Heartland Express Inc 10-Q for FY2021 Q1

Heartland Express Inc (HTLD)

10-Q 2021-05-07 For: 2021-03-31

Added on April 07, 2026

About this 10-Q

Heartland Express Inc filed this 10-Q on May 7, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $152.4M; down 8.4% from $166.32M a year earlier
Net income: $13.73M; up 3.7% from net income of $13.24M a year earlier
Diluted EPS: $0.17; up 6.3% from $0.16 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	HTLD	NASDAQ


Large accelerated filer [X]						Accelerated filer [ ]
Non-accelerated filer [ ]						Smaller reporting company [ ]
						Emerging growth company [ ]




			Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
Consolidated Balance Sheets as of March 31 , 202 1 and December 31, 20 20 (unaudited)			4
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31 , 202 1 and 20 20 (unaudited)			5
Consolidated Statements of Stockholders' Equity for the Three Months Ended Ma rch 31, 2021 and 2020 (unaudited)			6
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 202 1 and 20 20 (unaudited)			7
Notes to Consolidated Financial Statements (unaudited)			8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3. Quantitative and Qualitative Disclosures about Market Risk			20
Item 4. Controls and Procedures			20

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			22
Item 1A. Risk Factors			22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			22
Item 3. Defaults upon Senior Securities			22
Item 4. Mine Safety Disclosures			22
Item 5. Other Information			22
Item 6. Exhibits			23

Signatures			24


HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited)
ASSETS	March 31, 2021		December 31, 2020
CURRENT ASSETS
Cash and cash equivalents	$	148,212	$	113,852
Trade receivables, net of $1.1 million allowance in 2021 and 2020, respectively	60,568		55,577
Prepaid tires	8,758		8,241
Other current assets	9,129		15,342
Total current assets	226,667		193,012
PROPERTY AND EQUIPMENT
Land and land improvements	83,361		77,525
Buildings	87,713		86,712
Furniture and fixtures	5,034		4,807
Shop and service equipment	14,551		14,380
Revenue equipment	562,501		590,153
Construction in progress	6,908		5,783
Property and equipment, gross	760,068		779,360
Less accumulated depreciation	247,235		240,080
Property and equipment, net	512,833		539,280
GOODWILL	168,295		168,295
OTHER INTANGIBLES, NET	24,148		24,746
DEFERRED INCOME TAXES, NET	—		8,164
OTHER ASSETS	17,478		17,679
	$	949,421	$	951,176
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	16,954	$	12,751
Compensation and benefits	25,607		22,422
Insurance accruals	15,482		15,837
Other accruals	19,053		18,557
Income tax payable	6,960		1,475
Total current liabilities	84,056		71,042
LONG-TERM LIABILITIES
Income taxes payable	5,564		5,801
Deferred income taxes, net	92,450		104,004
Insurance accruals less current portion	44,934		45,995
Total long-term liabilities	142,948		155,800
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01; authorized 5,000 shares; none issued	—		—
Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2021 and 2020; outstanding 79,905 and 80,653 in 2021 and 2020, respectively	907		907
Additional paid-in capital	4,476		4,330
Retained earnings	903,105		890,970
Treasury stock, at cost; 10,784 and 10,036 in 2021 and 2020, respectively	(186,071)		(171,873)
	722,417		724,334
	$	949,421	$	951,176


HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share amounts)
(unaudited)
	Three Months Ended March 31,
	2021		2020

OPERATING REVENUE	$	152,402	$	166,318

OPERATING EXPENSES
Salaries, wages, and benefits	64,782		70,254
Rent and purchased transportation	964		1,608
Fuel	24,157		25,941
Operations and maintenance	5,688		6,800
Operating taxes and licenses	3,621		3,842
Insurance and claims	5,439		5,354
Communications and utilities	1,226		1,421
Depreciation and amortization	26,926		26,634
Other operating expenses	5,552		6,909
(Gain)/Loss on disposal of property and equipment	(4,232)		229
	134,123		148,992

Operating income	18,279		17,326

Interest income	138		377


Income before income taxes	18,417		17,703

Federal and state income taxes	4,683		4,465

Net income	$	13,734	$	13,238
Other comprehensive income, net of tax	—		—
Comprehensive income	$	13,734	$	13,238

Net income per share
Basic	$	0.17	$	0.16
Diluted	$	0.17	$	0.16

Weighted average shares outstanding
Basic	80,152		81,870
Diluted	80,206		81,945

Dividends declared per share	$	0.02	$	0.02


HEARTLAND EXPRESS, INC
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
(unaudited)

	Capital		Additional
	Stock,		Paid-In		Retained		Treasury
	Common		Capital		Earnings		Stock		Total
Balance, December 31, 2020	$	907	$	4,330	$	890,970	$	(171,873)	$	724,334
Net income	—		—		13,734		—		13,734
Dividends on common stock, $0.02 per share	—		—		(1,599)		—		(1,599)
Repurchases of common stock	—		—		—		(14,537)		(14,537)
Stock-based compensation, net of tax	—		146		—		339		485
Balance, March 31, 2021	$	907	$	4,476	$	903,105	$	(186,071)	$	722,417









	Capital		Additional
	Stock,		Paid-In		Retained		Treasury
	Common		Capital		Earnings		Stock		Total
Balance, December 31, 2019	$	907	$	4,141	$	826,666	$	(147,055)	$	684,659
Net income	—		—		13,238		—		13,238
Dividends on common stock, $0.02 per share	—		—		(1,628)		—		(1,628)
Repurchases of common stock	—		—		—		(12,278)		(12,278)
Stock-based compensation, net of tax	—		291		—		406		697
Balance, March 31, 2020	$	907	$	4,432	$	838,276	$	(158,927)	$	684,688


HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
	Three Months Ended March 31,
	2021		2020
OPERATING ACTIVITIES
Net income	$	13,734	$	13,238
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	26,983		26,761
Deferred income taxes	(3,390)		7,541
Stock-based compensation expense	581		936
(Gain)/Loss on disposal of property and equipment	(4,232)		229
Changes in certain working capital items:
Trade receivables	(4,991)		(6,096)
Prepaid expenses and other current assets	4,053		470
Accounts payable, accrued liabilities, and accrued expenses	(2,554)		(55)
Accrued income taxes	5,248		(2,967)
Net cash provided by operating activities	35,432		40,057
INVESTING ACTIVITIES
Proceeds from sale of property and equipment	25,152		2,409
Purchases of property and equipment	(9,750)		(42,092)

Change in other assets	78		51
Net cash provided by (used in) investing activities	15,480		(39,632)
FINANCING ACTIVITIES
Payment of cash dividends	(1,599)		(1,628)
Shares withheld for employee taxes related to stock-based compensation	(96)		(239)

Repurchases of common stock	(15,022)		(12,278)
Net cash used in financing activities	(16,717)		(14,145)
Net increase (decrease) in cash, cash equivalents and restricted cash	34,195		(13,720)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	131,140		96,076
End of period	$	165,335	$	82,356
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid (received) during the period for income taxes, net of refunds	$	2,825	$	(109)
Noncash investing and financing activities:
Purchased property and equipment in accounts payable	$	6,726	$	8,554
Sold revenue equipment and property in other current assets	$	212	$	2,000
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	$	148,212	$	64,183
Restricted cash included in other current assets	1,033		1,533
Restricted cash included in other assets	16,090		16,640
Total cash, cash equivalents and restricted cash	$	165,335	$	82,356


	Amortization period (years)	Gross Amount		Accumulated Amortization		Net intangible assets
		(in thousands)
Customer relationships	15-20	$	23,000	$	4,859	$	18,141
Tradename	0.5-6	12,900		8,860		4,040
Covenants not to compete	1-10	5,300		3,333		1,967
		$	41,200	$	17,052	$	24,148


	Three months ended March 31, 2021
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	13,734	80,152	$	0.17
Effect of restricted stock	—		54
Diluted EPS	$	13,734	80,206	$	0.17


	Three months ended March 31, 2020
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	13,238	81,870	$	0.16
Effect of restricted stock	—		75
Diluted EPS	$	13,238	81,945	$	0.16


	Three Months Ended March 31, 2021
	Number of Shares of Restricted Stock Awards (in thousands)	Weighted Average Grant Date Fair Value
Unvested at beginning of period	59.7	$	20.29
Granted	19.3	18.69
Vested	(25.3)	19.78
Forfeited	—	—
Outstanding (unvested) at end of period	53.7	$	19.95


	2021
	(in thousands)
Balance at January 1, 2021	$	4,937
Additions based on tax positions related to current year	175
Reductions for tax positions of prior years	(179)
Reductions due to lapse of applicable statute of limitations	(213)
Balance at March 31, 2021	$	4,720


GAAP to Non-GAAP Reconciliation Schedule:
Operating revenue, operating revenue excluding fuel surcharge revenue, fuel surcharge revenue, operating income, operating ratio, and adjusted operating ratio reconciliation (a)

	Three months ended March 31,
	2021		2020
	(Unaudited, in thousands)

Operating revenue	$	152,402	$	166,318
Less: Fuel surcharge revenue	16,785		19,465
Operating revenue, excluding fuel surcharge revenue	135,617		146,853

Operating expenses	134,123		148,992
Less: Fuel surcharge revenue	16,785		19,465
Adjusted operating expenses	117,338		129,527

Operating income	$	18,279	$	17,326
Operating ratio	88.0%		89.6%
Adjusted operating ratio	86.5%		88.2%


	(a) Total number of shares purchased	(b) Average price paid per share	(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Maximum number of shares that may yet be purchased under the plans or programs (1)
				5,439,575
January 1, 2021 - January 31, 2021	378,970	18.97	378,970	5,060,605
February 1, 2021 - February 28, 2021	389,831	18.85	389,831	4,670,774
March 1, 2021 - March 31, 2021	—	—	—	4,670,774
Total	768,801		768,801


			2.1						Acquisition and Merger Agreement, dated August 26, 2019, by and among, Midwest Holding Group, Inc., Millis Real Estate Leasing, LLC, the members of Millis Real Estate Leasing, LLC, Heartland Trucking, Inc., Heartland Express Inc. of Iowa, Heartland Express, Inc., in its capacity as guarantor, and David P. Millis, in his capacity as Sellers’ Representative.
			3.1						Articles of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of the Company's Form 10-Q for the quarter ended September 30, 2017, dated November 9, 2017.
			3.2						Amended and Restated Bylaws. Incorporated by reference to Exhibit 3.2 of the Company's Form 10-Q for the quarter ended September 30, 2017, dated November 9, 2017.
			31.1*						Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
			31.2*						Certification of Principal Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
			32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			32.2**						Certification of the Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Yes [X]			No [ ]


Yes [X]			No [ ]


Yes [ ]			No [ X ]


		HEARTLAND EXPRESS, INC.

Date:	May 6, 2021	By: /s/ Christopher A. Strain
		Christopher A. Strain
		Vice President of Finance
		and Chief Financial Officer
		(Principal Accounting and Financial Officer)


1.	I have reviewed this quarterly report on Form 10-Q of Heartland Express Inc. (the “Registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report;

4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and we have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

	d)	Disclosed in this quarterly report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s independent registered public accounting firm and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.


In connection with the Quarterly Report of Heartland Express, Inc. (the "Company"), on Form 10-Q for the period ended March 31, 2021 (the "Report"), filed with the Securities and Exchange Commission, I, Michael J. Gerdin, Chairman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.			The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
2.			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.