Heartland Express, Inc. Reports Revenues and Earnings for the First Quarter of 2014 NORTH LIBERTY, Iowa, April 23, 2014 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq:HTLD) announced today financial results for the quarter ended March 31, 2014. Financial Results Heartland Express ended the first quarter of 2014 with record operating revenues of $224.5 million, a net income of $14.1 million, and $0.16 earnings per share. Operating revenues increased 67.2% primarily due to the November 11, 2013 acquisition of Gordon Trucking, Inc. ("GTI"). Operating revenues for the quarter included fuel surcharge revenues of $45.9 million compared to $28.0 million in the same period of 2013.Operating income for the three-month period was positively impacted by a $1.4 million reduction in depreciation expense attributable to changing to the 125% declining balance method in the third quarter of 2013 and was negatively impacted by a $9.1 million decrease in gains on disposal of property and equipment.The Company posted an operating ratio (operating expenses as a percentage of operating revenues) of 90.8% and a 6.3% net margin (net income as a percentage of operating revenues) in the first quarter of 2014. Fleet utilization and operating results for the quarter were negatively impacted by severe winter weather across the eastern half of the U.S.The Company continues to be challenged by the impact of government hours-of-service regulations including the thirty-four hour restart and a thirty minute break within the first eight hours of driving that were effective July 1, 2013. Balance Sheet, Liquidity, and Capital Expenditures At March31, 2014, the Company had $16.9 million in cash balances and $62.0 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 0.78%.The Company had $182.5 million in available borrowing capacity on the line of credit at March31, 2014, after consideration of outstanding letters of credit, and was in compliance with associated financial covenants.The Company's debt balance decreased $13.0 million from December 31, 2013 due to net repayments during the quarter on the Company's line of credit.The Company ended the quarter with total assets of $723.7 million, net debt (total borrowing less cash on hand) of $45.1 million, and a net debt to total capitalization ratio of approximately 9.9%. During the quarter ended March31, 2014 the Company finalized the post-closing true-up of working capital balances related to the acquisition of GTI.As a result, the Company paid cash of $3.0 million during the quarter to the previous owners of GTI, which included $1.5 million for a difference between estimated and actual cash balances delivered at the close of the transaction.The Company continues to work towards the full integration of the two companies on a single information technology platform which it expects to complete during 2014. The average age of the Company's tractor fleet was 2.6 years as of March31, 2014 compared to 2.1 at March31, 2013.The Company took delivery of 151 new trucks during the first quarter.Approximately 1,000 new trucks are currently scheduled to be delivered throughout 2014 which is expected to decrease the overall age of the Company's tractor fleet throughout 2014.The new trucks to be delivered will be a mix of International ProStar Plus and Freightliner Cascadia models.The average age of the Company's trailer fleet was 4.8 years at March31, 2014 compared to 3.1 years at March31, 2013.The increase in the trailer average age was primarily due to the age of the GTI fleet upon acquisition on November 11, 2013.The Company is continuing its process of updating GTI's trailer fleet exiting model years 2007 and prior.The Company began taking delivery of 1,000 new Wabash dry van trailers during March 2014 which will reduce the average age of the trailer fleet throughout 2014. Net cash flows from operations continued to be strong at 14.3% of operating revenues during 2014 or $32.0 million.The primary uses of cash were $13.0 million for the repayment of long-term debt obligations, net capital expenditures during the quarter of $16.7 million mainly related to tractor fleet upgrades, and an additional payment of $3.0 million related to the acquisition of GTI.The Company currently anticipates net capital expenditures of approximately $115.0 million for the 2014 calendar year.The Company ended the past twelve months with a return on total assets of 10.4% and a 17.6% return on equity compared to 12.4% and 19.3%, respectively, during the twelve month period ending March 31, 2013. The Company continued its commitment to stockholders through the payment of cash dividends.A dividend of $0.02 per share was declared during the quarter and was paid on April 2, 2014. The Company has now paid cumulative cash dividends of $445.2 million, including three special dividends, over the past forty-three consecutive quarters. Other Information Heartland Express and GTI have had a long history of offering safe, high-quality service to their customers.Recently Heartland was recognized by Nestle Waters as their 2013 Southeast Region Carrier of the Year.GTI was named a top 20 national carrier to drive for by the Truckload Carriers Association (TCA) for the third year in a row.In addition, GTI has been named the safest U.S. based trucking company in its division (carriers over 100 million miles per year) by the TCA for the fifth consecutive year. GTI was also recognized by the California Trucking Association with two 2014 Fleet Safety Awards. This marks the fourth time in five years that GTI has been recognized as an outstanding and safe carrier by the State of California. These awards are a direct reflection upon our combined safety and operational excellence which starts with 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 (In thousands, except per share amounts) (unaudited) Three Months Ended March 31, 2014 2013 OPERATING REVENUE $ 224,481 $ 134,273 OPERATING EXPENSES: Salaries, wages, and benefits $70,945 $40,598 Rent and purchased transportation 14,510 1,298 Fuel 63,225 42,978 Operations and maintenance 10,121 5,441 Operating taxes and licenses 4,846 2,416 Insurance and claims 7,095 2,860 Communications and utilities 1,830 774 Depreciation and amortization 24,573 15,066 Other operating expenses 8,691 3,813 Gain on disposal of property and equipment (2,043) (11,178) 203,793 104,066 Operating income 20,688 30,207 Interest income 36 123 Interest expense (155) — Income before income taxes 20,569 30,330 Federal and state income taxes 6,490 10,596 Net income $14,079 $19,734 Earnings per share Basic $0.16 $0.23 Diluted $0.16 $0.23 Weighted average shares outstanding Basic 87,704 84,770 Diluted 87,917 85,046 Dividends declared per share $0.02 $0.02 HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited) March 31, December 31, ASSETS 2014 2013 CURRENT ASSETS Cash and cash equivalents $16,931 $17,763 Trade receivables, net 91,165 84,400 Prepaid tires 7,955 6,999 Prepaid shop supplies 3,287 4,194 Other current assets 12,410 11,061 Income tax receivable 2,179 5,706 Deferred income taxes, net 13,773 14,177 Total current assets 147,700 144,300 PROPERTY AND EQUIPMENT 638,351 622,864 Less accumulated depreciation 194,612 173,605 443,739 449,259 GOODWILL 100,212 98,686 OTHER INTANGIBLES, NET 18,155 18,746 OTHER ASSETS 13,940 13,850 $723,746 $724,841 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $26,539 $26,912 Compensationand benefits 27,333 28,084 Insurance accruals 20,250 20,945 Other accruals 11,860 12,627 Total current liabilities 85,982 88,568 LONG-TERM LIABILITIES Income taxes payable 18,915 20,089 Long-term debt 62,000 75,000 Deferred income taxes, net 65,260 61,948 Insurance accruals less current portion 67,736 67,965 Other long-term liabilities 13,618 13,618 Total long-term liabilities 227,529 238,620 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2014 and 2013; 907 907 outstanding 87,705 in 2014 and 2013, respectively Additional paid-in capital 6,158 5,897 Retained earnings 444,355 432,034 Treasury stock, at cost; 2,984 in 2014 and 2013, (41,185) (41,185) respectively 410,235 397,653 $723,746 $724,841 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 First Quarter of 2014
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