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0000799233FALSE901 HEARTLAND WAY,NORTH LIBERTYIA319645-706000007992332023-04-272023-04-27

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):
April 27, 2023

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HEARTLAND EXPRESS, INC.
(Exact name of registrant as specified in its charter)

Nevada 000-15087 93-0926999
(State of other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)

901 HEARTLAND WAY, NORTH LIBERTY IA
52317
(Address of Principal Executive Offices)  (Zip Code)
319 645-7060
Registrant's Telephone Number (including area code):


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))

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, $0.01 par value HTLD NASDAQ


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 April 27, 2023, Heartland Express, Inc. announced its unaudited financial results for the quarter ended March 31, 2023. The press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 9.01.   Financial Statements and Exhibits

(d) Exhibits
EXHIBIT  
NUMBER EXHIBIT DESCRIPTION
   
Heartland Express, Inc. press release dated April 27, 2023 with
  respect to the Company's unaudited financial results for the quarter ended
  March 31, 2023


The information contained in Items 2.02 and 9.01 of this report and the exhibit hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act:”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The information in this report and the exhibit hereto may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  Such statements are made based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties.  Actual results or events may differ from those anticipated by forward-looking statements. Please refer to the paragraph following the financial and operating information in the attached press release and various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission for information concerning risk, uncertainties, and other factors that may affect future results.



SIGNATURE

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

    HEARTLAND EXPRESS, INC.
     
Date: May 1, 2023   By:/s/Christopher A. Strain
    Christopher A. Strain
    Vice President-Finance,
    Treasurer and Chief Financial Officer




EXHIBIT INDEX
 EXHIBIT  
NUMBER EXHIBIT DESCRIPTION
   
Heartland Express, Inc. press release dated April 27, 2023 with
  respect to the Company's unaudited financial results for the quarter ended
  March 31, 2023
104 Cover Page Interactive Data File


EX-99.1 2 htld2023q1earningsrelease.htm EX-99.1 Document

Exhibit 99.1

April 27, 2023 For Immediate Release

Press Release

Heartland Express, Inc. Reports Revenues and Earnings for the First Quarter of 2023

NORTH LIBERTY, IOWA - April 27, 2023 - Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the three months ended March 31, 2023.

Three months ended March 31, 2023:
•Net Income of $12.6 million and Basic Earnings per Share of $0.16,
•Operating Revenue of $330.9 million, an increase of 118.8% over 2022,
•Operating Income of $22.9 million,
•Operating Ratio of 93.1% and 91.4% Non-GAAP Adjusted Operating Ratio(1),
•Total Assets of $1.6 billion,
•Stockholders' Equity of $866.6 million (All-time record).

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 months ended March 31, 2023, as our results delivered were driven by financial discipline in a challenging freight environment. We continued to drive operational changes at both Smith Transport and Contract Freighters, Inc. ("CFI"), our two most recent acquisitions which were completed in the back half of 2022 and doubled the size of our consolidated Company. As expected, in the initial periods following an acquisition, there are many operational opportunities to address and those efforts have been escalated given the current freight environment. We are attempting to improve the financial results of two large organizations during a period where freight demand is significantly less than it has been in the last two years along with significant pressure from many shippers to reduce freight rates while operational costs continue to rise. We thank our strong network of customers that value our long-term partnership and quality of service in a time where other shippers in our industry have focused solely on short-term cost reduction measures. We believe this current trend of lower freight demand and freight rate pressure will continue for the next one to two quarters and will likely have significant impacts on the available capacity within our industry. However, we 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 pay down approximately $129 million of outstanding debt and financing liabilities since they originated from the two acquisitions completed in 2022."

"Our consolidated operating revenues were $330.9 million, an increase of 118.8% compared to the same period of the prior year, and our consolidated operating ratio was 93.1%, and our Non-GAAP adjusted operating ratio(1) was 91.4%. Heartland Express and Millis Transfer delivered a GAAP operating ratio in the low 80's, while the combined results of Smith Transport and CFI were in the upper 90's during the first quarter of 2023. As expected, the GAAP operating ratio of Smith Transport and CFI is elevated as compared to our legacy operations and we will continue to focus on operating improvements for both revenues and costs to progress toward our stated goal of low 80's operating ratio within three years after acquisition. We believe this strategy has proven to be successful with past acquisitions and we are focused on delivering the same in partnership with both Smith Transport and CFI even when freight demand is currently lower than freight demand levels experienced prior to the acquisitions."

"Freight demand in the first quarter is typically softer due to expected seasonality following the fourth quarter holiday season, but the current demand levels are much lower than the standard and expected seasonality changes. Given what we have experienced and based on feedback from our customers, we expect volatile freight demand for at least the next two quarters of 2023. 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 at Heartland Express, Millis Transfer, Smith Transport, and CFI. We are excited about the future and believe we are stronger together as Heartland Express, Millis Transfer, Smith Transport, and CFI navigate the ups and downs of our industry and the significant opportunities ahead of us.”

Financial Results

Heartland Express ended the first quarter of 2023 with operating revenues of $330.9 million, compared to $151.3 million in the first quarter of 2022, an increase of $179.6 million (118.8%). Operating revenues for the quarter included fuel surcharge revenues of $49.6 million, compared to $24.0 million in the same period of 2022. Operating income for the three-month period ended March 31, 2023 was $22.9 million, an increase of $0.5 million (2.2%) as compared to the same period of the prior year. Net income was $12.6 million, as compared to $16.8 million in the first quarter of 2022. Basic earnings per share were $0.16 during the quarter, as compared to $0.21 in the same period of 2022. The Company posted an operating ratio of 93.1%, non-GAAP adjusted operating ratio(1) of 91.4%, and a 3.8% net margin (net income as a percentage of operating revenues) in the first quarter of 2023 compared to 85.2%, 81.7%, and 11.1%, respectively, in the first quarter of 2022.

Balance Sheet, Liquidity, and Capital Expenditures

As of March 31, 2023, the Company had $55.5 million in cash balances, an increase of $6.0 million since December 31, 2022. Debt and financing lease obligations of $366.0 million remain at March 31, 2023, down from the initial $447.3 million borrowings less associated fees for the CFI acquisition in August 2022 and $46.8 million debt and finance lease obligations assumed from the Smith acquisition in May 2022. There were no borrowings under the Company's unsecured line of credit at March 31, 2023. The Company had $86.4 million in available borrowing capacity on the line of credit as of March 31, 2023 after consideration of $13.6 million of outstanding letters of credit. The Company continues to be in compliance with associated financial covenants. The Company ended the quarter with total assets of $1.6 billion and stockholders' equity of $866.6 million, another all-time record for stockholders' equity.

Net cash flows from operations for the first three months of 2023 were $66.4 million, 20.1% of operating revenue. The primary uses of cash were $47.3 million repayments of debt and financing leases and $13.3 million, net of proceeds, used for property and equipment transactions. Since the acquisitions completed in 2022, the Company has repaid $120 million of variable rate term debt (CFI acquisition) and approximately $9 million of fixed rate equipment financing liabilities (Smith Transport acquisition).

The average age of the Company's consolidated tractor fleet was 2.1 years as of March 31, 2023 compared to 1.5 years on March 31, 2022. The average age of the Company's consolidated trailer fleet was 6.2 years as of March 31, 2023 compared to 3.7 years on March 31, 2022. The average age of our fleet was impacted by the inclusion of Smith Transport and CFI acquisitions 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 $70 to $80 million for tractors and trailers and expect to recognize $15 to $20 million of gains on disposition of equipment throughout all of 2023.
The Company continues its commitment to stockholders through the payment of cash dividends. A regular dividend of $0.02 per share was declared during the first quarter of 2023 and paid on April 7, 2023. The Company has now paid cumulative cash dividends of $544.2 million, including four special dividends, ($2.00 in 2007, $1.00 in 2010, $1.00 in 2012, and $0.50 in 2021) over the past seventy-nine consecutive quarters since 2003. Our outstanding shares at March 31, 2023 were 79.0 million. A total of 4.6 million shares of common stock have been repurchased for $81.5 million over the past five years. However, no shares of common stock were repurchased in the first three months of 2023 or throughout 2022.



The Company has the ability to repurchase an additional 6.6 million shares under the current authorization which would result in 72.3 million outstanding shares if fully executed.



Other Information

During the first quarter of 2023, we continued to deliver award-winning service and safety to our customers and were also recognized for operational excellence and community service, as evidenced by the following awards for our company and our employees:

•2022 PepsiCo/Gatorade SW Carrier of the Year
•2022 DHL/Tempur Pedic Carrier of the Year
•2023 PepsiCo “Rolling Remembrance” Participant
•Driver Zach Yeakley named 2022 TCA's Highway Angel of the Year (CFI)
•Driver Endrea Davisson - Women in Trucking Association - 2023 Top Women to Watch in Transportation (CFI)

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, the market for drivers, 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 proceeds therefrom, future operating ratio and future operating revenues, 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. 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 March 31,
2023 2022
OPERATING REVENUE $ 330,916  $ 151,275 
OPERATING EXPENSES:
Salaries, wages, and benefits $ 123,333  $ 58,638 
Rent and purchased transportation 33,144  748 
Fuel 57,528  29,711 
Operations and maintenance 15,026  5,079 
Operating taxes and licenses 5,543  3,209 
Insurance and claims 11,002  5,566 
Communications and utilities 2,876  1,078 
Depreciation and amortization 48,469  23,311 
Other operating expenses 17,891  5,798 
Gain on disposal of property and equipment (6,786) (4,258)
308,026  128,880 
Operating income 22,890  22,395 
Interest income 484  146 
Interest expense (6,075) — 
Income before income taxes 17,299  22,541 
Federal and state income taxes 4,687  5,766 
Net income $ 12,612  $ 16,775 
Earnings per share
Basic $ 0.16  $ 0.21 
Diluted $ 0.16  $ 0.21 
Weighted average shares outstanding
Basic 78,987  78,929 
Diluted 79,022  78,953 
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 2023 2022
CURRENT ASSETS  
Cash and cash equivalents $ 55,506  $ 49,462 
Trade receivables, net 126,170  139,819 
Prepaid tires 10,862  11,293 
Other current assets 19,774  26,069 
Income taxes receivable —  3,139 
Total current assets 212,312  229,782 
PROPERTY AND EQUIPMENT 1,279,915  1,282,194 
Less accumulated depreciation 341,509  308,936 
938,406  973,258 
GOODWILL 320,675  320,675 
OTHER INTANGIBLES, NET 102,410  103,701 
OTHER ASSETS 19,642  19,894 
DEFERRED INCOME TAXES, NET 1,488  1,224 
OPERATING LEASE RIGHT OF USE ASSETS 17,577  20,954 
  $ 1,612,510  $ 1,669,488 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES    
Accounts payable and accrued liabilities $ 47,492  $ 62,712 
Compensation and benefits 31,549  30,972 
Insurance accruals 17,635  18,490 
Long-term debt and finance lease liabilities - current portion 13,307  13,946 
Operating lease liabilities - current portion 10,885  12,001 
Income taxes payable 9,608  — 
Other accruals 16,088  18,636 
Total current liabilities 146,564  156,757 
LONG-TERM LIABILITIES    
Income taxes payable 6,569  6,466 
Long-term debt and finance lease liabilities less current portion 352,645  399,062 
Operating lease liabilities less current portion 6,692  8,953 
Deferred income taxes, net 199,121  207,516 
Insurance accruals less current portion 34,300  35,257 
Total long-term liabilities 599,327  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 78,989 and 78,984 in 2023 and 2022, respectively 907  907 
Additional paid-in capital 4,197  4,165 
Retained earnings 1,062,672  1,051,641 
Treasury stock, at cost; 11,700 and 11,705 in 2023 and 2022, respectively (201,157) (201,236)
  866,619  855,477 
  $ 1,612,510  $ 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 March 31,
2023 2022
(Unaudited, in thousands)
Operating revenue $ 330,916  $ 151,275 
Less: Fuel surcharge revenue 49,647  23,969 
Operating revenue, excluding fuel surcharge revenue 281,269  127,306 
Operating expenses 308,026  128,880 
Less: Fuel surcharge revenue 49,647  23,969 
Less: Amortization of intangibles 1,291  598 
Less: Acquisition-related costs —  255 
Adjusted operating expenses 257,088  104,058 
Operating income 22,890  22,395 
Adjusted operating income $ 24,181  $ 23,248 
Operating ratio 93.1  % 85.2  %
Adjusted operating ratio 91.4  % 81.7  %

(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.