(Source: Business Wire)
Knight Transportation (NYSE: KNX), one of North America's largest
truckload carriers, reported revenue and earnings for the third quarter
ended September 30, 2009. Highlights included:
Revenue before fuel surcharge of $150.2 million, a decrease of 3.6%
compared with the third quarter of 2008.
Diluted earnings per share decreased 15.6% to $0.16 from $0.19 in the
third quarter of 2008.
Net income of $13.1 million, a decrease of 18.1% compared with the
third quarter of 2008.
For the quarter, revenue before fuel surcharge decreased 3.6%, to $150.2
million from $155.9 million in the third quarter of 2008. Primarily due
to decreased fuel surcharge revenue, total revenue decreased 17.4%, to
$173.1 million from $209.7 million for the same quarter of 2008. The
U.S. average cost of diesel fuel during the third quarter was $2.60
compared to $4.34 in the third quarter of 2008. Operating income in the
quarter of $20.7 million represented a 21.0% decrease from the $26.2
million reported in the third quarter 2008. Net income decreased 18.1%
to $13.1 million from $16.0 million for the same period of 2008. Net
income per diluted share for the quarter was $0.16, compared to $0.19
for the same period of 2008.
Year-to-date, revenue before fuel surcharge decreased 5.4%, to $427.6
million from $452.0 million for the same period of 2008. Operating
income decreased 7.2% to $61.0 million from $65.7 for the same period of
2008. Net income decreased 6.7% to $37.4 million from $40.1 million in
the same period of 2008. Net income per diluted share was $0.45 compared
to $0.46 for the same period of 2008.
The company previously announced a quarterly cash dividend of $0.05 per
share to shareholders of record on September 4, 2009, which was paid on
September 25, 2009.
On October 14, 2009, the company was named to Forbes Magazine's list of
the "200 Best Small Companies in America" for the fifteenth consecutive
year.
On October 6, 2009, the company received an Environmental Excellence
Award from the U.S. Environmental Protection Agency (EPA) SmartWay
Transport Partnership. The company was one of 37 companies from the
Partnership's more than 2100 partners to be awarded the Excellence Award
for reducing emissions and improving the environment.
Chairman and Chief Executive Officer, Kevin P. Knight, offered the
following comments:
"Despite the continued challenging truckload freight environment, we
grew our total loads hauled in the quarter by 10.2% when compared to the
same period last year. We have experienced a steady, albeit modest,
sequential increase in load volumes as the year has progressed.
"In the third quarter, equipment productivity, as measured by average
revenue before fuel surcharge per tractor in the quarter, was down 4.5%
from the year-ago period. This compared favorably to an 8.1% year over
year decrease in revenue before fuel surcharge per tractor in the second
quarter 2009. Our non-paid empty mile percentage decreased to 11.8% from
11.9% in the year-ago period. Our average length of haul decreased 10.7%
to 465 miles from 521 miles in the same period last year. The drayage
activities in our intermodal business had a modestly negative effect on
our average length of haul.
"On a consolidated basis, Knight Transportation produced an operating
ratio (operating expenses, net of fuel surcharge, as a percentage of
revenue before fuel surcharge) of 86.2% in the third quarter of this
year compared to 83.2% in the same period last year. Knight Dry Van
generated an operating ratio of 85.6%. Knight Refrigerated generated an
operating ratio of 86.7%. Knight Brokerage generated an operating ratio
of 93.3%. We have made the decision to maintain our fleet size for
longer term strategy rather than short term benefit that would have
likely improved our near-term operating ratio.
"Revenue per total mile before fuel surcharge decreased 3.1% from the
same period a year ago when revenue per total mile before fuel surcharge
peaked for our company. Miles per tractor decreased 1.4% when compared
to the same period a year ago, an improvement compared with the 4.5%
decrease in the second quarter of 2009. Although we have experienced
sequential improvement in freight demand, it is not at a level to
significantly influence higher rates.
"There continues to be evidence that many, if not most, truckload
carriers are plagued with weak balance sheets, aging fleets and
shrinking revenues. We expect the challenging truckload market to yield
opportunities to continue to capture market share over time. We believe
we are well positioned to navigate the challenges of the current
environment and thrive as the market improves when truckload capacity
decreases and/or freight demand modestly increases.
"We are executing our plan in the current economic environment by
refining our operating model to create additional efficiencies, offering
customers a high level of service through our network of service centers
and branches, and preparing to capitalize on growth opportunities that
will enhance the returns for our shareholders over time. We continue to
actively evaluate strategic opportunities that can create value for our
stakeholders without undue risk. We have significant financial
flexibility and a strong balance sheet, with $509.7 million of
stockholders' equity, $72.5 million in cash and short term investments,
and zero debt at September 30, 2009.
"During the quarter, we saw benefits from continued improvement in
insurance and claims expense. We believe our training program and other
management efforts have been instrumental factors in reducing the
severity and frequency of accidents.
"In the quarter, our gain on the sale of equipment increased to
$833,000, from $367,000 for the same period last year. We continue to
operate a relatively young fleet of late-model equipment, with more than
half of our tractors equipped with 2007 U.S. EPA emission compliant
engines. Our service center network allows us to efficiently maintain
this equipment. Looking ahead, we plan to continue a similar trade cycle
and adopt the even cleaner burning engines which will be available in
2010."
The company will hold a conference call on October 21, 4:10PM EDT, to
further discuss its results of operations for the quarter ended
September 30, 2009. The dial in number for this conference call is
1-866-793-1299. 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,
"Third Quarter 2009 Conference Call Presentation."
Knight Transportation, Inc. is a truckload carrier offering dry van,
refrigerated, intermodal and brokerage services to customers through a
network of service centers and branches located throughout the United
States serving North America. As "Your Hometown National Carrier,"
Knight strives to offer customers and drivers personal service and
attention through each service center, while offering integrated freight
transportation nationwide and beyond through the scale of one of North
America's largest trucking companies. The principal types of freight we
transport include consumer staples, retail, paper products,
packaging/plastics, manufacturing, and import/export commodities.
INCOME STATEMENT DATA: Three Months Ended Sept 30, Nine Months Ended Sept 30,
(Unaudited, in thousands, except per share amounts)
2009 2008 2009 2008
REVENUE:
Revenue, before fuel surcharge $ 150,190 $ 155,851 $ 427,580 $ 451,987
Fuel surcharge 22,942 53,806 56,351 140,188
TOTAL REVENUE 173,132 209,657 483,931 592,175
OPERATING EXPENSES:
Salaries, wages and benefits 52,042 54,554 150,344 158,461
Fuel expense - gross 38,962 70,844 101,421 197,130
Operations and maintenance 11,219 11,495 31,944 31,443
Insurance and claims 5,424 6,170 16,132 20,948
Operating taxes and licenses 3,765 3,799 10,760 11,303
Communications 1,331 1,481 4,153 4,368
Depreciation and amortization 18,204 17,663 53,524 51,734
Lease expense - revenue equipment - - - 90
Purchased transportation 18,147 13,297 44,120 40,788
Miscellaneous operating expenses 3,304 4,115 10,564 10,221
152,398 183,418 422,962 526,486
Income From Operations 20,734 26,239 60,969 65,689
Interest income 424 332 1,079 776
Other income/(expense) 386 (19 ) 365 206
Income Before Income Taxes 21,544 26,552 62,413 66,671
INCOME TAXES 8,436 10,539 24,994 26,549
NET INCOME $ 13,108 $ 16,013 $ 37,419 $ 40,122
Net Income Per Share
- Basic $ 0.16 $ 0.19 $ 0.45 $ 0.47
- Diluted $ 0.16 $ 0.19 $ 0.45 $ 0.46
Weighted Average Shares Outstanding
- Basic 83,197 85,633 83,216 85,759
- Diluted 83,630 86,268 83,584 86,332
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BALANCE SHEET DATA:
09/30/09 12/31/08
ASSETS (Unaudited, in thousands)
Cash and cash equivalents $ 3,099 $ 22,027
Short term investments 69,362 31,877
Accounts receivable, net 72,460 70,810
Notes receivable, net 1,633 159
Other current assets 17,819 13,258
Prepaid expenses 11,213 7,108
Income tax receivable 2,140 774
Current deferred tax asset 5,232 6,480
Total Current Assets 182,958 152,493
Property and equipment, net 467,659 472,228
Notes receivable, long-term 2,095 674
Goodwill 10,338 10,353
Intangible assets, net 129 176
Long-term deferred tax assets - 5,877
Other assets and restricted cash 7,591 5,139
Total Assets $ 670,770 $ 646,940
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 6,516 $ 6,195
Accrued payroll and purchased transportation 9,293 7,432
Accrued liabilities 11,259 6,273
Claims accrual - current portion 13,235 15,239
Total Current Liabilities 40,303 35,139
Claims accrual - long-term portion 13,044 15,236
Deferred income taxes 107,675 112,661
Total Long-term Liabilities 120,719 127,897
Total Liabilities 161,022 163,036
Common stock 832 834
Additional paid-in capital 113,849 108,885
Retained earnings 395,067 374,185
Total Shareholders' Equity 509,748 483,904
Total Liabilities and Shareholders' Equity $ 670,770 $ 646,940
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Three Months Ended Sept 30, Nine Months Ended Sept 30,
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
OPERATING STATISTICS % %
Change Change
Average Revenue Per Tractor* $ 37,248 $ 38,990 -4.5 % $ 107,589 $ 114,555 -6.1 %
Non-paid Empty Mile Percent 11.8 % 11.9 % -0.8 % 12.0 % 11.7 % 2.6 %
Average Length of Haul 465 521 -10.7 % 473 524 -9.7 %
Operating Ratio** 86.2 % 83.2 % 85.7 % 85.5 %
Average Tractors - Total 3,768 3,809 -1.1 % 3,741 3,755 -0.4 %
Tractors - End of Quarter:
Company 3,435 3,655 3,435 3,655
Owner - Operator 317 145 317 145
3,752 3,800 3,752 3,800
Trailers - End of Quarter 8,686 9,130 8,686 9,130
Net Capital Expenditures (in thousands) $ 27,878 $ 18,799 $ 55,746 $ 49,316
Adjusted Cash Flow From Operations Excluding Change in Short-term Investments (in thousands) *** $ 25,101 $ 55,897 $ 91,091 $ 113,045
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* Includes dry van and refrigerated revenue excluding fuel surcharge, brokerage 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. Revenue from fuel surcharge is available on the accompanying statements of income. 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.
*** Adjusted cash flow from operations of $25,101 for the quarter ended Sept 30, 2009 does not include $12,809 increase in short-term investments, and adjusted cash flow from operations of $55,897 for the comparative quarter ended Sept 30, 2008 does not include $16,324 increase in short-term investments. These are the reconciling items needed to tie back to cashflow from operations.
*** Adjusted cash flow from operations of $91,091 for the nine month period ended Sept 30, 2009 does not include $37,486 increase in short-term investments, and adjusted cash flow from operations of $113,045 for the comparative nine month period ended Sept 30, 2008 does not include $20,406 increase in short-term investments. These are the reconciling items needed to tie back to cashflow from operations.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These statements generally may be identified by their use of terms or phrases such as "expects," "estimates," "anticipates," "projects," "believes," "plans," "intends," "may," "will," "should," "could," "potential," "continue," "future," and terms or phrases of similar substance. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Accordingly, actual results may differ from those set forth in the forward-looking statements. Readers should review and consider the factors that may affect future results and other disclosures by the Company in its press releases, stockholder reports, Annual Report on Form 10-K, and other filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.
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