Thursday, January 25, 2007, For Immediate Release

Press Release

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

CORALVILLE, IOWA – January 25, 2007 – Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter and year ended December 31, 2006.  Operating revenues for the quarter increased 4.8% to $146.8 million from $140.1 million in the fourth quarter of 2005.  Net income decreased 9.2% to $19.6 million from $21.6 million in the 2005 period. Earnings per share were $0.20 compared to $0.22 for the fourth quarter of 2005. 

For the year ended December 31, 2006, operating revenues increased 9.2% to $571.9 million from $523.8 million during the same period in 2005.  Net income increased 21.2% to $87.2 million from $71.9 million in the 2005 period. Earnings per share were $0.89 compared with $0.73 for the 2005 period.        

Gains on disposal of revenue equipment decreased to $0.6 million in the fourth quarter of 2006 compared to $5.8 million in the fourth quarter of 2005 primarily due to fewer trade-ins of revenue equipment. As a result, earnings per share were negatively impacted $0.03 per share for the quarter ended December 31, 2006. Operating results for the year are 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 (“SFAS”) 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. Gains on disposal of revenue equipment increased to $18.1 million during the year compared to $8.0 million in 2005. As a result, earnings per share were positively impacted $0.07 per share for the year ended December 31, 2006. Depreciation expense increased $3.3 million during the year ended December 31, 2006 as a result of SFAS No. 153, resulting in a decrease of $0.02 earnings per share.

For the quarter, Heartland Express, Inc. posted an operating ratio (operating expenses as a percentage of operating revenues) of 81.4% and a 13.4% net margin.  The Company reported an operating ratio of 78.4% and a 15.2% net margin for the year ended December 31, 2006. The Company ended the year with cash, cash equivalents, and short-term investments of $331.3 million, a $43.7 million increase from the $287.6 million reported on December 31, 2005.  The Company’s balance sheet continues to be debt-free. 

The Company completed the upgrade of its tractor fleet during the quarter. The Company took delivery of 400 new International tractors during the period and will take delivery of additional units in the first quarter. Federally mandated engine emission standards are required for all newly-manufactured engines beginning in January 2007. The Company is taking delivery of additional new trucks with pre-2007 engines because of the higher costs and untested technology associated with the new engine. The average age of the Company’s tractor fleet was 1.2 years at December 31, 2006. The average age of the Company’s trailer fleet was 3.1 years at December 31, 2006 with primarily the entire trailer fleet consisting of 2002 or newer model year Wabash trailers.                     

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 January 2, 2007 to shareholders of record at the close of business on December 21, 2006.  The Company has now paid cash dividends of $20.3 million over the past fourteen consecutive quarters. In addition, the Company declared a 4-for-3 stock split, paid as a 33% stock dividend in the second quarter of 2006. This was the Company’s ninth stock split since going public in 1986. The Company’s annual cash dividend increased approximately $2.0 million per year, a 33% increase. All share and per share data presented have been adjusted retroactively to reflect the effect of the stock split.

The Company purchased 176,700 shares of its outstanding common stock during the year. There are 4.9 million shares remaining under the repurchase program approved in September 2001 by its Board of Directors. Our strong cash position has allowed us to improve shareholder return with share repurchases and cash dividends without effecting growth opportunities. This repurchase of shares demonstrates the Board of Director’s confidence in the Company’s performance and future prospects.

Heartland Express was named to the Forbes Magazine’s list of the “200 Best Small Companies in America” for the fifth consecutive year and the fifteenth time during its twenty years as a public company.

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

319-545-2728

HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
		Three months ended										Twelve months ended
		December 31,										December 31,
		2006						2005				2006				2005
OPERATING REVENUE		$146,803,756						$140,054,231				$571,919,173				$523,792,747
OPERATING EXPENSES:
Salaries, wages, benefits		$  48,842,108						$ 42,987,613				$189,179,381				$174,180,078
Rent and purchased transportation		5,322,346						6,630,550				24,388,010				29,634,982
Fuel		36,518,430						35,509,621				146,240,090				123,557,662
Operations and maintenance		3,016,657						4,537,916				12,646,506				14,955,409
Operating taxes and licenses		2,612,938						2,463,156				9,143,059				8,968,439
Insurance and claims		5,076,975						6,120,904				16,620,678				17,938,170
Communications and utilities		913,335						958,068				3,721,282				3,554,328
Depreciation		13,545,636						10,967,604				47,351,247				38,228,334
Other operating expenses		4,243,309						4,216,045				17,356,647				16,695,948
Gain on disposal of property & equipment		(572,157)						(5,769,251)				(18,143,924)				(8,031,915)
		119,519,577						108,622,226				448,502,976				419,681,435
Operating income		27,284,179						31,432,005				123,416,197				104,111,312
Interest income		3,178,031						2,119,595				11,731,973				7,372,543
Income before income taxes		30,462,210						33,551,600				135,148,170				111,483,855
Federal and state income taxes		10,814,083						11,912,142				47,977,601				39,578,093
Net income		$  19,648,127						$ 21,639,458				$  87,170,569				$  71,905,762
Earnings per share		$             0.20						$            0.22				$             0.89				$             0.73
Weighted average shares
outstanding		98,251,889						98,428,589				98,359,361				99,125,254
Dividends declared per share		$            0.020						$          0.015				$           0.075				$           0.060

 

 

HEARTLAND EXPRESS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
		December 31,		December 31,
		2006		2005
CURRENT ASSETS
Cash and cash equivalents		$          8,458,882		$           5,366,929
Short-term investments		322,829,306		282,255,377
Trade receivables		43,499,482		42,860,411
Prepaid tires		5,075,566		3,998,430
Other prepaid expenses		1,635,077		304,667
Deferred income taxes		29,177,000	`	28,721,000
Total current assets		$      410,675,313		$         363,506,814
PROPERTY AND EQUIPMENT		$      344,323,852		$       281,710,956
Less accumulated depreciation		96,293,111		81,204,416
		$    248,030,741		$       200,506,540
OTHER ASSETS		$        10,363,658		$           9,494,571
		$      669,069,712		$       573,507,925
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued liabilities		$         15,075,647		$           10,572,525
Compensation & benefits		15,028,378		12,629,831
Income taxes payable		11,721,610		8,064,947
Insurance accruals		56,651,853		53,631,471
Other accruals		8,248,415		7,345,499
Total current liabilities		$      106,725,903		$         92,244,273
DEFERRED INCOME TAXES		$        56,408,000		$         48,012,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Capital stock: common, $.01 par value;
authorized 395,000,000 shares; issued and
outstanding 98,251,889 in 2006 and
98,428,589 in 2005		$           982,519		$                738,215
Additional paid-in capital		376,029		- -
Retained earnings		504,577,261		432,952,138
		$      505,935,809		$          433,690,353
Less unearned compensation		- -		(438,701)
		$      505,935,809		$          433,251,652
		$      669,069,712		$          573,507,925