Knight posts record 2Q revenue, net earnings

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Knight Transportation on Wednesday, July 18, announced its financial results for the quarter and year-to-date ended June 30.

For the quarter, total revenue increased 8.7 percent, to $180.2 million from $165.8 million for the same quarter of 2006. Revenue, before fuel surcharge, increased 9.0 percent, to $153.0 million from $140.4 million for the same quarter of 2006. Net income increased to $18.2 million from $18.1 million for the same period of 2006.

Year-to-date, total revenue increased 10.1 percent, to $346.7 million from $314.8 million for the same period of 2006. Revenue, before fuel surcharge, increased 10.4 percent, to $297.8 million from $269.7 million for the same period of 2006. Net income increased to $34.8 million from $34.0 million for the same period of 2006.

“Our industry continued to experience a challenging freight environment during the second quarter, as industry capacity of truckload equipment outpaced freight demand, leading to pricing pressure and lower utilization,” said Kevin P. Knight, chairman and chief executive officer of the Phoenix-based company. “Based on the sharp decline in new truck builds in 2007, following the 2006 pre-buy by many competitors, and a modestly growing economy, we expect the relationship between capacity and demand to reverse over the next several quarters. While the timing and magnitude of improvements in the freight environment are difficult to predict, we believe that continuing to develop our service center network and grow our fleet will position us favorably when our markets strengthen again.”

Knight said that despite the more challenging environment, the company continued to execute its business model of leading growth and profitability. “Our net income, as a percentage of revenue before fuel surcharge, for this quarter was 11.9 percent, and our operating ratio was 80.8 percent,” he said. “Our dry van business, which accounts for approximately 85 percent of revenues, posted an operating ratio, net of fuel surcharge, of 78.7 percent for the second quarter. We appreciate the contribution of our employees. Our double-digit revenue growth and low operating ratio in this environment have not come without hard work.”