Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter of 2013

Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter
of 2013

NORTH LIBERTY, Iowa, Feb. 4, 2014 (GLOBE NEWSWIRE) -- Heartland Express, Inc.
(Nasdaq:HTLD) announced today financial results for the quarter ended December
31, 2013.

Financial Results

For the quarter, operating revenues increased 34.6% to $183.3 million from
$136.2 million in the fourth quarter of 2012. Fuel surcharge revenues
increased 30.3% to $36.5 million from $28.0 million in the fourth quarter of
2012. Operating income increased 8.1% to $26.7 million from $24.7 million for
the fourth quarter of 2012. Net income increased 10.8% to $15.8 million
compared to $14.3 million in the fourth quarter of 2012. Basic earnings per
share increased 5.9% to $0.18 from $0.17 reported in the fourth quarter of
2012 on a 1.7% increase in weighted average shares outstanding mainly
attributable to shares issued in the November 11, 2013 acquisition of Gordon
Trucking, Inc. ("GTI"). For the quarter, the Company posted an operating ratio
(operating expenses as a percentage of operating revenues) of 85.4% and an
8.6% net margin (net income as a percentage of operating revenues) compared to
81.9% and 10.5%, respectively, in the fourth quarter of 2012. Operating income
for the three-month period was positively impacted by a $3.3 million increase
in gains on disposal of property and equipment and a $2.3 million reduction in
depreciation expense attributable to changing to the 125% declining balance
method in the third quarter of 2013. As previously mentioned in the third
quarter, the Company changed to 150% declining balance depreciation from
historical 125% declining balance depreciation for tractors in 2009 due to
lower used truck values, higher prices for new equipment, and uncertainty
surrounding the reliability and resale value of tractors with 2010
emission-compliant engines. Effective, July 1, 2013, the Company changed
depreciation for tractors back to the historical 125% declining balance method
as a stable used equipment market supported a return to the Company's
historical estimate of depreciation on tractor equipment over its expected
useful life.

For the year, operating revenues increased 6.7% to $582.3 million from $545.7
million in 2012. Fuel surcharge revenues increased 5.4% to $118.4 million from
$112.4 million in 2012.Operating income increased 18.3% to $112.3 million
from $94.9 million for 2012.Net income increased 14.7% to $70.6 million
compared to $61.5 million in 2012.Basic earnings per share increased 15.3% to
$0.83 from $0.72 reported in 2012 on a 0.8% decrease in weighted average
shares outstanding.For the year, the Company posted an operating ratio of
80.7% and a 12.1% net margin compared to 82.6% and 11.3%, respectively in
2012.Operating income for the year was positively impacted by a $18.2 million
increase in gains on disposal of property and equipment and a $4.4 million
reduction in depreciation expense attributable to changing to the 125%
declining balance method in the third quarter of 2013.

In the fourth quarter of 2013, the Company's results included certain
significant items related to our acquisition of GTI that are set forth in the
following table ($ in thousands, except per share amounts).

                                      

Three Months Ended December 31, 2013 Income/(Loss) Before After-Tax Net
                                     Taxes Impact         (Loss)/Income Impact
Transaction expenses                 $(1,044)             $(626)
Income tax accrual                   (872)                (872)
Amortization of intangibles          (296)                (178)
Loss on sale of auction rate         (200)                (120)
securities
Integration costs                    (359)                (215)
                                    $(2,771)             $(2,011)
Impact on basic earnings per share                       $(0.02)

As a result of the GTI acquisition, the fourth quarter results of operations
for 2013 include transaction expenses of $1.0 million.The Company recorded an
increase to the Company's historical deferred taxes at an expected higher
state tax rate in the future due to the inclusion of GTI in combined operating
results.The additional accrual was $0.9 million during the quarter,
reflecting an expected 1.5 basis point increase in the Company's effective tax
rate in the future.In connection with funding the GTI purchase price and
subsequent payoff of GTI debt assumed, the Company liquidated the remainder of
its auction rate securities, which were previously held as long-term
assets.The Company recognized a loss of $0.2 million on the disposition,
which was the only loss incurred in liquidating approximately $198.5 million
of these illiquid securities since the first auction failure occurred in
February 2008.The Company also incurred approximately $0.3 million in
amortization expense associated with the definite life intangible assets
recorded in connection with the GTI acquisition.Based on the preliminary
allocation of intangibles, quarterly amortization expense is expected to be
approximately $0.6 million during 2014.In addition the Company incurred
certain transitional integration costs of $0.4 million.In total, these items
negatively impacted basic earnings per share by $0.02 per share.

Contribution of Gordon Trucking, Inc. and Additional Information Concerning
Acquisition of GTI

For the quarter and year, GTI's net income was accretive to the Company's
earnings after taking into consideration the transaction expenses and
amortization of intangibles set forth in the table above.The Company
continues to anticipate future tax deductions associated with an increase in
tax basis and deductible intangible assets as a result of the GTI acquisition
which included an election under Internal Revenue Code Section 338(h)(10).The
present value of the future tax deductions is valued at approximately $60
million.In future periods, the Company does not expect to disclose separate
information concerning GTI's financial results.

During the quarter, the Company completed its preliminary allocation of the
purchase price consideration among the assets of GTI.The preliminary
allocation is detailed in the tables below.The final purchase price
allocation remains subject to a post-closing working capital adjustment,
earn-out amounts achieved (if any), and other adjustments.

                                      

ALLOCATION OF PURCHASE PRICE                                    (in thousands)
Cash paid (before netting $20 million cash acquired)            $130,900
Value of common stock issued (2.86 million shares)              41,100
Total consideration paid (before netting $20 million cash       $172,000
acquired), excluding debt assumed
                                                               
Total assets acquired net of liabilities assumed, at fair value 59,087
(including $20 million cash acquired)
Identifiable intangibles to be amortized                        19,042
Goodwill                                                        93,871
Total purchase price allocation (before netting $20 million     $172,000
cash acquired)
                                                               
                                                               
TOTAL PURCHASE PRICE CONSIDERATION                              (in thousands)
Cash paid pursuant to Stock Purchase Agreement                  $115,900
Cash paid pursuant to an Asset Purchase Agreement               15,000
Cash acquired included in historical book value of GTI assets   (20,000)
and liabilities
Net cash paid                                                   $110,900
                                                               
Common stock issued (par value of $0.01)                        $41,100
Debt assumption                                                 148,000
                                                               $300,000

Management Comments

Michael Gerdin, Chairman, President, and CEO of the Company, commented: "Since
announcing the Gordon Trucking acquisition on November 11, 2013, Heartland and
GTI have been meeting with respective customer bases regarding the
acquisition.Announcement of the acquisition has been positively received by
customers given the significant capacity that the acquisition brings
nationwide to the Company's collective customer base, as well as certain
different freight offerings to the legacy customer base of Heartland.The
Company remains diligent on customer service and safety, both of which have
been key elements to the underlying operating fundamentals of Heartland and
GTI historically.Collectively, the drivers of both organizations have
received the acquisition positively and there has not been any significant
change to GTI's legacy driver base as a result of the acquisition.Going
forward we will be updating GTI's trailer fleet and fully integrating the
operations of both companies under a single platform.During the quarter we
successfully integrated our Phoenix terminal operations, which was one of the
few overlapping terminal facilities as a result of the acquisition.We
remained focused on the cost synergies initially targeted and will continue to
work towards this goal over the next three to four years."

Balance Sheet, Liquidity, and Capital Expenditures

In connection with the GTI acquisition, the Company issued approximately $41.1
million in stock, and the balance of the consideration was comprised of
approximately $111.0 million in cash and $147.9 million in assumed debt.As
part of the acquisition, the Company assumed debt consisting of sixty various
notes totaling $147.9 million.At December31, 2013, the Company had $17.8
million in cash balances and $75.0 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 0.793%.The Company had
$169.5 million in available borrowing capacity on the line of credit at
December31, 2013, after consideration of outstanding letters of credit, and
was in compliance with associated financial covenants.The Company ended the
year with total assets of $724.8 million, net debt (total borrowing less cash
on hand) of $57.2 million, and a net debt to total capitalization ratio of
approximately 12.6%.

The average age of the Company's tractor fleet, including assets acquired from
GTI, was 2.4 years as of December31, 2013.Heartland's legacy tractor fleet
average age was 1.9 years as of December31, 2013 compared to 2.4 years as of
December31, 2012.GTI's average age of its tractor fleet was 3.2 years at
December31, 2013.Combined, the Company took delivery of 298 new trucks
during the fourth quarter and post acquisition for the GTI fleet, which
included ProStar Plus International and Freightliner Cascadia models.An
additional 645 new trucks are currently scheduled to be received during the
first half of 2014.The average age of the Company's trailer fleet, including
assets acquired from GTI, was 4.6 years at December31, 2013.Heartland's
legacy trailer fleet average age was 3.4 years compared to 3.1 years at
December31, 2012.GTI's average age of its trailer fleet was 5.9 years at
December31, 2013.The Company currently anticipates taking delivery of 1,000
new Wabash dry van trailers during 2014 to replace GTI's 2007 and older dry
van trailers.In future periods, the Company does not expect to report
separate information for Heartland Express and GTI equipment.

Net cash flows from operations continued to be strong at 18.8% of operating
revenues during 2013 or $109.7 million.The main uses of cash were the
acquisition of GTI and subsequent retirement of GTI debt obligations of $258.8
million, net capital expenditures for the year of $42.9 million, and dividends
of $6.9 million.These expenditures were offset in part by cash receipts from
calls and sales of investments of $21.1 million and net line of credit
borrowings of $75.0 million.The Company ended the year with a return on total
assets of 12.4% and a 20.5% return on equity compared to 11.6% and 17.7%,
respectively, during 2012.

During 2013 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
$443.4 million, including three special dividends, over the past forty-two
consecutive quarters.The Company did not repurchase any common stock during
2013.

Other Information

Heartland Express and GTI have had a long history of offering safe,
high-quality service to their respective customer bases.During the year
Heartland received seventeen customer service and safety awards reflecting
this commitment.In addition to the sixteen previously announced awards during
2013, we were recently recognized with the 2013 FedEx Smart Post Service
Award.During 2013, GTI received ten customer service and safety awards.These
awards include the Chep Dedicated Carrier of the Year 2012, Georgia Pacific
Consumer Products Carrier of the Year 2012, PepsiCo/Gatorade Carrier of the
Year 2012, as well as seven individual safety awards from the Truckload
Carriers Association, the American Trucking Association, the California
Trucking Association, the Washington State Patrol, and the Oregon Trucking
Association.These awards are a direct reflection upon our combined safety and
operational excellence which starts with our outstanding group of drivers.

We invite you to submit questions regarding the periods' performance and GTI
acquisition to investorrelations@heartlandexpress.com.Questions will be
accepted until 7:00 p.m. EST today, Tuesday, February 4, 2014.Although not
customary practice, management will host a conference call on Wednesday
morning, February 5, 2014, at 10:00 a.m. EST where Heartland's management team
will answer questions previously submitted.Time permitting; the Company will
address additional questions on the call.The dial-in number for the call is
(866) 710-0179, access code 76931.

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,
                                       2013      2012     2013      2012
OPERATING REVENUE                       $183,348  $136,193 $582,257  $545,745
                                                                 
OPERATING EXPENSES:                                               
Salaries, wages, and benefits           $57,644   $41,216  $178,736  $167,073
Rent and purchased transportation       9,073     1,521    12,808    6,273
Fuel                                    51,439    42,722   172,315   168,981
Operations and maintenance              8,089     6,911    22,345    25,282
Operating taxes and licenses            3,660     2,249    10,516    8,694
Insurance and claims                    5,267     3,608    14,888    14,906
Communications and utilities            1,313     704      3,552     2,953
Depreciation and amortization           21,795    14,974   68,908    57,158
Other operating expenses                7,320     3,256    19,157    14,633
Gain on disposal of property and        (8,972)   (5,676)  (33,270)  (15,109)
equipment
                                                                 
                                       156,628   111,485  469,955   450,844
                                                                 
Operating income                        26,720    24,708   112,302   94,901
                                                                 
Interest income                         84        174      462       674
                                                                 
Interest expense                        (208)     —        (208)     —
                                                                 
Income before income taxes              26,596    24,882   112,556   95,575
                                                                 
Federal and state income taxes          10,754    10,590   41,974    34,034
                                                                 
Net income                              $15,842   $14,292  $70,582   $61,541
                                                                 
Earnings per share                                                
Basic                                   $0.18     $0.17    $0.83     $0.72
Diluted                                 $0.18     $0.17    $0.83     $0.71
                                                                 
Weighted average shares outstanding                               
Basic                                   86,425    85,010   85,209    85,892
Diluted                                 86,629    85,287   85,441    86,201
                                                                 
Dividends declared per share            $0.02     $1.02    $0.08     $1.08

                                      

HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
                                                    December 31, December 31,
ASSETS                                               2013         2012
CURRENT ASSETS                                                   
Cash and cash equivalents                            $17,763      $119,838
Trade receivables, net                               84,400       46,555
Prepaid tires                                        6,999        6,603
Prepaid shop supplies                                4,194        —
Other current assets                                 11,061       2,281
Income tax receivable                                5,706        2,351
Deferred income taxes, net                           14,177       13,797
Total current assets                                 144,300      191,425
                                                                
PROPERTY AND EQUIPMENT                               622,864      432,330
Less accumulated depreciation                        173,605      189,959
                                                    449,259      242,371
LONG-TERM INVESTMENTS                                —            20,016
GOODWILL                                             98,686       4,815
OTHER INTANGIBLES, NET                               18,746       —
OTHER ASSETS                                         13,850       9,110
                                                    $724,841     $467,737
LIABILITIES AND STOCKHOLDERS' EQUITY                             
CURRENT LIABILITIES                                              
Accounts payable and accrued liabilities             $26,912      $7,583
Compensationand benefits                            28,084       16,409
Insurance accruals                                   20,945       13,924
Other accruals                                       12,627       7,439
Total current liabilities                            88,568       45,355
LONG-TERM LIABILITIES                                            
Income taxes payable                                 20,089       23,122
Long-term debt                                       75,000       —
Deferred income taxes, net                           61,948       51,306
Insurance accruals less current portion              67,965       57,590
Other long-term liabilities                          13,618       —
Total long-term liabilities                          238,620      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 87,705 and 84,770 in 2013 and 2012,
respectively
Additional paid-in capital                           5,897        2,968
Retained earnings                                    432,034      368,313
Treasury stock, at cost; 2,984 and 5,919 shares in   (41,185)     (80,540)
2013 and 2012, respectively
Accumulated other comprehensive loss                 —            (1,284)
                                                    397,653      290,364
                                                    $724,841     $467,737

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