Heartland Express, Inc. Reports Revenues and Earnings for the Third Quarter of 2009 and Named to Forbes 200 Best Small Companies

October 20, 2009 8:55 AM EDT

NORTH LIBERTY, Iowa--(BUSINESS WIRE)-- Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter and nine months ended September 30, 2009. Earnings per share decreased 15.8% to $0.16 from $0.19 in the third quarter of 2008. Net income decreased 22.5% to $14.5 million from $18.7 million in the 2008 period. Operating revenues for the quarter decreased 33.3% to $113.4 million from $169.9 million in the third quarter of 2008. Operating revenues for the year have been impacted by the continued impact on demand due to the economic downturn and the related downward pressure on freight rates. In addition, operating revenues for the quarter and the nine month period were impacted by a reduction in fuel surcharge revenues of $26.0 million and $68.8 million, respectively, due to lower fuel prices. Operating income for the third quarter of 2009 was favorably impacted by a $5.4 million, $0.04 per share, increase in gains on disposal of property and equipment related to the Company's fleet upgrade.

Earnings per share for the nine months ended September 30, 2009 decreased 3.8% to $0.51 from $0.53 in the compared 2008 period. Net income decreased 8.6% to $46.3 million from $50.6 million in the 2008 period. Operating revenues for the nine months ended September 30, 2009 decreased 28.6% to $345.3 million from $483.6 million in the first nine months of 2008. Operating income for this year's nine month period was favorably impacted by a $10.6 million, $0.08 per share, increase in gains on disposal of property and equipment related to the Company's fleet upgrade.

Heartland Express, Inc. posted an operating ratio (operating expenses as a percentage of operating revenues) of 80.2% and a 12.8% net margin (net income as a percentage of operating revenues) in the third quarter of 2009 both improvements over the same period of the prior year. The Company reported an operating ratio of 83.2% and an 11.0% net margin for the quarter ended September 30, 2008. The Company reported an operating ratio of 81.7% and a 13.4% net margin for the nine months ended September 30, 2009 compared to 85.7% and 10.5%, respectively, for the comparative 2008 period. The Company ended the third quarter of 2009 with cash, cash equivalents, short-term and long-term investments of $202.9 million, a $25.1 million decrease from the $228.0 million reported at December 31, 2008. This reduction is primarily attributable to the use of $45.4 million for repurchases of our stock and $50.7 million for capital expenditures. Since the first auction failure of our auction rate securities in February 2008 the Company has received approximately $41.0 million in calls of auction rate securities at par, of which $22.5 million has been received in 2009 including $9.0 million, received post September 30, 2009. The Company continues to be involved with efforts to bring liquidity to our remaining long-term auction rate securities portfolio. The Company's balance sheet continues to be debt-free.

The Company took delivery of 690 new tractors in the third quarter of 2009 for a total of 1,151 new International Pro Star tractors in 2009. The current fleet upgrade is expected to be completed in the fourth quarter of 2009 with the additional purchase of 449 tractors. These tractors continue to achieve positive results through advanced aerodynamics, speed management, and idle controls. Our depreciation expense for the three and nine months ended September 30, 2009 increased by $4.0 million and $7.9 million, respectively, primarily as a result of adding new tractors and disposing of older units and an approximate 22% increase in the cost of new tractors primarily associated with new engine emission requirements.

The current recession and extended economic downturn continues to impact our nation. Excess capacity in our industry continues to exist resulting in downward pressure on freight rates and reduced demand for freight services from shippers. The Company still has not seen any strong indicators of improvements in the demand for freight services that would increase our levels of business in the near future. In spite of continued depressed freight demand volumes, the Company remains in an opportunistic position. Efforts continue to be focused on customer service, cost controls, and challenging ourselves to improve each department during this period of economic downturn and preparing the Company to be even better after the end of the current recession.

Fuel prices have remained relatively stable throughout the current year. During the quarter ended September 30, 2009, the U.S. average cost of fuel was $2.60 per gallon compared to $4.32 for the compared 2008 period, a 39.8% decrease. Efforts continue to effectively control the Company's fuel cost. The primary focus is on idle hour reductions, strategic fueling decisions, and the purchase of state-of-the-art International Pro Star trucks with increased fuel economy features and idle control technology. Our fuel cost per mile decreased 42.7% and 46.2% for the three and nine months ended September 30, 2009, respectively, as compared to the same 2008 periods.

On October 14, 2009, Forbes magazine named Heartland Express one of the "Best 200 Small Companies in America." The Company has been recognized eighteen times during its twenty three years as a public company, and has made the list the past eight consecutive years. In addition, the Company has now been awarded nineteen service awards thus far this year for its ability to deliver the highest quality of customer service. Customer service awards received during the quarter include the Federal Express Carrier of the Year for our third consecutive year, Federal Express Platinum Service, Schneider Logistics Carrier of the Year, Kelloggs Komplete Carrier of the Year 2008, and the United Sugars Corporation Achievement of Excellence. Also, for the seventh consecutive year the Company received the dry van Quest for Quality award from Logistics Management.

Heartland Express continues to pay a regular quarterly cash dividend. The most recent dividend of approximately $1.8 million at the rate of $0.02 per share was paid on October 2, 2009 to shareholders of record at the close of business on September 21, 2009. The Company has now paid cash dividends of $237.7 million over the past twenty-five consecutive quarters.

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.

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,

                           2009          2008          2009          2008

                           (unaudited)                 (unaudited)

OPERATING REVENUE          $ 113,390     $ 169,935     $ 345,343     $ 483,577

OPERATING EXPENSES:

Salaries, wages, and       $ 41,755      $ 51,462      $ 128,752     $ 148,646
benefits

Rent and purchased           2,766         4,725         8,510         14,975
transportation

Fuel                         26,454        58,393        76,098        169,386

Operations and               3,618         4,051         11,972        12,367
maintenance

Operating taxes and          1,958         2,323         6,675         6,908
licenses

Insurance and claims         3,658         6,443         11,797        17,237

Communications and           881           856           2,783         2,792
utilities

Deprecation                  15,468        11,504        40,443        32,580

Other operating expenses     2,743         4,456         9,332         12,928

Gain on disposal of          (8,321  )     (2,899  )     (14,178 )     (3,533  )
property & equipment

                             90,980        141,314       282,184       414,286

Operating Income             22,410        28,621        63,159        69,291

Interest Income              489           1,943         1,922         7,042

Income before income         22,899        30,564        65,081        76,333
taxes

Federal and state income     8,392         11,841        18,818        25,715
taxes

Net income                 $ 14,507      $ 18,723      $ 46,263      $ 50,618

Earnings per share         $ 0.16        $ 0.19        $ 0.51        $ 0.53

Weighted average shares      90,689        96,158        91,281        96,177
outstanding

Dividends declared per     $ 0.02        $ 0.02        $ 0.06        $ 0.06
share

HEARTLAND EXPRESS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

                                                September 30,   December 31,

ASSETS                                          2009            2008

CURRENT ASSETS                                  (unaudited)

Cash and cash equivalents                       $ 41,341        $ 56,651

Short-term investments                            14,065          241

Trade receivables, net                            38,063          36,803

Prepaid tires                                     6,800           6,449

Other current assets                              4,820           2,834

Income tax receivable                             3,841           -

Deferred income taxes                             35,499          35,650

Total current assets                              144,429         138,628

PROPERTY AND EQUIPMENT                            407,134         389,561

Less accumulated depreciation                     140,959         151,881

                                                  266,175         237,680

LONG-TERM INVESTMENTS                             147,489         171,122

OTHER ASSETS                                      10,533          10,284

                                                $ 568,626       $ 557,714

LIABILITIES AND STOCKHOLDERS'

EQUITY

CURRENT LIABILITIES

Accounts payable and accrued liabilities        $ 15,526        $ 10,338

Compensation & benefits                           15,946          15,862

Income taxes payable                              -               452

Insurance accruals                                72,810          70,546

Other accruals                                    6,826           7,498

Total current assets                              111,108         104,696

LONG-TERM LIABILITIES

Income taxes payable                              30,944          35,264

Deferred income taxes                             67,777          57,715

                                                  98,721          92,979

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 90,689 in 2009 and 94,229 in 2008     907             942

Additional paid-in capital                        439             439

Retained earnings                                 362,777         367,281

Accumulated other comprehensive loss              (5,326  )       (8,623  )

                                                  358,797         360,039

                                                $ 568,626       $ 557,714

    Source: Heartland Express, Inc.

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