Old Dominion Freight Line(ODFL) - 2025 Q2 - Quarterly Results

Earnings Announcement The company announced a decline in Q2 and YTD 2025 financial performance amid a soft domestic economy Second Quarter 2025 Financial Results Overview The company reported a decline in Q2 and YTD 2025 financial performance due to a soft domestic economy but maintained high service quality Key Financial Highlights (Q2 and YTD 2025 vs. 2024): | Metric | Q2 2025 | Q2 2024 | % Chg. | YTD 2025 | YTD 2024 | % Chg. | | :-------------------------------- | :---------- | :---------- | :------- | :---------- | :---------- | :------- | | Total revenue | $1,407,724 | $1,498,697 | (6.1)% | $2,782,582 | $2,958,770 | (6.0)% | | Operating income | $357,895 | $421,691 | (15.1)% | $695,950 | $808,117 | (13.9)% | | Operating ratio | 74.6% | 71.9% | +2.7 pts | 75.0% | 72.7% | +2.3 pts | | Net income | $268,626 | $322,045 | (16.6)% | $523,286 | $614,349 | (14.8)% | | Diluted earnings per share | $1.27 | $1.48 | (14.2)% | $2.46 | $2.82 | (12.8)% | - Achieved an on-time service performance of 99% and a cargo claims ratio of 0.1%, demonstrating commitment to superior service[2] Management Commentary Management discusses the drivers behind the financial results and outlines the company's strategic focus amidst a challenging environment Analysis of Financial Performance Drivers Reduced LTL tons per day drove the revenue decrease, while disciplined yield management partially offset the impact - Decrease in second quarter revenue primarily due to a 9.3% decrease in LTL tons per day[3] - LTL tons per day decrease reflects a 7.3% decrease in LTL shipments per day and a 2.1% decrease in LTL weight per shipment[3] - LTL revenue per hundredweight, excluding fuel surcharges, increased 5.3% compared to Q2 2024, attributed to disciplined yield management[3] - Operating ratio increased by 270 basis points to 74.6% for Q2 2025, due to revenue deleveraging, increased depreciation, and higher overhead and direct operating costs[4][5] Strategic Outlook and Operational Focus Management remains confident in its long-term strategy, focusing on superior service, yield discipline, and network investment - Company continues to manage through a difficult operating environment that has persisted longer than anticipated[9] - Remains confident in long-term positioning, emphasizing best-in-class service, yield discipline, and efficient operations[9] - Consistent execution and investment in the network positions the company to capitalize on improved demand, supporting profitable revenue growth[9] Capital Management and Liquidity The company details its cash flow generation, capital expenditure plans, and significant capital returns to shareholders Cash Flow and Capital Allocation The company generated strong operating cash flow, detailed its capital expenditures, and projected total spending for 2025 Cash Flow and Cash Equivalents: | Metric | Q2 2025 | YTD 2025 | | :-------------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $285.9 million | $622.4 million | | Cash and cash equivalents (as of June 30, 2025) | $24.1 million | N/A | - Capital expenditures were $187.2 million for Q2 2025 and $275.3 million for the first half of the year[7] - Expected aggregate capital expenditures for 2025 total approximately $450 million, including[7]: - $210 million for real estate and service center expansion projects - $190 million for tractors and trailers - $50 million for information technology and other assets Shareholder Return Programs The company returned significant capital to shareholders through share repurchases and cash dividends in the first half of 2025 Capital Returned to Shareholders (First Six Months 2025): | Program | Amount | | :---------------- | :------------- | | Share repurchases | $424.6 million | | Cash dividends | $118.5 million | Company Information This section provides an overview of the company's operations as a leading North American LTL motor carrier Business Description Old Dominion is a leading North American LTL carrier offering a wide range of logistics and value-added services - One of the largest North American LTL motor carriers, providing regional, inter-regional, and national LTL services[12] - Operates through a single integrated, union-free organization with an expansive network of service centers across the continental U.S[12] - Offers value-added services including expedited transportation, container drayage, truckload brokerage, and supply chain consulting[12] Legal and Disclosures This section outlines cautionary statements regarding forward-looking information and details key business and economic risks Forward-Looking Statements and Risk Factors This section contains cautionary statements on forward-looking information and highlights various risks and uncertainties - Forward-looking statements involve risks and uncertainties that could cause actual events and results to be materially different[10] - Key risks include challenges in executing growth strategy, changes in customer relationships, economic downturns, competition, and cyber incidents[10][11] - The company undertakes no obligation to publicly update any forward-looking statement except as required by law[11] Detailed Financial and Operating Data This section provides unaudited financial statements and key operating statistics for the reported periods Statements of Operations (Unaudited) Presents unaudited consolidated statements of operations for the three and six months ended June 30, 2025, and 2024 OLD DOMINION FREIGHT LINE, INC. Statements of Operations (Unaudited): | (In thousands, except per share amounts) | Second Quarter 2025 | % | Second Quarter 2024 | % | Year to Date 2025 | % | Year to Date 2024 | % | | :--------------------------------------- | :------------------ | :---- | :------------------ | :---- | :---------------- | :---- | :---------------- | :---- | | Revenue | $1,407,724 | 100.0% | $1,498,697 | 100.0% | $2,782,582 | 100.0% | $2,958,770 | 100.0% | | Operating expenses: | | | | | | | | | | Salaries, wages & benefits | 672,093 | 47.7% | 683,784 | 45.6% | 1,330,178 | 47.8% | 1,352,174 | 45.7% | | Operating supplies & expenses | 142,457 | 10.1% | 161,020 | 10.7% | 292,349 | 10.5% | 333,492 | 11.3% | | General supplies & expenses | 41,676 | 3.0% | 44,371 | 3.0% | 81,556 | 2.9% | 89,947 | 3.0% | | Operating taxes & licenses | 34,983 | 2.5% | 36,282 | 2.4% | 70,586 | 2.5% | 72,120 | 2.5% | | Insurance & claims | 18,794 | 1.3% | 17,141 | 1.2% | 36,274 | 1.3% | 35,335 | 1.2% | | Communications & utilities | 9,296 | 0.7% | 10,158 | 0.7% | 20,099 | 0.7% | 21,153 | 0.7% | | Depreciation & amortization | 90,663 | 6.4% | 84,563 | 5.6% | 179,795 | 6.5% | 169,094 | 5.6% | | Purchased transportation | 28,544 | 2.0% | 32,010 | 2.2% | 56,207 | 2.0% | 62,720 | 2.1% | | Miscellaneous expenses, net | 11,323 | 0.9% | 7,677 | 0.5% | 19,588 | 0.8% | 14,618 | 0.6% | | Total operating expenses | 1,049,829 | 74.6% | 1,077,006 | 71.9% | 2,086,632 | 75.0% | 2,150,653 | 72.7% | | Operating income | 357,895 | 25.4% | 421,691 | 28.1% | 695,950 | 25.0% | 808,117 | 27.3% | | Non-operating expense (income): | | | | | | | | | | Interest expense | 6 | 0.0% | 131 | 0.0% | 8 | 0.0% | 168 | 0.0% | | Interest income | (684) | (0.0)% | (5,961) | (0.5)% | (2,346) | (0.1)% | (13,333) | (0.5)% | | Other expense, net | 1,357 | 0.0% | 1,075 | 0.1% | 2,428 | 0.1% | 1,954 | 0.1% | | Income before income taxes | 357,216 | 25.4% | 426,446 | 28.5% | 695,860 | 25.0% | 819,328 | 27.7% | | Provision for income taxes | 88,590 | 6.3% | 104,401 | 7.0% | 172,574 | 6.2% | 204,979 | 6.9% | | Net income | $268,626 | 19.1% | $322,045 | 21.5% | $523,286 | 18.8% | $614,349 | 20.8% | | Earnings per share: | | | | | | | | | | Basic | $1.27 | | $1.49 | | $2.47 | | $2.83 | | | Diluted | $1.27 | | $1.48 | | $2.46 | | $2.82 | | | Weighted average outstanding shares: | | | | | | | | | | Basic | 211,083 | | 216,369 | | 211,739 | | 216,981 | | | Diluted | 212,164 | | 217,541 | | 212,821 | | 218,174 | | Operating Statistics (Unaudited) Provides detailed unaudited operating statistics for the second quarter and year-to-date periods of 2025 and 2024 OLD DOMINION FREIGHT LINE, INC. Operating Statistics (Unaudited): | Metric | Second Quarter 2025 | Second Quarter 2024 | % Chg. | Year to Date 2025 | Year to Date 2024 | % Chg. | | :------------------------------------------ | :------------------ | :------------------ | :------- | :------------------ | :------------------ | :------- | | Work days | 64 | 64 | —% | 127 | 128 | (0.8)% | | Operating ratio | 74.6% | 71.9% | | 75.0% | 72.7% | | | LTL intercity miles (in thousands) | 159,582 | 172,361 | (7.4)% | 316,841 | 342,127 | (7.4)% | | LTL tons (in thousands) | 2,123 | 2,340 | (9.3)% | 4,211 | 4,604 | (8.5)% | | LTL tonnage per day | 33,178 | 36,560 | (9.3)% | 33,157 | 35,970 | (7.8)% | | LTL shipments (in thousands) | 2,874 | 3,100 | (7.3)% | 5,682 | 6,104 | (6.9)% | | LTL shipments per day | 44,907 | 48,444 | (7.3)% | 44,738 | 47,687 | (6.2)% | | LTL revenue per hundredweight | $32.84 | $31.77 | 3.4% | $32.76 | $31.87 | 2.8% | | LTL revenue per hundredweight, excluding fuel surcharges | $28.17 | $26.75 | 5.3% | $28.03 | $26.76 | 4.7% | | LTL revenue per shipment | $485.31 | $479.48 | 1.2% | $485.55 | $480.84 | 1.0% | | LTL revenue per shipment, excluding fuel surcharges | $416.31 | $403.77 | 3.1% | $415.50 | $403.74 | 2.9% | | LTL weight per shipment (lbs.) | 1,478 | 1,509 | (2.1)% | 1,482 | 1,509 | (1.8)% | | Average length of haul (miles) | 912 | 918 | (0.7)% | 914 | 919 | (0.5)% | | Average active full-time employees | 21,621 | 22,702 | (4.8)% | 21,719 | 22,796 | (4.7)% | Balance Sheets (Unaudited) Presents the company's unaudited balance sheets as of June 30, 2025, and December 31, 2024 OLD DOMINION FREIGHT LINE, INC. Balance Sheets (Unaudited): | (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $24,057 | $108,676 | | Other current assets | 674,086 | 612,007 | | Total current assets | 698,143 | 720,683 | | Net property and equipment | 4,590,436 | 4,505,431 | | Other assets | 262,517 | 265,281 | | Total assets | $5,551,096 | $5,491,395 | | Current maturities of long-term debt | $20,000 | $20,000 | | Other current liabilities | 486,863 | 520,529 | | Total current liabilities | 506,863 | 540,529 | | Long-term debt | 149,992 | 39,987 | | Other non-current liabilities | 663,610 | 666,291 | | Total liabilities | 1,320,465 | 1,246,807 | | Equity | 4,230,631 | 4,244,588 | | Total liabilities & equity | $5,551,096 | $5,491,395 |