SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
Commission File No. 0-24946
KNIGHT TRANSPORTATION, INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0649974
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5601 West Buckeye Road
Phoenix, Arizona
85043
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: 602-269-2000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------------- ------------
The number of shares outstanding of registrant's Common Stock, par value $0.01
per share, as of November 12, 1996 was 9,902,000 shares.
<PAGE>
KNIGHT TRANSPORTATION, INC.
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page Number
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of 1
September 30, 1996 (unaudited) and December 31, 1995
Consolidated Statements of Income (unaudited) 3
for the Three Month and Nine Month Periods Ended September 30, 1996
and September 30, 1995
Consolidated Statements of Cash Flows (unaudited) 4
for the Nine Month Periods Ended September 30, 1996
and September 30, 1995
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
Part II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 12
Item 3 Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6 Exhibits and Reports on Form 8-K 12
Signatures 13
Index to Exhibits 15
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
as of September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, 1996
( unaudited ) December 31, 1995
--------------------------- -------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 543,224 623,656
Accounts receivable, net 10,106,166 7,375,038
Inventories and supplies 407,220 422,589
Prepaid expenses 1,137,020 937,304
Deferred tax asset 2,855,301 1,420,000
--------------------------- -------------------------
Total current assets 15,048,931 10,778,587
--------------------------- -------------------------
PROPERTY AND EQUIPMENT:
Land and improvements 4,246,036 2,104,394
Buildings and improvements 923,576 246,384
Furniture and fixtures 1,804,810 1,158,140
Shop and service equipment 698,832 367,900
Revenue equipment 51,755,248 38,557,223
Leasehold improvements 575,015 469,854
--------------------------- -------------------------
60,003,517 42,903,895
Less: Accumulated depreciation (14,064,535) (10,926,067)
--------------------------- -------------------------
PROPERTY AND EQUIPMENT, net 45,938,982 31,977,828
OTHER ASSETS 708,560 343,079
--------------------------- -------------------------
$61,696,473 $43,099,494
=========================== =========================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (continued)
as of September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, 1996
LIABILITIES AND SHAREHOLDERS EQUITY ( unaudited ) December 31, 1995
------------------------- -------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 1,848,425 $ 3,202,258
Accrued liabilities 2,133,348 1,773,293
Claims accrual 3,927,580 3,093,513
Current portion of long-term debt 993,444 1,002,150
Line of credit - 2,000,000
------------------------- -------------------------
Total current liabilities 8,902,797 11,071,214
LONG TERM DEBT, less current portion 307,645 980,787
DEFERRED INCOME TAXES 8,728,310 6,315,200
------------------------- -------------------------
Total liabilities 17,938,752 18,367,201
------------------------- -------------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value; - -
authorized 50,000,000 shares,
none issued and outstanding
Common stock, $0.01 par value; 99,020 91,020
authorized 100,000,000 shares; issued and
outstanding 9,102,000 shares and 9,902,000
shares at December 31, 1995 and September
30, 1996 respectively
Additional paid-in capital 23,444,556 9,761,747
Retained earnings 20,214,145 14,879,526
------------------------- -------------------------
Total shareholders' equity 43,757,721 24,732,293
------------------------- -------------------------
$61,696,473 $43,099,494
========================= =========================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
----------------------------------- ----------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
OPERATING REVENUE $20,331,352 $14,800,919 $55,881,971 $40,235,827
OPERATING EXPENSES:
Salaries, wages and benefits 5,800,110 4,314,875 15,889,720 12,069,197
Fuel 2,124,898 1,609,851 5,876,038 4,437,537
Operations and maintenance 1,059,920 967,623 2,808,272 2,738,189
Insurance and claims 689,975 511,732 2,100,056 1,616,879
Operating taxes and licenses 719,019 540,545 1,977,926 1,595,668
Communications 132,836 72,214 367,616 196,032
Depreciation and amortization 2,061,244 1,409,086 5,628,368 3,939,583
Purchased transportation 3,874,059 2,266,622 10,411,172 5,130,007
Miscellaneous operating expenses 490,425 316,782 1,353,531 904,322
----------- ------------ ------------- ------------
16,952,486 12,009,330 46,412,699 32,627,414
----------- ------------ ------------- ------------
Income from operations 3,378,866 2,791,589 9,469,272 7,608,413
OTHER INCOME (EXPENSE):
Interest income 30,314 1,175 33,989 33,166
Interest expense (113,260) (61,368) (384,641) (182,269)
----------- ------------ ------------- ------------
(82,946) (60,193) (350,652) (149,103)
----------- ------------ ------------- ------------
Income before taxes 3,295,920 2,731,396 9,118,620 7,459,310
INCOME TAXES (1,350,000) (1,200,000) (3,784,000) (3,300,000)
----------- ------------ ------------- ------------
Net Income $1,945,920 $1,531,396 $5,334,620 $4,159,310
=========== ============ ============= ============
Net income per common share and common share
equivalent: Primary $0.20 $0.17 $0.57 $0.46
Fully diluted $0.20 $0.17 $0.56 $0.45
=========== ============ ============= ============
Weighted average number of common
shares and common share equivalents
outstanding: Primary 9,892,956 9,162,014 9,429,034 9,140,831
Fully diluted 9,915,879 9,163,136 9,477,436 9,159,762
=========== ============ ============= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $5,334,620 $4,159,310
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 5,628,368 3,939,583
Allowance for doubtful accounts (197,745) 32,496
Deferred income taxes 977,809 729,800
Changes in assets and liabilities:
Increase in receivables (2,533,383) (2,387,552)
(Increase) decrease in inventories and supplies 15,369 (8,819)
(Increase) decrease in prepaid expenses 901,484 (148,808)
Increase in other assets (519,462) (102,041)
Increase (decrease) in accounts payable (320,943) 22,621
Increase in accrued liabilities and
claims accrual 1,194,121 1,658,762
----------- ----------
Net cash provided by operating
activities 10,480,238 7,895,352
----------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (18,540,705) (8,269,662)
----------- ----------
Net cash used in investing activities (18,540,705) (8,269,662)
----------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in line of credit and note
payable (2,000,000) 966,661
Repayment of debt (1,783,048) (1,100,417)
Decrease in accounts payable - equipment (1,927,726) (1,528,322)
Proceeds from exercise of stock options - 18,000
Proceeds from issuance of common stock 13,690,809 -
---------------------- ---------------------
Net cash provided by (used in)
financing activities 7,980,035 (1,644,078)
---------------------- ---------------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (80,432) (2,018,388)
CASH AND CASH EQUIVALENTS,
beginning of period 623,656 2,146,797
---------------------- ---------------------
CASH AND CASH EQUIVALENTS, end of period $ 543,224 $ 128,409
====================== =====================
SUPPLEMENTAL DISCLOSURES:
Noncash investing and financing transactions:
Equipment acquired by $ 894,836 $
accounts payable -
Insurance premium financed 1,101,200 -
Cash Paid For:
Income taxes $ 2,454,144 $ 2,414,274
Interest 392,173 182,081
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Financial Information
The accompanying consolidated financial statements include the parent company
Knight Transportation, Inc., and its wholly owned subsidiaries, Quad-K Leasing,
Inc.; KTTE Holdings, Inc., QKTE Holdings, Inc., and Knight Dedicated Services
Limited Partnership which is comprised of KTTE Holdings, Inc. as general partner
and QKTE Holdings, Inc. as sole limited partner (hereinafter collectively called
the "Company"). All material intercompany items and transactions have been
eliminated in consolidation.
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The statements presented do not include all information and footnotes required
to be in conformity with generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Results of operations in interim periods are not necessarily
indicative of results for a full year. These consolidated financial statements
and notes thereto should be read in conjunction with the Company's consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended December 31, 1995. The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions. Such estimates and assumptions
affect the reported amounts of assets and liabilities as well as disclosure of
contingent assets and liabilities at the date of the accompanying consolidated
financial statements, and the reported amounts of the revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Note 2. Stock Issuance
The Company registered an additional 800,000 shares of Common Stock in an
offering which closed July 18, 1996. The Company received proceeds of $14.8
million in connection with the offering and incurred total expenses of
approximately $1.1 million. The Company used $11.7 million of the net proceeds
to repay its current line of credit indebtedness, with the balance to be used to
acquire additional revenue equipment and for general corporate purposes.
Note 3. Subsequent Events - Legal Matters
The Company's tractor and trailer fleets are registered in Oklahoma and Utah and
operate primarily in the western United States, including California. The
Company has paid apportioned licensing and registration fees based on its
understanding of its obligations to the various jurisdictions in which the
Company operates. In addition, the Company has established reserves on a
quarterly basis to provide for contingencies, including liabilities for
additional registration fees and other obligations due to changes in operating
patterns or regulatory interpretations. The Company has been audited by the
State of California Department of Motor Vehicles("DMV") for the 1994, 1995, and
1996 mileage years, with respect to tractor and trailer miles and costs and
unladen weights the DMV has asserted to be subject to apportioned registration.
The Company initially contested the results of the DMV audit, but reached an
agreement in principle with the DMV on November 8, 1996, to settle the
assessment for slightly less than $2.0 million. The Company has accrued reserves
sufficient to cover this amount of the assessment and the outcome of the audit,
in the opinion of management, will not have a materially adverse effect on the
6
<PAGE>
Company's financial position or results of operations. The Company's payment of
additional fees to California will be partially offset by refunds from other
states which have received over payments of apportioned registration fees.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
- ---------------------
Knight Transportation, Inc.'s (the "Company") operating revenue for the nine
months ended September 30, 1996 increased by 38.9% to approximately $55.9
million from approximately $40.0 million over the same period in 1995. For the
three months ended September 30, 1996 operating revenue increased by 37.4% to
approximately $20.3 million from approximately $14.8 million over the same
period in 1995. The increase in operating revenue resulted from expansion of the
Company's customer base and increased volume from existing customers, and was
facilitated by the continued expansion of the Company's fleet, including an
increase in the Company's independent contractor fleet. The Company's fleet
increased by 37.7% to 537 tractors (including 147 owned by independent
contractors) as of September 30, 1996, from 390 tractors (including 95 owned by
independent contractors) as of September 30, 1995. Despite increases in revenue,
the Company's revenue per mile decreased to $1.24 per mile for the nine months
ended September 30, 1996 from $1.26 per mile for the same period in 1995. This
decrease was offset by revenue increases resulting from the growth of the
Company's independent contractor program combined with additional revenues
generated by the Company's expansion of its operations with the commencement of
dedicated service and regional operations near Houston, Texas in early 1996.
Salaries, wages and benefits decreased as a percentage of operating revenue to
28.4% for the nine months ended September 30, 1996 from 30.0% for the same
period in 1995. For the three months ended September 30, 1996, salaries, wages
and benefits decreased as a percentage of operating revenue to 28.5% from 29.2%
for the same period in 1995. These decreases were primarily the result of the
increase in the ratio of independent contractors to company drivers.
Fuel expense decreased as a percentage of operating revenue to 10.5% for the
nine months ended September 30, 1996 from 11.0% for the same period in 1995. For
the three months ended September 30, 1996 fuel expenses as a percentage of
revenue decreased to 10.5% from 10.9% for the same period in 1995. Although
market fuel costs increased slightly, the Company's overall decrease resulted
from the growth of the Company's independent contractor program. Independent
contractors are required to pay their own fuel costs.
Operations and maintenance expense decreased as a percentage of operating
revenue to 5.0% for the nine months ended September 30, 1996 from 6.8% for the
corresponding period in 1995. For the three months ended September 30, 1996,
operation and maintenance expense as a percentage of revenue decreased to 5.2%
from 6.5% for the same period in 1995. These decreases resulted from a decline
in trailer lease costs incurred due to an increase in Company owned trailers
during the period and the continued growth in the Company's independent
contractor program.
Insurance and claims expense decreased as a percentage of operating revenue to
3.8% for the nine months ended September 30, 1996 from 4.0% for the same period
in 1995. For the three months ended September 30, 1996 insurance and claims
expense decreased as a percentage of operating revenue to 3.4% from 3.5%
7
<PAGE>
for the same period in 1995. These decreases were due to a reduction in
insurance premium costs and a reduced amount of actual claims during the period.
Operating taxes and licenses decreased as a percentage of revenue to 3.5% for
the nine months ended September 30, 1996 from 4.0% for the same period in 1995.
For the three months ended September 30, 1996 operating taxes and licenses
decreased as a percentage of operating income to 3.5% from 3.7% for the same
period in 1995. These decreases resulted primarily from growth in the Company's
independent contractor program. Independent contractors are required to pay
their own mileage taxes.
For the nine month period ended September 30, 1996, depreciation and
amortization expense increased as a percentage of operating revenue to 10.1%
from 9.8% for the corresponding period in 1995. For the three month period ended
September 30, 1996, depreciation and amortization expense increased as a
percentage of operating revenue to 10.1% from 9.5% for the same period in 1995.
Depreciation and amortization increased primarily due to the acquisition of
revenue equipment.
Purchased transportation increased as a percentage of operating revenue to 18.6%
for the nine months ended September 30, 1996 from 12.7% for the same period in
1995. For the three months ended September 30, 1996 purchased transportation
increased to 19.1% from 15.3% for the same period in 1995. These increases were
due to the growth in the Company's independent contractor program from 95
tractors as of September 30, 1995 to 147 as of September 30, 1996.
Communications and miscellaneous operating expenses as a percentage of revenues
for both the nine month and three month periods ended September 30, 1996 were
slightly higher than the same periods in 1995.
The Company's operating ratio (operating expenses as a percentage of operating
revenue) for the nine months ended September 30, 1996 increased to 83.1% from
81.1% for the same period in 1995. The Company's operating ratio for the three
months ended September 30, 1996 increased to 83.4% from 81.1% for the same
period in 1995. Management believes the increases in the operating ratio were
mainly due to the competitive market conditions that resulted in a lower revenue
per mile.
For both the nine month and three month periods ended September 30, 1996, net
interest expense as a percentage of revenue was slightly higher than the same
periods in 1995, resulting from increased borrowings to finance the Company's
purchase of additional revenue equipment.
Income taxes have been provided at the statutory federal and state rates,
adjusted for certain permanent differences between financial statement and
income tax reporting.
As a result of the preceding, the Company's net income as a percentage of
operating revenue was 9.6% for the three months ended September 30, 1996 as
compared to 10.3% for the same period in 1995 and 9.5% for the nine months ended
September 30, 1996 as compared to 10.3% for the same period in 1995.
8
<PAGE>
Liquidity and Capital Resources
The growth of the Company's business has required a significant investment in
new revenue equipment. The Company's primary source of liquidity has been funds
provided by operations, term borrowings to finance equipment purchases, the
Company's line of credit, and proceeds received from the Company's sale of
Common Stock in an offering completed on July 18, 1996. Net cash provided by
operating activities totaled approximately $10.5 million for the first nine
months of 1996 and approximately $7.9 million for the corresponding period in
1995.
Capital expenditures for the purchase of revenue equipment, office equipment and
leasehold improvements totaled approximately $19.4 million for the first nine
months of 1996 and approximately $8.3 million for the same period in 1995.
Net cash provided by financing activities and direct financing was approximately
$9.1 million for the first nine months of 1996 compared to net cash used in
financing activities of approximately $1.6 million for the same period in 1995.
Net cash provided by financing activities during the first nine months of 1996
was the result of proceeds received from the Company's sale of common stock.
The Company has a $15 million line of credit from its lender and uses that line
to finance the acquisition of revenue equipment and other corporate purposes to
the extent the cost of such acquisitions are not provided by funds from
operations. Under the Company's line of credit, the Company is obligated to
comply with certain financial covenants. The rate of interest on borrowings
against the line of credit will vary depending upon the interest rate election
made by the Company, based on either the London Interbank Offered Rate (LIBOR),
the prime rate, or the lender's certificate of deposit rate. At September 30,
1996, the Company had no outstanding borrowings under the revolving line of
credit.
Management of the Company believes it has adequate liquidity to meet its current
needs. The Company will continue to have significant capital requirements over
the long term, which may require the Company to incur debt or seek additional
equity capital. The availability of this capital will depend upon prevailing
market conditions, the market price of the common stock and other factors over
which the Company has no control, as well as the Company's financial condition
and results of operations.
The Company registered with the Securities and Exchange Commission and sold
through a public offering an additional 800,000 shares of Common Stock,
effective as of July 18, 1996. The Company received proceeds of $14.8 million in
connection with the offering. The Company incurred approxinately $1.1 million in
total expenses related to the offering. Of the net proceeds, the Company used
$11.7 million to repay its current line of credit indebtedness, with the balance
to be used to acquire additional revenue equipment and for general corporate
purposes.
Seasonality
To date, the Company's revenues have not shown any significant seasonal pattern.
Because the Company has operated primarily in Arizona, California and the
western United States, winter weather has not adversely affected the Company's
business. Expansion of the Company's operations into Texas and Louisiana, as
well as in the Midwest and on the East Coast, could expose the Company to
greater operating variances due to seasonal weather.
9
<PAGE>
Inflation
Many of the Company's operating expenses, including fuel costs and fuel taxes,
are sensitive to the effects of inflation, which could result in higher
operating costs. The effects of inflation on the Company's business during the
nine months ended September 30, 1996 were not significant.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is party to ordinary routine litigation incidental to its business
primarily involving claims for personal injury or property damage incurred in
the transportation of freight. The company maintains insurance to cover
liabilities in excess of self-insured retentions.
In 1994, the Company received notice from the Equal Employment Opportunity
Commission ("EEOC") of charges of race discrimination filed by two drivers
seeking employment as dispatchers. The EEOC found reasonable cause to believe
the Company had discriminated against the individuals and a class of similarly
situated individuals based on race. The EEOC also determined reasonable cause
existed to believe that the Company had engaged in retaliatory conduct against
one of the individuals. The Company has been notified by the EEOC that
conciliation has failed with respect to the two charges, including the class
charge, and the EEOC has filed suit against the Company alleging unlawful
employment practices relating to the selection of dispatchers on the basis of
race and unlawful retaliation. The EEOC is seeking damages on behalf of the
individuals involved and a class of persons the Company is alleged to have
failed to hire as dispatchers. The EEOC is also seeking injunctive relief
against alleged unlawful employment practices, the institution of policies
providing for equal employment, pecuniary relief for the affected class,
including back pay, pre-judgment interest and compensation for past and future
services, and punitive damages. It is the Company's policy to comply with all
applicable laws relating to equal employment opportunity. The Company believes
that the EEOC claims are without merit and that it has defenses to all claims.
The Company intends to vigorously defend the claims.
The Company's tractor and trailer fleets are registered in Oklahoma and Utah and
operate primarily in the western United States, including California. The
Company has paid apportioned licensing and registration fees based on its
understanding of its obligations to the various jurisdictions in which the
Company operates. In addition, the Company has established reserves on a
quarterly basis to provide for contingencies, including liabilities for
additional registration fees and other obligations due to changes in operating
patterns or regulatory interpretations. The Company has been audited by the
State of California Department of Motor Vehicles("DMV") for the 1994, 1995, and
1996 mileage years, with respect to tractor and trailer miles and costs and
unladen weights the DMV has asserted to be subject to apportioned registration.
The Company initially contested the results of the DMV audit, but reached an
agreement in principle with the DMV on November 8, 1996, to settle the
assessment for slightly less than $2.0 million. The Company has accrued reserves
sufficient to cover this amount of the assessment and the outcome of the audit,
in the opinion of management, will not have a materially adverse effect on the
Company's financial position or results of operations. The Company's payment of
additional fees to California will be partially offset by refunds from other
states which have received over payments of apportioned registration fees.
Two of the Company's officers, Kevin P. Knight and Gary J. Knight, are engaged
in arbitration proceedings with their former employer, Swift Transportation,
Inc. ("Swift") with respect to claims by Swift for damages and injunctive relief
in connection with disputes related to their departure in March 1990 from
employment with Swift. The Company is not a party to any of these proceedings
and does not believe these proceedings will affect its business or financial
condition.
11
<PAGE>
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
No. Description
--- -----------
Exhibit 4 Instruments defining the rights of
security holders, including indentures
(a) Articles 4, 10 and 11 of the Restated
Articles of Incorporation of the
Company. (Incorporated by reference to
Exhibit 3.1 to the Company's Report on
Form 10-K for the fiscal year ended
December 31, 1994.)
(b) Sections 2 and 5 of the Amended and
Restated By-laws of the Company.
(Incorporated by reference to Exhibit
3.2 to the Company's Report on Form
10-K for the fiscal year ended December
31, 1995.)
Exhibit 11 Schedule of Computation of Net Income
Per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the three month
period ended September 30, 1996.
12
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KNIGHT TRANSPORTATION, INC.
Date: November 12, 1996 By: /s/ Kevin P. Knight
------------------------------------
Kevin P. Knight
Chief Executive Officer
Date: November 12, 1996 By: /s/ Clark Jenkins
------------------------------------
Clark Jenkins
Chief Financial Officer and
Principal Financial Officer
13
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS TO
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File No. 0-24946
14
<PAGE>
KNIGHT TRANSPORTATION, INC.
INDEX TO EXHIBITS TO FORM 10-Q
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Pages(1)
- ----------- ----------- -----------------
<S> <C> <C>
Exhibit 4 Instruments defining the rights of security holders,
including indentures
(a) Articles 4, 10 and 11 of the Restated Articles of
Incorporation of the Company. (Incorporated by
reference to Exhibit 3.1 to the Company's Report
on Form 10-K for the fiscal year ended
December 31, 1994.)
(b) Sections 2 and 5 of the Amended and Restated By-laws
of the Company. (Incorporated by reference to Exhibit
3.2 to the Company's Report on Form 10-K for the
fiscal year ended December 31, 1995.)
Exhibit 11 Schedule of Computation of Net Income Per Share
Exhibit 27 Financial Data Schedule
</TABLE>
(1) The page numbers where exhibits (other than those incorporated by reference)
may be found are indicated only on the manually signed report.
15
KNIGHT TRANSPORTATION, INC.
AND SUBSIDIARIES
SCHEDULE OF COMPUTATION OF NET INCOME PER SHARE
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------------ ---------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary and Fully diluted:
Common shares outstanding
beginning of period $9,102,000 $9,100,000 $9,102,000 $9,100,000
Common share equivalents:
Employee stock options
outstanding & canceled (1)
Primary 130,086 61,237 105,136 40,569
Fully diluted 153,009 62,359 153,538 59,500
Employee stock options
exercised (1)
Primary
Fully diluted - 777 - 262
- 777 - 262
Issuance of 800,000 shares of
Common Stock (2)
Primary 660,870 - 221,898 -
Fully diluted 660,870 - 221,898 -
-------------- -------------- -------------- --------------
Number of common shares and
common share equivalents
outstanding
Primary 9,892,956 9,162,014 9,429,034 9,140,831
Fully diluted 9,915,879 9,163,136 9,477,436 9,159,762
============== ============== ============== ==============
Net Income $1,945,920 $1,531,396 $5,334,620 $4,159,310
Net income per common share
and common share equivalent
Primary $.20 $.17 $.57 $.46
Fully diluted $.20 $.17 $.56 $.45
============== ============== ============== ==============
</TABLE>
Notes:
(1) Amount calculated using the treasury stock method.
(2) Incremental weighted outstanding shares from 7/18/96 to the end of the
period
EXHIBIT 11
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE COMPANY'S
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 543,224
<SECURITIES> 0
<RECEIVABLES> 10,203,369
<ALLOWANCES> 97,203
<INVENTORY> 407,220
<CURRENT-ASSETS> 15,048,931
<PP&E> 60,003,517
<DEPRECIATION> 14,064,535
<TOTAL-ASSETS> 61,696,473
<CURRENT-LIABILITIES> 8,902,797
<BONDS> 0
0
0
<COMMON> 99,020
<OTHER-SE> 43,658,701
<TOTAL-LIABILITY-AND-EQUITY> 61,696,473
<SALES> 0
<TOTAL-REVENUES> 55,881,971
<CGS> 0
<TOTAL-COSTS> 46,412,699
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 350,652
<INCOME-PRETAX> 9,118,620
<INCOME-TAX> 3,784,000
<INCOME-CONTINUING> 5,334,620
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,334,620
<EPS-PRIMARY> .57
<EPS-DILUTED> .56
</TABLE>
