Heartland Express, Inc. Reports Revenues and Earnings for the Third Quarter of 2013 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 September30, 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 September30, 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 September30, 2013 and 4.3% or $5.4 million for the nine months ended September30, 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 September30, 2013 compared to 2.4 years as of September30, 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 September30, 2013 compared to 3.3 years at September30, 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 September30, 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 September30, 2013 compared with 16.5% for the same period of September30, 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 September30, 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 September30, 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 (4,477) (1,674) (24,299) (9,433) equipment 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 30, December 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 Compensationand 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; 907 907 outstanding 84,837 in 2013 and 84,770 in 2012 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 (80,540) (80,540) 2012 Accumulated other comprehensive loss (230) (1,284) 341,862 290,364 $537,452 $467,737 CONTACT: Heartland Express, Inc. Mike Gerdin, Chief Executive Officer John Cosaert, Chief Financial Officer 319-626-3600
Heartland Express, Inc. Reports Revenues and Earnings for the Third Quarter of 2013
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