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 319-645-7060 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: (State or Other Jurisdiction (I.R.S. Employer of Incorporation or organization) Identification No.) 901 Heartland Way, North Liberty, Iowa 52317 (Address of Principal Executive Offices) (Zip Code) For ...

[Executive Summary](index=1&type=section&id=Item%201.%20Executive%20Summary) Heartland Express reported a Q1 2024 net loss from weak freight demand and cost inflation, focusing on cost reduction and debt repayment [Q1 2024 Performance Overview](index=1&type=section&id=Item%201.1%20Q1%202024%20Performance%20Overview) Heartland Express reported a significant decline in Q1 2024 financial performance compared to Q1 2023, with operating revenue decreasing to $270.3 million and a net loss of $15.1 million, primarily due to weak freight demand, excess industry capacity, and cost inflation Q1 2024 Performance Overview | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Operating Revenue | $270.3M | $330.9M | -18.3% | | Net (Loss) Income | ($15.1M) | $12.6M | N/A | | Basic (Loss) Earnings per Share | ($0.19) | $0.16 | N/A | | Operating Ratio | 105.3% | 93.1% | +12.2 pp | [CEO Commentary and Strategic Initiatives](index=1&type=section&id=Item%201.2%20CEO%20Commentary%20and%20Strategic%20Initiatives) CEO Mike Gerdin attributed the weak results to challenging market conditions but highlighted internal efforts to improve operating effectiveness through cost reductions, purchasing scale, driver utilization, and on-time service. The company also focused on reducing unprofitable freight and debt, with a $36.7 million reduction in acquisition-related debt in Q1 2024 - Market Challenges: Weak freight demand, excess capacity, unfavorable weather, and ongoing operating cost inflation negatively impacted Q1 2024 results[1](index=1&type=chunk) - Strategic Focus: Internal efforts include cost reductions, purchasing scale, information systems projects for driver utilization improvements, and a continued focus on on-time service. The company also worked to reduce unprofitable freight and refused to lower freight rates to unsustainable levels[1](index=1&type=chunk) - Debt Reduction: Prioritized capital to reduce acquisition-related debt by an additional **$36.7 million** during the first quarter of 2024[1](index=1&type=chunk) [Consolidated Financial Results](index=1&type=section&id=Item%202.%20Consolidated%20Financial%20Results) Q1 2024 saw a substantial decline in operating revenue and a shift to net loss, reflecting challenging market conditions [Income Statement Analysis](index=4&type=section&id=Item%202.1%20Income%20Statement%20Analysis) The consolidated statements of income show a substantial year-over-year decline in revenue and a shift from net income to net loss for the three months ended March 31, 2024. Operating expenses increased relative to revenue, leading to an operating loss Consolidated Statements of Income (Three Months Ended March 31) | (In thousands, except per share amounts) | 2024 | 2023 | | :--------------------------------------- | :---------- | :---------- | | OPERATING REVENUE | $270,320 | $330,916 | | OPERATING EXPENSES: | | | | Salaries, wages, and benefits | $112,697 | $123,333 | | Rent and purchased transportation | 23,863 | 33,144 | | Fuel | 47,321 | 57,528 | | Operations and maintenance | 16,264 | 15,026 | | Operating taxes and licenses | 5,315 | 5,543 | | Insurance and claims | 14,584 | 11,002 | | Communications and utilities | 2,440 | 2,876 | | Depreciation and amortization | 46,504 | 48,469 | | Other operating expenses | 15,626 | 17,891 | | Loss (gain) on disposal of property and equipment | 89 | (6,786) | | Total Operating Expenses | 284,703 | 308,026 | | Operating (loss) income | (14,383) | 22,890 | | Interest income | 366 | 484 | | Interest expense | (5,302) | (6,075) | | (Loss) Income before income taxes | (19,319) | 17,299 | | Federal and state income taxes | (4,211) | 4,687 | | Net (loss) income | $(15,108) | $12,612 | | (Loss) Earnings per Share | | | | Basic | $(0.19) | $0.16 | | Diluted | $(0.19) | $0.16 | | Weighted Average Shares Outstanding Basic| 79,044 | 78,987 | | Weighted Average Shares Outstanding Diluted| 79,122 | 79,022 | | Dividends Declared per Share | $0.02 | $0.02 | [Key Performance Indicators](index=1&type=section&id=Item%202.2%20Key%20Performance%20Indicators) Key financial metrics for Q1 2024 reflect the challenging market, with significant drops in operating revenue and a shift from net income to net loss, alongside a notable increase in the operating ratio Key Financial Metrics (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------------- | :---------- | :---------- | :----------- | | Operating Revenue | $270.3M | $330.9M | -18.3% | | Fuel Surcharge Revenue | $36.2M | $49.6M | -27.0% | | Operating (Loss) Income | ($14.4M) | $22.9M | N/A | | Net (Loss) Income | ($15.1M) | $12.6M | N/A | | Basic (Loss) Earnings per Share | ($0.19) | $0.16 | N/A | | Operating Ratio | 105.3% | 93.1% | +12.2 pp | | Non-GAAP Adjusted Operating Ratio | 105.6% | 91.4% | +14.2 pp | | Net Loss as % of Operating Revenues | 5.6% | 3.8% (Net Income) | N/A | [Financial Position and Capital Management](index=1&type=section&id=Item%203.%20Financial%20Position%20and%20Capital%20Management) Heartland Express maintained a solid Q1 2024 financial position, reducing debt and managing capital expenditures [Balance Sheet Highlights](index=5&type=section&id=Item%203.1%20Balance%20Sheet%20Highlights) As of March 31, 2024, Heartland Express maintained a solid financial position with total assets of $1.45 billion and stockholders' equity of $848.8 million. The company successfully reduced its debt and financing lease obligations Condensed Consolidated Balance Sheets (March 31, 2024 vs December 31, 2023) | (in thousands) | March 31, 2024 | December 31, 2023 | | :----------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $23,823 | $28,123 | | Total current assets | 160,142 | 169,272 | | Property and equipment, net | 841,451 | 885,351 | | Goodwill | 322,597 | 322,597 | | Total Assets | $1,452,485 | $1,509,646 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | 127,468 | 123,476 | | Long-term debt and finance lease liabilities less current portion | 254,616 | 290,696 | | Total long-term liabilities | 476,227 | 520,910 | | Stockholders' Equity | 848,790 | 865,260 | | Total Liabilities and Stockholders' Equity | $1,452,485 | $1,509,646 | - Debt and financing lease obligations decreased to **$263.6 million** as of March 31, 2024, down from initial borrowings for the CFI and Smith acquisitions[4](index=4&type=chunk) - The Company had **$88.0 million** in available borrowing capacity on its unsecured line of credit as of March 31, 2024, and remained in compliance with financial covenants[4](index=4&type=chunk) [Cash Flow and Debt Reduction](index=1&type=section&id=Item%203.2%20Cash%20Flow%20and%20Debt%20Reduction) Net cash flows from operations for the first three months of 2024 were $31.0 million, primarily used for significant debt and financing lease repayments. The company has repaid a substantial portion of acquisition-related debt since 2022 and intends to prioritize further debt reductions throughout 2024 - Net cash flows from operations for Q1 2024 were **$31.0 million**, representing **11.5%** of operating revenue[5](index=5&type=chunk) - Primary use of cash in Q1 2024 was **$36.7 million** for repayments of debt and financing leases[1](index=1&type=chunk)[5](index=5&type=chunk) - Since the 2022 acquisitions, the Company has repaid a total of **$232.2 million** of acquisition-related debt, and plans to continue prioritizing capital towards further debt reductions in 2024[5](index=5&type=chunk) [Capital Expenditures and Fleet Information](index=2&type=section&id=Item%203.3%20Capital%20Expenditures%20and%20Fleet%20Information) The average age of the company's consolidated tractor and trailer fleets increased slightly year-over-year. For calendar year 2024, net capital expenditures are projected to be approximately $15 to $20 million, with no significant gains expected from equipment disposition Fleet Age (as of March 31) | Fleet Type | 2024 | 2023 | | :--------- | :------ | :------ | | Tractor | 2.4 years | 2.1 years | | Trailer | 6.7 years | 6.2 years | - Expected net capital expenditures for calendar year 2024 are approximately **$15 to $20 million**, with no significant gains anticipated from equipment disposition[6](index=6&type=chunk) [Shareholder Value](index=2&type=section&id=Item%204.%20Shareholder%20Value) The company maintained regular Q1 2024 dividend payments, demonstrating shareholder commitment, but did not repurchase shares [Dividends](index=4&type=section&id=Item%204.1%20Dividends) Heartland Express continued its commitment to stockholders by declaring a regular cash dividend of $0.02 per share during the first quarter of 2024, maintaining its long history of consecutive quarterly payments - A regular dividend of **$0.02 per share** was declared during Q1 2024 and paid on April 5, 2024[7](index=7&type=chunk)[14](index=14&type=chunk) - The Company has paid cumulative cash dividends of **$550.5 million**, including four special dividends, over the past eighty-three consecutive quarters since 2003[7](index=7&type=chunk) [Share Repurchase Program](index=2&type=section&id=Item%204.2%20Share%20Repurchase%20Program) Heartland Express did not repurchase any shares of common stock in Q1 2024 or throughout 2023, despite having authorization to repurchase an additional 6.6 million shares - No shares of common stock were repurchased in the first three months of 2024 or throughout all of 2023[7](index=7&type=chunk) - The Company has the ability to repurchase an additional **6.6 million shares** under the current authorization[7](index=7&type=chunk) [Other Information](index=2&type=section&id=Item%205.%20Other%20Information) Heartland Express received multiple industry awards in Q1 2024 and provided non-GAAP financial reconciliations for operational insights [Operational Achievements](index=2&type=section&id=Item%205.1%20Operational%20Achievements) During the first quarter of 2024, Heartland Express's operating brands continued to deliver award-winning service, safety, and integrity, earning several industry recognitions - Awards received include: Home Depot Truckload Carrier of the Year (Medium Fleet), Home Depot Truckload Carrier of the Year (Small Fleet), NFI US East Carrier of the Year, TCA Fleet Safety Award 2023 - 2nd Place (Division VI, 100+ Million Miles), Missouri Trucking Association - Safety Award (Over the Road, 15+ Million Miles), and Newsweek's 2024 Most Trustworthy Companies[8](index=8&type=chunk)[9](index=9&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=1&type=section&id=Item%205.2%20Non-GAAP%20Financial%20Measures%20Reconciliation) The report includes a reconciliation of GAAP to non-GAAP financial measures, such as operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio. Management believes these non-GAAP measures provide a more consistent basis for comparing operational results by excluding the volatility of fuel prices GAAP to Non-GAAP Reconciliation (Three Months Ended March 31) | (Unaudited, in thousands) | 2024 | 2023 | | :---------------------------------------- | :---------- | :---------- | | Operating revenue | $270,320 | $330,916 | | Less: Fuel surcharge revenue | 36,212 | 49,647 | | Operating revenue, excluding fuel surcharge revenue | 234,108 | 281,269 | | Operating expenses | 284,703 | 308,026 | | Less: Fuel surcharge revenue | 36,212 | 49,647 | | Less: Amortization of intangibles | 1,254 | 1,291 | | Adjusted operating expenses | 247,237 | 257,088 | | Operating (loss) income | (14,383) | 22,890 | | Adjusted operating (loss) income | $(13,129) | $24,181 | | Operating ratio | 105.3 % | 93.1 % | | Adjusted operating ratio | 105.6 % | 91.4 % | - Non-GAAP measures (operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio) are used to supplement GAAP results, providing a more consistent basis for comparing operations by excluding fuel price volatility[8](index=8&type=chunk)[17](index=17&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Item%206.%20Forward-Looking%20Statements) This section provides a standard disclaimer for forward-looking statements, highlighting inherent risks and uncertainties [Forward-Looking Statements Disclaimer](index=3&type=section&id=Item%206.1%20Forward-Looking%20Statements%20Disclaimer) This section contains a standard disclaimer regarding forward-looking statements, cautioning that such statements are based on management's current beliefs and involve certain risks and uncertainties, which may cause actual events to differ materially from those projected. The Company assumes no obligation to update these statements - Statements regarding freight supply and demand, future cost inflation, market conditions, operational improvements, goals, capital deployment, capital expenditures, equipment dispositions, operating ratio, stock repurchases, dividends, and debt repayment are considered forward-looking statements[11](index=11&type=chunk) - Actual events may differ materially from forward-looking statements due to numerous factors, including those specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2023[11](index=11&type=chunk) - The Company assumes no obligation to update any forward-looking statements[11](index=11&type=chunk) [Contact Information](index=3&type=section&id=Item%207.%20Contact%20Information) Investor relations contact details are provided for inquiries, listing key executive personnel [Investor Relations Contact](index=3&type=section&id=Item%207.1%20Investor%20Relations%20Contact) This section provides contact details for investor inquiries, listing the Chief Executive Officer and Chief Financial Officer - Contact persons for Heartland Express, Inc. are Mike Gerdin (Chief Executive Officer) and Chris Strain (Chief Financial Officer) at (319-645-7060)[12](index=12&type=chunk)

For the quarter ended March 2024, Heartland Express (HTLD) reported revenue of $270.32 million, down 18.3% over the same period last year. EPS came in at -$0.19, compared to $0.16 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $265.24 million, representing a surprise of +1.92%. The company delivered an EPS surprise of -72.73%, with the consensus EPS estimate being -$0.11.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings ...

Heartland Express (HTLD) came out with a quarterly loss of $0.19 per share versus the Zacks Consensus Estimate of a loss of $0.11. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -72.73%. A quarter ago, it was expected that this trucking and logistics company would post a loss of $0.10 per share when it actually produced earnings of $0.06, delivering a surprise of 160%.Over the last four quar ...

NORTH LIBERTY, Iowa, April 23, 2024 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (NASDAQ:HTLD) announced today financial results for the three months ended March 31, 2024. Three months ended March 31, 2024: Operating Revenue of $270.3 million,Net Loss of $15.1 million, Basic Loss per Share of $0.19,Operating Ratio of 105.3% and 105.6% Non-GAAP Adjusted Operating Ratio(1),Total Assets of $1.5 billion,Stockholders' Equity of $848.8 million. Heartland Express Chief Executive Officer Mike Gerdin commented on the ...

PART I Overview of Heartland Express's business, operations, and regulatory environment, including risk factors [ITEM 1. Business](index=4&type=section&id=ITEM%201.%20Business) Heartland Express provides diverse truckload and transportation services, expanded through recent acquisitions - Heartland Express, Inc. operates as a short, medium, and long-haul asset-based dry van truckload carrier, expanding services to include cross-border freight to/from Mexico through **2022 acquisitions of Smith Transport and CFI**[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - The company's revenue grew from **$21.6 million in 1986 to $1.2 billion in 2023**, achieving its highest revenue of **$4.0 billion** and second-highest net income of **$371.4 million** for 2019-2023[20](index=20&type=chunk) - Heartland Express operates under the brand names Heartland Express, Millis Transfer, Smith Transport, and CFI, managing its business based on consolidated operating goals[18](index=18&type=chunk) [General Business Overview](index=4&type=section&id=General) Overview of Heartland Express's corporate structure, service offerings, growth strategy, and debt management - Heartland Express, Inc. is a Nevada-incorporated holding company owning several legal entities, providing short, medium, and long-haul asset-based dry van truckload services across the U.S., with expanded cross-border freight in Mexico following **2022 acquisitions**[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - The company's growth strategy involves expanding services for existing customers, acquiring new customers, and strategic acquisitions, with criteria including safe operations, high-quality drivers, and a path to a **low-80s operating ratio**[20](index=20&type=chunk)[22](index=22&type=chunk) - Historically debt-free, the company incurred significant debt with the CFI acquisition but substantially lowered its debt balance from **2022 to 2023**, prioritizing debt reduction[22](index=22&type=chunk)[23](index=23&type=chunk) [Operations](index=6&type=section&id=Operations) Details on operational focus, terminal network, and customer satisfaction strategies - Operations focus on customer expectations, driver opportunities, and maximizing equipment utilization, with approximately **70% of loads in 2023** being less than **500 miles** within the U.S.[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk) - The company operates **thirty-one terminal facilities** across the contiguous U.S. and **one in Mexico**, strategically located for regional freight movements within a **500-mile radius**[28](index=28&type=chunk) - Customer satisfaction is emphasized through on-time performance, dependable late-model equipment, and consistent availability, supported by a high trailer-to-tractor ratio to minimize waiting times[30](index=30&type=chunk) [Customers, Marketing, Safety and Diversity](index=6&type=section&id=Customers%2C%20Marketing%2C%20Safety%20and%20Diversity) Overview of customer targeting, revenue concentration, and commitment to safety and diversity - The company targets customers with multiple, time-sensitive shipments, positioning itself as a provider of premium service at compensatory rates[32](index=32&type=chunk) - Primary customers include retailers, manufacturers, and parcel carriers, with diversification improving in **2022** due to acquisitions, and no single customer exceeding **10% of operating revenues** in **2023 or 2022**[34](index=34&type=chunk) Customer Revenue Concentration | Customer Group | 2023 Operating Revenues (%) | 2022 Operating Revenues (%) | | :--------------- | :-------------------------- | :-------------------------- | | 25 largest customers | 56% | 61% | | 10 largest customers | 36% | 41% | | 5 largest customers | 22% | 27% | [Environmental and Sustainability](index=8&type=section&id=Environmental%20and%20Sustainability) Heartland Express's commitment to environmental stewardship and energy conservation initiatives - Heartland Express's 'Environmental and Sustainability Mission' focuses on reducing waste and conserving energy through equipment designs, idle reduction, solar energy, and battery usage[35](index=35&type=chunk) - The company received the U.S. EPA SmartWay Excellence Award in **seven of the last nine years** and was a SmartWay High Performer **seven times**[35](index=35&type=chunk) [Human Rights](index=8&type=section&id=Human%20Rights) Heartland Express's commitment to human rights, diversity, and anti-trafficking initiatives - The company's 'Human Rights Mission' emphasizes diversity, inclusion, workplace safety, and prohibits forced labor and human trafficking, sponsoring 'Truckers Against Trafficking'[36](index=36&type=chunk) [Seasonality](index=8&type=section&id=Seasonality) Impact of cyclical and seasonal factors on trucking industry operations and demand - The trucking industry is cyclical and seasonal, with winter weather decreasing tractor productivity and increasing operating expenses due to idling and higher accident frequency[37](index=37&type=chunk)[38](index=38&type=chunk) - Fourth-quarter demand, especially from retail customers, typically requires additional capacity, but can be muted during soft freight environments, as seen in the last two years[38](index=38&type=chunk) [Drivers, Independent Contractors, and Other Employees](index=10&type=section&id=Drivers%2C%20Independent%20Contractors%2C%20and%20Other%20Employees) Overview of employee and independent contractor data, driver shortage challenges, and retention strategies Employee and Independent Contractor Data | Metric | 2023 | 2022 | | :-------------------------------- | :----- | :----- | | Average Employees | 6,320 | 4,710 | | Independent Contractor Miles (% of total) | 5.0% | 2.7% | - The trucking industry faces a persistent shortage of qualified drivers, intensified by freight demand and the **COVID-19 pandemic in 2021**, though availability improved in late **2022 and 2023** due to a declining freight environment[40](index=40&type=chunk) - The company attracts and retains drivers through competitive compensation, benefits, modern equipment, and facilities, including pay protection programs, with Millis Training Institute and Heartland Training Institute providing new driver sources[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) [Revenue Equipment](index=11&type=section&id=Revenue%20Equipment) Heartland Express's strategy for maintaining a modern fleet and equipment ownership practices - Heartland Express maintains a modern fleet of tractors and trailers for better operating performance, driver appeal, and reduced carbon footprint, evidenced by SmartWay awards[44](index=44&type=chunk) - The company primarily owns its revenue equipment, paying cash for new acquisitions, allowing flexibility in buying and selling, with tractors depreciated using the **125% declining balance method** and trailers by the straight-line method[45](index=45&type=chunk) Average Fleet Age | Fleet Type | December 31, 2023 (Years) | December 31, 2022 (Years) | | :----------- | :------------------------ | :------------------------ | | Tractors | 2.2 | 2.0 | | Trailers | 6.4 | 6.3 | - The average age of both tractor and trailer fleets is expected to increase in **2024** due to estimated lower net capital expenditures[217](index=217&type=chunk) [Fuel](index=12&type=section&id=Fuel) Management of fuel costs, impact of surcharges, and fuel price trends - Fuel is a significant operating cost, managed through discounted fuel stops and bulk sites, with surcharge agreements helping pass through long-term price increases, but not covering empty/out-of-route miles or idling costs[51](index=51&type=chunk) Fuel Expense and Surcharge Revenue | Metric | 2023 (Millions USD) | 2022 (Millions USD) | 2023 (% of Operating Expenses) | 2022 (% of Operating Expenses) | | :-------------------- | :------------------ | :------------------ | :----------------------------- | :----------------------------- | | Fuel Expense | $212.2 | $194.6 | 18.2% | 25.0% | | Fuel Surcharge Revenue | $173.8 | $169.2 | N/A | N/A | - The Department of Energy (DOE) average fuel price decreased by **15.5% in 2023** compared to **2022**, positively impacting net fuel cost despite higher empty route miles due to soft freight demand[51](index=51&type=chunk) [Competition and Industry](index=12&type=section&id=Competition%20and%20Industry) Overview of the highly competitive and cyclical truckload industry and Heartland Express's growth strategies - The truckload industry is highly competitive and fragmented, with competition based on freight rates, drivers, service, and equipment, while Heartland specializes in time-sensitive shipments with premium service[52](index=52&type=chunk) - The industry is cyclical; freight demand softened in late **2022** and degraded throughout **2023**, with challenges expected in the first half of **2024**, prompting strategic changes to improve operational readiness[53](index=53&type=chunk) - Organic growth is difficult due to driver shortages and equipment availability, leading the company to pursue strategic acquisitions like **Smith Transport and CFI** to combat these challenges[54](index=54&type=chunk)[55](index=55&type=chunk) [Safety and Risk Management](index=13&type=section&id=Safety%20and%20Risk%20Management) Heartland Express's safety program, compliance with regulations, and self-insurance practices - The company's safety program focuses on minimizing accidents and complying with governmental safety regulations, emphasizing communication, equipment specifications, maintenance, and driver compensation for safe driving[56](index=56&type=chunk) - Heartland Express self-insures a portion of risks related to cargo loss, physical damage, personal injury, property damage, and workers' compensation claims, with retention levels evaluated annually[57](index=57&type=chunk) - Effective **April 2023**, auto liability retention increased to **$3.0 million per claim** (with a **$3.5 million corridor**

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 September 30, 2023 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-15087 HEARTLAND EXPRESS INC. (Exact Name of Registrant as Specified in Its Charter) Nevada 93-0926999 (State or Other Jurisd ...

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, 2023 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-15087 HEARTLAND EXPRESS INC. (Exact Name of Registrant as Specified in Its Charter) Indicate by check mark whether the registrant ...

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Presents unaudited consolidated financial statements and notes, detailing acquisitions' impact on financial position [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements and notes, detailing acquisitions' financial impact [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing assets, liabilities, and equity at specific dates | ASSETS (in thousands) | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $55,506 | $49,462 | | Total current assets | $212,312 | $229,782 | | Property and equipment, net | $938,406 | $973,258 | | Goodwill | $320,675 | $320,675 | | Total Assets | $1,612,510 | $1,669,488 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | March 31, 2023 | December 31, 2022 | | :------------------------------------------------ | :------------- | :---------------- | | Total current liabilities | $146,564 | $156,757 | | Total long-term liabilities | $599,327 | $657,254 | | Total Stockholders' Equity | $866,619 | $855,477 | | Total Liabilities and Stockholders' Equity | $1,612,510 | $1,669,488 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Details the company's operating performance, including revenue, expenses, and net income | (in thousands, except per share amounts) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | OPERATING REVENUE | $330,916 | $151,275 | | OPERATING EXPENSES | $308,026 | $128,880 | | Operating income | $22,890 | $22,395 | | Income before income taxes | $17,299 | $22,541 | | Net income | $12,612 | $16,775 | | Basic Net income per share | $0.16 | $0.21 | | Diluted Net income per share | $0.16 | $0.21 | | Dividends declared per share | $0.02 | $0.02 | - Operating revenue increased significantly by **118.8% YoY**, primarily due to the acquisitions of Smith Transport and CFI. However, net income decreased by **24.8% YoY**, and basic EPS declined from **$0.21 to $0.16**[14](index=14&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in stockholders' equity, including net income, dividends, and stock compensation | (in thousands) | Balance, Dec 31, 2022 | Net Income | Dividends | Stock-based Comp | Balance, Mar 31, 2023 | | :------------------------- | :-------------------- | :--------- | :-------- | :--------------- | :-------------------- | | Capital Stock, Common | $907 | — | — | — | $907 | | Additional Paid-In Capital | $4,165 | — | — | $32 | $4,197 | | Retained Earnings | $1,051,641 | $12,612 | $(1,581) | — | $1,062,672 | | Treasury Stock | $(201,236) | — | — | $79 | $(201,157) | | Total | $855,477 | $12,612 | $(1,581) | $111 | $866,619 | - Total stockholders' equity increased from **$855.477 million** at December 31, 2022, to **$866.619 million** at March 31, 2023, driven by net income and stock-based compensation, partially offset by dividends[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities | (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $66,442 | $37,593 | | Net cash used in investing activities | $(12,801) | $(8,381) | | Net cash used in financing activities | $(47,366) | $(41) | | Net increase in cash, cash equivalents and restricted cash | $6,275 | $29,171 | | Cash, cash equivalents and restricted cash, End of period | $70,753 | $202,938 | - Net cash provided by operating activities increased by **$28.8 million YoY** to **$66.4 million**, primarily due to higher net income (net of non-working capital items) and increased cash from working capital. However, net cash used in financing activities significantly increased due to debt repayments related to 2022 acquisitions[19](index=19&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the consolidated financial statements [Note 1. Basis of Presentation and New Accounting Pronouncements](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20New%20Accounting%20Pronouncements) Explains the basis of financial statement preparation and impact of recent acquisitions - Heartland Express, Inc. is a Nevada-incorporated holding company operating as a short, medium, and long-haul truckload carrier. Recent acquisitions include Smith Transport (May 31, 2022) and CFI (August 31, 2022), significantly expanding its services to include cross-border freight and Mexican entities. The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information[21](index=21&type=chunk)[22](index=22&type=chunk) [Note 2. Use of Estimates](index=9&type=section&id=Note%202.%20Use%20of%20Estimates) Discusses management's use of estimates and assumptions in financial statement preparation - The preparation of financial statements requires management to make estimates and assumptions. No significant changes in estimates or assumptions related to critical accounting policies occurred during the three months ended March 31, 2023[23](index=23&type=chunk) [Note 3. Segment Information](index=9&type=section&id=Note%203.%20Segment%20Information) Describes the company's single reportable segment and its transportation services - The company operates as a single reportable segment, providing truckload services across the U.S., Mexico, and parts of Canada, primarily asset-based dry van, with some temperature-controlled and Mexico logistics services. The Chief Operating Decision Maker (CODM) manages all transportation services on a combined basis[24](index=24&type=chunk) [Note 4. Revenue Recognition](index=9&type=section&id=Note%204.%20Revenue%20Recognition) Details the company's policies for recognizing revenue from transportation services - Revenue is recognized over time as services are transferred to customers, typically within **30 days of delivery**. Each shipment is a separate contract, with revenue estimated based on miles run for multiple-stop loads and transit time for single-stop loads[25](index=25&type=chunk)[27](index=27&type=chunk) | Revenue Type (in millions) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------- | :-------------------------------- | :-------------------------------- | | Total revenues | $330.9 | $151.3 | | Fuel surcharge revenues | $49.6 | $24.0 | | Accessorial, brokerage, and other revenues | $24.6 | $3.2 | [Note 5. Cash and Cash Equivalents](index=10&type=section&id=Note%205.%20Cash%20and%20Cash%20Equivalents) Defines cash equivalents and details restricted cash balances - Cash equivalents are short-term, highly liquid investments. Restricted and designated cash and investments totaled **$15.2 million** at March 31, 2023, primarily for self-insurance deposits and specific purposes, not general business use[29](index=29&type=chunk) [Note 6. Prepaid Tires, Property, Equipment, and Depreciation](index=10&type=section&id=Note%206.%20Prepaid%20Tires,%20Property,%20Equipment,%20and%20Depreciation) Outlines accounting policies for property, equipment, and depreciation - Property and equipment are reported at cost, net of accumulated depreciation

Financial Performance - In 2022, the company generated operating revenues of $968.0 million, a 59.4% increase from $607.3 million in 2021, with a net income of $133.6 million compared to $79.3 million in the previous year[189]. - The company achieved an operating ratio of 80.5% for 2022, improving from 82.6% in 2021, and a net margin of 13.8%, up from 13.1% in 2021[189]. - Operating revenue increased by $360.7 million (59.4%), reaching $968.0 million for the year ended December 31, 2022, compared to $607.3 million in 2021[204]. - Operating income margin improved to 19.5% for the year ended December 31, 2022, compared to 17.4% in 2021[202]. - The effective tax rate increased to 26.2% for the twelve months ended December 31, 2022, from 25.2% in 2021[218]. Cash Flow and Debt Management - Cash flow from operating activities for 2022 was $194.7 million, representing 20.1% of operating revenues, slightly down from 20.3% in 2021[192]. - Operating cash flow for 2022 was $194.7 million, an increase from $123.4 million in 2021, representing 20.1% of operating revenues[234]. - The company had $375.0 million outstanding on the Term Facility and no outstanding under the Revolving Facility as of December 31, 2022[229]. - The company intends to pay down debt incurred from recent acquisitions while maintaining regular quarterly dividends[233]. - The company has a maximum net leverage ratio of 2.75 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00 under the Credit Facilities[226]. Acquisitions and Growth Strategy - The company completed two significant acquisitions in 2022: Smith Transport on May 31 and CFI on August 31, which added dry van truckload capacity and increased revenues[186][188]. - The company expects operating revenue growth in 2023, primarily from the Smith and CFI acquisitions, despite a weaker freight market[205]. - The company plans to focus on paying down debt incurred from acquisitions in 2022, with no significant acquisitions expected in the near term[196][197]. Operating Expenses - Fuel expense rose by $95.0 million (95.4%), totaling $194.6 million for the year ended December 31, 2022, primarily due to increased miles driven and a 51.8% rise in average diesel prices[210]. - Salaries, wages, and benefits increased by $96.3 million (38.5%), amounting to $346.3 million for the year ended December 31, 2022, driven by a higher number of drivers and support staff following acquisitions[209]. - Depreciation and amortization expenses increased by $28.9 million (27.8%), totaling $133.0 million for the year ended December 31, 2022, due to ongoing fleet replacement strategies[211]. - Rent and purchased transportation expenses increased by $50.5 million, totaling $54.3 million for the year ended December 31, 2022, largely due to the acquisition of CFI[208]. - The company experienced significant inflation impacts on operating expenses, particularly in driver compensation and equipment costs[219]. Asset Management - Total assets at the end of 2022 were $1.7 billion, with total stockholders' equity of $855.5 million, reflecting a return on assets of 9.8% and return on equity of 16.4%[189]. - The average age of the tractor fleet was 2.0 years and the trailer fleet was 6.3 years as of December 31, 2022, with expectations for consistency in 2023[199]. - The company has $382.4 million in outstanding debt and $30.6 million in finance lease liabilities as of December 31, 2022, totaling $413.0 million, with $375.0 million subject to variable interest rates[253]. Market Conditions and Challenges - The trucking industry is facing a qualified driver shortage, but driver availability has begun to improve in early 2023 due to changing market conditions[194]. - Freight demand is expected to remain challenged in the first half of 2023, influenced by supply chain issues and economic conditions[193]. - A 1.0% increase in the Secured Overnight Financing Rate (SOFR) would result in an additional $3.8 million in annual interest expense based on current variable rate debt[253]. - The company is exposed to commodity price risk, particularly in fuel and rubber purchases, with a $1.00 increase in average fuel price per gallon potentially decreasing income before taxes by approximately $9.3 million[254]. - A 10% increase in tire prices is expected to raise tire purchase expenses by $2.0 million, leading to a corresponding decrease in income before taxes[255]. Management and Estimates - Management believes that changes in revenue equipment markets could affect the estimates of depreciable life or salvage value, but such changes will not significantly impact the long-term financial condition of the company[245]. - The purchase price of acquired businesses is allocated to the estimated fair values of assets and liabilities, with significant judgment required in determining these values[247]. - The company has not recorded a valuation allowance against deferred tax assets, believing it is more likely than not that remaining deferred tax assets will be utilized[249]. - Management's estimates for income tax provisions and unrecognized tax benefits are based on historical patterns and state-specific regulations[250].