Heartland Express(HTLD) - 2021 Q1 - Quarterly Report

Financial Performance - Operating revenues for the first three months of 2021 were $152.4 million, a decrease from $166.3 million in the same period of 2020[69]. - Net income for Q1 2021 was $13.7 million, compared to $13.2 million in Q1 2020, with basic net income per share increasing from $0.16 to $0.17[69]. - Operating revenue decreased by $13.9 million (8.4%) to $152.4 million for the three months ended March 31, 2021, compared to $166.3 million for the same period in 2020[74]. - Net income increased by 3.7% to $13.7 million for the three months ended March 31, 2021, up from $13.2 million in the same period of 2020[73]. - The operating ratio improved to 88.0% for the three months ended March 31, 2021, compared to 89.6% in the prior year[73]. Cash Flow and Assets - Cash flow from operating activities was $35.4 million, representing 23.2% of operating revenues, down from $40.1 million or 24.1% in Q1 2020[69]. - Cash flow provided by operating activities was $35.4 million, representing 23.2% of operating revenues for the three months ended March 31, 2021, compared to 24.1% in the same period of 2020[92]. - The company had $148.2 million in cash and cash equivalents and no outstanding debt as of March 31, 2021[87]. - Total assets as of March 31, 2021, were $949.4 million, with a return on assets of 7.5% and return on equity of 9.9%[69]. Cost Management - The operating ratio improved to 88.0% in Q1 2021 from 89.6% in Q1 2020, while the adjusted operating ratio decreased to 86.5% from 88.2%[69][70]. - Salaries, wages, and benefits decreased by $5.5 million (7.8%) to $64.8 million due to a reduction in the number of drivers[77]. - Fuel surcharge revenue decreased by $2.7 million (13.8%) from $19.5 million in 2020 to $16.8 million in 2021, primarily due to decreased miles driven[74]. - The company has implemented various fuel management strategies to control costs, including strategic fueling and minimizing idling[68]. Equipment and Acquisitions - The average age of the tractor fleet was 1.7 years and the trailer fleet was 3.8 years as of March 31, 2021, indicating a focus on maintaining modern equipment[68]. - The company completed its third acquisition in eight years by acquiring Millis Transfer on August 26, 2019, enhancing its dry van truckload capacity[66]. - The total estimated purchase commitments for tractors and trailer equipment as of March 31, 2021, was $121.3 million, extending through the remainder of 2021[91]. Future Plans and Risks - The company plans to open its first joint driver training school in Carlisle, PA, during Q2 2021, to enhance driver recruitment efforts[66]. - A $1.00 increase in the average price of fuel per gallon is projected to decrease the company's income before income taxes by approximately $8.2 million in 2021[103]. - A 10% increase in tire prices is expected to raise tire purchase expenses by $1.4 million, leading to a corresponding decrease in income before income taxes[103]. - The company is exposed to commodity price risks primarily related to fuel and tire purchases[103]. - Increases in interest rates could impact the company's interest expense on future borrowings[102]. Debt and Financing - As of March 31, 2021, the company had no outstanding debt and $88.5 million available borrowing capacity on its Credit Agreement[102]. - The company can borrow under the Credit Agreement at either one-month or three-month LIBOR plus a spread of 0.700% to 0.900% per annum, or Prime plus 0.0%[102].