10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________ .

Commission File Number: 0-19582

OLD DOMINION FREIGHT LINE, INC.

(Exact name of registrant as specified in its charter)




Virginia		56-0751714
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



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

(336) 889-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock ($0.10 par value)

ODFL

The Nasdaq Stock Market LLC 
(Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2022 there were 111,773,874 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

INDEX


Part I – FINANCIAL INFORMATION		1

Item 1	Financial Statements	1
	Condensed Balance Sheets – June 30, 2022 and December 31, 2021	1
	Condensed Statements of Operations – For the three and six months ended June 30, 2022 and 2021	3
	Condensed Statements of Changes in Shareholders’ Equity – For the three and six months ended June 30, 2022 and 2021	4
	Condensed Statements of Cash Flows – For the six months ended June 30, 2022 and 2021	5
	Notes to the Condensed Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4	Controls and Procedures	18

Part II – OTHER INFORMATION		19

Item 1	Legal Proceedings	19
Item 1A	Risk Factors	19
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 6	Exhibits	20

Exhibit Index		21
Signatures		22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS


	June 30,
	2022			December 31,
(In thousands, except share and per share data)	(Unaudited)			2021
ASSETS
Current assets:
Cash and cash equivalents	$	196,134		$	462,564
Short-term investments		224,391			254,433
Customer receivables, less allowances of $11,855 and $9,855, respectively		680,096			567,474
Income taxes receivable		8,606			19,218
Other receivables		12,665			12,410
Prepaid expenses and other current assets		87,198			67,688
Total current assets		1,209,090			1,383,787

Property and equipment:
Revenue equipment		2,248,493			2,146,205
Land and structures		2,618,098			2,463,949
Other fixed assets		543,806			512,340
Leasehold improvements		13,486			13,131
Total property and equipment		5,423,883			5,135,625
Accumulated depreciation		(2,045,151	)		(1,919,939	)
Net property and equipment		3,378,732			3,215,686

Other assets		206,045			222,071
Total assets	$	4,793,867		$	4,821,544

Note: The Condensed Balance Sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

The accompanying notes are an integral part of these condensed financial statements.

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

(CONTINUED)


	June 30,
	2022		December 31,
(In thousands, except share and per share data)	(Unaudited)		2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	136,480	$	82,519
Compensation and benefits		264,070		257,905
Claims and insurance accruals		65,241		61,822
Other accrued liabilities		92,510		61,988
Income taxes payable		49,877		—
Current maturities of long-term debt		20,000		—
Total current liabilities		628,178		464,234

Long-term liabilities:
Long-term debt		79,955		99,947
Other non-current liabilities		281,187		328,838
Deferred income taxes		248,718		248,718
Total long-term liabilities		609,860		677,503
Total liabilities		1,238,038		1,141,737

Commitments and contingent liabilities

Shareholders’ equity:
Common stock - $0.10 par value, 280,000,000 shares authorized, 112,236,107 and 115,011,172 shares outstanding at June 30, 2022 and December 31, 2021, respectively		11,224		11,501
Capital in excess of par value		236,991		174,445
Retained earnings		3,307,614		3,493,861
Total shareholders’ equity		3,555,829		3,679,807
Total liabilities and shareholders’ equity	$	4,793,867	$	4,821,544

The accompanying notes are an integral part of these condensed financial statements.

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except share and per share data)	2022			2021			2022			2021
Revenue from operations	$	1,667,448		$	1,319,409		$	3,164,728		$	2,445,924

Operating expenses:
Salaries, wages and benefits		705,710			611,518			1,385,899			1,157,177
Operating supplies and expenses		236,712			137,577			428,069			261,733
General supplies and expenses		39,116			34,427			74,629			65,595
Operating taxes and licenses		34,952			33,256			70,028			64,522
Insurance and claims		16,964			14,983			33,071			27,905
Communications and utilities		9,898			8,390			19,774			16,586
Depreciation and amortization		68,310			63,947			135,650			127,934
Purchased transportation		42,681			43,927			95,181			78,641
Miscellaneous expenses, net		4,400			5,340			8,104			10,130
Total operating expenses		1,158,743			953,365			2,250,405			1,810,223

Operating income		508,705			366,044			914,323			635,701

Non-operating expense (income):
Interest expense		213			465			286			972
Interest income		(471	)		(196	)		(600	)		(482	)
Other expense, net		750			1,387			1,355			1,515
Total non-operating expense		492			1,656			1,041			2,005

Income before income taxes		508,213			364,388			913,282			633,696

Provision for income taxes		132,135			94,812			237,453			164,761

Net income	$	376,078		$	269,576		$	675,829		$	468,935

Earnings per share:
Basic	$	3.33		$	2.33		$	5.94		$	4.04
Diluted	$	3.30		$	2.31		$	5.90		$	4.01

Weighted average shares outstanding:
Basic		113,079,035			115,820,522			113,744,878			116,157,336
Diluted		113,805,149			116,561,242			114,484,894			116,906,572

Dividends declared per share	$	0.30		$	0.20		$	0.60		$	0.40

The accompanying notes are an integral part of these condensed financial statements.

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)



							Capital in
	Common Stock						Excess of			Retained
(In thousands)	Shares			Amount			Par Value			Earnings			Total
Balance as of December 31, 2021		115,011		$	11,501		$	174,445		$	3,493,861		$	3,679,807
Net income		—			—			—			299,751			299,751
Share repurchases, including settlements under accelerated share repurchase programs		(1,273	)		(127	)		62,500			(400,725	)		(338,352	)
Forward contract for accelerated share repurchases		—			—			(100,000	)		—			(100,000	)
Cash dividends declared		—			—			—			(34,128	)		(34,128	)
Share-based compensation and share issuances, net of forfeitures		50			5			4,286			—			4,291
Taxes paid in exchange for shares withheld		(27	)		(3	)		(8,059	)		—			(8,062	)
Balance as of March 31, 2022		113,761		$	11,376		$	133,172		$	3,358,759		$	3,503,307
Net income		—			—			—			376,078			376,078
Share repurchases, including settlements under accelerated share repurchase programs		(1,530	)		(153	)		100,000			(393,365	)		(293,518	)
Cash dividends declared		—			—			—			(33,858	)		(33,858	)
Share-based compensation and share issuances, net of forfeitures		5			1			3,881			—			3,882
Taxes paid in exchange for shares withheld		—			—			(62	)		—			(62	)
Balance as of June 30, 2022		112,236		$	11,224		$	236,991		$	3,307,614		$	3,555,829


							Capital in
	Common Stock						Excess of			Retained
(In thousands)	Shares			Amount			Par Value			Earnings			Total
Balance as of December 31, 2020		117,058		$	11,706		$	226,451		$	3,088,131		$	3,326,288
Net income		—			—			—			199,359			199,359
Share repurchases		(1,127	)		(113	)		—			(240,102	)		(240,215	)
Forward contract for accelerated share repurchases		—			—			(68,750	)		—			(68,750	)
Cash dividends declared		—			—			—			(23,193	)		(23,193	)
Share-based compensation and share issuances, net of forfeitures		55			5			2,964			—			2,969
Taxes paid in exchange for shares withheld		(21	)		(2	)		(4,539	)		—			(4,541	)
Balance as of March 31, 2021		115,965		$	11,596		$	156,126		$	3,024,195		$	3,191,917
Net income		—			—			—			269,576			269,576
Share repurchases		(160	)		(16	)		—			(39,984	)		(40,000	)
Cash dividends declared		—			—			—			(23,194	)		(23,194	)
Share-based compensation and share issuances, net of forfeitures		5			1			4,078			—			4,079
Balance as of June 30, 2021		115,810		$	11,581		$	160,204		$	3,230,593		$	3,402,378

The accompanying notes are an integral part of these condensed financial statements.

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	June 30,
(In thousands)	2022			2021
Cash flows from operating activities:
Net income	$	675,829		$	468,935
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		135,658			127,942
(Gain) Loss on disposal of property and equipment		(2,061	)		701
Other, net		15,649			15,352
Changes in operating assets and liabilities, net		(9,022	)		(104,639	)
Net cash provided by operating activities		816,053			508,291

Cash flows from investing activities:
Purchase of property and equipment		(323,063	)		(206,109	)
Proceeds from sale of property and equipment		18,928			15,512
Purchase of short-term investments		(99,997	)		(89,965	)
Proceeds from maturities of short-term investments		129,884			255,072
Net cash used in investing activities		(274,248	)		(25,490	)

Cash flows from financing activities:
Payments for share repurchases		(731,870	)		(280,215	)
Forward contract for accelerated share repurchases		—			(68,750	)
Dividends paid		(68,035	)		(46,408	)
Other financing activities, net		(8,330	)		(4,654	)
Net cash used in financing activities