Heartland Express(HTLD) - 2021 Q2 - Quarterly Report

Financial Performance - Operating revenues for the first six months of 2021 were $306.5 million, a decrease from $327.2 million in the same period of 2020[66] - Net income for the first half of 2021 was $34.5 million, compared to $32.4 million in the first half of 2020, resulting in basic net income per share of $0.43[66] - Net income for the three months ended June 30, 2021, was $20.7 million, an increase of 8.1% compared to $19.2 million in the same period of 2020[69] - Net income for the six months ended June 30, 2021, was $34.5 million, an increase of 6.3% from $32.4 million in the same period of 2020[82] - Operating revenue decreased by $20.7 million (6.3%) to $306.5 million for the six months ended June 30, 2021, from $327.2 million in 2020[83] Operating Efficiency - The operating ratio improved to 85.1% for the first six months of 2021, down from 87.1% in the same period of 2020[66] - Operating ratio improved to 82.3% for the three months ended June 30, 2021, compared to 84.5% in the prior year[69] Cash Flow and Liquidity - The company ended Q2 2021 with cash, cash equivalents, and restricted cash of $183.9 million, an increase of $52.7 million during the first half of 2021[66] - Cash flow from operating activities for the six months ended June 30, 2021, was $62.8 million, a decrease from $83.8 million in the same period of 2020, representing 20.5% of operating revenues compared to 25.6% in 2020[101] - As of June 30, 2021, the company had $167.2 million in cash and cash equivalents, no outstanding debt, and $88.9 million available borrowing capacity on the Credit Agreement[96] - Cash provided by investing activities was $8.3 million during the six months ended June 30, 2021, compared to cash used of $63.9 million in the same period of 2020, resulting in a net increase of $72.2 million[104] Fuel and Operating Costs - Average DOE diesel fuel prices per gallon increased to $3.21 in Q2 2021 from $2.43 in Q2 2020, impacting operating income due to rising fuel costs[64] - Fuel surcharge revenue increased by $5.1 million (36.8%) from $14.0 million in 2020 to $19.1 million in 2021, driven by higher average diesel fuel prices[70] - Fuel expenses increased by $6.5 million (35.6%) to $24.8 million for the three months ended June 30, 2021, due to higher average diesel prices[74] - A $1.00 increase in the average price of fuel per gallon could decrease income before income taxes by approximately $8.2 million in 2021[113] Acquisitions and Growth Strategy - The company has completed eight acquisitions since 1986, with the most recent being Millis Transfer in August 2019, aimed at expanding into new operating regions[61] - The company plans to continue evaluating acquisition candidates to support future growth, focusing on safe operations and high-quality drivers[61] Driver and Training Initiatives - The company is facing a qualified driver shortage, which has intensified competition for drivers, leading to increased wages and enhanced compensation packages[62] - A new driver training school is expected to open in Carlisle, PA, in Q3 2021, providing an additional source of potential drivers[63] Tax and Expenses - The effective tax rate for the three months ended June 30, 2021, was 24.6%, compared to 23.7% in the same period of 2020[81] - The effective tax rate for the six months ended June 30, 2021, was 25.0%, compared to 24.3% for the same period in 2020[95] - Salaries, wages, and benefits decreased by $5.2 million (7.7%) to $62.9 million for the three months ended June 30, 2021, primarily due to a decrease in the number of drivers[73] Capital Expenditures and Commitments - The total estimated purchase commitments for tractors and trailer equipment as of June 30, 2021, was $61.7 million, extending through the remainder of 2021 and into 2022[100] - The company expects to spend approximately $35 to $45 million in net capital expenditures during the remainder of 2021[104] Share Repurchase - The company repurchased 0.8 million shares for $14.5 million during the six months ended June 30, 2021, compared to 0.7 million shares for $12.3 million in the same period of 2020[106] Credit and Financing - The company is currently reviewing its line of credit options with the existing line expiring on August 31, 2021[108]