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):
July 22, 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 July 22, 2008
with respect to the Company's financial results for the quarter ended June 30,
2008.
Item 2.02. Results of Operations and Financial Condition.
On July 22, 2008, Heartland Express, Inc. announced its financial results
for the quarter ended June 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: July 22, 2008 BY: /s/John P. Cosaert
JOHN P. COSAERT
Vice-President
Finance and Treasurer
Exhibit No. 99.1
Tuesday, July 22, 2008, For Immediate Release
Press Release
Heartland Express, Inc. Reports Revenues and Earnings for the Second Quarter of
2008.
NORTH LIBERTY, IOWA - July 22, 2008 - Heartland Express, Inc. (Nasdaq: HTLD)
announced today financial results for the quarter and six months ended June 30,
2008. Operating revenues for the quarter increased 10.4% to $164.6 million from
$149.1 million in the second quarter of 2007. Net income decreased 13.2% to
$17.2 million from $19.8 million in the 2007 period. Earnings per share were
$0.18 compared to $0.20 for the second quarter of 2007. The driving components
of the decrease in net income and earnings per share during the second quarter
were the continued historical highs in fuel prices and decreases in gains on
sales of property and equipment offset by a favorable tax expense adjustment
related to the application of Financial Accounting Standards Board ("FASB")
Interpretation No. 48 ("FIN 48"). Operating income for the quarter was
negatively impacted approximately $4.3 million or $0.03 per share due to
increased fuel expenditures, net of fuel surcharge revenue passed through to
customers and approximately $4.1 million or $0.03 per share due to a reduction
in gains on disposal of property and equipment. Net income for the quarter was
positively impacted approximately $1.8 million, as a reduction of income tax
expense, or $0.02 per share due to FIN 48.
For the six months ended June 30, 2008, operating revenues increased 7.2% to
$313.6 from $292.5 million during the same period in 2007. Net income decreased
24.8% to $31.9 million for the six month period ended June 30, 2008 from $42.4
million in the 2007 period. Earnings per share were $0.33 in 2008 compared to
$0.43 in 2007 for the six month period. Operating income for the six months was
negatively impacted approximately $9.3 million or $0.07 per share due to
increased fuel expenditures, net of fuel surcharge revenue passed through to
customers and approximately $9.1 million or $0.07 per share due to a reduction
in gains on sales of property and equipment. Net income for the six month period
was positively impacted approximately $2.3 million, as a reduction of income tax
expense, or $0.02 per share due to FIN 48.
The Company experienced a 60.8% increase in average fuel costs per gallon in the
second quarter of 2008 compared to the second quarter of 2007. The average cost
of fuel during the quarter ended June 30, 2008 was $4.21 compared to $2.62 in
the second quarter of 2007. The Company experienced a 51.9% increase in average
fuel costs per gallon in the six month period ended June 30, 2008 compared to
the same six month period of 2007. The average cost of fuel during the six month
period ended June 30, 2008 was $3.80 compared to $2.50 in the six month period
of 2007. The Company continues to stress its fuel cost controlling initiatives.
Such initiatives include the continued purchasing of fuel in bulk for terminal
locations and 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 eleven
terminal locations have fueling capabilities.
For the quarter, Heartland Express, Inc. posted an operating ratio (operating
expenses as a percentage of operating revenues) of 87.3% and a 10.5% net margin
(net income as a percentage of operating revenues) compared to 81.2% and 13.3%
for the same period of 2007. The Company reported an operating ratio of 87.0%
and a 10.2% net margin for the six months ended June 30, 2008 compared to 79.7%
and 14.5% for the same period of 2007. The increases in operating ratios for the
current quarter and six month period were attributable to the increase in fuel
costs and lower amounts of gains on disposal of property and equipment as
described above. The Company ended the second quarter with cash, cash
equivalents, short-term and long-term investments of $215.2 million, a $20.3
million increase from the $194.9 million reported on December 31, 2007. The
Company's balance sheet continues to be debt-free.
As of June 30, 2008, the majority of the Company's $187.0 million long-term
investments continue to be invested in auction rate student loan educational
bonds backed by the U.S. government and continued to be associated with
unsuccessful auctions. The majority (96.5%) of the underlying investments
continue to hold AAA (or equivalent) ratings from recognized rating agencies.
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 therefore has chosen to hold such
investments until successful auctions resume or the investments are called by
the issuer rather than selling the securities at discounted pricing. 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 market value
during the quarter ended June 30, 2008.
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 July 2, 2008 to shareholders of record at the close
of business on June 20, 2008. The Company has now paid cash dividends of $228.4
million over the past twenty consecutive quarters which includes the special
dividend of $2.00 per share during the second quarter of 2007. Interest income
decreased in the six 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 in May 2007 of approximately $196.5 million
which was primarily funded with the sale of investments.
The Company anticipates beginning 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 is scheduled to begin
during the third quarter of 2008 and will continue through 2009. The Company
will also take delivery of 400 2009 Wabash trailers during the second half of
2008. Management believes the Company has adequate liquidity to meet these
capital requirements through cash generated through operations and existing cash
and cash equivalents.
The Company has recently been awarded five service awards in addition to the six
service awards announced during the first quarter of 2008. These awards evidence
the Company's continued ability to deliver the highest quality of service to the
Company's customers. Such second quarter awards include 2007 National Carrier of
the Year and Platinum Award for Federal Express, Kimberly Clark Carrier of the
Year for 2007, Whirlpool Truckload Supplier of the Year for 2007, and General
Mills Dry National Carrier of the Year for fiscal 2008. The award received from
Kimberly Clark was the first award of its kind distributed by Kimberly Clark and
the Company was honored and extremely proud to be the recipient of this
inaugural award.
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 Six months ended
June 30, June 30,
2008 2007 2008 2007
--------- --------- --------- ---------
(unaudited) (unaudited)
OPERATING REVENUE ........................... $ 164,592 $ 149,103 $ 313,641 $ 292,532
--------- --------- --------- ---------
OPERATING EXPENSES:
Salaries, wages, benefits ................ $ 48,591 $ 50,951 $ 97,183 $ 98,964
Rent and purchased transportation ........ 5,144 5,643 10,250 10,865
Fuel ..................................... 60,495 39,697 110,993 76,510
Operations and maintenance ............... 4,353 3,499 8,316 6,703
Operating taxes and licenses ............. 2,343 2,338 4,585 4,619
Insurance and claims ..................... 7,012 5,688 10,795 11,278
Communications and utilities ............. 931 1,013 1,936 1,869
Depreciation ............................. 10,663 11,877 21,076 23,581
Other operating expenses ................. 4,139 4,439 8,471 8,564
Loss (gain) on disposal of
property & equipment .................. 11 (4,112) (633) (9,778)
--------- --------- --------- ---------
143,682 121,033 272,972 233,175
--------- --------- --------- ---------
Operating income ................... 20,910 28,070 40,669 59,357
Interest income .......................... 2,236 2,906 5,099 6,222
--------- --------- --------- ---------
Income before income taxes ............... 23,146 30,976 45,768 65,579
Federal and state income taxes ............ 5,915 11,135 13,874 23,185
--------- --------- --------- ---------
Net income ............................... $ 17,231 $ 19,841 $ 31,894 42,394
========= ========= ========= =========
Earnings per share ....................... $ 0.18 $ 0.20 $ 0.33 $ 0.43
========= ========= ========= =========
Weighted average shares outstanding ...... 96,158 98,252 96,186 98,252
========= ========= ========= =========
Dividends declared per share ............. $ 0.02 $ 2.02 $ 0.04 $ 2.04
========= ========= ========= =========
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, December 31,
ASSETS 2008 2007
----------- ------------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents ................ $ 27,753 $ 7,960
Short-term investments ................... 460 186,944
Trade receivables, net ................... 53,036 44,359
Prepaid tires ............................ 4,760 4,764
Other current assets ..................... 5,976 3,391
Income tax receivable .................... -- 57
Deferred income taxes .................... 32,578 30,443
--------- ---------
Total current assets ........ 124,563 277,918
--------- ---------
PROPERTY AND EQUIPMENT ........................ 367,552 370,358
Less accumulated depreciation ............ 151,454 132,545
--------- ---------
216,098 237,813
LONG-TERM INVESTMENTS ......................... 187,014 --
OTHER ASSETS .................................. 10,491 10,563
--------- ---------
$ 538,166 $ 526,294
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued liabilities ... $ 14,866 $ 13,073
Compensation & benefits .................. 15,449 14,699
Income taxes payable ..................... 1,136 --
Insurance accruals ....................... 65,308 60,882
Other accruals ........................... 7,916 6,718
--------- ---------
Total current liabilities ........ 104,675 95,372
--------- ---------
LONG-TERM LIABILITIES
Income taxes payable ..................... 34,130 37,593
Deferred income taxes .................... 49,335 50,570
--------- ---------
83,465 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
Accumulated other comprehensive loss ..... (10,159) --
Retained earnings ........................ 358,784 341,350
--------- ---------
350,026 342,759
--------- ---------
$ 538,166 $ 526,294
========= =========