SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
                           COMMISSION FILE NO. 0-24946


                           KNIGHT TRANSPORTATION, INC.
             (Exact name of registrant as specified in its charter)


            ARIZONA                                              86-0649974
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                             5601 WEST BUCKEYE ROAD
                                PHOENIX, ARIZONA
                                      85043
                    (Address of Principal Executive Offices)
                                   (Zip Code)


        Registrant's telephone number, including area code: 602-269-2000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                               Yes [X]     No [ ]

The number of shares  outstanding of registrant's  Common Stock, par value $0.01
per share, as of August 9, 2002 was 37,042,634 shares.

                           KNIGHT TRANSPORTATION, INC.

                                      INDEX


PART I - FINANCIAL INFORMATION                                       PAGE NUMBER

ITEM 1.  FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheets as of June 30, 2002
           and December 31, 2001                                           1

         Condensed Consolidated Statements of Income for the Three
           months and Six Months Ended June 30, 2002 and June 30, 2001     3

         Condensed Consolidated Statements of Cash Flows for the Six
           months ended June 30, 2002 and June 30, 2001                    4

         Notes to Condensed Consolidated Financial Statements              6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
           AND RESULTS OF OPERATIONS                                      12

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK       19

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                20

ITEM 2.  CHANGES IN SECURITIES                                            20

ITEM 3   DEFAULTS UPON SENIOR SECURITIES                                  20

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS              20

ITEM 5.  OTHER INFORMATION                                                21

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K                                 21

SIGNATURES                                                                22

INDEX TO EXHIBITS                                                         24

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    AS OF JUNE 30, 2002 AND DECEMBER 31, 2001

                                              June 30, 2002    December 31, 2001
                                              -------------    -----------------
                                               (unaudited)
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                   $  38,837,138      $  24,135,601
  Accounts receivable, net                       33,647,237         31,693,074
  Notes receivable, net                             659,371            777,218
  Inventories and supplies                        1,354,778          1,905,934
  Prepaid expenses                                8,826,426          7,964,109
  Deferred tax asset                              6,431,723          6,081,462
                                              -------------      -------------

     Total current assets                        89,756,673         72,557,398
                                              -------------      -------------

PROPERTY AND EQUIPMENT:
  Land and improvements                          14,138,241         13,112,344
  Buildings and improvements                     12,890,728         12,456,546
  Furniture and fixtures                          6,288,083          6,297,862
  Shop and service equipment                      1,951,356          1,789,903
  Revenue equipment                             179,378,849        169,630,340
  Leasehold improvements                            889,641            666,860
                                              -------------      -------------
                                                215,536,898        203,953,855

  Less: Accumulated depreciation                (59,994,657)       (50,258,826)
                                              -------------      -------------

PROPERTY AND EQUIPMENT, net                     155,542,241        153,695,029
                                              -------------      -------------
NOTES RECEIVABLE - long-term                      3,197,010          3,108,263
                                              -------------      -------------
OTHER ASSETS                                     12,365,785        11 ,753,359
                                              -------------      -------------

                                              $ 260,861,709      $ 241,114,049
                                              =============      =============

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       1

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
                    AS OF JUNE 30, 2002 AND DECEMBER 31, 2001

                                              June 30, 2002    December 31, 2001
                                              -------------    -----------------
                                               (unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                            $   4,159,023      $   3,838,011
  Accrued liabilities                            12,320,725          6,321,829
  Current portion of long-term debt               3,035,583          3,159,162
  Claims accrual                                  8,722,194          7,509,397
                                              -------------      -------------

     Total current liabilities                   28,237,525         20,828,399

LINE OF CREDIT                                   12,200,000         12,200,000
LONG - TERM DEBT, less current portion              760,944          2,714,526
DEFERRED INCOME TAXES                            37,679,954         37,675,395
                                              -------------      -------------

     Total liabilities                           78,878,423         73,418,320
                                              -------------      -------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
  Preferred stock, $0.01 par value;
    authorized 50,000,000 shares,
    none issued and outstanding                          --                 --
  Common stock, $0.01 par value;
    Authorized 100,000,000 shares;
    37,034,022 and 36,834,106 shares issued
    and outstanding at June 30, 2002 and
    and December 31, 2001, respectively             370,340            368,341
  Additional paid-in capital                     71,697,753         69,846,990
  Retained earnings                             110,470,463         98,212,868
  Accumulated other comprehensive loss             (555,270)          (732,470)
                                              -------------      -------------

     Total shareholders' equity                 181,983,286        167,695,729
                                              -------------      -------------

                                              $ 260,861,709      $ 241,114,049
                                              =============      =============

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       2

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



                                           Three Months Ended                 Six Months Ended
                                                  June 30                          June 30
                                      ------------------------------    ------------------------------
                                          2002             2001             2002             2001
                                      -------------    -------------    -------------    -------------
                                                                             
REVENUE
  Revenue, before fuel surcharge      $  68,306,843    $  58,697,743    $ 130,196,868    $ 112,745,349
  Fuel surcharge                          1,508,907        2,490,201        1,970,353        5,105,616
                                      -------------    -------------    -------------    -------------

     Total revenue                       69,815,750       61,187,944      132,167,221      117,850,965
                                      -------------    -------------    -------------    -------------
OPERATING EXPENSES:
  Salaries, wages and benefits           22,937,540       19,540,189       44,200,244       37,874,993
  Fuel                                   10,729,091        9,959,204       19,709,136       19,141,316
  Operations and maintenance              4,082,768        3,172,348        7,485,046        6,294,236
  Insurance and claims                    3,016,684        2,194,052        5,674,220        4,250,575
  Operating taxes and licenses            1,913,651        1,721,676        3,784,252        3,377,225
  Communications                            556,782          450,283        1,172,677          849,204
  Depreciation and amortization           5,523,284        4,826,744       10,878,119        9,693,913
  Lease expense - revenue equipment       2,304,482        2,140,948        4,600,484        3,992,684
  Purchased transportation                5,648,483        6,167,230       10,527,590       12,019,256
  Miscellaneous operating expenses        1,788,239        1,929,259        3,409,885        3,463,216
                                      -------------    -------------    -------------    -------------
                                         58,501,004       52,101,933      111,441,653      100,956,618
                                      -------------    -------------    -------------    -------------

     Income from operations              11,314,746        9,086,011       20,725,567       16,894,347
                                      -------------    -------------    -------------    -------------

OTHER INCOME (EXPENSE):
  Interest income                           236,119          153,954          454,985          310,719
  Interest expense                         (246,621)        (639,872)        (512,958)      (1,508,415)
                                      -------------    -------------    -------------    -------------

                                            (10,502)        (485,918)         (57,973)      (1,197,696)
                                      -------------    -------------    -------------    -------------

  Income before taxes                    11,304,244        8,600,093       20,667,595       15,696,651

INCOME TAXES                             (4,600,000)      (3,540,000)      (8,410,000)      (6,400,000)
                                      -------------    -------------    -------------    -------------

  Net income                          $   6,704,244    $   5,060,093    $  12,257,595    $   9,296,651
                                      =============    =============    =============    =============

Net income per common share and
common share equivalent:
  Basic                               $        0.18    $        0.15    $        0.33    $        0.27
                                      =============    =============    =============    =============
  Diluted                             $        0.18    $        0.15    $        0.32    $        0.27
                                      =============    =============    =============    =============

Weighted average number of common
shares and common share equivalents
outstanding:
  Basic                                  36,975,422       34,041,480       36,947,722       33,967,955
                                      =============    =============    =============    =============
  Diluted                                38,060,131       34,803,425       38,082,216       34,685,471
                                      =============    =============    =============    =============


              The accompanying notes are an integral part of these
                   ondensed consolidated financial statements.

                                       3

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



                                                                       Six Months Ended
                                                                           June 30
                                                                 ----------------------------
                                                                     2002            2001
                                                                 ------------    ------------
                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES

Net income                                                       $ 12,257,595    $  9,296,651
Adjustments to reconcile net income to net cash
Provided by operating activities:
  Depreciation and amortization                                    10,878,119       9,693,913
  Allowance for doubtful accounts                                     190,187         164,813
  Interest rate swap agreement - fair value change                    177,200        (153,194)
  Tax benefit from exercise of stock options                          497,251         530,434
  Deferred income taxes                                              (345,702)        187,354
Changes in assets and liabilities:
  (Increase) decrease in trade receivables                         (2,144,350)      1,985,745
  Decrease (increase) in inventories and supplies                     551,156        (104,340)
  Increase in prepaid expenses                                       (862,317)     (2,779,653)
  Increase (decrease) in accounts payable                             321,012        (271,358)
  Increase in accrued liabilities and claims accrual                7,211,693       1,785,943
                                                                 ------------    ------------

  Net cash provided by operating activities                        28,731,844      20,336,308
                                                                 ------------    ------------

CASH FLOW FROM INVESTING ACTIVITIES:

  Purchase of property and equipment, net                         (12,725,331)    (10,360,609)
  Increase in other assets                                           (612,426)     (1,573,171)
  Decrease (increase) in notes receivable, net                         29,100      (2,399,370)
                                                                 ------------    ------------

  Net cash used in investing activities                           (13,308,657)    (14,333,150)
                                                                 ------------    ------------


              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       4

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

                                                        Six Months Ended
                                                             June 30
                                                  -----------------------------
                                                      2002             2001
                                                  ------------     ------------
CASH FLOW FROM FINANCING ACTIVITIES:

  Payments on line of credit, net                          -0-       (3,800,000)
  Payments of long-term debt                        (2,077,161)      (7,993,898)
  Proceeds from exercise of stock options            1,355,511        1,627,306
                                                  ------------     ------------

  Net cash used in financing activities               (721,650)     (10,166,592)
                                                  ------------     ------------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                  14,701,537       (4,163,434)
CASH AND CASH EQUIVALENTS,
  Beginning of period                               24,135,601        6,151,383
                                                  ------------     ------------

CASH AND CASH EQUIVALENTS, end of period          $ 38,837,138     $  1,987,949
                                                  ============     ============
SUPPLEMENTAL DISCLOSURES:

  Cash Flow Information:
    Income taxes paid                             $  3,995,386     $  2,518,731
                                                  ============     ============
    Interest paid                                 $    453,026     $  1,674,455
                                                  ============     ============

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       5

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Financial Information

The accompanying  consolidated  financial  statements include the parent company
Knight  Transportation,   Inc.,  and  its  wholly  owned  subsidiaries,   Knight
Administrative  Services,  Inc.; Quad-K Leasing, Inc.; KTTE Holdings, Inc., QKTE
Holdings, Inc.; Knight Management Services, Inc.; Knight Transportation Midwest,
Inc.;  Knight  Transportation  Gulf  Coast,  Inc.,  (formerly  John  Fayard Fast
Freight, Inc.); Knight Transportation South Central Ltd.; and KTeCom, L.L.C. All
material   inter-company   items  and  transactions   have  been  eliminated  in
consolidation.

The  condensed  consolidated  financial  statements  included  herein  have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America ("GAAP"),  pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
have been omitted or condensed  pursuant to such rules and  regulations.  In the
opinion  of  management,   all  adjustments   (consisting  of  normal  recurring
adjustments)  considered  necessary for a fair  presentation have been included.
Results of  operations  in interim  periods are not  necessarily  indicative  of
results for a full year. These condensed  consolidated  financial statements and
notes thereto  should be read in  conjunction  with the  Company's  consolidated
financial  statements and notes thereto  included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001. The  preparation of financial
statements in accordance  with GAAP  requires  management to make  estimates and
assumptions.  Such  estimates  and  assumptions  affect the reported  amounts of
assets  and  liabilities  as  well  as  disclosure  of  contingent   assets  and
liabilities,  at the date of the accompanying  condensed  consolidated financial
statements,  and the reported  amounts of the  revenues and expenses  during the
reporting periods. Actual results could differ from those estimates.

                                       6

Note 2. Net Income Per Share

A reconciliation  of the basic and diluted  earnings per share  computations for
the three months and six months ended June 30, 2002 and 2001 is as follows:



                                   Three Months Ended           Six Months Ended
                                         June 30                    June 30
                                -------------------------   -------------------------
                                   2002          2001          2002          2001
                                -----------   -----------   -----------   -----------
                                                              
Weighted average common
  shares outstanding - Basic     36,975,422    34,041,480    36,947,722    33,967,955

Effect of stock options           1,084,709       761,945     1,134,494       717,516
                                -----------   -----------   -----------   -----------

Weighted average common
  share and common share
  equivalents outstanding -
  Diluted                        38,060,131    34,803,425    38,082,216    34,685,471
                                ===========   ===========   ===========   ===========

Net income                      $ 6,704,244   $ 5,060,093   $12,257,595   $ 9,296,651
                                ===========   ===========   ===========   ===========

  Net income per common share
  and common share equivalent
    Basic                       $      0.18   $      0.15   $      0.33   $      0.27
                                ===========   ===========   ===========   ===========
    Diluted                     $      0.18   $      0.15   $      0.32   $      0.27
                                ===========   ===========   ===========   ===========


Note 3. Comprehensive Income (Loss)

Comprehensive income (loss) for the period was as follows:



                                         Three Months Ended           Six Months Ended
                                              June 30                      June 30
                                      -------------------------   -------------------------
                                         2002          2001          2002          2001
                                      -----------   -----------   -----------   -----------
                                                                    
Net Income                            $ 6,704,244   $ 5,060,093   $12,257,595   $ 9,296,651

Other comprehensive income (loss):
Interest rate swap agreement - fair
market value adjustment                    87,964        29,188       177,200      (153,194)
                                      -----------   -----------   -----------   -----------

Comprehensive income                  $ 6,792,208   $ 5,089,281   $12,434,795   $ 9,143,457
                                      ===========   ===========   ===========   ===========


                                       7

NOTE 4. SEGMENT INFORMATION

Although we have nine operating  segments,  we have  determined that we have one
reportable  segment.  Eight of the segments are managed  based on regions in the
United States in which we operate.  Each of these segments has similar  economic
characteristics  as they all  provide  short to  medium-haul  truckload  carrier
services of general  commodities  to a similar class of customers.  In addition,
each segment exhibits similar financial  performance,  including average revenue
per mile and operating ratio.  The remaining  segment is not reported because it
does not meet the materiality  thresholds in SFAS No. 131. As a result,  we have
determined that it is appropriate to aggregate our operating  divisions into one
reportable segment consistent with the guidance in SFAS No. 131. Accordingly, we
have not  presented  separate  financial  information  for each of our operating
divisions as our consolidated  financial  statements  present our one reportable
segment.

NOTE 5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

In June 1998 the Financial Accounting Standards Board (FASB) issued Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments and Certain  Hedging  Activities." In June 2000 the FASB issued SFAS
No. 138,  "Accounting  for Certain  Derivative  Instruments  and Certain Hedging
Activity,  an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138 require that
all derivative  instruments be recorded on the balance sheet at their respective
fair values. SFAS No. 133 and SFAS No. 138 are effective for all fiscal quarters
of all fiscal years  beginning  after June 30, 2000; we adopted SFAS No. 133 and
SFAS No. 138 on January 1, 2001.

All  derivatives are recognized on the balance sheet at their fair value. On the
date the  derivative  contract is entered into,  we designate the  derivative as
either a hedge of the fair value of a  recognized  asset or  liability  or of an
unrecognized  firm  commitment  ("fair  value"  hedge),  a hedge of a forecasted
transaction or the variability of cash flows to be received or paid related to a
recognized asset or liability ("cash flow" hedge), a foreign-currency fair-value
or cash-flow hedge ("foreign currency" hedge), or a hedge of a net investment in
a foreign  operation.  We formally  document all  relationships  between hedging
instruments  and hedged  items,  as well as its  risk-management  objective  and
strategy for  undertaking  various  hedge  transactions.  This process  includes
linking  all  derivatives  that are  designated  as  fair-value,  cash-flow,  or
foreign-currency  hedges to specific assets and liabilities on the balance sheet
or to specific firm  commitments  or forecasted  transactions.  We also formally
assess,  both at the  hedge's  inception  and on an ongoing  basis,  whether the
derivatives  that are used in  hedging  transactions  are  highly  effective  in
offsetting  changes  in fair  values or cash flows of hedged  items.  When it is
determined  that a derivative is not highly  effective as a hedge or that it has
ceased  to  be  a  highly  effective  hedge,  we  discontinue  hedge  accounting
prospectively.

In August and  September  2000,  we entered into two  agreements to obtain price
protection to reduce a portion of our exposure to fuel price fluctuations. Under
these agreements,  we purchased 1,000,000 gallons of diesel fuel, per month, for
a period of six months from  October 1, 2000 through  March 31, 2001.  If during
the 48 months following March 31, 2001, the price of heating oil on the New York
Mercantile  Exchange (NY MX HO) falls below $.58 per gallon, we may be obligated
to pay, for a maximum of 12  different  months  selected by the contract  holder
during the  48-month  period  beginning  after March 31,  2001,  the  difference
between  $.58 per  gallon  and NY MX HO  average  price for the  minimum  volume
commitment.  In July  2001,  we  entered  into a similar  agreement.  Under this
agreement,  we purchased 750,000 gallons of diesel fuel, per month, for a period
of six months  beginning  September 1, 2001 through February 28, 2002. If during
the 12-month  period  commencing  January 2005 through  December 2005, the price

                                       8

index  discussed  above falls below $.58 per gallon,  we may be obligated to pay
the  difference  between $.58 and the stated  index.  The three  agreements  are
stated at their fair value of $750,000 which is included in accrued  liabilities
in the accompanying condensed consolidated financial statements.

During  2001,  we entered  into an  interest  rate swap  agreement  on the $12.2
million  outstanding  under the revolving  line of credit for purposes of better
managing  cash flow.  On November 7, 2001,  we paid $762,500 to settle this swap
agreement.  The amount paid is included in other comprehensive loss and is being
amortized  to  interest  expense  over the  original  36 month  term of the swap
agreement.

NOTE 6. RECENTLY ADOPTED ACCOUNTING STANDARDS

In June 2001, the FASB issued SFAS No. 141,  "Business  Combinations"  (SFAS No.
141) and SFAS No. 142,  "Goodwill and Other  Intangible  Assets" (SFAS No. 142).
SFAS No. 141 requires  that the purchase  method of  accounting  be used for all
business  combinations.  SFAS No. 141 specifies  criteria that intangible assets
acquired  in a business  combination  must meet to be  recognized  and  reported
separately  from  goodwill.  SFAS No. 142 requires that goodwill and  intangible
assets with indefinite  useful lives no longer be amortized,  but instead tested
for impairment at least  annually in accordance  with the provisions of SFAS No.
142. SFAS No. 142 also requires that  intangible  assets with  estimable  useful
lives  be  amortized  over  their  respective  estimated  useful  lives to their
estimated  residual  values,  and reviewed for  impairment  in  accordance  with
ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS (SFAS No. 144).

We adopted the  provisions of SFAS No. 141 as of July 1, 2001,  and SFAS No. 142
as of January 1, 2002.  Goodwill and  intangible  assets  determined  to have an
indefinite  useful life acquired in a purchase  business  combination  completed
after June 30, 2001,  are not  amortized.  Goodwill and  indefinite  useful life
intangible  assets acquired in business  combinations  completed  before July 1,
2001 continued to be amortized  through December 31, 2001.  Amortization of such
assets ceased on January 1, 2002 upon adoption of SFAS 142.

Upon  adoption  of SFAS No.  142, we were  required  to  evaluate  our  existing
intangible   assets  and  goodwill  that  were  acquired  in  purchase  business
combinations,  and to make any necessary  reclassifications  in order to conform
with the new  classification  criteria in SFAS No. 141 for recognition  separate
from  goodwill.  We were also required to reassess the useful lives and residual
values of all intangible  assets acquired,  and make any necessary  amortization
period  adjustments by the end of the first interim period after  adoption.  For
intangible assets identified as having indefinite useful lives, we were required
to test those  intangible asset for impairment in accordance with the provisions
of SFAS No. 142 within the first interim period.  Impairment was measured as the
excess of  carrying  value  over the fair value of an  intangible  asset with an
indefinite life. The results of this analysis did not require us to recognize an
impairment loss.

In connection with SFAS No. 142's transitional  goodwill impairment  evaluation,
the  Statement  required  us to perform an  assessment  of whether  there was an
indication  that goodwill is impaired as of the date of adoption.  To accomplish
this,  we were  required to  identify  our  reporting  units and  determine  the
carrying value of each  reporting unit by assigning the assets and  liabilities,
including the existing goodwill and intangible  assets, to those reporting units
as of January 1, 2002.  We were  required  to  determine  the fair value of each
reporting  unit and  compare it to the  carrying  amount of the  reporting  unit
within six months of January  1, 2002.  To the extent the  carrying  amount of a
reporting  unit  exceeded the fair value of the  reporting  unit,  an indication
existed  that  the  reporting  unit  goodwill  may be  impaired  and we would be
required to perform the second step of the transitional impairment test.

                                       9

We  identified  our  reporting  units to be at the same  level as our  operating
segments as of January 1, 2002.  As of January 1, 2002,  we had eight  operating
segments, however, these operating segments have been aggregated and reported as
one reportable segment in accordance with the aggregation provisions of SFAS No.
131. In applying this same aggregation criteria, we have determined that we have
one reporting unit as of January 1, 2002. At January 1, 2002, the carrying value
of the  reporting  unit  goodwill was  $7,504,067.  We compared the implied fair
value of the reporting  unit goodwill with the carrying  amount of the reporting
unit  goodwill,  both of which were  measured  as of the date of  adoption.  The
implied fair value of goodwill was  determined by  allocating  the fair value of
the  reporting  unit to all of the  assets  (recognized  and  unrecognized)  and
liabilities  of the  reporting  unit in a manner  similar  to a  purchase  price
allocation,  in accordance with SFAS No. 141. The residual fair value after this
allocation  was the  implied  fair value of the  reporting  unit  goodwill.  The
implied fair value of the  reporting  unit  exceeded its carrying  amount and we
were not required to recognize an impairment loss.

Application of the provisions of SFAS No. 142 has affected the  comparability of
current period results of operations with prior periods  because  goodwill is no
longer being amortized. Thus, the following transitional disclosure presents net
earnings and earnings per share, adjusted as shown below:



                                                         THREE MONTHS ENDED     SIX MONTHS ENDED
                                                              30-JUN-01             30-JUN-01
                                                            -------------         -------------
                                                                            
Net earnings                                                $   5,060,093         $   9,296,651
Add back: amortization of goodwill, net of taxes*                 138,265               372,095
                                                            -------------         -------------
Adjusted net earnings                                       $   5,198,358         $   9,668,746
                                                            =============         =============

Basic earnings per share                                    $        0.15         $        0.27
Add back: amortization of goodwill, net of taxes*                     -0-                  0.01
                                                            -------------         -------------
Adjusted basic earnings per share                           $        0.15         $        0.28
                                                            =============         =============

Diluted earnings per share                                  $        0.15         $        0.27
Add back: amortization of goodwill, net of taxes*                     -0-                  0.01
                                                            -------------         -------------
Adjusted diluted earnings per share                         $        0.15         $        0.28
                                                            =============         =============


* Amortization of goodwill was non-deductible for tax purposes;  therefore,  the
tax component of the adjustment for amortization of goodwill is $0.

In August 2001,  the FASB issued SFAS No. 144. SFAS No. 144 addresses  financial
accounting and reporting for impairment or disposal of long-lived  assets.  This
statement  supersedes SFAS No. 121,  ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED
ASSETS TO BE DISPOSED OF, and the  accounting  and  reporting  provisions of APB
Opinion No. 30,  REPORTING  THE RESULTS OF  OPERATIONS-REPORTING  THE EFFECTS OF
DISPOSAL OF A SEGMENT OF A BUSINESS, AND EXTRAORDINARY, UNUSUAL AND INFREQUENTLY
OCCURRING EVENTS AND TRANSACTIONS,  for the disposal of a segment of a business.
This  statement  also amends ARB No. 51,  CONSOLIDATED  FINANCIAL  STATEMENTS to
eliminate the exception to  consolidate a subsidiary for which control is likely
to be  temporary.  SFAS No. 144 is effective  for fiscal years  beginning  after
December 15,  2001.  We adopted SFAS No. 144 on January 1, 2002 and there was no
impact on our results of operations or financial position.

                                       10

NOTE 7. RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations"  (SFAS No.  143).  SFAS No. 143  requires the Company to record the
fair value of an asset  retirement  obligation  as a liability  in the period in
which it incurs a legal  obligation  associated  with the retirement of tangible
long-lived  assets that result from the acquisition,  construction,  development
and/or normal use of the assets. The Company also records a corresponding  asset
which is  depreciated  over the life of the  asset.  Subsequent  to the  initial
measurement of the asset retirement obligation,  the obligation will be adjusted
at the end of each  period to reflect  the  passage  of time and  changes in the
estimated future cash flows  underlying the obligation.  The Company is required
to adopt SFAS No. 143 on January 1, 2003. Because of the extensive effort needed
to evaluate  the impact of  adopting  SFAS No.  143,  it is not  practicable  to
reasonably  estimate  the impact of  adopting  the  Statement  on the  Company's
financial statements at the date of this report.

In April 2002, the FASB issued  Statement of Financial  Accounting  Standard No.
145,  RESCISSION OF FASB STATEMENTS NO.4, 44 and 64, AMENDMENT OF FASB STATEMENT
NO. 13, AND TECHNICAL  CORRECTIONS  (SFAS NO. 145),  which  addresses  financial
accounting and reporting for reporting gains and losses from  extinguishment  of
debt,  accounting  for  intangible  assets of motor  carriers and accounting for
leases.   SFAS  No.  145   requires   that  gains  and  losses  from  the  early
extinguishment of debt should not be classified as extraordinary,  as previously
required. SFAS No. 145 also rescinds Statement 44, which was issued to establish
accounting  requirements  for the effects of transition to the provisions of the
Motor  Carrier Act of 1980  (Public Law 96-296,  96th  Congress,  July 1, 1980).
Those transitions are completed; therefore, Statement 44 is no longer necessary.
SFAS No. 145 also amends Statement 13 to require  sale-leaseback  accounting for
certain  lease  modifications  that have  economic  effects  that are similar to
sale-leaseback   transactions.   SFAS  No.  145  also  makes  various  technical
corrections to existing  pronouncements.  Those corrects are not  substantive in
nature.  The provisions of this statement relating to Statement 4 are applicable
in fiscal years  beginning  after May 15, 2002. The provisions of this Statement
related to Statement 13 are effective for  transactions  occurring after May 15,
2002.  All other  provisions  of this  Statement  are  effective  for  financial
statements  issued on or after May 15, 2002. The adoption of SFAS No. 145 is not
expected to have a material impact on our consolidated financial statements.

In June 2002, the FASB issued  Statement of Financial  Accounting  Standards No.
146,  ACCOUNTING FOR EXIT OR DISPOSAL  ACTIVITIES  (SFAS NO. 146).  SFAS NO. 146
addresses the  recognition,  measurement and reporting of costs  associated with
exit and disposal activities,  including restructuring activities.  SFAS No. 146
also  addresses  recognition  of certain costs related to terminating a contract
that is not a  capital  lease,  costs  to  consolidate  facilities  or  relocate
employees  and   termination   of  benefits   provided  to  employees  that  are
involuntarily  terminated under the terms of a one-time benefit arrangement that
is not an ongoing  benefit  arrangement or an individual  deferred  compensation
contract.  SFAS No. 146 is effective  for exit or disposal  activities  that are
initiated  after  December 31, 2002. The Company is in the process of evaluating
the adoption of SFAS No. 146 and its impact on the financial position or results
of operations of the Company.

NOTE 8. COMMITMENTS AND CONTINGENCIES

We are involved in certain  legal  proceedings  arising in the normal  course of
business.  In the opinion of  management,  our potential  exposure under pending
legal  proceedings  is  adequately  provided for in the  accompanying  condensed
consolidated financial statements.

NOTE 9. RECAPITALIZATION AND STOCK SPLIT

On May 9, 2001,  the Board of Directors  approved a  three-for-two  stock split,
effected in the form of a 50 percent stock dividend. The stock split occurred on
June 1, 2001, to all  shareholders  of record as of the close of business on May
18,  2001.  Also on December  7, 2001 our Board of  Directors  approved  another
three-for-two stock split,  effected in the form of a 50 percent stock dividend.
The stock split occurred on December 28, 2001, to all  stockholders of record as

                                       11

of the close of business on December 7, 2001. These stock splits have been given
retroactive   recognition  for  all  periods   presented  in  the   accompanying
consolidated  financial  statements.  All share  amounts and  earnings per share
amounts have been retroactively adjusted to reflect the stock splits.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS FORWARD LOOKING STATEMENTS

Except for certain  historical  information  contained  herein,  this  Quarterly
Report on Form 10-Q  contains  forward-looking  statements  that involve  risks,
assumptions  and  uncertainties  that are difficult to predict.  All statements,
other than  statements of historical  fact, are statements  that could be deemed
forward-looking statements,  including any projections of earnings, revenues, or
other financial  items,  any statement of plans,  strategies,  and objectives of
management  for  future  operations;  any  statements  concerning  proposed  new
strategies or developments;  any statements regarding future economic conditions
or  performance;  any  statements  of belief and any  statement  of  assumptions
underlying  any of the  foregoing.  Words  such  as  "believe,"  "may,"  "could"
"expects,"  "anticipates'"  and  "likely,"  and  variations  of these words,  or
similar expressions,  are intended to identify such forward-looking  statements.
Our actual results could differ  materially from those  discussed here.  Factors
that could cause or contribute to such differences  include, but are not limited
to,  those items  discussed  in the section  entitled  "Factors  That May Affect
Future  Results,"  and  "Management's   Discussion  and  Analysis  of  Financial
Condition  and Results of  Operations,"  set forth in our Annual  Report on Form
10-K,  which is by this reference  incorporated  herein.  We do not assume,  and
specifically  disclaim,  any obligation to update any forward-looking  statement
contained in this Quarterly Report.

RESULTS OF OPERATIONS

Our  revenue,  before fuel  surcharge,  for the six months  ended June 30, 2002,
increased by 15.5% to $130.2 million from $112.7 million over the same period in
2001. For the three months ended June 30, 2002, revenue,  before fuel surcharge,
increased by 16.4% to $68.3  million from $58.7  million over the same period in
2001. The increase in revenue, before fuel surcharge, resulted from expansion of
our  customer  base and  increased  volume from  existing  customers.  Our fleet
increased  by 8.9%  to  1,957  tractors  (including  199  owned  by  independent
contractors)  as of June 30, 2002,  from 1,797 tractors  (including 209 owned by
independent contractors) as of June 30, 2001.

Salaries,  wages and benefits increased as a percentage of revenue,  before fuel
surcharge,  to 33.9% for the six months ended June 30, 2002,  from 33.6% for the
same period in 2001. For the three months ended June 30, 2002,  salaries,  wages
and benefits  increased as a percentage of revenue,  before fuel  surcharge,  to
33.6% from 33.3% for the same period in 2001. These increases were primarily the
result  of  the  increase  in  the  ratio  of  Company  drivers  to  independent
contractors. At June 30, 2002, 90% of our fleet was operated by Company drivers,
compared  to 88% at June 30,  2001.  We  record  the cost of  medical  insurance
coverage,  along with the  uninsured  portion,  to salaries,  wages and benefits
expense. Our insurance program for medical claims, which involves self-insurance
with risk retention levels,  was higher for the 2002 period compared to the 2001
period.  Our health  insurance  self-insurance  level is $100,000 per person per
year, and our worker's compensation  self-insurance is at a maximum of $500,000.
Claims in excess of these  retention  levels  are  covered by  insurance,  which
management considers adequate. For Company drivers and non-driving employees, we
record accruals for worker's  compensation as a component of our claims accrual,
and the related expense is reflected in salaries,  wages and benefits expense in
our consolidated statements of income.

                                       12

Fuel  expense,  net of fuel  surcharge,  increased as a  percentage  of revenue,
before fuel surcharge, to 13.6% for the six months ended June 30, 2002, compared
to 12.5% for the same period in 2001.  For the three months ended June 30, 2002,
fuel expense as a percentage  of revenue,  before fuel  surcharge,  increased to
13.5% from 12.7% for the same period in 2001.  This  increase was  primarily the
result  of  the  increase  in the  ratio  of  Company  vehicles  to  independent
contractors,  as well as a reduction in fuel  surcharge  billings to  customers.
Independent contractors pay their own fuel costs.

Operations and maintenance expense increased as a percentage of revenue,  before
fuel surcharge, to 5.7% for the six months ended June 30, 2002 from 5.6% for the
same period in 2001.  For the three months ended June 30, 2002,  operations  and
maintenance expense increased as a percentage of revenue, before fuel surcharge,
to 6.0%  compared  to 5.4% for the same  period in 2001.  These  increases  were
primarily  due to the increase in the ratio of Company  vehicles to  independent
contractors, along with a slight aging of our fleet.

Insurance and claims expense  increased as a percentage of revenue,  before fuel
surcharge,  to 4.4% for the six months  ended June 30,  2002,  from 3.8% for the
same period in 2001.  For the three months ended June 30,  2002,  insurance  and
claims expense increased as a percentage of revenue,  before fuel surcharge,  to
4.4%  from  3.7% for the same  period  in 2001.  The  primary  reason  for these
increases  is  due  to   increases   in   insurance   premiums  and  the  higher
self-insurance  retention  levels  assumed  by us.  Our  insurance  program  for
liability, physical damage and cargo damage involves self-insurance with varying
risk  retention  levels.  Claims in excess of these  risk  retention  levels are
covered  by  insurance  which  management   considers  adequate.   We  currently
self-insure for a portion of our claims expense  resulting from personal injury,
cargo  loss and  property  damage  combined  up to a maximum of  $1,750,000  per
occurrence.  We accrue the estimated  cost of the  uninsured  portion of pending
claims.  These accruals are estimated  based on  management's  evaluation of the
nature  and  severity  of  individual  claims  and  estimates  of future  claims
development based on historical claims development trends.

Operating taxes and licenses  decreased as a percentage of revenue,  before fuel
surcharge,  to 2.9% for the six months  ended June 30,  2002,  from 3.0% for the
same period in 2001. For the three months ended June 30, 2002,  operating  taxes
and licenses as a percentage  of revenue,  before fuel  surcharge,  decreased to
2.8%  compared  to 2.9%  for the  same  period  in 2001.  These  decreases  were
primarily due to improved utilization of revenue equipment.

Communications  expense as a percentage of revenue,  before fuel surcharge,  for
both the six months and three months ended June 30,  2002,  remained  relatively
consistent with the same periods in 2001, at less than 1.0% of revenue.

Depreciation  and amortization  expense as a percentage of revenue,  before fuel
surcharge,  decreased to 8.4% for the six month period ended June 30, 2002, from
8.6% for the same  period in 2001.  For the three  months  ended June 30,  2002,
depreciation and amortization decreased as a percentage of revenue,  before fuel
surcharge,  to 8.1% from 8.2% for the same period in 2001.  These decreases were
primarily  related  to  increased  utilization  of  our  revenue  equipment  and
discontinuing  the  amortization  of goodwill on January 1, 2002,  in accordance
with SFAS No. 142.

Lease  Expense -  Revenue  Equipment  as  percentage  of  revenue,  before  fuel
surcharge, was 3.5% for the six months ended June 30, 2002, compared to 3.5% for
the same period in 2001.  For the three months ended June 30, 2002 Lease Expense
- - Revenue Equipment as a percentage of revenue, before fuel surcharge,  was 3.4%
compared to 3.6% for the same period in 2001. This decrease was primarily due to
increased  utilization of our revenue  equipment.  Under this leasing program we
had 568 tractors at both June 30, 2002 and June 30, 2001, under operating leases
with an average term of 3.5 years.

                                       13

Purchased  transportation  decreased  as a  percentage  of revenue,  before fuel
surcharge,  to 8.1% for the six months ended June 30,  2002,  from 10.7% for the
same  period in 2001.  For the  three  months  ended  June 30,  2002,  purchased
transportation as a percentage of revenue,  before fuel surcharge,  decreased to
8.3% from 10.5% for the same  period in 2001.  These  decreases  were due to the
decrease in the ratio of independent contractors to Company drivers to 10% as of
June 30, 2002, from 12% as of June 30, 2001.  Independent  contractors pay their
own expenses, including fuel, and are compensated at a fixed rate per mile.

Miscellaneous  operating expenses  decreased as a percentage of revenue,  before
fuel  surcharge,  to 2.6% for the six months ended June 30, 2002,  from 3.1% for
the same period in 2001. For the three months ended June 30, 2002, miscellaneous
operating expenses as a percentage of revenue, before fuel surcharge,  decreased
to 2.6% from 3.3% for the same period in 2001.  These  decreases  were primarily
due to the increase in the  utilization  of our revenue  equipment and decreased
travel expenses.

As a result of the above factors, our operating ratio (operating  expenses,  net
of fuel  surcharge,  as a percentage of revenue,  before fuel surcharge) for the
six  months  ended  June 30,  2002,  decreased  to 84.1% from 85.0% for the same
period in 2001.  Our  operating  ratio  decreased  to 83.4% for the three months
ended June 30, 2002, compared to 84.5% for the same period in 2001.

For the six months ended June 30,  2002,  net  interest  expense  decreased as a
percentage of revenue, before fuel surcharge, to less than 0.1% compared to 1.1%
for the same periods in 2001.  This  decrease was primarily due to the reduction
of our  outstanding  debt to  approximately  $16.0  million  at June  30,  2002,
compared to $42.6 million at June 30, 2001. Debt reduction was  facilitated,  in
part, by proceeds  received from the offering of our Common Stock that closed on
November 7, 2001.

Income  taxes have been  provided  at the  statutory  federal  and state  rates,
adjusted for certain  permanent  differences  between  financial  statement  and
income tax reporting.

As a result of the preceding changes, our net income as a percentage of revenue,
before fuel surcharge, was 9.4% for the six months ended June 30, 2002, compared
to 8.2% for the same period in 2001.  For the three  months ended June 30, 2002,
net income as a percentage of revenue, before fuel surcharge, was 9.8%, compared
to 8.6% for the same period in 2001.

CRITICAL ACCOUNTING POLICIES

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting  policies generally accepted in the United States of America requires
management to make decisions based upon estimates,  assumptions,  and factors we
consider as relevant to the circumstances.  Such decisions include the selection
of  applicable   accounting  principles  and  the  use  of  judgement  in  their
application,  the results of which  impact  reported  amounts  and  disclosures.
Changes in future economic conditions or other business circumstances may effect
the outcomes of our estimates and assumptions. Accordingly, actual results could
differ from those anticipated.  A summary of the significant accounting policies
followed in preparation of the consolidated financial statements is contained in
Note 1 of the consolidated  financial  statements contained in our annual report
on Form 10-K.  Other footnotes  describe  various  elements of the  consolidated
financial   statements  and  the  assumption  on  which  specific  amounts  were
determined.

                                       14

Our critical accounting policies include the following:

Revenue  Recognition  -  revenues  are  recognized  on the  date  shipments  are
delivered to the customer.

Insurance  and Claims  Reserves - The primary  claims  arising for us consist of
cargo liability,  personal injury, property damage, collision and comprehensive,
and  employee  medical  expenses.  We maintain  self-insurance  levels for these
various areas of risk and have established  reserves to cover these self-insured
liabilities.  We also maintain  insurance to cover  liabilities in excess of the
self-insurance amounts. The claims reserves represent accruals for the estimated
uninsured  portion of pending  claims  including  adverse  development  of known
claims as well as incurred but not reported claims. These estimates are based on
historical  information  along with certain  assumptions  about  future  events.
Changes in assumptions as well as changes in actual experience could cause these
estimates to change in the near term.

Property and Equipment - Property and equipment are stated at cost. Depreciation
on property and equipment is calculated by the straight-line method over five to
ten years with salvage values ranging from 15% to 40%. We periodically  evaluate
the carrying  value of  long-lived  assets held for use for possible  impairment
losses by analyzing  the operating  performance  and future cash flows for those
assets.  If  necessary,  we would  adjust the carrying  value of the  underlying
assets if the sum of the  undiscounted  cash flows  were less than the  carrying
value.  Impairment could be impacted by our projection of future cash flows, the
level of cash flows and  salvage  values,  the  methods of  estimation  used for
determining fair values.

Lease Obligations and Commitments - We have obligations  outstanding  related to
equipment and debt as of June 30, 2002. We have 568 tractors under noncancelable
operating leases. In accordance with SFAS No. 13,  "Accounting for Leases",  the
rental  expense  for  these  leases  is  recorded  as  "lease  expense - revenue
equipment."  These operating  leases are carried off balance sheet in accordance
with SFAS No. 13. The total amount outstanding under these agreements as of June
30,  2002,  was $17.9  million,  with $8.1  million  due in the next 12  months.
Long-term debt and the  outstanding  balance on our revolving line of credit are
recorded at the carrying amount which represents the amount due at maturity.

Inventories  and supplies - Inventory and supplies  consist of tires,  fuel, and
spare parts which are recorded at the lower of cost,  using first-in,  first-out
method, or net realizable value.

LIQUIDITY AND CAPITAL RESOURCES

The growth of our business has required a significant  investment in new revenue
equipment. Our primary source of liquidity has been funds provided by operations
and our line of credit with our  primary  lender.  During the fourth  quarter of
2001,  we  registered  with the  Securities  and  Exchange  Commission  and sold
2,678,907 shares of our Common Stock through a public  offering,  which resulted
in net proceeds to us of $41,249,460.  See our  Registration  Statements on Form
S-3 filed with the SEC on October 24, 2001 (File No. 333-72130), and November 2,
2001 (File No. 333-72688). The proceeds we received from this offering were used
for the repayment of indebtedness and for general corporate  purposes.  Net cash
provided by operating  activities was approximately  $28.7 million for the first
six months of 2002,  compared to $20.3 million for the  corresponding  period in
2001.

                                       15

Capital  expenditures for the purchase of revenue  equipment,  net of trade-ins,
office equipment and leasehold improvements, totaled $12.7 million for the first
six months of 2002, compared to $10.4 million for the same period in 2001.

Net cash used in financing  activities  and direct  financing was  approximately
$0.7  million  for the first six  months of 2002,  compared  to net cash used of
$10.2 million for the same period in 2001. Net cash used in financing activities
during the first six months of 2002 was  primarily  for the payment of long-term
debt.

We maintain a line of credit  totaling  $50 million with our lender and use this
line to finance the acquisition of revenue equipment and other corporate uses to
the extent our need for capital is not provided by funds from operations. We are
obligated to comply with certain  financial  covenants under our line of credit.
The rate of  interest  on  borrowings  against  the  line of  credit  will  vary
depending  upon the  interest  rate  election  made by us, based upon either the
London Interbank Offered Rate ("Libor") plus an adjustment  factor, or the prime
rate.  The average  interest  rate for the three  months ended June 30, 2002 was
2.47%. Borrowings under the line of credit amounted to $12.2 million at June 30,
2002. The line of credit expires in July 2003.

Through our subsidiaries,  we have entered into operating lease agreements under
which we lease  revenue  equipment to  independent  contractors  who contract to
transport loads for us. The total amount  outstanding  under these agreements as
of June 30, 2002, was $17.9 million, with interest rates from 5.2% to 8.2%, with
$8.1 million due in the next 12 months.

Management  believes  the Company  has  adequate  liquidity  to meet its current
needs. We will continue to have significant  capital  requirements over the long
term, which may require us to incur debt or seek additional equity capital.  The
availability of this capital will depend upon prevailing market conditions,  the
market  price of the common stock and several  other  factors over which we have
limited control, as well as our financial condition and results of operations.

FACTORS THAT MAY AFFECT FUTURE RESULTS

Our future  results may be  affected  by a number of factors  over which we have
little or no control.  Fuel prices,  insurance or claims costs,  interest rates,
the  availability  of  qualified  drivers,  fluctuations  in the resale value of
revenue  equipment,  economic and customer  business cycles and shipping demands
are  economic  factors  over  which we have  little or no  control.  Significant
increases or rapid fluctuations in fuel prices,  interest rates or insurance and
claims costs,  to the extent not offset by increases in freight  rates,  and the
resale value of revenue  equipment could reduce our  profitability.  Weakness in
the general  economy,  including  a weakness  in  consumer  demand for goods and
services,  could adversely affect our customers and our growth and revenues,  if
customers reduce their demand for transportation services.  Weakness in customer
demand for our services or in the general rate environment may also restrain our
ability to increase rates or obtain fuel surcharges.  It is also not possible to
predict the medium or long term effects of the  September  11,  2001,  terrorist
attacks and  subsequent  events on the economy or on customer  confidence in the
United States, or the impact, if any, on our future results of operations.

                                       16

The following issues and  uncertainties,  among others,  should be considered in
evaluating our growth outlook:

BUSINESS  UNCERTAINTIES.  We have  experienced  significant  and rapid growth in
revenue and profits since the inception of our business in 1990. There can be no
assurance  that our business will  continue to grow in a similar  fashion in the
future or that we can  effectively  adapt our  management,  administrative,  and
operational  systems to respond to any future growth.  Further,  there can be no
assurance  that our operating  margins will not be adversely  affected by future
changes in and expansion of our business or by changes in economic conditions.

INSURANCE.  Our future  insurance and claims  expenses  might exceed  historical
levels, which could reduce our earnings.  We currently self-insure for a portion
of our claims exposure resulting from cargo loss,  personal injury, and property
damage,  combined up to $1,750,000  per  occurrence.  Our worker's  compensation
self-insurance level remains at a maximum of $500,000,  and our health insurance
self-insurance  level is $100,000 per person per year.  If the number of claims,
or severity of claims,  for which we are self-insured  increases,  our operating
results could be adversely  affected.  Also, we maintain insurance with licensed
insurance  companies above the amounts for which we  self-insure.  After several
years of aggressive  pricing,  insurance carriers have raised premiums which has
increased our insurance and claims expense.  The terrorist  attacks of September
11, 2001, in the United States,  and subsequent events, may result in additional
increases in our insurance expenses. If these expenses continue to increase, and
we are unable to offset the increase  with higher  freight  rates,  our earnings
could be materially affected.

REVENUE EQUIPMENT. Our growth has been made possible through the addition of new
revenue  equipment.  Difficulty in financing or obtaining new revenue  equipment
(for  example,  delivery  delays from  manufacturers  or the  unavailability  of
independent contractors) could restrict future growth.

In the past we have acquired new tractors and trailers at favorable prices,  and
have entered into agreements with the  manufacturers  to repurchase the tractors
from us at agreed  prices.  Current  developments  in the secondary  tractor and
trailer  resale  market have  resulted in a large  supply of used  tractors  and
trailers on the market.  This supply of tractors has  depressed the market value
of used  equipment  to  levels  significantly  below  the  prices  at which  the
manufacturers  have  agreed  to  repurchase  the  equipment.  Accordingly,  some
manufacturers  may refuse or be financially  unable to keep their commitments to
repurchase   equipment  according  to  their  repurchase   agreement  terms.  We
understand  that  some   manufacturers  have  communicated  to  customers  their
intention  to  significantly  increase  new  equipment  prices and  eliminate or
sharply reduce the price of repurchase  commitments.  See Part II, Item 1, Legal
Proceedings,  below for a  discussion  of the  resolution  of our  dispute  with
Freightliner, L.L.C.

Our business plan and our current contract take into account new equipment price
increases due to engine design  requirements  imposed effective October 1, 2002,
by the Environmental Protection Agency. If new equipment prices were to increase
more  than  anticipated,  or if the  price  of  repurchase  commitments  were to
decrease,  we may be required to increase our  depreciation and financing costs,
write down the value of used equipment,  or retain some of our equipment longer,
with the  resulting  increase in operating  expense.  If our  resulting  cost of
revenue equipment were to increase,  or prices of used revenue equipment were to
decline,  and if we were unable to offset these increases through rate increases
or cost savings, our operating costs could increase,  which could materially and
adversely affect our earnings and cash flows.

                                       17

REGIONAL  OPERATIONS.  Currently,  a  significant  portion  of our  business  is
concentrated  in the  Arizona  and  California  markets  and a general  economic
decline or a natural  disaster in either of these  markets could have a material
adverse effect on our growth and profitability. If we are successful in deriving
a more  significant  portion of our revenues from markets in the Midwest,  South
Central, Southeastern and Southern regions and on the East Coast, our growth and
profitability  could  be  materially  adversely  affected  by  general  economic
declines or natural disasters in those markets.

In  addition  to our  headquarters  in  Phoenix,  Arizona,  we have  established
regional  operations in Katy, Texas;  Indianapolis,  Indiana;  Charlotte,  North
Carolina; Gulfport,  Mississippi; Salt Lake City, Utah; Kansas City, Kansas; and
Portland,  Oregon in order to serve  markets in these  regions.  These  regional
operations require the commitment of additional revenue equipment and personnel,
as well as management  resources,  for future development.  Should the growth of
our regional  operations  throughout  the United  States slow or  stagnate,  the
results  of our  operations  could  be  adversely  affected.  We  may  encounter
operating  conditions in these new markets that differ  substantially from those
previously  experienced  in our western United States  markets.  There can be no
assurance  that our  regional  operating  strategy,  as  employed in the western
United States,  can be duplicated  successfully in the other areas of the United
States  or that it  will  not  take  longer  than  expected  or  require  a more
substantial financial commitment than anticipated.

TECHNOLOGY.  We utilize  Terion's  trailer-tracking  technology  to assist  with
monitoring  the  majority  of our  trailers.  Terion  has filed  for  bankruptcy
protection  and is attempting a  reorganization  under Chapter 11 of the Federal
Bankruptcy  Code. If Terion ceases  operations or abandons that  technology,  we
would be required to incur the cost of  replacing  that  technology  or could be
forced  to  operate  without  this  trailer-tracking   technology,  which  could
adversely  affect our trailer  utilization  and our ability to assess  detention
charges.

INVESTMENTS. We have invested $200,000 and loaned approximately $2.26 million to
Concentrek, Inc., ("Concentrek") a transportation logistics company on a secured
basis.  We own  approximately  17% of Concentrek,  and the remainder is owned by
members of the Knight family and Concentrek's  management.  Randy Knight,  Kevin
Knight,  Gary Knight and Keith Knight have personally  guaranteed  $2,100,000 of
our loan to Concentrek.  If Concentrek's financial position does not continue to
improve,  and if it is unable to raise additional capital, we could be forced to
write down all or part of that investment.

DRIVER  RETENTION.  Difficulty  in attracting  or retaining  qualified  drivers,
including independent contractors,  or a downturn in customer business cycles or
shipping  demands  also could have a material  adverse  effect on our growth and
profitability.  If a shortage of drivers  should  occur in the future,  or if we
were unable to continue to attract and contract with independent contractors, we
could be  required  to adjust  our  driver  compensation  package,  which  could
adversely affect our profitability if not offset by a corresponding  increase in
rates.

SEASONALITY.  In the transportation  industry,  results of operations frequently
show a seasonal  pattern.  Seasonal  variations  may result from weather or from
customer's  reduced shipments after the busy winter holiday season. To date, our
revenue  has not shown any  significant  seasonal  pattern.  Because  we operate
primarily in Arizona,  California and the western United States,  winter weather
conditions have generally not adversely affected our business.  The expansion of
our  operations in the Midwest,  Rocky Mountain  region the East Coast,  and the
Southeast and Gulf Coast regions, could expose us to greater operating variances

                                       18

due to  seasonal  weather  in  these  regions.  Shortage  of  energy  issues  in
California and elsewhere in the Western United States could result in an adverse
effect on our  operations  and demand for our services  should  these  shortages
continue  or  increase.  This risk may exist in the  other  regions  in which we
operate, depending upon future changes in the energy industry.

INFLATION. Many of our operating expenses,  including fuel costs and fuel taxes,
are  sensitive  to the  effects  of  inflation,  which  could  result  in higher
operating  costs.  During  2000,  2001 and the  first  six  months  of 2002,  we
experienced  fluctuations  in fuel  costs,  as a  result  of  conditions  in the
petroleum  industry.  We have also periodically  experienced some wage increases
for  drivers.  Increases in fuel costs and driver  compensation  are expected to
continue during 2002 and may affect our operating income,  unless we are able to
pass  those  increased  costs  to  customers  through  rate  increases  or  fuel
surcharges. We have initiated an aggressive program to obtain rate increases and
fuel  surcharges  from customers in order to cover  increased costs due to these
increases in fuel prices,  driver  compensation and other expenses and have been
successful in implementing some fuel surcharges.  Competitive  conditions in the
transportation   industry,   including  fluctuating  demand  for  transportation
services,  could limit our ability to continue to obtain rate  increases or fuel
surcharge.

For other  risks and  uncertainties  that might  affect  our future  operations,
please  review  Part  II of our  Annual  Report  on  Form  10-K -  "MANAGEMENT'S
DISCUSSION  AND ANALYSIS OF  FINANCIAL  CONDITIONS  AND RESULTS OF  OPERATIONS -
FACTORS THAT MAY AFFECT FUTURE RESULTS."

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest  rate on debt and
from changes in commodity prices.  Under Financial  Accounting Reporting Release
Number 48, we are required to disclose  information  concerning market risk with
respect to foreign exchange rates, interest rates, and commodity prices. We have
elected to make such disclosures, to the extent applicable,  using a sensitivity
analysis approach, based on hypothetical changes in interest rates and commodity
prices.

Except as described below, we have not had occasion to use derivative  financial
instruments  for  risk  management  purposes  and do not  use  them  for  either
speculation  or  tracking.  Because our  operations  are  confined to the United
States, we are not subject to foreign currency risk.

INTEREST RATE RISK. We are subject to interest rate risk to the extent we borrow
against  our  line of  credit  or  incur  debt  in the  acquisition  of  revenue
equipment. We attempt to manage our interest rate risk by managing the amount of
debt we carry.  We have not issued debt  instruments.  An increase in short-term
interest rates could have a material  adverse effect on our financial  condition
if our debt levels increase and if the interest rate increases are not offset by
freight rate  increases or other  items.  We have entered into an interest  rate
swap agreement with our primary lender to better manage cash flow.

Under this swap  agreement a one- percent (1%)  increase or decrease in interest
rates would result in a  corresponding  increase or decrease in annual  interest
expense of approximately $122,000.  Management does not foresee or expect in the
near  future  any   significant   changes  in  our  exposure  to  interest  rate
fluctuations  or in how that  exposure  is  managed  by us.  We have not  issued
corporate debt instruments.

COMMODITY  PRICE RISK. We are also subject to commodity  price risk with respect
to purchases of fuel. Prices and availability of petroleum  products are subject
to  political,  economic  and market  factors  that are  generally  outside  our
control.  Because our  operations  are dependent  upon diesel fuel,  significant
increases in diesel fuel costs could materially and adversely affect our results
of operations and financial  condition if we are unable to pass increased  costs
on to customers through rate increases or fuel surcharges. Historically, we have
sought  to  recover  a portion  of our  short-term  fuel  price  increases  from
customers through fuel surcharges.  Fuel surcharges that can be collected do not
always  offset the  increase in the cost of diesel  fuel.  For the three  months
ended June 30, 2002, fuel expense,  net of fuel surcharge,  represented 16.2% of
our total operating expenses,  net of fuel surcharge,  compared to 15.1% for the
same period ending in 2001.

                                       19

In August and  September  2000,  we entered into two  agreements to obtain price
protection to reduce a portion of our exposure to fuel price fluctuations. Under
these agreements,  we purchased 1,000,000 gallons of diesel fuel, per month, for
a period of six months from  October 1, 2000 through  March 31, 2001.  If during
the 48 months following March 31, 2001, the price of heating oil on the New York
Mercantile  Exchange (NY MX HO) falls below $.58 per gallon, we may be obligated
to pay, for a maximum of 12 different  months as selected by the contract holder
during the  48-month  period  beginning  after March 31,  2001,  the  difference
between  $.58 per  gallon  and NY MX HO  average  price for the  minimum  volume
commitment.  In July  2001,  we  entered  into a similar  agreement.  Under this
agreement,  we purchased 750,000 gallons of diesel fuel, per month, for a period
of six months  beginning  September 1, 2001 through February 28, 2002. If during
the 12-month  period  commencing  January 2005 through  December 2005, the price
index  discussed  above falls below $.58 per gallon,  we may be obligated to pay
the difference between $.58 and the stated index.  Management estimates that any
potential  future payment under any of these  agreements  would be less than the
amount of our savings for reduced fuel costs. For example,  management estimates
that a further  reduction of $0.10 in the NY MX HO average price would result in
a net  savings,  after  making a payment  on this  agreement,  to our total fuel
expenses of approximately $1.9 million. Future increases in the NY MX HO average
price would  result in us not having to make  payments  under these  agreements.
Management's  current valuation of the fuel purchase agreements  indicates there
was no  material  impact  upon  adoption  of  SFAS  No.  133 on our  results  of
operations and financial position,  and we have valued these items at fair value
in the accompanying June 30, 2002, consolidated financial statements.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The  Company  is a party to  ordinary,  routine  litigation  and  administrative
proceedings  incidental to its business.  These  proceedings  primarily  involve
personnel matters,  including Equal Employment  Opportunity  Commission ("EEOC")
claims  and  claims for  personal  injury or  property  damage  incurred  in the
transportation of freight.  The Company maintains insurance to cover liabilities
arising from the transportation of freight for amounts in excess of self-insured
retentions.  It  is  the  Company's  policy  to  comply  with  applicable  equal
employment  opportunity laws and the Company  periodically  reviews its policies
and practices for equal employment opportunity compliance.

On July 31, 2002, we reached a resolution of our litigation  with  Freightliner,
L.L.C.   ("Freightliner")   through  successful  mediation.  We  initiated  this
litigation to protect our contractual and other rights  concerning new equipment
purchase prices and tractor  repurchase  commitments made to us by Freightliner.
We are  pleased  to put this  conflict  behind us and hope to develop a positive
working relationship with Freightliner in the near future.

ITEM 2. CHANGES IN SECURITIES

     Not Applicable

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not Applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not Applicable

                                       20

ITEM 5. OTHER INFORMATION

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits required by Item 601 of Regulation S-K

     Exhibit No.         Description
     -----------         -----------
     Exhibit 3           Instruments defining the rights of security holders,
                         including indentures

                  (3.1)  Restated Articles of Incorporation of the Company
                         (Incorporated by reference to Exhibit 3.1 to the
                         Company's Registration Statement on Form S-1. No
                         33-83534.)

                  (3.2)  Amended and Restated Bylaws of the Company
                         (Incorporated by reference to Exhibit 3.2 to the
                         Company's report on Form 10-K for the period ending
                         December 31, 1996.)

     Exhibit 4           Instruments defining the rights of security holders,
                         including indentures

                  (4.1)  Articles 4, 10 and 11 of the Restated Articles of
                         Incorporation of the Company. (Incorporated by
                         reference to Exhibit 3.1 to the Company's Report on
                         Form 10-K for the fiscal year ended December 31, 1994.)

                  (4.2)  Sections 2 and 5 of the Amended and Restated Bylaws of
                         the Company. (Incorporated by reference to Exhibit 3.2
                         to the Company's Report on Form 10-K for the fiscal
                         year ended December 31, 1995.)

     Exhibit 11          Schedule of Computation of Net Income Per Share
                         (Incorporated by reference from Note 2, Net Income Per
                         Share, in the Notes To Condensed Consolidated Financial
                         Statements on Form 10-Q, for the quarter ended June 30,
                         2002.)

     (b)  Reports on Form 8-K

          Form 8-K filed May 3,2002,  announcing change in Company's  certifying
          accountant.


                                       21

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        KNIGHT TRANSPORTATION, INC.


Date: August 9, 2002                    By: /s/ Kevin P. Knight
                                            ------------------------------------
                                            Kevin P. Knight
                                            Chief Executive Officer


Date: August 9, 2002                    By: /s/ Timothy Kohl
                                            ------------------------------------
                                            Timothy Kohl
                                            Chief Financial Officer and
                                            Principal Financial Officer

                                       22

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   EXHIBITS TO
                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                     For the quarterly period ended June 30,
                        2002 Commission File No. 0-24946




















                                       23

                           KNIGHT TRANSPORTATION, INC.

                         INDEX TO EXHIBITS TO FORM 10-Q

                                                                 Sequentially
Exhibit No.         Description                                Numbered Pages(1)
- -----------         -----------                                -----------------

Exhibit 4           Instruments defining the rights of
                    security holders, including indentures

              (a)   Articles 4, 10 and 11 of the Restated
                    Articles of Incorporation of the Company.
                    (Incorporated by reference to Exhibit
                    3.1 to the Company's Report on Form 10-K
                    for the fiscal year ended December 31, 1994.)

              (b)   Sections 2 and 5 of the Amended and Restated
                    By-laws of the Company. (Incorporated by
                    reference to Exhibit 3.2 to the Company's
                    Report on Form 10-K for the fiscal year
                    ended December 31, 1995.)

(1)  The  page  numbers  where  exhibits  (other  than  those   incorporated  by
     reference) may be found are indicated only on the manually signed report.

                                       24