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 Knight Transportation Reports Fourth Quarter and Annual 2016 Revenue and Earnings
   Wednesday, January 25, 2017 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 ended December 31, 2016.

The following table reflects key financial highlights for the fourth quarter and full year of 2016 and 2015.

                                                                                                                       
(dollars in thousands, except per share data)                                         Three Months Ended December 31,                                                                                      Twelve Months Ended December 31,
                                                                    -------------------------------------------------------------------                                          -------------------------------------------------------------------------------------
                                                                      2016       2015       Chg                                               2016         2015               Chg
                                                                    --------                      --------                      ------                                           ----------                      ----------                      --------------------
Total Revenue                                                       $289,098                      $290,739                       -0.6%                                           $1,118,034                      $1,182,964                              -5.5%
                                                                                                                                                                                                                                                  
Revenue, excluding trucking fuel surcharge                          $264,464                      $265,972                       -0.6%                                           $1,028,148                      $1,061,739                              -3.2%
                                                                                                                                                                                                                                                  
Operating Income                                                     $34,736                       $43,652                      -20.4%                                            $148,479                        $178,000                              -16.6%
Adjusted Operating Income(1)                                         $37,186                       $43,652                      -14.8%                                            $150,929                        $185,163                              -18.5%
                                                                                                                                                                                                                                                  
Net Income, attributable to Knight                                   $22,161                       $29,235                      -24.2%                                             $93,863                        $116,718                              -19.6%
Adjusted Net Income, attributable to Knight(2)                       $23,671                       $29,235                      -19.0%                                             $95,373                        $121,113                              -21.3%
                                                                                                                                                                                                                                                  
Earnings per diluted share                                            $0.27                         $0.36                       -23.6%                                              $1.16                           $1.42                               -18.4%
Adjusted earnings per diluted share(2)                                $0.29                         $0.36                       -18.4%                                              $1.17                           $1.47                               -19.9%
                                                                                                                                                                                                                                                  

The company previously announced a quarterly cash dividend of $0.06 per share to shareholders of record on December 2, 2016, which was paid on December 27, 2016.

Dave Jackson, President and Chief Executive Officer, commented on the quarter, "The freight environment continues to show signs of improvement as we experienced more non-contract opportunities during the fourth quarter of 2016 when compared to the same quarter last year. This resulted in continued year over year improvements in average miles per tractor and brokerage load count. Although our revenue per total mile continued to be down year over year, we experienced stronger sequential revenue per total mile growth from third quarter to fourth quarter this year when compared to the same period last year. With declining new truck orders, a weak used equipment market, and additional regulatory burdens expected to phase in during 2017, we expect continued improvement in the supply/demand relationship in the coming quarters.

"Our adjusted earnings per diluted share for the quarter were $0.29, compared to our adjusted earnings per diluted share of $0.36 in the same quarter last year. During the quarter, revenue per loaded mile, excluding fuel surcharge, decreased 1.2%, which negatively impacted our results by approximately $0.02 per share when compared to the same period last year. Less gain on sale of revenue equipment, increased net fuel cost, and lower other income also negatively impacted our results by approximately $0.05 per share. Driver pay continues to be inflationary when compared to the same quarter last year, which resulted in a $0.01 per share impact during the quarter. The effective income tax rate for the quarter was 36.1% versus 34.9% for the fourth quarter of 2015, which negatively impacted our results by approximately $0.01 per share. These negative items were partially offset by cost control efforts that resulted in combined savings of approximately $0.02 per share across several administrative departments.

"During the fourth quarter of 2016 we accrued $2.5 million of expense ($1.5 million after-tax) related to expected settlement costs for two class action lawsuits involving employment-related claims in California and Washington. We have provided adjusted financial information that excludes these expenses from our results of operations. We believe the comparability of our results is improved by excluding these infrequent expenses that are unrelated to our core operations."

The following table reflects our consolidated financial performance and that of our trucking and our logistics segments for the fourth quarter and full year of 2016 and 2015.

                                                                                                                    
(dollars in thousands)                                                             Three Months Ended December 31,                                                                                      Twelve Months Ended December 31,
                                                                --------------------------------------------------------------------                                          -------------------------------------------------------------------------------------
                                                                  2016       2015        Chg                                               2016         2015               Chg
                                                                --------                      --------                      -------                                           ----------                      ----------                      --------------------
Consolidated
------------------------------------------
Revenue, excluding trucking fuel surcharge                      $264,464                      $265,972                        -0.6%                                           $1,028,148                      $1,061,739                              -3.2%
Operating Income                                                 $34,736                       $43,652                       -20.4%                                            $148,479                        $178,000                              -16.6%
Adjusted Operating Income(1)                                     $37,186                       $43,652                       -14.8%                                            $150,929                        $185,163                              -18.5%
Adjusted Operating Ratio(1)                                       85.9%                         83.6%                        230 bps                                             85.3%                           82.6%                               270 bps
                                                                                                                                                                                                                                               
Trucking Segment
------------------------------------------
Revenue, excluding trucking fuel surcharge                      $202,747                      $204,321                        -0.8%                                            $810,358                        $830,710                               -2.4%
Operating Income                                                 $30,582                       $39,343                       -22.3%                                            $135,181                        $162,143                              -16.6%
Adjusted Operating Income(3)                                     $33,032                       $39,343                       -16.0%                                            $137,631                        $169,306                              -18.7%
Adjusted Operating Ratio(3)                                       83.7%                         80.7%                        300 bps                                             83.0%                           79.6%                               340 bps
                                                                                                                                                                                                                                               
Logistics Segment
------------------------------------------
Revenue                                                          $61,717                       $61,651                        0.1%                                             $217,790                        $231,029                               -5.7%
Operating Income                                                 $4,154                        $4,309                         -3.6%                                             $13,298                         $15,857                              -16.1%
Operating Ratio                                                   93.3%                         93.0%                        30 bps                                              93.9%                           93.1%                               80 bps
                                                                                                                                                                                                                                               

In the fourth quarter, the trucking segment achieved an adjusted operating ratio of 83.7% compared to 80.7% from the same quarter last year. We continue to improve the utilization of the fleet, as average miles per tractor improved 0.7% on a year over year basis. Revenue per tractor, excluding fuel surcharge, decreased 0.4%, year over year, as lower average revenue, excluding fuel surcharge, per loaded mile offset the improvement in average miles per tractor. Higher net fuel expense, less gain on sale of revenue equipment, and higher driver related expenses were the main factors negatively impacting our operating results when compared to the same period last year. We remain focused on improving the productivity of our assets, developing our freight network, and intensely controlling our costs.

During the fourth quarter of 2016, the logistics segment produced an operating ratio of 93.3% compared to 93.0% for the same quarter last year. Our logistics segment consists of brokerage, intermodal, and other logistics services. Revenue was essentially flat despite exiting our agriculture sourcing business in the first quarter of 2016. Compared to the same quarter last year, load volumes in our brokerage business increased 8.2% while gross margin percentage contracted 50 basis points. Brokerage revenue increased 6.3% when compared to the same quarter last year as increased load volume was offset by a 1.7% decline in revenue per load. We plan to continue to invest in and grow our logistics service offerings, which require comparatively little capital investment, as we seek to continue to improve our consolidated return on capital.

The used equipment market remained soft during the quarter and resulted in gain on sale of revenue equipment in the fourth quarter of 2016 of $0.7 million, compared to $3.2 million in the fourth quarter of 2015. The average age of our tractor fleet is 2.2 years, which has increased from 1.8 years from the second quarter of 2016. With rising new equipment prices and a weak used equipment market, we have extended the expected trade cycle of our tractors. We have been proactive in managing our preventative maintenance program with a goal of mitigating the additional maintenance cost associated with a slightly older fleet.

Over the last twelve months ended December 31, 2016, we have returned $59.5 million to our shareholders in the form of quarterly dividends and stock repurchases. We ended the quarter with $8.0 million of cash, $18.0 million of long-term debt, and $786.5 million of shareholders’ equity. Our net capital expenditures during 2016 were $89.0 million, while our cash flow from operations was $243.4 million. We expect our net capital expenditures in 2017 to be within a range of $95.0 to $110.0 million, which will primarily be used to replace existing tractors and trailers that will reach our current trade cycle during the year. We do not plan to grow our asset-based tractor fleet internally until we see significant strength in customer demand combined with stronger non-contract and contract rate markets.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for us beginning January 1, 2017, with early adoption permitted.

During the fourth quarter of 2016, we elected to early adopt the new guidance. The primary impact of adoption was the recognition of excess tax benefits as a reduction to income tax expense rather than paid-in capital, for all periods in 2016. The early adoption requires a recast of consolidated financial statements previously issued during 2016, the year of adoption. Therefore, our three months ended March 31, 2016, June 30, 2016, and September 30, 2016 now reflect an excess tax benefit, recorded as a reduction to income tax expense instead of additional paid-in capital, of $446,640, $243,433, and $416,697, respectively.

The company will hold a conference call on January 25, 2017, at 4:30 PM ET, to further discuss its results of operations for the quarter ended December 31, 2016. 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 2016 Conference Call Presentation."

Adjusted operating income, adjusted operating ratio, adjusted net income attributable to Knight, adjusted earnings per diluted share (EPS), and free cash flow 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,
                                                                                               2016                                                                   2015                                                                     2016                                                                     2015
                                                                        -----------------------------------------------                        -----------------------------------------------                         -------------------------------------------------                        -------------------------------------------------
                                                                                                                                                                                     (Unaudited, in thousands, except per share amounts)
REVENUE:
  Revenue, before fuel surcharge                                                           $ 264,464                                                              $ 265,972                                                               $ 1,028,148                                                              $ 1,061,739
  Fuel surcharge                                                           24,634        24,767                              89,886         121,225  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
TOTAL REVENUE                                                             289,098       290,739                           1,118,034       1,182,964  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                 
OPERATING EXPENSES:
    Salaries, wages and benefits                                                              83,197                                                                 84,148                                                                   333,929                                                                  334,069
    Fuel expense - gross                                                                      34,881                                                                 32,505                                                                   129,696                                                                  152,752
    Operations and maintenance                                                                19,360                                                                 18,790                                                                    76,246                                                                   80,855
    Insurance and claims                                                                       8,111                                                                  8,556                                                                    34,441                                                                   33,632
    Operating taxes and licenses                                                               4,083                                                                  4,957                                                                    18,728                                                                   18,911
    Communications                                                                               958                                                                  1,028                                                                     4,182                                                                    4,095
    Depreciation and amortization                                                             29,675                                                                 28,295                                                                   116,160                                                                  111,023
    Purchased transportation                                                                  65,091                                                                 64,585                                                                   233,863                                                                  246,864
    Miscellaneous operating expenses                                        9,006         4,223                              22,310          22,763  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
           Total operating expenses                                       254,362       247,087                             969,555       1,004,964  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
                                                                                                                                                                                                  
                                                                        ---------------------------------------------------------------------- --------------------------------------------------                      ------------------------------------------------------------------------ ----------------------------------------------------
    Income from operations                                                 34,736        43,652                             148,479         178,000  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                 
    Interest income                                                                               50                                                                     84                                                                       309                                                                      460
    Interest expense                                                                            (155 )                                                                 (284 )                                                                    (897 )                                                                   (998 )
    Other income                                                              337         1,808                               4,939           9,042  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
    Income before income taxes                                                                34,968                                                                 45,260                                                                   152,830                                                                  186,504
INCOME TAXES                                                               12,496    *                      15,668                              57,592    *                        68,047  
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
Net income                                                                                    22,472                                                                 29,592                                                                    95,238                                                                  118,457
Net income attributable to noncontrolling interest                           (311 )                           (357 )                                               (1,375 )                           (1,739 )
                                                                        -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------                       -------------------- --------- -------------------- -------------------- -------------------- --------- --------------------
NET INCOME ATTRIBUTABLE TO KNIGHT TRANSPORTATION                                           $  22,161                        $  29,235                                            $    93,863                        $   116,718  
                                                                        ==================== ======= ==================== ==================== ==================== ======= ====================                       ==================== ========= ==================== ==================== ==================== ========= ====================
                                                                                                                                                                                                                                                                                                 
     Basic Earnings Per Share                                                              $    0.28                                                              $    0.36                                                               $      1.17                                                              $      1.43
     Diluted Earnings Per Share                                                            $    0.27                                                              $    0.36                                                               $      1.16                                                              $      1.42
                                                                                                                                                                                                                                                                                                 
     Weighted Average Shares Outstanding - Basic                                              80,127                                                                 80,938                                                                    80,362                                                                   81,491
     Weighted Average Shares Outstanding - Diluted                                            81,140                                                                 81,747                                                                    81,228                                                                   82,467
                                                                                                                                                                                                                                                                                                                                
                                                                                                                 
BALANCE SHEET DATA:
                                                                                                                                                                                 12/31/16                                                       12/31/15
                                                                                                                                                           -------------------------------------------------                        ------------------------------
ASSETS                                                                                                                                                                                             (Unaudited, in thousands)
Cash and cash equivalents                                                                                                                                                     $     8,021                                                              $      8,691
Trade receivables, net of allowance for doubtful accounts                                                                                                                         142,167                                                                   131,945
Notes receivable, net of allowance for doubtful accounts                                                                                                                              560                                                                       648
Prepaid expenses                                                                                                                                                                   13,244                                                                    17,320
Assets held for sale                                                                                                                                                                9,634                                                                    29,327
Other current assets                                                                                                                                                                8,159                                                                    14,215
Income Tax Receivable                                                                                                                                            8,406           41,967
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Current Assets                                                                                                                                                         190,191                                                                   244,113
                                                                                                                                                                                                                                     
Property and equipment, net                                                                                                                                                       802,858                                                                   803,643
Notes receivable, long-term                                                                                                                                                         3,047                                                                     3,419
Goodwill                                                                                                                                                                           47,031                                                                    47,050
Intangible Assets, net                                                                                                                                                              2,575                                                                     3,075
Other long-term assets, restricted cash and investments                                                                                                         32,823           18,932
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Long-term Assets                                                                                                                                                       888,334                                                                   876,119
                                                                                                                                                                                                                                     
     Total Assets                                                                                                                                                             $ 1,078,525                        $  1,120,232
                                                                                                                                                           ==================== ========= ==================== ==================== ==================== ==========
                                                                                                                                                                                                                                     
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable                                                                                                                                                              $    18,006                                                              $     14,818
Accrued payroll and purchased transportation                                                                                                                                       25,017                                                                    23,776
Accrued liabilities                                                                                                                                                                16,722                                                                    21,609
Claims accrual - current portion                                                                                                                                                   18,633                                                                    19,471
Dividend payable - current portion                                                                                                                                 272              349
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Current Liabilities                                                                                                                                                     78,650                                                                    80,023
                                                                                                                                                                                                                                     
Claims accrual - long-term portion                                                                                                                                                 13,290                                                                    11,508
Long-term dividend payable and other liabilities                                                                                                                                    1,854                                                                     2,164
Deferred tax liabilities                                                                                                                                                          178,000                                                                   174,165
Long-term debt                                                                                                                                                  18,000          112,000
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Long-term Liabilities                                                                                                                                                  211,144                                                                   299,837
                                                                                                                                                                                                                                     
     Total Liabilities                                                                                                                                         289,794          379,860
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
                                                                                                                                                                                                                                     
Common stock                                                                                                                                                                          802                                                                       810
Additional paid-in capital                                                                                                                                                        223,267                    *                                              205,648
Accumulated other comprehensive income                                                                                                                                                  -                                                                     2,573
Retained earnings                                                                                                                                              562,404          529,367
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Knight Transportation Shareholders’ Equity                                                                                                                             786,473                                                                   738,398
     Noncontrolling interest                                                                                                                                     2,258            1,974
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Shareholders’ Equity                                                                                                                                788,731          740,372
                                                                                                                                                           -------------------- --------- -------------------- -------------------- -------------------- ----------
     Total Liabilities and Shareholders’ Equity                                                                                                                               $ 1,078,525                        $  1,120,232
                                                                                                                                                           ==================== ========= ==================== ==================== ==================== ==========
* Reflects the impact of the Company’s adoption of ASU
2016-09, Compensation-Stock Compensation (Topic 718): Improvement
to Employee Share-based Payment Accounting, to simplify several
aspects of the accounting for employee share-based payment
transactions, including the income tax consequences. The adoption
impacted the income statement by reducing the income tax expense,
while reducing additional paid-in capital in the balance sheet for
all periods of 2016.
 
                                                                                                
                                                                         Three Months Ended December 31,                                                     Twelve Months Ended December 31,
                                                                   2016             2015       % Change          2016                2015              % Change
                                                              ------------                        ------------                                  ---------------                        ---------------
                                                                                  (Unaudited)                                                                          (Unaudited)
OPERATING STATISTICS
                                                                                                                                                                                                           
Average Revenue Per Tractor**                                   $ 42,744                            $ 42,927       -0.4 %                          $ 172,185                              $ 173,329             -0.7 %
                                                                                                                                                                                                           
Non-paid Empty Mile Percent                                         12.7 %                              12.7 %      0.0 %                               12.5 %                                 12.0 %            4.2 %
                                                                                                                                                                                                           
Average Length of Haul                                               491                                 497       -1.2 %                                498                                    503             -1.0 %
                                                                                                                                                                                                           
Adjusted Operating Ratio (1)                                        85.9 %                              83.6 %                                          85.3 %                                 82.6 %
                                                                                                                                                                                                           
Average Tractors - Total                                           4,743                               4,760                                           4,706                                  4,793
                                                                                                                                                                                                           
Average Trailers - Total                                          12,570                              12,154                                          12,288                                 11,789
                                                                                                                                                                                                           
Net Capital Expenditures (in thousands)                         $ 12,945                            $ 40,562                                       $  89,001                              $ 149,414
                                                                                                                                                                                                           
Cash Flow From Operations (in thousands)                        $ 51,663                            $ 49,126                                       $ 243,354                              $ 205,765
** 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,
                                                                                  2016                       2015                                                                                                     2016                     2015
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                      (Unaudited, in thousands)
                                                                                                                                                                                                                                                                                                                                       
Total revenue                                                                        $ 289,098                                                                           $ 290,739                                                                                              $ 1,118,034                                                    $ 1,182,964
Less: Trucking fuel surcharge                                                           24,634                     24,767                                                                                                   89,886                  121,225
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Revenue, excluding trucking fuel surcharge                                           $ 264,464                  $ 265,972                                                                                              $ 1,028,148              $ 1,061,739
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Operating expense                                                                      254,362                                                                             247,087                                                                                                  969,555                                                      1,004,964
Adjusted for:
   Trucking fuel surcharge                                                            (24,634)                                                                            (24,767)                                                                                                 (89,886)                                                      (121,225)
   Accrual for class action lawsuits (b)                                               (2,450)                          -                                                                                                  (2,450)                  (7,163)
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Adjusted operating expenses                                                            227,278                    222,320                                                                                                  877,219                  876,576
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Adjusted operating income                                                             $ 37,186                   $ 43,652                                                                                                $ 150,929                $ 185,163
                                                                          ==================== ==================== ==================== ==================== ====================                                                                                     ==================== ==================== ==================== ====================
Operating ratio                                                                          88.0%                                                                               85.0%                                                                                                    86.7%                                                          85.0%
Adjusted operating ratio (a)                                                             85.9%                                                                               83.6%                                                                                                    85.3%                                                          82.6%
                                                                                                                                                                                                                                                                                                                                       
(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,
                                                                                  2016                       2015                                                                                                     2016                     2015
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                         (Unaudited, in thousands, except per share amounts)
                                                                                                                                                                                                                                                                                                                                       
Net Income attributable to Knight                                                     $ 22,161                                                                            $ 29,235                                                                                                 $ 93,863                                                      $ 116,718
Adjusted for:
   Accrual for class action lawsuits (net of tax)(b)                                     1,510                          -                                                                                                    1,510                    4,395
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Adjusted net income attributable to Knight                                            $ 23,671                   $ 29,235                                                                                                 $ 95,373                $ 121,113
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                       
Weighted Average Shares Outstanding - Diluted                                           81,140                                                                              81,747                                                                                                   81,228                                                         82,467
                                                                                                                                                                                                                                                                                                                                       
Earnings per diluted share                                                              $ 0.27                                                                              $ 0.36                                                                                                   $ 1.16                                                         $ 1.42
Adjusted for:
   Accrual for class action lawsuits (b)                                                  0.02                          -                                                                                                     0.02                     0.05
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Adjusted earnings per diluted share                                                     $ 0.29                     $ 0.36                                                                                $ 1.17 ***                                  $ 1.47
                                                                          ==================== ==================== ==================== ==================== ====================                                                                                     ==================== ==================== ==================== ====================
*** Footing variance due to rounding
                                                                                                                                                                                                                                                                                                                                       
(3)                                                                             
---------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Non-GAAP reconciliation
Operating ratio and adjusted operating ratio for trucking segment (a)
                                                                                                                                                                                                                                                                                                                                       
                                                                                                               Three Months Ended December 31,                                                                                                                                                   Twelve Months Ended December 31,
                                                                                  2016                       2015                                                                                                     2016                     2015
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
                                                                                                                                                                                                      (Unaudited, in thousands)
Trucking
Total revenue                                                                        $ 227,381                                                                           $ 229,088                                                                                                $ 900,244                                                      $ 951,935
Less: Trucking fuel surcharge                                                           24,634                     24,767                                                                                                   89,886                  121,225
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Revenue, excluding trucking fuel surcharge                                           $ 202,747                  $ 204,321                                                                                                $ 810,358                $ 830,710
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Operating expense                                                                      196,799                                                                             189,745                                                                                                  765,063                                                        789,792
Adjusted for:
   Trucking fuel surcharge                                                            (24,634)                                                                            (24,767)                                                                                                 (89,886)                                                      (121,225)
   Accrual for class action lawsuits (b)                                               (2,450)                          -                                                                                                  (2,450)                  (7,163)
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Adjusted operating expenses                                                            169,715                    164,978                                                                                                  672,727                  661,404
                                                                          -------------------- -------------------- -------------------- -------------------- --------------------                                                                                     -------------------- -------------------- -------------------- --------------------
Adjusted operating income                                                             $ 33,032                   $ 39,343                                                                                                $ 137,631                $ 169,306
                                                                          ==================== ==================== ==================== ==================== ====================                                                                                     ==================== ==================== ==================== ====================
Operating ratio                                                                          86.6%                                                                               82.8%                                                                                                    85.0%                                                          83.0%
Adjusted operating ratio                                                                 83.7%                                                                               80.7%                                                                                                    83.0%                                                          79.6%
(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 fourth quarter of 2016, we accrued $2.5 million of
expense ($1.5 million after-tax) related to two class action
lawsuits involving employment related claims. 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=20170125005953r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170125005953/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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