×

Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter and Year Ended December 31, 2014

NORTH LIBERTY, Iowa, Feb. 3, 2015 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq:HTLD) announced today financial results for the quarter and year ended December 31, 2014.

Financial Results

Operating income increased 28.2% to $34.2 million from $26.7 million for the fourth quarter of 2013. Net income increased 36.0% to $21.5 million compared to $15.8 million in the fourth quarter of 2013. Operating revenues for the quarter increased 10.7% to $203.0 million from $183.3 million in the fourth quarter of 2013. Fuel surcharge revenues decreased 0.9% to $36.2 million from $36.5 million in the fourth quarter of 2013. Basic earnings per share increased 38.9% to $0.25 from $0.18 reported in the fourth quarter of 2013 despite a 1.6% increase in basic weighted average shares outstanding. The increase in basic weighted average shares was mainly attributable to shares issued in the November 11, 2013 acquisition of Gordon Trucking, Inc. For the quarter, Heartland Express, Inc. (the "Company") posted an operating ratio (operating expenses as a percentage of operating revenues) of 83.1% and a 10.6% net margin (net income as a percentage of operating revenues) compared to 85.4% and 8.6%, respectively, in the fourth quarter of 2013.

The Company reported all-time record operating revenues of $871.4 million in 2014, a 49.7% increase from $582.3 million reported in 2013. Fuel surcharge revenues increased43.9% to $170.4 million from $118.4 million in 2013. Operating income increased 17.4% to $131.9 million from $112.3 million in 2013. Net income increased 20.2% to $84.8 million compared to $70.6 million in 2013. Basic earnings per share increased 16.9% to $0.97 from $0.83 reported in 2013 despite a 3.0% increase in basic weighted average shares outstanding. For the year, the Company posted an operating ratio of 84.9% and a 9.7% net margin compared to 80.7% and 12.1%, respectively in 2013.

Operating results for the quarter and the year were favorably impacted by declining fuel prices, a strong demand for truckload freight services, and a favorable pricing environment. The Company has completed its first full year of combined operations and continues to leverage its strengths to develop operational efficiencies and synergies. The Company was integrated to a single information technology platform in the third quarter of 2014. The combined operational platform has led to favorable improvements in communications and overall fleet utilization. It has also expanded the Company's area of service from predominately east of the Rockies to a coast-to-coast operation. This has resulted in nationwide capacity with one of the largest asset-based truckload fleets in the industry. An expanded capacity network and customer base has allowed the Company to become more diversified and no customer accounted for more than approximately 8.5% of the Company's total operating revenues in 2014.

Driver Compensation

The Company also implemented increases to its driver pay package effective November 1, 2014, raising driver compensation, on average, by approximately 10%. This increase solidified the Company's leadership position in terms of driver pay within the industry.

Balance Sheet, Liquidity, and Capital Expenditures

At December 31, 2014, the Company had $17.3 million in cash balances and $24.6 million in borrowings under the Company's $225 million unsecured line of credit. Borrowings under the line of credit bore interest at a weighted average interest rate of 0.787%. The Company had $196.0 million in available borrowing capacity on the line of credit at December 31, 2014, after consideration of outstanding letters of credit, and was in compliance with associated financial covenants. The Company ended the year with total assets of $760.0 million, net debt (total borrowing less cash on hand) of $7.3 million, and a net debt to total capitalization ratio of approximately 1.5%.

The average age of the Company's tractor fleet was 2.0 years as of December 31, 2014 compared to 2.4 years as of December 31, 2013. The Company took delivery of 462 new trucks during the fourth quarter, which included ProStar Plus International and Freightliner Cascadia models. Approximately 1,500 new trucks are currently scheduled to be received during 2015. The estimated average age of the Company's tractor fleet at the end of 2015 will be approximately 1.3 years. The average age of the Company's trailer fleet was 4.4 years at December 31, 2014 compared to 4.6 years at December 31, 2013. 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. The Company currently has commitments to sell approximately 2,000 trailers that will be turned in throughout 2015. The estimated average age of the Company's trailer fleet at the end of 2015 will be approximately 4.8 years.

Net cash flows from operations continued to be strong at 19.8% of operating revenues during 2014 or $172.5 million. The primary uses of cash during the year were $50.4 million for the net repayment of long-term debt obligations, net capital expenditures for the year of $113.7 million, and dividends of $7.0 million. The Company ended the year with a return on total assets of 11.4% and a 19.1% return on equity compared to 12.4% and 20.5%, respectively, during 2013.

During 2014, the Company continued its commitment to our stockholders through the payment of cash dividends. Dividends of $0.08 per share were declared and paid during the year. The Company has now paid cumulative cash dividends of $450.5 million, including three special dividends, over the past forty-six consecutive quarters.

Other Information

Commitment to customer service has allowed us to build solid, long-term relationships and brand ourselves as an industry leader for on-time service. This past year we once again were recognized for customer service by several of our customers. These awards include:

  • 2013 Walmart General Merchandise Carrier of the Year
  • FedEx 2014 Gold Award (fourth consecutive year) with a most recent year of 99.82% on-time service
  • FedEx SmartPost 2014 Peak Performance Award (fourth consecutive year)
  • FedEx 2014 Core Carrier of the Year (fourth consecutive year)
  • 2013 Whirlpool Corporation National Truckload Carrier of the Year (second consecutive year)
  • 2014 Best Performing Walmart Carrier for Unilever Award
  • United Sugars 2014 Dry Van Carrier of the Year (second consecutive year)
  • CHEP 2013 Dedicated Provider of the Year Award
  • Nestle Waters 2013 Southeast Region Carrier of the Year
  • Armada Supply Chain Solutions 2014 Elite Fleet Member Award
  • Winegard 2013 Carrier of the Year (third consecutive year)

During 2014, our operating fleet was also recognized with the following safety and other operational recognitions:

  • 2014 SmartWay Excellence Award, for leadership in conserving energy and lowering greenhouse gas emissions
  • Truckload Carriers Association (TCA) Top 20 Best Fleets to Drive For (third year in a row)
  • TCA - Safest U.S. based trucking company in its division (carriers over 100 million miles per year for the fifth consecutive year)
  • Two Fleet Safety Awards by the California Trucking Association (fourth time in five years recognized as an outstanding and safe carrier by the State of California)
  • BP's Driving Safety Standards (third year in a row)

These awards are hard-earned and are a direct reflection upon our outstanding group of drivers and operational excellence.

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.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2014 2013 2014 2013
OPERATING REVENUE $ 202,997 $ 183,348 $ 871,355 $ 582,257
OPERATING EXPENSES:
Salaries, wages, and benefits $ 67,254 $ 57,644 $ 278,126 $ 178,736
Rent and purchased transportation 11,180 9,073 51,950 12,808
Fuel 43,262 51,439 219,261 172,315
Operations and maintenance 9,179 8,089 39,052 22,345
Operating taxes and licenses 5,016 3,660 20,370 10,516
Insurance and claims 1,325 5,267 17,946 14,888
Communications and utilities 1,547 1,313 6,494 3,552
Depreciation and amortization 29,570 21,795 108,566 68,908
Other operating expenses 6,800 7,320 31,266 19,157
Gain on disposal of property and equipment (6,383) (8,972) (33,544) (33,270)
168,750 156,628 739,487 469,955
Operating income 34,247 26,720 131,868 112,302
Interest income 31 84 195 462
Interest expense (62) (208) (446) (208)
Income before income taxes 34,216 26,596 131,617 112,556
Federal and state income taxes 12,672 10,754 46,783 41,974
Net income $ 21,544 $ 15,842 $ 84,834 $ 70,582
Earnings per share
Basic $ 0.25 $ 0.18 $ 0.97 $ 0.83
Diluted $ 0.25 $ 0.18 $ 0.96 $ 0.83
Weighted average shares outstanding
Basic 87,779 86,425 87,748 85,209
Diluted 87,930 86,629 87,923 85,441
Dividends declared per share $ 0.02 $ 0.02 $ 0.08 $ 0.08
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
December 31, December 31,
ASSETS 2014 2013
CURRENT ASSETS
Cash and cash equivalents $ 17,303 $ 17,763
Trade receivables, net 77,034 84,400
Prepaid tires 10,160 6,999
Prepaid shop supplies 2,056 4,194
Other current assets 8,992 11,061
Income tax receivable 19,920 5,706
Deferred income taxes, net 14,767 14,177
Total current assets 150,232 144,300
PROPERTY AND EQUIPMENT 678,566 622,864
Less accumulated depreciation 198,007 173,605
480,559 449,259
GOODWILL 100,212 98,686
OTHER INTANGIBLES, NET 16,380 18,746
OTHER ASSETS 12,611 13,850
$ 759,994 $ 724,841
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 8,261 $ 26,912
Compensation and benefits 26,303 28,084
Insurance accruals 19,249 20,945
Other accruals 14,475 12,627
Total current liabilities 68,288 88,568
LONG-TERM LIABILITIES
Income taxes payable 18,296 20,089
Long-term debt 24,600 75,000
Deferred income taxes, net 101,605 61,948
Insurance accruals less current portion 59,300 67,965
Other long-term liabilities 11,318 13,618
Total long-term liabilities 215,119 238,620
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2014 and 2013; outstanding 87,781 and 87,705 in 2014 and 2013, respectively 907 907
Additional paid-in capital 4,058 5,897
Retained earnings 509,834 432,034
Treasury stock, at cost; 2,908 and 2,984 shares in 2014 and 2013, respectively (38,212) (41,185)
476,587 397,653
$ 759,994 $ 724,841

CONTACT: Heartland Express, Inc. Mike Gerdin, Chief Executive Officer John Cosaert, Chief Financial Officer 319-626-3600Source:Heartland Express, Inc.