For the quarter, total revenue increased 12.2% to $188.3 million from $167.8 million for the same quarter of 2009. Revenue before fuel surcharge increased 9.8% to $158.0 million compared to $143.9 million in the fourth quarter of 2009. For the quarter, GAAP net income increased to $14.2 million and $0.17 per diluted share.
For the year, total revenue increased 12.1% to $730.7 million from $651.7 million for the same period of 2009. Revenue before fuel surcharge increased 7.7% to $615.7 million from $571.5 million for 2009.
"We were pleased to return to double-digit revenue and earnings growth for 2010," said Chairman and Chief Executive Officer, Kevin P. Knight. "We believe Knight is well-positioned to continue to succeed in a freight transportation market that is constantly evolving 30 years after deregulation.
"In the fourth quarter, our revenue growth was attributed to a 5% 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% growth in our brokerage and rail intermodal revenues. In addition to the increase in average revenue per total mile, we also increased our average length of haul 2.0%, year over year, and we improved our non-revenue miles percentage by 5.7%.
"Average revenue per tractor, excluding fuel surcharge, improved 4% when compared to the same quarter last year. This increase in asset productivity was attributable to improved pricing and freight selection but offset by a 0.9% decrease in miles per tractor, year over year. Freight volumes in the second half of 2010 have been modest and measurably below the demand experienced in the second quarter of 2010 and the demand levels experienced before the economic recession. We expect the modest volume levels to continue into the first quarter of 2011."
Knight produced an operating ratio (operating expenses, net of fuel surcharge, as a percentage of revenue before fuel surcharge) of 83.6% in the fourth quarter of this year compared to 85.4% in the same quarter last year, excluding a non-cash $2.5 million pre-tax equity compensation adjustment 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.
The company invested $4.4 million of net capital expenditures in the quarter is it continued to maintain a relatively new fleet in accordance with its trade cycle and added tractors to the fleet.
It's also rolling out tractors operating the clean burning US EPA 2010 emissions level engines. To date, over 85% of Knight's company-owned tractor fleet operates with either the US EPA 07 or the US EPA 2010 engine.
Trucking analyst Peter Nesvold with Jefferies & Co. noted that "We were a little surprised to see KNX report that it had expanded its fleet by 4.5% year over year. Swift made similar remarks yesterday, with a 4.4% increase in tractor count year over year during 4Q. Most mgmts in the TL industry have suggested that they were reluctant to add capacity unless rates continued to move markedly higher."