I have been working in the logistics sector for almost two decades. I have been into stock investing and macroeconomic analysis for almost a decade. Currently, I focus on ASEAN and NYSE/NASDAQ Stocks, particularly in banks, telco, logistics, and hotels. Since 2014, I have been trading on the PH stock market. I focus on banking, telco, and retail sectors. A colleague encouraged me to engage in the stock market as part of my portfolio diversification instead of putting all my savings in banks and properties. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Address of Principal Executive Offices) (Zip Code) 319-645-7060 (Registrant's telephone number, including area code) For the transition period from to Commission file number 0-15087 HEART ...

[Company Overview & Executive Summary](index=1&type=section&id=Company%20Overview%20%26%20Executive%20Summary) This section provides an executive summary of Heartland Express's Q2 and H1 2025 financial performance, key strategic initiatives, and the prevailing industry context [Q2 & H1 2025 Highlights](index=1&type=section&id=Q2%20%26%20H1%202025%20Highlights) Heartland Express reported net losses for Q2 and H1 2025 amidst a challenging industry, while maintaining positive cash flow and strategic investments in fleet, debt reduction, and share repurchases Q2 and H1 2025 Key Financial Highlights (USD) | Metric | Q2 2025 | H1 2025 | | :--------------------------------- | :-------------- | :-------------- | | Operating Revenue | $210.4 million | $429.8 million | | Net Loss | $10.9 million | $24.7 million | | Basic Loss per Share | $0.14 | $0.32 | | Operating Ratio | 105.9% | 106.4% | | Non-GAAP Adjusted Operating Ratio | 106.0% | 106.5% | | Total Assets (as of June 30, 2025) | $1.3 billion | N/A | | Cash (as of June 30, 2025) | $22.9 million | N/A | | Stockholders' Equity (as of June 30, 2025) | $786.7 million | N/A | | Shares Repurchased (Q2) | 1 million shares | N/A | | Acquisition-related debt reduction (since 2022) | $300 million | N/A | | Debt & Finance Lease Payments (H1) | N/A | ~$7 million | [CEO Commentary & Industry Context](index=1&type=section&id=CEO%20Commentary%20%26%20Industry%20Context) CEO Mike Gerdin highlighted sequential improvements despite a challenging industry with excess capacity and weak demand, affirming the company's focus on fleet investment, debt reduction, and operational efficiencies - The industry faces a prolonged and challenging operating environment with capacity outpacing weak freight demand, unsustainable pricing, and rising operating costs, creating significant headwinds[3](index=3&type=chunk) - Despite an operating loss, the company maintained **positive cash flows from operations**, enabling investments in its fleet (**$5.8 million**, net), debt reduction (**$5.6 million** paid), and common stock repurchases (**$8.9 million** paid) during Q2 2025[3](index=3&type=chunk) - The company is strategically reducing underperforming freight lanes and overall fleet size to align with current demand, focusing on driver utilization and operating cost reductions[7](index=7&type=chunk) - Material improvements in freight demand and customer pricing are not expected until later in 2025, with a positive impact on financial results and freight outlook anticipated in 2026[7](index=7&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) The company experienced significant declines in operating revenues and increased net losses for Q2 and H1 2025, while maintaining liquidity and strategically managing capital [Consolidated Statements of Income](index=2&type=section&id=Consolidated%20Statements%20of%20Income) Heartland Express reported significant declines in operating revenues and increased net losses for Q2 and H1 2025, with deteriorating operating ratios reflecting challenging market conditions Q2 2025 vs. Q2 2024 Financial Performance (USD) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :-------------- | | Operating Revenues | $210.4 million | $274.8 million | -23.4% | | Fuel Surcharge Revenues | $24.5 million | $36.8 million | -33.4% | | Net Loss | $10.9 million | $3.5 million | +211.4% | | Basic Loss per Share | $0.14 | $0.04 | +250.0% | | Operating Ratio | 105.9% | 99.9% | +600 bps | | Non-GAAP Adjusted Operating Ratio | 106.0% | 99.4% | +660 bps | | Net Loss as % of Operating Revenues | 5.2% | 1.3% | +390 bps | H1 2025 vs. H1 2024 Financial Performance (USD) | Metric | H1 2025 | H1 2024 | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :-------------- | | Operating Revenues | $429.8 million | $545.1 million | -21.2% | | Fuel Surcharge Revenues | $50.8 million | $73.0 million | -30.4% | | Operating Loss | $27.3 million | $14.1 million | +93.6% | | Net Loss | $24.7 million | $18.6 million | +32.8% | | Basic Loss per Share | $0.32 | $0.24 | +33.3% | | Operating Ratio | 106.4% | 102.6% | +380 bps | | Non-GAAP Adjusted Operating Ratio | 106.5% | 102.5% | +400 bps | | Net Loss as % of Operating Revenues | 5.8% | 3.4% | +240 bps | [Three Months Ended June 30, 2025 (Q2)](index=2&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20%28Q2%29) For the second quarter of 2025, the company reported a substantial operating loss and net loss, primarily driven by a significant decrease in operating revenue and increased operating expenses compared to the prior year Consolidated Statements of Income - Q2 2025 (in thousands USD) | Item | Q2 2025 | Q2 2024 | | :--------------------------------- | :-------------- | :-------------- | | OPERATING REVENUE | $210,387 | $274,754 | | OPERATING EXPENSES | $222,806 | $274,490 | | Operating (loss) income | $(12,419) | $264 | | Interest income | $198 | $288 | | Interest expense | $(2,962) | $(4,574) | | Loss before income taxes | $(15,183) | $(4,022) | | Federal and state income tax benefit | $(4,328) | $(544) | | Net loss | $(10,855) | $(3,478) | | Basic Loss per share | $(0.14) | $(0.04) | | Diluted Loss per share | $(0.14) | $(0.04) | [Six Months Ended June 30, 2025 (H1)](index=2&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20%28H1%29) The first half of 2025 saw a consolidated operating loss and net loss, reflecting a challenging period with reduced revenues and higher expenses compared to the same period in the previous year Consolidated Statements of Income - H1 2025 (in thousands USD) | Item | H1 2025 | H1 2024 | | :--------------------------------- | :-------------- | :-------------- | | OPERATING REVENUE | $429,807 | $545,074 | | OPERATING EXPENSES | $457,124 | $559,194 | | Operating (loss) income | $(27,317) | $(14,120) | | Interest income | $326 | $576 | | Interest expense | $(6,066) | $(9,576) | | Loss before income taxes | $(33,057) | $(23,120) | | Federal and state income tax benefit | $(8,329) | $(4,520) | | Net loss | $(24,728) | $(18,600) | | Basic Loss per share | $(0.32) | $(0.24) | | Diluted Loss per share | $(0.32) | $(0.24) | [Balance Sheet, Liquidity, and Capital Expenditures](index=2&type=section&id=Balance%20Sheet%2C%20Liquidity%2C%20and%20Capital%20Expenditures) As of June 30, 2025, Heartland Express maintained strong liquidity with increased cash and reduced debt, generating positive operating cash flow for fleet and equipment investments Key Balance Sheet and Liquidity Metrics (in thousands USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :-------------- | | Cash and cash equivalents | $22,879 | $12,812 | +$10,067 | | Total current assets | $136,201 | $129,448 | +$6,753 | | Total assets | $1,299,372 | $1,334,192 | -$34,820 | | Debt and financing lease obligations | $194,000 | N/A | -$300,000 (since 2022) | | Available borrowing capacity (line of credit) | $88,300 | N/A | N/A | | Total stockholders' equity | $786,737 | $822,599 | -$35,862 | Cash Flow and Capital Expenditure Highlights (H1 2025, USD) | Item | Amount | | :--------------------------------- | :-------------- | | Net cash flows from operations | $46.8 million | | Repayment of debt and financing leases | $6.9 million | | Repurchases of common stock | $8.9 million | | Dividends paid | $3.1 million | | Net property and equipment transactions | $17.5 million | | Expected net capital expenditures (CY 2025) | $35 - $45 million | | Expected gains on disposal of property and equipment (CY 2025) | $12 - $17 million | - The average age of the consolidated tractor fleet remained stable at **2.6 years** as of June 30, 2025, while the average age of the consolidated trailer fleet increased to **7.5 years** from 6.9 years in the prior year[11](index=11&type=chunk) [GAAP to Non-GAAP Reconciliation](index=6&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) The company provides non-GAAP financial measures, including operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio, to offer a more consistent basis for comparing operational results by excluding the volatility of fuel prices and non-cash amortization of intangibles GAAP to Non-GAAP Reconciliation (in thousands USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Operating revenue | $210,387 | $274,754 | $429,807 | $545,074 | | Less: Fuel surcharge revenue | $24,509 | $36,828 | $50,830 | $73,039 | | Operating revenue, excluding fuel surcharge revenue | $185,878 | $237,926 | $378,977 | $472,035 | | Operating (loss) income | $(12,419) | $264 | $(27,317) | $(14,120) | | Adjusted operating (loss) income | $(11,165) | $1,518 | $(24,808) | $(11,611) | | Operating ratio | 105.9% | 99.9% | 106.4% | 102.6% | | Adjusted operating ratio | 106.0% | 99.4% | 106.5% | 102.5% | - Non-GAAP measures are not intended to replace GAAP results but supplement them, providing a clearer view of underlying operations by removing fuel price volatility and non-cash amortization of intangibles[13](index=13&type=chunk)[20](index=20&type=chunk) [Operational Review & Strategic Initiatives](index=1&type=section&id=Operational%20Review%20%26%20Strategic%20Initiatives) The company's operating brands showed varied performance amidst challenging market conditions, driving strategic fleet reductions and technology investments for future efficiencies [Operating Brand Performance](index=1&type=section&id=Operating%20Brand%20Performance) The company's four operating brands exhibited varied performance, with Heartland Express and Millis Transfer profitable, Smith Transport improving, and CFI impacted by a major system conversion - Heartland Express fleet remained **profitable** with sequential financial improvements in Q2 and H1 2025[4](index=4&type=chunk) - Both Heartland Express and Millis Transfer fleets operated **profitably** and improved their operating ratio by approximately **400 bps** in Q2 2025 compared to Q1 2025[4](index=4&type=chunk) - Smith Transport fleet improved its operating ratio sequentially but did not operate profitably in Q2 2025[4](index=4&type=chunk) - CFI fleet completed a major transportation management system conversion and began a full fleet telematics transition (**75% complete**), but did not operate profitably and saw a negative sequential financial impact[4](index=4&type=chunk) [Fleet Management & Technology](index=1&type=section&id=Fleet%20Management%20%26%20Technology) Heartland Express is actively managing fleet size and investing in technology, including a major system conversion for CFI and a goal to unify all brands on a common system by year-end 2025 - CFI began a full fleet telematics transition in Q2 2025, approximately **75% complete**, aiming to improve driver utilization and experience, with full completion expected in Q3 2025[4](index=4&type=chunk) - All four operating brands are expected to be on a common transportation management system by **December 31, 2025**, projected to drive multiple operating efficiencies in 2026[6](index=6&type=chunk) - The company is strategically reducing its overall fleet size to better align with current freight demand[7](index=7&type=chunk) Average Fleet Age | Fleet Type | June 30, 2025 | June 30, 2024 | | :----------------- | :-------------- | :-------------- | | Consolidated tractor fleet | 2.6 years | 2.6 years | | Consolidated trailer fleet | 7.5 years | 6.9 years | [Market Conditions & Future Outlook](index=1&type=section&id=Market%20Conditions%20%26%20Future%20Outlook) The company faces a challenging industry with excess capacity and weak demand, anticipating material improvements later in 2025 and a positive freight outlook in 2026 - The industry is experiencing a prolonged and challenged operating environment where current capacity outpaces weak freight demand, coupled with unsustainable pricing and rising operating costs[3](index=3&type=chunk) - The company has begun to see some encouraging signs in current freight demand and customer pricing[7](index=7&type=chunk) - Material improvements are not expected until later in 2025, with a resulting positive impact on future financial results and an improved freight outlook in 2026[7](index=7&type=chunk) [Shareholder Value & Corporate Governance](index=1&type=section&id=Shareholder%20Value%20%26%20Corporate%20Governance) Heartland Express demonstrates commitment to shareholder value through consistent dividends and share repurchases, alongside receiving industry recognition for service and safety [Dividends](index=3&type=section&id=Dividends) Heartland Express continues its commitment to stockholders through consistent cash dividend payments, having paid dividends for eighty-eight consecutive quarters since 2003 Dividend Information (USD) | Metric | Q2 2025 | | :--------------------------------- | :-------------- | | Regular dividend declared per share | $0.02 | | Total cumulative cash dividends paid (since 2003) | $558.3 million | | Consecutive quarters of dividends paid | 88 | [Share Repurchases](index=1&type=section&id=Share%20Repurchases) The company actively repurchased its common stock during the second quarter of 2025, continuing a trend of returning capital to shareholders and reducing outstanding shares Common Stock Repurchases (USD) | Metric | Q2 2025 | Q2 2024 | | :--------------------------------- | :-------------- | :-------------- | | Shares repurchased | 1.0 million | 0.6 million | | Value of shares repurchased | $8.9 million | $7.3 million | | Total shares repurchased (past 5 years) | 4.2 million | N/A | | Total value of shares repurchased (past 5 years) | $61.6 million | N/A | | Remaining repurchase authorization | 5.0 million shares | N/A | | Outstanding shares (June 30, 2025) | 77.6 million | N/A | [Awards and Recognition](index=3&type=section&id=Awards%20and%20Recognition) Heartland Express and its operating brands received multiple awards during the second quarter of 2025, recognizing their commitment to service and fleet safety - Awards received in Q2 2025 include[13](index=13&type=chunk)[15](index=15&type=chunk) - Georgia-Pacific - OTR Van National Carrier of the Year[15](index=15&type=chunk) - Mars Pet Nutrition - Carrier of the Year[15](index=15&type=chunk) - Molson Coors - National Transportation Supplier of the Year[15](index=15&type=chunk) - Shaw Floors - Outbound "Class B" Carrier of the Year[15](index=15&type=chunk) - WK Kellogg - WKKC CS&L Supplier Founders Award[15](index=15&type=chunk) [Legal & Contact Information](index=3&type=section&id=Legal%20%26%20Contact%20Information) This section provides disclaimers regarding forward-looking statements and essential contact information for investor and media inquiries [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains a standard disclaimer regarding forward-looking statements, emphasizing that actual events may differ materially from projections due to various risks and uncertainties - The press release contains forward-looking statements identified by terms like 'expects,' 'estimates,' 'anticipates,' and 'outlook,' relating to freight supply/demand, market conditions, operational improvements, capital expenditures, profitability, stock repurchases, dividends, and debt repayment[14](index=14&type=chunk) - Such statements are based on management's current beliefs and involve risks and uncertainties, and actual events may differ materially due to factors outlined in the company's SEC filings (10-K, 10-Q)[14](index=14&type=chunk) - The company assumes no obligation to update any forward-looking statements[14](index=14&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Contact details are provided for investor and media inquiries - Contact for Heartland Express, Inc. (319-645-7060)[15](index=15&type=chunk) - Mike Gerdin, Chief Executive Officer[15](index=15&type=chunk) - Chris Strain, Chief Financial Officer[15](index=15&type=chunk)

Core Insights - Heartland Express reported a revenue of $210.39 million for the quarter ended June 2025, which is a decrease of 23.4% compared to the same period last year [1] - The company's EPS was -$0.14, worsening from -$0.04 in the year-ago quarter, and the EPS surprise was -75% against a consensus estimate of -$0.08 [1] - The reported revenue fell short of the Zacks Consensus Estimate of $236.65 million, resulting in a surprise of -11.1% [1] Financial Metrics - The operating ratio was reported at 105.9%, which is higher than the estimated average of 102.3% by two analysts [4] - Fuel surcharge revenue was $24.51 million, below the average estimate of $27.13 million, marking a year-over-year decline of 33.5% [4] - Operating revenue, excluding fuel surcharge revenue, was $185.88 million, significantly lower than the estimated $209.53 million, representing a year-over-year decrease of 21.9% [4] Stock Performance - Over the past month, shares of Heartland Express returned +0.1%, while the Zacks S&P 500 composite increased by +5.7% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Heartland Express reported a quarterly loss of $0.14 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.08, and compared to a loss of $0.04 per share a year ago, indicating a significant earnings surprise of -75.00% [1] - The company posted revenues of $210.39 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 11.1%, and this represents a decline from year-ago revenues of $274.75 million [2] - Heartland Express shares have declined approximately 22.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.1% [3] 分组2 - The earnings outlook for Heartland Express is currently unfavorable, with a Zacks Rank of 5 (Strong Sell), suggesting that the shares are expected to underperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $249.87 million, and for the current fiscal year, it is -$0.26 on revenues of $950.84 million [7] - The Transportation - Truck industry, to which Heartland Express belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, indicating a challenging environment for the company [8]

Core Viewpoint - Heartland Express, Inc. reported financial results for the three and six months ended June 30, 2025, indicating a challenging operating environment with weak freight demand and rising costs, leading to operating losses despite positive cash flows from operations [1][2][3]. Financial Results - For the three months ended June 30, 2025, operating revenue was $210.4 million, down from $274.8 million in the same period of 2024, with a net loss of $10.9 million compared to a net loss of $3.5 million in Q2 2024 [6][7]. - For the six months ended June 30, 2025, operating revenue was $429.8 million, down from $545.1 million in the same period of 2024, with a net loss of $24.7 million compared to a net loss of $18.6 million in the prior year [7][8]. Operating Performance - The operating ratio for Q2 2025 was 105.9%, compared to 99.9% in Q2 2024, indicating increased operational inefficiencies [6][7]. - The Heartland Express and Millis Transfer fleets operated profitably, improving their operating ratios by approximately 400 basis points in Q2 2025 compared to Q1 2025 [2][3]. Debt and Capital Management - The company reduced debt and financing lease obligations from $494 million in 2022 to $194 million as of June 30, 2025, reflecting a $300 million reduction in less than three years [5][8]. - Cash balances increased to $22.9 million as of June 30, 2025, up by $10.1 million since December 31, 2024 [8][9]. Shareholder Returns - The company repurchased 1 million shares of common stock for $8.9 million during Q2 2025, continuing its commitment to return capital to shareholders [5][11]. - A regular dividend of $0.02 per share was declared and paid on July 3, 2025, contributing to cumulative cash dividends of $558.3 million since 2003 [11][12]. Operational Initiatives - The CFI fleet is undergoing a full fleet telematics transition, approximately 75% complete, aimed at improving driver utilization and experience [2][3]. - The company continues to strategically reduce underperforming freight lanes and align fleet size with current demand [3][4].

Group 1 - The article highlights Heartland Express, Inc. (NASDAQ: HTLD) as an under-the-radar stock in the US freight and logistics market, which faces ongoing challenges similar to other truckload companies [1] - The author has nearly two decades of experience in the logistics sector and has been involved in stock investing and macroeconomic analysis for almost a decade, focusing on various markets including ASEAN and NYSE/NASDAQ [1] - The author emphasizes the importance of portfolio diversification, having transitioned from investing solely in banks and properties to including stocks across different industries and market capitalizations [1] Group 2 - The author began trading in the US market in 2020 and has holdings in US banks, hotels, shipping, and logistics companies, indicating a broad investment strategy [1] - The article reflects the author's journey of learning and sharing knowledge about the stock market, particularly through platforms like Seeking Alpha, which has been instrumental in comparing analyses across different markets [1]

Investment Rating - The report does not explicitly state an investment rating for the transportation and logistics industry Core Insights - The report highlights a positive trend in U.S. imports, with a 6.1% week-over-week increase as of May 18, outperforming seasonal expectations by 980 basis points and showing a 2.8% year-over-year increase [2] - Spot rates for truckload transportation have surged, with dry van rates increasing by 6.1% week-over-week, outperforming historical averages [3] - There are concerns regarding potential freight demand impacts due to tariffs, with expectations of a flat outlook for dry van spot rates in 2026 [6] Summary by Sections Import & Congestion Monitor - Container bookings from China to the U.S. are at five-year lows, down 27% compared to 2023, indicating subdued future demand [2] - The report notes a recovery in container imports at the Port of LA/LB, which increased by 24% week-over-week [2] Truckload and Rail Data - Spot rates for dry van, reefers, and flatbed have all increased week-over-week, with dry van rates now 4% higher year-over-year [3] - The dry van load-to-truck ratio increased by 57% week-over-week, indicating a tightening market [6] - Rail management teams express skepticism about the feasibility of transcontinental mergers due to regulatory barriers [7] Airfreight & Surface Transportation - Airfreight rates have been monitored closely due to tariff implications, with significant declines observed in key freight lanes, particularly the China-U.S. lane, which fell by 6% week-over-week [10] - The overall airfreight market is experiencing broad-based weakness, with all major lanes underperforming seasonal expectations year-to-date [10] Rail Performance - The report card for railroads indicates varying performance levels, with some railroads rated as excellent while others are fair or poor [9] - Regulatory challenges are highlighted as a significant barrier to potential mergers in the rail industry, with environmental impact studies being particularly burdensome [7]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) For the first quarter ended March 31, 2025, Heartland Express reported a decrease in operating revenue to $219.4 million from $270.3 million in the prior year's quarter, recording a net loss of $13.9 million, or ($0.18) per diluted share, a slight improvement from Q1 2024 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $140,418 | $129,448 | | Cash and cash equivalents | $23,873 | $12,812 | | Property and equipment, net | $766,762 | $764,407 | | Goodwill | $322,597 | $322,597 | | **Total Assets** | **$1,344,711** | **$1,334,192** | | **Total Current Liabilities** | $155,501 | $119,559 | | Long-term debt and finance lease liabilities | $188,842 | $191,707 | | **Total Liabilities** | **$536,986** | **$511,593** | | **Total Stockholders' Equity** | **$807,725** | **$822,599** | Consolidated Statement of Comprehensive Income (Loss) (in thousands, except per share data) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Operating Revenue | $219,420 | $270,320 | | Operating Expenses | $234,318 | $284,703 | | **Operating Loss** | **($14,898)** | **($14,383)** | | **Net Loss** | **($13,873)** | **($15,108)** | | Diluted Net Loss Per Share | ($0.18) | ($0.19) | | Dividends Declared Per Share | $0.02 | $0.02 | Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,843 | $30,976 | | Net cash provided by (used in) investing activities | ($11,499) | $1,952 | | Net cash used in financing activities | ($3,008) | ($36,723) | | **Net increase (decrease) in cash** | **$11,336** | **($3,795)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes clarify that the company operates as a single reportable segment providing truckload services, with Q1 2025 total revenues of $219.4 million, and an effective tax rate of 22.4% - The company operates as a single reportable segment, providing asset-based dry van truckload services across the U.S., Mexico, and parts of Canada[26](index=26&type=chunk) - Total revenues for Q1 2025 were **$219.4 million**, down from **$270.3 million** in Q1 2024, with fuel surcharge revenues decreasing to **$26.3 million** from **$36.2 million**[29](index=29&type=chunk) - As of March 31, 2025, the company had **$184.0 million** outstanding on its Term Facility and nothing outstanding under its **$100.0 million** Revolving Facility, with a weighted average interest rate of **6.0%**[49](index=49&type=chunk) - The effective tax rate was **22.4%** for Q1 2025, compared to **21.8%** for Q1 2024, attributed to fewer permanent differences offsetting the tax benefit in 2025[54](index=54&type=chunk) - As of March 31, 2025, the company had purchase commitments for tractors and trailers totaling **$38.8 million** for the remainder of 2025[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q1 2025 net loss to a prolonged weak freight environment, where operating cost inflation outpaced freight rates, compounded by adverse weather, leading to an operating ratio of 106.8% - The freight market remained weak through Q1 2025, though management sees encouraging signs of a potential recovery, and the company is strategically shrinking its fleet to align with current freight demand[67](index=67&type=chunk) Q1 2025 vs. Q1 2024 Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Revenue | $219.4M | $270.3M | | Net Loss | ($13.9M) | ($15.1M) | | Basic Net Loss per Share | ($0.18) | ($0.19) | | Operating Ratio | 106.8% | 105.3% | | Non-GAAP Adjusted Operating Ratio | 107.1% | 105.6% | - Operating revenue decreased by **$50.9 million (18.8%)** due to a weak freight environment, fewer drivers, and significant winter weather disruptions[79](index=79&type=chunk) - Salaries, wages, and benefits decreased **17.3%** to **$93.2 million** due to lower company miles, while fuel costs decreased **19.9%** to **$37.9 million** due to lower diesel prices and fewer miles driven[81](index=81&type=chunk)[83](index=83&type=chunk) - For the full year 2025, the company anticipates net capital expenditures of approximately **$40 to $50 million** and gains on disposal of property and equipment of **$10 to $15 million**[104](index=104&type=chunk) - The company ended Q1 2025 with **$23.9 million** in cash and cash equivalents, **$189.5 million** in outstanding debt, and **$88.3 million** available borrowing capacity on its Revolving Facility[102](index=102&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are related to interest rate fluctuations on its variable-rate debt and commodity price volatility for fuel and tires, with no derivative instruments currently used for risk management - The company has **$184.0 million** in debt subject to variable interest rates, where a hypothetical **1.0%** increase in the SOFR rate would decrease annual income before taxes by approximately **$1.8 million**[112](index=112&type=chunk) - The company is exposed to commodity price risk for fuel, where a **$1.00** increase in the average price of fuel per gallon would decrease annual income before taxes by approximately **$14.4 million**[113](index=113&type=chunk) - A **10%** increase in the price of tires would increase tire purchase expense by **$2.2 million**, correspondingly decreasing income before income taxes[113](index=113&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation by management, including the CEO and CFO, the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[115](index=115&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[117](index=117&type=chunk) [PART II - OTHER INFORMATION](index=27&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary and routine litigation incidental to its business, primarily related to personal injury, property damage, cargo, and workers' compensation claims, maintaining insurance coverage for liabilities exceeding its self-insured retention amounts - The company is a party to ordinary, routine litigation and administrative proceedings incidental to its business, mainly involving claims from transportation of freight[120](index=120&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factor concerning self-insurance, noting that the company self-insures a significant portion of its claims, which increases earnings volatility, and recent changes to its insurance program could lead to increased volatility in insurance and claims expenses - The company self-insures for a significant portion of its claims exposure, which could significantly increase the volatility of its earnings[122](index=122&type=chunk) - In April 2025, the company's auto liability retention limit was increased, and an additional corridor was added where the company retains liability of **$5.0 million** for the first accident exceeding **$20.0 million**[124](index=124&type=chunk) - Aggregate excess liability coverage was reduced from **$80.0 million** to **$75.0 million** in April 2025, with the company retaining any liability in excess of **$75.0 million**[124](index=124&type=chunk)[125](index=125&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) None reported for the period - None[127](index=127&type=chunk) [Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported for the period - None[128](index=128&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[129](index=129&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[130](index=130&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and XBRL data files - The report includes a list of filed exhibits, such as CEO and CFO certifications and XBRL data files[132](index=132&type=chunk)

Financial Performance - Operating revenues for Q1 2025 were $219.4 million, down from $270.3 million in Q1 2024, representing a decrease of approximately 18.8%[2] - The net loss for Q1 2025 was $13.9 million, an improvement from a net loss of $15.1 million in Q1 2024, indicating a reduction of about 8%[2] - Basic loss per share was $0.18 in Q1 2025, compared to $0.19 in the same period of 2024, reflecting a slight improvement[2] - Operating revenue for Q1 2025 was $219,420,000, down from $270,320,000 in Q1 2024, representing a decrease of approximately 18.9%[17] - Operating revenue excluding fuel surcharge revenue was $193,099,000 in Q1 2025, compared to $234,108,000 in Q1 2024, a decline of about 17.5%[17] - Adjusted operating loss for Q1 2025 was $(13,644,000), slightly worse than the $(13,129,000) loss in Q1 2024[17] - The operating loss for Q1 2025 was $(14,898,000), compared to $(14,383,000) in Q1 2024, indicating a slight deterioration in performance[17] Operational Efficiency - The operating ratio for Q1 2025 was 106.8%, compared to 105.3% in Q1 2024, indicating a decline in operational efficiency[2] - The adjusted operating ratio increased to 107.1% in Q1 2025 from 105.6% in Q1 2024, indicating a decline in operational efficiency[17] - Operating expenses for Q1 2025 totaled $234,318,000, down from $284,703,000 in Q1 2024, a reduction of approximately 17.7%[17] Cash Flow and Assets - Cash balances increased to $23.9 million as of March 31, 2025, up by $11.1 million since December 31, 2024[3] - Total assets were reported at $1.3 billion, with stockholders' equity at $807.7 million as of March 31, 2025[3] - Net cash flows from operations for Q1 2025 were $25.8 million, representing 11.8% of operating revenue[5] Capital Expenditures and Dividends - The company expects net capital expenditures of approximately $40 to $50 million for the calendar year 2025[6] - A regular dividend of $0.02 per share was declared and paid during Q1 2025, maintaining a commitment to stockholders[7] Fleet Information - The average age of the consolidated tractor fleet was 2.6 years, while the trailer fleet averaged 7.4 years as of March 31, 2025[6] Non-GAAP Measures - The company emphasizes that non-GAAP measures like adjusted operating income provide better comparability for underlying operations, despite limitations[17] - Management continues to rely primarily on GAAP results while using non-GAAP measures as supplemental information[17] - The company aims to mitigate the volatility of fuel prices in its financial reporting to better reflect operational performance[17] Fuel Surcharge Revenue - The company reported a fuel surcharge revenue of $26,321,000 in Q1 2025, compared to $36,212,000 in Q1 2024, reflecting a decrease of about 27.4%[17]