UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.
For the Quarterly Period Ended March 31, 2004

                                       or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.
For the transition period from           to

Commission File Number: 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.  [X] Yes [ ] No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).  [X] Yes  [ ] No

The number of shares  outstanding of registrant's  Common Stock, par value $0.01
per share, as of April 30, 2004 was 37,557,486 shares.


<PAGE>

                           KNIGHT TRANSPORTATION, INC.

                                      INDEX
<TABLE>
PART I - FINANCIAL INFORMATION                                                                            Page Number
<S>                        <C>                                                                                 <C>
Item 1.                    Financial Statements

                           Condensed Consolidated Balance Sheets as of March 31, 2004                          1
                             and December 31, 2003 (Unaudited)

                           Condensed Consolidated Statements of Income for the three                           3
                             months ended March 31, 2004 and 2003 (Unaudited)

                           Condensed Consolidated Statements of Cash Flows for the three                       4
                             months ended March 31, 2004 and 2003 (Unaudited)

                           Notes to Condensed Consolidated Financial Statements (Unaudited)                    6

Item 2.                    Management's Discussion and Analysis of Financial Condition                         14
                             and Results of Operations

Item 3.                    Quantitative and Qualitative Disclosures About Market Risk                          24

Item 4.                    Controls and Procedures                                                             25

Part II - OTHER INFORMATION
                                                                                                               26
Item 1.                    Legal Proceedings

Item 2.                    Changes in Securities and Use of Proceeds                                           26

Item 3.                    Defaults Upon Senior Securities                                                     26

Item 4.                    Submission of Matters to a Vote of Security Holders                                 26

Item 5.                    Other Information                                                                   26

Item 6.                    Exhibits and Reports on Form 8-K                                                    26

Signatures                                                                                                     29
</TABLE>





<PAGE>
PART I -  FINANCIAL INFORMATION


Item 1.   Financial Statements


                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
                Condensed Consolidated Balance Sheets (unaudited)
                   As of March 31, 2004 and December 31, 2003
                                 (In thousands)
<TABLE>
                                                       March 31, 2004                December 31, 2003
                                                   ------------------------        -----------------------
<S>                                                <C>                             <C>
ASSETS

CURRENT ASSETS:

   Cash and cash equivalents                       $             40,933            $            40,550
   Accounts receivable, net                                      44,488                         38,751
   Notes receivable, net                                            409                            515
   Inventories and supplies                                       1,614                          1,336
   Prepaid expenses                                               6,699                          7,490
   Income tax receivable                                           -                             1,761
   Deferred tax asset                                             5,670                          5,667
                                                   ------------------------        -----------------------

         Total current assets                                    99,813                          96,070
                                                   ------------------------        -----------------------

PROPERTY AND EQUIPMENT:
   Land and improvements                                         13,936                          13,911
   Buildings and improvements                                    18,356                          17,166
   Furniture and fixtures                                         5,241                           4,916
   Shop and service equipment                                     2,503                           2,409
   Revenue equipment                                            275,223                         256,803
   Leasehold improvements                                         1,007                             968
                                                   ------------------------        -----------------------

                                                                316,266                         296,173
   Less:  Accumulated depreciation
              nd amortization                                  (88,064)                        (83,238)
                                                   ------------------------        -----------------------

PROPERTY AND EQUIPMENT, net                                     228,202                         212,935
                                                   ------------------------        -----------------------
NOTES RECEIVABLE - long-term                                        187                             362
GOODWILL                                                          7,504                           7,504
OTHER ASSETS                                                      4,416                           4,355
                                                   ------------------------        -----------------------

                                                   $            340,122            $            321,226
                                                   ========================        =======================


    The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>

                                       1
<PAGE>

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

          Condensed Consolidated Balance Sheets (unaudited) (continued)
                   As of March 31, 2004 and December 31, 2003
                        (In thousands, except par values)
<TABLE>
                                                                          March 31, 2004              December 31, 2003
                                                                     ------------------------    ---------------------------
<S>                                                                  <C>                         <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

    Accounts payable                                                  $             6,453         $                3,408
    Accrued payroll                                                                 3,988                          3,448
    Accrued liabilities                                                             8,880                          4,493
    Claims accrual                                                                 15,708                         14,805
                                                                     ------------------------    ---------------------------

     Total current liabilities                                                     35,029                         26,154


DEFERRED INCOME TAXES                                                              55,292                         55,149
                                                                     ------------------------    ---------------------------

     Total liabilities                                                             90,321                         81,303
                                                                     ------------------------    ---------------------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
    Preferred stock, $0.01 par value;
      authorized 50,000 shares;
      none issued and outstanding                                                     -                              -
    Common stock, $0.01 par value; authorized
      100,000 shares; 37,531 and 37,489
      issued  and  outstanding at March 31, 2004
      and December 31, 2003, respectively                                             375                            375
    Additional paid-in capital                                                     78,509                          77,942
    Retained earnings                                                             170,917                         161,606
                                                                     ------------------------    ---------------------------

     Total shareholders' equity                                                   249,801                         239,923
                                                                     ------------------------    ---------------------------

                                                                      $           340,122         $               321,226
                                                                     ========================    ===========================


         The accompanying notes are an integral part of these condensed consolidated financial statements.

</TABLE>
                                       2
<PAGE>

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
             Condensed Consolidated Statements of Income (unaudited)
                      (In thousands, except per share data)
<TABLE>
                                                                                   Three Months Ended
                                                                                       March 31,

                                                                              2004                 2003
                                                                              ----                 ----
                  <C>                                                   <C>                   <C>
                 REVENUE:
                      Revenue, before fuel surcharge                            $90,243              $73,551
                      Fuel surcharge                                              4,069                3,658
                                                                        -----------------     ----------------

                       Total revenue                                             94,312               77,209
                                                                        -----------------     ----------------

                 OPERATING EXPENSES:
                      Salaries, wages and benefits                               30,130               23,791
                      Fuel                                                       16,714               14,228
                      Operations and maintenance                                  5,661                4,688
                      Insurance and claims                                        4,889                3,827
                      Operating taxes and licenses                                2,224                2,126
                      Communications                                                869                  720
                      Depreciation and amortization                               8,898                6,786
                      Lease expense - revenue
                        equipment                                                 1,233                1,975
                      Purchased transportation                                    6,588                5,512
                      Miscellaneous operating
                        expenses                                                  1,719                1,703
                                                                        -----------------     ----------------
                                                                                 78,925               65,356
                                                                        -----------------     ----------------

                     Income from operations                                      15,387               11,853
                                                                        -----------------     ----------------

                 OTHER INCOME (EXPENSE):
                      Interest income                                               124                  136
                      Interest expense                                               -                  (202)
                                                                        -----------------     ----------------

                                                                                    124                  (66)
                                                                        -----------------     ----------------

                      Income before taxes                                        15,511               11,787

                 INCOME TAXES                                                    (6,200)              (4,710)
                                                                        -----------------     ----------------

                      Net income                                                 $9,311               $7,077
                                                                        =================     ================

                 Net income per common share and common share
                 equivalent:
                                               Basic                              $0.25                $0.19
                                                                        =================     ================
                                               Diluted                            $0.24                $0.19
                                                                        =================     ================

                 Weighted average number of common shares and
                 common share equivalents outstanding:
                                               Basic                             37,507               37,192
                                                                        =================     ================
                                               Diluted                           38,273               38,087
                                                                        =================     ================


        The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                       3
<PAGE>

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
           Condensed Consolidated Statements of Cash Flows (unaudited)
                                 (In thousands)
<TABLE>
                                                                                         Three Months Ended
                                                                                              March 31,

                                                                                      2004                        2003
                                                                                      ----                        ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                         <C>                         <C>
Net income                                                                         $   9,311                  $   7,077
Adjustments to reconcile net income to net cash
  provided by operating activities:
        Depreciation and amortization                                                  8,898                      6,786
        Non-cash compensation expense for issuance of
         common stock to certain members of board of directors                            13                         18
        Provision for allowance for doubtful accounts
          and notes receivable                                                           (53)                       136
        Interest rate swap agreement - fair value change                                  -                          84
        Tax benefit on stock option exercises                                            298                        567
        Deferred income taxes                                                            140                      2,143
Changes in assets and liabilities:
        (Increase) decrease in trade receivables                                      (5,733)                       426
        (Increase) in inventories and supplies                                          (279)                      (155)
        Decrease (increase) in prepaid expenses                                          791                     (2,514)
        Decrease in income tax receivable                                              1,762                         -
        (Increase) in other assets                                                       (62)                       (66)
        (Decrease) increase in accounts payable                                         (731)                       304
        Increase in accrued liabilities and claims accrual                             5,830                      3,696
                                                                            ---------------------       ------------------

        Net cash provided by operating activities                                     20,185                     18,502
                                                                            ---------------------       ------------------

CASH FLOW FROM INVESTING ACTIVITIES:

        Purchase of property and equipment                                           (20,390)                   (20,498)
        Investment in/advances to other companies                                         -                        (100)
        Decrease in notes receivable                                                     332                        281
                                                                            ---------------------       ------------------

        Net cash used in investing activities                                        (20,058)                   (20,317)
                                                                            ---------------------       ------------------


       The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                       4
<PAGE>

                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

     Condensed Consolidated Statements of Cash Flows (unaudited) (continued)
                                 (In thousands)
<TABLE>

                                                                                     Three Months Ended
                                                                                         March 31,

                                                                             2004                          2003
                                                                             ----                          ----
<C>                                                                  <C>                           <C>
CASH FLOW FROM FINANCING ACTIVITIES:

     Payments on long-term debt                                                    -                         (1,393)
     Proceeds from exercise of stock options                                      256                           594
                                                                     ----------------------        ---------------------

      Net cash provided by (used in) financing activities                         256                          (799)
                                                                     ----------------------        ---------------------

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                                              383                        (2,614)
CASH AND CASH EQUIVALENTS,
     beginning of period                                                       40,550                        36,198
                                                                     ----------------------        ---------------------

CASH AND CASH EQUIVALENTS, end of period                                   $   40,933                    $   33,584
                                                                     ======================        =====================


SUPPLEMENTAL DISCLOSURES:

     Noncash investing and financing transactions:
       Equipment acquired in accounts payable                              $    3,849                    $    7,341
       Net book value of revenue equipment traded                               2,338                         2,249

     Cash flow information:
       Income taxes paid                                                   $      145                    $      216
       Interest paid                                                               -                            169






        The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                       5
<PAGE>
                  KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1.   Financial Information

The  accompanying   condensed  consolidated  financial  statements  include  the
accounts of Knight Transportation,  Inc., and its wholly owned subsidiaries (the
Company).  All  material  inter-company  balances  and  transactions  have  been
eliminated in consolidation.

The  condensed  consolidated  financial  statements  included  herein  have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America ("GAAP"),  pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
have been omitted or condensed  pursuant to such rules and  regulations.  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 condensed  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, 2003.

The  preparation  of  financial  statements  in  accordance  with GAAP  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  condensed
consolidated financial statements,  and the reported amounts of the revenues and
expenses  during the reporting  periods.  Actual results could differ from those
estimates.

     a.   Nature of Business

     Knight Transportation,  Inc. (an Arizona corporation) and subsidiaries (the
     Company)  is  a  short  to  medium-haul,   truckload   carrier  of  general
     commodities.  The  operations  are  based in  Phoenix,  Arizona,  where the
     Company has its corporate offices, fuel island, truck terminal, dispatching
     and maintenance  services.  The Company also has operations in Katy, Texas;
     Indianapolis,  Indiana;  Charlotte,  North Carolina;  Salt Lake City, Utah;
     Gulfport,  Mississippi;  Kansas City, Kansas;  Portland,  Oregon;  Memphis,
     Tennessee;  Atlanta,  Georgia; Denver, Colorado; and Las Vegas, Nevada. The
     Company operates in one industry, road transportation,  which is subject to
     regulation by the Department of Transportation and various state regulatory
     authorities. The Company has an owner-operator program. Owner-operators are
     independent  contractors who provide their own tractors.  The Company views
     owner-operators  as an alternative  method to obtaining  additional revenue
     equipment.

     b.   Significant Accounting Policies

     Principles  of  Consolidation  - The  accompanying  consolidated  financial
     statements include the parent company Knight Transportation,  Inc., and its
     wholly owned  subsidiaries (the Company).  All material  intercompany items
     and transactions have been eliminated in consolidation.

     Use of Estimates - The  preparation  of financial  statements in conformity
     with accounting principles generally accepted in the United States requires
     management  to make  estimates  and  assumptions  that affect the  reported
     amounts of assets and liabilities  and disclosure of contingent  assets and
     liabilities  at the  date of the  financial  statements,  and the  reported
     amounts of  revenues  and  expenses  during the  reporting  period.  Actual
     results could differ from those estimates.

                                       6
<PAGE>
     Cash  Equivalents - The Company  considers  all highly  liquid  instruments
     purchased  with  original  maturities  of three  months  or less to be cash
     equivalents.

     Notes  Receivable  - Included  in notes  receivable  are  amounts  due from
     independent  contractors  under a  program  whereby  the  Company  finances
     tractor purchases for its independent  contractors.  These notes receivable
     are   collateralized   by  revenue   equipment   and  are  due  in  monthly
     installments,  including  principal  and  interest  at  10%,  over  periods
     generally ranging from three to five years.

     Inventories  and Supplies - Inventories and supplies  consist  primarily of
     tires and spare  parts  which  are  stated at the lower of cost,  using the
     first-in, first-out (FIFO) method, or net realizable value.

     Property  and  Equipment  -  Property  and  equipment  are  stated at cost.
     Depreciation  and  amortization  on property and equipment is calculated by
     the straight-line method over the following estimated useful lives:

                                                             Years
                                                            -------
               Land improvements                               5
               Buildings and improvements                    20-30
               Furniture and fixtures                          5
               Shop and service equipment                     5-10
               Revenue equipment                              5-10
               Leasehold improvements                          10

     Goodwill - Effective  January 1, 2002,  we adopted  Statement  of Financial
     Accounting  Standards  ("SFAS")  No. 142,  "Goodwill  and Other  Intangible
     Assets," which establishes  financial accounting and reporting for acquired
     goodwill and other intangible assets and supersedes  Accounting  Principles
     Board Opinion No. 17, "Intangible Assets." Under SFAS No. 142, goodwill and
     indefinite-lived intangible assets are no longer amortized but are reviewed
     at least annually for impairment.

     SFAS No.  142  requires  that  goodwill  be tested  for  impairment  at the
     reporting  unit  level  at  adoption  and  at  least  annually  thereafter,
     utilizing a two-step methodology. The initial step requires us to determine
     the fair value of the reporting unit and compare it to the carrying  value,
     including  goodwill,  of such unit.  If the fair value exceeds the carrying
     value,  no impairment  loss would be recognized.  However,  if the carrying
     value of the  reporting  unit  exceeds its fair value,  the goodwill of the
     reporting unit may be impaired. The amount, if any, of the impairment would
     then be measured in the second step.

     In connection with adopting this standard as of January 1, 2002, during the
     first quarter of 2002 we identified  our reporting  units to be at the same
     level as the operating  segments;  however,  these operating  segments have
     been  aggregated and reported as one reportable  segment in accordance with
     the  aggregation  provisions  of  SFAS  No.  131.  In  applying  this  same
     aggregation  criteria, we determined that we had one reporting unit, and we
     completed  step one of the test for  impairment,  which  indicated that the
     fair value, as determined utilizing various evaluation techniques including
     discounted cash flow and comparative market analysis, of the reporting unit
     exceeded the carrying value of the reporting  unit. In accordance with SFAS
     No. 142, our policy is to evaluate  this  goodwill for  impairment at least
     annually,  or more frequently  should any of the certain  circumstances  as
     listed in SFAS No. 142 occur.

                                       7
<PAGE>

     Other Assets - Other assets include:
<TABLE>
                                                                                2004              2003
                                                                            -------------    -------------
                                                                            (In thousands)   (In thousands)
            <S>                                                             <C>              <C>
            Investment in and related advances to Concentrek, Inc.          $       2,245    $       2,245
            Investment in Knight Flight, LLC                                        1,388            1,388
            Other                                                                     783              722
                                                                                      ---              ---
                                                                            $       4,416    $       4,355
                                                                            =============    =============
</TABLE>
     In  April  1999,   we  acquired  a  17%   interest  in   Concentrek,   Inc.
     ("Concentrek")  through  the  purchase  of shares of  Concentrek's  Class A
     Preferred Stock for $200,000. This stock does not have voting rights except
     in  connection  with  certain  major  corporate  events,  such as a merger,
     consolidation,  or sale of substantially  all of Concentrek's  assets.  The
     remaining  83% interest in Concentrek  is owned by Randy,  Kevin,  Gary and
     Keith Knight and members of Concentrek's management.  We have made loans to
     Concentrek to fund start-up costs. At March 31, 2004, the total outstanding
     amount of these loans was  approximately  $2.0  million.  Of the total loan
     amounts,  $824,500 is evidenced by a  promissory  note that is  convertible
     into  Concentrek's  Class A  Preferred  Stock,  and  according  to the note
     agreement,  the  conversion  of which would not result in our  ownership in
     Concentrek  to exceed 17%.  The  remaining  $1.2  million is evidenced by a
     promissory note which is personally  guaranteed by Randy,  Kevin,  Gary and
     Keith  Knight.  Both loans are  secured by a lien on  Concentrek's  assets.
     These loans are on parity with respect to their  security.  This investment
     is recorded at cost and our  ownership  percentage in this  investment  was
     less than 20% at March 31,  2004 and we do not have  significant  influence
     over the operating decisions of that entity.

     In November 2000, we acquired a 19% interest in Knight Flight Services, LLC
     ("Knight Flight") which purchased and operates a Cessna Citation 560 XL jet
     aircraft.  The  aircraft  is leased to Pinnacle  Air  Charter,  L.L.C.,  an
     unaffiliated  entity, which leases the aircraft on behalf of Knight Flight.
     We have no further  financial  commitments to Knight Flight.  The remaining
     81%  interest  in Knight  Flight is owned by Randy,  Kevin,  Gary and Keith
     Knight, who have personally  guaranteed the balance of the debt incurred to
     finance the purchase of the  aircraft,  and have agreed to  contribute  any
     capital required to meet any cash short falls. We have a priority use right
     for the aircraft. This investment is accounted for on the equity method.

     We evaluate equity securities for other than temporary declines in value at
     each balance sheet date.

     Impairment  of  Long-Lived  Assets  -  Statement  of  Financial  Accounting
     Standards   ("SFAS")  No.  144  provides  a  single  accounting  model  for
     long-lived assets to be disposed of. SFAS No. 144 also changes the criteria
     for  classifying  an asset as held for  sale;  and  broadens  the  scope of
     businesses  to be disposed of that qualify for  reporting  as  discontinued
     operations and changes the timing of recognizing losses on such operations.
     We adopted  SFAS No. 144 on January 1, 2002.  The  adoption of SFAS No. 144
     did not affect our financial statements.  Prior to the adoption of SFAS No.
     144, we accounted for  long-lived  assets in accordance  with SFAS No. 121,
     "Accounting for Impairment of Long-Lived  Assets and for Long-Lived  Assets
     to be Disposed Of."

     In accordance with SFAS No. 144,  long-lived  assets,  such as property and
     equipment,  are  reviewed  for  impairment  whenever  events or  changes in
     circumstances  indicate  that the  carrying  amount  of an asset may not be
     recoverable.  Recoverability of assets to be held and used is measured by a
     comparison  of the carrying  amount of an asset to  estimated  undiscounted
     future

                                       8
<PAGE>
     cash flows expected to be generated by the asset. If the carrying amount of
     an asset exceeds its estimated  future cash flows, an impairment  charge is
     recognized by the amount by which the carrying  amount of the asset exceeds
     the fair value of the asset.  Assets to be disposed of would be  separately
     presented  in the balance  sheet and  reported at the lower of the carrying
     amount or fair value less costs to sell, and are no longer depreciated. The
     assets and  liabilities  of a disposal  group  classified  as held for sale
     would be  presented  separately  in the  appropriate  asset  and  liability
     sections of the balance sheet.

     Recoverability  of long-lived assets is dependent upon, among other things,
     our  ability to  continue  to achieve  profitability,  in order to meet our
     obligations when they become due. In the opinion of management,  based upon
     current  information,  the  carrying  amount of  long-lived  assets will be
     recovered  by future  cash flows  generated  through the use of such assets
     over respective estimated useful lives.

     Revenue  Recognition - We recognize  revenues,  including fuel  surcharges,
     when persuasive evidence of an arrangement  exists,  delivery has occurred,
     the fee is fixed or  determinable  and  collectibility  is probable.  These
     conditions are met upon delivery.

     Income  Taxes - We use the asset and  liability  method of  accounting  for
     income taxes.  Deferred tax assets and  liabilities  are recognized for the
     future tax consequences  attributable to differences  between the financial
     statement  carrying  amount of existing  assets and  liabilities  and their
     respective  tax bases.  Deferred  tax assets and  liabilities  are measured
     using enacted tax rates expected to apply to taxable income in the years in
     which those temporary differences are expected to be recovered or settled.

     Financial  Instruments - The Company's  financial  instruments include cash
     equivalents,  trade  receivables,  notes  receivable,  accounts payable and
     notes payable.  Due to the  short-term  nature of cash  equivalents,  trade
     receivables  and  accounts  payable,  the fair  value of these  instruments
     approximates their recorded value. In the opinion of management, based upon
     current  information,  the fair value of notes receivable and notes payable
     approximates  market value.  The Company does not have  material  financial
     instruments  with  off-balance  sheet risk, with the exception of operating
     leases.

     Segment Information - Although we have sixteen operating divisions, we have
     determined  that we have one reportable  segment.  Fifteen of the divisions
     are  managed  based on the  regions  of the  United  States  in which  each
     operates.  Each of these divisions has similar economic  characteristics as
     they all provide short to medium haul truckload  carrier service of general
     commodities  to a similar  class of customers.  In addition,  each division
     exhibits similar financial performance,  including average revenue per mile
     and operating ratio. The remaining division is not reported because it does
     not meet the  materiality  thresholds  in SFAS No. 131  "Disclosures  about
     Segments of an  Enterprise".  As a result,  we have  determined  that it is
     appropriate  to  aggregate  our  operating  divisions  into one  reportable
     segment consistent with the guidance in SFAS No. 131. Accordingly,  we have
     not  presented  separate  financial  information  for each of our operating
     divisions  as  our  consolidated   financial  statements  present  our  one
     reportable segment.

     Derivative and Hedging  information - All derivatives are recognized on the
     balance sheet at their fair value.  On the date the derivative  contract is
     entered  into,  we designate  the  derivative as either a hedge of the fair
     value of a  recognized  asset or  liability  or of firm  commitment  ("fair
     value" hedge), or a hedge of a forecasted transaction or the variability of
     cash  flows  to be  received  or paid  related  to a  recognized  asset  or
     liability  ("cash flow"  hedge).  We formally  assess,  both at the hedge's
     inception and on an ongoing basis, whether the derivatives that are used in
     hedging  transactions are effective in offsetting changes in fair values or
     cash flows of

                                       9
<PAGE>
     hedged items. When it is determined that a derivative is not effective as a
     hedge or that it has ceased to be an effective hedge, we discontinue  hedge
     accounting  prospectively.  In August and September 2000, and in July 2001,
     we entered  into three  agreements,  respectively;  these  three  contracts
     relate  to the price of  heating  oil on the New York  Mercantile  Exchange
     ("NYMX")  and were  entered  into in  connection  with  volume  diesel fuel
     purchases  between  October 2000 and February  2002.  The three  agreements
     described  above are stated at their fair market value in the  accompanying
     condensed consolidated financial statements.

     During 2001, we entered into an interest  rate swap  agreement on the $12.2
     million  outstanding on our line of credit for purposes of better  managing
     cash flow.  On  November  7, 2001,  we paid  $762,500  to settle  this swap
     agreement.  The amount was included in other  comprehensive  income and had
     been fully amortized to interest expense at December 31, 2003.

     Recently Adopted and to be Adopted Accounting  Pronouncements -- In January
     2003, the FASB issued  Interpretation  No. 46,  "Consolidation  of Variable
     Interest  Entities,  an interpretation of ARB No. 51", which was revised in
     December 2003. This interpretation  addresses the consolidation by business
     enterprises   of   variable   interest   entities   as   defined   in  this
     interpretation.   This  interpretation   applies  immediately  to  variable
     interests in variable interest entities created after January 31, 2003, and
     to variable  interests in variable interest entities obtained after January
     31, 2003.  For public  enterprises  with a variable  interest in a variable
     interest  entity  created  before  February  l, 2003,  this  interpretation
     applies to that enterprise no later than the beginning of the first interim
     or  annual   reporting  period  beginning  after  December  15,  2003.  The
     application of this  interpretation  did not have a material  effect on our
     consolidated financial statements.

     In December 2003, the  Securities  and Exchange  Commission  ("SEC") issued
     Staff Accounting Bulletin No. 104 ("SAB No. 104"),  "Revenue  Recognition",
     which  codifies,  revises  and  rescinds  certain  sections of SAB No. 101,
     "Revenue  Recognition",   in  order  to  make  this  interpretive  guidance
     consistent with current authoritative  accounting and auditing guidance and
     SEC rules and regulations.  The changes noted in SAB No. 104 did not have a
     material effect on our consolidated financial statements.

     Reclassifications  - Certain prior period amounts have been reclassified to
     conform to the current period presentation.

Note 2.   Stock-Based Compensation

Stock-Based  Compensation - At March 31, 2004,  the Company had one  stock-based
employee compensation plan. The Company applies the intrinsic-value-based method
of accounting  prescribed by Accounting  Principles  Board (APB) Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees,"  and  related   interpretations
including  Financial  Accounting  Standards Board (FASB)  Interpretation No. 44,
"Accounting  for  Certain   Transactions   involving  Stock   Compensation,   an
interpretation  of APB Opinion No. 25," issued in March 2000, to account for its
fixed-plan stock options. Under this method, compensation expense is recorded on
the date of grant  only if the  current  market  price of the  underlying  stock
exceeded  the exercise  price.  No  stock-based  employee  compensation  cost is
reflected in net income,  as all options  granted under the plan had an exercise
price equal to the market  value of the  underlying  common stock on the date of
the  grant.   Statement  of  Financial  Accounting  Standards  (SFAS)  No.  123,
"Accounting  for  Stock-Based   Compensation,"  as  amended  by  SFAS  No.  148,
"Accounting   for  Stock-Based   Compensation  -  Transition  and   Disclosure,"
established  accounting and  disclosure  requirements  using a  fair-value-based
method of accounting for stock-based employee  compensation plans. As allowed by
SFAS  No.   123,   the   Company   has   elected  to   continue   to  apply  the
intrinsic-value-based method of accounting described above, and has adopted only
the disclosure requirements of SFAS No. 123. The following table illustrates the
effect on net  income if the

                                       10
<PAGE>
fair-value-based  method had been applied to all outstanding and unvested awards
for the three-month periods ended March 31, 2004 and 2003 (in thousands,  except
per share data):
<TABLE>
                                                                     2004            2003
                                                                 -------------    -------------
        <S>                                                      <C>              <C>
        Net income, as reported                                    $   9,311        $   7,077
        Deduct total stock-based employee
        compensation expense determined under
        fair-value-based method for all rewards, net
        of tax                                                          (289)            (220)
                                                                 -------------    -------------

        Pro forma net income                                       $   9,022        $   6,857
                                                                 =============    =============

        Diluted earnings per share - as reported                   $    0.24        $    0.19
                                                                 =============    =============
        Diluted earnings per share - pro forma                     $    0.24        $    0.18
                                                                 =============    =============
</TABLE>
The fair value of each option  grant is estimated on the date of the grant using
the  Black-Scholes  option  pricing  model with the following  weighted  average
assumptions  used for grants in 2004: risk free interest rate of 3.5%;  expected
life of seven years; expected volatility of 50%; expected dividend yield rate of
zero;  and  expected  forfeitures  of  3.39%.  The  following  weighted  average
assumptions  were  used for  grants  in 2003:  risk free  interest  rate  3.36%;
expected life of six years;  expected volatility of 52%; expected dividend yield
rate of zero; and expected forfeitures of 3.92%.

Note 3.   Net Income Per Share

A reconciliation  of the basic and diluted  earnings per share  computations for
the three months ended March 31, 2004 and 2003, is as follows:

                                                   Three Months Ended
                                                        March 31,

                                                2004                2003
                                                ----                ----

Weighted average common
 shares outstanding  - basic                      37,507              37,192

Effect of stock options                              766                 895
                                           ----------------    ----------------

Weighted average common
 share and common share
 equivalents outstanding -
 diluted                                          38,273              38,087
                                           ================    ================

Net income                                        $9,311              $7,077
                                           ================    ================

 Net income per common share and
 common share equivalent
                  Basic                            $0.25               $0.19
                                           ================    ================
                  Diluted                          $0.24               $0.19
                                           ================    ================

                                       11
<PAGE>
Note 4.   Comprehensive Income

Comprehensive income for the period was as follows:

                                                   Three Months Ended
                                                        March 31,

                                                2004                2003
                                                ----                ----

Net income                                        $9,311              $7,077

Other comprehensive income:
Interest rate swap agreement - fair
market value adjustment                                -                  84
                                           ----------------    ----------------

Comprehensive income                              $9,311              $7,161
                                           ================    ================

Note 5.   Segment Information

Although we have sixteen  operating  divisions,  we have determined that we have
one reportable segment. Fifteen of the divisions are managed based on regions in
the United  States in which we  operate.  Each of these  divisions  has  similar
economic  characteristics  as they all provide  short to  medium-haul  truckload
carrier  services of general  commodities  to a similar class of  customers.  In
addition,  each  division  exhibits  similar  financial  performance,  including
average  revenue per mile and operating  ratio.  The  remaining  division is not
reported  because it does not meet the  materiality  thresholds in SFAS No. 131,
"Disclosures  about  Segments of an Enterprise  and Related  Information".  As a
result,  we have  determined  that it is  appropriate to aggregate our operating
divisions into one reportable  segment  consistent with the guidance in SFAS No.
131. Accordingly,  we have not presented separate financial information for each
of our operating divisions as our consolidated  financial statements present our
one reportable segment.

Note 6.   Derivative Instruments and Hedging Activities

All  derivatives are recognized on the balance sheet at their fair value. On the
date the  derivative  contract is entered into,  we designate the  derivative as
either a hedge of the fair value of a  recognized  asset or  liability  or of an
unrecognized  firm  commitment  ("fair  value" hedge) or a hedge of a forecasted
transaction or the variability of cash flows to be received or paid related to a
recognized asset or liability ("cash flow" hedge).  We formally assess,  both at
the hedge's inception and on an ongoing basis,  whether the derivatives that are
used in hedging  transactions are effective in offsetting changes in fair values
or cash flows of hedged items.  When it is  determined  that a derivative is not
effective  as a  hedge  or that  it has  ceased  to be an  effective  hedge,  we
discontinue hedge accounting prospectively.

In  August  and  September  2000,  and in  July  2001,  we  entered  into  three
agreements,   respectively,   which  are  derivative  instruments.  These  three
contracts relate to the price of heating oil on the New York Mercantile Exchange
("NYMX") and were entered into in connection  with volume diesel fuel  purchases
between October 2000 and February 2002. The three agreements described above are
stated at their fair market  value in the  accompanying  condensed  consolidated
financial statements.

                                       12
<PAGE>
During  2001,  we entered  into an  interest  rate swap  agreement  on the $12.2
million  outstanding on our line of credit for purposes of better  managing cash
flow. On November 7, 2001, we paid $762,500 to settle this swap  agreement.  The
amount was included in other  comprehensive  income and had been fully amortized
to interest expense at December 31, 2003.

Note 7.   Commitments and Contingencies

We are involved in certain  legal  proceedings  arising in the normal  course of
business.  In the opinion of  management,  our potential  exposure under pending
legal  proceedings  is  adequately  provided for in the  accompanying  condensed
consolidated financial statements.









                                       13
<PAGE>
Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

Cautionary Note Regarding Forward-Looking Statements

     Except for certain historical  information  contained herein, the following
discussion contains  forward-looking  statements that involve risks, assumptions
and  uncertainties  which are difficult to predict.  All statements,  other than
statements   of  historical   fact,   are   statements   that  could  be  deemed
forward-looking  statements,  including without  limitation:  any projections of
earnings,   revenues,   or  other  financial  items;  any  statement  of  plans,
strategies,  and objectives of management for future operations;  any statements
concerning  proposed  new services or  developments;  any  statements  regarding
future economic conditions or performance;  and any statements of belief and any
statement  of  assumptions  underlying  any  of the  foregoing.  Words  such  as
"believe," "may," "could," "expects," "hopes,"  "anticipates," and "likely," and
variations of these words, or similar expressions, are intended to identify such
forward-looking  statements.  Actual events or results  could differ  materially
from those discussed in forward-looking statements.  Factors that could cause or
contribute to such differences  include, but are not limited to, those discussed
in the section  entitled  "Factors  That May Affect  Future  Results," set forth
below. We do not assume, and specifically disclaim, any obligation to update any
forward-looking statement contained in this Report.

Introduction

Business Overview

     We are a dry van truckload carrier based in Phoenix,  Arizona. We transport
general  commodities  for  shippers  throughout  the  United  States,  generally
focusing our operations on short-to-medium  lengths of haul. We provide regional
truckload carrier services from our 15 operating  divisions  located  throughout
the United States. Over the past five years we have achieved substantial revenue
and income  growth as a result of our  continuing  expansion  into new  regional
markets,  emphasis on maintaining  and improving  efficiencies  and cost control
discipline,  and success at obtaining  rate increases as a result of providing a
high level of customer  service.  During this period,  our revenue,  before fuel
surcharge,  grew at a 21% compounded  annual rate from $125.0 million in 1998 to
$326.9 million in 2003, and our net income grew at a 22% compounded  annual rate
from $13.3 million in 1998 to $35.5 million in 2003.

Operating and Growth Strategy

     Our operating strategy is focused on the following core elements:

     o    Focusing  on  Regional  Operations.  We seek to operate  primarily  in
          high-density,   predictable   traffic  lanes  in  selected  geographic
          regions. We believe our regional operations allow us to obtain greater
          freight  volumes and higher  revenue per mile, and also enhance safety
          and driver recruitment and retention.

     o    Maintaining  Operating  Efficiencies  and Controlling  Costs. We focus
          almost  exclusively on operating  dry-vans in distinct  geographic and
          shipping markets in order to achieve increased penetration of targeted
          service areas and higher equipment utilization in dense traffic lanes.
          We actively seek to control costs by, among other things,  operating a
          modern  equipment  fleet,  maintaining  a high  driver  to  non-driver
          employee ratio, and regulating vehicle speed.

     o    Providing a High Level of Customer Service.  We seek to compete on the
          basis of service in addition to price, and offer our customers a broad
          range of services to meet their  specific  needs,  including  multiple
          pick ups and deliveries, on-time pick ups and deliveries within narrow
          time frames,  dedicated fleet and personnel,  and  specialized  driver
          training.

     o    Using  Technology to Enhance Our  Business.  Our tractors are equipped
          with a satellite-based tracking and communications system to permit us
          to stay in contact with our drivers, obtain load position updates, and
          provide our customers with freight visibility. A significant

                                       14
<PAGE>
          number of our trailers are equipped with tracking  technology to allow
          us to manage our trailers more effectively,  maintain a low trailer to
          tractor ratio,  efficiently  assess detention fees, and minimize cargo
          loss.

     The primary  source of our revenue  growth has been our ability to open new
regional  facilities in certain geographic areas and operate these facilities at
a profit. During 2003, we established presences in Atlanta,  Georgia and Denver,
Colorado,  and opened a regional facility in Las Vegas, Nevada in February 2004.
We anticipate opening our 16th operating division in Eastern Pennsylvania during
the second  quarter of 2004.  Based on our current  expectations  concerning the
economy,  we anticipate opening at least one other new regional facility in 2004
and adding 350 to 400 new tractors  system-wide  during the year. As part of our
growth strategy, we also periodically evaluate acquisition  opportunities and we
will  continue to consider  acquisitions  that meet our  financial and operating
criteria.

Revenue and Expenses

     We primarily  generate  revenue by transporting  freight for our customers.
Generally,  we are paid by the mile for our services.  We enhance our revenue by
charging for tractor and trailer  detention,  loading and unloading  activities,
and other  specialized  services,  as well as  through  the  collection  of fuel
surcharges  to mitigate the impact of  increases  in the cost of fuel.  The main
factors  that affect our  revenue  are the revenue per mile we receive  from our
customers, the percentage of miles for which we are compensated,  and the number
of miles we generate  with our  equipment.  These  factors  relate,  among other
things,  to the  general  level  of  economic  activity  in the  United  States,
inventory  levels,  specific  customer  demand,  the  level of  capacity  in the
trucking  industry,  and  driver  availability.   Going  forward,  the  recently
effective revised  hours-of-service  regulations could have a negative impact on
our miles per truck if they  reduce  the amount of time that our  drivers  spend
driving.  To the extent we are not able to offset any such  impact  through  the
collection  of fees from  shippers  who retain our  equipment  or  drivers,  our
revenue would be adversely affected. Although it is still too early to ascertain
the ultimate  impact of the new  hours-of-service  regulations,  our preliminary
expectation is that they will not  materially  affect our results of operations.
We invested  significant  time and resources  training our driver and non-driver
personnel  and   communicating   with  our  customers  in  preparation  for  the
effectiveness  of the new rules in January 2004,  and have  experienced  minimal
disruption in our operations to date.

     For much of the past three years,  economic  activity in the United  States
has been  somewhat  sluggish,  which has  limited to some  extent our ability to
obtain  rate  increases.  During the second  half of 2003,  however,  the United
States economy experienced strong growth, which many forecasters anticipate will
continue  throughout 2004. Business inventory levels also improved in late 2003.
We believe  that if the  economy  continues  to  improve  and  inventory  levels
continue to increase,  we should  experience  stronger  and more stable  freight
demand among current and  prospective  customers in 2004 than we  experienced in
2001, 2002, and the first half of 2003. Historically, the excess capacity in the
transportation  industry has limited our ability to improve rates. Over the past
two years,  however,  the  transportation  industry  has seen some  reduction in
capacity.  We hope that, in 2004,  lower capacity  coupled with stronger freight
demand will continue to provide us with better pricing power.

     The main factors that impact our  profitability on the expense side are the
variable costs of  transporting  freight for our customers.  These costs include
fuel expense,  driver-related  expenses, such as wages, benefits,  training, and
recruitment,  and  owner-operator  costs,  which are  recorded  under  purchased
transportation.  Expenses that have both fixed and variable  components  include
maintenance  and tire expense and our total cost of insurance and claims.  These
expenses  generally vary with the miles we travel,  but also have a controllable
component based on safety,  fleet age,  efficiency,  and other factors. Our main
fixed costs are the  acquisition  and  financing  of long-term  assets,  such as
revenue  equipment and operating  terminals,  and the compensation of non-driver
personnel.  Effectively  controlling  our  expenses is an  important  element of
assuring  our  profitability.  The  primary  measure  we  use  to  evaluate  our
profitability is operating ratio, excluding the impact of fuel surcharge revenue
(operating expenses, net of fuel surcharge,  as a percentage of revenue,  before
fuel  surcharge).  We view any operating  ratio,  whether for the Company or any
operations center, in excess of 85% as unacceptable performance.

                                       15
<PAGE>
Recent Results of Operations and Quarter-End Financial Condition

     For the quarter ended March 31, 2004, our results of operations improved as
follows versus the same period in 2003:

     o    Revenue, before fuel surcharge, increased 22.7%, to $90.2 million from
          $73.6 million;

     o    Net income increased 31.6%, to $9.3 million from $7.1 million; and

     o    Net income per diluted share increased to $0.24 from $0.19.

     We believe the improvements in our profitability are attributable primarily
to higher average revenue per tractor per week (excluding fuel  surcharge),  our
main measure of asset productivity,  which increased 8.6% to $2,853 in the first
quarter of 2004 from $2,628 in the first quarter of 2003.  This  improvement was
driven by a 4.1%  increase in average  revenue per loaded mile  (excluding  fuel
surcharge)  to $1.489  from  $1.430 and a 4.9%  increase  in  average  miles per
tractor to 28,142 from 26,838.  We believe these increases were  attributable to
stronger  freight  demand  and a better  rate  environment  in the 2004  quarter
primarily due to the improving U.S.  economy.  Rate and mile  improvements  were
partially  offset by a 6.3% increase in our percentage of  non-revenue  miles to
11.8% for the first  quarter of 2004 from 11.1% for the same period in the prior
year, which was principally due to positioning of our revenue equipment in areas
which  allowed us to capitalize  on the most  favorable  freight in terms of the
highest rates.

     In addition,  in the first quarter of 2004 we saw considerable  improvement
in our driver hiring and retention situation. During the fourth quarter of 2003,
we experienced a temporary  challenge  attracting a sufficient number of drivers
to optimize utilization of our tractor fleet. In response to this challenge,  we
placed additional  emphasis on our driver recruiting and retention  efforts.  We
believe  these  steps,  coupled  with  one cent per  mile  increases  in  driver
compensation  implemented in September 2003 and January 2004, which affected our
costs in the first  quarter of 2004 and will  continue to affect our costs going
forward,  have  effectively  addressed the driver issues that we previously were
experiencing.

     At March 31, 2004 our balance  sheet  reflected  $40.9  million in cash and
cash equivalents, no long-term debt, and shareholders' equity of $249.8 million.
For the quarter,  we generated  $20.2 million in cash flow from  operations  and
used  $20.4  million  for net  capital  expenditures.







                                       16
<PAGE>
Results of Operations

     The following table sets forth the percentage  relationships of our expense
items to total  revenue and  revenue,  before fuel  surcharge,  for the quarters
ended March 31, 2004, and 2003. Fuel expense as a percentage of revenue,  before
fuel surcharge,  is calculated using fuel expense, net of surcharge.  Management
believes  that  eliminating  the  impact of this  sometimes  volatile  source of
revenue affords a more consistent  basis for comparing our results of operations
from period to period.
<TABLE>
                                     Quarter Ended                                        Quarter Ended
                                       March 31,                                            March 31,
                                 ---------------------                                ---------------------
                                   2004        2003                                      2004       2003
                                 ---------   ---------                                ---------   ---------
<S>                              <C>         <C>        <C>                           <C>         <C>
Total revenue                      100.0%     100.0%    Revenue, before fuel surcharge   100.0%     100.0%
                                 ---------   ---------                                ---------   ---------
Operating expenses:                                     Operating expenses:
Salaries, wages and                                     Salaries, wages and
benefits                            32.0       30.8     benefits                          33.4       32.3
Fuel                                17.7       18.4     Fuel(1)                           14.0       14.4
Operations and                                          Operations and
maintenance                          6.0        6.1     maintenance                        6.3        6.4
Insurance and claims                 5.2        5.0     Insurance and claims               5.4        5.2
Operating taxes and                                     Operating taxes and
licenses                             2.4        2.8     licenses                           2.5        2.9
Communications                       0.9        0.9     Communications                     1.0        1.0
Depreciation and                                        Depreciation and
amortization                         9.4        8.8     amortization                       9.9        9.2
Lease expense - revenue                                 Lease expense - revenue
        equipment                    1.3        2.5             equipment                  1.4        2.7
Purchased transportation             7.0        7.1     Purchased transportation           7.3        7.5
Miscellaneous operating                                 Miscellaneous operating
       expenses                      1.8        2.2            expenses                    1.9        2.3
                                 ---------   ---------                                ---------   ---------
Total operating expenses            83.7       84.6     Total operating expenses          82.9       83.9
                                 ---------   ---------                                ---------   ---------
Income from operations              16.3       15.4     Income from operations            17.1       16.1
Net interest and other                                  Net interest and other
expense                              0.1       (0.1)    expense                            0.1       (0.1)
                                 ---------   ---------                                ---------   ---------
Income before income                16.4       15.3     Income before income              17.2       16.0
taxes                                                   taxes
Income taxes                         6.5        6.1     Income taxes                       6.9        6.4
                                 ---------   ---------                                ---------   ---------
Net Income                           9.9%       9.2%    Net Income                        10.3%       9.6%
                                 =========   =========                                =========   =========
___________________________
(1) Net of fuel surcharge.
</TABLE>

     A discussion of our results of operations  for the quarters ended March 31,
2004 and 2003 is set forth below.

                                       17
<PAGE>
Comparison of Three Months Ended March 31, 2004 to Three Months Ended
March 31, 2003

     Our total revenue for the quarter  ended March 31, 2004  increased to $94.3
million from $77.2 million for the same quarter in 2003.  Total revenue included
$4.1  million of fuel  surcharge  revenue in the 2004  quarter  compared to $3.7
million in the 2003  quarter.  In  discussing  our results of  operations we use
revenue,  before fuel  surcharge,  and fuel expense,  net of surcharge,  because
management  believes  that  eliminating  the impact of this  sometimes  volatile
source of revenue affords a more  consistent  basis for comparing our results of
operations from period to period. We also discuss the changes in our expenses as
a percentage of revenue,  before fuel  surcharge,  rather than  absolute  dollar
changes.  We do this  because we believe  the high  variable  cost nature of our
business  makes a comparison  of changes in expenses as a percentage  of revenue
more meaningful than absolute dollar changes.

     Revenue, before fuel surcharge,  increased by 22.7% to $90.2 million in the
quarter  ended  March 31, 2004 from $73.6  million in the same  quarter in 2003.
This increase  primarily  resulted from the expansion of our customer base as we
continue to add additional  regional  facilities,  as well as improved rates and
utilization  in the 2004 period.  As a result of our expansion  into new regions
and  improving  freight  demand,  our  tractor  fleet  grew  to  2,477  tractors
(including  249 owned by  independent  contractors)  as of March 31, 2004,  from
2,168 tractors (including 212 owned by independent  contractors) as of March 31,
2003, a 14.3%  increase.  This growth in our fleet,  coupled with higher average
revenue  per loaded  mile and  average  miles per  tractor in the 2004  quarter,
resulted in the significant period-over-period improvement in revenue.

     Salaries,  wages and benefits expense increased as a percentage of revenue,
before fuel surcharge,  to 33.4% for the quarter ended March 31, 2004 from 32.3%
for the same quarter in 2003, primarily due to the increases in driver pay rates
implemented  during the previous 6 months.  As of March 31,  2004,  90.0% of our
fleet was operated by Company  drivers,  compared to 90.2% as of March 31, 2003.
For our drivers,  we record  accruals for  workers'  compensation  benefits as a
component  of our  claims  accrual,  and the  related  expense is  reflected  in
salaries, wages and benefits in our consolidated statements of income.

     Fuel expense, net of fuel surcharge,  decreased, as a percentage of revenue
before fuel surcharge,  to 14.0% for the quarter ended March 31, 2004 from 14.4%
for the same quarter in 2003,  due mainly to a 3.4% increase in average  revenue
per total mile  (excluding  fuel  surcharge) to $1.314 from $1.271.  The Company
maintains  a fuel  surcharge  program  to assist us in  recovering  a portion of
increased  fuel  costs.  As  a  percentage  of  total  revenue,  including  fuel
surcharge,  fuel expense decreased to 17.7% for the quarter ended March 31, 2004
from 18.4% for the same  quarter in 2003 as a result of the  increase in average
revenue per total mile.  See  "Quantitative  and  Qualitative  Disclosure  About
Market Risk - Commodity Price Risk," below.

     Operations  and  maintenance  expense  remained  relatively  constant  as a
percentage  of revenue,  before fuel  surcharge,  at 6.3% for the quarter  ended
March 31, 2004, compared to 6.4% for the same quarter in 2003.

     Insurance and claims expense increased slightly as a percentage of revenue,
before fuel surcharge, to 5.4% for the quarter ended March 31, 2004, compared to
5.2% for the same  quarter  in 2003,  primarily  as a result of an  increase  in
insurance  premiums and higher  self-insurance  retention  levels assumed by the
Company.

     Operating  taxes and licenses  expense as a percentage  of revenue,  before
fuel surcharge, decreased to 2.5% for the quarter ended March 31, 2004 from 2.9%
for the  same  quarter  in  2003.  This  decrease  resulted  primarily  from the
improvements in rates and utilization during the 2004 quarter described above.

                                       18
<PAGE>
     Communications  expenses as a percentage of revenue, before fuel surcharge,
remained constant at 1.0% for both the 2004 and 2003 quarters.

     Depreciation  and amortization  expense,  as a percentage of revenue before
fuel surcharge, increased to 9.9% for the quarter ended March 31, 2004 from 9.2%
for the same quarter in 2003. This increase was primarily related to an increase
in the percentage of our Company fleet comprised of purchased vehicles. At March
31, 2004, 87% of our Company fleet was comprised of purchased vehicles, compared
to 75% at March 31, 2003.  Our Company  fleet  includes  purchased  vehicles and
vehicles held under operating leases, while our total fleet includes vehicles in
our Company fleet as well as vehicles provided by independent contractors.

     Lease expense for revenue equipment as a percentage of revenue, before fuel
surcharge,  decreased to 1.4% for the quarter ended March 31, 2004,  compared to
2.7% for the same  quarter in 2003,  primarily  as a result of a decrease in the
percentage  of the Company  fleet  comprised  of vehicles  held under  operating
leases.

     Purchased  transportation  expense as a percentage of revenue,  before fuel
surcharge,  decreased to 7.3% for the quarter  ended March 31, 2004  compared to
7.5% for the same period in 2003.  This decrease was primarily the result of the
improvements in revenue per mile during the 2004 quarter  described above. As of
March 31,  2004,  10.0% of our fleet was  operated by  independent  contractors,
compared  to 9.8% at March  31,  2003.

     Miscellaneous  operating  expenses as a percentage of revenue,  before fuel
surcharge,  decreased to 1.9% for the quarter ended March 31, 2004 from 2.3% for
the same  quarter  in  2003,  primarily  due to the  improvements  in rates  and
utilization during the 2004 quarter described above.

     As a result of the above factors,  our operating ratio (operating expenses,
net of fuel  surcharge,  expressed  as a  percentage  of  revenue,  before  fuel
surcharge) was 82.9% for the quarter ended March 31, 2004, compared to 83.9% for
same quarter in 2003.

     We generated net interest income of less than 1.0% of revenue,  before fuel
surcharge,  for the quarter ended March 31, 2004, and net interest  expense as a
percentage of revenue,  before fuel surcharge, of less than 1.0% for the quarter
ended March 31, 2003. We had no outstanding debt at March 31, 2004,  compared to
$13.5 million at March 31, 2003.

     Income taxes have been provided at the  statutory  federal and state rates,
adjusted for certain permanent  differences  between financial  statement income
and  income for tax  reporting.  Our  effective  tax rate was 40.0% for 2004 and
2003.  As a percentage  of revenue,  before fuel  surcharge,  income tax expense
increased to 6.9% for the quarter  ended March 31, 2004,  from 6.4% for the same
quarter in 2003, primarily due to the improvement in our operating ratio.

     As a result of the preceding  changes,  our net income,  as a percentage of
revenue before fuel surcharge, was 10.3% for 2004, compared to 9.6% in 2003.

Liquidity and Capital Resources

     The growth of our business has required,  and will  continue to require,  a
significant  investment  in  new  revenue  equipment.  Our  primary  sources  of
liquidity have been funds  provided by operations,  and to a lesser extent lease
financing arrangements, issuances of equity securities, and borrowings under our
line of credit.

     Net cash provided by operating  activities was approximately  $20.2 million
for the quarter  ended March 31,  2004,  compared to $18.5  million for the same
quarter in 2003.  The increase for the 2004 quarter was  primarily the result of
an increase in revenue and the improvement in our operating ratio.

                                       19
<PAGE>
     Capital  expenditures  for  the  purchase  of  revenue  equipment,  net  of
trade-ins,  office  equipment,  land and leasehold  improvements,  totaled $20.4
million for the quarter  ended March 31, 2004  compared to $20.5 million for the
same quarter in 2003.

     Net cash provided by financing  activities was  approximately  $0.3 million
for the quarter  ended March 31, 2004,  compared to net cash used for  financing
activities  of  approximately  $0.8 million for same  quarter in 2003.  Net cash
provided by  financing  during the 2004  quarter was the result of stock  option
exercises.  The net cash used for financing during the 2003 period was primarily
for the payments on our line of credit and long-term debt,  which was retired in
full during the fourth quarter of 2003.

     At March 31, 2004, we did not have any borrowing outstanding.  We currently
maintain a line of credit,  which permits  revolving  borrowings  and letters of
credit totaling $10.0 million.  At March 31, 2004, the line of credit  consisted
solely  of  issued  but  unused   letters  of  credit   totaling  $8.0  million.
Historically this line of credit had been maintained at $50.0 million.  However,
due to our continued strong positive cash position, and in an effort to minimize
bank fees,  we do not  believe a  revolving  credit  facility  or term loans are
necessary to meet our current and  anticipated  near-term cash needs. We believe
any necessary  increase in our line of credit to provide for a revolving line or
credit or term loans could be accomplished  quickly as needed.  We are obligated
to comply with certain financial  covenants under our line of credit and were in
compliance with these covenants at March 31, 2004.

     As of March 31, 2004, we held $40.9  million in cash and cash  equivalents.
Management  believes  we will be able to finance our near term needs for working
capital  over  the  next  twelve  months,  as well as  acquisitions  of  revenue
equipment  during such period,  with cash balances,  cash flows from operations,
and  borrowings  and operating  lease  financing  believed to be available  from
financing  sources.  We will continue to have significant  capital  requirements
over the long-term, which may require us to incur debt or seek additional equity
capital.  The  availability  of additional  capital will depend upon  prevailing
market  conditions,  the market  price of our  common  stock and  several  other
factors over which we have limited control,  as well as our financial  condition
and results of operations.  Nevertheless, based on our recent operating results,
current cash position,  anticipated  future cash flows, and sources of financing
that we expect will be available to us, we do not expect that we will experience
any significant liquidity constraints in the foreseeable future.

Off-Balance Sheet Transactions

     Our liquidity is not materially affected by off-balance sheet transactions.
Like many other trucking companies, historically we have utilized non-cancelable
operating leases to finance a portion of our revenue equipment acquisitions.  At
March 31,  2004,  we leased 285  tractors  under  operating  leases with varying
termination  dates  ranging from April 2004 to April 2006.  Vehicles  held under
operating  leases are not carried on our balance  sheet,  and lease  payments in
respect of such vehicles are reflected in our income statements in the line item
"lease expense - revenue  equipment."  Our rental  expense  related to operating
leases was $1.2 million for the quarter  ended March 31, 2004,  compared to $2.0
million  for the same  quarter  of 2003.  The  total  amount  outstanding  under
operating  leases as of March 31, 2004, was $4.7 million,  with $2.0 million due
in the next 12 months. The effective annual interest rates under these operating
leases range from 5.2% to 6.4%.

Critical Accounting Policies and Estimates

     The  preparation  of financial  statements  in accordance  with  accounting
principles  generally  accepted in the United  States of America  requires  that
management  make a number of assumptions  and estimates that affect the reported
amounts  of  assets,  liabilities,  revenue  and  expenses  in our  consolidated
financial  statements and accompanying notes.  Management bases its estimates on
historical  experience and various other assumptions  believed to be reasonable.
Although  these  estimates are based on  management's  best knowledge of current
events and actions that may impact the Company in the future, actual results may
differ from these estimates and assumptions.  Our critical  accounting

                                       20
<PAGE>
policies are those that affect our financial statements materially and involve a
significant level of judgment by management.

     Revenue Recognition.  We recognize revenue, including fuel surcharges, upon
delivery of a shipment.

     Revenue Equipment.  Property and equipment are stated at cost. Depreciation
on property and  equipment is calculated  by the  straight-line  method over the
estimated  useful life down to an  estimated  salvage  value of the property and
equipment.  We periodically  evaluate the useful lives and salvage values of our
property and equipment  based upon,  among other  things,  our  experience  with
similar assets,  including gains or losses upon dispositions of such assets. Our
determinations with respect to salvage values are based upon the expected market
values of equipment at the end of the expected  life. We presently do not expect
any  decrease in the  salvage  values of our  revenue  equipment  as a result of
conditions in the used  equipment  market or otherwise.  We do not conduct "fair
value" assessments of our capital assets in the ordinary course of business and,
unless a  triggering  event under SFAS 144 occurs,  we do not expect to do so in
the future.

     Tires on  revenue  equipment  purchased  are  capitalized  as a part of the
equipment cost and depreciated over the life of the vehicle.  Replacement  tires
and recapping costs are expensed when placed in service.

     Claims Reserves and Estimates. Reserves and estimates for claims is another
of our critical accounting  policies.  The primary claims arising for us consist
of  cargo   liability,   personal  injury,   property   damage,   collision  and
comprehensive, workers' compensation, and employee medical expenses. We maintain
self-insurance  levels  for  these  various  areas of risk and have  established
reserves to cover these self-insured liabilities.  We also maintain insurance to
cover liabilities in excess of the self-insurance  amounts.  The claims reserves
represent  accruals  for the  estimated  uninsured  portion of  pending  claims,
including  adverse  development  of known  claims,  as well as incurred  but not
reported claims. These estimates are based on historical information,  primarily
our own claims  experience and the experience of our third party  administrator,
along with certain  assumptions  about future events.  Changes in assumptions as
well as changes in actual  experience  could cause these  estimates to change in
the near term. The significant  recent increases in our  self-insured  retention
for personal  injury and  property  damage  claims  amplify the  importance  and
potential impact of these estimates.

     Estimates also are involved in other aspects of our business. For instance,
we make similar types of estimates concerning the collectibility of our accounts
receivable and the  concentration of our credit exposure based on our historical
experience and certain assumptions about future events.

     Accounting for Income Taxes. Significant management judgment is required in
determining our provision for income taxes and in determining  whether  deferred
tax  assets  will be  realized  in full or in  part.  Deferred  tax  assets  and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  When it is more likely than not that all or some portion
of specific deferred tax assets, such as certain tax credit carryovers, will not
be realized,  a valuation  allowance must be  established  for the amount of the
deferred  tax assets  that are  determined  not to be  realizable.  A  valuation
allowance  for  deferred  tax assets has not been  deemed  necessary  due to the
Company's profitable operations.  Accordingly, if the facts or financial results
were to change,  thereby  impacting the likelihood of realizing the deferred tax
assets,  judgment  would have to be applied to determine the amount of valuation
allowance required in any given period. We continually  evaluate strategies that
would allow for the future  utilization of our deferred tax assets and currently
believe we have the ability to enact  strategies  to fully  realize our deferred
tax  assets  should  our  earnings  in  future  periods  not  support  the  full
realization of the deferred tax assets.

                                       21
<PAGE>
Factors That May Affect Future Results

     Our future  results may be  affected  by a number of factors  over which we
have little or no control.  Fuel prices,  insurance and claims  costs,  interest
rates, the availability of qualified  drivers,  fluctuations in the resale value
of revenue equipment, economic and customer business cycles and shipping demands
are factors  over which we have little or no control.  Significant  increases or
rapid fluctuations in fuel prices,  interest rates or insurance costs or claims,
to the extent not offset by fuel surcharges and increases in freight rates,  and
the resale value of revenue equipment, could reduce our profitability.  Weakness
in the general  economy,  including a weakness in consumer  demand for goods and
services,  could adversely affect our customers and our growth and revenues,  if
customers reduce their demand for transportation services.  Weakness in customer
demand for our services or in the general rate environment may also restrain our
ability to increase rates or obtain fuel surcharges.  It is also not possible to
predict the effects of terrorist attacks and subsequent events on the economy or
on customer  confidence  in the United  States,  or the  impact,  if any, on our
future results of operations.

     The following issues and uncertainties,  among others, should be considered
in evaluating our business outlook:

     Business Uncertainties. We have experienced significant and rapid growth in
revenue and profits since the inception of our business in 1990. There can be no
assurance  that our business will  continue to grow in a similar  fashion in the
future or that we can  effectively  adapt our  management,  administrative,  and
operational  systems to respond to any future growth.  Further,  there can be no
assurance  that our operating  margins will not be adversely  affected by future
changes in and expansion of our business or by changes in economic conditions.

     Insurance. Our future insurance and claims expenses might exceed historical
levels, which could reduce our earnings. We are self-insured for personal injury
and property damage liability,  cargo liability,  collision and comprehensive up
to a maximum limit of $2.0 million per  occurrence.  Our maximum  self-retention
for workers'  compensation  where a traffic accident is not involved is $500,000
per occurrence.  We maintain insurance with licensed  insurance  companies above
the amounts for which we self-insure.  Our insurance policies provide for excess
personal injury and property damage liability up to a total of $40.0 million per
occurrence  and  cargo   liability,   collision,   comprehensive   and  workers'
compensation  coverage  up to a total  of  $10.0  million  per  occurrence.  Our
personal injury and property damage policies also include  coverage for punitive
damages where such coverage is allowed.

     If the  number  of  claims  for which we are  self-insured  increases,  our
operating results could be adversely affected. After several years of aggressive
pricing in the 1990s,  insurance  carriers  raised  premiums  and sought  higher
self-insurance  retention  levels,  which  increased  our  insurance  and claims
expense.  The  terrorist  attacks of  September  11, 2001,  exacerbated  already
difficult  conditions  in  the  United  States  insurance  market  resulting  in
additional  increases  in our  insurance  expenses.  If these costs  continue to
increase, or if the severity or number of claims increase,  and if we are unable
to offset the resulting  increases in expenses with higher  freight  rates,  our
earnings could be materially and adversely affected.

     Revenue  Equipment.  Our growth has been made possible through the addition
of new revenue  equipment.  Difficulty  in financing  or  obtaining  new revenue
equipment  (for  example,  delivery  delays from  manufacturers,  a  significant
decline in used revenue equipment  values, or the  unavailability of independent
contractors) could restrict future growth or affect our  profitability.

                                       22
<PAGE>
     The EPA recently adopted new emissions control  regulations,  which require
progressive  reductions in exhaust  emissions from diesel engines  through 2007,
for engines  manufactured in October 2002 and thereafter.  In part to offset the
costs  of  compliance  with  the  new  EPA  engine  design  requirements,   some
manufacturers  have  significantly   increased  new  equipment  prices.  If  new
equipment prices increase more than anticipated,  we may be required to increase
our depreciation and financing costs and/or retain some of our equipment longer,
with a resulting increase in maintenance  expenses.  To the extent we are unable
to offset any such  increases in expenses  with rate  increases or cost savings,
our results of operations would be adversely affected.

     Inflation.  Many of our operating  expenses,  including fuel costs and fuel
taxes,  are sensitive to the effects of inflation,  which could result in higher
operating costs.  During 2003 and the first three months of 2004, we experienced
fluctuations in fuel costs, as a result of conditions in the petroleum industry.
We have  initiated  an  aggressive  program  to obtain  rate and fuel  surcharge
increases.  Competitive  conditions in the  transportation  industry,  including
lower demand for transportation services, could limit our ability to continue to
obtain rate increases or fuel surcharges.  Due to our significant  operations in
the West Coast region, we are particularly  affected by the substantially higher
fuel prices currently prevailing in that portion of the country. Generally, West
Coast fuel prices are on average  approximately $0.10 per gallon higher than the
national average.  Recently,  however,  this fuel price difference has been over
$0.40 per gallon. As fuel surcharges  generally are based on national fuel price
averages,  this fuel price disparity  disproportionately  affects carriers, like
us, with substantial  operations on the West Coast. We are attempting to address
this  situation  by  implementing  a higher West Coast  surcharge  on our tariff
customers  and  negotiating  with our contract  customers to obtain  higher fuel
surcharge rates. To the extent we are not successful in these negotiations,  our
results  of  operations  may  be  adversely  affected.   See  "Quantitative  and
Qualitative Disclosure About Market Risk - Commodity Price Risk," below.

     We also have  periodically  experienced  some wage  increases  for drivers.
Increases in driver  compensation  could continue during 2004 and may affect our
operating income,  unless we are able to pass those increased costs to customers
through rate increases.

     Driver Retention.  Difficulty in attracting or retaining qualified drivers,
including independent contractors,  or a downturn in customer business cycles or
shipping  demands also could have a materially  adverse effect on our growth and
profitability.  If a shortage of drivers  should  occur in the future,  or if we
were unable to continue to attract and contract with independent contractors, we
could be  required  to adjust  our  driver  compensation  package,  which  could
adversely affect our profitability if not offset by a corresponding  increase in
rates.

     Seasonality.   In  the  transportation  industry,   results  of  operations
frequently show a seasonal pattern.  Seasonal variations may result from weather
or from customer's  reduced  shipments after the busy winter holiday season.  To
date, our revenue has not shown any  significant  seasonal  pattern.  Because we
have  significant  operations  in Arizona,  California  and the  western  United
States,  winter weather generally has not adversely  affected our business.  The
continued expansion of our operations  throughout the United States could expose
us to greater  operating  variances  due to seasonal  weather in these  regions.
Shortage of energy  issues in  California  and  elsewhere in the Western  United
States could result in an adverse  effect on our  operations  and demand for our
services should these shortages continue or increase. This risk may exist in the
other regions in which we operate, depending upon availability of energy.

     For other risks and uncertainties  that might affect our future operations,
please  review  Part  II of our  Annual  Report  on  Form  10-K -  "Management's
Discussion  and Analysis of  Financial  Conditions  and Results of  Operations -
Factors That May Affect Future Results."

                                       23
<PAGE>
Item 3.   Quantitative and Qualitative Disclosures About Market Risk

     We are  exposed to market risk  changes in  interest  rate on debt and from
changes in commodity prices.

     Under Financial  Accounting  Reporting Release Number 48 and Securities and
Exchange  Commission  rules  and  regulations,   we  are  required  to  disclose
information  concerning  market  risk with  respect to foreign  exchange  rates,
interest rates, and commodity  prices. We have elected to make such disclosures,
to the  extent  applicable,  using a  sensitivity  analysis  approach,  based on
hypothetical changes in interest rates and commodity prices.

     Except as  described  below,  we have not had  occasion  to use  derivative
financial  instruments  for  risk  management  purposes  and do not use them for
either speculation or trading. Because our operations are confined to the United
States, we are not subject to foreign currency risk.

     Interest Rate Risk

     We are  subject to  interest  rate risk to the extent the  Company  borrows
against  its  line of  credit  or  incurs  debt in the  acquisition  of  revenue
equipment. We attempt to manage our interest rate risk by managing the amount of
debt we carry. In the opinion of management,  an increase in short-term interest
rates could have a materially  adverse effect on our financial  condition if our
debt  levels  increase  and if the  interest  rate  increases  are not offset by
freight rate increases or other items.  Management does not foresee or expect in
the near  future  any  significant  changes in our  exposure  to  interest  rate
fluctuations  or in how that  exposure  is  managed  by us.  We have not  issued
corporate debt instruments.

     Commodity Price Risk

     We are also  subject to  commodity  price risk with respect to purchases of
fuel.  Prices and  availability of petroleum  products are subject to political,
economic and market factors that are generally outside our control.  Because our
operations are dependent upon diesel fuel,  significant increases in diesel fuel
costs  could  materially  and  adversely  affect our results of  operations  and
financial  condition  if we are unable to pass  increased  costs on to customers
through  rate  increases  or fuel  surcharges.  Historically,  we have sought to
recover a portion of our short-term fuel price increases from customers  through
fuel  surcharges.  Fuel  surcharges  that can be  collected  do not always fully
offset an increase in the cost of diesel  fuel.  Based on our recent  historical
experience,  we  believe  that  we  generally  pass  through  to  our  customers
approximately  80% to 90% of  increases in fuel  prices.  For the quarter  ended
March 31, 2004, fuel expense,  net of fuel surcharge,  represented  16.9% of our
total operating expenses, net of fuel surcharge,  compared to 17.1% for the same
quarter ending in 2003.

     We are  party to three  fuel  hedging  contracts  relating  to the price of
heating oil on the New York  Mercantile  Exchange  ("NYMX") that we entered into
between  October 2000 and February  2002 in  connection  with volume diesel fuel
purchases.  If the price of heating oil on the NYMX falls below $0.58 per gallon
we may be required to pay the  difference  between $0.58 and the index price (1)
for 1.0 million  gallons per month for any selected  twelve months through March
31, 2005,  and (2) for 750,000  gallons per month for the twelve months of 2005.
At April 8, 2004,  the price of  heating  oil on the NYMX was $0.93 for May 2004
contracts.  For each $0.05 per gallon the price of heating  oil would fall below
$0.58 per gallon during the relevant periods,  our potential loss on the hedging
contracts would be approximately $1.0 million.  However, our net savings on fuel
costs  resulting  from lower fuel prices under our volume  diesel fuel  purchase
contracts  would be  approximately  $1.0  million,  after taking the loss on the
hedging contracts into  consideration.  We have valued these items at fair value
in the accompanying March 31, 2004 consolidated financial statements.

                                       24
<PAGE>
Item 4.   Controls and Procedures

     As required by Rule 13a-15 under the Exchange  Act, the Company has carried
out an  evaluation  of the  effectiveness  of the  design and  operation  of the
Company's disclosure controls and procedures as of the end of the period covered
by this report.  This  evaluation was carried out under the supervision and with
the  participation  of the Company's  management,  including our Chief Executive
Officer and our Chief Financial Officer.  Based upon that evaluation,  our Chief
Executive  Officer and Chief  Financial  Officer  concluded  that our disclosure
controls and  procedures  were  effective as of the end of the period covered by
this report. During the Company's first fiscal quarter, there were no changes in
the Company's  internal  control over financial  reporting that have  materially
affected,  or that are  reasonably  likely to materially  affect,  the Company's
internal control over financial reporting.

     Disclosure  controls and procedures are controls and other  procedures that
are  designed  to  ensure  that  information  required  to be  disclosed  in the
Company's  reports  filed or  submitted  under  the  Exchange  Act is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's rules and forms.  Disclosure  controls and
procedures  include controls and procedures  designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive  Officer and Chief Financial  Officer as appropriate,  to allow timely
decisions regarding disclosures.

     The  Company  has  confidence  in its  internal  controls  and  procedures.
Nevertheless,  the Company's  management,  including the Chief Executive Officer
and Chief Financial  Officer,  does not expect that our disclosure  controls and
procedures  or our  internal  controls  will  prevent all errors or  intentional
fraud. An internal  control  system,  no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of such
internal  controls are met.  Further,  the design of an internal  control system
must reflect the fact that there are resource  constraints,  and the benefits of
controls  must be  considered  relative to their costs.  Because of the inherent
limitations  in all internal  control  systems,  no  evaluation  of controls can
provide  absolute  assurance that all control issues and instances of fraud,  if
any, within the Company have been detected.



                                       25
<PAGE>
PART II  - OTHER INFORMATION

Item 1.   Legal Proceedings

     We  are  a  party  to  ordinary,   routine  litigation  and  administrative
proceedings  incidental to our business.  These  proceedings  primarily  involve
claims for personal injury or property damage incurred in the  transportation of
freight and for personnel matters.

Item 2.   Changes in Securities and use of Proceeds

          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

          Exhibit No.    Description
          ------------   ------------

          Exhibit 3      Articles of Incorporation and Bylaws

                 (3.1)   Restated  Articles  of  Incorporation  of  the  Company
                         (Incorporated  by  reference  to  Exhibit  3.1  to  the
                         Company's   Registration  Statement  on  Form  S-1.  No
                         33-83534.)

               (3.1.1)   First   Amendment   to   Restated    Articles   of
                         Incorporation of the Company (Incorporated by reference
                         to Exhibit 3.1.1 to the  Company's  report on Form 10-K
                         for the period ended December 31, 2000.)

               (3.1.2)   Second   Amendment   to   Restated   Articles   of
                         Incorporation of the Company (Incorporated by reference
                         to  Exhibit   3.1.2  to  the   Company's   Registration
                         Statement on Form S-3 No. 333-72130.)

               (3.1.3)   Third   Amendment   to   Restated    Articles   of
                         Incorporation   of  the   Company.   (Incorporated   by
                         reference to Exhibit 3.1.3 to the  Company's  Report on
                         Form 10-K for the period ended December 31, 2002.)

                                       26
<PAGE>
                 (3.2)   Restated  Bylaws  of  the  Company   (Incorporated   by
                         reference to Exhibit 3.2 to the Company's  Registration
                         Statement  on Form S-3 No.  333-72130.)

               (3.2.1)   First  Amendment  to Restated  Bylaws of the Company
                         (Incorporated  by  reference  to  Exhibit  3.2.1 to the
                         Company's  Report  on Form  10-K for the  period  ended
                         December 31, 2002.)

          Exhibit 4      Instruments  defining  the  rights  of  security
                         holders, including indentures

                 (4.1)   Articles  4,  10  and 11 of the  Restated  Articles  of
                         Incorporation   of  the   Company.   (Incorporated   by
                         reference to Exhibit 3.1 to this Report on Form 10-Q.)

                 (4.2)   Sections 2 and 5 of the Restated Bylaws of the Company.
                         (Incorporated  by  reference  to  Exhibit  3.2 to  this
                         Report on Form 10-Q.)

          Exhibit 11     Schedule of Computation of Net Income Per Share
                         (Incorporated by reference from Note 3, Net Income
                         Per Share, in the Notes To Consolidated Financial
                         Statements contained in this Report on Form 10-Q.)

          Exhibit 31     Section 302 Certifications

                (31.1)   Certification   pursuant  to  Item   601(b)(31)  of
                         Regulation  S-K, as adopted  pursuant to Section 302 of
                         the Sarbanes-Oxley Act of 2002, by Kevin P. Knight, the
                         Company's Chief Executive Officer

                (31.2)   Certification   pursuant  to  Item   601(b)(31)  of
                         Regulation  S-K, as adopted  pursuant to Section 302 of
                         the  Sarbanes-Oxley  Act of 2002,  by David A. Jackson,
                         the Company's Chief Financial Officer

          Exhibit 32    Section 906 Certifications

                (32.1)   Certification  pursuant to 18 U.S.C. Section 1350, as
                         adopted  pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002, by Kevin P. Knight,  the  Company's  Chief
                         Executive Officer

                (32.2)   Certification  pursuant to 18 U.S.C. Section 1350, as
                         adopted  pursuant to Section 906 of the  Sarbanes-Oxley
                         Act of 2002, by David A. Jackson,  the Company's  Chief
                         Financial Officer

          (b) Reports on Form 8-K

               During the quarter ended March 31, 2004,  the Company filed with,
          or  furnished  to,  the  Securities  and  Exchange   Commission   (the
          "Commission") the following Current Reports on Form 8-K:

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<PAGE>
          Current  Report on Form 8-K dated  December  31,  2003 (filed with the
          Commission  on January  5, 2004)  reporting  the  announcement  of new
          management titles for certain of the Company's executive officers;

          Current  Report on Form 8-K dated  January 21, 2004  (furnished to the
          Commission  on January 22,  2004)  reporting  the  issuance of a press
          releasing  announcing the Company's  financial results for the quarter
          and year ended December 31, 2003; and

          Current  Report  on Form 8-K  dated  March 16,  2004  (filed  with the
          Commission on March 23, 2004) reporting the resignation of KPMG LLP as
          the Company's principal independent public accountants.








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<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: May 7, 2004        By: /s/ Kevin P. Knight
                           ----------------------------------------------------
                           Kevin P. Knight
                           Chief Executive Officer, in his capacity as such and
                           on behalf of the registrant




Date: May 7, 2004        By: /s/ David A. Jackson
                            ----------------------------------------------------
                            David A. Jackson
                            Chief Financial Officer, in his capacity as such and
                            on behalf of the registrant













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