Tuesday, October 20, 2009, For Immediate Release

Press Release

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

NORTH LIBERTY, IOWA – October 20, 2009 – 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.

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								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 benefits		$	41,755		$		51,462				$		128,752				$	148,646
	Rent and purchased transportation			2,766				4,725						8,510					14,975
	Fuel			26,454				58,393						76,098					169,386
	Operations and maintenance			3,618				4,051						11,972					12,367
	Operating taxes and licenses			1,958				2,323						6,675					6,908
	Insurance and claims			3,658				6,443						11,797					17,237
	Communications and utilities			881				856						2,783					2,792
	Deprecation			15,468				11,504						40,443					32,580
	Other operating expenses			2,743				4,456						9,332					12,928
	Gain on disposal of property & equipment			(8,321)				(2,899)						(14,178)					(3,533)
				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 taxes			22,899				30,564						65,081					76,333
	Federal and state income taxes			8,392				11,841						18,818					25,715
	Net income		$	14,507		$		18,723				$		46,263				$	50,618
	Earnings per share		$	0.16		$		0.19				$		0.51				$	0.53
	Weighted average shares outstanding			90,689				96,158						91,281					96,177
	Dividends declared per share		$	0.02		$		0.02				$		0.06				$	0.06

 

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