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Knight Transportation Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 04:49PM
Knight Transportation Inc. (KNX) filed Quarterly Report for the period ended 2012-03-31. Knight Transn has a market cap of $1.31 billion; its shares were traded at around $16.18 with a P/E ratio of 21.8 and P/S ratio of 1.5. The dividend yield of Knight Transn stocks is 1.5%. Knight Transn had an annual average earning growth of 7.8% over the past 10 years.
Highlight of Business Operations:The first quarter of 2012 included a $4.0 million pretax, non-cash stock compensation charge ($3.9 million after tax) relating to the accelerated vesting of certain stock options that had been issued prior to 2009. Excluding the non-cash charge, net income for the first quarter of 2012 would have been $14.4 million, or $0.18 per diluted share. In the first quarter of 2012, average revenue per tractor improved 10.3% while average fleet count increased 2.5% when compared to the same period of 2011. The revenue per tractor improvement was driven by a 2.8% increase in revenue per total mile and a 7.3% increase in miles per tractor. We realized improvement in revenue per loaded mile, which improved 3.1%, while non-paid empty miles increased to 10.7% in the current quarter compared to 10.4% for the same quarter of 2011.
Our capital expenditures, net of equipment sales, were $24.3 million for the three months ended March 31, 2012, compared to $2.8 million for the same period a year ago. At March 31, 2012, our cash and cash equivalents totaled $11.6 million, and our shareholders' equity was $489.4 million, compared to $9.6 million and $476.4 million at December 31, 2011.
Total revenue for the three months ended March 31, 2012, increased 17.7% to $219.5 million from $186.5 million for the same period in 2011. Total revenue included $43.9 million of fuel surcharge revenue in the three-month period of 2012, compared to $36.0 million in the three-month period of 2011.
Revenue, before fuel surcharge, increased 16.7% to $175.6 million for the three months ended March 31, 2012, from $150.5 million for the same period in 2011. We experienced revenue growth in all our service offerings in the first quarter of 2012, including 9.1% in our dry van operations, 13.7% in our refrigerated operations, 27.9% in our port and rail services, and 20.0% in our brokerage operations. During the three-month period of 2012, we operated an average of 98 additional tractors year-over-year and increased miles per tractor 7.3% from the same period last year. An increase in revenue per mile of 2.8% with 2.6% longer length of haul further contributed to the revenue growth achieved in the first quarter of 2012.
Fuel expense, net of fuel surcharge, as a percentage of revenue before fuel surcharge, decreased to 7.6% for the three months ended March 31, 2012, from 9.1% for the same period in 2011. This decrease as a percentage of revenue before surcharge is due to a combination of revenue growth of our non-asset-based businesses, where no fuel expense is incurred, and effective fuel efficiency initiatives. Improvements have been made in the driving behavior of our driving associates resulting in lower idle time, less out of route miles and improved fuel miles per gallon. We continue to update our fleet with more fuel-efficient 2010 U.S. EPA emission engines, our average fleet age at March 31, 2012 was 1.7 years compared to 2.3 years at March 31, 2011, and we have installed aerodynamic trailer blades on 75.6% of our trailer fleet compared to 22.4% last year. Our fuel surcharge program helps to offset increases in fuel prices but applies only to loaded miles and typically does not offset empty miles, idle time, and out of route miles driven. Typical fuel surcharge programs involve a computation based on the change in national or regional fuel prices. These programs may update as often as weekly, but typically require a specified minimum change in fuel cost to prompt a change in fuel surcharge revenue. Therefore, many of these programs have a time lag between when fuel costs change and when the change is reflected in fuel surcharge revenue. Due to this time lag, during periods of sharply rising fuel costs our fuel expense, net of fuel surcharge, negatively impacts our operating income. During the first quarter of 2012, the U.S National Average Diesel Fuel price increased 9.6% compared to 18.0% during the first quarter of 2011. The less volatile fuel prices in the first quarter of 2012 compared to 2011 resulted in improved fuel surcharge recovery.
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