Knight reports higher 4Q net income

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Knight Transportation

Knight Transportation on Wednesday, Jan. 26, reported that for the fourth quarter ended Dec. 31, total revenue increased 12.2 percent to $188.3 million from $167.8 million for the same quarter of 2009. Revenue before fuel surcharge increased 9.8 percent to $158.0 million compared to $143.9 million. GAAP net income increased to $14.2 million; excluding adjustments, net income increased 23.6 percent to $16.2 million from $13.1 million.

For the year, total revenue increased 12.1 percent to $730.7 million from $651.7 million for the same period of 2009. Revenue before fuel surcharge increased 7.7 percent to $615.7 million from $571.5 million. GAAP net income increased to $59.1 million; excluding adjustments; net income increased 20.8 percent to $61.1 million from $50.6 million.

“We were pleased to return to double-digit revenue and earnings growth for 2010,” said Kevin Knight, chairman and chief executive officer of the Phoenix-based truckload company. “This performance would not be possible without the leadership depth and the dedication of our employees at Knight, and the value placed on our services by our customers. We believe Knight is well-positioned to continue to succeed in a freight transportation market that is constantly evolving 30 years after deregulation.”

Knight said fourth-quarter revenue growth was attributed to a 5.0 percent improvement in average revenue per total mile, adding 153 additional average tractors to the fleet compared to the fourth quarter last year, and 22.2 percent growth in brokerage and rail intermodal revenues. “In addition to the increase in average revenue per total mile, we also increased our average length of haul 2 percent, year over year, and we improved our non-revenue miles percentage by 5.7 percent,” he said.

On a consolidated basis, Knight produced an operating ratio (operating expenses, net of fuel surcharge, as a percentage of revenue before fuel surcharge) of 83.6 percent in the fourth quarter of this year compared to 85.4 percent in the same quarter last year, excluding adjustments from the 2010 period. “A significant percentage of our growth in 2010 came through less capital-intensive operations such as brokerage, intermodal, port services and increasing our owner-operator fleet by approximately 117 tractors, all of which often generate lower margins but favorable returns on investment,” Knight said.

Knight said that during the past few years, the company has undertaken an extensive examination of its customers’ supply chains, their various transportation modes, the role of truckload freight and the services the company believes it can provide while generating meaningful returns for its shareholders. “Entering 2011, we believe we have the service center network, the modern fleet, the comprehensive truckload services, the management team, the technology and the capital resources to grow each of our businesses,” said Knight, who expects the industry’s capacity to remain tight and to likely tighten further because of the introduction of the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program and revisions to driver hours-of-service rules. “In this environment, we feel well-positioned to grow organically and to capitalize on strategic opportunities.”