NORTH LIBERTY, Iowa, Oct. 24, 2014 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq:HTLD) announced today financial results for the quarter and nine month period ended September 30, 2014.
Heartland Express (the "Company") ended the third quarter of 2014 with operating revenues of $217.1 million, a 66.2% increase, compared to $130.6 million operating revenues in the third quarter of 2013. Net income for the third quarter of 2014 was $22.7 million, compared to $15.9 million, a 43.3% increase. Basic earnings per share were $0.26 in the quarter compared to $0.19 earnings per share in the third quarter of 2013, a 36.8% increase. Operating revenues for the quarter included fuel surcharge revenues of $42.4 million compared to $26.7 million in the same period of 2013. Operating income for the three-month period was positively impacted by a $6.8 million increase in gains on disposal of property and equipment and a 37.5% decrease in net fuel expense per mile. However, third quarter earnings per share were negatively impacted by approximately $0.02 per share due to manufacturer's delays in the delivery of new tractors, resulting in lower than expected gain on sale of equipment. The Company posted an operating ratio (operating expenses as a percentage of operating revenues) of 83.3% and a 10.5% net margin (net income as a percentage of operating revenues) in the third quarter of 2014 compared to 80.1% and 12.1%, respectively in the third quarter of 2013.
For the nine month period ended September 30, 2014 the Company had operating revenues of $668.4 million, net income of $63.3 million, and $0.72 earnings per share compared to $398.9 million, $54.7 million, and $0.65, respectively for the same nine month period ended September 30, 2013. Operating revenues increased 67.5% primarily due to increased miles associated with the Gordon Trucking, Inc. ("GTI") acquisition on November 11, 2013. Operating income increased 14.1% for the nine month period and was positively impacted by a $2.9 million increase in gains on disposal of property and equipment and a 26.5% decrease in net fuel expense per mile. The Company posted an operating ratio (operating expenses as a percentage of operating revenues) of 85.4% and a 9.5% net margin (net income as a percentage of operating revenues) in the nine months ended September 30, 2014 compared to 78.5% and 13.7%, respectively for the same period of 2013.
Freight demand continued to be strong throughout the quarter as the Company experienced above normal volumes of freight across the entire United States. All regions of the country were strong, with some like the west coast being extremely overbooked. Loads turned down throughout the quarter were the highest the Company has seen since before the recession.
Operating results continue to be favorably impacted by the GTI acquisition although the Company and the industry continue to be challenged by the shortage of qualified drivers. Recruiting, retention, and responding to concerns of our drivers continue to be a primary focus of the Company. In addition, the Company continues to develop operational efficiencies and synergies post GTI acquisition, and during the third quarter achieved the integration to a single information technology platform across the Company. Further efficiencies and synergies will continue to be realized going forward because of this integration and our new ability to be operationally in sync.
Balance Sheet, Liquidity, and Capital Expenditures
At September 30, 2014, the Company had $23.3 million in cash balances and $21.0 million in borrowings under the Company's $250 million unsecured line of credit. Borrowings under the line of credit bore interest at a weighted average interest rate of 0.78%. The Company had $224.6 million in available borrowing capacity on the line of credit at September 30, 2014 after consideration of outstanding letters of credit. The Company is in compliance with associated financial covenants. The Company's debt balance decreased $54.0 million from December 31, 2013 due to net repayments during the nine months ended September 30, 2014. Since the high point of the Company's debt borrowings of $76.7 million in December of 2013, the Company has had net debt repayments of $55.7 million. Pursuant to the terms of the credit agreement, the borrowing capacity will be reduced to $225.0 million on November 1, 2014. The Company ended the quarter with total assets of $751.6 million.
The average age of the Company's tractor fleet was 2.1 years as of September 30, 2014 compared to 2.0 at September 30, 2013. During the third quarter of 2014 the Company took delivery of 293 new tractors and has approximately 460 new tractors scheduled for delivery prior to the end of the year. The new tractors have been and will continue to be a mix of International ProStar Plus and Freightliner Cascadia models. The average age of tractors is currently expected to decrease throughout the remainder of 2014 and into 2015. The average age of the Company's trailer fleet was 4.3 years at September 30, 2014 compared to 3.2 years at September 30, 2013. During the third quarter of 2014 the Company took delivery of 441 trailers and has approximately 200 new trailers scheduled for delivery prior to the end of 2014. By the end of 2014 the Company currently anticipates that its trailer fleet will be 86% 2008 and newer model years. The Company will continue to take advantage of a favorable used trailer market into 2015. It is currently estimated that the Company's dry-van trailer fleet will be 100% 2011 and newer model years by the end of 2015.
Net cash flows from operations for the first nine months of 2014 continued to be strong at 19.3% of operating revenues or $129.0 million. The primary uses of cash during the nine month period ended September 30, 2014 were $54.0 million for the repayment of long-term debt obligations and net capital expenditures of $56.7 million related to tractor and trailer fleet upgrades. The Company currently anticipates net capital expenditures of approximately $65.0 million in the fourth quarter of 2014 to fund revenue equipment purchases for units delivered as of September 30, 2014 and additional units to be delivered in the fourth quarter. The Company currently anticipates a total of $122.0 million in net capital expenditures for the 2014 calendar year. The Company ended the past twelve months with a return on total assets of 10.7% and an 18.6% return on equity.
The Company continues its commitment to stockholders through the payment of cash dividends. A dividend of $0.02 per share was declared during the quarter and was paid on October 2, 2014. The Company has now paid cumulative cash dividends of $448.7 million, including three special dividends, ($2.00 in 2007, $1.00 in 2010, and $1.00 in 2012) over the past forty-five consecutive quarters. The Company has also repurchased approximately $80.5 million of common stock over the past five years.
This press release may contain statements that might be considered as forward-looking statements or predictions of future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission.
|HEARTLAND EXPRESS, INC.|
|CONSOLIDATED STATEMENTS OF INCOME|
|(In thousands, except per share amounts)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|OPERATING REVENUE||$ 217,092||$ 130,645||$ 668,358||$ 398,909|
|Salaries, wages, and benefits||$ 68,688||$ 39,556||$ 210,872||$ 121,093|
|Rent and purchased transportation||12,518||1,112||40,770||3,735|
|Operations and maintenance||9,977||4,987||29,874||14,256|
|Operating taxes and licenses||5,189||1,972||15,354||6,856|
|Insurance and claims||5,155||2,016||16,621||9,620|
|Communications and utilities||1,564||767||4,947||2,239|
|Depreciation and amortization||27,754||15,117||78,996||47,112|
|Other operating expenses||7,779||4,334||24,465||11,839|
|Gain on disposal of property and equipment||(11,257)||(4,477)||(27,160)||(24,299)|
|Income before income taxes||36,214||26,126||97,400||85,960|
|Federal and state income taxes||13,477||10,258||34,111||31,220|
|Net income||$ 22,737||$ 15,868||$ 63,289||$ 54,740|
|Earnings per share|
|Basic||$ 0.26||$ 0.19||$ 0.72||$ 0.65|
|Diluted||$ 0.26||$ 0.19||$ 0.72||$ 0.64|
|Weighted average shares outstanding|
|Dividends declared per share||$ 0.02||$ 0.02||$ 0.06||$ 0.06|
|HEARTLAND EXPRESS, INC.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(in thousands, except per share amounts)|
|September 30,||December 31,|
|Cash and cash equivalents||$ 23,323||$ 17,763|
|Trade receivables, net||87,235||84,400|
|Prepaid shop supplies||2,264||4,194|
|Other current assets||13,973||11,061|
|Income tax receivable||—||5,706|
|Deferred income taxes, net||14,990||14,177|
|Total current assets||151,874||144,300|
|PROPERTY AND EQUIPMENT||645,279||622,864|
|Less accumulated depreciation||182,842||173,605|
|OTHER INTANGIBLES, NET||16,971||18,746|
|$ 751,621||$ 724,841|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and accrued liabilities||$ 35,733||$ 26,912|
|Compensation and benefits||27,794||28,084|
|Income taxes payable||1,993||—|
|Total current liabilities||100,426||88,568|
|Income taxes payable||17,963||20,089|
|Deferred income taxes, net||78,103||61,948|
|Insurance accruals less current portion||66,790||67,965|
|Other long-term liabilities||10,984||13,618|
|Total long-term liabilities||194,840||238,620|
|COMMITMENTS AND CONTINGENCIES|
|Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2014 and 2013; outstanding 87,779 in 2014 and 87,705 in 2013, respectively||907||907|
|Additional paid-in capital||3,638||5,897|
|Treasury stock, at cost; 2,910 in 2014 and 2,984 in 2013, respectively||(38,238)||(41,185)|
|$ 751,621||$ 724,841|
CONTACT: Heartland Express, Inc. Mike Gerdin, Chief Executive Officer John Cosaert, Chief Financial Officer 319-626-3600Source:Heartland Express, Inc.