UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2004
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number: 0-19582
OLD DOMINION FREIGHT LINE, INC.
(Exact name of registrant as specified in its charter)
| VIRGINIA | 56-0751714 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
500 Old Dominion Way
Thomasville, NC 27360
(Address of principal executive offices)
(Zip Code)
(336) 889-5000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
As of November 4, 2004, there were 24,845,235 shares of the registrant’s Common Stock ($.10 par value) outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended |
Nine Months Ended | |||||||||||
| (In thousands, except share and per share data) |
Sept. 30, 2004 |
Sept. 30, 2003 |
Sept. 30, 2004 |
Sept. 30, 2003 | ||||||||
| Revenue from operations |
$ | 215,117 | $ | 176,873 | $ | 600,015 | $ | 493,555 | ||||
| Operating expenses: |
||||||||||||
| Salaries, wages and benefits |
120,674 | 102,843 | 344,394 | 291,827 | ||||||||
| Purchased transportation |
7,859 | 5,882 | 21,099 | 15,646 | ||||||||
| Operating supplies and expenses |
26,360 | 18,052 | 70,174 | 53,551 | ||||||||
| Depreciation and amortization |
11,536 | 9,949 | 33,038 | 28,081 | ||||||||
| Building and office equipment rents |
1,915 | 1,880 | 5,608 | 5,467 | ||||||||
| Operating taxes and licenses |
7,891 | 6,794 | 22,870 | 19,614 | ||||||||
| Insurance and claims |
6,172 | 4,290 | 18,864 | 13,221 | ||||||||
| Communications and utilities |
3,030 | 2,705 | 8,411 | 7,589 | ||||||||
| General supplies and expenses |
7,020 | 5,900 | 20,526 | 17,038 | ||||||||
| Miscellaneous expenses, net |
1,143 | 1,800 | 3,712 | 3,886 | ||||||||
| Total operating expenses |
193,600 | 160,095 | 548,696 | 455,920 | ||||||||
| Operating income |
21,517 | 16,778 | 51,319 | 37,635 | ||||||||
| Other deductions: |
||||||||||||
| Interest expense, net |
1,290 | 1,531 | 4,053 | 4,528 | ||||||||
| Other expense, net |
97 | 179 | 475 | 261 | ||||||||
| Total other deductions |
1,387 | 1,710 | 4,528 | 4,789 | ||||||||
| Income before income taxes |
20,130 | 15,068 | 46,791 | 32,846 | ||||||||
| Provision for income taxes |
7,915 | 5,952 | 18,403 | 12,974 | ||||||||
| Net income |
$ | 12,215 | $ | 9,116 | $ | 28,388 | $ | 19,872 | ||||
| Earnings per share: |
||||||||||||
| Basic |
$ | 0.50 | $ | 0.38 | $ | 1.17 | $ | 0.83 | ||||
| Diluted |
$ | 0.50 | $ | 0.38 | $ | 1.17 | $ | 0.82 | ||||
| Weighted average shares outstanding: |
||||||||||||
| Basic |
24,600,431 | 24,080,171 | 24,261,022 | 24,059,579 | ||||||||
| Diluted |
24,616,231 | 24,106,276 | 24,279,666 | 24,089,460 | ||||||||
The accompanying notes are an integral part of these financial statements.
2
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
| (In thousands, except share data) |
September 30, 2004 (Unaudited) |
December 31, 2003 |
||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 3,094 | $ | 1,051 | ||||
| Customer receivables, less allowances of $7,588 and $7,388, respectively |
93,906 | 73,036 | ||||||
| Other receivables |
2,246 | 2,542 | ||||||
| Tires on equipment |
10,204 | 8,833 | ||||||
| Prepaid expenses |
8,603 | 11,369 | ||||||
| Deferred income taxes |
4,599 | 4,539 | ||||||
| Total current assets |
122,652 | 101,370 | ||||||
| Property and equipment: |
||||||||
| Revenue equipment |
307,305 | 263,698 | ||||||
| Land and structures |
193,557 | 177,597 | ||||||
| Other fixed assets |
82,296 | 70,146 | ||||||
| Leasehold improvements |
948 | 1,584 | ||||||
| Total property and equipment |
584,106 | 513,025 | ||||||
| Less accumulated depreciation and amortization |
(222,574 | ) | (197,257 | ) | ||||
| Net property and equipment |
361,532 | 315,768 | ||||||
| Other assets |
17,990 | 17,421 | ||||||
| Total assets |
$ | 502,174 | $ | 434,559 | ||||
The accompanying notes are an integral part of these financial statements.
3
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
(CONTINUED)
| (In thousands, except share data) |
September 30, 2004 (Unaudited) |
December 31, 2003 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 26,873 | $ | 12,185 | ||
| Compensation and benefits |
25,731 | 19,626 | ||||
| Claims and insurance accruals |
21,791 | 17,742 | ||||
| Other accrued liabilities |
6,112 | 4,603 | ||||
| Income taxes payable |
— | 1,736 | ||||
| Current maturities of long-term debt |
22,046 | 22,440 | ||||
| Total current liabilities |
102,553 | 78,332 | ||||
| Long-term liabilities: |
||||||
| Long-term debt |
58,957 | 74,986 | ||||
| Other non-current liabilities |
20,962 | 17,437 | ||||
| Deferred income taxes |
38,926 | 31,263 | ||||
| Total long-term liabilities |
118,845 | 123,686 | ||||
| Total liabilities |
221,398 | 202,018 | ||||
| Shareholders’ equity: |
||||||
| Common stock - $.10 par value, 70,000,000 shares authorized, 24,836,235 shares outstanding at September 30, 2004 and 24,089,028 shares outstanding at December 31, 2003 |
2,484 | 2,409 | ||||
| Capital in excess of par value |
91,941 | 72,169 | ||||
| Retained earnings |
186,351 | 157,963 | ||||
| Total shareholders’ equity |
280,776 | 232,541 | ||||
| Commitments and contingencies |
— | — | ||||
| Total liabilities and shareholders’ equity |
$ | 502,174 | $ | 434,559 | ||
The accompanying notes are an integral part of these financial statements.
4
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| Capital in excess of par value |
Retained earnings |
Total | ||||||||||||
| Common Stock |
||||||||||||||
| (In thousands) |
Shares |
Amount |
||||||||||||
| Balance as of December 31, 2002 |
23,967 | $ | 2,397 | $ | 70,803 | $ | 130,363 | $ | 203,563 | |||||
| Net income |
— | — | — | 27,600 | 27,600 | |||||||||
| Exercise of common stock options |
122 | 12 | 954 | — | 966 | |||||||||
| Tax benefit from exercise of common stock options |
— | — | 412 | — | 412 | |||||||||
| Balance as of December 31, 2003 |
24,089 | 2,409 | 72,169 | 157,963 | 232,541 | |||||||||
| Net income (Unaudited) |
— | — | — | 28,388 | 28,388 | |||||||||
| Exercise of common stock options (Unaudited) |
11 | 1 | 92 | — | 93 | |||||||||
| Sale of common stock (Unaudited) |
736 | 74 | 19,680 | — | 19,754 | |||||||||
| Balance as of September 30, 2004 (Unaudited) |
24,836 | $ | 2,484 | $ | 91,941 | $ | 186,351 | $ | 280,776 | |||||
The accompanying notes are an integral part of these financial statements.
5
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended Sept. 30, |
||||||||
| (In thousands) |
2004 (Unaudited) |
2003 (Unaudited) |
||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 28,388 | $ | 19,872 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
33,038 | 28,081 | ||||||
| (Gain) loss on sale of property and equipment |
(385 | ) | 209 | |||||
| Changes in assets and liabilities: |
||||||||
| Customer and other receivables, net |
(20,574 | ) | (10,676 | ) | ||||
| Tires on equipment |
(1,371 | ) | (817 | ) | ||||
| Prepaid expenses and other assets |
2,196 | 6,841 | ||||||
| Accounts payable |
14,688 | 2,396 | ||||||
| Compensation, benefits and other accrued liabilities |
7,614 | 7,902 | ||||||
| Claims and insurance accruals |
6,731 | 2,446 | ||||||
| Deferred income tax |
7,603 | 4,938 | ||||||
| Income taxes payable |
(1,736 | ) | — | |||||
| Other liabilities |
843 | 753 | ||||||
| Net cash provided by operating activities |
77,035 | 61,945 | ||||||
| Cash flows from investing activities: |
||||||||
| Purchase of property and equipment |
(79,879 | ) | (83,119 | ) | ||||
| Proceeds from sale of property and equipment |
1,463 | 3,373 | ||||||
| Net cash used in investing activities |
(78,416 | ) | (79,746 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuance of long-term debt |
815 | 2,650 | ||||||
| Principal payments under long-term debt agreements |
(20,738 | ) | (10,537 | ) | ||||
| Net proceeds from revolving line of credit |
3,500 | 14,000 | ||||||
| Proceeds from the conversion of stock options |
93 | 1,021 | ||||||
| Net proceeds from stock issuance |
19,754 | — | ||||||