Knight says 2Q net income up 26%

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Knight Transportation

Knight Transportation on Wednesday, July 21, reported total revenue for the second quarter ended June 30 increased 14.4 percent to $185.4 million from $162.1 million for the same quarter of 2009. Revenue before fuel surcharge increased 7.6 percent to $155.3 million compared to $144.3 million. Net income increased 26.0 percent to $15.8 million from $12.6 million.

Year-to-date, total revenue increased 13.0 percent to $351.1 million from $310.8 million for the same period of 2009. Revenue before fuel surcharge increased 6.6 percent to $295.6 million from $277.4 million. Net income increased 15.9 percent to $28.2 million from $24.3 million.

“Many of the truckload markets we serve experienced capacity constraints,” said Kevin P. Knight, chairman and chief executive officer of the Phoenix-based company. “Our diversified service offering was able to provide solutions for our customers that address the changes that come with the tightening of truckload capacity. As a result of demand outpacing available capacity, we experienced improvement in revenue per mile, miles per truck and average length of haul while decreasing nonpaid empty miles. The key components of our yield have been improving since the fourth quarter of last year and, as of the second quarter 2010, are now in positive territory.”

On a consolidated basis, Knight Transportation produced an operating ratio of 83.3 percent in the second quarter of this year compared to 85.6 percent in the same period last year. “While demand was strong for dry van, refrigerated and port service businesses, our third-party business was more challenging during the second quarter,” Knight said. “Securing sufficient capacity was challenging for our brokerage operations and pressured margins. We are making adjustments to our rates to allow for the execution of more third-party transactions.”

The company’s average fleet, including owner-operators, grew slightly to 3,753 tractors. “If contract rates and the operating ratio continue to improve, we plan to add 100 to 150 tractors during the second half of 2010,” Knight said. “In this changing environment, we continue to be vigilant on improving the efficiency of our low-cost operating model and appropriately responding to the changing market conditions. We expect to grow our revenues in each business as business conditions continue to improve. We continue to evaluate strategic growth and acquisition opportunities that will enhance the returns for our shareholders over time.”