EX-99.1 2 htld1q2019earningsrelease.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

April 18, 2019 For Immediate Release

Press Release

Heartland Express, Inc. Reports Revenues and Earnings for the First Quarter of 2019

NORTH LIBERTY, IOWA - April 18, 2019 - Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the three months ended March 31, 2019.

Three months ended March 31, 2019:
•
Net Income of $17.3 million, Basic Earnings per Share of $0.21,
•
Operating Revenue of $139.5 million,
•
Operating Income of $20.8 million, a 61.0% increase from March 31, 2018,
•
Operating Ratio of 85.1% and 83.0% Non-GAAP Adjusted Operating Ratio(1), 
•
Cash Balance of $176.3 million and a Debt-Free Balance Sheet.

Heartland Express Chief Executive Officer Michael Gerdin, commented on the quarterly operating results and ongoing initiatives of the Company, "We are excited to report our results for the three months ended March 31, 2019. Our operating results were strong in terms of profit and overall operating efficiency despite general freight environment and weather challenges during the quarter. Our operating ratio improved from the first quarter of 2018 at 91.7% to 85.1% during the first quarter of 2019 and improved from 91.0% to 83.5% for the trailing four quarters ended March 31, 2018 and 2019, respectively. Our net income grew from $13.4 million in the first quarter of 2018 to $17.3 million during the first quarter of 2019, a 29.5% increase. As expected, our cash balance increased to $176.3 million at the end of the first quarter of 2019 from $105.0 million at the end of the first quarter of 2018 and increased $14.9 million as compared to $161.4 million at the end of 2018. Our operating revenue results during the first quarter of 2019 were challenged by severe weather over multiple weeks which included safety shutdowns for our drivers and impacted customer operations and shipping patterns. In addition, we have experienced general softness in the overall freight environment during the first quarter of 2019 as customer demand to date in 2019 has been less than that over the same period of 2018. However, we have been successful with our driver recruiting and retention efforts which have resulted in organic growth during the first quarter of 2019 as compared to the quarter ended December 31, 2018. We continued to refresh our fleet of tractors and trailers as well as several of our terminal locations as we look to provide the latest equipment and terminal amenities to our professional drivers while remaining debt free. I am pleased with our drivers, our team that supports our drivers, and our financial results for the first quarter of 2019."

Financial Results

Heartland Express ended the first quarter of 2019 with net income of $17.3 million, compared to $13.4 million in the first quarter of 2018, an increase of $3.9 million (29.5%). Basic earnings per share were $0.21 during the quarter compared to $0.16 basic earnings per share in the first quarter of 2018. Operating revenues were $139.5 million, compared to $156.7 million in the first quarter of 2018, a decrease of $17.2 million (11.0%). Operating revenues for the quarter included fuel surcharge revenues of $17.0 million compared to $21.5 million in the same period of 2018, a $4.5 million decrease. Operating revenues decreased 9.4%, excluding the impact of fuel surcharge revenues(1), primarily due to fewer miles driven during the first quarter of 2019 as compared to the same period in 2018. Although revenues were down quarter over quarter, operating income for the three month period increased $7.9 million primarily due to improved operating margins. The Company posted an operating ratio of 85.1%, adjusted operating ratio(1) of 83.0%, and a 12.4% net margin (net income as a percentage of operating revenues) in the first quarter of 2019 compared to 91.7%, 90.4%, and 8.5%, respectively in the first quarter of 2018.







Balance Sheet, Liquidity, and Capital Expenditures

At March 31, 2019, the Company had $176.3 million in cash balances and no borrowings under the Company's unsecured line of credit. The Company had $89.3 million in available borrowing capacity on the line of credit at March 31, 2019 after consideration of $10.7 million outstanding letters of credit. In addition to the current borrowing base of $100 million, the Company has the ability to increase the available borrowing base by $100 million, subject to normal credit and lender approvals. The Company continues to be in compliance with associated financial covenants. The Company ended the quarter with total assets of $832.9 million and stockholders' equity of $631.8 million.

Net cash flows from operations for the three months of 2019 were $35.8 million, 25.6% of operating revenue. The primary use of net cash generated from operations during the three month period ended March 31, 2019 was $20.5 million for net equipment transactions, and $1.6 million for dividends. The average age of the Company's tractor fleet was 1.4 years as of March 31, 2019 compared to 1.5 years at March 31, 2018. The average age of the Company's trailer fleet was 3.5 years at March 31, 2019 compared to 4.9 years at March 31, 2018. The Company currently anticipates a total of approximately $80 to $100 million in net capital expenditures for calendar year 2019. The Company ended the past twelve months with a return on total assets of 9.5% and a 12.6% return on equity.
            
The Company continues its commitment to stockholders through the payment of cash dividends and repurchases of common stock. A dividend of $0.02 per share was declared and paid during the first quarter of 2019. The Company has now paid cumulative cash dividends of $479.0 million, including three special dividends, ($2.00 in 2007, $1.00 in 2010, and $1.00 in 2012) over the past sixty-three consecutive quarters.

During the three months ended March 31, 2019, the Company purchased no shares of our common stock but purchased 71,894 shares of our common stock for $1.3 million during the three months ended March 31, 2018. Our outstanding shares at March 31, 2019 were 81.9 million shares. A total of 6.1 million shares of common stock have been repurchased for $113.8 million over the past five years. The Company has the ability to repurchase an additional 6.9 million shares under the current authorization which would result in 75.0 million outstanding shares if fully executed.

Other Information

During the first quarter of 2019, we continued to deliver award-winning service and safety to our customers, as evidenced by the following awards received:

•
Quaker/Gatorade - 2018 Carrier of the Year (Central West Region)
•
Quaker/Gatorade - 2018 Carrier of the Year (Southwest Region)

Operating revenue excluding fuel surcharge revenue 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 reducing unnecessary or unproductive costs, operational improvements, progress toward our goals, and future capital expenditures 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, 2018. The Company assumes no obligation to update any forward-looking statements, which speak as of their respective dates.



Contact: Heartland Express, Inc. (319-626-3600)

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 March 31,
 
 
 
2019
 
2018
 
OPERATING REVENUE
 
$
139,536

 
$
156,695

 
 
 
 
 
 
 
OPERATING EXPENSES:
 
 
 
 
 
Salaries, wages, and benefits
 
$
53,796

 
$
62,009

 
Rent and purchased transportation
 
2,412

 
6,125

 
Fuel
 
23,180

 
28,940

 
Operations and maintenance
 
5,845

 
7,865

 
Operating taxes and licenses
 
3,891

 
3,952

 
Insurance and claims
 
4,789

 
4,224

 
Communications and utilities
 
1,223

 
1,870

 
Depreciation and amortization
 
22,227

 
25,601

 
Other operating expenses
 
5,171

 
6,030

 
Gain on disposal of property and equipment
 
(3,841
)
 
(2,869
)
 
 
 
 
 
 
 
 
 
118,693

 
143,747

 
 
 
 
 
 
 
Operating income
 
20,843

 
12,948

 
 
 
 
 
 
 
Interest income
 
1,145

 
342

 
 
 
 
 
 
 
Income before income taxes
 
21,988

 
13,290

 
 
 

 

 
Federal and state income taxes
 
4,670

 
(88
)
 
 
 
 
 
 
 
Net income
 
$
17,318

 
$
13,378

 
 
 

 

 
Earnings per share
 
 
 
 
 
Basic
 
$
0.21

 
$
0.16

 
Diluted
 
$
0.21

 
$
0.16

 
 
 
 
 
 
 
Weighted average shares outstanding
 
 
 
 
 
Basic
 
81,936

 
83,309

 
Diluted
 
81,956

 
83,349

 
 
 
 
 
 
 
Dividends declared per share
 
$
0.02

 
$
0.02

 





HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
 
 
March 31,
 
December 31,
ASSETS
 
2019
 
2018
CURRENT ASSETS
 
 
 
 
Cash and cash equivalents
 
$
176,303

 
$
161,448

Trade receivables, net
 
53,279

 
48,955

Prepaid tires
 
10,521

 
9,378

Other current assets
 
13,171

 
12,551

Income tax receivable
 
—

 
170

Total current assets
 
253,274

 
232,502

 
 
 
 
 
PROPERTY AND EQUIPMENT
 
621,771

 
603,670

Less accumulated depreciation
 
211,516

 
200,550

 
 
410,255

 
403,120

GOODWILL
 
132,410

 
132,410

OTHER INTANGIBLES, NET
 
13,892

 
14,494

DEFERRED INCOME TAXES, NET
 
4,774

 
4,535

OTHER ASSETS
 
18,330

 
19,152

 
 
$
832,935

 
$
806,213

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable and accrued liabilities
 
$
16,586

 
$
10,552

Compensation and benefits
 
22,659

 
22,558

Insurance accruals
 
21,123

 
22,130

Other accruals
 
11,552

 
9,449

Income taxes payable
 
2,010

 
—

Total current liabilities
 
73,930

 
64,689

LONG-TERM LIABILITIES
 
 
 
 
Income taxes payable
 
5,317

 
5,577

Deferred income taxes, net
 
73,795

 
71,041

Insurance accruals less current portion
 
48,066

 
48,934

Total long-term liabilities
 
127,178

 
125,552

COMMITMENTS AND CONTINGENCIES
 
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
 
Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2019 and 2018; outstanding 81,943 in 2019 and 81,930 in 2018, respectively
 
907

 
907

Additional paid-in capital
 
3,424

 
3,454

Retained earnings
 
775,940

 
760,262

Treasury stock, at cost; 8,746 in 2019 and 8,759 in 2018, respectively
 
(148,444
)
 
(148,651
)
 
 
631,827

 
615,972

 
 
$
832,935

 
$
806,213







(1)
GAAP to Non-GAAP Reconciliation Schedule:
 
Operating revenue, operating revenue excluding fuel surcharge revenue, operating income, operating ratio, and adjusted operating ratio reconciliation (a)
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
2019
 
2018
 
 
 
(Unaudited, in thousands)
 
 
 
 
 
 
 
Operating revenue
 
$
139,536

 
$
156,695

 
Less: Fuel surcharge revenue
 
17,016

 
21,530

 
Operating revenue, excluding fuel surcharge revenue
 
122,520

 
135,165

 
 
 
 
 
 
 
Operating expenses
 
118,693

 
143,747

 
Less: Fuel surcharge revenue
 
17,016

 
21,530

 
Adjusted operating expenses
 
101,677

 
122,217

 
 
 
 
 
 
 
Operating income
 
$
20,843

 
$
12,948

 
Operating ratio
 
85.1
%
 
91.7
%
 
Adjusted operating ratio
 
83.0
%
 
90.4
%
 

(a) Operating revenue excluding fuel surcharge revenue and adjusted operating ratio as reported in this press release are based upon operating expenses, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue.