Heartland Express Inc 10-Q for FY2021 Q2

Heartland Express Inc (HTLD)

10-Q 2021-08-06 For: 2021-06-30

Added on April 07, 2026

About this 10-Q

Heartland Express Inc filed this 10-Q on August 6, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $154.13M; down 4.2% from $160.87M a year earlier
Net income: $20.74M; up 8.1% from net income of $19.18M a year earlier
Diluted EPS: $0.26; up 8.3% from $0.24 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 June 30 , 2021 and December 31, 2020 (unaudited)			4
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30 , 2021 and 2020 (unaudited)			5
Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30 , 2021 and 2020 (unaudited)			6
Consolidated Statements of Cash Flows for the Six Months Ended June 30 , 2021 and 2020 (unaudited)			7
Notes to Consolidated Financial Statements (unaudited)			8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			15
Item 3. Quantitative and Qualitative Disclosures about Market Risk			22
Item 4. Controls and Procedures			23

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			24
Item 1A. Risk Factors			24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			24
Item 3. Defaults upon Senior Securities			24
Item 4. Mine Safety Disclosures			24
Item 5. Other Information			24
Item 6. Exhibits			25

Signatures			26


HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited)
ASSETS	June 30, 2021		December 31, 2020
CURRENT ASSETS
Cash and cash equivalents	$	167,241	$	113,852
Trade receivables, net of $1.1 million allowance in 2021 and 2020, respectively	59,290		55,577
Prepaid tires	8,768		8,241
Other current assets	12,212		15,342
Total current assets	247,511		193,012
PROPERTY AND EQUIPMENT
Land and land improvements	83,123		77,525
Buildings	87,730		86,712
Furniture and fixtures	5,142		4,807
Shop and service equipment	14,766		14,380
Revenue equipment	542,533		590,153
Construction in progress	11,597		5,783
Property and equipment, gross	744,891		779,360
Less accumulated depreciation	244,510		240,080
Property and equipment, net	500,381		539,280
GOODWILL	168,295		168,295
OTHER INTANGIBLES, NET	23,550		24,746
DEFERRED INCOME TAXES, NET	—		8,164
OTHER ASSETS	17,248		17,679
	$	956,985	$	951,176
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	18,952	$	12,751
Compensation and benefits	24,002		22,422
Insurance accruals	14,521		15,837
Other accruals	18,654		18,557
Income tax payable	1,090		1,475
Total current liabilities	77,219		71,042
LONG-TERM LIABILITIES
Income taxes payable	5,306		5,801
Deferred income taxes, net	90,471		104,004
Insurance accruals less current portion	42,223		45,995
Total long-term liabilities	138,000		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 79,913 and 80,653 in 2021 and 2020, respectively	907		907
Additional paid-in capital	4,531		4,330
Retained earnings	922,249		890,970
Treasury stock, at cost; 10,776 and 10,036 in 2021 and 2020, respectively	(185,921)		(171,873)
	741,766		724,334
	$	956,985	$	951,176


HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share amounts)
(unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

OPERATING REVENUE	$	154,128	$	160,873	$	306,530	$	327,191

OPERATING EXPENSES
Salaries, wages, and benefits	62,931		68,147		127,713		138,401
Rent and purchased transportation	1,009		1,028		1,973		2,636
Fuel	24,804		18,287		48,961		44,228
Operations and maintenance	5,670		7,597		11,358		14,398
Operating taxes and licenses	3,413		3,724		7,034		7,566
Insurance and claims	4,678		5,852		10,117		11,206
Communications and utilities	967		1,272		2,193		2,692
Depreciation and amortization	25,956		27,168		52,882		53,803
Other operating expenses	5,204		6,056		10,756		12,965
Gain on disposal of property and equipment	(7,855)		(3,247)		(12,088)		(3,018)
	126,777		135,884		260,899		284,877

Operating income	27,351		24,989		45,631		42,314

Interest income	175		157		312		534


Income before income taxes	27,526		25,146		45,943		42,848

Federal and state income taxes	6,784		5,964		11,466		10,428

Net income	$	20,742	$	19,182	$	34,477	$	32,420
Other comprehensive income, net of tax	—		—		—		—
Comprehensive income	$	20,742	$	19,182	$	34,477	$	32,420

Net income per share
Basic	$	0.26	$	0.24	$	0.43	$	0.40
Diluted	$	0.26	$	0.24	$	0.43	$	0.40

Weighted average shares outstanding
Basic	79,906		81,351		80,028		81,611
Diluted	79,957		81,415		80,081		81,680

Dividends declared per share	$	0.02	$	0.02	$	0.04	$	0.04


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
Net income	—		—		20,742		—		20,742
Dividends on common stock, $0.02 per share	—		—		(1,598)		—		(1,598)

Stock-based compensation, net of tax	—		55		—		150		205
Balance, June 30, 2021	$	907	$	4,531	$	922,249	$	(185,921)	$	741,766





	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
Net income	—		—		19,182		—		19,182
Dividends on common stock, $0.02 per share	—		—		(1,628)		—		(1,628)
Stock-based compensation, net of tax	—		174		—		199		373
Balance, June 30, 2020	$	907	$	4,606	$	855,830	$	(158,728)	$	702,615


HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
	Six Months Ended June 30,
	2021		2020
OPERATING ACTIVITIES
Net income	$	34,477	$	32,420
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	52,977		54,048
Deferred income taxes	(5,369)		9,304
Stock-based compensation expense	800		1,357
Gain on disposal of property and equipment	(12,088)		(3,018)
Changes in certain working capital items:
Trade receivables	(3,713)		(7,380)
Prepaid expenses and other current assets	2,073		(3,318)
Accounts payable, accrued liabilities, and accrued expenses	(5,502)		(222)
Accrued income taxes	(880)		567
Net cash provided by operating activities	62,775		83,758
INVESTING ACTIVITIES
Proceeds from sale of property and equipment	56,030		18,838
Purchases of property and equipment	(47,585)		(82,769)

Change in other assets	(174)		43
Net cash provided by (used in) investing activities	8,271		(63,888)
FINANCING ACTIVITIES
Payment of cash dividends	(3,198)		(3,256)
Shares withheld for employee taxes related to stock-based compensation	(110)		(287)

Repurchases of common stock	(15,022)		(12,278)
Net cash used in financing activities	(18,330)		(15,821)
Net increase in cash, cash equivalents and restricted cash	52,716		4,049
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Beginning of period	131,140		96,076
End of period	$	183,856	$	100,125
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for income taxes, net of refunds	$	17,715	$	557
Noncash investing and financing activities:
Purchased property and equipment in accounts payable	$	6,415	$	5,731
Sold revenue equipment and property in other current assets	$	1,516	$	2,017
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	$	167,241	$	82,457
Restricted cash included in other current assets	1,007		1,391
Restricted cash included in other assets	15,608		16,277
Total cash, cash equivalents and restricted cash	$	183,856	$	100,125


	Amortization period (years)	Gross Amount		Accumulated Amortization		Net intangible assets
		(in thousands)
Customer relationships	15-20	$	23,000	$	5,187	$	17,813
Tradename	0.5-6	12,900		8,980		3,920
Covenants not to compete	1-10	5,300		3,483		1,817
		$	41,200	$	17,650	$	23,550


	Three months ended June 30, 2021
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	20,742	79,906	$	0.26
Effect of restricted stock	—		51
Diluted EPS	$	20,742	79,957	$	0.26


	Three months ended June 30, 2020
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	19,182	81,351	$	0.24
Effect of restricted stock	—		64
Diluted EPS	$	19,182	81,415	$	0.24


	Six months ended June 30, 2021
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	34,477	80,028	$	0.43
Effect of restricted stock	—		53
Diluted EPS	$	34,477	80,081	$	0.43


	Six months ended June 30, 2020
	Net Income (numerator)		Shares (denominator)	Per Share Amount
Basic EPS	$	32,420	81,611	$	0.40
Effect of restricted stock	—		69
Diluted EPS	$	32,420	81,680	$	0.40


	Three Months Ended June 30, 2021
	Number of Shares of Restricted Stock Awards (in thousands)	Weighted Average Grant Date Fair Value
Unvested at beginning of period	53.7	$	19.95
Granted	—	—
Vested	(9.5)	20.52
Forfeited	—	—
Outstanding (unvested) at end of period	44.2	$	19.83


	2021
	(in thousands)
Balance at January 1, 2021	$	4,937
Additions based on tax positions related to current year	354
Reductions for tax positions of prior years	(179)
Reductions due to lapse of applicable statute of limitations	(533)
Balance at June 30, 2021	$	4,579


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 June 30,						Six months ended June 30,
	2021			2020			2021			2020
	(Unaudited, in thousands)						(Unaudited, in thousands)

Operating revenue	$	154,128		$	160,873		$	306,530		$	327,191
Less: Fuel surcharge revenue	19,132			13,981			35,916			33,445
Operating revenue, excluding fuel surcharge revenue	134,996			146,892			270,614			293,746

Operating expenses	126,777			135,884			260,899			284,877
Less: Fuel surcharge revenue	19,132			13,981			35,916			33,445
Adjusted operating expenses	107,645			121,903			224,983			251,432

Operating income	$	27,351		$	24,989		$	45,631		$	42,314
Operating ratio	82.3		%	84.5		%	85.1		%	87.1		%
Adjusted operating ratio	79.7		%	83.0		%	83.1		%	85.6		%


Yes [X]			No [ ]


Yes [X]			No [ ]


Yes [ ]			No [ X ]


			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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		HEARTLAND EXPRESS, INC.

Date:	August 5, 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 June 30, 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.