NORTH LIBERTY, Iowa, Oct. 16, 2013 (GLOBE NEWSWIRE) -- Heartland
Express, Inc. (Nasdaq:HTLD) announced today financial results for the
quarter ended September 30, 2013. For the quarter, net income increased
$3.4 million to $15.9 million compared to $12.4 million in the 2012
period, a 27.6% increase. Basic earnings per share increased 26.7% to
$0.19 from $0.15 reported in the third quarter of 2012. For the nine
months ended September 30, 2013 net income increased $7.5 million to
$54.7 million compared to $47.2 million for the same period of 2012, a
15.9% increase. Basic earnings per share increased 18.2% to $0.65 from
$0.55 reported in the nine months ended September 30, 2012.
For the quarter ended September 30, 2013, operating revenues decreased
to $130.6 million from $135.0 million in the third quarter of 2012.
Improvements in rates were more than offset by new government
regulations on hours of service which began July 1, 2013, a competitive
environment for the high quality, professional truck drivers who meet
our hiring requirements, an inconsistent freight environment, and
slightly lower fuel surcharge revenue. Fuel surcharge revenues were
$26.7 million for the quarter, a 1.6% decline from $27.1 million in the
same period of 2012.
For the nine months ended September 30, 2013 operating revenues
decreased to $398.9 million from $409.6 million in the 2012 period,
including a decline in fuel surcharge revenues to $82.0 million in the
2013 period compared with $84.4 million in the 2012 period. Operating
income for the three and nine month periods was positively impacted by
a $2.8 million and a $14.9 million increase in gains, respectively, on
disposal of property and equipment as Heartland Express, Inc. (the
"Company") continued to upgrade its fleet and the used equipment market
remained strong.
Effective July 1, 2013, the Company adjusted its depreciation estimate
for tractors to the 125% declining balance method from the 150%
declining balance method. Under the declining balance method,
depreciation for each tractor is highest in the first year and declines
in each year throughout the useful life. This differs from the straight
line method used by many other trucking companies, and the Company
believes that the declining balance method better matches the actual
declines in value of new tractors over their useful lives. Beginning in
2009, the Company changed its estimate of depreciation from the 125%
method to the 150% declining balance method because of sharply lower
used truck values, higher prices for new equipment, and uncertainty
surrounding the reliability and resale value of tractors with 2010
emission-compliant engines. The Company believes a more stable used
equipment market now supports a return to the Company's historical
estimate of depreciation on tractor equipment over its expected useful
life as well as estimated values of such equipment at the end of the
equipment's useful life. In future periods, depreciation expense per
tractor and gain on sale per tractor are expected to be lower than
under the 150% declining balance method, assuming the Company's average
fleet age remains relatively young. Changing to the 125% declining
balance method from the 150% declining balance method increased
operating income and decreased depreciation expense by approximately
$2.1 million during the three and nine months ended September 30, 2013.
For the quarter, the Company posted an operating ratio (operating
expenses as a percentage of operating revenues) of 80.1% and a 12.1%
net margin (net income as a percentage of operating revenues) compared
to 85.4% and 9.2%, respectively, in the third quarter of 2012. The
Company posted an operating ratio of 78.5% and a 13.7% net margin for
the nine month period ended September 30, 2013 compared to an 82.9%
operating ratio and an 11.5% net margin for the same period of 2012.
Improvements in our overall fleet fuel economy, largely the result of
capital spending on a newer tractor fleet, lower fleet utilization, and
decreases in fuel prices, all contributed in fuel expense decreases for
both the quarterly period and year to date periods compared to the
respective periods of 2012. Fuel expense decreased 7.5% or $3.2 million
for the quarter ended September 30, 2013 and 4.3% or $5.4 million for
the nine months ended September 30, 2013. The U.S. average cost of
diesel fuel was $3.92 per gallon during the third quarter of 2013, a
1.0% decrease from the third quarter of the prior year. The U.S.
average cost of diesel fuel for the first nine months of 2013 was $3.94
per gallon, a 0.5% decline from an average price of $3.96 for the
comparable period of 2012.
The average age of the Company's tractor fleet was 2.0 years as of
September 30, 2013 compared to 2.4 years as of September 30, 2012. The
Company took delivery of 303 new tractors during the third quarter of
2013 which included International ProStar Plus and Freightliner
Cascadia models. The current tractor fleet upgrade will continue
through the first quarter of 2014 which will complete the latest
scheduled purchase of 1,100 new tractors. The average age of the
Company's trailer fleet was 3.2 years at September 30, 2013 compared to
3.3 years at September 30, 2012, with 100% of our trailers being 2007
models and newer at the end of the quarter.
The Company ended the quarter with cash, cash equivalents, and short
and long-term investments totaling $175.4 million, a $35.5 million
increase from the $139.9 million reported at December 31, 2012 despite
spending $35.1 million (net of sales proceeds) for fleet equipment
upgrades during the first nine months of the year. As of September 30,
2013, the Company's balance of auction rate securities, at par, was
$11.4 million. The Company has received call notices, at par, of $6.9
million of auction rate securities which are expected to be received in
early fourth quarter of 2013. Net cash flows from operations increased
to 18.3% of operating revenues during the nine months ended September
30, 2013 compared with 16.5% for the same period of September 30, 2012.
The Company continues to maintain a debt-free balance sheet with total
assets of $537.5 million. The Company ended the trailing twelve months
as of September 30, 2013 with a return on total assets of 13.6% and a
21.8% return on equity compared to 11.8% and 17.9%, respectively,
during the trailing twelve months as of September 30, 2012.
A dividend of $0.02 per share was declared during the quarter and was
paid on October 2, 2013. The Company has now paid cumulative cash
dividends of $441.7 million, including three special dividends, over
the past forty-one consecutive quarters. The Company has not purchased
any shares of its common stock during the current fiscal year. As of
September 30, 2013, there are 3.2 million shares remaining under the
current repurchase authorization.
Heartland Express continues to build on its reputation as a quality
service provider. Providing excellent customer service has allowed us
to build solid, long-term relationships. In addition to seven
previously announced awards during 2013, we were recently recognized
with the DuPont 2012 Outstanding Service Award, the FedEx 2013 Carrier
of the Year Award, the FedEx 2013 Gold Award for 99.8% on time service,
the FedEx Smartpost 2013 Peak Performance Award, the Niagara Waters
East Region Carrier Partner of the Year Award, the Sonoco 2013 Helping
Hands of the Year Award, the United Sugars 2013 Dry Van Carrier of the
Year Award, the Whirlpool Corporation 2013 Carrier of the Year Award,
and Logistics Management magazine's Dry Freight Carrier Quest for
Quality award for the eleventh consecutive year. These awards are a
direct reflection upon our operational excellence and our outstanding
group of drivers.
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
(Unaudited, in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
--------- -------- --------- --------
OPERATING REVENUE $130,645 $135,010 $398,909 $409,552
--------- -------- --------- --------
OPERATING EXPENSES:
Salaries, wages, and benefits $39,556 $40,899 $121,093 $125,857
Rent and purchased
transportation 1,112 1,495 3,735 4,752
Fuel 39,261 42,443 120,876 126,259
Operations and maintenance 4,987 6,468 14,256 18,371
Operating taxes and licenses 1,972 2,122 6,856 6,445
Insurance and claims 2,016 4,832 9,620 11,297
Communications and utilities 767 756 2,239 2,249
Depreciation 15,117 14,250 47,112 42,184
Other operating expenses 4,334 3,752 11,839 11,379
Gain on disposal of property
and equipment (4,477) (1,674) (24,299) (9,433)
--------- -------- --------- --------
104,645 115,343 313,327 339,360
--------- -------- --------- --------
Operating income 26,000 19,667 85,582 70,192
Interest income 126 191 378 500
--------- -------- --------- --------
Income before income taxes 26,126 19,858 85,960 70,692
Federal and state income
taxes 10,258 7,424 31,220 23,443
--------- -------- --------- --------
Net income $15,868 $12,434 $54,740 $47,249
========= ======== ========= ========
Earnings per share
Basic $0.19 $0.15 $0.65 $0.55
========= ======== ========= ========
Diluted $0.19 $0.14 $0.64 $0.55
========= ======== ========= ========
Weighted average shares
outstanding
Basic 84,837 85,646 84,799 86,189
========= ======== ========= ========
Diluted 85,038 85,925 85,041 86,508
========= ======== ========= ========
Dividends declared per share $0.02 $0.02 $0.06 $0.06
========= ======== ========= ========
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
September December
30, 31,
ASSETS 2013 2012
--------- --------
CURRENT ASSETS
Cash and cash equivalents $164,215 $119,838
Short term investments 6,850 --
Trade receivables, net 48,112 46,555
Prepaid tires 4,806 6,603
Other current assets 5,689 2,281
Income tax receivable 4,119 2,351
Deferred income taxes,
net 12,509 13,797
--------- --------
Total current assets 246,300 191,425
--------- --------
PROPERTY AND EQUIPMENT 449,894 432,330
Less accumulated
depreciation 177,206 189,959
--------- --------
272,688 242,371
--------- --------
LONG-TERM INVESTMENTS 4,345 20,016
OTHER ASSETS 14,119 13,925
--------- --------
$537,452 $467,737
========= ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and
accrued liabilities $28,825 $7,583
Compensation and benefits 18,235 16,409
Insurance accruals 11,934 13,924
Other accruals 7,535 7,439
--------- --------
Total current liabilities 66,529 45,355
--------- --------
LONG-TERM LIABILITIES
Income taxes payable 19,708 23,122
Deferred income taxes,
net 55,345 51,306
Insurance accruals less
current portion 54,008 57,590
--------- --------
Total long-term
liabilities 129,061 132,018
--------- --------
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY
Capital stock, common,
$.01 par value;
authorized 395,000
shares; issued 90,689 in
2013 and 2012;
outstanding 84,837 in
2013 and 84,770 in 2012 907 907
Additional paid-in
capital 3,774 2,968
Retained earnings 417,951 368,313
Treasury stock, at cost;
5,852 in 2013 and 5,919
in 2012 (80,540) (80,540)
Accumulated other
comprehensive loss (230) (1,284)
--------- --------
341,862 290,364
--------- --------
$537,452 $467,737
========= ========
