Common stock		836			833
Additional paid-in capital		120,904			115,348
Retained earnings		422,822			403,977
Total Knight Transporation Shareholders' Equity		544,562			520,158
Noncontrolling interest		(4	)		-
Total Shareholders' Equity		544,558			520,158
Total Liabilities and Shareholders' Equity	$	704,298		$	686,473

	Three Months Ended June 30,									Six Months Ended June 30,
	2010			2009						2010			2009
	(Unaudited)			(Unaudited)						(Unaudited)			(Unaudited)
OPERATING  STATISTICS							%									%
							Change									Change
Average Revenue Per Tractor*	$	39,234		$	36,329			8.0	%	$	74,489		$	70,316			5.9	%
Non-paid Empty Mile Percent		10.2	%		11.7	%		-12.8	%		10.5	%		12.1	%		-13.2	%
Average Length of Haul		484			474			2.1	%		474			477			-0.6	%
Operating Ratio**		83.3	%		85.6	%					84.9	%		85.5	%
Average Tractors - Total		3,753			3,735			0.5	%		3,756			3,728			0.8	%
Tractors - End of Quarter:
Company		3,396			3,452						3,396			3,452
Owner - Operator		376			299						376			299
		3,772			3,751						3,772			3,751
Trailers - End of Quarter		8,516			8,769						8,516			8,769
Net Capital Expenditures (in thousands)	$	32,109		$	16,989					$	45,321		$	27,868
Adjusted Cash Flow From Operations Excluding Change in Short-term Investments (in thousands) ***	$	24,587		$	18,141					$	56,770		$	65,990

*	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 $24,587 for the quarter ended June 30, 2010 does not include $11,105 decrease in short-term trading investments, and adjusted cash flow from operations of $18,141 for the comparative quarter ended June 30, 2009 does not include $9,890 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 $56,770 for the six month period ended June 30, 2010 does not include $25,701 increase in short-term investments, and adjusted cash flow from operations of $65,990 for the comparative six month period ended June 30, 2009 does not include $24,676 increase in short-term 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 stateme nts.  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

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