Heartland Express, Inc. (Nasdaq: HTLD) announced today financial
results for the three months ended March 31, 2021.
Three months ended March 31, 2021:
- Net Income of $13.7 million, and Basic Earnings per Share of
$0.17,
- Operating Revenue of $152.4 million,
- Operating Income of $18.3 million,
- Operating Ratio of 88.0% and 86.5% Non-GAAP Adjusted Operating
Ratio(1),
- Cash Balance of $148.2 million and Total Assets of $949.4
million,
- Stockholders' Equity of $722.4 million,
- Debt-Free Balance Sheet.
Heartland Express Chief Executive Officer Mike
Gerdin, commented on the quarterly operating results and ongoing
initiatives of the Company, "Our operating results for the three
months ended March 31, 2021 showed strength in terms of
profit, overall operating efficiency, and our continued ability to
build cash on our balance sheet. During the first quarter of 2021,
we generated an additional $34 million of cash on hand. The first
two months of the quarter delivered strong freight demand but were
restricted by significant weather shutdowns in the month of
February. Extreme winter weather events affected the Company’s
revenues during the month of February while at the same time we
continued to pay our drivers during extended weather shut downs to
protect their pay while we had them shut down for safety. However,
the month of March delivered a strong finish to the end of the
first quarter, with significantly better revenue and operating
results as compared to the first two months of 2021.”
Mr. Gerdin continued, “From a financial
perspective, we were able to improve our operating income and
control costs to deliver an operating ratio of 88.0% and a non-GAAP
adjusted operating ratio(1) of 86.5%, an improvement to the same
quarter of 2020 where we delivered an operating ratio of 89.6% and
a non-GAAP adjusted operating ratio(1) of 88.2%. Our operating
income for the first quarter was $18.3 million, a 5.5% increase,
compared to $17.3 million in the first quarter of 2020. We also
continue to navigate the challenge to recruit, hire, and retain
qualified and safe operating drivers. Even though we recently
increased driver pay by approximately 6% in October 2020, we intend
to implement additional driver pay enhancements during the second
quarter of 2021. We continue to be extremely proud of our drivers
and have continued to challenge ourselves to develop strategies to
better compensate our drivers for the critical work that they
perform. We are proud of what we have accomplished and we believe
we are well positioned for the days ahead.”
Financial Results
Heartland Express ended the first quarter of
2021 with operating revenues of $152.4 million, compared to $166.3
million in the first quarter of 2020. Operating revenues for the
quarter included fuel surcharge revenues of $16.8 million, compared
to $19.5 million in the same period of 2020, a $2.7 million
decrease. Operating income for the three-month period ended
March 31, 2021 was $18.3 million, an increase of $1.0 million
as compared to the same period of the prior year. Net income was
$13.7 million, compared to $13.2 million in the first quarter of
2020, an increase of 3.7%. Basic earnings per share were $0.17
during the quarter as compared to $0.16 during the same period of
2020. The Company posted an operating ratio of 88.0%, non-GAAP
adjusted operating ratio(1) of 86.5%, and a 9.0% net margin (net
income as a percentage of operating revenues) in the first quarter
of 2021 compared to 89.6%, 88.2%, and 8.0%, respectively, in the
first quarter of 2020.
Balance Sheet, Liquidity, and Capital
Expenditures
As of March 31, 2021, the Company had
$148.2 million in cash balances and no borrowings under the
Company's unsecured line of credit. The Company had $88.5 million
in available borrowing capacity on the line of credit as of
March 31, 2021 after consideration of $11.5 million
outstanding letters of credit. In addition to the current borrowing
base of $100 million, the Company has the ability to increase the
available borrowing base by an additional $100 million, subject to
normal credit and lender approvals. The Company continues to be in
compliance with associated financial covenants. The Company ended
the quarter with total assets of $949.4 million and stockholders'
equity of $722.4 million.
Net cash flows from operations for the first
three months of 2021 were $35.4 million, 23.2% of operating
revenue. Net revenue equipment and terminal transactions provided
$15.4 million of cash. The primary uses of net cash during the
three-month period ended March 31, 2021 was $15.0 million for
the repurchase of our common stock and $1.6 million for
dividends.
The average age of the Company's tractor fleet
was 1.7 years as of March 31, 2021 compared to 2.0 years on
March 31, 2020. The average age of the Company's trailer fleet
was 3.8 years as of March 31, 2021 compared to 3.8 years on
March 31, 2020. The Company currently anticipates a total of
approximately $85 to $95 million in net capital expenditures for
the remainder of calendar year 2021.
The Company ended the past twelve months with a
return on total assets of 7.5% and a 9.9% return on
equity.
The Company continues its commitment to stockholders through the
payment of cash dividends and repurchases of common stock. A
dividend of $0.02 per share was declared and paid during the first
quarter of 2021. The Company has now paid cumulative cash dividends
of $492.0 million, including three special dividends, ($2.00 in
2007, $1.00 in 2010, and $1.00 in 2012) over the past seventy-one
consecutive quarters since 2003. During the three months ended
March 31, 2021, the Company purchased 768,801 shares of our common
stock for $14.5 million as compared to 710,376 shares of our common
stock for $12.3 million during the same period of 2020. Our
outstanding shares at March 31, 2021 were 79.9 million. A
total of 3.6 million shares of common stock have been repurchased
for $65.8 million over the past five years. The Company has the
ability to repurchase an additional 4.7 million shares under the
current authorization which would result in 75.2 million
outstanding shares if fully executed.
Other Information
During the first quarter of 2021, we continued
to deliver award-winning service and safety to our customers as
evidenced by the following awards received:
- Transplace - 2020 Carrier of the
Year
- Tosca - 2020 Carrier of the
Year
Operating revenue excluding fuel surcharge
revenue and adjusted operating ratio are non-GAAP financial
measures and are not intended to replace financial measures
calculated in accordance with GAAP. These non-GAAP financial
measures supplement our GAAP results. We believe that using these
measures affords a more consistent basis for comparing our results
of operations from period to period. The information required by
Item 10(e) of Regulation S-K under the Securities Act of 1933 and
the Securities Exchange Act of 1934 and Regulation G under the
Securities Exchange Act of 1934, including a reconciliation to the
most directly comparable financial measure calculated in accordance
with GAAP, is included in the table at the end of this press
release.
This press release may contain statements that
might be considered as forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, as
amended. Such statements may be identified by their use of terms or
phrases such as “seek,” “expects,” “estimates,” “anticipates,”
“projects,” “believes,” “hopes,” “plans,” “goals,” “intends,”
“may,” “might,” “likely,” “will,” “should,” “would,” “could,”
“potential,” “predict,” “continue,” “strategy,” “future,”
“outlook,” and similar terms and phrases. In this press release,
the statements relating to reducing unnecessary or unproductive
costs, our ability to react to changing market conditions,
operational improvements, progress toward our goals, and future
capital expenditures are forward-looking statements. Such
statements are based on management's belief or interpretation of
information currently available. These statements and assumptions
involve certain risks and uncertainties, and undue reliance should
not be placed on such statements. Actual events may differ
materially from those set forth in, contemplated by, or underlying
such statements as a result of numerous factors, including, without
limitation, those specified in the Company's Annual Report on Form
10-K for the year ended December 31, 2020. The Company assumes no
obligation to update any forward-looking statements, which speak as
of their respective dates.
Contact: Heartland Express, Inc. (319-626-3600)Mike Gerdin, Chief
Executive OfficerChris Strain, Chief Financial Officer |
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF INCOME (In thousands, except per share
amounts)(unaudited)
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
OPERATING REVENUE |
|
$ |
152,402 |
|
|
$ |
166,318 |
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
Salaries, wages, and
benefits |
|
$ |
64,782 |
|
|
$ |
70,254 |
|
Rent and purchased
transportation |
|
964 |
|
|
1,608 |
|
Fuel |
|
24,157 |
|
|
25,941 |
|
Operations and
maintenance |
|
5,688 |
|
|
6,800 |
|
Operating taxes and
licenses |
|
3,621 |
|
|
3,842 |
|
Insurance and claims |
|
5,439 |
|
|
5,354 |
|
Communications and
utilities |
|
1,226 |
|
|
1,421 |
|
Depreciation and
amortization |
|
26,926 |
|
|
26,634 |
|
Other operating expenses |
|
5,552 |
|
|
6,909 |
|
(Gain)/Loss on disposal of
property and equipment |
|
(4,232 |
) |
|
229 |
|
|
|
|
|
|
|
|
134,123 |
|
|
148,992 |
|
|
|
|
|
|
Operating income |
|
18,279 |
|
|
17,326 |
|
|
|
|
|
|
Interest income |
|
138 |
|
|
377 |
|
|
|
|
|
|
Income before income
taxes |
|
18,417 |
|
|
17,703 |
|
|
|
|
|
|
Federal and state income
taxes |
|
4,683 |
|
|
4,465 |
|
|
|
|
|
|
Net income |
|
$ |
13,734 |
|
|
$ |
13,238 |
|
|
|
|
|
|
Earnings per share |
|
|
|
|
Basic |
|
$ |
0.17 |
|
|
$ |
0.16 |
|
Diluted |
|
$ |
0.17 |
|
|
$ |
0.16 |
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
Basic |
|
80,152 |
|
|
81,870 |
|
Diluted |
|
80,206 |
|
|
81,945 |
|
|
|
|
|
|
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 |
|
2021 |
|
2020 |
CURRENT
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
148,212 |
|
|
$ |
113,852 |
|
Trade receivables, net |
|
60,568 |
|
|
55,577 |
|
Prepaid tires |
|
8,758 |
|
|
8,241 |
|
Other current assets |
|
9,129 |
|
|
15,342 |
|
Total current assets |
|
226,667 |
|
|
193,012 |
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT |
|
760,068 |
|
|
779,360 |
|
Less accumulated depreciation |
|
247,235 |
|
|
240,080 |
|
|
|
512,833 |
|
|
539,280 |
|
GOODWILL |
|
168,295 |
|
|
168,295 |
|
OTHER INTANGIBLES,
NET |
|
24,148 |
|
|
24,746 |
|
DEFERRED INCOME TAXES,
NET |
|
— |
|
|
8,164 |
|
OTHER
ASSETS |
|
17,478 |
|
|
17,679 |
|
|
|
$ |
949,421 |
|
|
$ |
951,176 |
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
16,954 |
|
|
$ |
12,751 |
|
Compensation and benefits |
|
25,607 |
|
|
22,422 |
|
Insurance accruals |
|
15,482 |
|
|
15,837 |
|
Income taxes payable |
|
6,960 |
|
|
1,475 |
|
Other accruals |
|
19,053 |
|
|
18,557 |
|
Total current liabilities |
|
84,056 |
|
|
71,042 |
|
LONG-TERM
LIABILITIES |
|
|
|
|
Income taxes payable |
|
5,564 |
|
|
5,801 |
|
Deferred income taxes, net |
|
92,450 |
|
|
104,004 |
|
Insurance accruals less current portion |
|
44,934 |
|
|
45,995 |
|
Total long-term liabilities |
|
142,948 |
|
|
155,800 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Capital stock, common, $.01 par value; authorized 395,000 shares;
issued 90,689 in 2021 and 2020; outstanding 79,905 and 80,653 in
2021 and 2020, respectively |
|
907 |
|
|
907 |
|
Additional paid-in capital |
|
4,476 |
|
|
4,330 |
|
Retained earnings |
|
903,105 |
|
|
890,970 |
|
Treasury stock, at cost; 10,784 and 10,036 in 2021 and 2020,
respectively |
|
(186,071 |
) |
|
(171,873 |
) |
|
|
722,417 |
|
|
724,334 |
|
|
|
$ |
949,421 |
|
|
$ |
951,176 |
|
(1)
GAAP to Non-GAAP Reconciliation Schedule: |
Operating revenue, operating revenue excluding fuel surcharge
revenue, fuel surcharge revenue, operating income, operating ratio,
and adjusted operating ratio reconciliation (a) |
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
(Unaudited, in thousands) |
|
|
|
|
|
Operating revenue |
|
$ |
152,402 |
|
|
$ |
166,318 |
|
Less: Fuel surcharge revenue |
|
16,785 |
|
|
19,465 |
|
Operating revenue, excluding fuel surcharge revenue |
|
135,617 |
|
|
146,853 |
|
|
|
|
|
|
Operating expenses |
|
134,123 |
|
|
148,992 |
|
Less: Fuel surcharge revenue |
|
16,785 |
|
|
19,465 |
|
Adjusted operating expenses |
|
117,338 |
|
|
129,527 |
|
|
|
|
|
|
Operating income |
|
$ |
18,279 |
|
|
$ |
17,326 |
|
Operating ratio |
|
88.0 |
% |
|
89.6 |
% |
Adjusted operating ratio |
|
86.5 |
% |
|
88.2 |
% |
(a) Operating revenue excluding fuel surcharge
revenue, fuel surcharge revenue, and adjusted operating ratio as
reported in this press release are based upon operating expenses,
net of fuel surcharge revenue, as a percentage of operating revenue
excluding fuel surcharge revenue. We believe that adjusted
operating ratio is more representative of our underlying operations
by excluding the volatility of fuel prices, which we cannot
control. Adjusted operating ratio is not a substitute for operating
ratio measured in accordance with GAAP. There are limitations to
using non-GAAP financial measures. Although we believe that
adjusted operating ratio improves comparability in analyzing our
period-to-period performance, it could limit comparability to other
companies in our industry if those companies define adjusted
operating ratio differently. Because of these limitations, adjusted
operating ratio should not be considered a measure of income
generated by our business or discretionary cash available to us to
invest in the growth of our business. Management compensates for
these limitations by primarily relying on GAAP results and using
non-GAAP financial measures on a supplemental basis.
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