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| 8-K - DECEMBER 31, 2010 EARNINGS 8K - HEARTLAND EXPRESS INC | earningsrelease8k2010q4.htm |
January 20, 2011 For Immediate Release
Press Release
Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter of 2010
NORTH LIBERTY, IOWA - January 20, 2011 - Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter ended December 31, 2010. Operating revenues for the quarter increased 13.2% to $129.2 million from $114.2 million in the fourth quarter of 2009. Net income was $15.4 million compared to $10.7 million in the 2009 period, a 43.9% increase. Earnings per share increased 41.7% to $0.17 from $0.12 reported in the fourth quarter of 2009. For the quarter, Heartland Express, Inc. (the “Company”) posted an operating ratio (operating expenses as a percentage of operating revenues) of 81.0% and a 11.9% net margin (net income as a percentage of operating revenues) compared to 86.2% and 9.4%, respectively, in the fourth quarter of last year.
Operating revenues for the year ended December 31, 2010 increased 8.7% to $499.5 million from $459.5 million in the 2009 period. Net income was $62.2 million compared to $56.9 million in the 2009 period, a 9.2% increase. Earnings per share increased 11.3% to $0.69 from $0.62 reported in the year ended December 31, 2009. The Company accomplished this increase in earnings per share despite a decrease in gains on disposal of property and equipment and an increase in depreciation expense which collectively reduced earnings per share by $0.07. These changes were primarily attributable to the purchase of new tractors during the latter half of 2009 and the third and fourth quarters of 2010. For the year ended December 31, 2010, the Company posted an operating ratio of 81.7% and a 12.5% net margin compared to 82.8% and 12.4%, respectively, reported last year.
Operating revenues continue to trend upward as a result of tighter industry capacity. However, freight volumes are still moderate in this less than robust economy. The Company continues to focus on improving utilization and cost controls as is reflected in our fourth quarter and year-to-date operating ratio and net margin. Industry capacity will continue to be restrained by the shortage of qualified drivers. Driver recruitment and retention are expected to be impacted by the stringent safety requirements of the CSA enforcement (Compliance Safety Accountability). The Company will complete the installation of PeopleNet® electronic on-board recorders in all 2009 model and newer trucks, estimated to be approximately 95% of the fleet, by the end of the first quarter. This on-board computing and communications system, including paperless logs, is expected to improve safety, equipment utilization, and customer service.
The average age of the Company's tractor fleet was 1.8 years as of December 31, 2010 with 89.5% of the fleet being 2009 models and newer. The Company completed the purchase and delivery of 200 new 2011 ProStar Internationals in the fourth quarter and will take delivery of 200 new 2012 ProStar Internationals in the first quarter of 2011. The Company began an upgrade of its trailer fleet during 2010. The first phase of this upgrade was the purchase of 600 new Great Dane trailers during the third and fourth quarters of 2010. This upgrade will continue throughout 2011 with purchases of new Great Dane and Wabash trailers. These fleet upgrades will keep our tractor and trailer fleet new and positions the Company to take advantage of growth opportunities.
Fuel expense increased $6.1 million or 21.6% during the quarter primarily due to an increase in average fuel prices. During the quarter ended December 31, 2010 the U.S. average cost of fuel was $3.158 per gallon compared to $2.745 per gallon for the same period of 2009, a 15.0% increase. The Company is aggressively managing truck idling hours and fuel purchasing decisions in an
effort to offset a portion of the accelerating fuel costs. Additionally, all 2009 and newer model trucks are more fuel efficient and equipped with idle management controls.
The Company ended the quarter with cash, cash equivalents, and short-term and long-term investments totaling $209.8 million, a $9.4 million increase from the $200.4 million reported at December 31, 2009. The net increase in cash, cash equivalents, and investments is after $97.9 million in dividend payments to our shareholders. Long-term and short-term investments include illiquid auction rate securities held since February 2008. The Company ended the quarter with $91.8 million, at par, in illiquid auction rate securities which was down from $153.0 million at December 31, 2009. Since February 2008, the Company has received $115.0 million in calls, at par, including $8.3 million received subsequent to December 31, 2010. Net cash flows from operations continue to be strong at 19.7% of operating revenues. The Company's balance sheet continues to be debt-free with total assets of $506.0 million. The Company ended the past four quarters with a return on total assets of 11.8% and a 17.7% return on equity.
Heartland Express declared a dividend of $0.02 per share during the quarter. This dividend was paid on December 20, 2010 to shareholders of record at the close of business on December 10, 2010. The Company has now paid cumulative cash dividends of $337.5 million over the past thirty consecutive quarters.
Our dependability and performance have made us an industry leader in customer service. This past year we received nineteen customer service awards for our relentless on-time service. These awards include the 2009 Sears Partner in Progress Award, 2009 Quaker/Gatorade Southwest Region Carrier of the Year, 2009 Quaker/Gatorade Central West Region Carrier of the Year, 2009 Unilever Excellence Award for outstanding on-time delivery, the Nestle Waters 2009 World Class Customer Service Award, the 2009 Genpak Regional Carrier of the Year, the 2009 Eastman Chemical Company Supplier Excellence Award, the 2009 LXP Carrier of the Year - Tier One Carriers for the third consecutive year, Lowe's 2009 Platinum Carrier Award, the Walmart Transportation 2009 General Merchandise Platinum Carrier of the Year Award, the fiscal year 2010 Federal Express Platinum Award for the fourth consecutive year, the fiscal year 2010 Federal Express Smartpost Carrier of the Year for the third time in four years, the United Sugars Achievement of Excellence Award, the Whirlpool Corporation 2009 National Truckload Carrier of the Year Award, the Schneider Logistics 2010 Carrier of the Year Award for the fifth year in a row, the Chep 2010 Line Haul National Carrier of the Year Award, and the Ralcorp 2010 Award for Excellence. In addition, the Company received the Quest for Quality Award for dry freight carriers for the eighth consecutive year and the BP Lubricants USA safe driving award for the fourth consecutive year.
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.
Contact: Heartland Express, Inc.
Mike Gerdin, President
John Cosaert, Chief Financial Officer
319-626-3600
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||
OPERATING REVENUE | $ | 129,244 | $ | 114,196 | $ | 499,516 | $ | 459,539 | |||||||
OPERATING EXPENSES: | |||||||||||||||
Salaries, wages, and benefits | $ | 42,541 | $ | 39,964 | $ | 167,980 | $ | 168,716 | |||||||
Rent and purchased transportation | 2,191 | 2,628 | 9,460 | 11,138 | |||||||||||
Fuel | 34,234 | 28,148 | 126,477 | 104,246 | |||||||||||
Operations and maintenance | 4,477 | 2,941 | 17,086 | 14,913 | |||||||||||
Operating taxes and licenses | 2,289 | 2,611 | 8,480 | 9,286 | |||||||||||
Insurance and claims | 2,160 | 4,832 | 12,526 | 16,629 | |||||||||||
Communications and utilities | 519 | 872 | 3,187 | 3,655 | |||||||||||
Depreciation | 15,708 | 18,288 | 61,949 | 58,730 | |||||||||||
Other operating expenses | 3,433 | 3,638 | 14,239 | 12,970 | |||||||||||
Gain on disposal of property and equipment | (2,833 | ) | (5,531 | ) | (13,317 | ) | (19,708 | ) | |||||||
104,719 | 98,391 | 408,067 | 380,575 | ||||||||||||
Operating income | 24,525 | 15,805 | 91,449 | 78,964 | |||||||||||
Interest income | 258 | 416 | 1,424 | 2,338 | |||||||||||
Income before income taxes | 24,783 | 16,221 | 92,873 | 81,302 | |||||||||||
Federal and state income taxes | 9,403 | 5,535 | 30,657 | 24,353 | |||||||||||
Net income | $ | 15,380 | $ | 10,686 | $ | 62,216 | $ | 56,949 | |||||||
Earnings per share | $ | 0.17 | $ | 0.12 | $ | 0.69 | $ | 0.62 | |||||||
Weighted average shares outstanding | 90,689 | 90,689 | 90,689 | 91,131 | |||||||||||
Dividends declared per share | $ | 0.02 | $ | 0.02 | $ | 1.08 | $ | 0.08 | |||||||
HEARTLAND EXPRESS, INC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) | ||||||||
December 31, | December 31, | |||||||
ASSETS | 2010 | 2009 | ||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 121,120 | $ | 52,351 | ||||
Short-term investments | 8,300 | 7,126 | ||||||
Trade receivables, net | 41,619 | 37,361 | ||||||
Prepaid tires | 6,570 | 6,579 | ||||||
Other current assets | 1,725 | 1,923 | ||||||
Income tax receivable | 2,052 | 4,658 | ||||||
Deferred income taxes, net | 12,400 | 14,516 | ||||||
Total current assets | 193,786 | 124,514 | ||||||
PROPERTY AND EQUIPMENT | 386,188 | 413,564 | ||||||
Less accumulated depreciation | 165,736 | 138,394 | ||||||
220,452 | 275,170 | |||||||
LONG-TERM INVESTMENTS | 80,394 | 140,884 | ||||||
OTHER ASSETS | 11,403 | 10,595 | ||||||
$ | 506,035 | $ | 551,163 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 10,972 | $ | 6,953 | ||||
Compensation and benefits | 14,823 | 13,770 | ||||||
Insurance accruals | 16,341 | 19,236 | ||||||
Other accruals | 6,764 | 7,095 | ||||||
Total current liabilities | 48,900 | 47,054 | ||||||
LONG-TERM LIABILITIES | ||||||||
Income taxes payable | 27,313 | 31,323 | ||||||
Deferred income taxes, net | 40,917 | 51,218 | ||||||
Insurance accruals less current portion | 54,718 | 53,898 | ||||||
Total long-term liabilities | 122,948 | 136,439 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Capital stock, common, $.01 par value; authorized 395,000 shares; issued and outstanding 90,689 in 2010 and 2009 | 907 | 907 | ||||||
Additional paid-in capital | 439 | 439 | ||||||
Retained earnings | 335,922 | 371,650 | ||||||
Accumulated other comprehensive loss | (3,081 | ) | (5,326 | ) | ||||
334,187 | 367,670 | |||||||
$ | 506,035 | $ | 551,163 | |||||