Operating Ratio Improves to a Company Record
of 72.6%
Old Dominion Freight Line, Inc. (Nasdaq: ODFL) today announced
financial results for the three-month and nine-month periods ended
September 30, 2021.
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands, except per share
amounts)
2021
2020
% Chg.
2021
2020
% Chg.
Total revenue
$
1,400,046
$
1,058,166
32.3
%
$
3,845,970
$
2,941,740
30.7
%
LTL services revenue
$
1,378,339
$
1,044,640
31.9
%
$
3,787,721
$
2,903,140
30.5
%
Other services revenue
$
21,707
$
13,526
60.5
%
$
58,249
$
38,600
50.9
%
Operating income
$
383,410
$
270,244
41.9
%
$
1,019,111
$
652,580
56.2
%
Operating ratio
72.6
%
74.5
%
73.5
%
77.8
%
Net income
$
286,634
$
201,868
42.0
%
$
755,569
$
482,850
56.5
%
Diluted earnings per share
$
2.47
$
1.71
44.4
%
$
6.48
$
4.07
59.2
%
Diluted weighted average shares
outstanding
116,162
117,933
(1.5
)%
116,656
118,697
(1.7
)%
Greg C. Gantt, President and Chief Executive Officer of Old
Dominion, commented, “Old Dominion produced strong profitable
growth for the third quarter of 2021 with results that include new
Company records for revenue and profitability. The increase in
quarterly revenue reflects the strength of the domestic economy and
unprecedented demand for our best-in-class service. Our superior
service offering and available network capacity are fundamental
qualities that differentiate Old Dominion in the marketplace and
support our ongoing ability to win market share.
“The Company’s revenue growth of 32.3% included a 15.7% increase
in LTL revenue per hundredweight and a 13.7% increase in LTL tons.
The increase in LTL tons was the result of a 19.4% increase in LTL
shipments that was partially offset by a 4.8% decrease in LTL
weight per shipment. The decrease in weight per shipment was
primarily due to our continuing efforts to reduce the number of
heavy-weighted shipments in our network to preserve capacity and
improve our operating efficiency. These efforts, as well as the
0.8% increase in average length of haul, also had the effect of
increasing our reported yield metrics. The 10.1% increase in LTL
revenue per hundredweight, excluding fuel surcharges, reflects the
changes in the mix of our freight as well as the success of our
long-term pricing strategy that focuses on individual account
profitability.
“Our operating ratio improved to a Company record of 72.6% for
the third quarter of 2021. We improved many of our cost categories
as a percent of revenue during the quarter due to the leverage
created by our balanced revenue growth as well as improvements in
our operating efficiency. Our operating supplies and expenses,
however, increased as a percent of revenue due primarily to the
significant increase in fuel prices. We also increased our use of
purchased transportation during the third quarter to supplement the
capacity of our workforce. The average number of full-time
employees increased 20.9% as compared to the third quarter of 2020,
and we intend to continue hiring additional employees during the
fourth quarter to support our volume growth and reduce our reliance
on purchased transportation.”
Cash Flow and Use of Capital
Old Dominion’s net cash provided by operating activities was
$364.3 million for the third quarter of 2021 and $872.6 million for
the first nine months of the year. The Company had $339.8 million
in cash and cash equivalents at September 30, 2021.
Capital expenditures were $178.6 million for the third quarter
of 2021 and $384.7 million for the first nine months of the year.
The Company expects its aggregate capital expenditures for 2021 to
total approximately $565 million, including planned expenditures of
$235 million for real estate and service center expansion projects;
$290 million for tractors and trailers; and $40 million for
information technology and other assets.
Old Dominion continued to return capital to shareholders during
the third quarter of 2021 through its dividend and share repurchase
programs, including a $250 million accelerated share repurchase
agreement that will expire no later than March 2022. For the first
nine months of this year, the cash utilized for shareholder return
programs included $599.0 million of share repurchases and $69.4
million of cash dividends.
Summary
Mr. Gantt concluded, “Old Dominion produced another quarter with
Company record financial results by continuing to execute on our
long-term strategic plan. This plan focuses on providing our
customers with superior service at a fair price, while also
consistently investing in the resources that are necessary to
support our long-term market share initiatives. We are committed to
investing further to expand the capacity of our service center
network and our fleet. We will also continue to invest in new
technologies that can further improve our customer service and
drive additional operating efficiencies. Our most important
investment, however, will continue to be in our OD Family of
employees. Our people are critical to our success as they work
tirelessly to provide service value to our customers. As we
continue to execute on these same business strategies that have
been in place for many years, we are confident that we can produce
further profitable growth and increased 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 November 3, 2021, at (877) 344-7529, Access Code
10160197.
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, many of which will continue to be amplified by
the current COVID-19 pandemic: (1) the challenges associated with
executing our growth strategy, and developing, marketing and
consistently delivering high-quality services that meet customer
expectations; (2) various risks related to public health epidemics,
pandemics and similar outbreaks; (3) changes in our relationships
with significant customers; (4) our exposure to claims related to
cargo loss and damage, property damage, personal injury, workers’
compensation and healthcare, increased self-insured retention or
deductible levels or premiums for excess coverage, and claims in
excess of insured coverage levels; (5) the availability and cost of
new equipment, including regulatory changes and supply constraints
that could impact the cost of these assets; (6) the availability
and price of diesel fuel and 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; (7) seasonal trends in the
less-than-truckload (“LTL”) industry, including harsh weather
conditions and disasters; (8) the availability and cost of capital
for our significant ongoing cash requirements; (9) decreases in
demand for, and the value of, used equipment; (10) our ability to
successfully consummate and integrate acquisitions; (11) the costs
and potential liabilities related to our international business
relationships; (12) the costs and potential adverse impact of
compliance with anti-terrorism measures on our business; (13) the
competitive environment with respect to our industry, including
pricing pressures; (14) 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; (15) the negative impact of any unionization,
or the passage of legislation or regulations that could facilitate
unionization, of our employees; (16) increases in driver and
maintenance technician compensation or difficulties attracting and
retaining qualified drivers and maintenance technicians to meet
freight demand and maintain our customer relationships; (17) our
ability to retain our key employees and continue to effectively
execute our succession plan; (18) potential costs and liabilities
associated with cyber incidents and other risks with respect to our
information technology systems or those of our third-party service
providers, including system failure, security breach, disruption by
malware or ransomware or other damage; (19) the failure to adapt to
new technologies implemented by our competitors in the LTL and
transportation industry, which could negatively affect our ability
to compete; (20) 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; (21) the Compliance, Safety, Accountability initiative of
the Federal Motor Carrier Safety Administration (“FMCSA”) could
adversely impact our ability to hire qualified drivers, meet our
growth projections and maintain our customer relationships; (22)
the costs and potential adverse impact of compliance with, or
violations of, current and future rules issued by the Department of
Transportation, the FMCSA and other regulatory agencies; (23) the
costs and potential liabilities related to compliance with, or
violations of, existing or future governmental laws and
regulations, including environmental laws; (24) the effects of
legal, regulatory or market responses to climate change concerns;
(25) the costs associated with healthcare legislation or rising
healthcare costs; (26) the costs and potential liabilities related
to litigation and governmental proceedings, inquiries, notices or
investigations; (27) the impact of changes in tax laws, rates,
guidance and interpretations; (28) the concentration of our stock
ownership with the Congdon family; (29) the ability or the failure
to declare future cash dividends; (30) fluctuations in the amount
and frequency of our stock repurchases; (31) volatility in the
market value of our common stock; (32) 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 (33) 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 one of the largest North
American less-than-truckload (“LTL”) motor carriers and provides
regional, inter-regional and national LTL services through a single
integrated, union-free organization. Our service offerings, which
include expedited transportation, are provided through an expansive
network of service centers located throughout the continental
United States. The Company also maintains strategic alliances with
other carriers to provide 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
Third Quarter
Year to Date
(In thousands, except per share
amounts)
2021
2020
2021
2020
Revenue
$
1,400,046
100.0
%
$
1,058,166
100.0
%
$
3,845,970
100.0
%
$
2,941,740
100.0
%
Operating expenses:
Salaries, wages & benefits
649,685
46.4
%
524,658
49.6
%
1,806,862
47.0
%
1,510,047
51.3
%
Operating supplies & expenses
146,509
10.5
%
90,269
8.5
%
408,242
10.6
%
273,374
9.3
%
General supplies & expenses
37,312
2.7
%
27,383
2.6
%
102,907
2.7
%
86,872
3.0
%
Operating taxes & licenses
34,028
2.4
%
29,923
2.8
%
98,550
2.6
%
86,280
2.9
%
Insurance & claims
15,674
1.1
%
11,821
1.1
%
43,579
1.1
%
32,581
1.1
%
Communications & utilities
8,738
0.6
%
7,622
0.7
%
25,324
0.7
%
23,075
0.8
%
Depreciation & amortization
65,160
4.7
%
64,983
6.2
%
193,094
5.0
%
196,153
6.7
%
Purchased transportation
52,037
3.7
%
25,405
2.4
%
130,678
3.4
%
65,188
2.2
%
Miscellaneous expenses, net
7,493
0.5
%
5,858
0.6
%
17,623
0.4
%
15,590
0.5
%
Total operating expenses
1,016,636
72.6
%
787,922
74.5
%
2,826,859
73.5
%
2,289,160
77.8
%
Operating income
383,410
27.4
%
270,244
25.5
%
1,019,111
26.5
%
652,580
22.2
%
Non-operating expense (income):
Interest expense
371
0.0
%
1,071
0.1
%
1,343
0.0
%
1,936
0.1
%
Interest income
(178
)
(0.0
)%
(123
)
(0.0
)%
(660
)
(0.0
)%
(1,602
)
(0.1
)%
Other expense, net
266
0.0
%
961
0.1
%
1,781
0.1
%
4,205
0.2
%
Income before income taxes
382,951
27.4
%
268,335
25.3
%
1,016,647
26.4
%
648,041
22.0
%
Provision for income taxes
96,317
6.9
%
66,467
6.3
%
261,078
6.8
%
165,191
5.6
%
Net income
$
286,634
20.5
%
$
201,868
19.0
%
$
755,569
19.6
%
$
482,850
16.4
%
Earnings per share:
Basic
$
2.48
$
1.72
$
6.52
$
4.09
Diluted
2.47
1.71
6.48
4.07
Weighted average outstanding
shares:
Basic
115,411
117,188
115,906
117,947
Diluted
116,162
117,933
116,656
118,697
OLD DOMINION FREIGHT LINE,
INC.
Operating Statistics
Third Quarter
Year to Date
2021
2020
% Chg.
2021
2020
% Chg.
Work days
64
64
0.0
%
191
192
(0.5
)%
Operating ratio
72.6
%
74.5
%
73.5
%
77.8
%
LTL intercity miles (1)
184,812
160,543
15.1
%
524,924
457,909
14.6
%
LTL tons (1)
2,625
2,309
13.7
%
7,555
6,490
16.4
%
LTL tonnage per day
41,020
36,078
13.7
%
39,556
33,802
17.0
%
LTL shipments (1)
3,413
2,859
19.4
%
9,624
8,054
19.5
%
LTL shipments per day
53,335
44,672
19.4
%
50,388
41,948
20.1
%
LTL revenue per intercity mile
$
7.47
$
6.54
14.2
%
$
7.24
$
6.36
13.8
%
LTL revenue per hundredweight
$
26.31
$
22.74
15.7
%
$
25.17
$
22.44
12.2
%
LTL revenue per hundredweight, excluding
fuel surcharges
$
22.52
$
20.46
10.1
%
$
21.76
$
20.02
8.7
%
LTL revenue per shipment
$
404.65
$
367.28
10.2
%
$
395.16
$
361.74
9.2
%
LTL revenue per shipment, excluding fuel
surcharges
$
346.46
$
330.43
4.9
%
$
341.69
$
322.61
5.9
%
LTL weight per shipment (lbs.)
1,538
1,615
(4.8
)%
1,570
1,612
(2.6
)%
Average length of haul (miles)
940
933
0.8
%
933
924
1.0
%
Average active full-time employees
22,682
18,766
20.9
%
21,594
18,875
14.4
%
(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
September 30,
December 31,
(In thousands)
2021
2020
Cash and cash equivalents
$
339,761
$
401,430
Short-term investments
224,899
330,274
Other current assets
714,192
511,635
Total current assets
1,278,852
1,243,339
Net property and equipment
3,110,114
2,914,031
Other assets
224,154
212,040
Total assets
$
4,613,120
$
4,369,410
Current liabilities
$
534,291
$
373,130
Long-term debt
99,943
99,931
Other non-current liabilities
558,988
570,061
Total liabilities
1,193,222
1,043,122
Equity
3,419,898
3,326,288
Total liabilities & equity
$
4,613,120
$
4,369,410
Note: The financial and operating statistics in this press
release are unaudited.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211027005223/en/
Adam N. Satterfield Senior Vice President, Finance and Chief
Financial Officer (336) 822-5721
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