Heartland Express, Inc. Reports Operating Results for the Second Quarter of 2024
Rhea-AI Summary
Heartland Express (NASDAQ: HTLD) reported financial results for Q2 2024, showing continued challenges in the freight market. Key highlights include:
- Operating Revenue: $274.8 million
- Operating Income: $0.3 million
- Net Loss: $3.5 million
- Basic Loss per Share: $0.04
- Operating Ratio: 99.9%
CEO Mike Gerdin noted sequential improvements from Q1 2024 but emphasized ongoing weak freight demand and cost inflation. The company repaid $63.4 million of debt year-to-date and repurchased $7.3 million of common stock in Q2. Gerdin expects freight market improvements to extend into 2025. Heartland Express maintains a strong balance sheet with $23.9 million in cash and $836.8 million in stockholders' equity.
Positive
- Sequential improvement in operating revenue and operating ratio from Q1 2024
- Repaid $63.4 million of debt year-to-date in 2024
- Strong balance sheet with $836.8 million in stockholders' equity
- Continued payment of cash dividends, with $552.1 million paid cumulatively since 2003
- Received multiple industry awards for service and safety
Negative
- Net loss of $3.5 million in Q2 2024, compared to net income of $7.8 million in Q2 2023
- Operating ratio increased to 99.9% from 94.7% in Q2 2023
- Basic loss per share of $0.04 in Q2 2024, compared to earnings per share of $0.10 in Q2 2023
- Weak freight demand and ongoing operating cost inflation impacting financial performance
- Expectation of freight market improvements delayed until 2025
News Market Reaction
On the day this news was published, HTLD declined 0.72%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
NORTH LIBERTY, Iowa, July 23, 2024 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the three and six months ended June 30, 2024.
Three months ended June 30, 2024:
- Operating Revenue of
$274.8 million , - Operating Income of
$0.3 million , - Net Loss of
$3.5 million , - Basic Loss per Share of
$0.04 , - Operating Ratio of
99.9% and99.4% Non-GAAP Adjusted Operating Ratio(1), - Total Assets of
$1.4 billion , - Stockholders' Equity of
$836.8 million .
Six months ended June 30, 2024:
- Operating Revenue of
$545.1 million , - Net Loss of
$18.6 million , - Basic Loss per Share of
$0.24 , - Operating Ratio of
102.6% and102.5% Non-GAAP Adjusted Operating Ratio(1).
Heartland Express Chief Executive Officer Mike Gerdin commented on the quarterly operating results and ongoing initiatives of the Company, "Our consolidated operating results for the three and six months ended June 30, 2024 reflect the combination of an extended and significant period of weak freight demand, driven by excess capacity in the industry and ongoing operating cost inflation. While I am pleased with our operating improvements sequentially as an organization, we have more work to do and will need freight demand improvements in order to reach our historical operating results target of an operating ratio of
Mr. Gerdin continued, "We continue to believe that the freight market will improve as more capacity exits the market so the industry as a whole can return to more disciplined operating decisions and improved financial results. But, our current expectation of the timing of that favorable change likely extends into 2025. We believe in the long-term strength of our organization as we repurchased shares of our common stock for
Financial Results
Heartland Express ended the second quarter of 2024 with operating revenues of
For the six months ended June 30, 2024, Heartland Express delivered operating revenues of
Balance Sheet, Liquidity, and Capital Expenditures
As of June 30, 2024, the Company had
Net cash flows from operations for the first six months of 2024 were
The average age of the Company's consolidated tractor fleet was 2.6 years as of June 30, 2024 compared to 2.1 years on June 30, 2023. The average age of the Company's consolidated trailer fleet was 6.9 years as of June 30, 2024 compared to 6.1 years as of June 30, 2023. During the calendar year of 2024, we currently expect net capital expenditures of approximately
The Company continues its commitment to stockholders through the payment of cash dividends. A regular dividend of
Other Information
During the second quarter of 2024, our family of operating brands continued to deliver award-winning service and safety as evidenced by the following awards for our company and our employees:
- DHL Truckload Carrier of the Year
- Uber Freight Award National Truckload Carrier of the Year
- WEX Circle of Excellence
- Henkel Consumer Brands Logistics Award - Asset Excellence
Operating revenue excluding fuel surcharge revenue, adjusted operating income, 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,” “ensure,” “outlook,” and similar terms and phrases. In this press release, the statements relating to freight supply and demand, future cost inflation, our ability to react to and capitalize on changing market conditions, the expected impact of operational improvements and strategic changes, progress toward our goals, deployment of cash reserves, future capital expenditures, future dispositions of revenue equipment and gains therefrom, future operating ratio, and future stock repurchases, dividends, and debt repayment 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, 2023 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. The Company assumes no obligation to update any forward-looking statements, which speak as of their respective dates.
| Contact: Heartland Express, Inc. (319-645-7060) Mike Gerdin, Chief Executive Officer Chris Strain, Chief Financial Officer |
| HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| OPERATING REVENUE | $ | 274,754 | $ | 306,169 | $ | 545,074 | $ | 637,085 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Salaries, wages, and benefits | $ | 110,116 | $ | 120,311 | $ | 222,813 | $ | 243,643 | ||||||||
| Rent and purchased transportation | 21,688 | 28,468 | 45,551 | 61,611 | ||||||||||||
| Fuel | 47,011 | 49,867 | 94,332 | 107,396 | ||||||||||||
| Operations and maintenance | 16,732 | 16,047 | 32,996 | 31,073 | ||||||||||||
| Operating taxes and licenses | 5,255 | 5,457 | 10,570 | 11,001 | ||||||||||||
| Insurance and claims | 12,972 | 10,433 | 27,556 | 21,435 | ||||||||||||
| Communications and utilities | 2,270 | 2,679 | 4,710 | 5,555 | ||||||||||||
| Depreciation and amortization | 46,138 | 48,337 | 92,642 | 96,806 | ||||||||||||
| Other operating expenses | 13,431 | 16,362 | 29,058 | 34,253 | ||||||||||||
| Gain on disposal of property and equipment | (1,123 | ) | (8,022 | ) | (1,034 | ) | (14,809 | ) | ||||||||
| 274,490 | 289,939 | 559,194 | 597,964 | |||||||||||||
| Operating income (loss) | 264 | 16,230 | (14,120 | ) | 39,121 | |||||||||||
| Interest income | 288 | 592 | 654 | 1,076 | ||||||||||||
| Interest expense | (4,574 | ) | (6,111 | ) | (9,875 | ) | (12,187 | ) | ||||||||
| (Loss) Income before income taxes | (4,022 | ) | 10,711 | (23,341 | ) | 28,010 | ||||||||||
| Federal and state income taxes | (544 | ) | 2,940 | (4,755 | ) | 7,627 | ||||||||||
| Net (loss) income | $ | (3,478 | ) | $ | 7,771 | $ | (18,586 | ) | $ | 20,383 | ||||||
| (Loss) Earnings per share | ||||||||||||||||
| Basic | $ | (0.04 | ) | $ | 0.10 | $ | (0.24 | ) | $ | 0.26 | ||||||
| Diluted | $ | (0.04 | ) | $ | 0.10 | $ | (0.24 | ) | $ | 0.26 | ||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 78,913 | 78,999 | 78,979 | 78,993 | ||||||||||||
| Diluted | 78,981 | 79,081 | 79,051 | 79,052 | ||||||||||||
| Dividends declared per share | $ | 0.02 | $ | 0.02 | $ | 0.04 | $ | 0.04 | ||||||||
| HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited) | ||||||||
| June 30, | December 31, | |||||||
| ASSETS | 2024 | 2023 | ||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 23,861 | $ | 28,123 | ||||
| Trade receivables, net | 108,913 | 102,740 | ||||||
| Prepaid tires | 9,488 | 10,650 | ||||||
| Other current assets | 17,178 | 17,602 | ||||||
| Income taxes receivable | 4,678 | 10,157 | ||||||
| Total current assets | 164,118 | 169,272 | ||||||
| PROPERTY AND EQUIPMENT | 1,317,391 | 1,319,909 | ||||||
| Less accumulated depreciation | 514,644 | 434,558 | ||||||
| 802,747 | 885,351 | |||||||
| GOODWILL | 322,597 | 322,597 | ||||||
| OTHER INTANGIBLES, NET | 96,029 | 98,537 | ||||||
| OTHER ASSETS | 15,156 | 14,953 | ||||||
| DEFERRED INCOME TAXES, NET | 1,304 | 1,494 | ||||||
| OPERATING LEASE RIGHT OF USE ASSETS | 11,483 | 17,442 | ||||||
| $ | 1,413,434 | $ | 1,509,646 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued liabilities | $ | 40,017 | $ | 37,777 | ||||
| Compensation and benefits | 28,417 | 28,492 | ||||||
| Insurance accruals | 25,678 | 21,507 | ||||||
| Long-term debt and finance lease liabilities - current portion | 8,644 | 9,303 | ||||||
| Operating lease liabilities - current portion | 7,018 | 9,259 | ||||||
| Other accruals | 24,063 | 17,138 | ||||||
| Total current liabilities | 133,837 | 123,476 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Income taxes payable | 6,012 | 6,270 | ||||||
| Long-term debt and finance lease liabilities less current portion | 228,522 | 290,696 | ||||||
| Operating lease liabilities less current portion | 4,465 | 8,183 | ||||||
| Deferred income taxes, net | 173,198 | 189,121 | ||||||
| Insurance accruals less current portion | 30,634 | 26,640 | ||||||
| Total long-term liabilities | 442,831 | 520,910 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2024 and 2023; outstanding 78,452 and 79,039 in 2024 and 2023, respectively | 907 | 907 | ||||||
| Additional paid-in capital | 4,333 | 4,527 | ||||||
| Retained earnings | 1,038,357 | 1,060,094 | ||||||
| Treasury stock, at cost; 12,237 and 11,650 in 2024 and 2023, respectively | (206,831 | ) | (200,268 | ) | ||||
| 836,766 | 865,260 | |||||||
| $ | 1,413,434 | $ | 1,509,646 | |||||
(1)
| GAAP to Non-GAAP Reconciliation Schedule: | ||||||||||||||||
| Operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio reconciliation (a) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited, in thousands) | (Unaudited, in thousands) | |||||||||||||||
| Operating revenue | $ | 274,754 | $ | 306,169 | $ | 545,074 | $ | 637,085 | ||||||||
| Less: Fuel surcharge revenue | 36,828 | 41,501 | 73,039 | 91,148 | ||||||||||||
| Operating revenue, excluding fuel surcharge revenue | 237,926 | 264,668 | 472,035 | 545,937 | ||||||||||||
| Operating expenses | 274,490 | 289,939 | 559,194 | 597,964 | ||||||||||||
| Less: Fuel surcharge revenue | 36,828 | 41,501 | 73,039 | 91,148 | ||||||||||||
| Less: Amortization of intangibles | 1,254 | 1,310 | 2,509 | 2,601 | ||||||||||||
| Adjusted operating expenses | 236,408 | 247,128 | 483,646 | 504,215 | ||||||||||||
| Operating income (loss) | 264 | 16,230 | (14,120 | ) | 39,121 | |||||||||||
| Adjusted operating income (loss) | $ | 1,518 | $ | 17,540 | $ | (11,611 | ) | $ | 41,722 | |||||||
| Operating ratio | 99.9 | % | 94.7 | % | 102.6 | % | 93.9 | % | ||||||||
| Adjusted operating ratio | 99.4 | % | 93.4 | % | 102.5 | % | 92.4 | % | ||||||||
(a) Operating revenue excluding fuel surcharge revenue, as reported in this press release is based upon operating revenue minus fuel surcharge revenue. Adjusted operating income as reported in this press release is based upon operating revenue excluding fuel surcharge revenue, less operating expenses, net of fuel surcharge revenue, and non-cash amortization expense related to intangible assets. Adjusted operating ratio as reported in this press release is based upon operating expenses, net of fuel surcharge revenue, and amortization of intangibles, as a percentage of operating revenue excluding fuel surcharge revenue. We believe that operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio are more representative of our underlying operations by excluding the volatility of fuel prices, which we cannot control. Operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio are not substitutes for operating revenue, operating income, or operating ratio measured in accordance with GAAP. There are limitations to using non-GAAP financial measures. Although we believe that operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio improve comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry if those companies define such measures differently. Because of these limitations, operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio should not be considered measures 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.
FAQ
What was Heartland Express's (HTLD) operating revenue for Q2 2024?
Did Heartland Express (HTLD) report a profit or loss in Q2 2024?
How much debt did Heartland Express (HTLD) repay in 2024 so far?
What was Heartland Express's (HTLD) operating ratio in Q2 2024?
When does Heartland Express (HTLD) expect freight market improvements?
