Heartland Express, Inc. Reports Revenues and Earnings for the Second Quarter of 2023
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NORTH LIBERTY, Iowa, July 31, 2023 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the three and six months ended June 30, 2023.
Three months ended June 30, 2023:
- Operating Revenue of
$306.2 million , an increase of63.0% over 2022, - Net Income of
$7.8 million , - Basic Earnings per Share of
$0.10 , - Operating Income of
$16.2 million , - Operating Ratio of
94.7% and93.4% Non-GAAP Adjusted Operating Ratio(1), - Total Assets of
$1.6 billion , - Stockholders' Equity of
$872.9 million (All-time record).
Six months ended June 30, 2023:
- Operating Revenue of
$637.1 million , an increase of87.9% over 2022, - Net Income of
$20.4 million , - Basic Earnings per Share of
$0.26 , - Operating Income of
$39.1 million , - Operating Ratio of
93.9% and92.4% 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, "I am proud to report our consolidated operating results for the three and six months ended June 30, 2023 and recognize the first anniversary of our acquisition of Smith Transport, which occurred on May 31, 2022. We also look ahead to the first anniversary of our most recent acquisition, Contract Freighters, Inc ("CFI"), which will occur during the third quarter of 2023. As a result of these acquisitions and our legacy operations of Heartland Express and Millis Transfer, our operating revenue for the three and six months ended June 2023 has increased significantly by
Mr. Gerdin continued, "I am proud of our drivers and support teams across all four of our operating brands for battling through these tough times and delivering profitable results during the second quarter. During the second quarter of 2023, we have demonstrated our financial stability and discipline as we were able to continue to generate significant operating cash flows, invest in our fleet and terminal network, and to date have paid down approximately
"Freight demand during the second quarter is typically stronger than the first quarter due to expected seasonal increases from the spring and early summer months, but current freight demand levels continue to be lower than our expectations for optimal operations. Given what we have experienced and based on feedback from our customers, we expect volatile freight demand for at least the next quarter of 2023 and look to the holiday season of the fourth quarter for potential improvements in the freight demand environment. However, we remain committed to ongoing investments in our drivers and our company, to ensure stability for all of our employees. This includes a rewarding level of compensation, along with the equipment and tools to have a safe and successful career. We are excited about the future and believe we are stronger together and well positioned for the future as Heartland Express, Millis Transfer, Smith Transport, and CFI.”
Financial Results
Heartland Express ended the second quarter of 2023 with operating revenues of
For the six months ended June 30, 2023, Heartland Express delivered operating revenues of
Balance Sheet, Liquidity, and Capital Expenditures
As of June 30, 2023, the Company had
Net cash flows from operations for the first six months of 2023 were
The average age of the Company's consolidated tractor fleet was 2.1 years as of June 30, 2023 compared to 1.9 years on June 30, 2022. The average age of the Company's consolidated trailer fleet was 6.1 years as of June 30, 2023 compared to 4.6 years on June 30, 2022. The average age of our fleet was impacted by the inclusion of the CFI acquisition in 2022. We anticipate continued disposition of older tractors and trailers in the Smith Transport and CFI fleets throughout 2023 and beyond. We currently expect net capital expenditures of
The Company continues its commitment to stockholders through the payment of cash dividends. A regular dividend of
Other Information
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,” “outlook,” and similar terms and phrases. In this press release, the statements relating to freight supply and demand, our ability to react to changing market conditions, operational improvements, 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, acquisitions, 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, 2022 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. 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, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
OPERATING REVENUE | $ | 306,169 | $ | 187,821 | $ | 637,085 | $ | 339,097 | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Salaries, wages, and benefits | $ | 120,311 | $ | 65,869 | $ | 243,643 | $ | 124,506 | ||||||||
Rent and purchased transportation | 28,468 | 3,127 | 61,611 | 3,874 | ||||||||||||
Fuel | 49,867 | 42,046 | 107,396 | 71,758 | ||||||||||||
Operations and maintenance | 16,047 | 6,066 | 31,073 | 11,146 | ||||||||||||
Operating taxes and licenses | 5,457 | 3,352 | 11,001 | 6,562 | ||||||||||||
Insurance and claims | 10,433 | 6,339 | 21,435 | 11,905 | ||||||||||||
Communications and utilities | 2,679 | 1,126 | 5,555 | 2,204 | ||||||||||||
Depreciation and amortization | 48,337 | 24,309 | 96,806 | 47,620 | ||||||||||||
Other operating expenses | 16,362 | 12,244 | 34,253 | 18,042 | ||||||||||||
Gain on disposal of property and equipment | (8,022 | ) | (81,712 | ) | (14,809 | ) | (85,970 | ) | ||||||||
289,939 | 82,766 | 597,964 | 211,647 | |||||||||||||
Operating income | 16,230 | 105,055 | 39,121 | 127,450 | ||||||||||||
Interest income | 592 | 260 | 1,076 | 406 | ||||||||||||
Interest expense | (6,111 | ) | (174 | ) | (12,187 | ) | (174 | ) | ||||||||
Income before income taxes | 10,711 | 105,141 | 28,010 | 127,682 | ||||||||||||
Federal and state income taxes | 2,940 | 28,235 | 7,627 | 34,001 | ||||||||||||
Net income | $ | 7,771 | $ | 76,906 | $ | 20,383 | $ | 93,681 | ||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.10 | $ | 0.97 | $ | 0.26 | $ | 1.19 | ||||||||
Diluted | $ | 0.10 | $ | 0.97 | $ | 0.26 | $ | 1.19 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 78,999 | 78,934 | 78,993 | 78,931 | ||||||||||||
Diluted | 79,081 | 78,959 | 79,052 | 78,956 | ||||||||||||
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 | 2023 | 2022 | ||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 46,250 | $ | 49,462 | ||||
Trade receivables, net | 114,471 | 139,819 | ||||||
Prepaid tires | 11,440 | 11,293 | ||||||
Other current assets | 18,677 | 26,069 | ||||||
Income taxes receivable | 7,927 | 3,139 | ||||||
Total current assets | 198,765 | 229,782 | ||||||
PROPERTY AND EQUIPMENT | 1,291,777 | 1,282,194 | ||||||
Less accumulated depreciation | 364,653 | 308,936 | ||||||
927,124 | 973,258 | |||||||
GOODWILL | 320,675 | 320,675 | ||||||
OTHER INTANGIBLES, NET | 101,100 | 103,701 | ||||||
OTHER ASSETS | 32,956 | 19,894 | ||||||
DEFERRED INCOME TAXES, NET | 1,563 | 1,224 | ||||||
OPERATING LEASE RIGHT OF USE ASSETS | 14,482 | 20,954 | ||||||
$ | 1,596,665 | $ | 1,669,488 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 61,047 | $ | 62,712 | ||||
Compensation and benefits | 30,263 | 30,972 | ||||||
Insurance accruals | 17,413 | 18,490 | ||||||
Long-term debt and finance lease liabilities - current portion | 12,597 | 13,946 | ||||||
Operating lease liabilities - current portion | 9,436 | 12,001 | ||||||
Other accruals | 17,189 | 18,636 | ||||||
Total current liabilities | 147,945 | 156,757 | ||||||
LONG-TERM LIABILITIES | ||||||||
Income taxes payable | 6,183 | 6,466 | ||||||
Long-term debt and finance lease liabilities less current portion | 336,177 | 399,062 | ||||||
Operating lease liabilities less current portion | 5,046 | 8,953 | ||||||
Deferred income taxes, net | 194,415 | 207,516 | ||||||
Insurance accruals less current portion | 33,962 | 35,257 | ||||||
Total long-term liabilities | 575,783 | 657,254 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2023 and 2022; outstanding 79,013 and 78,984 in 2023 and 2022, respectively | 907 | 907 | ||||||
Additional paid-in capital | 3,898 | 4,165 | ||||||
Retained earnings | 1,068,863 | 1,051,641 | ||||||
Treasury stock, at cost; 11,676 and 11,705 in 2023 and 2022, respectively | (200,731 | ) | (201,236 | ) | ||||
872,937 | 855,477 | |||||||
$ | 1,596,665 | $ | 1,669,488 |
(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, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited, in thousands) | (Unaudited, in thousands) | |||||||||||||||
Operating revenue | $ | 306,169 | $ | 187,821 | $ | 637,085 | $ | 339,097 | ||||||||
Less: Fuel surcharge revenue | 41,501 | 36,377 | 91,148 | 60,346 | ||||||||||||
Operating revenue, excluding fuel surcharge revenue | 264,668 | 151,444 | 545,937 | 278,751 | ||||||||||||
Operating expenses | 289,939 | 82,766 | 597,964 | 211,647 | ||||||||||||
Less: Fuel surcharge revenue | 41,501 | 36,377 | 91,148 | 60,346 | ||||||||||||
Less: Amortization of intangibles | 1,310 | 598 | 2,601 | 1,195 | ||||||||||||
Less: Acquisition-related costs | — | 714 | — | 973 | ||||||||||||
Less: Gain on sale of a terminal property | — | (73,175 | ) | — | (73,175 | ) | ||||||||||
Adjusted operating expenses | 247,128 | 118,252 | 504,215 | 222,308 | ||||||||||||
Operating income | 16,230 | 105,055 | 39,121 | 127,450 | ||||||||||||
Adjusted operating income | $ | 17,540 | $ | 33,192 | $ | 41,722 | $ | 56,443 | ||||||||
Operating ratio | 94.7 | % | 44.1 | % | 93.9 | % | 62.4 | % | ||||||||
Adjusted operating ratio | 93.4 | % | 78.1 | % | 92.4 | % | 79.8 | % | ||||||||
(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, non-cash amortization expense related to intangible assets, acquisition-related legal and professional fees, and the gain on sale of a terminal property. Adjusted operating ratio as reported in this press release is based upon operating expenses, net of fuel surcharge revenue, amortization of intangibles, acquisition-related costs, and the gain on sale of terminal property, 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, and removes items resulting from acquisitions or one-time transactions that do not reflect our core operating performance. 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.
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