Knight split reflects “confidence,” says analyst

The decision by Phoenix-based truckload carrier Knight Transportation to offer a 3-for-2 stock split on all shares of its outstanding common stock shows that the company is “confident” that the freight market should remain robust for at least the next year or two, according to industry analyst Satish Jindel. “It shows that they have fairly strong confidence that the ground freight market is going

The decision by Phoenix-based truckload carrier Knight Transportation to offer a 3-for-2 stock split on all shares of its outstanding common stock shows that the company is “confident” that the freight market should remain robust for at least the next year or two, according to industry analyst Satish Jindel.

“It shows that they have fairly strong confidence that the ground freight market is going to remain strong – and industry data reflects that,” Jindel, president of Pittsburgh-based SJ Consulting, told Fleet Owner. “It also shows that they want to increase the liquidity of the company.”

Knight said its stock split would entitle all shareholders of record as of the close of business on July 12 to receive one additional share of common stock for every two shares of common stock held on that date, with the additional shares distributed to shareholders on or about July 20. Knight added that its currently has approximately 37.6 million shares of common stock outstanding, which would grow to some 56.4 million shares outstanding after the stock split occurs.

One reason behind the stock split may stem from Knight’s solid financial performance so far this year. In the first quarter, Knight said its revenue increased 22.7% to $90.2 million compared to the same quarter in 2003, with net income increasing 31.6% to $9.3 million. The company also improved its loaded revenue per mile in excess of 4% in the first quarter without sacrificing length of haul, adding up to eighth consecutive quarters of loaded revenue per mile improvement.

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