UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)
  [X}  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.
For the Quarterly Period Ended September 30, 2003

                                       or

  [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934.
For the transition period from             to

Commission File Number: 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.

                         X  Yes        No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).  [X] Yes   [ ] No

The number of shares  outstanding of registrant's  Common Stock, par value $0.01
per share, as of October 16, 2003 was 37,430,866 shares.



                           KNIGHT TRANSPORTATION, INC.

                                      INDEX

PART I - FINANCIAL INFORMATION                                                                       Page Number
                                                                                                   
Item 1.            Financial Statements

                   Condensed Consolidated Balance Sheets as of September 30, 2003                         1
                     and December 31, 2002

                   Condensed Consolidated Statements of Income for the Three                              3
                     Months and Nine Months Ended September 30, 2003
                     and September 30, 2002

                   Condensed Consolidated Statements of Cash Flows for the Nine                           4
                     Months ended September 30, 2003 and September 30, 2002

                   Notes to Condensed Consolidated Financial Statements                                   6

Item 2.            Management's Discussion and Analysis of Financial Condition                           10
                   And Results of Operations

Item 3.            Quantitative and Qualitative Disclosures about Market Risk                            18

Item 4.            Controls and Procedures                                                               18

Part II - OTHER INFORMATION

Item 1.            Legal Proceedings                                                                     20

Item 2.            Changes in Securities and Use of Proceeds                                             20

Item 3             Defaults Upon Senior Securities                                                       20

Item 4.            Submission of Matters to a Vote of Security Holders                                   20

Item 5.            Other Information                                                                     20

Item 6.            Exhibits and Reports on Form 8-K                                                      20

Signatures                                                                                               23



Part I - Financial Information

Item 1.  Financial Statements

                                            KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

                                                Condensed Consolidated Balance Sheets
                                                           (In thousands)

                                                     September 30, 2003              December 31, 2002
                                                   ------------------------        -----------------------
                                                         (unaudited)
                                                                             
ASSETS

CURRENT ASSETS:

   Cash and cash equivalents                       $           44,814              $          36,198
   Accounts receivable, net of allowance
     for doubtful accounts of $1,740 and
     $1,325, respectively                                      40,914                         40,356
   Notes receivable, net                                          628                            956
   Inventories and supplies                                     1,348                          1,345
   Prepaid expenses                                             9,103                          9,653
   Deferred tax asset                                           4,838                          3,428
                                                   ------------------------        -----------------------

         Total current assets                                 101,645                         91,936
                                                   ------------------------        -----------------------

PROPERTY AND EQUIPMENT:
   Land and improvements                                       13,860                         14,158
   Buildings and improvements                                  14,579                         12,898
   Furniture and fixtures                                       6,329                          6,134
   Shop and service equipment                                   2,351                          1,975
   Revenue equipment                                          249,152                        211,184
   Leasehold improvements                                       1,303                          1,049
                                                   ------------------------        -----------------------

                                                              287,574                        247,398
   Less:  Accumulated depreciation
           and amortization                                   (79,211)                       (70,505)
                                                   ------------------------        -----------------------

PROPERTY AND EQUIPMENT, net                                   208,363                        176,893
                                                   ------------------------        -----------------------
NOTES RECEIVABLE - long-term, net                                 524                          1,487
                                                   ------------------------        -----------------------
OTHER ASSETS                                                   12,578                         13,524
                                                   ------------------------        -----------------------

                                                   $          323,110              $         283,840
                                                   ========================        =======================


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

                                        1



                                            KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

                                          Condensed Consolidated Balance Sheets (continued)
                                                  (In thousands, except par values)

                                                                        September 30, 2003            December 31, 2002
                                                                      ------------------------    --------------------------
                                                                            (unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                                            
CURRENT LIABILITIES:

    Accounts payable                                                               $ 9,555                        $ 7,749
    Accrued payroll                                                                  3,909                          3,571
    Accrued liabilities                                                              5,287                          3,227
    Current portion of long-term debt                                                    -                          2,715
    Claims accrual                                                                  13,541                         10,419
                                                                      ------------------------    ---------------------------

    Total current liabilities                                                       32,292                         27,681

LINE OF CREDIT                                                                      12,200                         12,200
DEFERRED INCOME TAXES                                                               49,934                         44,302
                                                                      ------------------------    ---------------------------
    Total liabilities                                                               94,426                         84,183
                                                                      ------------------------    ---------------------------

COMMITMENTS AND CONTINGENCIES (note 8)

SHAREHOLDERS' EQUITY:
     Preferred stock, $0.01 par value;
        authorized 50,000 shares,
        none issued and outstanding                                                      -                              -
     Common stock, $0.01 par value;
        authorized 100,000 shares;
        37,401 and 37,145 shares issued
        and outstanding at September 30, 2003
        and December 31, 2002, respectively                                            374                            371
        Additional paid-in capital                                                  76,806                         73,521
        Retained earnings                                                          151,638                        126,148
        Accumulated other comprehensive loss                                         (134)                          (383)
                                                                      ------------------------    ---------------------------

        Total shareholders' equity                                                 228,684                        199,657
                                                                      ------------------------    ---------------------------

                                                                                  $323,110                       $283,840
                                                                      ========================    ===========================

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

                                        2




                                          KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
                                     Condensed Consolidated Statements of Income (unaudited)
                                              (In thousands, except per share data)

                                                           Three Months Ended                        Nine Months Ended
                                                              September 30,                            September 30,
                                                      2003                 2002                 2003                  2002
                                                      ----                 ----                 ----                  ----
                                                                                                    
REVENUE
  Revenue, before fuel surcharge                      $84,445            $72,777             $239,786              $202,974
   Fuel surcharge                                       3,194              1,785               10,171                 3,756
                                                 ----------------    -----------------    ------------------    ------------------

      Total revenue                                    87,639             74,562              249,957               206,730
                                                 ----------------    -----------------    ------------------    ------------------
OPERATING EXPENSES:
      Salaries, wages and benefits                     26,908             24,506               77,097                68,706
      Fuel                                             14,277             11,633               42,142                31,343
      Operations and maintenance                        5,444              4,743               15,165                12,228
      Insurance and claims                              4,136              3,196               12,237                 8,870
      Operating taxes and licenses                      2,342              1,921                6,758                 5,705
      Communications                                      769                577                2,236                 1,750
      Depreciation and amortization                     7,744              5,793               21,796                16,672
      Lease expense - revenue
       equipment                                        1,920              2,304                5,843                 6,904
      Purchased transportation                          6,465              5,607               18,519                16,134
      Miscellaneous operating
       expenses                                         1,816              1,784                5,535                 5,195
                                                 ----------------    -----------------    ------------------    ------------------
                                                       71,821             62,064              207,328               173,507
                                                 ----------------    -----------------    ------------------    ------------------

      Income from operations                           15,818             12,498               42,629                33,223
                                                 ----------------    -----------------    ------------------    ------------------

OTHER INCOME (EXPENSE):
     Interest income                                      110                276                  419                   731
     Interest expense                                    (165)              (237)                (548)                 (750)
                                                 ----------------    -----------------    ------------------    ------------------

                                                          (55)                39                 (129)                  (19)
                                                 ----------------    -----------------    ------------------    ------------------

      Income before taxes                              15,763             12,537               42,500                33,204

INCOME TAXES                                           (6,300)            (5,100)             (17,010)              (13,510)
                                                 ----------------    -----------------    ------------------    ------------------

      Net income                                       $9,463             $7,437             $ 25,490              $ 19,694
                                                 ================    =================    ==================    ==================

Net income per common share and
common share equivalent:
                      Basic                             $0.25              $0.20                $0.68                 $0.53
                                                 ================    =================    ==================    ==================
                      Diluted                           $0.25              $0.20                $0.67                 $0.52
                                                 ================    =================    ==================    ==================

Weighted  average number of common
shares and common share equivalents
outstanding:
                      Basic                            37,388             37,047               37,305                36,981
                                                 ================    =================    ==================    ==================
                      Diluted                          38,335             38,001               38,230                38,059
                                                 ================    =================    ==================    ==================

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

                                        3



                                            KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
                                     Condensed Consolidated Statements of Cash Flows (unaudited)
                                                           (In thousands)

                                                                                          Nine Months Ended
                                                                                            September 30,

                                                                                    2003                      2002
                                                                                    ----                      ----
CASH FLOWS FROM OPERATING ACTIVITIES
                                                                                                  
Net income                                                                         $   25,490                 $    19,694
Adjustments to reconcile net income to net cash
Provided by operating activities:
       Depreciation and amortization                                                   21,796                      16,672
       Non-cash compensation expense for issuance of                                       23                          --
        stock to certain members of board of directors
       Allowance for doubtful accounts                                                    401                         330
       Interest rate swap agreement - fair value change                                   249                         264
       Tax benefit from exercise of stock options                                       1,638                         974
       Deferred income taxes                                                            4,222                       3,705
Changes in assets and liabilities:
       Increase in trade receivables                                                     (973)                     (5,802)
       (Increase) decrease in inventories and supplies                                     (3)                        728
       Decrease (increase) in prepaid expenses                                            550                      (1,153)
       Increase in other assets                                                          (441)                         --
       Increase in accounts payable                                                     1,604                       1,256
       Increase in accrued liabilities and claims accrual                               5,520                       6,428
                                                                            ---------------------       ------------------

       Net cash provided by operating activities                                       60,076                      43,096
                                                                            ---------------------       ------------------

CASH FLOW FROM INVESTING ACTIVITIES:

       Purchase of property and equipment, net                                        (53,064)                    (23,297)
       Investment in/advances to other companies                                         (213)                       (925)
       Cash received from advance to other company                                      1,600                           -
       Decrease in notes receivable, net                                                1,305                         683
                                                                            ---------------------       ------------------

       Net cash used in investing activities                                          (50,372)                    (23,539)
                                                                            ---------------------       ------------------

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

                                        4




                                            KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
                               Condensed Consolidated Statements of Cash Flows (unaudited) (continued)
                                                           (In thousands)

                                                                                     Nine Months Ended
                                                                                       September 30,

                                                                             2003                          2002
                                                                             ----                          ----
                                                                                            
CASH FLOW FROM FINANCING ACTIVITIES:

     Payments on long-term debt                                                (2,715)                       (2,614)
     Proceeds from exercise of stock options                                    1,627                         1,624
                                                                     ----------------------        ---------------------

     Net cash used in financing activities                                     (1,088)                         (990)
                                                                     ----------------------        ---------------------

NET INCREASE IN CASH AND
     CASH EQUIVALENTS                                                           8,616                        18,567
CASH AND CASH EQUIVALENTS,
     Beginning of period                                                       36,198                        24,136
                                                                     ----------------------        ---------------------

CASH AND CASH EQUIVALENTS, end of period                                   $   44,814                    $   42,703
                                                                     ======================        =====================


SUPPLEMENTAL DISCLOSURES:

     Noncash investing and financing transactions:
       Equipment acquired in accounts payable                              $    4,476                    $      -0-

     Cash Flow Information:
       Income taxes paid                                                   $    9,911                     $   5,700
       Interest paid                                                              297                           589



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

                                        5


                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Financial Information

The  accompanying   condensed  consolidated  financial  statements  include  the
accounts of Knight Transportation,  Inc., and its wholly owned subsidiaries (the
Company).  All  material  inter-company  balances  and  transactions  have  been
eliminated in consolidation.

The condensed  consolidated  financial  statements included herein are unaudited
and 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, 2002.

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.  Stock Based Compensation

Stock-Based   Compensation  -  At  September  30,  2003,  the  Company  had  one
stock-based    employee    compensation    plan.   The   Company   applies   the
intrinsic-value-based  method of accounting  prescribed by Accounting Principles
Board (APB)  Opinion No. 25,  "Accounting  for Stock Issued to  Employees,"  and
related  interpretations  including Financial  Accounting Standards Board (FASB)
Interpretation  No. 44,  "Accounting  for Certain  Transactions  involving Stock
Compensation, an interpretation of APB Opinion No. 25," issued in March 2000, to
account  for its  fixed-plan  stock  options.  Under this  method,  compensation
expense is recorded on the date of grant only if the current market price of the
underlying   stock  exceeded  the  exercise  price.   No  stock-based   employee
compensation  cost is reflected in net income,  as all options granted under the
plan had an exercise  price equal to the market value of the  underlying  common
stock on the  date of the  grant.  SFAS No.  123,  "Accounting  for  Stock-Based
Compensation," as amended by Statement of Financial  Accounting Standards (SFAS)
No. 148, "Accounting for Stock-Based  Compensation - Transition and Disclosure,"
established  accounting and  disclosure  requirements  using a  fair-value-based
method of accounting for stock-based employee  compensation plans. As allowed by
SFAS  No.   123,   the   Company   has   elected  to   continue   to  apply  the
intrinsic-value-based method of accounting described above, and has adopted only
the disclosure requirements of SFAS No. 123. The following table illustrates the
effect on net  income if the  fair-value-based  method  had been  applied to all
outstanding  and  unvested  awards for the three and  nine-month  periods  ended
September 30, 2003 and 2002 (in thousands, except per share data):

                                                   Three Months Ended                      Nine Months Ended
                                                      September 30,                          September 30,

                                                2003                2002                2003               2002
                                                ----                ----                ----               ----
                                                                                          
Net income, as reported                            $ 9,463             $ 7,437           $ 25,490            $ 19,694

Deduct total stock-based
compensation expense determined
under fair-value based method for
all rewards, net of tax                              (256)               (165)              (767)               (494)
                                           ----------------    ----------------    ---------------    ----------------

Pro forma net income                               $ 9,207             $ 7,272          $  24,723            $ 19,200
                                           ================    ================    ===============    ================

  Diluted earnings per share:
                As reported                          $0.25               $0.20              $0.67               $0.52
                                           ================    ================    ===============    ================
                Pro forma                            $0.24               $0.19              $0.65               $0.50
                                           ================    ================    ===============    ================

The fair value of each option  grant is estimated on the date of the grant using
the  Black-Scholes  option  pricing  model with the following  weighted  average
assumptions  used for grants in 2003:  risk free interest  rate 3.36%;  expected
life of six years;  expected  volatility of 51%; expected dividend yield rate of
zero;  and  expected  forfeitures  of  3.51%.  The  following  weighted  average
assumptions  were  used for  grants  in 2002:  risk free  interest  rate  3.36%;
expected life of six years;  expected volatility of 52%; expected dividend yield
rate of zero; and expected forfeitures of 3.92%.

                                       7

Note 3.  Net Income Per Share

A reconciliation  of the basic and diluted  earnings per share  computations for
the three  months  and nine  months  ended  September  30,  2003 and 2002 was as
follows: (in thousands, except per share data)

                                                   Three Months Ended                      Nine Months Ended
                                                      September 30,                          September 30,

                                                2003                2002                2003               2002
                                                ----                ----                ----               ----
                                                                                          
Weighted average common
  shares outstanding - Basic                        37,388              37,047             37,305              36,981

Effect of stock options                                947                 954                925               1,078
                                           ----------------    ----------------    ---------------    ----------------

Weighted average common
  share and common share
  equivalents outstanding -
  Diluted                                           38,335              38,001             38,230              38,059
                                           ================    ================    ===============    ================

Net income                                         $ 9,463             $ 7,437          $  25,490            $ 19,694
                                           ================    ================    ===============    ================

 Net income per common share
 and common share equivalent
            Basic                                    $0.25               $0.20              $0.68               $0.53
                                           ================    ================    ===============    ================
            Diluted                                  $0.25               $0.20              $0.67               $0.52
                                           ================    ================    ===============    ================

Note 4.  Comprehensive Income

Comprehensive  income for the three and nine-month  periods ended  September 30,
2003 and 2002 was as follows (in thousands):

                                                   Three Months Ended                      Nine Months Ended
                                                      September 30,                          September 30,

                                                2003                2002                2003               2002
                                                ----                ----                ----               ----
                                                                                          
Net Income                                          $9,463              $7,437            $25,490             $19,694

Other comprehensive income:
Interest rate swap agreement - fair
 market value adjustment                                82                  86                249                 263
                                           ----------------    ----------------    ---------------    ----------------

Comprehensive income                                $9,545              $7,523            $25,739             $19,957
                                           ================    ================    ===============    ================

Note 5.  Segment Information

Although we have fifteen  operating  divisions,  we have determined that we have
one reportable  segment.  Fourteen of the divisions are managed based on regions
in the United  States in which we operate.  Each of these  divisions 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  division  exhibits  similar  financial  performance,  including
average  revenue per mile and operating  ratio.  The  remaining

                                       8

division is not reported because it does not meet the materiality  thresholds in
SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
information".  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 6.  Derivative Instruments and Hedging Activities

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 assess, both at the hedge's inception and on an
ongoing basis, whether the derivatives that are used in hedging transactions are
effective in  offsetting  changes in fair values or cash flows of hedged  items.
When it is  determined  that a derivative is not effective as a hedge or that it
has  ceased  to  be  an  effective   hedge,  we  discontinue   hedge  accounting
prospectively.

In  August  and  September  2000,  and in  July  2001,  we  entered  into  three
agreements,  respectively,  which are designated as derivative contracts.  These
three contracts  relate to the price of heating oil on the New York  Merchantile
Exchange  ("NYMX") and were entered into in  connection  with volume diesel fuel
purchases between October 2000 and February 2002. The three agreements described
above are  stated  at their  fair  market  value in the  accompanying  condensed
consolidated financial statements.

During  2001,  we entered  into an  interest  rate swap  agreement  on the $12.2
million  outstanding on our 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 is  included  in other  comprehensive  income and is being  amortized  to
interest expense over the original 36-month term of the swap agreement.

Note 7.  Recently Adopted and to be Adopted Accounting Pronouncements

In June 2002,  the FASB issued SFAS No.  146,  "Accounting  for Exit or Disposal
Activities."  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,  recognition  of costs to
consolidate  facilities  or  relocate  employees  and  recognition  of costs for
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  adoption  of SFAS No.  146 did not  have a  material  impact  on our
consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure  Requirements for Guarantees,  Including  Indirect  Guarantees of
Indebtedness to Others,  an  interpretation of FASB Statements No. 5, 57 and 107
and a rescission of FASB Interpretation No. 34." This interpretation  elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under guarantees  issued.  This  interpretation
also  clarifies  that a guarantor is required to recognize at the inception of a
guarantee,  a liability  for the fair value of the  obligation  undertaken.  The
initial  recognition  and  measurement  provisions  of this  interpretation  are
applicable to guarantees issued or modified after December 31, 2002, and are not
expected to have a material effect on our consolidated financial statements. The
disclosure  requirements  are effective for financial  statements of interim and
annual  periods  ending  after  December  31,  2002.  The  application  of  this
interpretation  did not have a  material  effect on our  consolidated  financial
statements.

                                       9

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable   Interest   Entities,   an   interpretation   of  ARB  No.  51."  This
interpretation  addresses the consolidation by business  enterprises of variable
interest entities as defined in this interpretation. This interpretation applies
immediately to variable  interests in variable  interest  entities created after
January 31,  2003,  and to variable  interests  in  variable  interest  entities
obtained after January 31, 2003. For public enterprises with a variable interest
in  a  variable   interest   entity  created  before   February  l,  2003,  this
interpretation  applies to that  enterprise  no later than the  beginning of the
first interim or annual  reporting period beginning after December 15, 2003. The
application of this  interpretation is not expected to have a material effect on
our consolidated financial statements.

In April 2003,  the Financial  Accounting  Standards  Board issued SFAS No. 149,
"Amendment of Statement 133 on Derivative  Instruments and Hedging  Activities."
SFAS No.  149  amends and  clarifies  financial  accounting  and  reporting  for
derivative  instruments  embedded in other contracts and for hedging  activities
under  SFAS  No.  133,  "Accounting  for  Derivative   Instruments  and  Hedging
Activities."  It is effective for contracts  entered into or modified after June
30,  2003,  except  as stated  within  the  statement,  and  should  be  applied
prospectively.  The  adoption of SFAS No. 149 did not have a material  impact on
our consolidated financial statements.

On May 15, 2003, the Financial  Accounting  Standards Board issued SFAS No. 150,
"Accounting  for Certain  Financial  Instruments  with  Characteristics  of Both
Liabilities  and  Equity."  SFAS  No.  150  requires   issuers  to  classify  as
liabilities  (or assets in some  circumstances)  three  classes of  freestanding
financial  instruments that embody obligations for the issuer.  Generally,  SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003 and is otherwise  effective at the  beginning of the first  interim
period  beginning after June 15, 2003. We adopted the provisions of SFAS No. 150
on July 1, 2003. The adoption of SFAS No. 150 did not have a material  impact on
our consolidated financial statements.

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.

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Except for certain  historical  information  contained  herein,  this  Quarterly
Report on Form 10-Q contains  forward-looking  statements  within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve risks, assumptions and uncertainties which 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 in
forward-looking  statements.  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.

                                       10

Overview

We are a dry van  truckload  carrier  based in Phoenix,  Arizona.  We  transport
general  commodities  for  shippers  throughout  the  United  States,  generally
focusing  our  operations  on  short-to-medium  lengths  of haul  in our  eleven
operating centers.  Over the past five years we have achieved substantial growth
from $125.0 million in revenue, before fuel surcharge,  and $13.3 million in net
income in 1998 to $279.3 million in revenue,  before fuel  surcharge,  and $27.9
million in net income in 2002.  The main factors that affect our results are the
number of tractors we operate, our revenue per tractor (which includes primarily
our revenue per total mile and our number of miles per tractor), and our ability
to control our costs.

For the quarter ended  September 30, 2003, our revenue,  before fuel  surcharge,
increased  16.0% to $84.4  million  from $72.8  million for the same  quarter of
2002.  Net income  increased  28.4% to $9.5 million from $7.4  million,  and net
income per  diluted  share  increased  to $0.25  from  $0.20.  The main  factors
contributing to the improvement  were a 14.8% increase in average tractors and a
1.0% increase in revenue per tractor  versus the 2002  quarter.  We expanded our
business geographically and increased our volume in existing territories.  These
factors more than offset  higher costs of  insurance,  maintenance  and fuel. We
ended the quarter with $44.8  million in cash and $12.2  million in  borrowings.
Our shareholders' equity was $228.7 million.

Note Regarding Revenue and Expenses

Our total revenue for the three months ended  September  30, 2003,  increased to
$87.7  million  from $74.6  million for the same period in 2002.  Total  revenue
included  $3.2  million of fuel  surcharge  revenue in the 2003  period and $1.8
million of fuel surcharge  revenue in the 2002 period. In discussing our results
of operations we use revenue,  before fuel surcharge,  (and fuel expense, net of
surcharge),  because we believe that eliminating this sometimes  volatile source
of  revenue  affords  a more  consistent  basis for  comparing  our  results  of
operations from period to period. We also discuss the changes in our expenses as
a percentage of revenue,  before fuel  surcharge,  rather than  absolute  dollar
changes.  We do this  because we believe  the high  variable  cost nature of our
business  makes a comparison  of changes in expenses as a percentage  of revenue
more meaningful than absolute changes.

Results of Operations

Our revenue,  before fuel  surcharge,  for the nine months ended  September  30,
2003,  increased  by 18.1% to $240.0  million  from $203.0  million for the same
period in 2002. For the three months ended September 30, 2003,  revenue,  before
fuel  surcharge,  increased by 16.0% to $84.4 million from $72.8 million for the
same period in 2002.  The increase in revenue,  before fuel  surcharge,  for the
first nine months of 2003 resulted  primarily  from a 14.8%  increase in average
tractors as we expanded our  geographic  coverage and  increased our business in
existing territories, as well as a 1.0% increase in revenue per average tractor.
The increase in our revenue per tractor  primarily was attributable to increased
revenue  per mile  resulting  from our sales  efforts and a market that was more
receptive to rate increases.

Salaries,  wages and benefits decreased as a percentage of revenue,  before fuel
surcharge, to 32.2% for the nine months ended September 30, 2003, from 33.8% for
the same  period  in 2002.  For the  three  months  ended  September  30,  2003,
salaries,  wages and benefits decreased as a percentage of revenue,  before fuel
surcharge, to 31.9% from 33.7% for the same period in 2002. These decreases were
primarily the result of increased  revenue per mile, which increased the revenue
generated  per  tractor  without an  increase in the miles for which our drivers
were  compensated,  along  with  continued  efforts  at  improving  efficiencies
throughout  back-office  functions.  During this quarter we increased our driver
pay  scale by $0.01  per  mile,  and plan to make an  additional  $0.01 per mile
available for our higher performing  driving  associates by the end of the first
quarter  of  2004.  Our  cost of  health  insurance  and  worker's  compensation
programs,  which  are  included  in  salaries,  wages  and  benefits,   remained
relatively constant as a percentage of revenue between the two periods.

                                       11

Fuel  expense,  net of fuel  surcharge,  decreased as a  percentage  of revenue,
before fuel  surcharge,  to 13.3% for the nine months ended  September 30, 2003,
compared  to 13.6% for the same  period  in 2002.  For the  three  months  ended
September 30, 2003,  fuel expense,  net of fuel  surcharges,  as a percentage of
revenue,  before  fuel  surcharge,  decreased  to 13.1%  from 13.5% for the same
period in 2002.  These  decreases  were  primarily  the result of  increases  in
revenue per mile. Our independent contractors pay their own fuel costs.

Operations and maintenance expense increased as a percentage of revenue,  before
fuel  surcharge,  to 6.3% for the nine months ended September 30, 2003 from 6.0%
for the same period in 2002.  These  increases  were  primarily due to increased
tire expenses and increased  maintenance expenses due to the aging of our fleet.
For the three  months  ended  September  30, 2003,  operations  and  maintenance
expense remained  relatively  unchanged as a percentage of revenue,  before fuel
surcharge, at 6.4% compared to 6.5% for the same period in 2002.

Insurance and claims expense  increased as a percentage of revenue,  before fuel
surcharge,  to 5.1% for the nine months ended  September 30, 2003, from 4.4% for
the same  period  in 2002.  For the  three  months  ended  September  30,  2003,
insurance and claims expense  increased as a percentage of revenue,  before fuel
surcharge,  to 4.9% from 4.4% for the same period in 2002.  The primary  reasons
for these  increases  were  higher  insurance  premiums  and an  increase in our
self-insurance  retention  level.  Based on our current  insurance  policies and
experience,  and assuming the absence of any catastrophic  events, we expect our
insurance and claims expense to be approximately 4.7% to 5.3% of revenue, before
fuel surcharge, for the next several quarters.

Operating  taxes and  licenses  remained  constant as a  percentage  of revenue,
before fuel surcharge,  at 2.8% for the nine months ended September 30, 2003 and
for the same period in 2002.  For the three  months  ended  September  30, 2003,
operating taxes and licenses as a percentage of revenue,  before fuel surcharge,
increased slightly to 2.8% from 2.6% for the same period of 2002.

Communications  expense as a percentage of revenue,  before fuel surcharge,  for
both the nine  months  and three  months  ended  September  30,  2003,  remained
relatively  consistent  with the same  periods  in 2002,  at less  than  1.0% of
revenue.

Depreciation  and amortization  expense as a percentage of revenue,  before fuel
surcharge, increased to 9.1% for the nine month period ended September 30, 2003,
from 8.2% for the same period in 2002. For the three months ended  September 30,
2003, depreciation and amortization increased as a percentage of revenue, before
fuel surcharge,  to 9.2% from 8.0% for the same period in 2002.  These increases
were  primarily  related to an increase in the  percentage  of our company fleet
comprised of purchased  vehicles.  Our company fleet includes purchased vehicles
and vehicles  acquired under operating lease  agreements,  while our total fleet
includes  vehicles in our company  fleet and  vehicles  provided by  independent
contractors.

Lease  expense for  revenue  equipment  as  percentage  of revenue,  before fuel
surcharge,  was 2.4% for the nine months ended  September 30, 2003,  compared to
3.4% for the same period in 2002. For the three months ended September 30, 2003,
lease  expense for revenue  equipment  as a percentage  of revenue,  before fuel
surcharge,  was  2.3%  compared  to 3.2%  for the same  period  in  2002.  These
decreases  were  primarily  due to the increase in purchased  vehicles,  and the
associated decrease in operating lease vehicles,  as a percentage of our company
fleet, as discussed above.

Purchased  transportation  decreased  as a  percentage  of revenue,  before fuel
surcharge,  to 7.7% for the nine months ended  September 30, 2003, from 7.9% for
the same period in 2002.  This  decrease  was  primarily  due to the increase in
revenue per mile.  For the three months ended  September  30, 2003,  and for the
same period of 2002, purchased transportation as a percentage of revenue, before
fuel surcharge,  remained constant at 7.7%. Our independent contractors provided
9.8% of our total fleet at  September

                                       12

30, 2003, compared to 9.4% for the same period in 2002. Independent  contractors
pay their own operating expenses and are compensated at a fixed rate per mile.

Miscellaneous  operating expenses  decreased as a percentage of revenue,  before
fuel surcharge,  to 2.3% for the nine months ended September 30, 2003, from 2.6%
for the same period in 2002.  For the three  months  ended  September  30, 2003,
miscellaneous  operating  expenses  as a  percentage  of  revenue,  before  fuel
surcharge,  decreased  to 2.2%  from  2.5% for the same  period  in 2002.  These
decreases as a percentage  of revenue were  attributable  to higher  revenue per
mile, which more efficiently spread these costs over greater revenue.

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
nine months ended September 30, 2003, decreased to 82.2% from 83.6% for the same
period in 2002.  Our  operating  ratio  decreased  to 81.3% for the three months
ended September 30, 2003, compared to 82.8% for the same period in 2002.

For the nine months and three months  ended  September  30,  2003,  net interest
expense as a percentage of revenue, before fuel surcharge, remained at less than
0.1%, consistent with net interest expense levels for the same periods in 2002.

Income  taxes have been  provided  at the  statutory  federal  and state  rates,
adjusted for certain  permanent  differences  between  financial  statement  and
income tax  reporting.  Our effective tax rate declined from 40.7% to 40.0% from
the 2002  periods  to the 2003  periods as a result of  certain  tax  management
techniques.

As a result of the preceding changes, our net income as a percentage of revenue,
before fuel  surcharge,  was 10.6% for the nine months ended September 30, 2003,
compared  to 9.7% for the  same  period  in 2002.  For the  three  months  ended
September  30,  2003,  net  income  as a  percentage  of  revenue,  before  fuel
surcharge, was 11.2%, compared to 10.2% for the same period in 2002.

Liquidity and Capital Resources

The growth of our business has required  significant  investment  in new revenue
equipment.  Our  primary  sources  of  liquidity  have been  funds  provided  by
operations and our line of credit. Net cash provided by operating activities was
approximately $60.1 million for the first nine months of 2003, compared to $43.1
million for the corresponding period in 2002.

Net cash used in investing  activities  totaled $50.4 million for the first nine
months of 2003  compared  to $23.5  million  for the same  period  in 2002.  The
increase  was the result of an  increase  in  delivery  and  payment for revenue
equipment in the 2003 period,  compared to the 2002 period.  The 2002 period was
an unusually low period for us with respect to deliveries of revenue  equipment.
We expect our capital  expenditures,  net of  dispositions,  to be approximately
$10.0 million for the remainder of 2003.

Net  cash  used  in  financing  activities  remained  relatively  consistent  at
approximately  $1.1 million for the first nine months of 2003,  compared to $1.0
million  for the same  period  in 2002.  Net cash used in  financing  activities
during the first nine months of 2003 and 2002 was  primarily  for the payment of
interest on long-term debt.

We currently maintain a line of credit totaling $22.2 million. Historically this
line of credit had been maintained at $50.0 million. Due to our continued strong
positive  cash  position,  and in an effort to minimize bank fees, we feel it is
currently  only  necessary  to  maintain a line of credit  equal to our  current
outstanding  balance on that line, along with the letter of credit  subfacility.
We believe any  necessary  increase in our line of credit could be  accomplished
quickly as needed. We are obligated to comply with certain  financial  covenants
under  our line of  credit  and  were in  compliance  with  these  covenants  at

                                       13

September  30,  2003.  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  applicable
margin, or the prime rate. Borrowings under the line of credit amounted to $12.2
million at September 30, 2003. The line of credit expires in September 2005. The
line of credit  contains a letter of credit  subfacility  of $10.0  million that
directly reduces available borrowing. At September 30, 2003, the total amount of
issued but unused letters of credit was $7.7 million.

Through our  subsidiaries,  we have entered into lease agreements under which we
lease revenue  equipment.  The total amount  outstanding under these off-balance
sheet  operating  leases as of September 30, 2003,  was $8.7 million,  with $4.3
million due in the next 12 months.

As of September 30, 2003, we held $44.8 million in cash and cash equivalents. We
believe we will be able to finance our near term needs for working  capital,  as
well as  acquisitions  of revenue  equipment,  with cash flows from  operations,
borrowings  available  under our line of credit or other sources,  and operating
lease financing believed to be available to finance revenue  equipment.  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.

Critical Accounting Policies

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires that management make
a number of  assumptions  and  estimates  that  affect the  reported  amounts of
assets,  liabilities,   revenue  and  expenses  in  our  consolidated  financial
statements and accompanying  notes. Our critical  accounting  policies are those
that affect our financial statements  materially and involve a significant level
of judgment by management.  Our critical  accounting  policies  include  revenue
recognition,  insurance  and claims  reserves,  depreciation  and  amortization,
valuation of long-lived  assets and accounting for income taxes.  For additional
information,  please refer to the  discussion  of Critical  Accounting  Policies
contained  in our most  recent  annual  report on Form 10-K under  "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations -
Critical  Accounting  Policies  and  Estimates"  and  in  the  footnotes  to our
consolidated   financial   statements,   particularly  note  1.  There  were  no
significant  changes in our critical  accounting  policies during the first nine
months of 2003.

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 and claims costs, liability claims,
regulating   requirements  that  may  increase  costs  or  decrease  efficiency,
including revised hours-of-service requirements for drivers, the availability of
qualified drivers,  interest rates,  fluctuations in the resale value of revenue
equipment,  economic  and  customer  business  cycles and  shipping  demands are
factors over which we have little or no control.  Significant increases or rapid
fluctuations  in fuel prices,  interest  rates or  insurance  costs or liability
claims,  and increases in costs of  compliance  with, or decreases in efficiency
resulting  from,  regulatory  requirements,  to the  extent  not  offset by fuel
surcharges  and increases in freight rates,  as well as downward  changes in 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 effects of 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.

                                       14


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.  During 2002, we were self-insured for
personal injury and property damage  liability,  cargo liability,  collision and
comprehensive  up to a maximum  limit of $1.75 million per  occurrence.  We were
self-insured  for workers'  compensation  up to a maximum  limit of $500,000 per
occurrence.  In the  first  quarter  of  2003,  we  amended  our  self-insurance
retention  levels to a combined  $2.0 million for  personal  injury and property
damage  liability,  cargo  liability,  collision,   comprehensive  and  workers'
compensation   per   occurrence.   Our  maximum   self-retention   for  workers'
compensation  where a traffic  accident is not  involved  remains  $500,000  per
occurrence.  We maintain insurance with licensed  insurance  companies above the
amounts for which we self-insure. Following changes made in the first quarter of
2003, our insurance policies now provide for excess personal injury and property
damage  liability  up to a total of $35.0  million per  occurrence,  compared to
$30.0  million  per  occurrence  for  2002,  and  cargo  liability,   collision,
comprehensive and workers'  compensation coverage up to a total of $10.0 million
per  occurrence.  Our personal  injury and property damage policies also include
coverage for punitive damages where such coverage is allowed.

If the number of claims for which we are self-insured  increases,  our operating
results could be adversely  affected.  After several years of aggressive pricing
in the 1990s,  insurance  carriers raised premiums which increased our insurance
and claims  expense.  The terrorist  attacks of September 11, 2001,  exacerbated
already difficult  conditions in the United States insurance market resulting in
additional  increases in our insurance  expenses.  If these expenses continue to
increase,  or if the  severity  or  number  of claims  increase  or  exceed  our
self-retention  limits,  and if we are unable to offset the resulting  increases
with higher  freight  rates,  our earnings  could be  materially  and  adversely
affected.

Regulatory  Requirements.  The United States Department of  Transportation  (the
"DOT") and  various  state and local  agencies  exercise  broad  powers over our
business,  generally  governing such  activities as  authorization  to engage in
motor carrier operations,  safety, and insurance  requirements.  The DOT adopted
revised hours-of-service regulations for drivers on April 28, 2003. Although the
regulations  have been adopted,  motor carriers are not required to comply until
January 4, 2004. The revised regulations could reduce the potential or practical
amount of time that drivers can spend  driving,  if we are unable to limit their
other on-duty activities. These changes could adversely affect our profitability
if  shippers  are  unwilling  to assist in  managing  the  drivers'  non-driving
activities,  such as loading, unloading, and waiting. If the revised regulations
increase our costs and we cannot pass the additional  costs through to shippers,
our operating  results could be materially and adversely  affected.  Our company
drivers and independent contractors also must comply with the safety and fitness
regulations promulgated by the DOT, including those relating to drug and alcohol
testing.  We also may  become  subject  to new or more  restrictive  regulations
relating to ergonomics or other matters. In addition to direct regulation by the
DOT and other  agencies,  our  business  also is subject  to the  effects of new
tractor engine design requirements  implemented by the Environmental  Protection
Agency (the "EPA")  effective  October 1, 2002, which are discussed below in the
paragraph  entitled  "Revenue  Equipment."  Additional  changes  in the laws and
regulations  governing or impacting  our industry  could affect the economics of
the industry by requiring  changes in operating  practices or by influencing the
demand for, and the costs of providing, services to shippers.

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.

                                       15

In the past we have  acquired new  tractors  and  trailers at favorable  prices,
including  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 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 the terms of our agreements with them. Some  manufacturers have significantly
increased new equipment prices,  in part to meet new engine design  requirements
imposed,  effective  October 1, 2002, by the EPA, and have eliminated or sharply
reduced the price of repurchase commitments.

Our business plan takes into account new equipment price increases due to engine
design  requirements  imposed  effective  October  1,  2002,  by  the  EPA,  and
potentially lower equipment  repurchase  prices. If new equipment prices were to
increase more than anticipated,  or if the price of repurchase  commitments were
to decrease or fail to be honored by equipment manufacturers, we may be required
to increase our depreciation  and financing costs,  write down the value of used
equipment, and/or retain some of our equipment longer, with a resulting increase
in  maintenance  expenses.  If our resulting  cost of revenue  equipment were to
increase, and/or prices of used revenue equipment were to decline, our operating
costs could increase,  which could  materially and adversely affect our earnings
and cash flows, if we are unable to obtain  commensurate  rate increases or cost
savings.  Additionally,  the cost of  operating  new  engines is  expected to be
somewhat higher than the cost of operating older engines, due primarily to lower
anticipated fuel efficiency and higher anticipated  maintenance expenses. If our
fuel or maintenance expenses were to increase as a result of our use of the new,
EPA-compliant  engines,  and we are unable to offset  such  increases  with fuel
surcharges or higher freight rates, our results of operations would be adversely
affected.

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 materially
adverse  effect on our growth and  profitability.  If we do not  continue  to be
successful at deriving a more  significant  portion of our revenues from markets
throughout the United States,  our growth and profitability  could be materially
and  adversely  affected by general  economic  declines or natural  disasters in
those markets.

In  addition  to our  headquarters  in  Phoenix,  Arizona,  we have  established
regional  operating centers in Katy, Texas;  Indianapolis,  Indiana;  Charlotte,
North  Carolina;  Gulfport,  Mississippi;  Salt Lake City,  Utah;  Kansas  City,
Kansas;  Portland,  Oregon; Memphis,  Tennessee;  Atlanta,  Georgia; and Denver,
Colorado 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.

                                       16

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 2002 and the first nine months of 2003, we experienced
fluctuations in fuel costs, as a result of conditions in the petroleum industry.
We also have periodically experienced some wage increases for drivers. Increases
in fuel costs and driver  compensation could continue during 2003 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  a
substantial   amount  of  fuel   surcharges.   Competitive   conditions  in  the
transportation  industry,  including lower demand for  transportation  services,
could limit our ability to continue to obtain rate increases or fuel surcharges.

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 materially  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 further adjust our driver compensation package, which could
adversely affect our profitability if not offset by a corresponding  increase in
rates.  During this quarter we increased our driver pay scale by $0.01 per mile,
and plan to make an additional $0.01 available for our higher performing driving
associates by the end of the first quarter of 2004.

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 have
significant  operations in Arizona,  California  and the western  United States,
winter weather generally has not adversely affected our business.  The continued
expansion  of our  operations  throughout  the United  States could expose us to
greater operating  variances 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 availability of energy.

Technology.  We utilize  Terion's  trailer-tracking  technology  to assist  with
monitoring  the majority of our  trailers.  Terion has emerged from a Chapter 11
bankruptcy  and a plan of  reorganization  has been  approved by the  Bankruptcy
Court. If Terion ceases operations or abandons that trailer-tracking technology,
we would be required to incur the cost of replacing that  technology or could be
forced to operate  without this  technology,  which could  adversely  affect our
trailer utilization and our ability to assess detention charges.

In addition,  substantially  all of our tractors are equipped  with the Qualcomm
tracking  and  communications  system.  If the  Qualcomm  system were to fail or
experience  significant  disruptions in service,  our tractor  utilization might
suffer,  we may be forced to incur the expense of  implementing  a new satellite
tracking and  communications  system or to operate without this technology,  and
our driver turnover could increase as a result of dissatisfaction with the level
or quality of satellite communications service available in our trucks.

Stock Price Volatility. The market price of our common stock could be subject to
significant  fluctuations in response to certain factors,  such as variations in
our  anticipated or actual results of operations or in the anticipated or actual
results of operations of other companies in the transportation industry, changes
in conditions  affecting the economy generally,  including incidents of military
action or terrorism,  analyst reports,  general trends in the industry, sales of
common stock by insiders,  as well as other  factors  unrelated to our operating
results. Volatility in the market price of our common stock may prevent you from
being able to sell your shares at or above the price you paid for your shares.

                                       17

Investments.   We  have   invested  in  and/or  loaned  to   Concentrek,   Inc.,
("Concentrek")  a  transportation  logistics  company  $2.2 million on a secured
basis. Of this $2.2 million, $1.2 million is personally guaranteed by members of
the Knight family. We own approximately 17% of Concentrek,  and the remainder is
owned  by  members  of  the  Knight  family  and  Concentrek's  management.   If
Concentrek's financial position does not continue to improve, or if it is unable
to raise  additional  capital,  we could be forced to write  down all or part of
this investment.

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 rates on debt and
from  changes in  commodity  prices.  We have  determined  that  market risk for
interest  rates and currency  fluctuations  are not material  because of our low
level of debt and because all of our  transactions are in United States dollars.
We have not used  derivative  instruments  for  speculation or trading.  We have
elected  to  make  the  disclosures  concerning  commodity  price  risk  using a
sensitivity  analysis  approach,  based on  hypothetical  changes  in  commodity
prices.

Commodity  Price Risk.  We are 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.

We are party to three contracts  relating to the price of heating oil on the New
York  Merchantile  Exchange  ("NYMX")  that we entered into in  connection  with
volume  diesel fuel  purchases  between  October 2000 and February  2002. If the
price of heating oil on the NYMX falls below $0.58 per gallon we may be required
to pay the  difference  between  $0.58 and the index  price (1) for 1.0  million
gallons per month for any selected twelve months through March 31, 2005, and (2)
for  750,000  gallons  per month for the twelve  months of 2005.  At October 10,
2003, the price of heating oil on the NYMX was $0.89 for January 2004 contracts.
For each $0.05 per gallon  the price of heating  oil would fall below  $0.58 per
gallon during the relevant periods, our potential loss on the contracts would be
approximately  $1.0 million.  However,  our net savings on fuel costs from lower
contracts would be approximately $700,000 after taking the loss on the contracts
into consideration. We have valued these items at fair value in the accompanying
September 30, 2003, condensed consolidated financial statements.

Item 4.  Controls and Procedures

As required by Rule 13a-15 under the  Exchange  Act, the Company has carried out
an evaluation of the  effectiveness of the design and operation of the Company's
disclosure  controls and  procedures as of the end of the period covered by this
report.  This  evaluation  was  carried out under the  supervision  and with the
participation of the Company's management, including our Chief Executive Officer
and our Chief Financial Officer. Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer  concluded that our disclosure  controls and
procedures  were  effective as of the end of the period  covered by this report.
There were no changes in the Company's internal control over financial reporting
that occurred  during the quarter ended  September 30, 2003 that have materially
affected,  or that are  reasonably  likely to materially  affect,  the Company's
internal control over financial reporting.

                                       18

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that  information  required to be disclosed in the  Company's
reports  filed or  submitted  under the  Exchange  Act is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include controls and procedures designed to ensure that information  required to
be disclosed in Company  reports filed under the Exchange Act is accumulated and
communicated to management,  including the Company's Chief Executive  Officer as
appropriate, to allow timely decisions regarding disclosures.

The  Company  has   confidence   in  its  internal   controls  and   procedures.
Nevertheless,  the Company's  management,  including the Chief Executive Officer
and Chief Financial  Officer,  does not expect that our disclosure  controls and
procedures  or our  internal  controls  will  prevent all errors or  intentional
fraud. An internal  control  system,  no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of such
internal  controls are met.  Further,  the design of an internal  control system
must reflect the fact that there are resource  constraints,  and the benefits of
controls  must be  considered  relative to their costs.  Because of the inherent
limitations  in all internal  control  systems,  no  evaluation  of controls can
provide  absolute  assurance that all control issues and instances of fraud,  if
any, within the Company have been detected.




                                       19




PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

We are a party to ordinary,  routine litigation and  administrative  proceedings
incidental to our  business.  These  proceedings  primarily  involve  claims for
personal injury or property damage incurred in the transportation of freight and
for personnel matters.

Item 2.  Changes in Securities and Use of Proceeds

         Not Applicable

Item 3.  Defaults Upon Senior Securities

         Not Applicable

Item 4.  Submission of Matters to a Vote of Security Holders

         Not Applicable

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            Articles of Incorporation and Bylaws

                        (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.)

                      (3.1.1) First Amendment to Restated Articles of Incorporation of the
                              Company (Incorporated by reference to Exhibit 3.1.1 to the
                              Company's report on Form  10-K for the  period ending
                              December 31, 2000.)

                      (3.1.2) Second Amendment to Restated Articles of Incorporation of the
                              Company (Incorporated  by reference to Exhibit 3.1.2 to the
                              Company's Registration Statement on Form S-3 No.
                              333-72130.)

                        (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.)

                      (3.2.1) Amendment to Amended and Restated Bylaws of the Company
                              (Incorporated by reference to Exhibit 99.1 to the Company's
                              Current Report on Form 8-K dated February 6, 2003.)

                                       20

         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 3, Net Income Per Share, in the Notes To
                              Consolidated Financial Statements on Form 10-Q, for the quarter
                              ended September 30, 2003.)


         Exhibit 31           Section 302 Certifications

                       (31.1) Certification  pursuant to Item 601(b)(31) of Regulation S-K, as
                              adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                              2002, by Kevin P. Knight, the Company's Chief Executive
                              Officer

                       (31.2) Certification pursuant to Item 601(b)(31) of Regulation S-K,  as
                              adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                              2002, by Timothy M. Kohl, the Company's Chief Financial
                              Officer


         Exhibit 32           Section 906 Certifications

                       (32.1) Certification pursuant to 18 U.S.C. Section 1350, as adopted
                              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by
                              Kevin P. Knight, the Company's Chief Executive Officer

                       (32.2) Certification pursuant to 18 U.S.C. Section 1350, as adopted
                              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by
                              Timothy M. Kohl, the Company's Chief Financial Officer

         (b)                  Reports on Form 8-K

                              During the quarter ended September 30, 2003, the Company
          filed with, or furnished to, the Securities and Exchange Commission (the  "Commission")
          the following Current Reports on Form 8-K:

                                       21


          Current Report on Form 8-K dated July 16, 2003 (furnished to the Commission on
          July 17, 2003) regarding the issuance of a press release to report the Company's
          financial results for the quarter and six months ended June 30, 2003; and

          Current Report on Form 8-K dated September 19, 2003 (filed with the Commission on
          September 23, 2003) regarding the appointment of Mr. Michael Garnreiter to the
          Company's Board of Directors, as a Class III director.





                                       22




                                   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: October 31, 2003   By: /s/ Kevin P. Knight
                            -----------------------------------
                           Kevin P. Knight
                           Chief Executive Officer, in his capacity as such and
                           on behalf of the registrant




Date: October 31, 2003   By: /s/ Timothy Kohl
                            -----------------------------------
                           Timothy Kohl
                           Chief Financial Officer and
                           Principal Financial Officer, in his capacity as such
                           and on behalf of the registrant










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