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 Knight Transportation Reports Fourth Quarter and Annual 2015 Revenue and Earnings
   Wednesday, January 27, 2016 4:01:00 PM ET

Knight Transportation, Inc. (KNX ), one of North America’s largest and most diversified truckload transportation companies, today reported revenue and net income for the fourth quarter and year ended December 31, 2015.

Key financial highlights for the fourth quarter and annual period of 2015 and 2014 were as follows:

(dollars in thousands, except per share data)                                                                      Three Months Ended Dec 31,                                                                                                                                           Twelve Months Ended Dec 31,
                                                                                                              -------------------------------------------------------------------------------------------------------------------------------------------------------                                                               -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  2015          2014      % Chg                                                                        2015            2014       % Chg
                                                                                                              -------------------- -------                                           -------------------- -------                                           ---------                                                               -------------------- ---------                                           -------------------- ---------                                           ---------------------
Total revenue                                                                                                                    $ 290,739                                                              $ 317,468                                            -8.4 %                                                                                    $ 1,182,964                                                              $ 1,102,332                                                  7.3 %
Revenue, excluding trucking fuel surcharge                                                                                       $ 265,972                                                              $ 273,653                                            -2.8 %                                                                                    $ 1,061,739                                                              $   925,985                                                 14.7 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Operating income                                                                                                                 $  43,652                                                              $  52,782                                           -17.3 %                                                                                    $   178,000                                                              $   162,722                                                  9.4 %
Adjusted operating income(1)                                                                                                            NA                                                                     NA                                                 NA                                                                                   $   185,163                                                              $   162,722                                                 13.8 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Net income, attributable to Knight                                                                                               $  29,235                                                              $  32,938                                           -11.2 %                                                                                    $   116,718                                                              $   102,862                                                 13.5 %
Adjusted net income, attributable to Knight(2)                                                                                          NA                                                                     NA                                                 NA                                                                                   $   121,113                                                              $   102,862                                                 17.7 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Earnings per diluted share                                                                                                       $    0.36                                                              $    0.40                                           -10.2 %                                                                                    $      1.42                                                              $      1.25                                                 12.9 %
Adjusted earnings per diluted share(2)                                                                                                  NA                                                                     NA                                                 NA                                                                                   $      1.47                                                              $      1.25                                                 17.1 %
 

The company previously announced a quarterly cash dividend of $0.06 per share to shareholders of record on December 4, 2015, which was paid on December 21, 2015.

Dave Jackson, President and Chief Executive Officer, commented on the quarter, "During the fourth quarter we experienced a less robust freight environment when compared to the same quarter last year. The contracted portion of our freight volume remained relatively stable, however, non-contract opportunities were challenged by falling load counts and additional competition. This led to a decline in consolidated revenue, excluding trucking fuel surcharge, of 2.8%. Our diluted earnings per share were $0.36, which benefited from a lower effective tax rate by approximately $0.03 per diluted share. Our profitability, cash flow generation, and return on capital remained strong, but exceptional performance during the fourth quarter of 2014, in which our revenue, excluding trucking fuel surcharge, grew 32.6% and our net income grew 63.9%, resulted in a difficult comparison for 2015. Both our trucking and logistics segments continue to operate at industry leading levels as we continue to enhance our logistics capabilities to meet the supply chain needs of our customers. We also continue to explore growth through acquisition and believe the current environment should yield opportunities."

The following chart reflects our consolidated financial performance and that of our trucking and our logistics segments for the fourth quarter and annual period of 2015 and 2014.

(dollars in thousands)                                                                                                               Three Months Ended Dec 31,                                                                                                                                                                                    Twelve Months Ended Dec 31,
                                                                                                          --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                               ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                              2015            2014            Chg                                                                       2015             2014                 Chg
                                                                                                          -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           ----------                                                               -------------------- --------- --------------------                                           -------------------- ------- --------------------                                           ---------------------
Consolidated
Revenue, excluding trucking fuel surcharge                                                                                   $ 265,972                                                                                   $ 273,653                                                                 -2.8 %                                                                                     $ 1,061,739                                                                                   $ 925,985                                                                      14.7 %
Adjusted operating income(1)                                                                                                 $  43,652                                                                                   $  52,782                                                                -17.3 %                                                                                     $   185,163                                                                                   $ 162,722                                                                      13.8 %
Adjusted operating ratio(1)                                                                                                       83.6 %                                                                                      80.7 %                                                                290 bps                                                                                          82.6 %                                                                                      82.4 %                                                                            20 bps
Trucking
Revenue, excluding trucking fuel surcharge                                                                                   $ 204,321                                                                                   $ 208,739                                                                 -2.1 %                                                                                     $   830,710                                                                                   $ 715,712                                                                      16.1 %
Adjusted operating income(3)                                                                                                 $  39,343                                                                                   $  46,934                                                                -16.2 %                                                                                     $   169,306                                                                                   $ 147,424                                                                      14.8 %
Adjusted operating ratio(3)                                                                                                       80.7 %                                                                                      77.5 %                                                                320 bps                                                                                          79.6 %                                                                                      79.4 %                                                                            20 bps
Logistics
Revenue                                                                                                                      $  61,651                                                                                   $  64,914                                                                 -5.0 %                                                                                     $   231,029                                                                                   $ 210,273                                                                       9.9 %
Operating income                                                                                                             $   4,309                                                                                   $   5,848                                                                -26.3 %                                                                                     $    15,857                                                                                   $  15,298                                                                       3.7 %
Operating ratio                                                                                                                   93.0 %                                                                                      91.0 %                                                                200 bps                                                                                          93.1 %                                                                                      92.7 %                                                                            40 bps
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

In the fourth quarter, the trucking segment achieved an adjusted operating ratio of 80.7% compared to 77.5% from the same quarter last year. Revenue per tractor, excluding fuel surcharge, decreased 3.7%, year over year, attributable to a 1.5% decline in average revenue per loaded mile, an 0.8% decrease in average miles per tractor, while our average length of haul increased 4.0%. During the quarter we increased driver pay in specific geographies, which resulted in higher driver pay inflation. Although the freight environment remains less robust we are experiencing improved average miles per tractor in the first half of January this year, when compared to the same period last year. Contract pricing is relatively firm despite the more competitive freight environment and lack of non-contract opportunities. We remain focused on improving the productivity of our assets, developing our freight network, and intensely controlling cost.

During the fourth quarter of 2015, brokerage revenue, which is the largest component of our logistics segment, decreased 5.5% when compared to the same quarter last year. Load volume grew by 49.7%, but was offset by a decline in revenue per load as a result of lower fuel surcharge, a shorter length of haul, and less non-contract opportunities. Gross margins expanded 90 basis points compared to the fourth quarter last year as we continue to leverage enhanced technology to procure transportation. In the fourth quarter, the logistics segment produced an operating ratio of 93.0% compared to 91.0% for the same quarter last year. During the quarter, operating income was negatively impacted as a result of lower commodity prices that negatively impacted our sourcing business as well as costs associated with the startup of our expanded logistics and transportation management offering. We plan to continue to invest in our logistics service offerings in order to provide more solutions to our customers, while improving our return on capital.

Attracting and retaining high quality driving associates remains a significant industry challenge. Although the current shortage of qualified driving associates has been, and will continue to be, a headwind for adding additional capacity, we have experienced a reduction in our open tractor count.

Our tractor fleet remains one of the most modern fleets in the industry with an average age of 1.7 years. The used equipment market remained soft during the quarter and resulted in gain on sale of revenue equipment in the fourth quarter of 2015 of $3.2 million, compared to $3.6 million in the fourth quarter of 2014.

During the fourth quarter of 2015 we did not purchase any shares of our common stock. We currently have approximately 5.8 million shares available under our stock repurchase authorization. During 2015 we returned $65.2 million to our shareholders in the form of quarterly dividends and stock repurchases. We ended the quarter with $8.7 million of cash, $112.0 million of long term debt, and $738.4 million of shareholders’ equity. For the full year of 2015 our net capital expenditures were $149.4 million, while our cash flow from operations was $202.3 million. Given the current market, we do not have plans to grow the tractor fleet organically in 2016 and therefore expect lower net capital expenditures in the range of $85.0-$100.0 million.

The company will hold a conference call on January 27, 2016, at 4:30 PM EDT, to further discuss its results of operations for the quarter ended December 31, 2015. The dial in number for this conference call is 1-855-733-9163. 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://investor.knighttrans.com/events, "Fourth Quarter 2015 Conference Call Presentation."

Adjusted operating income, adjusted operating ratio, adjusted net income attributable to Knight, and adjusted earnings per diluted share (EPS) are non-GAAP financial measures and are not intended to replace financial measures calculated in accordance with GAAP. These non-GAAP financial measures supplement our GAAP results in evaluating certain parts of our business. We believe that using these measures affords a more consistent basis for comparing our results of operations from period to period. The information required by Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and Regulation G under the Securities Exchange Act of 1934, including a reconciliation to their most directly comparable financial measures calculated in accordance with GAAP, is included in the tables at the end of this press release.

Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services using a nationwide network of business units and service centers in the U.S. to serve customers throughout North America. In addition to operating one of the country’s largest tractor fleets, Knight also contracts with third-party equipment providers to provide a broad range of truckload services to its customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors.

INCOME STATEMENT DATA:                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                      Three Months Ended December 31,                                                                                                                                                                                                    Twelve Months Ended December 31,
                                                                                                                                          2015                                              2014                                                                                                                                                                             2015                                                2014
                                                                                                                                        -------                                           -------                                                                                                                                                                         ---------                                           ---------
                                                                                                                                                                                                                                                               (Unaudited, in thousands, except per share amounts)
REVENUE:
  Revenue, before fuel surcharge                                                                                                      $ 265,972                                         $ 273,653                                                                                                                                                                       $ 1,061,739                                         $   925,985
  Fuel surcharge                                                                                                      24,767      43,815                                                                                                                                     121,225       176,347  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
TOTAL REVENUE                                                                                                        290,739     317,468                                                                                                                                   1,182,964     1,102,332  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                          
OPERATING EXPENSES:
    Salaries, wages and benefits                                                                                                         84,148                                            81,036                                                                                                                                                                           334,069                                             271,815
    Fuel expense - gross                                                                                                                 32,505                                            48,336                                                                                                                                                                           152,752                                             203,758
    Operations and maintenance                                                                                                           18,790                                            20,078                                                                                                                                                                            80,855                                              71,558
    Insurance and claims                                                                                                                  8,556                                             8,718                                                                                                                                                                            33,632                                              31,133
    Operating taxes and licenses                                                                                                          4,957                                             5,708                                                                                                                                                                            18,911                                              17,972
    Communications                                                                                                                        1,028                                             1,278                                                                                                                                                                             4,095                                               4,899
    Depreciation and amortization                                                                                                        28,295                                            26,471                                                                                                                                                                           111,023                                              92,893
    Purchased transportation                                                                                                             64,585                                            69,736                                                                                                                                                                           246,864                                             238,041
    Miscellaneous operating expenses                                                                                   4,223       3,325                                                                                                                                      22,763         7,541  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
           Total operating expenses                                                                                  247,087     264,686                                                                                                                                   1,004,964       939,610  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                                 
                                                                                                                   ----------------------------------------------------------------------------------------------------                                                                                                                              --------------------------------------------------------------------------------------------------------
    Income from operations                                                                                            43,652      52,782                                                                                                                                     178,000       162,722  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                                          
    Interest income                                                                                                                          84                                               132                                                                                                                                                                               460                                                 458
    Interest expense                                                                                                                       (284 )                                            (391 )                                                                                                                                                                            (998 )                                              (730 )
    Other income                                                                                                       1,808       3,524                                                                                                                                       9,042         9,380  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
    Income before income taxes                                                                                                           45,260                                            56,047                                                                                                                                                                           186,504                                             171,830
INCOME TAXES                                                                                                          15,668      22,747                                                                                                                                      68,047        67,809  
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
Net income                                                                                                                               29,592                                            33,300                                                                                                                                                                           118,457                                             104,021
Net income attributable to noncontrolling interest                                                                      (357 )                         (362 )                                                                                                                                                       (1,739 )                         (1,159 )
                                                                                                                   -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- --------- --------------------
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION                                                                                      $  29,235                      $  32,938                                                                                                                                                    $   116,718                      $   102,862  
                                                                                                                   ==================== ======= ==================== ==================== ======= ====================                                                                                                                               ==================== ========= ==================== ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                          
     Basic Earnings Per Share                                                                                                         $    0.36                                         $    0.40                                                                                                                                                                       $      1.43                                         $      1.27
     Diluted Earnings Per Share                                                                                                       $    0.36                                         $    0.40                                                                                                                                                                       $      1.42                                         $      1.25
                                                                                                                                                                                                                                                                                                                                                                                                          
     Weighted Average Shares Outstanding - Basic                                                                                         80,938                                            81,376                                                                                                                                                                            81,491                                              80,947
     Weighted Average Shares Outstanding - Diluted                                                                                       81,747                                            82,713                                                                                                                                                                            82,467                                              82,042
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
BALANCE SHEET DATA:                                                                                   
                                                                                                                                                                    12/31/15                                                                                      12/31/14
                                                                                                                                                                   ---------                                                                                     ----------
ASSETS                                                                                                                                                                                           (Unaudited, in thousands)
Cash and cash equivalents                                                                                                                                        $     8,691                                                                                   $     17,066
Trade receivables, net of allowance for doubtful accounts                                                                                                            131,945                                                                                        143,531
Notes receivable, net of allowance for doubtful accounts                                                                                                                 648                                                                                          1,020
Prepaid expenses                                                                                                                                                      17,320                                                                                         17,423
Assets held for sale                                                                                                                                                  29,327                                                                                         23,248
Other current assets                                                                                                                                                  14,215                                                                                         13,345
Income Tax Receivable                                                                                                                                                 41,967                                                                                         19,432
Current deferred tax assets                                                                                                                             -              3,187
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Current Assets                                                                                                                         244,113            238,252
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                             
Property and equipment, net                                                                                                                                          803,643                                                                                        752,046
Notes receivable, long-term                                                                                                                                            3,419                                                                                          4,065
Goodwill                                                                                                                                                              47,050                                                                                         47,067
Intangible Assets, net                                                                                                                                                 3,075                                                                                          3,575
Other assets and restricted cash                                                                                                                   18,932             37,280
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Long-term Assets                                                                                                                                          876,119                                                                                        844,033
                                                                                                                                                                                                                                             
     Total Assets                                                                                                                                                $ 1,120,232                          $  1,082,285
                                                                                                                                              ==================== ========= ==================== ==================== ==================== ==================== ==========
                                                                                                                                                                                                                                             
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable                                                                                                                                                 $    14,818                                                                                   $     19,122
Accrued payroll and purchased transportation                                                                                                                          23,776                                                                                         34,127
Accrued liabilities                                                                                                                                                   21,609                                                                                         20,604
Claims accrual - current portion                                                                                                                                      19,471                                                                                         18,532
Dividend payable - current portion                                                                                                                    349                200
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Current Liabilities                                                                                                                                        80,023                                                                                         92,585
                                                                                                                                                                                                                                             
Claims accrual - long-term portion                                                                                                                                    11,508                                                                                         11,505
Long-term dividend payable and other liabilities                                                                                                                       2,164                                                                                          2,513
Deferred tax liabilities                                                                                                                                             174,165                                                                                        162,007
Long-term debt                                                                                                                                    112,000            134,400
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Long-term Liabilities                                                                                                                                     299,837                                                                                        310,425
                                                                                                                                                                                                                                             
     Total Liabilities                                                                                                                            379,860            403,010
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                             
Common stock                                                                                                                                                             810                                                                                            818
Additional paid-in capital                                                                                                                                           205,648                                                                                        185,184
Accumulated other comprehensive income                                                                                                                                 2,573                                                                                         12,231
Retained earnings                                                                                                                                 529,367            479,527
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Knight Transportation Shareholders’ Equity                                                                                                                738,398                                                                                        677,760
     Noncontrolling interest                                                                                                                        1,974              1,515
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Shareholders’ Equity                                                                                                                   740,372            679,275
                                                                                                                                              -------------------- --------- -------------------- -------------------- -------------------- -------------------- ----------
     Total Liabilities and Shareholders’ Equity                                                                                                                  $ 1,120,232                          $  1,082,285
                                                                                                                                              ==================== ========= ==================== ==================== ==================== ==================== ==========
 
 
                                                               Three Months Ended December 31,        Twelve Months Ended December 31,
                                                                     2015       2014          % Change                                                                                    2015        2014          % Change
                                                                    ------     ------                                                                                                   -------     -------
                                                                         (Unaudited)                                                                                                         (Unaudited)
OPERATING STATISTICS
                                                                                                                                                                                                                    
Average Revenue Per Tractor*                                      $ 42,927   $ 44,583             -3.7 %                                                                              $ 173,329   $ 171,510               1.1 %
                                                                                                                                                                                                                    
Non-paid Empty Mile Percent                                           12.7 %     11.5 %           10.4 %                                                                                   12.0 %      10.1 %            18.8 %
                                                                                                                                                                                                                    
Average Length of Haul                                                 497        478              4.0 %                                                                                    503         492               2.2 %
                                                                                                                                                                                                                    
Adjusted Operating Ratio (1)                                          83.6 %     80.7 %                                                                                                    82.6 %      82.4 %
                                                                                                                                                                                                                    
Average Tractors - Total                                             4,760      4,682                                                                                                     4,793       4,173
                                                                                                                                                                                                                    
Average Trailers - Total                                            12,154     11,441                                                                                                    11,789       9,732
                                                                                                                                                                                                                    
Net Capital Expenditures (in thousands)                           $ 40,562   $ 57,526                                                                                                 $ 149,414   $ 178,834
                                                                                                                                                                                                                    
Cash Flow From Operations (in thousands)                          $ 45,626   $ 60,120                                                                                                 $ 202,265   $ 177,187
                                                                                                                                                                                                                    
* Includes trucking segment revenue excluding fuel surcharge.
                                                                                                                                                                                                                    
                                                                                                                                                                                                                    
GAAP to Non-GAAP Reconciliation Schedules:
(1)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Non-GAAP reconciliation
Adjusted operating income, operating ratio, and adjusted operating
ratio reconciliation (a)
                                                                                                                                                                        
                                                                                                                                  Three Months Ended December 31,                                                                                                                                                                                          Twelve Months Ended December 31,
                                                                                                   2015        2014                                                                                                                                       2015             2014
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                              (Unaudited, in thousands)
                                                                                                                                                                                                                                                                                                                                                                                      
Total revenue                                                                                                       290,739                                           317,468                                                                                                                                                                         1,182,964                                            1,102,332
Less: Trucking fuel surcharge                                                                     24,767      43,815                                                                                                                                     121,225        176,347
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Revenue, excluding trucking fuel surcharge                                                       265,972     273,653                                                                                                                                   1,061,739        925,985
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Operating expense                                                                                                   247,087                                           264,686                                                                                                                                                                         1,004,964                                              939,610
Adjusted for:
   Trucking fuel surcharge                                                                                          (24,767 )                                         (43,815 )                                                                                                                                                                        (121,225 )                                          (176,347)
   Accrual for class action lawsuits (b)                                                               -           -                                                                                                                                      (7,163 )                               -
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Adjusted operating expenses                                                                      222,320     220,871                                                                                                                                     876,576        763,263
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Adjusted operating income                                                                         43,652      52,782                                                                                                                                     185,163        162,722
                                                                                               ==================== ======= ==================== ==================== ======= ====================                                                                                                                               ==================== ========= ==================== ==================== ==========
Operating ratio                                                                                                        85.0 %                                            83.4 %                                                                                                                                                                            85.0 %                                              85.2%
Adjusted operating ratio                                                                                               83.6 %                                            80.7 %                                                                                                                                                                            82.6 %                                              82.4%
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
(2)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Non-GAAP reconciliation
Adjusted net income attributable to Knight and adjusted earnings per
diluted share reconciliation:
                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                  Three Months Ended December 31,                                                                                                                                                                                          Twelve Months Ended December 31,
                                                                                                   2015        2014                                                                                                                                       2015             2014
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                 (Unaudited, in thousands, except per share amounts)
                                                                                                                                                                                                                                                                                                                                                                                      
Net Income attributable to Knight                                                                                 $  29,235                                         $  32,938                                                                                                                                                                       $   116,718                                         $    102,862
Adjusted for:
   Accrual for class action lawsuits (net of tax)(b)                                                   -           -                                                                                                                                                    $     4,395              -
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Adjusted net income attributable to Knight                                                                        $  29,235                      $  32,938                                                                                                                                                    $   121,113                      $    102,862
                                                                                               ==================== ======= ==================== ==================== ======= ====================                                                                                                                               ==================== ========= ==================== ==================== ==========
                                                                                                                                                                                                                                                                                                                                                                                      
Weighted Average Shares Outstanding - Diluted                                                                        81,747                                            82,713                                                                                                                                                                            82,467                                               82,042
                                                                                                                                                                                                                                                                                                                                                                                      
Earnings per diluted share                                                                                        $    0.36                                         $    0.40                                                                                                                                                                       $      1.42                                         $       1.25
Adjusted for:
   Accrual for class action lawsuits (b)                                                                          $    0.00                      $    0.00                                                                                                                                                    $      0.05                      $       0.00
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Adjusted earnings per diluted share                                                                               $    0.36                      $    0.40                                                                                                                                                    $      1.47                      $       1.25
                                                                                               ==================== ======= ==================== ==================== ======= ====================                                                                                                                               ==================== ========= ==================== ==================== ==========
 
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
(3)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Non-GAAP reconciliation
Operating ratio and adjusted operating ratio for trucking segment (a)
                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                  Three Months Ended December 31,                                                                                                                                                                                          Twelve Months Ended December 31,
                                                                                                   2015        2014                                                                                                                                       2015             2014
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                              (Unaudited, in thousands)
Trucking
Total revenue                                                                                                       229,088                                           252,554                                                                                                                                                                           951,935                                              892,059
Less: Trucking fuel surcharge                                                                     24,767      43,815                                                                                                                                     121,225        176,347
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Revenue, excluding trucking fuel surcharge                                                       204,321     208,739                                                                                                                                     830,710        715,712
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Operating expense                                                                                                   189,745                                           205,620                                                                                                                                                                           789,792                                              744,635
Adjusted for:
   Trucking fuel surcharge                                                                                          (24,767 )                                         (43,815 )                                                                                                                                                                        (121,225 )                                          (176,347)
   Accrual for class action lawsuits (b)                                                               -           -                                                                                                                                      (7,163 )                               -
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Adjusted operating expenses                                                                      164,978     161,805                                                                                                                                     661,404        568,288
                                                                                               -------------------- ------- -------------------- -------------------- ------- --------------------                                                                                                                               -------------------- --------- -------------------- -------------------- ----------
Adjusted operating income                                                                         39,343      46,934                                                                                                                                     169,306        147,424
                                                                                               ==================== ======= ==================== ==================== ======= ====================                                                                                                                               ==================== ========= ==================== ==================== ==========
Operating ratio                                                                                                        82.8 %                                            81.4 %                                                                                                                                                                            83.0 %                                              83.5%
Adjusted operating ratio                                                                                               80.7 %                                            77.5 %                                                                                                                                                                            79.6 %                                              79.4%
                                                                                                                                                                                                                                                                                                                                                                                      
 

(a) 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. 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.

(b) During the second quarter of 2015 we accrued $7.2 million of expense ($4.4 million after-tax) related to two class action lawsuits involving employment related claims.

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.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160127006051r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160127006051/en/

SOURCE: Knight Transportation, Inc.

Knight Transportation, Inc. 
David A. Jackson, President and CEO 
or 
Adam W. Miller, CFO 
602-606-6315


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