Exhibit 99
January 25, 2012
Phoenix, Arizona
Knight Transportation Reports Revenue and Net Income for the Fourth Quarter Ended December 31, 2011
Knight Transportation, Inc. (NYSE: KNX), one of North America's largest truckload transportation companies, today reported revenue and net income for the fourth quarter ended December 31, 2011.
For the quarter, total revenue increased 19.0% to $224.1 million from $188.3 million for the same quarter of 2010. Revenue before fuel surcharge increased 14.6% to $181.0 million compared to $158.0 million in the fourth quarter of 2010. Net income per diluted share increased 30.0% to $0.22 compared to $0.17 for the same quarter of 2010. Net income increased 22.7% to $17.5 million compared to $14.2 million for the same quarter of 2010.
As reported previously, the fourth quarter of 2010 included a non-cash $2.5 million pre-tax ($2.0 million after tax) stock compensation charge related to an adjustment to the straight-line recognition of expense as prescribed in ASC 718 and the accelerated vesting of equity awards under the plan as a result of the passing of a senior executive. Any year over year operating ratio comparisons made below exclude this 2010 non-cash charge. Excluding the 2010 non-cash charge, net income per diluted share increased 14.0% to $0.22 compared to $0.19, and net income increased 7.6% to $17.5 million compared to $16.2 million for the same quarter of 2010.
For the year, total revenue increased 18.5% to $866.2 million from $730.7 million for the same period of 2010. Revenue before fuel surcharge increased 13.3% to $697.3 million compared to $615.7 million for the same period of 2010. Net income per diluted share increased 5.2% to $0.74 in 2011 compared to $0.70 in 2010. Net income increased 2.0% to $60.2 million for 2011 from $59.1 million for 2010. Excluding the 2010 non-cash charge discussed above, net income per diluted share increased 1.7% to $0.74 from $0.72, and net income decreased 1.4% to $60.2 million from $61.1 million for 2010.
The company previously announced a quarterly cash dividend of $0.06 per share to shareholders of record on December 2, 2011, paid on December 22, 2011.
Chairman and Chief Executive Officer, Kevin P. Knight, offered the following comments:
"We were pleased with our ninth consecutive quarter of year over year revenue growth as we continue to gain market share and grow each of our businesses. In the fourth quarter our asset-based businesses (dry van, refrigerated, and port/rail services) demonstrated healthy operating fundamentals with the 6.8% improvement in revenue per tractor, a 4.1% increase in miles per tractor, and a 2.6% increase in revenue per total mile (not including fuel surcharge), as compared to the fourth quarter last year. This marks the eighth consecutive quarter with year over year improvement in revenue per tractor and is the largest improvement we have produced in the last six quarters. We continued to see double-digit revenue growth from our non-asset based brokerage and intermodal businesses.
"Our objective is to be an industry leader in growth and profitability for each service and mode of truckload transportation we provide. Although industry freight volumes appeared to have grown modestly compared to the fourth quarter last year, we were able to deliver double digit growth in both revenue and operating income, year over year. Each of our businesses produced meaningful top line growth, year over year, and we expect continued growth in future quarters.
"On a consolidated basis, we produced an operating ratio of 83.8% compared to 83.6% for the same quarter last year. Our dry van business produced an operating ratio of 82.4% compared to 82.9% for the same quarter last year with 3.4% revenue growth, excluding fuel surcharge. Our refrigerated business produced an operating ratio of 81.7% compared to 82.5% for the same quarter last year with 15.9% revenue growth, excluding fuel surcharge. Our port and rail services business produced an operating ratio of 88.9% compared to 84.8% for the same quarter last year with 21.0% revenue growth, excluding fuel surcharge. Our brokerage business produced an operating ratio of 93.3% compared to 94.7% for the same quarter last year with 23.6% total revenue growth. Our intermodal business continues to grow, but did not provide meaningful revenue in the quarter.
"We remain committed to providing our customers a broad and growing range of truckload services. The more rapid growth of our port and rail services, brokerage, and intermodal businesses impacts our operating margin and returns because these businesses usually generate lower margins than our asset-based businesses, but they typically require less capital investment.
"Higher fuel prices have continued to negatively impact the industry and fuel surcharge programs have not adequately offset the additional cost. The U.S. National Average Diesel Fuel price per gallon for the fourth quarter increased 22.5% to $3.87 from $3.16 for the same period of 2010. We continue to mitigate the effects of rising fuel expense by effectively managing our fuel miles per gallon with an intense focus on reducing idle time, managing out of route miles, and improving the driving habits of our driving associates. We also continue to update our fleet with more fuel efficient post-2010 EPA emission compliant engines, install aerodynamic devices on our tractors, and equip our trailers with trailer blades, which lead to meaningful fuel efficiency improvements.
"Driver availability continues to be a concern across the industry as increased regulation has continued to shrink the pool of qualified drivers. Although we face a challenging driver market, we believe our driver development and training programs continue to enable us to source driving associates and develop them into Knight company drivers. We also feel our decentralized service center network, regional freight lanes, late-model tractor fleet, financial strength, and ability to provide favorable compensation offer us a competitive advantage in recruiting and retaining qualified driving associates.
"Our combined fleet finished the quarter with 3,976 tractors compared to 3,866 last year. This includes owner-operators which grew from 446 tractors to 467 tractors in the fourth quarter this year, an increase of 4.7%. We invested $40.3 million of net capital expenditures in the fourth quarter. For the year, net capital expenditures were $138.3 million as we refreshed our tractor fleet from an average age of 2.2 years at the beginning of 2011 to ending the year with an average age of 1.7 years. We expect our net capital expenditures to decrease significantly in 2012, as our newer fleet will require fewer replacement trucks. Our gain on sale of revenue equipment decreased to $2.5 million in the fourth quarter of 2011 from $2.8 million in the fourth quarter of 2010.
"We have returned $96.1 million to our shareholders in the form of quarterly dividends and stock repurchases over the twelve month period ending December 31, 2011. Our cash balance at December 31, 2011 was $9.6 million and we ended the fourth quarter with $476.4 million of shareholders' equity.
"Acquisitions continue to be part of our growth strategy, and we continue to evaluate strategic opportunities to enhance the returns for our shareholders over time. In this environment we feel well positioned to capitalize on opportunities to grow revenues in each of our businesses.
"Subsequent to the fourth quarter of 2011, the compensation committee of the board of directors approved the accelerated vesting of certain stock options issued prior to 2009 which will result in a non-cash stock compensation charge that will be recognized in the first quarter 2012. The majority of this expense is related to stock options with a grant price above the company share price as of December 31, 2011. We estimate this charge will impact our net income per diluted share by approximately $.05 in the first quarter 2012. We believe taking the non-cash charge facilitates the ability to better align our employees' compensation with company goals."
The company will hold a conference call on January 25, 2012 at 4:30 PM EDT, to further discuss its results of operations for the quarter ended December 31, 2011. The dial in number for this conference call is 1-877-743-0363. 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 2011 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.
Contact:
David A. Jackson, President & CFO
602-606-6224
INCOME STATEMENT DATA: | Three Months Ended Dec 31, | Twelve Months Ended Dec 31, | ||||||||||||||||||||||
(Unaudited, in thousands, except per share amounts) | ||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
REVENUE: | ||||||||||||||||||||||||
Revenue, before fuel surcharge | $ | 181,001 | $ | 157,982 | $ | 697,286 | $ | 615,654 | ||||||||||||||||
Fuel surcharge | 43,099 | 30,329 | 168,913 | 115,055 | ||||||||||||||||||||
TOTAL REVENUE | 224,100 | 188,311 | 866,199 | 730,709 | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||
Salaries, wages and benefits | 56,467 | 52,904 | 218,686 | 206,536 | ||||||||||||||||||||
Fuel expense - gross | 56,968 | 45,603 | 226,471 | 174,398 | ||||||||||||||||||||
Operations and maintenance | 13,401 | 11,920 | 53,714 | 46,612 | ||||||||||||||||||||
Insurance and claims | 7,044 | 6,613 | 30,072 | 25,053 | ||||||||||||||||||||
Operating taxes and licenses | 3,973 | 3,783 | 15,212 | 13,998 | ||||||||||||||||||||
Communications | 1,437 | 1,411 | 5,534 | 5,465 | ||||||||||||||||||||
Depreciation and amortization | 19,891 | 18,077 | 75,832 | 70,962 | ||||||||||||||||||||
Purchased transportation | 33,600 | 23,128 | 129,143 | 82,031 | ||||||||||||||||||||
Miscellaneous operating expenses | 2,084 | 1,417 | 11,514 | 10,439 | ||||||||||||||||||||
194,865 | 164,856 | 766,178 | 635,494 | |||||||||||||||||||||
Income From Operations | 29,235 | 23,455 | 100,021 | 95,215 | ||||||||||||||||||||
Interest income | 131 | 129 | 1,068 | 1,554 | ||||||||||||||||||||
Interest expense | (131 | ) | - | (180 | ) | - | ||||||||||||||||||
Other (expense) income | 271 | 271 | 279 | 843 | ||||||||||||||||||||
Income before income taxes | 29,506 | 23,855 | 101,188 | 97,612 | ||||||||||||||||||||
INCOME TAXES | 11,800 | 9,643 | 40,480 | 38,633 | ||||||||||||||||||||
Net Income | 17,706 | 14,212 | 60,708 | 58,979 | ||||||||||||||||||||
Net (income)/loss attributable to noncontrolling interest | (237 | ) | 29 | (461 | ) | 93 | ||||||||||||||||||
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION | $ | 17,469 | $ | 14,241 | $ | 60,247 | $ | 59,072 | ||||||||||||||||
Net Income Per Share | ||||||||||||||||||||||||
- Basic | $ | 0.22 | $ | 0.17 | $ | 0.74 | $ | 0.71 | ||||||||||||||||
- Diluted | $ | 0.22 | $ | 0.17 | $ | 0.74 | $ | 0.70 | ||||||||||||||||
Weighted Average Shares Outstanding | ||||||||||||||||||||||||
- Basic | 79,378 | 83,677 | 81,439 | 83,533 | ||||||||||||||||||||
- Diluted | 79,706 | 84,444 | 81,872 | 84,416 | ||||||||||||||||||||
BALANCE SHEET DATA: | ||||||||||||||||||||||||
12/31/11 | 12/31/10 | |||||||||||||||||||||||
ASSETS | (Unaudited, in thousands) | |||||||||||||||||||||||
Cash and cash equivalents | $ | 9,584 | $ | 28,013 | ||||||||||||||||||||
Short-term investments | - | 24,379 | ||||||||||||||||||||||
Accounts receivable, net | 101,319 | 78,479 | ||||||||||||||||||||||
Notes receivable, net | 1,034 | 1,391 | ||||||||||||||||||||||
Related party notes and interest receivable | 2,868 | 3,038 | ||||||||||||||||||||||
Prepaid expenses | 10,131 | 8,514 | ||||||||||||||||||||||
Assets held for sale | 19,416 | 4,132 | ||||||||||||||||||||||
Other current assets | 9,605 | 4,717 | ||||||||||||||||||||||
Income tax receivable | 3,821 | 6,914 | ||||||||||||||||||||||
Current deferred tax asset | 2,319 | 5,671 | ||||||||||||||||||||||
Total Current Assets | 160,097 | 165,248 | ||||||||||||||||||||||
Property and equipment, net | 547,033 | 483,709 | ||||||||||||||||||||||
Notes receivable, long-term | 3,987 | 4,246 | ||||||||||||||||||||||
Goodwill | 10,295 | 10,313 | ||||||||||||||||||||||
Intangible assets, net | - | 52 | ||||||||||||||||||||||
Other assets and restricted cash | 16,171 | 13,419 | ||||||||||||||||||||||
Total Assets | $ | 737,583 | $ | 676,987 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||
Accounts payable | $ | 14,322 | $ | 7,571 | ||||||||||||||||||||
Accrued payroll and purchased transportation | 9,096 | 6,547 | ||||||||||||||||||||||
Accrued liabilities | 13,645 | 11,075 | ||||||||||||||||||||||
Claims accrual - current portion | 12,875 | 13,843 | ||||||||||||||||||||||
Dividend payable - current portion | 77 | 1,433 | ||||||||||||||||||||||
Total Current Liabilities | 50,015 | 40,469 | ||||||||||||||||||||||
Claims accrual - long-term portion | 8,693 | 10,168 | ||||||||||||||||||||||
Dividend payable - long-term portion | 1,457 | - | ||||||||||||||||||||||
Deferred income taxes | 145,668 | 118,886 | ||||||||||||||||||||||
Debt - long-term | 55,000 | - | ||||||||||||||||||||||
Total Long-term Liabilities | 210,818 | 129,054 | ||||||||||||||||||||||
Total Liabilities | 260,833 | 169,523 | ||||||||||||||||||||||
Common stock | 794 | 837 | ||||||||||||||||||||||
Additional paid-in capital | 132,723 | 126,975 | ||||||||||||||||||||||
Accumulated other comprehensive (loss)/income | (448 | ) | 7 | |||||||||||||||||||||
Retained earnings | 343,290 | 379,714 | ||||||||||||||||||||||
Total Knight Transportation Shareholders' Equity | 476,359 | 507,533 | ||||||||||||||||||||||
Noncontrolling interest | 391 | (69 | ) | |||||||||||||||||||||
Total Shareholders' Equity | 476,750 | 507,464 | ||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 737,583 | $ | 676,987 |
OPERATING STATISTICS: | Three Months Ended Dec 31, | Twelve Months Ended Dec 31, | ||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||
% Change | % Change | |||||||||||||||||||||||
Average Revenue Per Tractor* | $ | 39,974 | $ | 37,443 | 6.8 | % | $ | 157,076 | $ | 150,992 | 4.0 | % | ||||||||||||
Non-paid Empty Mile Percent | 10.8 | % | 10.8 | % | -0.4 | % | 10.6 | % | 10.7 | % | -1.3 | % | ||||||||||||
Average Length of Haul | 468 | 467 | 0.2 | % | 483 | 478 | 1.0 | % | ||||||||||||||||
Operating Ratio** | 83.8 | % | 85.2 | % | 85.7 | % | 84.5 | % | ||||||||||||||||
Average Tractors - Total | 3,963 | 3,904 | 3,908 | 3,817 | ||||||||||||||||||||
Tractors - End of Quarter: | ||||||||||||||||||||||||
Company | 3,509 | 3,420 | 3,509 | 3,420 | ||||||||||||||||||||
Owner - Operator | 467 | 446 | 467 | 446 | ||||||||||||||||||||
3,976 | 3,866 | 3,976 | 3,866 | |||||||||||||||||||||
Trailers - End of Quarter | 8,986 | 9,008 | 8,986 | 9,008 | ||||||||||||||||||||
Net Capital Expenditures (in thousands) | $ | 40,327 | $ | 4,392 | $ | 138,308 | $ | 91,511 | ||||||||||||||||
Adjusted Cash Flow From Operations Excluding Change in Short-term Investments (in thousands) *** | $ | 38,341 | $ | 44,649 | $ | 136,318 | $ | 126,228 |
* Includes dry van, refrigerated, and port services revenue excluding fuel surcharge, brokerage revenue, intermodal 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 income statements. We measure our revenue, before fuel surcharge, and our operating expenses, net of fuel surcharge, because we believe that eliminating this potentially 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 $44,649 for prior year quarter ended December 31, 2010 does not include $46,011 decrease in short-term trading investments. This item is needed to tie back to cash flow from operations. |
*** Adjusted cash flow from operations of $136,318 for the twelve-month period ended December, 2011 does not include $24,379 decrease in short-term trading investments, and adjusted cash flow from operations of $126,228 for the comparative twelve-month period ended December 31, 2010 does not include $42,563 decrease in short-term trading investments. These are the reconciling items needed to tie back to cash flow from operations. |
In the press release, we provided adjusted cash flow from operations excluding change in short-term investments. The exclusion of the change in short-term investments is not in accordance with generally accepted accounting principles in the United States ("GAAP"). This non-GAAP financial measure is intended to supplement, but not substitute for, the most directly comparable GAAP measure. We believe that the non-GAAP financial measure provides meaningful information to assist investors and analysts in understanding our financial results because it excludes an item that may not be indicative or is unrelated to our core operating results. However, because non-GAAP financial measures are not standardized, investors are strongly encouraged to review our financial statements and publicly filed reports in their entirety and not rely on any single financial measure. A reconciliation to the most closely-related GAAP measure is provided in the preceding paragraphs. |
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, President & CFO, at (602) 269-2000 |
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