Heartland Express(HTLD) - 2023 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Presents unaudited consolidated financial statements and notes, detailing acquisitions' impact on financial position Item 1. Financial Statements Presents unaudited consolidated financial statements and notes, detailing acquisitions' financial impact Consolidated Balance Sheets 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 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][77][78] Consolidated Statements of Stockholders' Equity 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] Consolidated Statements of Cash Flows 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][107][109] Notes to Consolidated Financial Statements Provides detailed explanations and disclosures supporting the consolidated financial statements Note 1. Basis of Presentation and New Accounting Pronouncements 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][22] Note 2. Use of Estimates 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] Note 3. Segment Information 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] Note 4. Revenue Recognition 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][27] | 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 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] Note 6. Prepaid Tires, Property, Equipment, and Depreciation Outlines accounting policies for property, equipment, and depreciation - Property and equipment are reported at cost, net of accumulated depreciation