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TheStreet Open House

Knight Transportation Reports Revenue And Net Income For The Second Quarter Ended June 30, 2012

''Our combined fleet finished the quarter with 4,133 tractors compared to 3,883 last year, an increase of 250 tractors or 6.4%. This includes owner-operators, which grew from 465 tractors to 473 tractors in the second quarter this year. We invested $32.2 million of net capital expenditures in the second quarter, as we continue to maintain a modern tractor fleet with an average age of 1.8 years. Our gain on sale of revenue equipment increased to $2.2 million in the second quarter of 2012 from $1.5 million in the second quarter of 2011.

''We have returned $178.6 million to our shareholders in the form of quarterly dividends and stock repurchases over the twenty-four-month period ending June 30, 2012. We did not repurchase any shares in the second quarter of 2012. We ended the quarter with $2.8 million of cash, $50.0 million of borrowing under our unsecured revolving credit agreement, and $504.7 million of shareholders' equity.

''Acquisitions and investments continue to be part of our growth strategy, and we continue to evaluate strategic opportunities to enhance the returns for our shareholders over time.''

The company will hold a conference call on July 25, 2012, at 4:30 PM EDT, to further discuss its results of operations for the quarter ended June 30, 2012. The dial in number for this conference call is 1-855-733-9163. Slides to accompany this call will be posted on the company’s website and will be available to download prior to the scheduled conference time. To view the presentation, please visit http://investors.knighttrans.com/presentations, ''Second Quarter 2012 Conference Call Presentation.''

Knight Transportation, Inc. is a provider of multiple truckload transportation services using a nationwide network of service centers in the U.S. to serve customers throughout North America. In addition to operating one of the country’s largest tractor fleets, Knight also partners with third-party equipment providers to provide a broad range of truckload services to its customers while creating quality driving jobs for our driving associates and successful business opportunities for owner-operators.

INCOME STATEMENT DATA:     Three Months Ended June 30,     Six Months Ended June 30,
(Unaudited, in thousands, except per share amounts)
   
2012 2011   2012 2011
REVENUE:
Revenue, before fuel surcharge $ 188,838 $ 182,350 $ 364,437 $ 332,850
Fuel surcharge   47,430     46,133     91,363     82,107  
TOTAL REVENUE   236,268     228,483     455,800     414,957  
 
OPERATING EXPENSES:
Salaries, wages and benefits 59,089 55,856 120,045 106,791
Fuel expense - gross 56,612 60,079 113,923 109,778
Operations and maintenance 15,078 14,859 28,815 26,588
Insurance and claims 8,281 8,794 15,926 15,015
Operating taxes and licenses 3,973 3,893 8,075 7,605
Communications 1,271 1,396 2,666 2,721
Depreciation and amortization 20,933 18,351 41,305 36,825
Purchased transportation 36,064 34,801 67,924 60,240
Miscellaneous operating expenses   2,864     3,320     5,184     6,313  
  204,165     201,349     403,863     371,876  
Income From Operations   32,103     27,134     51,937     43,081  
 
Interest income 108 462 221 807
Interest expense (114 ) - (242 ) -
Other income   197     -     394     8  
Income before income taxes 32,294 27,596 52,310 43,896
INCOME TAXES   12,924     11,120     22,280     17,565  
Net Income 19,370 16,476 30,030 26,331
Net income attributable to noncontrolling interest   (81 )   (118 )   (195 )   (117 )
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION $ 19,289   $ 16,358   $ 29,835   $ 26,214  
Net Income Per Share
- Basic $ 0.24 $ 0.20 $ 0.37 $ 0.31
- Diluted $ 0.24 $ 0.20 $ 0.37 $ 0.31
Weighted Average Shares Outstanding
- Basic 79,686 82,785 79,609 83,275
- Diluted 80,076 83,307 80,045 83,882
 
BALANCE SHEET DATA:
06/30/12 12/31/11

 

(Unaudited, in thousands)

ASSETS

Cash and cash equivalents $ 2,843 $ 9,584
Accounts receivable, net 113,336 101,319
Notes receivable, net 864 1,034
Related party notes and interest receivable 2,814 2,868
Prepaid expenses 15,122 10,131
Assets held for sale 18,230 19,416
Other current assets 12,688 9,605
Income tax receivable - 3,821
Current deferred tax asset   3,202     2,319  
Total Current Assets   169,099     160,097  
 
Property and equipment, net 559,719 547,033
Notes receivable, long-term 3,637 3,987
Goodwill 10,285 10,295
Other assets and restricted cash   18,208     16,171  
Total Assets $ 760,948   $ 737,583  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 6,372 $ 14,322
Accrued payroll and purchased transportation 10,455 9,096
Accrued liabilities 20,558 13,645
Claims accrual - current portion 13,892 12,875
Dividend payable - current portion   91     77  
Total Current Liabilities 51,368 50,015
 
Claims accrual - long-term portion 8,557 8,693
Long-term dividend payable & other liabilities 2,397 1,457
Deferred income taxes 143,660 145,668
Long-term debt   50,000     55,000  
Total Long-term Liabilities 204,614 210,818
 
Total Liabilities   255,982     260,833  
 
 
Common stock 797 794
Additional paid-in capital 141,470 132,723
Accumulated other comprehensive income/(loss) (399 ) (448 )
Retained earnings   362,842     343,290  
Total Knight Transportation Shareholders' Equity 504,710 476,359
Noncontrolling interest   256     391  
Total Shareholders' Equity   504,966     476,750  
Total Liabilities and Shareholders' Equity $ 760,948   $ 737,583  
 
 
    Three Months Ended June 30,     Six Months Ended June 30,
2012   2011  

% Change

2012   2011  

% Change

(Unaudited) (Unaudited)
 
OPERATING STATISTICS

 

 

 

 

Average Revenue Per Tractor* $ 40,459 $ 40,849 -1.0 % $ 79,519 $ 76,245 4.3 %
 
Non-paid Empty Mile Percent 10.1 % 10.5 % -3.8 % 10.4 % 10.5 % -1.0 %
 
Average Length of Haul 485 478 1.5 % 482 473 1.9 %
 
Operating Ratio** 83.0 % 85.1 % 84.7 % 87.1 %
 
Average Tractors - Total 4,070 3,871 4,024 3,875
 
Tractors - End of Quarter:
Company 3,660 3,418 3,660 3,418
Owner - Operator   473     465     473     465  
4,133 3,883 4,133 3,883
 
Trailers - End of Quarter 9,118 8,837 9,118 8,837
 
Net Capital Expenditures (in thousands) $ 32,184 $ 31,116 $ 56,474 $ 33,874
 
Adjusted Cash Flow From Operations Excluding Change in Short-term Investments (in thousands) *** $ 32,155 $ 39,921 $ 62,410 $ 65,476
 
* Includes dry van, refrigerated, and port services revenue excluding fuel surcharge, brokerage revenue, intermodal revenue, and other revenue.
 
 
** Operating ratio as reported in this press release is based upon total operating expenses, net of fuel surcharge, as a percentage of revenue before fuel surcharge. Operating ratio reported for the six months ending June 30, 2012 is based upon total operating expenses, excluding the first quarter 2012 one time non-cash stock compensation charge of $4 million related to the accelerated vesting of certain stock options issued prior to 2009, and net of fuel surcharge, as a percentage of revenue before fuel surcharge. We measure our revenue, before fuel surcharge, and our operating expenses, net of fuel surcharge, because we believe that eliminating this sometimes volatile source of revenue affords a more consistent basis for comparing our results of operations from period to period.
 
 
*** No adjustment was made to the current quarter ended June 30, 2012 adjusted cash flow from operations of $32,155 as there was no change in short-term trading investments. Adjusted cash flow from operations of $39,921 for prior year quarter ended June 30, 2011 does not include $58,757 decrease in short-term trading investments. This reconciling item is needed to tie back to cash flow from operations.
 
*** No adjustment was made to the six-month period ended June 30, 2012 adjusted cash flow from operations of $62,410 as there was no change in short-term trading investments. Adjusted cash flow from operations of $65,476 for the prior year six-month period ended June 30, 2011 does not include $24,379 decrease in short-term trading investments. This reconciling item is needed to tie back to cash flow from operations.
 
 

In the press release, we provided adjusted cash flow from operations excluding changes in short-term investments. The exclusion of the change in short-term investments is not in accordance with generally accepted accounting principles in the United States (''GAAP''). This non-GAAP financial measure is intended to supplement, but not substitute for, the most directly comparable GAAP measure. We believe that the non-GAAP financial measure provides meaningful information to assist investors and analysts in understanding our financial results because it excludes an item that may not be indicative or is unrelated to our core operating results. However, because non-GAAP financial measures are not standardized, investors are strongly encouraged to review our financial statements and publicly filed reports in their entirety and not rely on any single financial measure. A reconciliation to the most closely-related GAAP measure is provided in the preceding paragraph.

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