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Knight Transportation Inc. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: March 1, 2011 11:24PM
Knight Transportation Inc. (KNX) filed Annual Report for the period ended 2010-12-31. Knight Transportation Inc has a market cap of $1.56 billion; its shares were traded at around $18.61 with a P/E ratio of 26.2 and P/S ratio of 2.1. The dividend yield of Knight Transportation Inc stocks is 1.3%. Knight Transportation Inc had an annual average earning growth of 8.4% over the past 10 years.Hedge Fund Gurus that owns KNX: Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC, Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns KNX: First Pacific Advisors of First Pacific Advisors, LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2010, was approximately $1.2 billion (based upon $20.24 per share closing price on that date as reported by the New York Stock Exchange). In making this calculation the registrant has assumed, without admitting for any purpose, that all executive officers and directors, and no other persons, are affiliates.
We have two reportable segments comprised of an asset-based segment and a non-asset-based segment. Our asset-based segment includes our dry van, temperature-controlled, and drayage operations, which are geographically diversified but have similar economic and other relevant characteristics, as they all provide truckload carrier services of general commodities to a similar class of customers. As a result, we have determined that it is appropriate to aggregate these operating segments into one reportable segment consistent with the guidance in Accounting Standards Codification ("ASC") Sub-Topic 280-10, Segment Reporting. Our non-asset-based segment consists of our brokerage operations, which we have determined qualifies as a reportable segment under ASC 280-10 Segment Reporting. However, because its results of operations are not material to our consolidated financial statements as a whole, we have not presented separate financial information for this segment. For the year ended December 31, 2010, the non-asset-based segment accounted for 5.5% of our consolidated revenue, 2.0% of our consolidated net income attributable to Knight Transportation, and 1.5% of our consolidated assets. Brokerage revenue, including intercompany transactions and fuel surcharge, was $40.2 million, $37.2 million, and $41.0 million for the years ended December 31, 2010, 2009, and 2008, respectively. Net income for this segment was approximately $1.2 million for both years ended December 31, 2010 and 2009, and $1.0 million for the year ended December 31, 2008. Our non-asset-based segment had assets of $10.4 million at December 31, 2010, compared to $7.2 million a year ago.
The primary claims arising in our business consist of auto liability, including personal injury, property damage, physical damage, and cargo loss. We are insured against auto liability claims under a self-insured retention ("SIR") policy. For the policy years ending January 31, 2010 and 2011, our SIR was $1.5 million, with no responsibility for additional "aggregate" losses. For the policy year February 1, 2011 to January 31, 2012, our SIR increased to $2.0 million with no responsibility for "aggregate" losses. In prior years, our retention generally ranged from $1.0 million to $2.0 million per occurrence, plus "aggregate" losses of up to $1.5 million, depending on the applicable policy year. We have secured excess liability coverage up to $55.0 million per occurrence.
We are self-insured for workers' compensation claims up to a maximum limit of $500,000 per occurrence. We also maintain primary and excess coverage for employee medical expenses and hospitalization, with self retention level of $225,000 per claimant.
Stocks Discussed: KNX,