Heartland Express Inc 10-Q for FY2022 Q1

Heartland Express Inc (HTLD)

10-Q 2022-05-09 For: 2022-03-31

Added on April 07, 2026

About this 10-Q

Heartland Express Inc filed this 10-Q on May 9, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $151.28M; down 0.7% from $152.4M a year earlier
Net income: $16.78M; up 22.1% from net income of $13.73M a year earlier
Diluted EPS: $0.21; up 23.5% from $0.17 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, 2022 and December 31, 202 1 (unaudited)			3
Consolidated Statements of Comprehensive Income for the Three Months Ended Ma rch 31, 2022 and 2021 (unaudited)			4
Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2022 and 2021 (unaudited)			5
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (unaudited)			6
Notes to Consolidated Financial Statements (unaudited)			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			13
Item 3. Quantitative and Qualitative Disclosures about Market Risk			19
Item 4. Controls and Procedures			19

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			20
Item 1A. Risk Factors			20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			20
Item 3. Defaults Upon Senior Securities			20
Item 4. Mine Safety Disclosures			20
Item 5. Other Information			20
Item 6. Exhibits			21

Signatures			22


HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited)
ASSETS	March 31, 2022		December 31, 2021
CURRENT ASSETS
Cash and cash equivalents	$	187,085	$	157,742
Trade receivables, net of $1.1 million allowance in 2022 and 2021, respectively	61,583		52,812
Prepaid tires	10,043		9,168
Other current assets	9,776		9,406
Income tax receivable	—		4,095
Total current assets	268,487		233,223
PROPERTY AND EQUIPMENT
Land and land improvements	90,787		90,218
Buildings	96,685		95,305
Furniture and fixtures	5,399		5,365
Shop and service equipment	17,104		15,727
Revenue equipment	491,924		500,311
Construction in progress	3,732		3,834
Property and equipment, gross	705,631		710,760
Less accumulated depreciation	233,652		222,845
Property and equipment, net	471,979		487,915
GOODWILL	168,295		168,295
OTHER INTANGIBLES, NET	21,758		22,355
OTHER ASSETS	16,594		16,754
	$	947,113	$	928,542
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	20,278	$	20,538
Compensation and benefits	24,171		21,411
Insurance accruals	15,248		15,677
Other accruals	14,394		13,968
Income tax payable	3,452		—
Total current liabilities	77,543		71,594
LONG-TERM LIABILITIES
Income taxes payable	5,313		5,491
Deferred income taxes, net	88,227		89,971
Insurance accruals less current portion	33,502		34,384
Total long-term liabilities	127,042		129,846
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 2022 and 2021; outstanding 78,932 and 78,923 in 2022 and 2021, respectively	907		907
Additional paid-in capital	4,205		4,141
Retained earnings	939,571		924,375
Treasury stock, at cost; 11,757 and 11,766 in 2022 and 2021, respectively	(202,155)		(202,321)
	742,528		727,102
	$	947,113	$	928,542


HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share amounts)
(unaudited)
	Three Months Ended March 31,
	2022		2021

OPERATING REVENUE	$	151,275	$	152,402

OPERATING EXPENSES
Salaries, wages, and benefits	58,638		64,782
Rent and purchased transportation	748		964
Fuel	29,711		24,157
Operations and maintenance	5,079		5,688
Operating taxes and licenses	3,209		3,621
Insurance and claims	5,566		5,439
Communications and utilities	1,078		1,226
Depreciation and amortization	23,311		26,926
Other operating expenses	5,798		5,552
Gain on disposal of property and equipment	(4,258)		(4,232)
	128,880		134,123

Operating income	22,395		18,279

Interest income	146		138


Income before income taxes	22,541		18,417

Federal and state income taxes	5,766		4,683

Net income	$	16,775	$	13,734
Other comprehensive income, net of tax	—		—
Comprehensive income	$	16,775	$	13,734

Net income per share
Basic	$	0.21	$	0.17
Diluted	$	0.21	$	0.17

Weighted average shares outstanding
Basic	78,929		80,152
Diluted	78,953		80,206

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, 2021	$	907	$	4,141	$	924,375	$	(202,321)	$	727,102
Net income	—		—		16,775		—		16,775
Dividends on common stock, $0.02 per share	—		—		(1,579)		—		(1,579)
Stock-based compensation, net of tax	—		64		—		166		230
Balance, March 31, 2022	$	907	$	4,205	$	939,571	$	(202,155)	$	742,528











	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


HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
	Three Months Ended March 31,
	2022		2021
OPERATING ACTIVITIES
Net income	$	16,775	$	13,734
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,311		26,983
Deferred income taxes	(1,744)		(3,390)
Stock-based compensation expense	271		581
Gain on disposal of property and equipment	(4,258)		(4,232)
Changes in certain working capital items:
Trade receivables	(8,771)		(4,991)
Prepaid expenses and other current assets	1,083		4,053
Accounts payable, accrued liabilities, and accrued expenses	3,557		(2,554)
Accrued income taxes	7,369		5,248
Net cash provided by operating activities	37,593		35,432
INVESTING ACTIVITIES
Proceeds from sale of property and equipment	13,648		25,152
Purchases of property and equipment	(22,029)		(9,750)
Change in other assets	—		78
Net cash provided by (used in) investing activities	(8,381)		15,480
FINANCING ACTIVITIES
Payment of cash dividends	—		(1,599)
Shares withheld for employee taxes related to stock-based compensation	(41)		(96)
Repurchases of common stock	—		(15,022)
Net cash used in financing activities	(41)		(16,717)
Net increase in cash, cash equivalents and restricted cash	29,171		34,195
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	173,767		131,140
End of period	$	202,938	$	165,335
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for income taxes, net of refunds	$	142	$	2,825
Noncash investing and financing activities:
Purchased property and equipment in accounts payable	$	2,058	$	6,726
Sold revenue equipment and property in other current assets	$	1,213	$	212
Common stock dividends declared in accounts payable	$	1,579	$	—
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	$	187,085	$	148,212
Restricted cash included in other current assets	916		1,033
Restricted cash included in other assets	14,937		16,090
Total cash, cash equivalents and restricted cash	$	202,938	$	165,335


	Amortization period (years)	Gross Amount		Accumulated Amortization		Net intangible assets
		(in thousands)
Customer relationships	15-20	$	23,000	$	6,169	$	16,831
Tradename	0.5-6	12,900		9,340		3,560
Covenants not to compete	1-10	5,300		3,933		1,367
		$	41,200	$	19,442	$	21,758


	Three months ended March 31, 2022
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	16,775	78,929	$	0.21
Effect of restricted stock	—		24
Diluted EPS	$	16,775	78,953	$	0.21


	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, 2022
	Number of Shares of Restricted Stock Awards (in thousands)	Weighted Average Grant Date Fair Value
Unvested at beginning of period	14.0	$	19.70
Granted	25.0	15.17
Vested	(12.0)	15.51
Forfeited	—	—
Outstanding (unvested) at end of period	27.0	$	17.37


	2022
	(in thousands)
Balance at January 1, 2022	$	4,671
Additions based on tax positions related to current year	84
Reductions for tax positions of prior years	(22)
Reductions due to lapse of applicable statute of limitations	(224)
Balance at March 31, 2022	$	4,509


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

	Three months ended March 31,
	2022			2021
	(Unaudited, in thousands)

Operating revenue	$	151,275		$	152,402
Less: Fuel surcharge revenue	23,969			16,785
Operating revenue, excluding fuel surcharge revenue	127,306			135,617

Operating expenses	128,880			134,123
Less: Fuel surcharge revenue	23,969			16,785
Adjusted operating expenses	104,911			117,338

Operating income	$	22,395		$	18,279
Operating ratio	85.2		%	88.0		%
Adjusted operating ratio	82.4		%	86.5		%


			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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		HEARTLAND EXPRESS, INC.

Date:	May 6, 2022	By: /s/ Christopher A. Strain
		Christopher A. Strain
		Vice President of Finance
		and Chief Financial Officer
		(Principal Accounting and Financial Officer)


Yes [X]			No [ ]


Yes [X]			No [ ]


Yes [ ]			No [ X ]


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, 2022 (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.