Heartland Express(US:HTLD)2022-05-06 22:08Financial 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].