Operating Ratio Improves 20 Basis Points to
85.7%
Old Dominion Freight Line, Inc. (NASDAQ: ODFL) today announced
financial results for the three-month period ended March 31, 2017,
which include the following:
Three Months Ended March 31,
(In thousands, except per share amounts) 2017
2016
%Chg.
Revenue
$ 754,096 $ 707,733
6.6
% Operating income
$ 108,122 $ 99,548
8.6 % Operating ratio
85.7 % 85.9 % Net
income
$ 65,792 $ 60,285
9.1 % Diluted
earnings per share
$ 0.80 $ 0.72
11.1 %
Diluted weighted average shares outstanding
82,444 83,983
(1.8 )%
“Old Dominion produced solid financial results for the first
quarter of 2017, with improvements in both our revenue and
operating ratio,” said David S. Congdon, Vice Chairman and Chief
Executive Officer of Old Dominion. “Our revenue growth was driven
by a 4.9% increase in LTL revenue per hundredweight and a 2.4%
increase in LTL tons per day for the quarter. LTL revenue per
hundredweight, excluding fuel surcharges, increased 2.4% even as
the changes in the mix of our freight put downward pressure on this
yield metric.
“Our operating ratio in the first quarter of 2017 improved
slightly as compared with the first quarter of 2016. Reductions in
our insurance and claims costs and variable operating costs as a
percent of revenue offset the increase in depreciation expense
resulting from our continued investments in real estate, equipment
and technology. These investments, along with the extraordinary
efforts of our entire Old Dominion family of employees, enabled us
to continue to provide outstanding customer service, with on-time
deliveries of more than 99% and a Company record cargo claims ratio
of 0.2%.”
Cash Flow and Use of Capital
Old Dominion’s net cash provided by operating activities was
$110.8 million for the first quarter of 2017 compared to $168.4
million for the first quarter of 2016, with changes in working
capital accounts primarily driving the difference. The Company had
$47.6 million in cash and cash equivalents at the end of the first
quarter, and its debt-to-total capitalization was 4.7% compared
with 6.9% at March 31, 2016.
Capital expenditures were $57.0 million for the first quarter of
2017. The Company continues to expect capital expenditures for 2017
to total approximately $385 million, including planned expenditures
of $185 million for real estate and service center expansion
projects, $155 million for tractors and trailers, and $45 million
for technology and other assets.
Old Dominion returned $8.3 million of capital to its
shareholders in the first quarter of 2017. Of this total, $8.2
million was in the form of dividends, as the Company made its first
ever regular quarterly cash dividend payment of $0.10 per share.
The Company also remains committed to the disciplined management of
its ongoing share repurchase program, and at the end of the first
quarter it had approximately $199.9 million remaining under its
current $250.0 million stock repurchase program.
Summary
Mr. Congdon concluded, “We are encouraged by the increased
economic momentum observed in the first quarter, which supported
the increases in freight density and yield that helped us improve
our operating ratio. Given our premium service offering and network
capacity, we are well-positioned to leverage the opportunities that
a growing economy would produce. Regardless of the operating
environment, we remain fully committed to our proven business model
and are confident that by continuing to deliver a value proposition
of superior customer service at a fair price, we can produce
additional long-term growth in market share and shareholder
value.”
Old Dominion will hold a conference call to discuss this release
today at 10:00 a.m. Eastern Time. Investors will have the
opportunity to listen to the conference call live over the Internet
by going to www.odfl.com. Please log on at least 15 minutes early
to register, download and install any necessary audio software. For
those who cannot listen to the live broadcast, a replay will be
available at this website shortly after the call through May 27,
2017. A telephonic replay will also be available through May 5,
2017, at (719) 457-0820, Confirmation Number 8629557.
Forward-looking statements in this news release are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We caution the reader that such
forward-looking statements involve risks and uncertainties that
could cause actual events and results to be materially different
from those expressed or implied herein, including, but not limited
to, the following: (1) the competitive environment with respect to
industry capacity and pricing, including the use of fuel
surcharges, which could negatively impact our total overall pricing
strategy and our ability to cover our operating expenses; (2) our
ability to collect fuel surcharges and the effectiveness of those
fuel surcharges in mitigating the impact of fluctuating prices for
diesel fuel and other petroleum-based products; (3) the negative
impact of any unionization, or the passage of legislation or
regulations that could facilitate unionization, of our employees;
(4) the challenges associated with executing our growth strategy,
including our ability to successfully consummate and integrate any
acquisitions; (5) changes in our goals and strategies, which are
subject to change at any time at our discretion; (6) various
economic factors such as recessions, downturns in the economy,
global uncertainty and instability, changes in U.S. social,
political, and regulatory conditions and/or a disruption of
financial markets may decrease demand for our services; (7)
increases in driver compensation or difficulties attracting and
retaining qualified drivers to meet freight demand; (8) our
exposure to claims related to cargo loss and damage, property
damage, personal injury, workers' compensation, group health and
group dental, including increased premiums, adverse loss
development, increased self-insured retention levels and claims in
excess of insured coverage levels; (9) cost increases associated
with employee benefits, including costs associated with employee
healthcare plans; (10) the availability and cost of capital for our
significant ongoing cash requirements; (11) the availability and
cost of new equipment and replacement parts, including regulatory
changes and supply constraints that could impact the cost of these
assets; (12) decreases in demand for, and the value of, used
equipment; (13) the availability and cost of diesel fuel; (14) the
costs and potential liabilities related to compliance with, or
violations of, existing or future governmental laws and
regulations, including environmental laws, engine emissions
standards, hours-of-service for our drivers, driver fitness
requirements and new safety standards for drivers and equipment;
(15) the costs and potential liabilities related to various legal
proceedings and claims that have arisen in the ordinary course of
our business, some of which include class-action allegations; (16)
the costs and potential liabilities related to governmental
proceedings or inquiries; (17) the costs and potential liabilities
related to our international business operations and relationships;
(18) the costs and potential adverse impact of compliance with, or
violations of, current and future rules issued by the Department of
Transportation, the Federal Motor Carrier Safety Administration,
including its Compliance, Safety, Accountability initiative, and
other regulatory agencies; (19) seasonal trends in the
less-than-truckload industry, including harsh weather conditions
and disasters; (20) our dependence on key employees; (21) the
concentration of our stock ownership with the Congdon family; (22)
the costs and potential adverse impact associated with future
changes in accounting standards or practices; (23) potential costs
associated with cyber incidents and other risks, including system
failure, security breach, disruption by malware or other damage;
(24) failure to keep pace with developments in technology, any
disruption to our technology infrastructure, or failures of
essential services upon which our technology platforms rely could
cause us to incur costs or result in a loss of business; (25) the
costs and potential adverse impact associated with transitional
challenges in upgrading or enhancing our technology systems; (26)
damage to our reputation through unfavorable publicity; (27) the
costs and potential adverse impact of compliance with
anti-terrorism measures on our business; (28) dilution to existing
shareholders caused by any issuance of additional equity; (29) the
impact of a quarterly cash dividend and/or the failure to declare
future cash dividends; (30) fluctuations in the market value of our
common stock; (31) the impact of certain provisions in our articles
of incorporation, bylaws, and Virginia law that could discourage,
delay or prevent a change in control of us or a change in our
management; and (32) other risks and uncertainties described in our
most recent Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission. Our forward-looking statements
are based upon our beliefs and assumptions using information
available at the time the statements are made. We caution the
reader not to place undue reliance on our forward-looking
statements (i) as these statements are neither a prediction nor a
guarantee of future events or circumstances, and (ii) the
assumptions, beliefs, expectations and projections about future
events may differ materially from actual results. We undertake no
obligation to publicly update any forward-looking statement to
reflect developments occurring after the statement is made, except
as otherwise required by law.
Old Dominion Freight Line, Inc. is a leading,
less-than-truckload (“LTL”), union-free motor carrier providing
regional, inter-regional and national LTL services, which include
ground and air expedited transportation and consumer household
pickup and delivery through a single integrated organization. In
addition to its core LTL services, the Company offers a range of
value-added services including container drayage, truckload
brokerage, supply chain consulting and warehousing.
OLD DOMINION FREIGHT LINE, INC. Statements of
Operations First Quarter (In
thousands, except per share amounts) 2017 2016
Revenue $ 754,096 100.0 %
$ 707,733 100.0 % Operating
expenses: Salaries, wages & benefits 416,504 55.2 % 400,869
56.6 % Operating supplies & expenses 90,987 12.1 % 75,372 10.6
% General supplies & expenses 22,872 3.0 % 21,142 3.0 %
Operating taxes & licenses 24,022 3.2 % 23,188 3.3 % Insurance
& claims 8,790 1.2 % 10,244 1.5 % Communications &
utilities 7,433 1.0 % 7,005 1.0 % Depreciation & amortization
50,287 6.7 % 44,772 6.3 % Purchased transportation 17,997 2.4 %
18,496 2.6 % Building and office equipment rents 2,114 0.3 % 2,273
0.3 % Miscellaneous expenses, net 4,968 0.6 % 4,824
0.7 % Total operating expenses 645,974 85.7 % 608,185
85.9 % Operating income 108,122 14.3 % 99,548 14.1 %
Non-operating expense (income): Interest expense 595 0.1 %
1,183 0.2 % Interest income (35 ) (0.0 )% (16 ) (0.0 )% Other
expense, net 409 0.0 % 516 0.1 % Income before
income taxes 107,153 14.2 % 97,865 13.8 % Provision for
income taxes 41,361 5.5 % 37,580 5.3 %
Net
income $ 65,792 8.7 %
$ 60,285 8.5 %
Earnings per share: Basic $ 0.80 $ 0.72 Diluted 0.80 0.72
Weighted average outstanding shares: Basic 82,349
83,983 Diluted 82,444 83,983
OLD DOMINION FREIGHT LINE,
INC. Operating Statistics First
Quarter 2017 2016
% Chg. Work days 64 64 — % Operating ratio 85.7 % 85.9 % LTL
intercity miles (1) 139,752 140,816 (0.8 )% LTL tons (1) 1,970
1,924 2.4 % LTL tonnage per day 30,781 30,063 2.4 % LTL shipments
(1) 2,523 2,489 1.4 % LTL revenue per intercity mile $ 5.36 $ 4.95
8.3 % LTL revenue per hundredweight $ 19.03 $ 18.14 4.9 % LTL
revenue per hundredweight, excluding fuel surcharges $ 16.94 $
16.54 2.4 % LTL revenue per shipment $ 297.11 $ 280.33 6.0 % LTL
revenue per shipment, excluding fuel surcharges $ 264.47 $ 255.72
3.4 % LTL weight per shipment (lbs.) 1,561 1,546 1.0 % Average
length of haul (miles) 920 935 (1.6 )% Average full-time employees
17,511 17,754 (1.4 )% (1) - In
thousands Note: Our LTL operating statistics exclude certain
transportation and logistics services where pricing is generally
not determined by weight. These statistics also exclude adjustments
to revenue for undelivered freight required for financial statement
purposes in accordance with our revenue recognition policy.
OLD DOMINION FREIGHT LINE, INC. Balance Sheets
March 31, December 31,
(In thousands) 2017 2016 Cash and
cash equivalents $ 47,551 $ 10,171 Other current assets 377,523
372,451 Total current assets 425,074 382,622 Net property
and equipment 2,246,286 2,241,402 Other assets 73,650 72,223
Total assets $ 2,745,010 $ 2,696,247 Current
maturities of long-term debt $ 50,000 $ — Other current liabilities
284,785 288,636 Total current liabilities 334,785 288,636
Long-term debt 45,000 104,975 Other non-current liabilities 455,862
451,478 Total liabilities 835,647 845,089 Equity 1,909,363
1,851,158 Total liabilities & equity $ 2,745,010
$ 2,696,247
Note: The financial and operating statistics in this press
release are unaudited.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170427005339/en/
Old Dominion Freight Line, Inc.Adam Satterfield,
336-822-5721Senior Vice President, Finance and Chief Financial
Officer
Old Dominion Freight Line (NASDAQ:ODFL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Old Dominion Freight Line (NASDAQ:ODFL)
Historical Stock Chart
From Sep 2023 to Sep 2024