Heartland Express Inc. (HTLD, Financial) filed Quarterly Report for the period ended 2009-06-30.
Heartland Express Inc. is a short-to-medium haul truckload carrier based near Iowa City Iowa. The Company provides nationwide transportation service to major shippers using late-model tractors and a uniform fleet of 53-foot aluminum plate dry vans. Heartland Express Inc. has a market cap of $1.43 billion; its shares were traded at around $15.73 with a P/E ratio of 23.1 and P/S ratio of 2.4. The dividend yield of Heartland Express Inc. stocks is 0.5%. Heartland Express Inc. had an annual average earning growth of 14.4% over the past 10 years. GuruFocus rated Heartland Express Inc. the business predictability rank of 5-star.
transports freight for major shippers and generally earns revenue based on the
number of miles per load delivered. The Company operated eleven regional
operating divisions that provided regional dry van truckload services from nine
regional operating centers in addition to its corporate headquarters during the
quarter ended June 30, 2009. The Company\'s eleven regional operating divisions,
not including operations at the corporate headquarters, accounted for 72.6% and
73.4% of operating revenues for the second quarter of 2009 and 2008,
respectively, and 72.9% and 73.5% of operating revenues for the six month period
ended June 30, 2009 and 2008, respectively. The Company\'s newest regional
operating center near Dallas, Texas opened in early January 2009. The Company
takes pride in the quality of the service that it provides to its customers. The
keys to maintaining a high level of service are the availability of late-model
equipment and experienced drivers.
The Company ended the second quarter of 2009 with operating revenues of $117.0
million, including fuel surcharges, net income of $17.6 million, and earnings
per share of $0.19 on average outstanding shares of 90.7 million. The Company
posted an 81.4% operating ratio (operating expenses as a percentage of operating
revenues) and a 15.1% net margin (net income as a percentage of operating
revenues). The Company ended the quarter with cash, cash equivalents, short-term
and long-term investments of $205.0 million and a debt-free balance sheet. The
Company had total assets of $543.0 million at June 30, 2009. The Company
achieved a return on assets of 12.9% and a return on equity of 20.2% for the
twelve months ended June 30, 2009, compared to the twelve months ended June 30,
2008, which were 12.5% and 19.3%, respectively. The Company\'s cash flow from
operations for the first six months of 2009 of $45.3 million represented a 3.0%
increase from the same period of 2008 mainly due to a $4.5 million increase in
net income adjusted for non-cash items offset by a decrease in cash flows from
working capital items which were attributable to trade receivable cash
collections, timing of certain accounts payable and accrued expense items, and
income tax accrual reductions. The Company\'s cash flow from operations was 19.5%
of operating revenues for the six months ended June 30, 2009 compared to 14.0%
for the same period in 2008.
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
- - - -
Operating revenue 100.0% 100.0% 100.0% 100.0%
- - - -
Operating expenses:
Salaries, wages, and benefits 36.7% 29.5% 37.5% 31.0%
Rent and purchased transportation 2.4 3.1 2.5 3.3
Fuel 21.4 36.8 21.4 35.4
Operations and maintenance 3.7 2.6 3.6 2.7
Operating taxes and licenses 2.1 1.4 2.0 1.5
Insurance and claims 4.0 4.3 3.5 3.4
Communications and utilities 0.8 0.6 0.8 0.6
Depreciation 11.3 6.5 10.8 6.7
Other operating expenses 2.7 2.5 2.8 2.7
Gain on disposal of property
and equipment (3.6) - (2.5) (0.2)
- - - -
Total operating expenses 81.4% 87.3% 82.4% 87.0%
- - - -
Operating income 18.6% 12.7% 17.6% 13.0%
Interest income 0.5 1.4 0.6 1.6
- - - -
Income before income taxes 19.0% 14.1% 18.2% 14.6%
Federal and state income taxes 4.0 3.6 4.5 4.4
- - - -
Net income 15.1% 10.5% 13.7% 10.2%
= = = =
Fuel decreased $35.4 million (58.5%), to $25.1 million for the three months
ended June 30, 2009 from $60.5 million for the same period of 2008. The decrease
is the result of decreased fuel prices, decreased miles driven, and an increase
in fuel economy as result of newer tractor fleet as well as our idle reduction
initiatives. The Company\'s fuel cost per mile per company-owned tractor mile
decreased 51.0% in second quarter of 2009 compared to 2008. Fuel cost per mile,
net of fuel surcharge, decreased 33.1% in the second quarter of 2009 compared to
2008. The Company\'s second quarter fuel cost per gallon, $2.10 per gallon,
decreased by 50.1% in 2009 compared to the same period of 2008, $4.21 per
gallon. Fuel expense during the quarter ended June 30, 2009 was net of the
benefit of the Company\'s fuel hedging efforts based on gains of $0.6 million for
settlements received on fuel derivative contracts.
Fuel decreased $61.4 million (55.3%), to $49.6 million for the six months ended
June 30, 2009 from $111.0 million for the same period of 2008. The decrease is
the net result of decreased fuel prices ($45.5 million) and a decrease in miles
driven and idle reduction initiatives ($15.9 million). The Company\'s fuel cost
per company-owned tractor mile decreased 47.8% in first six months of 2009
compared to the same period of 2008. Fuel cost per mile, net of fuel surcharge,
decreased 34.1% in the first six months of 2009 compared to the same period of
2008. The Company\'s fuel cost per gallon for the first six months of 2009, $2.04
per gallon, decreased by 46.3% in 2009 compared to the same period of 2008,
Volatile fuel prices will continue to impact us significantly. Based on the
Company\'s historical experience, the Company is not able to pass through to
customers 100% of fuel price increases. For the quarter ended June 30, 2009 and
2008, fuel expense, net of fuel surcharge revenue and fuel stabilization paid to
owner operators along with favorable fuel hedge settlements, was $13.4 million
and $23.7 million or 15.2% and 22.2%, respectively, of the Company\'s total net
operating expenses, net of fuel surcharge. For the six months ended June 30,
2009 and 2008, fuel expense, net of fuel surcharge revenue and fuel
stabilization paid to owner operators along with favorable fuel hedge
settlements, was $27.0 million and $47.8 million or 15.5% and 22.7%,
respectively, of the Company\'s total net operating expenses, net of fuel
surcharge. A significant increase in fuel costs, or a shortage of diesel fuel,
could materially and adversely affect our results of operations. In February
2007, the Board of Directors authorized the Company to begin hedging activities
related to projected future purchases of diesel fuel to reduce its exposure to
diesel fuel price fluctuations. During the quarter ended March 31, 2009, the
Company contracted with an unrelated third party to hedge forecasted future cash
flows related to fuel purchases for the quarter ended June 30, 2009. The hedge
of forecasted future cash flow was transacted through the use of certain swap
contracts. The Company has implemented the provisions of SFAS No. 133 and SFAS
No. 161, and has designated such hedges as cash flow hedges. The cash flow
hedging strategy was implemented mainly to reduce the Company\'s exposure to
significant upward movements in diesel fuel prices related to fuel consumed by
empty and out-of-route miles and truck engine idling time, which is not
recoverable through fuel surcharge agreements. The contracted hedge expired on
June 30, 2009 and favorably impacted fuel expense $0.6 million for the quarter
ended June 30, 2009. There were no open hedging contracts at June 30, 2009.
Read the The complete ReportHTLD is in the portfolios of Richard Aster Jr of Meridian Fund, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.
Heartland Express Inc. is a short-to-medium haul truckload carrier based near Iowa City Iowa. The Company provides nationwide transportation service to major shippers using late-model tractors and a uniform fleet of 53-foot aluminum plate dry vans. Heartland Express Inc. has a market cap of $1.43 billion; its shares were traded at around $15.73 with a P/E ratio of 23.1 and P/S ratio of 2.4. The dividend yield of Heartland Express Inc. stocks is 0.5%. Heartland Express Inc. had an annual average earning growth of 14.4% over the past 10 years. GuruFocus rated Heartland Express Inc. the business predictability rank of 5-star.
Highlight of Business Operations:
Heartland Express, Inc. is a short-to-medium haul truckload carrier. The Companytransports freight for major shippers and generally earns revenue based on the
number of miles per load delivered. The Company operated eleven regional
operating divisions that provided regional dry van truckload services from nine
regional operating centers in addition to its corporate headquarters during the
quarter ended June 30, 2009. The Company\'s eleven regional operating divisions,
not including operations at the corporate headquarters, accounted for 72.6% and
73.4% of operating revenues for the second quarter of 2009 and 2008,
respectively, and 72.9% and 73.5% of operating revenues for the six month period
ended June 30, 2009 and 2008, respectively. The Company\'s newest regional
operating center near Dallas, Texas opened in early January 2009. The Company
takes pride in the quality of the service that it provides to its customers. The
keys to maintaining a high level of service are the availability of late-model
equipment and experienced drivers.
The Company ended the second quarter of 2009 with operating revenues of $117.0
million, including fuel surcharges, net income of $17.6 million, and earnings
per share of $0.19 on average outstanding shares of 90.7 million. The Company
posted an 81.4% operating ratio (operating expenses as a percentage of operating
revenues) and a 15.1% net margin (net income as a percentage of operating
revenues). The Company ended the quarter with cash, cash equivalents, short-term
and long-term investments of $205.0 million and a debt-free balance sheet. The
Company had total assets of $543.0 million at June 30, 2009. The Company
achieved a return on assets of 12.9% and a return on equity of 20.2% for the
twelve months ended June 30, 2009, compared to the twelve months ended June 30,
2008, which were 12.5% and 19.3%, respectively. The Company\'s cash flow from
operations for the first six months of 2009 of $45.3 million represented a 3.0%
increase from the same period of 2008 mainly due to a $4.5 million increase in
net income adjusted for non-cash items offset by a decrease in cash flows from
working capital items which were attributable to trade receivable cash
collections, timing of certain accounts payable and accrued expense items, and
income tax accrual reductions. The Company\'s cash flow from operations was 19.5%
of operating revenues for the six months ended June 30, 2009 compared to 14.0%
for the same period in 2008.
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
- - - -
Operating revenue 100.0% 100.0% 100.0% 100.0%
- - - -
Operating expenses:
Salaries, wages, and benefits 36.7% 29.5% 37.5% 31.0%
Rent and purchased transportation 2.4 3.1 2.5 3.3
Fuel 21.4 36.8 21.4 35.4
Operations and maintenance 3.7 2.6 3.6 2.7
Operating taxes and licenses 2.1 1.4 2.0 1.5
Insurance and claims 4.0 4.3 3.5 3.4
Communications and utilities 0.8 0.6 0.8 0.6
Depreciation 11.3 6.5 10.8 6.7
Other operating expenses 2.7 2.5 2.8 2.7
Gain on disposal of property
and equipment (3.6) - (2.5) (0.2)
- - - -
Total operating expenses 81.4% 87.3% 82.4% 87.0%
- - - -
Operating income 18.6% 12.7% 17.6% 13.0%
Interest income 0.5 1.4 0.6 1.6
- - - -
Income before income taxes 19.0% 14.1% 18.2% 14.6%
Federal and state income taxes 4.0 3.6 4.5 4.4
- - - -
Net income 15.1% 10.5% 13.7% 10.2%
= = = =
Fuel decreased $35.4 million (58.5%), to $25.1 million for the three months
ended June 30, 2009 from $60.5 million for the same period of 2008. The decrease
is the result of decreased fuel prices, decreased miles driven, and an increase
in fuel economy as result of newer tractor fleet as well as our idle reduction
initiatives. The Company\'s fuel cost per mile per company-owned tractor mile
decreased 51.0% in second quarter of 2009 compared to 2008. Fuel cost per mile,
net of fuel surcharge, decreased 33.1% in the second quarter of 2009 compared to
2008. The Company\'s second quarter fuel cost per gallon, $2.10 per gallon,
decreased by 50.1% in 2009 compared to the same period of 2008, $4.21 per
gallon. Fuel expense during the quarter ended June 30, 2009 was net of the
benefit of the Company\'s fuel hedging efforts based on gains of $0.6 million for
settlements received on fuel derivative contracts.
Fuel decreased $61.4 million (55.3%), to $49.6 million for the six months ended
June 30, 2009 from $111.0 million for the same period of 2008. The decrease is
the net result of decreased fuel prices ($45.5 million) and a decrease in miles
driven and idle reduction initiatives ($15.9 million). The Company\'s fuel cost
per company-owned tractor mile decreased 47.8% in first six months of 2009
compared to the same period of 2008. Fuel cost per mile, net of fuel surcharge,
decreased 34.1% in the first six months of 2009 compared to the same period of
2008. The Company\'s fuel cost per gallon for the first six months of 2009, $2.04
per gallon, decreased by 46.3% in 2009 compared to the same period of 2008,
Volatile fuel prices will continue to impact us significantly. Based on the
Company\'s historical experience, the Company is not able to pass through to
customers 100% of fuel price increases. For the quarter ended June 30, 2009 and
2008, fuel expense, net of fuel surcharge revenue and fuel stabilization paid to
owner operators along with favorable fuel hedge settlements, was $13.4 million
and $23.7 million or 15.2% and 22.2%, respectively, of the Company\'s total net
operating expenses, net of fuel surcharge. For the six months ended June 30,
2009 and 2008, fuel expense, net of fuel surcharge revenue and fuel
stabilization paid to owner operators along with favorable fuel hedge
settlements, was $27.0 million and $47.8 million or 15.5% and 22.7%,
respectively, of the Company\'s total net operating expenses, net of fuel
surcharge. A significant increase in fuel costs, or a shortage of diesel fuel,
could materially and adversely affect our results of operations. In February
2007, the Board of Directors authorized the Company to begin hedging activities
related to projected future purchases of diesel fuel to reduce its exposure to
diesel fuel price fluctuations. During the quarter ended March 31, 2009, the
Company contracted with an unrelated third party to hedge forecasted future cash
flows related to fuel purchases for the quarter ended June 30, 2009. The hedge
of forecasted future cash flow was transacted through the use of certain swap
contracts. The Company has implemented the provisions of SFAS No. 133 and SFAS
No. 161, and has designated such hedges as cash flow hedges. The cash flow
hedging strategy was implemented mainly to reduce the Company\'s exposure to
significant upward movements in diesel fuel prices related to fuel consumed by
empty and out-of-route miles and truck engine idling time, which is not
recoverable through fuel surcharge agreements. The contracted hedge expired on
June 30, 2009 and favorably impacted fuel expense $0.6 million for the quarter
ended June 30, 2009. There were no open hedging contracts at June 30, 2009.
Read the The complete ReportHTLD is in the portfolios of Richard Aster Jr of Meridian Fund, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.