Old Dominion Freight Line(US:ODFL)2025-05-06 20:21Part I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed financial statements for the quarter ended March 31, 2025, including balance sheets, statements of operations, changes in shareholders' equity, and cash flows, reflecting a softer economic environment with decreased revenue, net income, and cash from operations compared to the prior year Condensed Balance Sheets The balance sheet shows total assets of $5.491 billion as of March 31, 2025, nearly unchanged from December 31, 2024, with total liabilities slightly increasing to $1.256 billion and shareholders' equity decreasing to $4.235 billion due to share repurchases and dividends exceeding net income Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $97,198 | $108,676 | | Total current assets | $734,384 | $720,683 | | Net property and equipment | $4,497,361 | $4,505,431 | | Total assets | $5,491,294 | $5,491,395 | | Total current liabilities | $557,353 | $540,529 | | Total liabilities | $1,255,970 | $1,246,807 | | Total shareholders' equity | $4,235,324 | $4,244,588 | Condensed Statements of Operations For the three months ended March 31, 2025, revenue decreased to $1.375 billion from $1.460 billion in the prior-year period, with net income falling to $254.7 million from $292.3 million and diluted earnings per share (EPS) dropping to $1.19 from $1.34 Q1 Operating Results (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue from operations | $1,374,858 | $1,460,073 | | Operating income | $338,055 | $386,426 | | Net income | $254,660 | $292,304 | | Diluted EPS | $1.19 | $1.34 | Condensed Statements of Changes in Shareholders' Equity Shareholders' equity decreased from $4.245 billion at year-end 2024 to $4.235 billion at March 31, 2025, primarily due to $203.0 million in share repurchases and $59.4 million in cash dividends, partially offset by $254.7 million in net income - Share repurchases totaled $203.0 million in Q1 2025, a significant increase from $86.0 million in Q1 202420 - Cash dividends declared increased to $0.28 per share in Q1 2025 from $0.26 per share in Q1 20241820 Condensed Statements of Cash Flows Net cash from operating activities was $336.5 million, a decrease from $423.9 million in the prior year's quarter, with cash used in investing at $82.9 million and cash used in financing at $265.1 million, primarily for share repurchases and dividends, resulting in cash and cash equivalents ending the period at $97.2 million, down from $581.0 million a year ago Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $336,519 | $423,893 | | Net cash used in investing activities | $(82,917) | $(117,952) | | Net cash used in financing activities | $(265,080) | $(158,766) | | (Decrease) increase in cash | $(11,478) | $147,175 | | Cash and cash equivalents at end of period | $97,198 | $580,974 | Notes to the Condensed Financial Statements The notes detail the company's business, accounting policies, and financial instruments, highlighting its operation as a single reportable segment in the less-than-truckload (LTL) industry, the initiation of a new $3.0 billion share repurchase program in May 2024, and total long-term debt of $60.0 million as of March 31, 2025 - The company operates as a single reportable segment providing LTL services, which accounted for $1.36 billion of the $1.37 billion total revenue in Q1 20252649 - A new $3.0 billion stock repurchase program began in May 2024. As of March 31, 2025, $2.06 billion remained authorized under this program3134 - Total long-term debt, including current maturities, was $60.0 million at March 31, 2025, related to Series B Notes due in annual installments through May 2027404248 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 5.8% decrease in Q1 2025 revenue to continued softness in the domestic economy, leading to a 6.3% decline in LTL tonnage per day, while maintaining pricing discipline with a 2.2% increase in LTL revenue per hundredweight (4.1% excluding fuel surcharges), resulting in a worsened operating ratio of 75.4% from 73.5% due to deleveraging and higher depreciation, prompting a reduction in the 2025 capital expenditure plan to $450 million while continuing capital return programs Results of Operations Q1 2025 revenue decreased by 5.8% YoY to $1.375 billion, driven by a 6.3% drop in LTL tonnage per day and a 5.0% decrease in LTL shipments per day, partially offset by a 2.2% increase in LTL revenue per hundredweight, leading to an increased operating ratio of 75.4% from 73.5% in Q1 2024 and a 12.9% fall in net income to $254.7 million, with preliminary April 2025 data showing a continued revenue per day decrease of 5.5% YoY Q1 2025 vs Q1 2024 Key Operating Metrics | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue (in thousands) | $1,374,858 | $1,460,073 | (5.8)% | | Operating Ratio | 75.4% | 73.5% | +190 bps | | LTL tonnage per day | 33,135 | 35,380 | (6.3)% | | LTL shipments per day | 44,566 | 46,931 | (5.0)% | | LTL revenue per hundredweight | $32.67 | $31.98 | 2.2% | - Excluding fuel surcharges, LTL revenue per hundredweight increased 4.1% in Q1 2025 compared to Q1 2024, reflecting the company's yield management strategy61 - Salaries, wages, and benefits decreased 1.5% due to a 4.7% reduction in average full-time employees, but increased as a percentage of revenue from 45.8% to 47.9%596364 - April 2025 revenue per day decreased 5.5% YoY, with LTL tons per day down 8.8% and LTL revenue per hundredweight up 3.6%62 Liquidity and Capital Resources The company's liquidity is sourced from operations, cash on hand, and two main financing agreements, with net cash from operations decreasing to $336.5 million in Q1 2025 from $423.9 million in Q1 2024, a reduced 2025 capital expenditure plan of $450 million, and significant capital returned to shareholders via $201.1 million in share repurchases and $59.5 million in dividends during the quarter - The 2025 capital expenditure plan is estimated at $450 million, a reduction of $125 million from the initial plan, allocated to real estate ($210M), fleet ($190M), and technology ($50M)74 - In Q1 2025, the company paid $59.5 million in dividends and used $201.1 million for share repurchases71 - As of March 31, 2025, the company had $214.7 million available under its Credit Agreement and $2.06 billion remaining under its 2023 Stock Repurchase Program7684 Forward-Looking Information This section outlines numerous forward-looking statements and associated risks, including economic downturns, inflationary pressures, competition, fuel price volatility, labor market challenges, and potential impacts from regulations and cybersecurity threats, cautioning that actual results could differ materially from these statements - The company identifies key risks including economic factors (inflation, downturns), competition, fuel costs, labor challenges, and regulatory changes919398 Item 3. Quantitative and Qualitative Disclosures about Market Risk The company states there have been no material changes to its market risk exposures since the end of the last fiscal year, referring to its 2024 Form 10-K for a full discussion of market risk, which is primarily related to interest rate fluctuations on its variable-rate credit agreement - No material changes to market risk exposures were reported for the quarter. The primary exposure is to interest rate changes on the Credit Agreement, as the Series B Notes have a fixed rate8795 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes to internal control over financial reporting occurring during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the quarter covered by the report96 - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls97 Part II – OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings arising in the ordinary course of business, with management not believing the resolution of these matters will have a material adverse effect on its financial position, results, or cash flows, and no environmental proceedings meeting the $1.0 million disclosure threshold reported for the quarter - The company does not expect current legal proceedings, which have arisen in the ordinary course of business, to have a material adverse effect on its financials100 - No environmental legal proceedings with potential monetary sanctions of $1.0 million or more are disclosed for the three months ended March 31, 2025101 Item 1A. Risk Factors The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024, directing investors to that filing for a comprehensive discussion of risks - There have been no material changes to the risk factors identified in the company's Annual Report on Form 10-K for the year ended December 31, 2024103 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase activity for the first quarter of 2025, with a total of 1,139,597 shares repurchased at an average price of $180.40 per share, and approximately $2.06 billion remaining available for repurchase under the active 2023 Repurchase Program as of March 31, 2025 Q1 2025 Share Repurchases | Month (2025) | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January | 312,012 | $184.61 | | February | 384,709 | $189.04 | | March | 442,876 | $169.94 | | Total | 1,139,597 | $180.40 | - As of March 31, 2025, $2.06 billion remained authorized for repurchase under the $3.0 billion 2023 Repurchase Program105106 Item 5. Other Information The company reports that no directors or Section 16 officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the first quarter of 2025 - No directors or Section 16 officers adopted or terminated a Rule 10b5-1 trading plan in Q1 2025107 Item 6. Exhibits This section lists the exhibits filed as part of the 10-Q report, which include CEO/CFO certifications required by the Sarbanes-Oxley Act and financial data files formatted in iXBRL - The report includes required certifications under Sarbanes-Oxley Sections 302 and 906, as well as iXBRL formatted financial statements110