Press Release
Heartland Express, Inc. Reports Revenues and Earnings for the Third Quarter of 2004.
CORALVILLE, IOWA – October 18, 2004 – Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the third quarter ended September 30, 2004. Gross revenues for the quarter increased 12.3% to $117.3 million from $104.5 million in the third quarter of 2003. Net income increased 17.8% to $17.1 million from $14.5 million in the 2003 period. Basic earnings per share were $0.23 compared to $0.19 for the third quarter of 2003.
For the nine months, revenue increased 11.8% to $337.6 from $302.1 during the same period in 2003. Net income increased 20.2% to $45.9 million from $38.2 million in the 2003 period. Basic earnings per share were $0.61 compared with $0.51 for the 2003 period.
For the quarter, Heartland Express, Inc. posted an operating ratio (operating expenses as a percentage of gross revenues) of 78.1% and a 14.6% net margin. The Company ended the nine months ended September 30, 2004 with an operating ratio of 79.6% and a 13.6% net margin. These results are all improvements over the prior year. They were achieved in a period of record high fuel prices and a continued shortage of qualified drivers.
The Company ended the third quarter with cash, cash equivalents, and investments of $239.5 million, a $37.1 million increase from the $202.4 million reported on December 31, 2003. The Company’s balance sheet continues to be debt-free.
Earlier this year the Company announced the replacement of its tractor fleet. The Company has taken delivery of 650 new International 9400i model tractors. The delivery of new tractors and the trade-in of the current fleet is scheduled to be completed by December 31, 2006. The Company also upgraded its trailer fleet with the purchase of 700 new Wabash trailers during the second and third quarter of this year.
During the quarter, Heartland Express declared a 3-for-2 stock split, payable as 50% stock dividend. The stock dividend increased the Company’s issued and outstanding common stock from 50.0 million to 75.0 million shares. The stock dividend was paid on August 20, 2004. All of the above earnings per share data has been adjusted to reflect the effect of this stock dividend.
The Company’s regular quarterly dividend was declared September 9, 2004. The quarterly dividend of $1.5 million at the rate of $0.02 per share was paid on October 1, 2004 to shareholders of record at the close of business on September 20, 2004. This was the fifth consecutive quarterly cash dividend paid. Our recent stock split increases our total annual dividend by $2.0 million to a total of $6.0 million annually. It is a pleasure to share the continued success of the Company with our stockholders. It is important to note that the recent stock split increased quarterly dividend payout by 50%.
During the quarter, Heartland Express strengthened its industry-leading driver compensation package by introducing their “GREEN MILE$” program. Company drivers and owner operators will be paid an additional 7 cents per mile for all HHG miles driven in what will be known as the “Green Zone”. The “Green Zone” is an area north of the southern border of Maryland and east of Interstate 81 running through Maryland, Pennsylvania, and New York. The defined area includes all or a portion of the upper Northeastern United States. This program became effective October 2nd, 2004. The Company is strongly committed to attracting and retaining the safest experienced drivers in the industry.
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.
For further information contact
John P. Cosaert, EVP; CFO
Heartland Express, Inc.
319-545-2728
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HEARTLAND EXPRESS, INC. |
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AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF INCOME |
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(UNAUDITED) |
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Three months ended |
Nine months ended |
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September 30, |
September 30, |
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2004 |
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2003 |
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2004 |
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2003 |
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OPERATING REVENUE |
$117,299,278 |
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$104,460,615 |
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$ 337,647,731 |
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$ 302,100,139 |
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OPERATING EXPENSES: |
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Salaries, wages, benefits |
$ 40,305,667 |
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$ 34,949,275 |
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$ 119,163,588 |
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$ 102,452,186 |
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Rent and purchased transportation |
8,578,807 |
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12,090,171 |
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28,620,347 |
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39,194,285 |
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Operations and maintenance |
25,297,575 |
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19,094,695 |
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68,954,053 |
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56,546,521 |
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Taxes and licenses |
2,143,218 |
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2,265,221 |
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6,638,458 |
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6,263,920 |
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Insurance and claims |
2,562,377 |
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3,384,300 |
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10,454,595 |
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9,919,671 |
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Communications and utilities |
886,416 |
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946,331 |
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2,828,948 |
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2,763,214 |
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Depreciation |
7,842,781 |
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7,139,016 |
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21,214,242 |
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19,433,000 |
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Other operating expenses |
4,020,431 |
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3,080,052 |
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10,935,875 |
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9,185,983 |
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(Gain) loss on disposal of fixed assets |
2,085 |
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23,802 |
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(99,804) |
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(6,969) |
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$ 91,639,357 |
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$ 82,972,863 |
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$ 268,710,302 |
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$ 245,751,811 |
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Operating income |
$ 25,659,921 |
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$ 21,487,752 |
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$ 68,937,429 |
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$ 56,348,328 |
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Interest income |
805,135 |
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470,972 |
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2,024,522 |
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1,501,993 |
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Income before income taxes |
$ 26,465,056 |
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$ 21,958,724 |
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$ 70,961,951 |
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$ 57,850,321 |
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Federal and state income taxes |
9,395,071 |
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7,465,967 |
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25,070,700 |
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19,669,108 |
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Net income |
$ 17,069,985 |
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$ 14,492,757 |
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$ 45,891,251 |
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$ 38,181,213 |
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Earnings per common share: |
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Basic earnings per share |
$ 0.23 |
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$ 0.19 |
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$ 0.61 |
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$ 0.51 |
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Basic weighted average shares |
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outstanding |
75,000,000 |
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75,000,000 |
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75,000,000 |
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75,000,000 |
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HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
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ASSETS |
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September 30, |
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December 31, |
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2004 |
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2003 |
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(unaudited) |
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CURRENT ASSETS |
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Cash and short term investments |
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$ 239,497,693 |
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$ 202,431,155 |
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Trade receivables |
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39,552,428 |
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36,836,728 |
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Prepaid tires |
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2,927,590 |
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2,529,580 |
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Deferred income taxes |
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24,894,000 |
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21,308,000 |
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Other current assets |
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1,685,726 |
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673,101 |
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Total current assets |
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$ 308,557,437 |
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$ 263,778,564 |
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PROPERTY AND EQUIPMENT |
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$ 251,291,695 |
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$ 232,650,992 |
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Less accumulated depreciation |
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63,802,426 |
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56,951,186 |
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$ 187,489,269 |
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$ 175,699,806 |
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OTHER ASSETS |
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$ 9,016,455 |
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$ 8,928,186 |
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$ 505,063,161 |
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$ 448,406,556 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES |
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Accounts payable & accrued liabilities |
$ 16,762,333 |
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$ 15,684,826 |
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Accrued expenses |
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62,967,658 |
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53,724,940 |
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Income taxes payable |
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5,747,683 |
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7,720,875 |
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Total current liabilities |
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$ 85,477,674 |
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$ 77,130,641 |
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DEFERRED INCOME TAXES |
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$ 45,393,000 |
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$ 39,760,000 |
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COMMITMENTS AND CONTINGENCIES |
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STOCKHOLDERS' EQUITY |
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Capital stock: Common, $.01 par value; |
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authorized 395,000,000 shares; issued and |
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outstanding 75,000,000 in 2004 and |
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50,000,000 in 2003 |
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$ 750,000 |
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$ 500,000 |
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Additional paid-in capital |
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8,510,305 |
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8,510,305 |
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Retained earnings |
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365,851,547 |
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323,710,296 |
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$ 375,111,852 |
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$ 332,720,601 |
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Less unearned compensation |
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(919,365) |
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(1,204,686) |
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$ 374,192,487 |
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$ 331,515,915 |
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$ 505,063,161 |
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$ 448,406,556 |