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8-K - Q4 2012 EARNINGS RELEASE 8K - HEARTLAND EXPRESS INCearningsrelease8k2012q4.htm


Exhibit 99.1

January 23, 2013 For Immediate Release

Press Release

Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter of 2012

NORTH LIBERTY, IOWA - January 23, 2013 - Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter ended December 31, 2012. Operating revenues for the quarter increased 3.8% to $136.2 million from $131.2 million in the fourth quarter of 2011. Operating income for the three month period was negatively impacted by a $4.1 million decrease in gains on disposal of property and equipment. Net income was $14.3 million compared to $17.1 million in the 2011 period, a 16.5% decrease. Basic earnings per share decreased 14.4% to $0.17 from $0.20 reported in the fourth quarter of 2011. Fuel surcharge revenues for the quarter increased 5.6% to $28.0 million from $26.5 million in the fourth quarter of 2011. For the quarter, Heartland Express, Inc. (the “Company”) posted an operating ratio (operating expenses as a percentage of operating revenues) of 81.9% and a 10.5% net margin (net income as a percentage of operating revenues) compared to 79.5% and 13.0%, respectively, in the fourth quarter of last year.

Operating revenues for the year increased 3.2% to $545.7 million from $528.6 million in the prior year. Operating income for the year was negatively impacted by a $17.0 million decrease in gains on disposal of property and equipment. Net income was $61.5 million compared to $69.9 million in the 2011 period, a 12.0% decrease. Basic earnings per share decreased 8.2% to $0.72 from $0.78 reported in 2011. Fuel surcharge revenues for the year increased 4.3% to $112.4 million from $107.8 million in the prior year. For the year, the Company posted an operating ratio of 82.6% and an 11.3% net margin compared to 79.8% and 13.2%, respectively, reported last year.

The Company continues to experience significant swings in fuel expense from quarter to quarter. Fuel expense increased $3.2 million or 8.2% during the quarter and $7.1 million or 4.4% during the year, primarily due to an increase in average fuel prices over the similar prior periods. The U.S. average cost of fuel was $4.015 per gallon during the fourth quarter of 2012, a 3.7% increase over the fourth quarter of the prior year and $3.971 for the year, a 3.2% increase from the prior year. The Company continues to focus on fuel surcharge pricing, truck idling hours, overall tractor fuel economy, and fuel purchasing decisions in an effort to lessen the impact of higher fuel costs.
 
The average age of the Company's tractor fleet was 2.4 years as of December 31, 2012 with all of the fleet being 2010 models and newer. The Company took delivery of 225 new trucks during the fourth quarter which included ProStar Plus International and Freightliner Cascadia models. An additional 675 new trucks will be received throughout the first quarter of 2013 to complete this current upgrade. The average age of the Company's trailer fleet improved to 3.1 years at December 31, 2012 compared to 4.1 years at December 31, 2011, with 96% of our trailers being 2007 models and newer at year end. The Company took delivery of 1,864 new Wabash trailers during the year including 890 during the fourth quarter. The Company sold 1,292 trailers during the year including 119 trailers during the fourth quarter. These continued fleet upgrades keep our tractor and trailer fleets in late model equipment which the Company believes is a key component of delivering quality customer service. These fleet upgrades also allow us to maintain our strong industry CSA (Compliance, Safety, Accountability) scores.
 





The Company ended the year with cash, cash equivalents, and long-term investments totaling $139.9 million, a $50.4 million decrease from the $190.3 million reported at December 31, 2011. Consistent with 2011, net cash flows from operations continued to be strong at 18.7% of operating revenues during 2012. Our reduction in cash and investments during the year was mainly the result of capital expenditures for the year of $37.6 million primarily for new tractors and trailers, net of equipment sale proceeds related to our trailer and tractor fleet upgrade programs, dividend payments of $91.9 million and payments for stock repurchases of $24.2 million. The Company funded these current year expenditures through the use of cash generated from operations as well as $32.4 million in calls, at par, received on illiquid auction rate securities. The Company continues to maintain a debt-free balance sheet with total assets of $467.7 million. The Company ended the year with a return on total assets of 11.6% and a 17.7% return on equity compared to 13.0% and 19.9%, respectively, during 2011.
 
Commitment to our shareholders continues through the payment of cash dividends and the repurchase of common stock. A dividend of $1.02 per share was declared and paid during the quarter. The Company has now paid cumulative cash dividends of $436.5 million, including three special dividends, over the past thirty-eight consecutive quarters. In addition, the Company purchased 2.1% of its outstanding shares during the year at a cost of $24.2 million. Total shares repurchased during the year were 1.8 million including 0.7 million in the fourth quarter.
 
Nineteen customer service awards were received in 2012 because of our dependability and performance. The Company's commitment to customer service as one of our core fundamentals has allowed us to build solid, long-term relationships and brand ourselves as an industry leader for on-time service. These awards include the Eastman Chemical 2011 Supplier Excellence Award for the sixteenth consecutive year, the 2011 Winegard Company Truckload Carrier of the Year Award, the Cost Plus World Market 2011 Premier Carrier Partner Award, the Lowe's 2011 Gold Carrier Award, the Walmart Transportation 2011 Sam's Carrier of the Year Award, the Nestle Waters Madison 2011 World Class Customer Service Award, the FedEx SmartPost Carrier of the Year award for the fifth time, the FedEx Gold Service Award for 99.87% on time service, the FedEx SmartPost Peak Performance Award, the Dupont 2011 Outstanding Service Award, TransFreight Certificate of Appreciation for dedication to exceptional performance, the United Sugars 2012 Service in Excellence Award, the Sonoco 2012 Prospector Award, the Schneider Logistics Carrier of the Year Award, the 2011 BP Safety Award, and the LXP Managed Freight Elite Fleet Member Award. In addition, we received the Fleet Owner magazine 2011 For-Hire Fleet of the Year and the Logistics Management magazine Dry-Freight Carriers Quest for Quality Award for the tenth consecutive year as well as the Environmental Protection Agency's SmartWay Excellence Award.
 
This press release may contain statements that might be considered as forward-looking statements or predictions of future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission.
 
Contact: Heartland Express, Inc.
Mike Gerdin, Chief Executive Officer
John Cosaert, Chief Financial Officer
319-626-3600







HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)

 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2012
 
2011
 
2012
 
2011
OPERATING REVENUE
$
136,193

 
$
131,209

 
$
545,745

 
$
528,623

 
 
 
 
 
 
 
 
OPERATING EXPENSES:
 
 
 
 
 
 
 
Salaries, wages, and benefits
$
41,216

 
$
41,885

 
$
167,073

 
$
166,717

Rent and purchased transportation
1,521

 
1,760

 
6,273

 
7,527

Fuel
42,722

 
39,494

 
168,981

 
161,915

Operations and maintenance
6,911

 
4,435

 
25,282

 
20,938

Operating taxes and licenses
2,249

 
2,272

 
8,694

 
9,225

Insurance and claims
3,608

 
2,770

 
14,906

 
13,142

Communications and utilities
704

 
816

 
2,953

 
2,957

Depreciation
14,974

 
16,284

 
57,158

 
57,226

Other operating expenses
3,256

 
4,432

 
14,633

 
14,552

Gain on disposal of property and equipment
(5,676
)
 
(9,804
)
 
(15,109
)
 
(32,133
)
 
 
 
 
 
 
 
 
 
111,485

 
104,344

 
450,844

 
422,066

 
 
 
 
 
 
 
 
Operating income
24,708

 
26,865

 
94,901

 
106,557

 
 
 
 
 
 
 
 
Interest income
174

 
153

 
674

 
773

 
 
 
 
 
 
 
 
Income before income taxes
24,882

 
27,018

 
95,575

 
107,330

 
 
 
 
 
 
 
 
Federal and state income taxes
10,590

 
9,897

 
34,034

 
37,398

 
 
 
 
 
 
 
 
Net income
$
14,292

 
$
17,121

 
$
61,541

 
$
69,932

 
 
 
 
 
 
 
 
Earnings per share
 
 
 
 
 
 
 
Basic
$
0.17

 
$
0.20

 
$
0.72

 
$
0.78

Diluted
$
0.17

 
$
0.20

 
$
0.71

 
$
0.78

 
 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
 
 
Basic
85,010

 
87,150

 
85,892

 
89,656

Diluted
85,287

 
87,219

 
86,201

 
89,673

 
 
 
 
 
 
 
 
Dividends declared per share
$
1.02

 
$
0.02

 
$
1.08

 
$
0.08







HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
 
 
December 31,
 
December 31,
ASSETS
 
2012
 
2011
CURRENT ASSETS
 
 
 
 
Cash and cash equivalents
 
$
119,838

 
$
139,770

Trade receivables, net
 
46,555

 
44,198

Prepaid tires
 
6,603

 
12,820

Other current assets
 
2,281

 
1,932

Income tax receivable
 
2,351

 
314

Deferred income taxes, net
 
13,797

 
14,401

Total current assets
 
191,425

 
213,435

 
 
 
 
 
PROPERTY AND EQUIPMENT
 
432,330

 
409,710

Less accumulated depreciation
 
189,959

 
161,269

 
 
242,371

 
248,441

LONG-TERM INVESTMENTS
 
20,016

 
50,569

OTHER ASSETS
 
13,925

 
13,221

 
 
$
467,737

 
$
525,666

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable and accrued liabilities
 
$
7,583

 
$
9,088

Compensation and benefits
 
16,409

 
15,493

Insurance accruals
 
13,924

 
13,997

Other accruals
 
7,439

 
7,085

Total current liabilities
 
45,355

 
45,663

LONG-TERM LIABILITIES
 
 
 
 
Income taxes payable
 
23,122

 
24,077

Deferred income taxes, net
 
51,306

 
57,661

Insurance accruals less current portion
 
57,590

 
57,494

Total long-term liabilities
 
132,018

 
139,232

COMMITMENTS AND CONTINGENCIES
 
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
 
Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2012 and 2011; outstanding 84,770 and 86,475 in 2012 and 2011, respectively
 
907

 
907

Additional paid-in capital
 
2,968

 
589

Retained earnings
 
368,313

 
398,706

Treasury stock, at cost; 5,919 and 4,214 shares in 2012 and 2011, respectively
 
(80,540
)
 
(56,350
)
Accumulated other comprehensive loss
 
(1,284
)
 
(3,081
)
 
 
290,364

 
340,771

 
 
$
467,737

 
$
525,666