Knight Transportation, Phoenix, reports revenue and income are up for the third quarter compared to last year, but are relatively flat for the first nine months compared to 2007.
For the quarter, total revenue increased 16.3%, to $209.7 million from $180.3 million for the same quarter of 2007. Revenue, before fuel surcharge, increased 2.8%, to $155.9 million from $151.7 million for the same quarter of 2007. Net income increased 10.4% to $16 million from $14.5 million for the same period of 2007. Net income per diluted share for the quarter was $0.19, compared to $0.17 for the same period of 2007.
Year-to-date, total revenue increased 12.4%, to $592.2 million from $527 million for the same period of 2007. Revenue, before fuel surcharge, increased 0.6%, to $452 million from $449.5 million for the same period of 2007. Net income decreased to $40.1 million from $49.3 million for the same period of 2007. Net income per diluted share was $0.46 compared to $0.57 for the same period of 2007.
"Despite the continuation of the challenging truckload freight environment, we were able to yield double-digit earnings growth, year over year," said Chairman and Chief Executive Officer Kevin P. Knight.
Knight Transportation produced a consolidated operating ratio (total operating expenses, net of fuel surcharge, as a percentage of operating revenue, excluding fuel surcharge) of 83.2%. Its network of 29 dry van service centers yielded an operating ratio of 82.3%. Knight Refrigerated posted an 85.6% operating ratio for the quarter. Knight Brokerage's operating ratio for the third quarter, including fuel surcharge in revenue, was 94.6%
"Our progress in the quarter was attributable to an increase of 3.9% in revenue per total mile, improved fuel surcharge collection, and favorable insurance and claims performance in the quarter," Knight said. "Our improvement in revenue per total mile was a combination of higher freight rates, lower average length of haul, and a 100 basis point improvement in non-paid empty miles percentage. Our average revenue per tractor improved (excluding fuel surcharges) by 3.1%, compared with the third quarter of 2007.
"Declining diesel fuel prices improved our ability to more adequately collect fuel surcharge. Despite the decline in fuel prices, the U.S. Department of Energy national average diesel fuel price for the quarter of $4.34, increased $1.44 above the third quarter of 2007 average of $2.90. We continue to focus on improving the fuel efficiency of our fleet through reduced empty miles, decreased idle time, improved fuel purchasing, and controlling out-of-route miles. Our efforts to improve fuel efficiency resulted in improvements to the average miles per gallon ratio of the fleet.
"The improvement in insurance and claims expense was achieved through a reduction in the frequency and severity of accidents. Over the past 18 months we have implemented the Smith Systems training in most of our service centers. Smith Systems is the leader in professional driver training with hands-on, behind-the-wheel, instructional training. We expect to have Smith Systems implemented in every service center by the end of the first quarter 2009. We believe such training and other management efforts have been contributing factors to a reduction in our insurance and claims expense."
Knight noted that a softening market for used tractors and trailers also negatively affected the company's results. Gain on sale of equipment was $699,000 less for the third quarter of 2008 compared to the third quarter of 2007.
The company added 32 tractors to its fleet since the end of the second quarter and operated approximately the same number of average tractors in the quarter as the same period a year ago.
During the quarter, Knight launched Squire Transportation LLC. Squire, a wholly owned subsidiary of Knight, is a training company focused on developing skilled, productive, and safe drivers. Squire's mission is to provide drivers with the skills necessary to have a driving career with Knight. The company's first Squire center is located in Indianapolis.
"Despite progress in average revenue per tractor, our regional dry van and refrigerated markets remain highly competitive," Knight said. "The short-to-medium dry van market, in particular, continues to experience increased competition from traditionally long-haul carriers."
Year-to-date, Knight noted, the cmopany has generated significant cash. As of Sept. 30, the company had $67.5 million in cash and short-term investments. For the first nine months of the year, the company increased its cash and short-term investment balance by $36.2 million after using $27.5 million for stock re-purchase and shareholder dividends. The balance sheet continues to have zero debt, and shareholders' equity grew to $502 million.
For the quarter, total revenue increased 16.3%, to $209.7 million from $180.3 million for the same quarter of 2007. Revenue, before fuel surcharge, increased 2.8%, to $155.9 million from $151.7 million for the same quarter of 2007. Net income increased 10.4% to $16 million from $14.5 million for the same period of 2007. Net income per diluted share for the quarter was $0.19, compared to $0.17 for the same period of 2007.
Year-to-date, total revenue increased 12.4%, to $592.2 million from $527 million for the same period of 2007. Revenue, before fuel surcharge, increased 0.6%, to $452 million from $449.5 million for the same period of 2007. Net income decreased to $40.1 million from $49.3 million for the same period of 2007. Net income per diluted share was $0.46 compared to $0.57 for the same period of 2007.
"Despite the continuation of the challenging truckload freight environment, we were able to yield double-digit earnings growth, year over year," said Chairman and Chief Executive Officer Kevin P. Knight.
Knight Transportation produced a consolidated operating ratio (total operating expenses, net of fuel surcharge, as a percentage of operating revenue, excluding fuel surcharge) of 83.2%. Its network of 29 dry van service centers yielded an operating ratio of 82.3%. Knight Refrigerated posted an 85.6% operating ratio for the quarter. Knight Brokerage's operating ratio for the third quarter, including fuel surcharge in revenue, was 94.6%
"Our progress in the quarter was attributable to an increase of 3.9% in revenue per total mile, improved fuel surcharge collection, and favorable insurance and claims performance in the quarter," Knight said. "Our improvement in revenue per total mile was a combination of higher freight rates, lower average length of haul, and a 100 basis point improvement in non-paid empty miles percentage. Our average revenue per tractor improved (excluding fuel surcharges) by 3.1%, compared with the third quarter of 2007.
"Declining diesel fuel prices improved our ability to more adequately collect fuel surcharge. Despite the decline in fuel prices, the U.S. Department of Energy national average diesel fuel price for the quarter of $4.34, increased $1.44 above the third quarter of 2007 average of $2.90. We continue to focus on improving the fuel efficiency of our fleet through reduced empty miles, decreased idle time, improved fuel purchasing, and controlling out-of-route miles. Our efforts to improve fuel efficiency resulted in improvements to the average miles per gallon ratio of the fleet.
"The improvement in insurance and claims expense was achieved through a reduction in the frequency and severity of accidents. Over the past 18 months we have implemented the Smith Systems training in most of our service centers. Smith Systems is the leader in professional driver training with hands-on, behind-the-wheel, instructional training. We expect to have Smith Systems implemented in every service center by the end of the first quarter 2009. We believe such training and other management efforts have been contributing factors to a reduction in our insurance and claims expense."
Knight noted that a softening market for used tractors and trailers also negatively affected the company's results. Gain on sale of equipment was $699,000 less for the third quarter of 2008 compared to the third quarter of 2007.
The company added 32 tractors to its fleet since the end of the second quarter and operated approximately the same number of average tractors in the quarter as the same period a year ago.
During the quarter, Knight launched Squire Transportation LLC. Squire, a wholly owned subsidiary of Knight, is a training company focused on developing skilled, productive, and safe drivers. Squire's mission is to provide drivers with the skills necessary to have a driving career with Knight. The company's first Squire center is located in Indianapolis.
"Despite progress in average revenue per tractor, our regional dry van and refrigerated markets remain highly competitive," Knight said. "The short-to-medium dry van market, in particular, continues to experience increased competition from traditionally long-haul carriers."
Year-to-date, Knight noted, the cmopany has generated significant cash. As of Sept. 30, the company had $67.5 million in cash and short-term investments. For the first nine months of the year, the company increased its cash and short-term investment balance by $36.2 million after using $27.5 million for stock re-purchase and shareholder dividends. The balance sheet continues to have zero debt, and shareholders' equity grew to $502 million.
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