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].

Financial Performance - Operating revenues for the first nine months of 2022 were $613.1 million, a 33.5% increase from $459.1 million in the same period of 2021[94]. - Net income for the first nine months of 2022 was $118.1 million, compared to $58.9 million in the same period of 2021, resulting in a basic net income per share of $1.50[94]. - Operating revenue increased by $154.0 million (33.5%) to $613.1 million for the nine months ended September 30, 2022, compared to $459.1 million in the same period of 2021[118]. - Net income for the nine months ended September 30, 2022, was $118.1 million, representing a 100.4% increase from $58.9 million in the same period of 2021[117]. - Net income for the three months ended September 30, 2022, was $24.4 million, a slight decrease of 0.2% from $24.5 million in the same period of 2021[100]. Operational Efficiency - The operating ratio improved to 73.5% for the nine months ended September 30, 2022, down from 82.8% for the same period in 2021[94]. - Adjusted operating ratio was 83.7% for the three months ended September 30, 2022, compared to 74.5% in the prior year, indicating a decline in operational efficiency[100]. - Operating expenses as a percentage of total operating revenue decreased from 78.2% in 2021 to 87.3% in 2022, reflecting increased costs associated with recent acquisitions[98]. Acquisitions and Growth Strategy - The company completed two strategic acquisitions, Smith Transport and CFI, in 2022 to enhance operational scale and service offerings[85][89]. - The company acquired CFI and Smith Transport in 2022, which contributed to the increase in operating revenues and expenses[99]. - Future growth is expected to depend on economic conditions, customer demand, and the ability to attract and retain experienced drivers[89]. Fuel and Expenses - Average diesel fuel prices increased by 53.5% year-over-year, reaching $5.15 per gallon in Q3 2022 compared to $3.36 in Q3 2021[93]. - Fuel expenses rose by $51.0 million (68.6%) to $125.2 million due to higher average diesel prices (57.0%) and increased fuel consumption[123]. - Fuel expenses rose by $28.1 million (111.4%) to $53.4 million for the three months ended September 30, 2022, driven by higher diesel prices and increased miles driven[106]. - Fuel surcharge revenue increased by $27.9 million (141.9%) to $47.5 million for the three months ended September 30, 2022, due to higher average diesel fuel prices[101]. Labor Costs - Salaries, wages, and benefits increased by $34.7 million (55.3%) to $97.4 million for the three months ended September 30, 2022, primarily due to acquisitions and increased driver wage rates[104]. - Salaries, wages, and benefits increased by $31.5 million (16.5%) to $221.9 million, primarily due to the increase in the number of drivers and higher wage rates[120]. Cash Flow and Assets - Cash flow from operating activities for the first nine months of 2022 was $112.6 million, representing 18.4% of operating revenues[94]. - The company ended Q3 2022 with total assets of $1.7 billion and achieved a return on assets of 11.8%[94]. - Cash flow from operating activities was $112.6 million, representing 18.4% of operating revenues, compared to $95.7 million (20.8% of operating revenues) in the same period of 2021[135]. Tax and Interest Expenses - The effective tax rate decreased to 25.9% for the three months ended September 30, 2022, down from 26.9% in the prior year, due to a reduction in tax accruals for uncertain tax positions[115]. - The effective tax rate increased to 26.5% for the nine months ended September 30, 2022, compared to 25.8% in the same period of 2021[129]. - Interest expense increased by $2.3 million in the three months ended September 30, 2022, resulting from financing associated with the Smith Transport acquisition[114]. - Interest expense increased by $2.5 million due to financing assumed through the Smith Transport acquisition and the credit facility related to the CFI acquisition[128]. Commodity Price Risk - Commodity price risk is primarily related to fuel and rubber purchases[144]. - A $1.00 increase in average fuel price per gallon would decrease income before income taxes by approximately $14.0 million in 2022[144]. - A 10% increase in tire prices would increase tire purchase expenses by $2.9 million, resulting in a corresponding decrease in income before income taxes[144]. - Fuel surcharge agreements help limit exposure to commodity price risk but do not fully offset fuel cost increases[144]. - The company cannot pass through 100% of tire price increases due to timing and severity of increases[144]. - The company has historically minimized tire price increases through bulk purchases[144]. Equipment and Commitments - The average age of the tractor fleet increased to 2.1 years as of September 30, 2022, compared to 1.7 years a year earlier, influenced by recent acquisitions[93]. - Total estimated purchase commitments for tractors and trailer equipment as of September 30, 2022, were $68.5 million, extending through the remainder of 2022 and into 2023[134]. - The company entered into a $550.0 million unsecured credit facility, including a $100.0 million revolving line of credit and $450.0 million in term loans, to support its acquisitions[130]. Gains and Disposals - Gains on the disposal of property and equipment increased by $65.5 million to $92.8 million, primarily due to a $73.2 million gain on the sale of a terminal property[127].

Financial Performance - Operating revenues for the first six months of 2022 were $339.1 million, a 10.5% increase from $306.5 million in the same period of 2021[79]. - Net income for the first half of 2022 was $93.7 million, compared to $34.5 million in the first half of 2021, representing a 171.0% increase[79]. - The operating ratio improved to 62.4% for the first six months of 2022, down from 85.1% in the same period of 2021[79]. - Operating revenue increased by $33.7 million (21.9%) to $187.8 million for the three months ended June 30, 2022, compared to $154.1 million in the same period of 2021[86]. - Net income for the three months ended June 30, 2022, was $76.9 million, representing an increase of 270.8% from $20.7 million in the same period of 2021[85]. - The operating ratio improved to 44.1% for the three months ended June 30, 2022, down from 82.3% in the same period of 2021[85]. - Adjusted operating income was $31.9 million for the three months ended June 30, 2022, compared to $27.4 million in the same period of 2021[85]. - Operating revenue increased by $32.6 million (10.6%) to $339.1 million for the six months ended June 30, 2022, compared to $306.5 million for the same period in 2021[99]. Cash Flow and Assets - The company ended the second quarter of 2022 with cash, cash equivalents, and restricted cash of $186.7 million, an increase of $12.9 million during the first six months[79]. - Cash flow from operating activities for the first half of 2022 was $58.5 million, representing 17.3% of operating revenues, down from 20.5% in the same period of 2021[79]. - Cash flow from operating activities was $58.5 million for the six months ended June 30, 2022, compared to $62.8 million in the same period of 2021, representing 17.3% of operating revenues[115]. - Cash used in investing activities was $42.8 million during the six months ended June 30, 2022, primarily due to the $122.0 million cash outflow for the acquisition of Smith Transport[116]. Acquisitions and Growth - The company completed the acquisition of Smith Transport on May 31, 2022, marking its fourth acquisition in nine years[74]. - The acquisition of Smith Transport on May 31, 2022, contributed to changes in operating revenues and expenses for the periods reported[84]. - The company is focused on expanding driver training programs to address the ongoing shortage of qualified drivers in the industry[76]. Expenses and Costs - Average diesel fuel prices increased by 70.9% year-over-year, from $3.21 per gallon in June 2021 to $5.49 per gallon in June 2022[77]. - Fuel expenses increased by $17.2 million (69.5%) to $42.0 million for the three months ended June 30, 2022, primarily due to higher average diesel prices[90]. - Salaries, wages, and benefits rose by $3.0 million (4.7%) to $65.9 million for the three months ended June 30, 2022, driven by increased driver wage rates and the acquisition of Smith Transport[89]. - Salaries, wages, and benefits decreased by $3.2 million (2.5%) to $124.5 million for the six months ended June 30, 2022, primarily due to a reduction in the number of drivers[101]. - Fuel expenses increased by $22.8 million (46.6%) to $71.8 million for the six months ended June 30, 2022, attributed to higher average diesel prices[102]. - Other operating expenses increased by $7.3 million to $18.0 million during the six months ended June 30, 2022, mainly due to a legal settlement and the acquisition of Smith Transport[106]. Gains and Losses - The company reported a gain on the disposal of property and equipment of $81.7 million for the three months ended June 30, 2022, compared to $7.9 million in the same period of 2021[95]. - Gains on the disposal of property and equipment increased by $73.9 million to $86.0 million during the six months ended June 30, 2022, primarily from a $73.2 million gain on the sale of a terminal property[107]. Tax and Effective Rates - The effective tax rate increased to 26.9% for the three months ended June 30, 2022, from 24.6% in the same period of 2021[96]. Commodity Price Risk - Commodity price risk is primarily related to fuel and rubber purchases[124]. - A $1.00 increase in average fuel price per gallon would decrease income before income taxes by approximately $9.1 million in 2022[124]. - A 10% increase in tire prices would increase tire purchase expenses by $1.4 million, leading to a corresponding decrease in income before income taxes[124]. - Fuel surcharge agreements help limit exposure to commodity price risk, but do not fully offset fuel cost increases[124]. - The company cannot pass through 100% of tire price increases due to the timing and severity of increases[124]. - The company has historically minimized tire price increases through bulk purchases from suppliers[124]. - Fuel costs associated with out-of-route miles, empty miles, and tractor idle time cannot be passed through to customers[124]. - The analysis is based on actual fuel purchases for 2021 adjusted for the acquisition of Smith Transport[124]. - The company expects to maintain consistent miles driven, fuel surcharges as a percentage of revenue, and miles per gallon with adjusted 2021 amounts[124]. - The current rate environment affects the ability to pass through tire price increases[124].

Financial Performance - Operating revenues for the first three months of 2022 were $151.3 million, a slight decrease from $152.4 million in the same period of 2021[60]. - Net income for Q1 2022 was $16.8 million, compared to $13.7 million in Q1 2021, resulting in basic net income per share of $0.21 versus $0.17[60]. - Net income for the three months ended March 31, 2022, was $16.8 million, an increase of 22.1% compared to $13.7 million for the same period in 2021[64]. - Operating revenue decreased by $1.1 million (0.7%) to $151.3 million for the three months ended March 31, 2022, from $152.4 million in 2021[65]. - The effective tax rate was 25.6% for the three months ended March 31, 2022, compared to 25.4% in 2021[73]. Operating Efficiency - The operating ratio improved to 85.2% in Q1 2022 from 88.0% in Q1 2021, while the adjusted operating ratio decreased to 82.4% from 86.5%[60][61]. - The operating ratio improved to 85.2% for the three months ended March 31, 2022, compared to 88.0% in the prior year[64]. Cash Flow and Assets - Cash flow from operating activities was $37.6 million, representing 24.9% of operating revenues, up from $35.4 million or 23.2% in Q1 2021[60]. - Cash flow from operating activities was $37.6 million, representing 24.9% of operating revenues for the three months ended March 31, 2022, compared to 23.2% in 2021[78]. - The company ended Q1 2022 with total assets of $947.1 million and cash, cash equivalents, and restricted cash of $202.9 million[60]. - The company had $187.1 million in cash and cash equivalents and no outstanding debt as of March 31, 2022[74]. Fuel and Expenses - Average diesel fuel prices increased by 45.7% year-over-year, reaching $4.24 per gallon in Q1 2022 compared to $2.91 in Q1 2021[58]. - Fuel expenses increased by $5.5 million (23.0%) to $29.7 million for the three months ended March 31, 2022, primarily due to a 45.7% rise in average diesel prices[68]. - The company is focused on managing fuel costs, which have become the second highest expense, and is implementing various strategies to mitigate fuel price volatility[59]. - A $1.00 increase in the average price of fuel per gallon would decrease income before income taxes by approximately $7.0 million in 2022[86]. - Fuel surcharge agreements with most customers help limit exposure to commodity price risk, but do not fully offset fuel cost increases[86]. Workforce and Training - Salaries, wages, and benefits decreased by $6.2 million (9.5%) to $58.6 million for the three months ended March 31, 2022, due to a reduction in the number of drivers[67]. - The driver training program, Millis Training Institute, has been expanded to address the shortage of qualified drivers in the industry[57]. Acquisitions and Commitments - The company has completed eight acquisitions since 1986, with the most recent being Millis Transfer in August 2019, aimed at expanding into new markets[55]. - Total estimated purchase commitments for tractors and trailer equipment as of March 31, 2022, were $22.3 million, extending through 2022 and into 2023[77]. Investment Activities - Cash used in investing activities was $8.4 million during the three months ended March 31, 2022, compared to cash provided by investing activities of $15.5 million in the same period of 2021[79]. Commodity Price Risk - The company is subject to commodity price risk primarily related to fuel and rubber purchases[86]. - The company cannot pass through 100% of tire price increases due to the timing and severity of increases[86]. - A 10% increase in tire prices would increase tire purchase expenses by $1.1 million, resulting in a corresponding decrease in income before income taxes[86].

Financial Performance - In 2021, the company generated operating revenues of $607.3 million, a decrease from $645.3 million in 2020, with a net income of $79.3 million compared to $70.8 million in the previous year[167]. - The operating ratio improved to 82.6% in 2021 from 85.5% in 2020, indicating better operational efficiency[168]. - The company achieved a net margin of 13.1% in 2021, up from 11.0% in 2020, reflecting improved profitability[168]. - Operating revenue decreased by $38.0 million (5.9%) to $607.3 million for the year ended December 31, 2021, from $645.3 million in 2020[182]. - Operating income increased to 17.4% of operating revenue in 2021, compared to 14.5% in 2020[181]. - Gains on the disposal of property and equipment rose by $22.6 million (152.4%) to $37.4 million in 2021, driven by a 132.8% increase in trailer sales volume[193]. Cash Flow and Investments - Cash flow from operating activities was $123.4 million, or 20.3% of operating revenues, down from $178.9 million, or 27.7% in 2020[170]. - Cash flows used in investing activities decreased by $108.4 million to $2.6 million in 2021, mainly due to reduced net purchases of property and equipment[200]. - The company had $157.7 million in cash and cash equivalents at December 31, 2021, with no outstanding debt[198]. Cost Management - The company maintains a disciplined approach to cost controls, aiming for a low-80s operating ratio and a debt-free balance sheet[164]. - Salaries, wages, and benefits decreased by $19.5 million (7.2%) to $250.0 million in 2021, attributed to a reduction in the number of drivers[185]. - Fuel expenses increased by $13.5 million (15.7%) to $99.6 million for the year ended December 31, 2021, primarily due to a 28.9% rise in average diesel prices[186]. Driver and Workforce Management - The trucking industry faces a qualified driver shortage, with competition for drivers expected to remain challenging due to decreasing numbers of qualified drivers[173]. - The company plans to continue enhancing driver compensation and benefits to attract and retain experienced drivers, with multiple pay increases implemented over the last three years[173]. Assets and Equity - The company’s total assets were $928.5 million and total stockholders' equity was $727.1 million at the end of 2021, with a return on assets of 8.4% and return on equity of 10.9%[168]. Tax and Compliance - The effective tax rate increased to 25.2% in 2021 from 24.9% in 2020, due to non-recurring favorable adjustments in 2020[194]. - The company paid income taxes of $38.5 million in 2021, an increase from $13.7 million in 2020, primarily due to a federal refund received in 2020 and increased tax liability in 2021[203]. - At December 31, 2021, the company had $4.7 million in gross unrecognized tax benefits, with $3.7 million potentially impacting the effective tax rate if recognized[209]. Debt and Financing - The company entered into a Credit Agreement with Wells Fargo Bank, providing for a $25.0 million Revolver and an uncommitted accordion feature allowing for an additional $100.0 million increase[204]. - The Credit Agreement includes a maximum adjusted leverage ratio of 2:1 and a minimum tangible net worth requirement of $250.0 million, with compliance confirmed for 2021 and 2020[206]. - The company has no outstanding debt as of December 31, 2021, and interest rates on future borrowings will be based on the Secured Overnight Financing Rate plus a spread[220]. Market Risks - The company does not currently use derivative financial instruments for risk management purposes, limiting exposure to market risks[219]. - The company estimates that a $1.00 increase in the average price of fuel per gallon would decrease income before income taxes by approximately $7.0 million[222]. - A 10% increase in tire prices is expected to raise tire purchase expenses by $1.1 million, resulting in a corresponding decrease in income before income taxes[222]. Share Repurchase - As of December 31, 2021, the company has 6.6 million shares remaining authorized for repurchase, with 1.8 million shares repurchased in 2021 and 1.5 million in 2020[202].