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 21, 2008
HEARTLAND EXPRESS, INC.
(Exact name of registrant as specified in its charter)
Commission File Number - 0-15087
NEVADA 93-0926999
(State of other Jurisdiction (IRS Employer ID No.)
of Incorporation)
901 NORTH KANSAS AVE, NORTH LIBERTY, IA 52317
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number (including area code): 319-626-3600
Item 9.01. Financial Statements and Exhibits
Exhibit 99.1 - Heartland Express, Inc. press release dated October 20, 2008
with respect to the Company's financial results for the quarter ended September
30, 2008.
Item 2.02. Results of Operations and Financial Condition.
On October 20, 2008, Heartland Express, Inc. announced its financial
results for the quarter ended September 30, 2008. The press release is attached
as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
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: October 21, 2008 BY: /s/John P. Cosaert
JOHN P. COSAERT
Vice-President
Finance and Treasurer
Exhibit No. 99.1
Monday, October 20, 2008, For Immediate Release
Press Release
Heartland Express, Inc. Reports Revenues and Earnings for the Third Quarter of
2008.
NORTH LIBERTY, IOWA - October 20, 2008 - Heartland Express, Inc. (Nasdaq: HTLD)
announced today financial results for the quarter and nine months ended
September 30, 2008. Operating revenues for the quarter increased 15.9% to $169.9
million from $146.6 million in the third quarter of 2007. Net income increased
9.2% to $18.7 million from $17.1 million in the 2007 period. Earnings per share
were $0.19 compared to $0.18 for the third quarter of 2007. Operating income for
the quarter was favorably impacted approximately $2.4 million or $0.02 per share
due to increased gains on disposal of property and equipment.
For the nine months ended September 30, 2008, operating revenues increased 10.1%
to $483.6 from $439.1 million during the same period in 2007. Net income
decreased 15.0% to $50.6 million for the nine month period ended September 30,
2008 from $59.5 million in the 2007 period. Earnings per share were $0.53 in
2008 compared to $0.61 in 2007 for the nine month period. Operating income for
the nine months was negatively impacted approximately $7.9 million or $0.05 per
share due to increased fuel costs, net of fuel surcharge revenue passed through
to customers and approximately $6.7 million or $0.05 per share due to a
reduction in gains on sales of property and equipment. Net income for the nine
month period was positively impacted approximately $2.9 million by a reduction
of income tax expense due to FIN 48 adjustments or $0.03 per share.
The Company experienced a 46.5% increase in average fuel costs per gallon in the
third quarter of 2008 compared to the third quarter of 2007. The average cost of
fuel during the quarter ended September 30, 2008 was $4.03 compared to $2.75 in
the third quarter of 2007. The Company experienced a 50.2% increase in average
fuel costs per gallon in the nine month period ended September 30, 2008 compared
to the same nine month period of 2007. The average cost of fuel during the nine
month period ended September 30, 2008 was $3.86 compared to $2.57 in the nine
month period of 2007. The Company continues to stress its fuel cost controlling
initiatives. Such initiatives include taking advantage of bulk purchases where
it is cost effective to do so when compared to over-the-road purchases,
reductions in tractor idle time, and controlling out-of-route non-billable
miles. All of the Company's terminal locations have fueling capabilities.
For the quarter, Heartland Express, Inc. posted an operating ratio (operating
expenses as a percentage of operating revenues) of 83.2% and an 11.0% net margin
(net income as a percentage of operating revenues) compared to 81.9% and 11.7%
for the same period of 2007. The Company reported an operating ratio of 85.7%
and a 10.5% net margin for the nine months ended September 30, 2008 compared to
80.4% and 13.6% for the same period of 2007. The increased operating ratio for
the nine month period was attributable to the increase in fuel costs and lower
amounts of gains on disposals of property and equipment as described above. The
Company ended the third quarter with cash, cash equivalents, short-term and
long-term investments of $249.0 million, a $54.1 million increase from the
$194.9 million reported on December 31, 2007. The Company's balance sheet
continues to be debt-free.
As of September 30, 2008, all of the Company's $180.6 million long-term
investments continue to be invested in auction rate student loan educational
bonds backed by the U.S. government and continue to be associated with
unsuccessful auctions. The majority (96.3% of par value) of the underlying
investments continue to hold AAA (or equivalent) ratings from recognized rating
agencies. All of the Company's auction rate security holdings are with financial
institutions that have entered into auction rate security settlements with
various regulatory authorities. These settlements focus mostly on small
institutions, as defined by the individual settlement agreements. Although only
3.7% of our portfolio is specifically covered by these settlements, each of the
settlements contained clauses that the financial institutions will use their
best efforts to liquidate auction rate securities from Company's not
specifically covered by the settlements by the end of 2009. Management continues
to believe that current amounts of cash and cash equivalents along with cash
flows from operations are sufficient to meet the Company's cash flow
requirements and allow the Company to hold these investments to maturity or
until they can be sold for par value. The Company's average rate of return on
these investments continues to exceed the current rates of return on other AAA
rated, short-term, tax free security investment options. There were not any
significant changes in fair value during the quarter ended September 30, 2008.
The Company began a tractor fleet upgrade in the third quarter. The upgrade is
expected to include the purchase of approximately 1,600 International ProStar
tractors. Delivery of tractors began during the third quarter of 2008 and will
continue through 2009. The Company took delivery of 197 new tractors in the
third quarter of 2008 and expects to take delivery of 378 new tractors in the
fourth quarter of 2008. The Company also took delivery of 248 new Wabash
trailers during the third quarter of 2008 and will purchase an additional 152
new trailers in the fourth quarter of 2008. Management believes the Company has
adequate liquidity to meet these capital requirements through cash generated
from operations and existing cash and cash equivalents.
The Company purchased a terminal location in Dallas, Texas during the quarter.
This terminal will not only strengthen the company's presence in the Southwest
but will also complement the Company's recent expansion to the western United
States. The office and shop facility, situated on approximately seven acres of
land, is located on the southeast side of Dallas on Highway 175 in Seagoville.
An adjacent five acre tract of land was acquired for future expansion. Property
renovations are underway and operations are scheduled to begin in the fourth
quarter of this year. The opening of this facility will mark the beginning of
the Company's tenth regional operation.
During the quarter, Heartland Express declared a regular quarterly cash
dividend. The quarterly dividend of approximately $1.9 million at the rate of
$0.02 per share was paid on October 2, 2008 to shareholders of record at the
close of business on September 19, 2008. The Company has now paid cash dividends
of $230.4 million over the past twenty-one consecutive quarters which includes
the special dividend of $2.00 per share during the second quarter of 2007.
Interest income decreased in the nine month period of 2008 compared to the same
period in 2007 primarily due to a decrease in average investments balance as a
result of the payment of the special dividend.
On October 14, 2008, Forbes magazine named Heartland Express one of the "Best
200 Small Companies in America." The Company has been recognized seventeen times
during its twenty two years as a public company, and has made the list the past
seven consecutive years. The Company was recently recognized as the United
Sugars' dry van carrier of the year for the second consecutive year. In
addition, the Company received Bremner Foods' large carrier of the year, the
Federal Express SmartPost national carrier of the year award and was recognized
for 100% on time service by Federal Express Ground for their fiscal year 2008.
Also, for the sixth consecutive year the Company received the dry van Quest for
Quality award from Logistics Management. These awards exemplify the quality of
service provided to our customers.
This press release may contain statements that might be considered as
forward-looking statements or predictions of future operations. Such statements
are based on management's belief or interpretation of information currently
available. These statements and assumptions involve certain risks and
uncertainties. Actual events may differ from these expectations as specified
from time to time in filings with the Securities and Exchange Commission.
Contact: Heartland Express, Inc.
Mike Gerdin, President
John Cosaert, Chief Financial Officer
319-626-3600
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2008 2007 2008 2007
---- ---- ---- ----
(unaudited) (unaudited)
--------- --------- --------- ---------
OPERATING REVENUE ............................. $ 169,935 $ 146,575 $ 483,577 $ 439,107
--------- --------- --------- ---------
OPERATING EXPENSES:
Salaries, wages, benefits .................. $ 51,462 $ 48,096 $ 148,646 147,060
Rent and purchased transportation .......... 4,725 5,252 14,975 16,117
Fuel ....................................... 58,393 40,747 169,386 117,257
Operations and maintenance ................. 4,051 3,253 12,367 9,957
Operating taxes and licenses ............... 2,323 2,552 6,908 7,170
Insurance and claims ....................... 6,443 2,826 17,237 14,104
Communications and utilities ............... 856 996 2,792 2,865
Depreciation ............................... 11,504 12,365 32,580 35,946
Other operating expenses ................... 4,456 4,472 12,928 13,036
Gain on disposal of property & equipment ... (2,899) (493) (3,533) (10,271)
--------- --------- --------- ---------
141,314 120,066 414,286 353,241
--------- --------- --------- ---------
Operating income ............ 28,621 26,509 69,291 85,866
Interest income ............................ 1,943 1,741 7,042 7,963
--------- --------- --------- ---------
Income before income taxes ................. 30,564 28,250 76,333 93,829
Federal and state income taxes ............. 11,841 11,105 25,715 34,290
--------- --------- --------- ---------
Net income ................................. $ 18,723 $ 17,145 $ 50,618 59,539
========= ========= ========= =========
Earnings per share ......................... $ 0.19 $ 0.18 $ 0.53 $ 0.61
========= ========= ========= =========
Weighted average shares outstanding ........ 96,158 97,499 96,177 97,998
========= ========= ========= =========
Dividends declared per share ............... 0.020 0.020 0.060 2.065
========= ========= ========= =========
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
September 30, December 31,
ASSETS 2008 2007
--------- ---------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents ................ $ 67,820 $ 7,960
Short-term investments ................... 545 186,944
Trade receivables, net ................... 47,169 44,359
Prepaid tires ............................ 5,697 4,764
Other current assets ..................... 6,058 3,391
Income tax receivable .................... 473 57
Deferred income taxes .................... 33,033 30,443
--------- ---------
Total current assets ........ 160,795 277,918
--------- ---------
PROPERTY AND EQUIPMENT ........................ 378,117 370,358
Less accumulated depreciation ............ 154,798 132,545
--------- ---------
223,319 237,813
LONG-TERM INVESTMENTS ......................... 180,622 --
OTHER ASSETS .................................. 10,437 10,563
--------- ---------
$ 575,173 $ 526,294
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued liabilities ... $ 28,712 $ 13,073
Compensation & benefits .................. 16,254 14,699
Insurance accruals ....................... 67,061 60,882
Other accruals ........................... 7,746 6,718
--------- ---------
Total current liabilities ........ 119,773 95,372
--------- ---------
LONG-TERM LIABILITIES
Income taxes payable ..................... 35,023 37,593
Deferred income taxes .................... 52,015 50,570
--------- ---------
87,038 88,163
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value; authorized
5,000 shares, none issued .............. -- --
Capital stock: common, $0.01 par value;
authorized 395,000 shares; issued and
outstanding 96,158 in 2008, 96,949 in 2007 962 970
Additional paid-in capital ............... 439 439
Retained earnings ........................ 375,584 341,350
Accumulated other comprehensive loss ..... (8,623) --
--------- ---------
368,362 342,759
--------- ---------
$ 575,173 $ 526,294
========= =========