Heartland Express, Inc. Reports Revenues and Earnings for the First Quarter of 2006
CORALVILLE, Iowa--April 17, 2006--Heartland Express, Inc. announced today financial results for the quarter ended March 31, 2006. Operating revenues for the quarter increased 13.8% to $135.0 million from $118.7 million in the first quarter of 2005. Net income increased 30.8% to $19.7 million from $15.1 million in the 2005 period. Earnings per share were $0.27 compared to $0.20 for the first quarter of 2005, a 35.0% increase.For the quarter, Heartland Express, Inc. posted an operating ratio (operating expenses as a percentage of operating revenues) of 79.2% and a 14.6% net margin. The Company ended the first quarter with cash, cash equivalents, and short-term investments of $321.7 million, a $34.1 million increase from the $287.6 million reported on December 31, 2005. During the quarter the Company generated $39.7 million net cash flow from operations, a 20.7% increase over the first quarter of 2005. The Company's balance sheet continues to be debt-free.
Operating results for the first quarter were 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 results for the quarter were favorably impacted by $2.7 million 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 $0.02 per share for the quarter ended March 31, 2006.
The Company's replacement of its tractor fleet entered its third and final year. The Company began taking delivery of new 2007 Internationals in March. The average age of the Company's tractor fleet was 1.6 years at March 31, 2006, with 71% of the fleet comprised of 2005 or newer model year Internationals. The fleet replacement will continue throughout the year and is scheduled to be completed by December 31, 2006. The Company also began the upgrade of its trailer fleet in the first quarter with the purchase of 2007 Wabash trailers as replacements for its 2001 models. The Company took delivery of 91 new tractors and 335 new trailers during the 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 April 3, 2006 to shareholders of record at the close of business on March 23, 2006. The Company has now paid eleven consecutive quarterly cash dividends.
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
(UNAUDITED)
Three months ended
March 31,
2006 2005
------------- -------------
OPERATING REVENUE $134,999,299 $118,677,472
------------- -------------
OPERATING EXPENSES:
Salaries, wages, benefits $46,370,582 $42,716,841
Rent and purchased transportation 6,199,672 7,712,212
Operations and maintenance 2,946,733 2,572,310
Fuel 32,961,018 25,561,638
Taxes and licenses 2,067,167 2,075,290
Insurance and claims 4,086,849 2,832,265
Communications and utilities 952,339 698,877
Depreciation 10,177,659 8,388,684
Other operating expenses 4,197,629 4,234,394
Gain on disposal of property and
equipment (3,059,237) (181,342)
------------- -------------
$106,900,411 $96,611,169
------------- -------------
Operating income $28,098,888 $22,066,303
Interest income 2,505,947 1,335,225
------------- -------------
Income before income taxes $30,604,835 $23,401,528
Federal and state income taxes 10,864,684 8,307,543
------------- -------------
Net income $19,740,151 $15,093,985
============= =============
Earnings per share $0.27 $0.20
============= =============
Weighted average shares outstanding 73,821,500 75,000,000
============= =============
Dividends declared per share $0.02 $0.02
============= =============
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2006 2005
------------- -------------
(unaudited)
CURRENT ASSETS
Cash and cash equivalents $5,942,323 $5,366,929
Short-term investments 315,781,320 282,255,377
Trade receivables 41,340,251 42,860,411
Prepaid tires 3,847,890 3,998,430
Other prepaid expenses 3,467,847 304,667
Deferred income taxes 29,258,000 28,721,000
------------- -------------
Total current assets $399,637,631 $363,506,814
------------- -------------
PROPERTY AND EQUIPMENT $288,160,405 $281,710,956
Less accumulated depreciation 88,008,975 81,204,416
------------- -------------
$200,151,430 $200,506,540
------------- -------------
OTHER ASSETS $9,471,941 $9,494,571
------------- -------------
$609,261,002 $573,507,925
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable & accrued liabilities $15,388,124 $10,572,525
Compensation & benefits 13,521,323 12,629,831
Income taxes payable 19,079,773 8,064,947
Insurance accruals 54,183,611 53,631,471
Other accruals 7,587,570 7,345,499
------------- -------------
Total current liabilities $109,760,401 $92,244,273
------------- -------------
DEFERRED INCOME TAXES $47,891,000 $48,012,000
------------- -------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Capital stock: common, $.01 par value;
authorized 395,000,000 shares; issued
and outstanding 73,821,500 $738,215 $738,215
Additional paid-in capital 94,228 - -
Retained earnings 450,777,158 432,952,138
------------- -------------
$451,609,601 $433,690,353
Less unearned compensation - - (438,701)
------------- -------------
$451,609,601 $433,251,652
------------- -------------
$609,261,002 $573,507,925
============= =============