Produces Company Record Operating Ratio of
77.9%
Old Dominion Freight Line, Inc. (Nasdaq: ODFL) today announced
financial results for the three-month and six-month periods ended
June 30, 2019, which include the following:
Three Months Ended
Six Months Ended
June 30,
June 30,
(In thousands, except per share
amounts)
2019
2018
%
Chg.
2019
2018
%
Chg.
Total revenue
$
1,060,666
$
1,033,498
2.6
%
$
2,051,448
$
1,958,518
4.7
%
LTL services revenue
$
1,047,208
$
1,018,491
2.8
%
$
2,023,771
$
1,929,545
4.9
%
Other services revenue
$
13,458
$
15,007
(10.3
)%
$
27,677
$
28,973
(4.5
)%
Operating income
$
234,489
$
220,481
6.4
%
$
412,915
$
369,821
11.7
%
Operating ratio
77.9
%
78.7
%
79.9
%
81.1
%
Net income
$
174,072
$
163,434
6.5
%
$
307,395
$
272,767
12.7
%
Diluted earnings per share
$
2.16
$
1.99
8.5
%
$
3.80
$
3.32
14.5
%
Diluted weighted average shares
outstanding
80,645
82,170
(1.9
)%
80,893
82,262
(1.7
)%
“Old Dominion’s financial results for the second quarter of 2019
include new Company records for revenue, operating ratio and
earnings per diluted share,” said Greg C. Gantt, President and
Chief Executive Officer of Old Dominion. “We were especially
pleased to produce these quarterly financial records during a
period with lower LTL shipments and tonnage, which reflects the
ongoing softer demand environment. Maintaining our long-term,
consistent approach to pricing may have also contributed to the
decrease in our volumes. The strength of our yield, however,
allowed us to increase our revenue and also contributed to the
improvement in our operating ratio. We intend to maintain our
disciplined approach to yield management and believe the pricing
environment has remained relatively stable.
“The increase in LTL revenue in the second quarter was driven by
a 9.5% increase in LTL revenue per hundredweight that was partially
offset by a 6.3% decline in LTL tonnage for the quarter. The
decrease in LTL tonnage was primarily attributable to a 3.8%
decrease in LTL weight per shipment and a 2.6% decrease in LTL
shipments. The decrease in LTL weight per shipment was expected and
also contributed to the increase in our LTL revenue per
hundredweight. We expect our LTL weight per shipment in the second
half of 2019 to be more consistent with the second half of
2018.
“Our operating ratio for the second quarter of 2019 improved to
77.9% from 78.7% for the same period last year. The increased
efficiency of our operations and our continued focus on cost
management allowed us to improve our direct operating costs as a
percent of revenue, which more than offset the increase in overhead
costs. The combination of our revenue growth and improved operating
ratio allowed us to increase earnings per diluted share by 8.5% to
$2.16 for the second quarter.”
Cash Flow and Use of Capital
Old Dominion’s net cash provided by operating activities was
$255.7 million for the second quarter of 2019 and $461.9 million
for the first half of the year. The Company had $229.0 million in
cash and cash equivalents at the end of the second quarter of
2019.
Capital expenditures were $159.2 million for the second quarter
of 2019 and $230.0 million for the first six months of the year.
The Company expects its capital expenditures for 2019 to total
approximately $480 million, including planned expenditures of $220
million for real estate and service center expansion projects; $165
million for tractors and trailers; and $95 million for information
technology and other assets.
Old Dominion returned $147.8 million of capital to its
shareholders in the second quarter of 2019 and $192.2 million for
the first half of the year. For the first half, this total
consisted of $164.7 million of share repurchases and $27.4 million
of cash dividends.
Summary
Mr. Gantt concluded, “Old Dominion produced strong financial
results for the first half of 2019 – record-breaking results for
our Company – that demonstrate the consistency of our business
model. Our ability to improve our operating ratio in each of the
first and second quarters of 2019, despite declines in tonnage for
both periods, reaffirms our commitment to our long-term business
plan that has been so successful for us throughout many economic
cycles. This plan is centered on providing our customers with a
value proposition of superior service at a fair price and regularly
investing in service center capacity to support our long-term
market share goals. It is also important for us to continue to
invest in the education and training of our employees, who
consistently operate with great efficiency and remain focused on
providing on-time and claims-free service. We are confident in our
team’s ability to execute on the fundamental aspects of our
business, which we believe will continue to produce long-term
growth in earnings 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 ir.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 and will be
available for 30 days. A telephonic replay will also be available
through August 2, 2019, at (719) 457-0820, Confirmation Number
7082211.
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 revision at any time at our discretion; (6) various
economic factors such as recessions, downturns in the economy,
global uncertainty and instability, changes in international trade
policies, changes in U.S. social, political, and regulatory
conditions or a disruption of financial markets, which may decrease
demand for our services or increase our costs; (7) the impact of
changes in tax laws, rates, guidance and interpretations, including
those related to certain provisions of the Tax Cuts and Jobs Act;
(8) increases in driver and maintenance technician compensation or
difficulties attracting and retaining qualified drivers and
maintenance technicians to meet freight demand; (9) 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 or deductible levels and claims in excess of
insured coverage levels; (10) cost increases associated with
employee benefits, including costs associated with employee
healthcare plans; (11) the availability and cost of capital for our
significant ongoing cash requirements; (12) the availability and
cost of new equipment and replacement parts, including regulatory
changes and supply constraints that could impact the cost of these
assets; (13) decreases in demand for, and the value of, used
equipment; (14) the availability and cost of diesel fuel; (15) 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;
(16) 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; (17)
the costs and potential liabilities related to governmental
proceedings, inquiries, notices or investigations; (18) the costs
and potential liabilities related to our international business
relationships; (19) 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 (the “FMCSA”) and other regulatory agencies;
(20) the costs and potential adverse impact of compliance
associated with FMCSA’s electronic logging device (“ELD”)
regulations and guidance, including the transition of our fleet and
safety management systems from our legacy electronic automatic
on-board recording devices to a new ELD hardware and software
platform; (21) seasonal trends in the less-than-truckload industry,
including harsh weather conditions and disasters; (22) our ability
to retain our key employees and continue to effectively execute our
succession plan; (23) the concentration of our stock ownership with
the Congdon family; (24) the costs and potential adverse impact
associated with future changes in accounting standards or
practices; (25) potential costs and liabilities associated with
cyber incidents and other risks with respect to our systems and
networks or those of our third-party service providers, including
system failure, security breach, disruption by malware or
ransomware or other damage; (26) failure to comply with data
privacy, security or other laws and regulations; (27) 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, which could cause us to incur
costs or result in a loss of business; (28) the costs and potential
adverse impact associated with transitional challenges in upgrading
or enhancing our technology systems; (29) damage to our reputation
through unfavorable perceptions or publicity, including those
related to environmental, social and governance issues,
cybersecurity and data privacy concerns; (30) the costs and
potential adverse impact of compliance with anti-terrorism measures
on our business; (31) dilution to existing shareholders caused by
any issuance of additional equity; (32) the impact of a quarterly
cash dividend or the failure to declare future cash dividends; (33)
recent and future volatility in the market value of our common
stock; (34) 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 (35) other risks and uncertainties described in our
most recent Annual Report on Form 10-K and other filings with the
SEC. 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 as (i) 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 through a single
integrated organization. Our service offerings, which include
expedited transportation, are provided through an expansive network
of service centers located throughout the continental United
States. Through strategic alliances, the Company also provides LTL
services throughout North America. In addition to its core LTL
services, the Company offers a range of value-added services
including container drayage, truckload brokerage and supply chain
consulting.
OLD DOMINION FREIGHT LINE,
INC.
Statements of
Operations
Second Quarter
Year to Date
(In thousands, except per share
amounts)
2019
2018
2019
2018
Revenue
$
1,060,666
100.0
%
$
1,033,498
100.0
%
$
2,051,448
100.0
%
$
1,958,518
100.0
%
Operating expenses:
Salaries, wages & benefits
532,583
50.2
%
522,249
50.5
%
1,054,927
51.4
%
1,023,560
52.3
%
Operating supplies & expenses (1)
122,410
11.5
%
126,566
12.3
%
243,767
11.9
%
242,502
12.4
%
General supplies & expenses
32,391
3.1
%
29,891
2.9
%
63,951
3.1
%
59,867
3.1
%
Operating taxes & licenses
29,384
2.8
%
28,165
2.7
%
58,455
2.9
%
54,953
2.8
%
Insurance & claims
11,587
1.1
%
11,342
1.1
%
22,759
1.1
%
22,441
1.1
%
Communications & utilities
6,134
0.6
%
7,439
0.7
%
13,973
0.7
%
14,485
0.7
%
Depreciation & amortization
62,571
5.9
%
56,235
5.5
%
125,644
6.1
%
109,716
5.6
%
Purchased transportation
24,468
2.3
%
26,044
2.5
%
45,155
2.2
%
47,784
2.4
%
Miscellaneous expenses, net
4,649
0.4
%
5,086
0.5
%
9,902
0.5
%
13,389
0.7
%
Total operating expenses
826,177
77.9
%
813,017
78.7
%
1,638,533
79.9
%
1,588,697
81.1
%
Operating income
234,489
22.1
%
220,481
21.3
%
412,915
20.1
%
369,821
18.9
%
Non-operating (income) expense:
Interest expense
160
0.0
%
11
0.0
%
282
0.0
%
22
0.0
%
Interest income
(1,769
)
(0.2
)%
(668
)
(0.1
)%
(3,252
)
(0.2
)%
(1,124
)
(0.0
)%
Other expense (income), net
524
0.1
%
(334
)
(0.0
)%
(76
)
(0.0
)%
1,965
0.1
%
Income before income taxes
235,574
22.2
%
221,472
21.4
%
415,961
20.3
%
368,958
18.8
%
Provision for income taxes
61,502
5.8
%
58,038
5.6
%
108,566
5.3
%
96,191
4.9
%
Net income
$
174,072
16.4
%
$
163,434
15.8
%
$
307,395
15.0
%
$
272,767
13.9
%
Earnings per share:
Basic
$
2.16
$
1.99
$
3.81
$
3.32
Diluted
2.16
1.99
3.80
3.32
Weighted average outstanding
shares:
Basic
80,522
82,068
80,776
82,160
Diluted
80,645
82,170
80,893
82,262
(1)
Operating supplies and expenses includes
building and office equipment rents that were separately disclosed
on our Statements of Operations in prior periods.
OLD DOMINION FREIGHT LINE,
INC.
Operating Statistics
Second Quarter
Year to Date
2019
2018
% Chg.
2019
2018
% Chg.
Work days
64
64
—
%
127
128
(0.8
)%
Operating ratio
77.9
%
78.7
%
79.9
%
81.1
%
LTL intercity miles (1) (2)
163,884
171,779
(4.6
)%
323,539
330,934
(2.2
)%
LTL tons (1)
2,306
2,462
(6.3
)%
4,512
4,736
(4.7
)%
LTL tonnage per day
36,031
38,469
(6.3
)%
35,528
37,000
(4.0
)%
LTL shipments (1)
2,970
3,049
(2.6
)%
5,789
5,837
(0.8
)%
LTL shipments per day
46,406
47,641
(2.6
)%
45,583
45,602
(0.0
)%
LTL revenue per intercity mile (2)
$
6.40
$
5.94
7.7
%
$
6.25
$
5.86
6.7
%
LTL revenue per hundredweight
$
22.72
$
20.74
9.5
%
$
22.42
$
20.46
9.6
%
LTL revenue per hundredweight, excluding
fuel surcharges
$
19.73
$
17.94
10.0
%
$
19.50
$
17.76
9.8
%
LTL revenue per shipment
$
352.88
$
334.95
5.4
%
$
349.54
$
332.00
5.3
%
LTL revenue per shipment, excluding fuel
surcharges
$
306.37
$
289.69
5.8
%
$
304.03
$
288.24
5.5
%
LTL weight per shipment (lbs.)
1,553
1,615
(3.8
)%
1,559
1,623
(3.9
)%
Average length of haul (miles)
917
915
0.2
%
918
915
0.3
%
Average full-time employees
20,735
20,501
1.1
%
20,890
20,044
4.2
%
(1) -
In thousands
(2) -
Prior year intercity mile statistics have
been adjusted to exclude miles related to non-LTL shipments.
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
June 30,
December 31,
(In thousands)
2019
2018
Cash and cash equivalents
$
228,960
$
190,282
Other current assets
512,460
515,947
Total current assets
741,420
706,229
Net property and equipment
2,858,171
2,754,943
Other assets (1)
159,112
84,111
Total assets
$
3,758,703
$
3,545,283
Current liabilities (1)
386,105
356,732
Long-term debt
45,000
45,000
Other non-current liabilities (1)
529,113
463,068
Total liabilities
960,218
864,800
Equity
2,798,485
2,680,483
Total liabilities & equity
$
3,758,703
$
3,545,283
(1)
On January 1, 2019, the Company adopted
Accounting Standards Update 2016-02, “Leases” (Topic 842), which
resulted in the recognition of right-of-use assets of approximately
$67 million with corresponding lease liabilities on our Condensed
Balance Sheet as of June 30, 2019.
Note: The financial and operating statistics in this press
release are unaudited.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190725005242/en/
Adam N. Satterfield Senior Vice President, Finance and Chief
Financial Officer (336) 822-5721
Old Dominion Freight Line (NASDAQ:ODFL)
Historical Stock Chart
From Feb 2024 to Mar 2024
Old Dominion Freight Line (NASDAQ:ODFL)
Historical Stock Chart
From Mar 2023 to Mar 2024