Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter of 2005
CORALVILLE, Iowa--Jan. 1, 20068, 2006--Heartland Express, Inc. announced today financial results for the quarter ended December 31, 2005. Operating revenues for the quarter increased 17.3% to $140.1 million from $119.4 million in the fourth quarter of 2004. Net income increased 30.7% to $21.6 million from $16.6 million in the 2004 period. Earnings per share were $0.29 compared to $0.22 for the fourth quarter of 2004.For the twelve month period, operating revenues increased 14.6% to $523.8 million from $457.1 million during the same period in 2004. Net income increased 15.1% to $71.9 million from $62.4 million in the 2004 period. Earnings per share were $0.97 compared with $0.83 for the 2004 period.
Heartland Express, Inc. posted an operating ratio (operating expenses as a percentage of operating revenues) of 77.6% and a 15.5% net margin in the fourth quarter of 2005 and an 80.1% operating ratio and a 13.7% net margin for the twelve months ended December 31, 2005. Operating results for the fourth quarter were favorably impacted by gains primarily from the trade of revenue equipment. Gains from the trade of revenue equipment are being recognized in compliance with Statement of Financial Accounting Standards No. 153, "Accounting for Non-monetary Transactions", which became effective July 1, 2005. In addition, the fourth quarter operating results were negatively impacted by record high diesel prices which have continued throughout the quarter.
The Company ended the year with cash, cash equivalents, and short-term investments of $287.6 million, a $29.3 million increase from the $258.3 million reported on December 31, 2004. Total assets increased to $573.5 million in 2005 from $517.0 million reported in 2004. The Company's balance sheet continues to be debt-free.
The limited availability of experienced drivers continues to challenge the trucking industry. The Company recently announced a driver pay increase for the third consecutive year. Our most senior and experienced company drivers will be earning $0.50 per mile while our owner-operators will be earning a base rate of $0.95 per mile by the end of 2006 with the implementation of the latest pay increase. Heartland Express hires only safe, experienced drivers who understand the importance of customer service and is committed to compensating them accordingly.
The Company is continuing the replacement of its entire tractor fleet. The Company took delivery of 1,000 new Internationals this year including 400 in the fourth quarter. The fleet replacement is approximately 70% completed and is scheduled to be completed by December 31, 2006. In addition, the Company took delivery of 1,000 new Wabash trailers during this year including 300 in the fourth quarter.
During the quarter, Heartland Express declared a regular quarterly cash dividend. The quarterly dividend of approximately $1.5 million at the rate of $0.02 per share was paid on January 3, 2006 to shareholders of record at the close of business on December 22, 2005. The Company has now paid quarterly dividends of $12.9 million over the past ten consecutive quarters.
The Company's outstanding common stock has decreased to 73.8 million shares from 75.0 million at the end of 2004 as a result of the repurchase of approximately 1.2 million shares of its outstanding common stock during the year.
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.
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three months ended Twelve months ended
December 31, December 31,
2005 2004 2005 2004
------------- ------------- ------------- -------------
OPERATING
REVENUE $140,054,233 $119,438,580 $523,792,749 $457,086,311
------------- ------------- ------------- -------------
OPERATING
EXPENSES:
Salaries,
wages,
benefits $42,987,612 $38,341,494 $174,180,077 $157,505,082
Rent and
purchased
trans-
portation 6,630,551 8,137,147 29,634,983 36,757,494
Operations and
maintenance 40,047,536 27,248,171 138,513,070 96,202,224
Taxes and
licenses 2,463,155 2,357,922 8,968,438 8,996,380
Insurance and
claims 6,120,903 6,089,455 17,938,169 16,544,050
Communications
and utilities 958,068 839,546 3,554,328 3,668,494
Depreciation 10,967,602 8,413,915 38,228,332 29,628,157
Other
operating
expenses
(income), net (1,553,200) 3,390,173 8,664,039 14,226,244
------------- ------------- ------------- -------------
108,622,227 94,817,823 419,681,436 363,528,125
------------- ------------- ------------- -------------
Operating
income 31,432,006 24,620,757 104,111,313 93,558,186
Interest
income 2,119,595 1,046,434 7,372,543 3,070,956
------------- ------------- ------------- -------------
Income before
income taxes 33,551,601 25,667,191 111,483,856 96,629,142
Federal and
state income
taxes 11,912,143 9,111,854 39,578,094 34,182,554
------------- ------------- ------------- -------------
Net income $21,639,458 $16,555,337 $71,905,762 $62,446,588
============= ============= ============= =============
Earnings per
common share:
Earnings
per share $0.29 $0.22 $0.97 $0.83
============= ============= ============= =============
Weighted
average
shares
outstanding 73,821,500 75,000,000 74,343,969 75,000,000
Dividends
declared per
share $0.020 $0.020 $0.080 $0.067
============= ============= ============= =============
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, December 31,
2005 2004
------------- -------------
CURRENT ASSETS
Cash and cash equivalents $5,366,929 $1,610,543
Short-term investments 282,255,377 256,727,782
Trade receivables 42,860,411 37,102,813
Prepaid tires 3,998,430 2,692,090
Deferred income taxes 28,721,000 24,964,000
Other prepaid expenses 304,666 158,267
------------- -------------
Total current assets 363,506,813 323,255,495
------------- -------------
PROPERTY AND EQUIPMENT 281,710,956 253,648,785
Less accumulated depreciation 81,204,416 68,973,751
------------- -------------
200,506,540 184,675,034
------------- -------------
OTHER ASSETS 9,494,572 9,081,322
------------- -------------
$573,507,925 $517,011,851
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued liabilities $10,572,525 $9,722,099
Accrued expenses 73,606,801 63,142,908
Income taxes payable 8,064,947 7,918,914
------------- -------------
Total current liabilities 92,244,273 80,783,921
------------- -------------
DEFERRED INCOME TAXES 48,012,000 46,885,000
------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Capital stock: Common, $.01 par value;
authorized 395,000,000 shares; issued
and outstanding 73,821,500 and
75,000,000 738,215 750,000
Additional paid-in capital -- 8,510,305
Retained earnings 432,952,138 380,906,884
------------- -------------
433,690,353 390,167,189
Less unearned compensation (438,701) (824,259)
------------- -------------
433,251,652 389,342,930
------------- -------------
$573,507,925 $517,011,851
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