Tuesday, July 18, 2006, For Immediate Release

Press Release

Heartland Express, Inc. Reports Revenues and Earnings for the Second Quarter of 2006.

CORALVILLE, IOWA – July 18, 2006 – Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter ended June 30, 2006.  Operating revenues for the quarter increased 11.0% to $143.1 million from $128.9 million in the second quarter of 2005.  Net income increased 40.5% to $24.8 million from $17.6 million in the 2005 period. Earnings per share were $0.25 compared to $0.18 for the second quarter of 2005. 

For the six months ended June 30, 2006, operating revenues increased 12.3% to $278.1 from $247.5 during the same period in 2005.  Net income increased 36.0% to $44.5 million from $32.7 million in the 2005 period. Earnings per share were $0.45 compared with $0.33 for the 2005 period.

For the quarter, Heartland Express, Inc. posted an operating ratio (operating expenses as a percentage of operating revenues) of 75.2% and a 17.3% net margin.  The Company reported an operating ratio of 77.1% and a 16.0% net margin for the six months ended June 30, 2006. The Company ended the second quarter with cash, cash equivalents, and short-term investments of $321.3 million, a $33.7 million increase from the $287.6 million reported on December 31, 2005.  The Company’s balance sheet continues to be debt-free. 

Operating results for the six month period are favorably impacted by gains primarily from the trade of revenue equipment. Effective July 1, 2005 gains from the trade of revenue equipment are being recognized in operating income in compliance with Statement of Financial Accounting Standards No. 153, "Accounting for Non-monetary Transactions". Prior to July 1, 2005 gains from the trade-in of revenue equipment were deferred and presented as a reduction of the depreciable basis of new revenue equipment. Operating income for the three month and six month periods ended June 30, 2006 were favorably impacted by $8.7 million and $11.3 million, respectively, from gains on the trade-in of revenue equipment, net of the associated increase in depreciation expense as a result of the higher depreciable basis of traded revenue equipment acquired since July 1, 2005. As a result of these gains earnings per share was positively impacted $0.06 per share for the quarter ended June 30, 2006 and $0.07 for the six months ended June 30, 2006.

The Company has continued to upgrade its tractor and trailer fleet during the quarter. The Company took delivery of 354 new International tractors and 914 new Wabash trailers during the period. The average age of the Company’s tractor fleet was 1.4 years at June 30, 2006, with 85% of the fleet comprised of 2005 or newer model year Internationals. The tractor fleet replacement will continue throughout the year and is scheduled to be completed by December 31, 2006. The Company will complete the upgrade of its trailer fleet in the third quarter. The average age of the Company’s trailer fleet was 2.8 years at June 30, 2006.

During the quarter, Heartland Express declared a regular quarterly cash dividend.  The quarterly dividend of approximately $2.0 million at the rate of $0.02 per share was paid on July 3, 2006 to shareholders of record at the close of business on June 22, 2006.  The Company has now paid twelve consecutive quarterly cash dividends.  In addition, the Company declared a 4-for-3 stock split, paid as a 33% stock dividend in the second quarter of 2006.  This stock split increased the Company’s outstanding common stock from 73.8 million to 98.4 million shares. This was the Company’s ninth stock split since going public in 1986. The Company’s annual cash dividend will increase approximately $2.0 million per year, a 33% increase, as a result of the recent stock split. All per share data presented have been adjusted retroactively to reflect the effect of the stock split.

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.

John Cosaert, Chief Financial Officer

Mike Gerdin, President

319-545-2728

 

HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
		Three months ended										Six months ended
		June 30,										June 30,
		2006						2005				2006			2005
OPERATING REVENUE		$143,058,628						$128,851,347				$278,057,927			$247,528,818
OPERATING EXPENSES:
Salaries, wages, benefits		$ 46,040,770						$ 43,447,096				$ 92,411,352			$ 86,163,937
Rent and purchased transportation		6,772,305						7,829,721				12,971,977			15,541,933
Fuel		37,789,391						28,498,868				70,750,409			54,060,506
Operations and maintenance		3,358,967						3,777,156				6,305,700			6,349,466
Operating taxes and licenses		2,203,726						2,180,646				4,270,893			4,255,936
Insurance and claims		4,835,933						3,969,432				8,922,782			6,801,697
Communications and utilities		943,092						928,039				1,895,431			1,626,916
Depreciation		11,181,612						9,053,013				21,359,271			17,441,697
Other operating expenses		4,158,378						4,006,619				8,356,007			8,241,012
Gain on disposal of property & equipment		(9,724,303)						(120,299)				(12,783,540)			(301,641)
		107,559,871						103,570,291				214,460,282			200,181,459
Operating income		35,498,757						25,281,056				63,597,645			47,347,359
Interest income		2,906,972						2,052,067				5,412,919			3,387,292
Income before income taxes		38,405,729						27,333,123				69,010,564			50,734,651
Federal and state income taxes		13,634,068						9,703,258				24,498,752			18,010,801
Net income		$ 24,771,661						$ 17,629,865				$44,511,812			$32,723,850
Earnings per share		$             0.25						$           0.18				$            0.45			$            0.33
Weighted average shares
outstanding		98,428,589						99,668,612				98,428,589			99,833,391
Dividends declared per share		$           0.020						$        0.015				$          0.035			$          0.030

 

 

HEARTLAND EXPRESS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
		June 30,		December 31,
		2006		2005
		(unaudited)
CURRENT ASSETS
Cash and cash equivalents		$        4,773,300		$           5,366,929
Short-term investments		316,494,007		282,255,377
Trade receivables		44,029,867		42,860,411
Prepaid tires		4,994,120		3,998,430
Other prepaid expenses		4,748,165		304,667
Deferred income taxes		28,632,000		28,721,000
Total current assets		$   403,671,459		$    363,506,814
PROPERTY AND EQUIPMENT		$   301,688,322		$    281,710,956
Less accumulated depreciation		85,204,755		81,204,416
		$  216,483,567		$    200,506,540
OTHER ASSETS		$      9,431,586		$         9,494,571
		$  29,586,612		$    573,507,925
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued liabilities		$      18,953,611		$         10,572,525
Compensation & benefits		13,952,389		12,629,831
Income taxes payable		9,152,164		8,064,947
Insurance accruals		55,218,404		53,631,471
Other accruals		7,376,127		7,345,499
Total current liabilities		$     104,652,695		$       92,244,273
DEFERRED INCOME TAXES		$      50,427,000		$       48,012,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Capital stock: common, $.01 par value;
authorized 395,000,000 shares; issued and
outstanding 98,428,589 in 2006 and
73,821,500 in 2005		$         984,286		$              738,215
Additional paid-in capital		188,454		- -
Retained earnings		473,334,177		432,952,138
		$  74,506,917		$    433,690,353
Less unearned compensation		- -		(438,701)
		$   74,506,917		$     33,251,652
		$  29,586,612		$    573,507,925