Knight Transportation announced Wednesday, April 18, its financial results for the quarter ended March 31. For the quarter, total revenue increased 11.7 percent, to $166.5 million from $149.1 million for the same quarter of 2006. Revenue, before fuel surcharge, increased 12.0 percent, to $144.8 million from $129.3 million for the same quarter of 2006. Net income increased 5.0 percent, to $16.6 million from $15.8 million for the same period of 2006.
“This quarter represented the 49th consecutive quarter, since going public, that Knight Transportation generated higher year-over-year operating income,” said Kevin P. Knight, chairman and chief executive officer of the Phoenix-based company. “Our net income, as a percentage of revenue before fuel surcharge, for this quarter was 11.5 percent, which represented the third-highest first quarter in our history as a public company. Our operating ratio was 81.2 percent, which represented our third-best first-quarter operating ratio in our history.”
Knight said the company was pleased with its double-digit revenue growth considering the current challenging freight environment. “Our growth was accomplished through a combination of continued fleet expansion, our asset purchase of Roads West Transportation during the fourth quarter of 2006, and increased revenue per mile,” he said. “Also, our brokerage line of business continues to expand.”
Average miles per tractor decreased 4.8 percent as compared to the same period of 2006. “The decrease in utilization is attributed primarily to a less robust freight environment and a shortened length of haul,” Knight said. “Going forward, we intend to continue to execute our business model of leading growth and profitability, by continuing to grow existing service centers and also new openings. This will not be easy in the current environment, particularly if freight demand remains soft.”
Knight said the company also plans to continue to evaluate the market for acquisition opportunities that make sense within its disciplined operating framework. “Our base expectation for the medium to longer term is to grow our fleet between 10 percent and 15 percent annually and continue to grow our brokerage business,” he said. “We will evaluate that base goal and may adjust it up or down periodically based on factors such as freight demand, driver availability and acquisitions.
“Our constant efforts to reduce operating costs helped to minimize the overall impact of expense increases relating to driver compensation, prices of revenue equipment, higher cost for ultra-low-sulfur diesel fuel, and declining fuel efficiency due to emissions control regulations,” Knight said.