8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 25, 2018

OLD DOMINION FREIGHT LINE, INC.

(Exact name of registrant as specified in its charter)

Virginia	0-19582	56-0751714
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 Old Dominion Way Thomasville, North Carolina	27360
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (336) 889-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On October 25, 2018, Old Dominion Freight Line, Inc. issued a press release regarding its financial results for its third quarter of 2018, ended September 30, 2018. A copy of this press release is furnished as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

Exhibit   No.	Description
99.1	Press Release dated October 25, 2018

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	OLD DOMINION FREIGHT LINE, INC.
By:	/s/ Kimberly S. Maready
	Kimberly S. Maready Vice President – Accounting & Finance (Principal Accounting Officer)

Date: October 25, 2018

EX-99.1

Exhibit 99.1

Contact:	Adam N. Satterfield
	Senior Vice President - Finance and Chief Financial Officer
	(336) 822-5721

OLD DOMINION FREIGHT LINE INCREASES THIRD-QUARTER REVENUE 21.2%

TO $1.06 BILLION AND GROWS EARNINGS PER DILUTED SHARE 71.0% TO $2.12

Achieves Company Record Operating Ratio of 78.4%

THOMASVILLE, N.C. - (October 25, 2018) - Old Dominion Freight Line, Inc. (Nasdaq: ODFL) today announced financial results for the three-month and nine-month periods ended September 30, 2018, which include the following:

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
(In thousands, except per share amounts)	2018			2017			% Chg.		2018			2017			% Chg.
Total revenue	$	1,058,233		$	872,987		21.2	%	$	3,016,751		$	2,466,995		22.3	%
LTL services revenue	$	1,041,854		$	859,832		21.2	%	$	2,971,399		$	2,426,419		22.5	%
Other services revenue	$	16,379		$	13,155		24.5	%	$	45,352		$	40,576		11.8	%
Operating income	$	228,385		$	163,875		39.4	%	$	598,206		$	432,429		38.3	%
Operating ratio	78.4		%	81.2		%			80.2		%	82.5		%
Net income	$	173,442		$	102,314		69.5	%	$	446,209		$	266,524		67.4	%
Diluted earnings per share	$	2.12		$	1.24		71.0	%	$	5.43		$	3.23		68.1	%
Diluted weighted average shares outstanding	81,976			82,381			(0.5	)%	82,166			82,418			(0.3	)%

“Old Dominion Freight Line’s third quarter represents another period of substantial growth with results that included many new Company records,” remarked Greg C. Gantt, the Company’s President and Chief Executive Officer. “We continued to benefit from the strong domestic economy and available capacity within our service center network, which supported our ability to win market share during the quarter. Revenue increased at a rate above 20% for the third straight quarter, and the combination of quality revenue growth and ongoing cost control measures allowed us to improve our operating ratio to a new Company record of 78.4%.

“The 21.2% growth in revenue over the same period of last year included a 12.5% increase in LTL revenue per hundredweight and an 8.1% increase in LTL tons. The increase in LTL tons resulted from an increase in LTL shipments of 9.7% that was partially offset by a 1.4% decrease in LTL weight per shipment. While a decrease in weight per shipment can be an indicator of a slowing economy, we believe this decrease was primarily due to operational changes we made at the end of the second quarter that were designed to reduce the number of heavy-weighted shipments in

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our network. The decrease in LTL weight per shipment, as well as a 0.1% increase in length of haul, contributed to the improvement in our reported yield. LTL revenue per hundredweight, excluding fuel surcharges, grew 9.0% for the third quarter, as we also continued our focus on yield-improvement initiatives designed to improve individual account profitability.

“We improved most of our cost categories as a percent of revenue during the third quarter, although operating supplies and expenses increased 90 basis points due primarily to the rising cost of diesel fuel. Salaries, wages and benefits improved to 50.7% of revenue as compared to 52.9% for the third quarter of last year despite a 16.2% increase in average full-time employees. We believe the size of our current workforce is generally appropriate and do not anticipate any major changes to our headcount during the fourth quarter. Income tax expense for the third quarter benefited from certain discrete tax adjustments as well as a slight decrease in our annual effective tax rate.”

Cash Flow and Use of Capital

Old Dominion’s net cash provided by operating activities was $250.7 million for the third quarter of 2018 and $675.4 million for the first nine months of the year, an increase of 67.7% and 74.1%, respectively, from the comparable periods in 2017. The Company had $177.5 million in cash and cash equivalents at the end of the third quarter of 2018, and its ratio of debt-to-total capitalization was 1.7% compared with 4.0% at December 31, 2017.

Capital expenditures were $177.6 million for the third quarter of 2018 and $469.9 million for the first nine months of the year. The Company expects our capital expenditures for 2018 to total approximately $555 million, including planned expenditures of $200 million for real estate and service center expansion projects; $300 million for tractors and trailers; and $55 million for technology and other assets.

Old Dominion returned $39.8 million of capital to its shareholders in the third quarter of 2018 and $108.6 million for the first nine months of the year. For the first nine months, the total consisted of $76.6 million of share repurchases and $32.0 million of cash dividends.

Summary

Mr. Gantt concluded, “Old Dominion achieved Company records for revenue and profitability during the third quarter. The quarterly results once again reflect the consistent execution of our long-term business strategy of providing on-time, claims-free service at a fair price. While this strategy has allowed us to increase our market share significantly over time - regardless of the economic environment - our ability to grow requires consistent investments in capacity, technology, and our employees. Our OD Family of employees remains committed to providing our customers with the best service in the industry, which gives us confidence in Old Dominion’s ability to produce further profitable growth and increase shareholder value.”

Old Dominion will hold a conference call to discuss this release today at 10:00 a.m. Eastern Time. Investors will have the opportunity to listen to the conference call live over the Internet by going to ir.odfl.com. Please log on at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at this website shortly after the call through November 24, 2018. A telephonic replay will also be available through November 3, 2018, at (719) 457-0820, Confirmation Number 3409151.

Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution the reader that such forward-looking statements involve risks and uncertainties that could cause actual events and results to be materially different from those expressed or implied herein, including, but not limited to, the following: (1) the competitive environment with respect to industry capacity and pricing, including the use of fuel surcharges, which could negatively impact our total overall pricing strategy and our ability to cover our operating expenses; (2) our ability to collect fuel surcharges and the effectiveness of those fuel surcharges in mitigating the impact of fluctuating prices for diesel fuel and other petroleum-based products; (3) the negative impact of any unionization, or the passage of legislation or regulations that could facilitate unionization, of our employees; (4) the challenges associated with executing our growth strategy, including our ability to successfully consummate and integrate any acquisitions; (5) changes in our goals and strategies, which are subject to change at any

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time at our discretion; (6) various economic factors such as recessions, downturns in the economy, global uncertainty and instability, changes in U.S. social, political, and regulatory conditions or a disruption of financial markets, which may decrease demand for our services; (7) the impact of changes in tax laws, rates, guidance and interpretations, including those related to certain provisions of the Tax Cuts and Jobs Act; (8) increases in driver and maintenance technician compensation or difficulties attracting and retaining qualified drivers and maintenance technicians to meet freight demand; (9) our exposure to claims related to cargo loss and damage, property damage, personal injury, workers' compensation, group health and group dental, including increased premiums, adverse loss development, increased self-insured retention levels and claims in excess of insured coverage levels; (10) cost increases associated with employee benefits, including costs associated with employee healthcare plans; (11) the availability and cost of capital for our significant ongoing cash requirements; (12) the availability and cost of new equipment and replacement parts, including regulatory changes and supply constraints that could impact the cost of these assets; (13) decreases in demand for, and the value of, used equipment; (14) the availability and cost of diesel fuel; (15) the costs and potential liabilities related to compliance with, or violations of, existing or future governmental laws and regulations, including environmental laws, engine emissions standards, hours-of-service for our drivers, driver fitness requirements and new safety standards for drivers and equipment; (16) the costs and potential liabilities related to various legal proceedings and claims that have arisen in the ordinary course of our business, some of which include class-action allegations; (17) the costs and potential liabilities related to governmental proceedings, inquiries, notices or investigations; (18) the costs and potential liabilities related to our international business relationships; (19) the costs and potential adverse impact of compliance with, or violations of, current and future rules issued by the Department of Transportation, the Federal Motor Carrier Safety Administration (the “FMCSA”) and other regulatory agencies; (20) the costs and potential adverse impact of compliance associated with addressing interoperability between legacy electronic automatic on-board recording devices and electronic logging devices (“ELDs”) that comply with FMCSA’s ELD regulations and guidance; (21) seasonal trends in the less-than-truckload industry, including harsh weather conditions and disasters; (22) our dependence on key employees; (23) the concentration of our stock ownership with the Congdon family; (24) the costs and potential adverse impact associated with future changes in accounting standards or practices; (25) potential costs associated with cyber incidents and other risks, including system failure, security breach, disruption by malware or other damage; (26) failure to keep pace with developments in technology, any disruption to our technology infrastructure, or failures of essential services upon which our technology platforms rely, which could cause us to incur costs or result in a loss of business; (27) the costs and potential adverse impact associated with transitional challenges in upgrading or enhancing our technology systems; (28) damage to our reputation through unfavorable publicity; (29) the costs and potential adverse impact of compliance with anti-terrorism measures on our business; (30) dilution to existing shareholders caused by any issuance of additional equity; (31) the impact of a quarterly cash dividend or the failure to declare future cash dividends; (32) fluctuations in the market value of our common stock; (33) the impact of certain provisions in our articles of incorporation, bylaws, and Virginia law that could discourage, delay or prevent a change in control of us or a change in our management; and (34) other risks and uncertainties described in our most recent Annual Report on Form 10-K and other filings with the SEC. Our forward-looking statements are based upon our beliefs and assumptions using information available at the time the statements are made. We caution the reader not to place undue reliance on our forward-looking statements as (i) these statements are neither a prediction nor a guarantee of future events or circumstances and (ii) the assumptions, beliefs, expectations and projections about future events may differ materially from actual results. We undertake no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law.

Old Dominion Freight Line, Inc. is a leading, less-than-truckload ("LTL"), union-free motor carrier providing regional, inter-regional and national LTL services through a single integrated organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. Through strategic alliances, the Company also provides LTL services throughout North America. In addition to its core LTL services, the Company offers a range of value-added services including container drayage, truckload brokerage and supply chain consulting.

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OLD DOMINION FREIGHT LINE, INC.
Statements of Operations
	Third Quarter										Year to Date
(In thousands, except per share amounts)	2018					2017					2018					2017
Revenue	$	1,058,233		100.0	%	$	872,987		100.0	%	$	3,016,751		100.0	%	$	2,466,995		100.0	%
Operating expenses:
Salaries, wages & benefits	536,513			50.7	%	461,799			52.9	%	1,560,073			51.7	%	1,320,207			53.5	%
Operating supplies & expenses	126,024			11.9	%	95,543			11.0	%	365,004			12.1	%	275,110			11.2	%
General supplies & expenses	31,209			3.0	%	28,785			3.3	%	91,076			3.0	%	79,940			3.2	%
Operating taxes & licenses	27,952			2.6	%	24,547			2.8	%	82,905			2.8	%	73,530			3.0	%
Insurance & claims	12,069			1.1	%	10,700			1.2	%	34,510			1.1	%	28,804			1.2	%
Communications & utilities	8,215			0.8	%	6,490			0.7	%	22,700			0.8	%	20,945			0.9	%
Depreciation & amortization	58,086			5.5	%	51,934			6.0	%	167,802			5.6	%	152,670			6.2	%
Purchased transportation	25,373			2.4	%	22,739			2.6	%	73,157			2.4	%	61,596			2.5	%
Building and office equipment rents	1,533			0.1	%	2,018			0.2	%	5,055			0.2	%	6,114			0.2	%
Miscellaneous expenses, net	2,874			0.3	%	4,557			0.5	%	16,263			0.5	%	15,650			0.6	%
Total operating expenses	829,848			78.4	%	709,112			81.2	%	2,418,545			80.2	%	2,034,566			82.5	%
Operating income	228,385			21.6	%	163,875			18.8	%	598,206			19.8	%	432,429			17.5	%
Non-operating expense (income):
Interest expense	29			0.0	%	555			0.0	%	51			0.0	%	1,792			0.1	%
Interest income	(778		)	(0.1	)%	(228		)	(0.0	)%	(1,902		)	(0.1	)%	(332		)	(0.0	)%
Other (income) expense, net	(70		)	(0.0	)%	(977		)	(0.1	)%	1,895			0.1	%	(999		)	(0.1	)%
Income before income taxes	229,204			21.7	%	164,525			18.9	%	598,162			19.8	%	431,968			17.5	%
Provision for income taxes	55,762			5.3	%	62,211			7.2	%	151,953			5.0	%	165,444			6.7	%
Net income	$	173,442		16.4	%	$	102,314		11.7	%	$	446,209		14.8	%	$	266,524		10.8	%
Earnings per share:
Basic	$	2.12				$	1.24				$	5.44				$	3.24
Diluted	$	2.12				$	1.24				$	5.43				$	3.23
Weighted average outstanding shares:
Basic	81,885					82,286					82,068					82,317
Diluted	81,976					82,381					82,166					82,418

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OLD DOMINION FREIGHT LINE, INC.
Operating Statistics
	Third Quarter								Year to Date
	2018			2017			% Chg.		2018			2017			% Chg.
Work days	63			63			—	%	191			191			—	%
Operating ratio	78.4		%	81.2		%			80.2		%	82.5		%
LTL intercity miles (1)	173,124			156,343			10.7	%	508,327			447,086			13.7	%
LTL tons (1)	2,367			2,190			8.1	%	7,104			6,308			12.6	%
LTL shipments (1)	3,042			2,774			9.7	%	8,879			8,039			10.4	%
LTL revenue per intercity mile	$	5.99		$	5.46		9.7	%	$	5.85		$	5.44		7.5	%
LTL revenue per hundredweight	$	21.90		$	19.47		12.5	%	$	20.94		$	19.28		8.6	%
LTL revenue per hundredweight, excluding fuel surcharges	$	18.86		$	17.31		9.0	%	$	18.13		$	17.17		5.6	%
LTL revenue per shipment	$	340.91		$	307.45		10.9	%	$	335.05		$	302.52		10.8	%
LTL revenue per shipment, excluding fuel surcharges	$	293.56		$	273.38		7.4	%	$	290.07		$	269.40		7.7	%
LTL weight per shipment (lbs.)	1,557			1,579			(1.4	)%	1,600			1,569			2.0	%
Average length of haul (miles)	920			919			0.1	%	917			918			(0.1	)%
Average full-time employees	21,214			18,257			16.2	%	20,434			17,804			14.8	%

(1) -	In thousands
Note:	Our LTL operating statistics exclude certain transportation and logistics services where pricing is generally not determined by weight. These statistics also exclude adjustments to revenue for undelivered freight required for financial statement purposes in accordance with our revenue recognition policy.

OLD DOMINION FREIGHT LINE, INC.
Balance Sheets
	September 30,		December 31,
(In thousands)	2018		2017
Cash and cash equivalents	$	177,468	$	127,462
Other current assets	518,847		457,191
Total current assets	696,315		584,653
Net property and equipment	2,703,275		2,404,459
Other assets	89,722		79,312
Total assets	$	3,489,312	$	3,068,424
Current maturities of long-term debt	$	—	$	50,000
Other current liabilities	362,457		301,049
Total current liabilities	362,457		351,049
Long-term debt	45,000		45,000
Other non-current liabilities	464,923		395,521
Total liabilities	872,380		791,570
Equity	2,616,932		2,276,854
Total liabilities & equity	$	3,489,312	$	3,068,424

Note: The financial and operating statistics in this press release are unaudited.

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