Group 1 - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets [1] - Investment diversification has become a strategy for individuals, moving away from traditional savings in banks and properties [1] - The popularity of insurance companies in the Philippines has influenced investment choices since 2014 [1] Group 2 - Initial investments were made in blue-chip companies, but there has been a shift towards a diversified portfolio across various industries and market capitalizations [1] - The US market has been entered since 2020, with a focus on banks, hotels, shipping, and logistics companies [1] - The use of analytical tools and comparisons between the US and Philippine markets has enhanced investment strategies [1]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's analysis of financial condition and results of operations [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements and notes, reflecting increased net losses and decreased operating revenues [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This table presents the consolidated balance sheets, highlighting changes in assets, liabilities, and equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $1,299,372 | $1,334,192 | $(34,820) | -2.61% | | Total Liabilities | $512,635 | $511,593 | $1,042 | 0.20% | | Total Stockholders' Equity | $786,737 | $822,599 | $(35,862) | -4.36% | | Cash and cash equivalents | $22,879 | $12,812 | $10,067 | 78.57% | | Property and equipment, net | $728,677 | $764,407 | $(35,730) | -4.67% | [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) This table presents the consolidated statements of comprehensive income (loss), showing significant declines in operating revenue and increased net losses | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | $210,387 | $274,754 | $(64,367) | -23.43% | | Operating (loss) income | $(12,419) | $264 | $(12,683) | -4804.92% | | Net loss | $(10,855) | $(3,478) | $(7,377) | -212.12% | | Basic Net loss per share | $(0.14) | $(0.04) | $(0.10) | -250.00% | | Diluted Net loss per share | $(0.14) | $(0.04) | $(0.10) | -250.00% | | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | $429,807 | $545,074 | $(115,267) | -21.15% | | Operating (loss) income | $(27,317) | $(14,120) | $(13,197) | -93.46% | | Net loss | $(24,728) | $(18,586) | $(6,142) | -33.05% | | Basic Net loss per share | $(0.32) | $(0.24) | $(0.08) | -33.33% | | Diluted Net loss per share | $(0.32) | $(0.24) | $(0.08) | -33.33% | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) This table details changes in stockholders' equity, including net loss, stock repurchases, and dividends | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | $822,599 | $786,737 | $(35,862) | | Net loss (6 months) | N/A | $(24,728) | N/A | | Repurchases of common stock (6 months) | N/A | $(8,931) | N/A | | Dividends on common stock (6 months) | N/A | $(3,124) | N/A | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This table presents the consolidated statements of cash flows, showing changes in operating, investing, and financing activities | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $46,842 | $70,966 | $(24,124) | -33.99% | | Net cash used in investing activities | $(17,318) | $(2,631) | $(14,687) | -558.99% | | Net cash used in financing activities | $(19,233) | $(72,379) | $53,146 | -73.43% | | Net increase (decrease) in cash, cash equivalents and restricted cash | $10,291 | $(4,044) | $14,335 | -354.47% | | Purchases of property and equipment | $(57,350) | $(15,244) | $(42,106) | -276.21% | | Repayments of finance leases and debt | $(6,949) | $(63,358) | $56,409 | -89.03% | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes accompanying the consolidated financial statements, explaining accounting policies and specific financial items [Note 1. Basis of Presentation and New Accounting Pronouncements](index=8&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20New%20Accounting%20Pronouncements) The company provides truckload and transportation services, with interim financial statements prepared under GAAP, and is evaluating a new FASB update - Heartland Express, Inc. and its subsidiaries provide nationwide asset-based dry van truckload service, cross-border freight, and other transportation services[19](index=19&type=chunk) - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions[20](index=20&type=chunk) - FASB Update 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024, is being evaluated for impact, with no material impact expected[21](index=21&type=chunk) [Note 2. Use of Estimates](index=8&type=section&id=Note%202.%20Use%20of%20Estimates) Financial statement preparation involves management estimates and assumptions, with no significant changes in critical accounting policies during the period - Management makes estimates and assumptions in preparing consolidated financial statements, which may differ from actual results[22](index=22&type=chunk) - No significant changes in estimates and assumptions related to critical accounting policies occurred during the three and six months ended June 30, 2025[22](index=22&type=chunk) [Note 3. Segment Information](index=8&type=section&id=Note%203.%20Segment%20Information) The company operates as a single reportable segment, providing truckload services across North America, managed on a combined basis - The Company has one reportable segment, consistent with authoritative accounting guidance[23](index=23&type=chunk) - Services include asset-based dry van truckload, temperature-controlled transportation, and Mexico logistics services[23](index=23&type=chunk) - The Chief Operating Decision Maker (CODM) oversees and manages all transportation services on a combined basis[23](index=23&type=chunk) [Note 4. Revenue Recognition](index=8&type=section&id=Note%204.%20Revenue%20Recognition) Revenue is recognized over time, with total revenues, fuel surcharge, and other revenues significantly decreasing in 2025 compared to 2024 - Revenue is recognized over time as control of promised services is transferred to customers, reflecting expected consideration[24](index=24&type=chunk) - The average length of haul is under **400 loaded miles** per trip, generally less than two days of continuous transit time[25](index=25&type=chunk) Revenue by Type (Three Months Ended June 30) | Revenue Type | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Change (in millions) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $210.4 | $274.8 | $(64.4) | -23.4% | | Fuel surcharge revenues | $24.5 | $36.8 | $(12.3) | -33.4% | | Accessorial, brokerage and other revenues | $14.7 | $20.0 | $(5.3) | -26.5% | Revenue by Type (Six Months Ended June 30) | Revenue Type | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $429.8 | $545.1 | $(115.3) | -21.1% | | Fuel surcharge revenues | $50.8 | $73.0 | $(22.2) | -30.4% | | Accessorial, brokerage and other revenues | $30.6 | $40.1 | $(9.5) | -23.7% | [Note 5. Cash and Cash Equivalents](index=9&type=section&id=Note%205.%20Cash%20and%20Cash%20Equivalents) Cash equivalents are highly liquid investments, with restricted and designated cash totaling **$13.7 million** at June 30, 2025 - Cash equivalents are short-term, highly liquid investments with original maturities of three months or less[28](index=28&type=chunk) Restricted and Designated Cash and Investments | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Restricted and designated cash and investments | $13.7 | $13.5 | $0.2 | - Restricted funds represent deposits for self-insurance and designated funds are earmarked for specific purposes[28](index=28&type=chunk) [Note 6. Prepaid Tires, Property, Equipment, and Depreciation](index=9&type=section&id=Note%206.%20Prepaid%20Tires%2C%20Property%2C%20Equipment%2C%20and%20Depreciation) Property and equipment are reported at cost, with new tires capitalized and depreciation methods varying by asset type and specific salvage values - Property and equipment are reported at cost, net of accumulated depreciation[29](index=29&type=chunk) - New tires are capitalized as 'Prepaid tires' and amortized over two years[29](index=29&type=chunk) - Depreciation for new tractors uses the declining balance method, while other assets use the straight-line method, with salvage values of **$15,000** for new tractors and **$4,000** for new trailers[29](index=29&type=chunk) [Note 7. Other Intangibles, Net and Goodwill](index=9&type=section&id=Note%207.%20Other%20Intangibles%2C%20Net%20and%20Goodwill) Goodwill remained constant at **$322.6 million**, while finite-lived intangibles are amortized, with expenses of **$1.3 million** and **$2.5 million** for the periods - Goodwill remained constant at **$322.6 million** at June 30, 2025 and December 31, 2024[32](index=32&type=chunk) - Other intangibles, net, totaled **$91.0 million** at June 30, 2025, including **$31.6 million** of indefinite-lived trade name assets and **$59.4 million** of net finite-lived intangible assets[30](index=30&type=chunk) Amortization Expense | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Amortization expense | $1.3 | $1.3 | $2.5 | $2.5 | [Note 8. (Loss) Earnings per Share](index=11&type=section&id=Note%208.%20%28Loss%29%20Earnings%20per%20Share) Basic and diluted loss per share increased for both periods ended June 30, 2025, reflecting higher net losses Loss per Share (Three Months Ended June 30) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic loss per share | $(0.14) | $(0.04) | | Diluted loss per share | $(0.14) | $(0.04) | Loss per Share (Six Months Ended June 30) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic loss per share | $(0.32) | $(0.24) | | Diluted loss per share | $(0.32) | $(0.24) | [Note 9. Equity](index=12&type=section&id=Note%209.%20Equity) The company's stock repurchase program has **5.0 million** shares remaining, with **1.0 million** shares repurchased for **$8.9 million** in H1 2025, and quarterly dividends of **$0.02** per share declared - The stock repurchase program has **5.0 million** shares remaining authorized for repurchase as of June 30, 2025[35](index=35&type=chunk) Stock Repurchases (Six Months Ended June 30) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Shares repurchased | 1.0 million | 0.6 million | | Value of repurchases | $8.9 million | $7.3 million | Dividends Declared | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Dividends declared | $1.6 million | $1.6 million | $3.1 million | $3.2 million | | Dividends per share | $0.02 | $0.02 | $0.04 | $0.04 | [Note 10. Stock-Based Compensation](index=12&type=section&id=Note%2010.%20Stock-Based%20Compensation) The 2021 Restricted Stock Award Plan has **0.3 million** shares available, with compensation expense of **$0.5 million** for Q2 2025 and **$1.1 million** for H1 2025 - The 2021 Restricted Stock Award Plan has **0.3 million** shares remaining available for grants at June 30, 2025[37](index=37&type=chunk) Stock-Based Compensation Expense | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Compensation expense | $0.5 | $0.4 | $1.1 | $0.7 | - Unrecognized compensation expense was **$0.4 million** at June 30, 2025, to be recognized over a weighted average period of **1.2 years**[38](index=38&type=chunk) [Note 11. Long-Term Debt](index=13&type=section&id=Note%2011.%20Long-Term%20Debt) The company has a **$550.0 million** unsecured credit facility, with **$179.8 million** outstanding on the term loan at a **6.0%** weighted average interest rate - The Company entered into a **$550.0 million** unsecured credit facility (including a **$100.0 million** revolving line of credit and **$450.0 million** in term loans) in conjunction with the CFI acquisition[42](index=42&type=chunk) - Outstanding borrowings on the Term Facility were **$179.8 million** at June 30, 2025, with no outstanding borrowings under the Revolving Facility[50](index=50&type=chunk) - The weighted average interest rate on outstanding borrowings under the Credit Facilities was **6.0%** at June 30, 2025, and the Company was in compliance with all financial covenants[48](index=48&type=chunk)[50](index=50&type=chunk) [Note 12. Lease Obligations](index=14&type=section&id=Note%2012.%20Lease%20Obligations) The company holds operating lease right-of-use assets of **$4.5 million** and finance lease liabilities of **$9.2 million** at June 30, 2025 Lease Assets and Liabilities | Lease Category | June 30, 2025 (in thousands) | | :--- | :--- | | Operating Lease Right of Use Assets | $4,479 | | Finance Lease Liabilities (Present Value) | $9,216 | Future Minimum Lease Payments | Future Minimum Lease Payments (in thousands) | Operating | Finance | | :--- | :--- | :--- | | Total minimum lease payments | $4,629 | $9,401 | | Less: future payment amount for interest | $150 | $185 | | Present value of minimum lease payments | $4,479 | $9,216 | [Note 13. Income Taxes](index=15&type=section&id=Note%2013.%20Income%20Taxes) The effective tax benefit rate increased to **28.5%** for Q2 2025 and **25.2%** for H1 2025, with gross unrecognized tax benefits decreasing to **$4.2 million** Effective Tax Benefit Rate | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Effective tax benefit rate | 28.5% | 13.5% | 25.2% | 20.4% | - The increase in the effective tax benefit rate is primarily due to a larger reduction in accrued liabilities from statutes of limitation expiring and favorable provision to actual adjustments[55](index=55&type=chunk) Gross Unrecognized Tax Benefits | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Gross unrecognized tax benefits | $4.2 | $5.2 | [Note 14. Commitments and Contingencies](index=16&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) The company faces routine litigation and has **$37.3 million** in estimated purchase commitments for equipment extending into 2026 - The Company is a party to ordinary, routine litigation and administrative proceedings incidental to its business, with potential exposure adequately provided for[59](index=59&type=chunk) - Total estimated purchase commitments for tractors and trailer equipment as of June 30, 2025, was **$37.3 million**, extending into 2026[59](index=59&type=chunk) [Note 15. Subsequent Events](index=16&type=section&id=Note%2015.%20Subsequent%20Events) The U.S. enacted the One Big Beautiful Bill Act (OBBBA) in July 2025, with its impact currently being analyzed for financial statements - In July 2025, the U.S. enacted comprehensive tax legislation, the One Big Beautiful Bill Act (OBBBA)[60](index=60&type=chunk) - The impact of the OBBBA is being analyzed and will be included in the financial statement period in which it was signed into law[60](index=60&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company faced a challenging freight environment in H1 2025, resulting in decreased revenue and increased net losses, despite cost management efforts - The company posted a **106.4%** operating ratio (**106.5%** non-GAAP adjusted) for the six months ended June 30, 2025, compared to **102.6%** (**102.5%** non-GAAP adjusted) for the same period of 2024[73](index=73&type=chunk)[75](index=75&type=chunk) - Net loss for the six months ended June 30, 2025, was **$24.7 million**, compared to **$18.6 million** in the first six months of 2024[73](index=73&type=chunk) - Operating revenues decreased by **$115.3 million** (**21.1%**) to **$429.8 million** for the six months ended June 30, 2025, primarily due to fewer drivers and a weak freight environment[73](index=73&type=chunk)[93](index=93&type=chunk) [Overview](index=17&type=section&id=Overview) Heartland Express expanded services with the CFI acquisition, now facing a weak freight market, leading to fleet reductions and cost optimization efforts - With the acquisition of CFI in August 2022, the company expanded its services to include cross-border freight to and from Mexico[64](index=64&type=chunk) - The freight demand began to soften in H2 2022 and remained weak throughout 2023 and 2024, with material improvements not expected until potentially later in 2025[66](index=66&type=chunk) - The company is strategically reducing underperforming lanes of freight and its overall fleet size to better align with current freight demand and reduce operating costs[66](index=66&type=chunk) - Driver pay per mile and as a percentage of revenue increased in 2023, 2024, and H1 2025 due to non-productive time payments in a slower freight environment[68](index=68&type=chunk) Average Age of Fleet | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Average age of tractor fleet | 2.6 years | 2.6 years | | Average age of trailer fleet | 7.5 years | 6.9 years | [Results of Operations](index=21&type=section&id=Results%20of%20Operations) The operating ratio worsened to **106.4%** in H1 2025, with net loss increasing significantly due to decreased revenue and higher operating costs - The Heartland Express brand was profitable in H1 2025, but Millis Transfer, Smith Transport, and CFI experienced under-utilized assets, operating cost growth, and driver retention challenges, leading to a lack of profitability[92](index=92&type=chunk) Operating Performance (Six Months Ended June 30) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating ratio | 106.4% | 102.6% | | Adjusted operating ratio | 106.5% | 102.5% | | Net loss | $(24.7) million | $(18.6) million | [Three Months Ended June 30, 2025 Compared With the Three Months Ended June 30, 2024](index=21&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20With%20the%20Three%20Months%20Ended%20June%2030%2C%202024) Q2 2025 net loss increased to **$10.9 million**, with operating revenue decreasing by **23.4%** and the operating ratio worsening to **105.9%** Financial Performance (Three Months Ended June 30) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(10.9) | $(3.5) | $(7.4) | -211.4% | | Operating ratio | 105.9% | 99.9% | 6.0 pp | 6.0% | | Operating revenue | $210.4 | $274.8 | $(64.4) | -23.4% | | Salaries, wages, and benefits | $87.2 | $110.1 | $(22.9) | -20.8% | | Fuel expense | $33.7 | $47.0 | $(13.3) | -28.3% | | Insurance and claims expense | $14.2 | $13.0 | $1.2 | 9.2% | | Depreciation and amortization | $41.5 | $46.1 | $(4.6) | -10.0% | | Gain on disposal of property and equipment | $2.8 | $1.1 | $1.7 | 154.5% | | Interest expense | $3.0 | $4.6 | $(1.6) | -34.8% | - Average DOE diesel fuel prices decreased by **7.9%** for the three months ended June 30, 2025, compared to 2024[71](index=71&type=chunk)[83](index=83&type=chunk) - The increase in insurance and claims expense is due to claim severity, frequency, and general unfavorable accident claim trends within the trucking industry[86](index=86&type=chunk) [Six Months Ended June 30, 2025 Compared With the Six Months Ended June 30, 2024](index=23&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20With%20the%20Six%20Months%20Ended%20June%2030%2C%202024) H1 2025 net loss increased to **$24.7 million**, with operating revenue decreasing by **21.1%** and the operating ratio at **106.4%** Financial Performance (Six Months Ended June 30) | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (in millions) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(24.7) | $(18.6) | $(6.1) | -32.8% | | Operating ratio | 106.4% | 102.6% | 3.8 pp | 3.7% | | Operating revenue | $429.8 | $545.1 | $(115.3) | -21.1% | | Salaries, wages, and benefits | $180.4 | $222.8 | $(42.4) | -19.0% | | Fuel expense | $71.6 | $94.3 | $(22.7) | -24.1% | | Insurance and claims expense | $26.1 | $27.6 | $(1.5) | -5.4% | | Depreciation and amortization | $83.1 | $92.6 | $(9.5) | -10.3% | | Gain on disposal of property and equipment | $4.6 | $1.0 | $3.6 | 360.0% | | Interest expense | $6.1 | $9.9 | $(3.8) | -38.4% | - Average DOE diesel fuel prices decreased by **8.1%** for the six months ended June 30, 2025, compared to 2024[94](index=94&type=chunk)[98](index=98&type=chunk) - The decrease in insurance and claims expense is due to favorable claim severity and frequency comparing the two periods[101](index=101&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is driven by operating cash flow and equipment sales, with **$550.0 million** credit facility available, and **$35-45 million** in net capital expenditures expected for 2025 - Primary sources of liquidity are cash flow from operating activities and proceeds from sales of used equipment[108](index=108&type=chunk) - The company has a **$550.0 million** unsecured credit facility, with **$179.8 million** outstanding on the Term Facility and **$88.3 million** available on the Revolving Facility at June 30, 2025[108](index=108&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) Net Cash Provided by Operating Activities | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $46.8 | $71.0 | $(24.2) | - Expected net capital expenditures for 2025 are approximately **$35 to $45 million**, with **$12 to $17 million** in gains on disposal of property and equipment[119](index=119&type=chunk) - The company intends to continue paying down debt, maintaining regular quarterly dividends, and funding ongoing capital expenditure needs[118](index=118&type=chunk) - The stock repurchase program has **5.0 million** shares remaining authorized for repurchase as of June 30, 2025, with no expiration date[123](index=123&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate changes and commodity price fluctuations, with specific sensitivities to SOFR, fuel, and tire prices - The Company is exposed to market risk changes in interest rates (on outstanding borrowings) and commodity prices (primarily fuel and rubber)[126](index=126&type=chunk) - A **1.0%** increase in the SOFR rate would decrease income before income taxes by approximately **$1.8 million** annually, based on current variable-rate debt[127](index=127&type=chunk) - A **$1.00** increase in the average price of fuel per gallon, year over year, would decrease income before income taxes by approximately **$14.4 million** in 2025[128](index=128&type=chunk) - A **10%** increase in the price of tires would increase tire purchase expense by **$2.2 million**, decreasing income before income taxes[128](index=128&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[130](index=130&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[132](index=132&type=chunk) [PART II - OTHER INFORMATION](index=29&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides other information, including legal proceedings, risk factors, equity security sales, and exhibits [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, primarily for personal injury and property damage, with insurance covering liabilities beyond self-insured retentions - The Company is a party to ordinary, routine litigation and administrative proceedings incidental to its business[135](index=135&type=chunk) - These proceedings primarily involve claims for personal injury, property damage, cargo, and workers' compensation[135](index=135&type=chunk) - The Company maintains insurance to cover liabilities arising from the transportation of freight for amounts in excess of certain self-insured retentions[135](index=135&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) The company's business is subject to various risks and uncertainties, detailed in its 2024 Annual Report on Form 10-K and Q1 2025 Form 10-Q - Risks and uncertainties associated with the business are discussed in the Company's 2024 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025[136](index=136&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **1.0 million** shares for **$8.93** per share, with **5,020,150** shares remaining authorized for repurchase Share Repurchases (May 2025) | Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs | | :--- | :--- | :--- | :--- | :--- | | May 1, 2025 - May 31, 2025 | 1,000,000 | $8.93 | 1,000,000 | 5,020,150 | - The share repurchase plan has no expiration date and remains in effect until authorized shares are repurchased or authorization is terminated[138](index=138&type=chunk) [Item 3. Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were reported[139](index=139&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable[140](index=140&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q2 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the second quarter of 2025[141](index=141&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications, corporate documents, and XBRL data files - Exhibits include certifications (31.1, 31.2, 32.1, 32.2), Articles of Incorporation (3.1), Amended and Restated Bylaws (3.2), and XBRL interactive data files (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[142](index=142&type=chunk) [Signatures](index=31&type=section&id=Signatures) The report was signed on August 7, 2025, by Christopher A. Strain, Vice President of Finance and Chief Financial Officer - The report was signed on August 7, 2025[147](index=147&type=chunk) - Signed by Christopher A. Strain, Vice President of Finance and Chief Financial Officer[147](index=147&type=chunk)

[Company Overview & Executive Summary](index=1&type=section&id=Company%20Overview%20%26%20Executive%20Summary) This section provides an executive summary of Heartland Express's Q2 and H1 2025 financial performance, key strategic initiatives, and the prevailing industry context [Q2 & H1 2025 Highlights](index=1&type=section&id=Q2%20%26%20H1%202025%20Highlights) Heartland Express reported net losses for Q2 and H1 2025 amidst a challenging industry, while maintaining positive cash flow and strategic investments in fleet, debt reduction, and share repurchases Q2 and H1 2025 Key Financial Highlights (USD) | Metric | Q2 2025 | H1 2025 | | :--------------------------------- | :-------------- | :-------------- | | Operating Revenue | $210.4 million | $429.8 million | | Net Loss | $10.9 million | $24.7 million | | Basic Loss per Share | $0.14 | $0.32 | | Operating Ratio | 105.9% | 106.4% | | Non-GAAP Adjusted Operating Ratio | 106.0% | 106.5% | | Total Assets (as of June 30, 2025) | $1.3 billion | N/A | | Cash (as of June 30, 2025) | $22.9 million | N/A | | Stockholders' Equity (as of June 30, 2025) | $786.7 million | N/A | | Shares Repurchased (Q2) | 1 million shares | N/A | | Acquisition-related debt reduction (since 2022) | $300 million | N/A | | Debt & Finance Lease Payments (H1) | N/A | ~$7 million | [CEO Commentary & Industry Context](index=1&type=section&id=CEO%20Commentary%20%26%20Industry%20Context) CEO Mike Gerdin highlighted sequential improvements despite a challenging industry with excess capacity and weak demand, affirming the company's focus on fleet investment, debt reduction, and operational efficiencies - The industry faces a prolonged and challenging operating environment with capacity outpacing weak freight demand, unsustainable pricing, and rising operating costs, creating significant headwinds[3](index=3&type=chunk) - Despite an operating loss, the company maintained **positive cash flows from operations**, enabling investments in its fleet (**$5.8 million**, net), debt reduction (**$5.6 million** paid), and common stock repurchases (**$8.9 million** paid) during Q2 2025[3](index=3&type=chunk) - The company is strategically reducing underperforming freight lanes and overall fleet size to align with current demand, focusing on driver utilization and operating cost reductions[7](index=7&type=chunk) - Material improvements in freight demand and customer pricing are not expected until later in 2025, with a positive impact on financial results and freight outlook anticipated in 2026[7](index=7&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) The company experienced significant declines in operating revenues and increased net losses for Q2 and H1 2025, while maintaining liquidity and strategically managing capital [Consolidated Statements of Income](index=2&type=section&id=Consolidated%20Statements%20of%20Income) Heartland Express reported significant declines in operating revenues and increased net losses for Q2 and H1 2025, with deteriorating operating ratios reflecting challenging market conditions Q2 2025 vs. Q2 2024 Financial Performance (USD) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :-------------- | | Operating Revenues | $210.4 million | $274.8 million | -23.4% | | Fuel Surcharge Revenues | $24.5 million | $36.8 million | -33.4% | | Net Loss | $10.9 million | $3.5 million | +211.4% | | Basic Loss per Share | $0.14 | $0.04 | +250.0% | | Operating Ratio | 105.9% | 99.9% | +600 bps | | Non-GAAP Adjusted Operating Ratio | 106.0% | 99.4% | +660 bps | | Net Loss as % of Operating Revenues | 5.2% | 1.3% | +390 bps | H1 2025 vs. H1 2024 Financial Performance (USD) | Metric | H1 2025 | H1 2024 | Change (YoY) | | :--------------------------------- | :-------------- | :-------------- | :-------------- | | Operating Revenues | $429.8 million | $545.1 million | -21.2% | | Fuel Surcharge Revenues | $50.8 million | $73.0 million | -30.4% | | Operating Loss | $27.3 million | $14.1 million | +93.6% | | Net Loss | $24.7 million | $18.6 million | +32.8% | | Basic Loss per Share | $0.32 | $0.24 | +33.3% | | Operating Ratio | 106.4% | 102.6% | +380 bps | | Non-GAAP Adjusted Operating Ratio | 106.5% | 102.5% | +400 bps | | Net Loss as % of Operating Revenues | 5.8% | 3.4% | +240 bps | [Three Months Ended June 30, 2025 (Q2)](index=2&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20%28Q2%29) For the second quarter of 2025, the company reported a substantial operating loss and net loss, primarily driven by a significant decrease in operating revenue and increased operating expenses compared to the prior year Consolidated Statements of Income - Q2 2025 (in thousands USD) | Item | Q2 2025 | Q2 2024 | | :--------------------------------- | :-------------- | :-------------- | | OPERATING REVENUE | $210,387 | $274,754 | | OPERATING EXPENSES | $222,806 | $274,490 | | Operating (loss) income | $(12,419) | $264 | | Interest income | $198 | $288 | | Interest expense | $(2,962) | $(4,574) | | Loss before income taxes | $(15,183) | $(4,022) | | Federal and state income tax benefit | $(4,328) | $(544) | | Net loss | $(10,855) | $(3,478) | | Basic Loss per share | $(0.14) | $(0.04) | | Diluted Loss per share | $(0.14) | $(0.04) | [Six Months Ended June 30, 2025 (H1)](index=2&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20%28H1%29) The first half of 2025 saw a consolidated operating loss and net loss, reflecting a challenging period with reduced revenues and higher expenses compared to the same period in the previous year Consolidated Statements of Income - H1 2025 (in thousands USD) | Item | H1 2025 | H1 2024 | | :--------------------------------- | :-------------- | :-------------- | | OPERATING REVENUE | $429,807 | $545,074 | | OPERATING EXPENSES | $457,124 | $559,194 | | Operating (loss) income | $(27,317) | $(14,120) | | Interest income | $326 | $576 | | Interest expense | $(6,066) | $(9,576) | | Loss before income taxes | $(33,057) | $(23,120) | | Federal and state income tax benefit | $(8,329) | $(4,520) | | Net loss | $(24,728) | $(18,600) | | Basic Loss per share | $(0.32) | $(0.24) | | Diluted Loss per share | $(0.32) | $(0.24) | [Balance Sheet, Liquidity, and Capital Expenditures](index=2&type=section&id=Balance%20Sheet%2C%20Liquidity%2C%20and%20Capital%20Expenditures) As of June 30, 2025, Heartland Express maintained strong liquidity with increased cash and reduced debt, generating positive operating cash flow for fleet and equipment investments Key Balance Sheet and Liquidity Metrics (in thousands USD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :-------------- | | Cash and cash equivalents | $22,879 | $12,812 | +$10,067 | | Total current assets | $136,201 | $129,448 | +$6,753 | | Total assets | $1,299,372 | $1,334,192 | -$34,820 | | Debt and financing lease obligations | $194,000 | N/A | -$300,000 (since 2022) | | Available borrowing capacity (line of credit) | $88,300 | N/A | N/A | | Total stockholders' equity | $786,737 | $822,599 | -$35,862 | Cash Flow and Capital Expenditure Highlights (H1 2025, USD) | Item | Amount | | :--------------------------------- | :-------------- | | Net cash flows from operations | $46.8 million | | Repayment of debt and financing leases | $6.9 million | | Repurchases of common stock | $8.9 million | | Dividends paid | $3.1 million | | Net property and equipment transactions | $17.5 million | | Expected net capital expenditures (CY 2025) | $35 - $45 million | | Expected gains on disposal of property and equipment (CY 2025) | $12 - $17 million | - The average age of the consolidated tractor fleet remained stable at **2.6 years** as of June 30, 2025, while the average age of the consolidated trailer fleet increased to **7.5 years** from 6.9 years in the prior year[11](index=11&type=chunk) [GAAP to Non-GAAP Reconciliation](index=6&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) The company provides non-GAAP financial measures, including operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio, to offer a more consistent basis for comparing operational results by excluding the volatility of fuel prices and non-cash amortization of intangibles GAAP to Non-GAAP Reconciliation (in thousands USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Operating revenue | $210,387 | $274,754 | $429,807 | $545,074 | | Less: Fuel surcharge revenue | $24,509 | $36,828 | $50,830 | $73,039 | | Operating revenue, excluding fuel surcharge revenue | $185,878 | $237,926 | $378,977 | $472,035 | | Operating (loss) income | $(12,419) | $264 | $(27,317) | $(14,120) | | Adjusted operating (loss) income | $(11,165) | $1,518 | $(24,808) | $(11,611) | | Operating ratio | 105.9% | 99.9% | 106.4% | 102.6% | | Adjusted operating ratio | 106.0% | 99.4% | 106.5% | 102.5% | - Non-GAAP measures are not intended to replace GAAP results but supplement them, providing a clearer view of underlying operations by removing fuel price volatility and non-cash amortization of intangibles[13](index=13&type=chunk)[20](index=20&type=chunk) [Operational Review & Strategic Initiatives](index=1&type=section&id=Operational%20Review%20%26%20Strategic%20Initiatives) The company's operating brands showed varied performance amidst challenging market conditions, driving strategic fleet reductions and technology investments for future efficiencies [Operating Brand Performance](index=1&type=section&id=Operating%20Brand%20Performance) The company's four operating brands exhibited varied performance, with Heartland Express and Millis Transfer profitable, Smith Transport improving, and CFI impacted by a major system conversion - Heartland Express fleet remained **profitable** with sequential financial improvements in Q2 and H1 2025[4](index=4&type=chunk) - Both Heartland Express and Millis Transfer fleets operated **profitably** and improved their operating ratio by approximately **400 bps** in Q2 2025 compared to Q1 2025[4](index=4&type=chunk) - Smith Transport fleet improved its operating ratio sequentially but did not operate profitably in Q2 2025[4](index=4&type=chunk) - CFI fleet completed a major transportation management system conversion and began a full fleet telematics transition (**75% complete**), but did not operate profitably and saw a negative sequential financial impact[4](index=4&type=chunk) [Fleet Management & Technology](index=1&type=section&id=Fleet%20Management%20%26%20Technology) Heartland Express is actively managing fleet size and investing in technology, including a major system conversion for CFI and a goal to unify all brands on a common system by year-end 2025 - CFI began a full fleet telematics transition in Q2 2025, approximately **75% complete**, aiming to improve driver utilization and experience, with full completion expected in Q3 2025[4](index=4&type=chunk) - All four operating brands are expected to be on a common transportation management system by **December 31, 2025**, projected to drive multiple operating efficiencies in 2026[6](index=6&type=chunk) - The company is strategically reducing its overall fleet size to better align with current freight demand[7](index=7&type=chunk) Average Fleet Age | Fleet Type | June 30, 2025 | June 30, 2024 | | :----------------- | :-------------- | :-------------- | | Consolidated tractor fleet | 2.6 years | 2.6 years | | Consolidated trailer fleet | 7.5 years | 6.9 years | [Market Conditions & Future Outlook](index=1&type=section&id=Market%20Conditions%20%26%20Future%20Outlook) The company faces a challenging industry with excess capacity and weak demand, anticipating material improvements later in 2025 and a positive freight outlook in 2026 - The industry is experiencing a prolonged and challenged operating environment where current capacity outpaces weak freight demand, coupled with unsustainable pricing and rising operating costs[3](index=3&type=chunk) - The company has begun to see some encouraging signs in current freight demand and customer pricing[7](index=7&type=chunk) - Material improvements are not expected until later in 2025, with a resulting positive impact on future financial results and an improved freight outlook in 2026[7](index=7&type=chunk) [Shareholder Value & Corporate Governance](index=1&type=section&id=Shareholder%20Value%20%26%20Corporate%20Governance) Heartland Express demonstrates commitment to shareholder value through consistent dividends and share repurchases, alongside receiving industry recognition for service and safety [Dividends](index=3&type=section&id=Dividends) Heartland Express continues its commitment to stockholders through consistent cash dividend payments, having paid dividends for eighty-eight consecutive quarters since 2003 Dividend Information (USD) | Metric | Q2 2025 | | :--------------------------------- | :-------------- | | Regular dividend declared per share | $0.02 | | Total cumulative cash dividends paid (since 2003) | $558.3 million | | Consecutive quarters of dividends paid | 88 | [Share Repurchases](index=1&type=section&id=Share%20Repurchases) The company actively repurchased its common stock during the second quarter of 2025, continuing a trend of returning capital to shareholders and reducing outstanding shares Common Stock Repurchases (USD) | Metric | Q2 2025 | Q2 2024 | | :--------------------------------- | :-------------- | :-------------- | | Shares repurchased | 1.0 million | 0.6 million | | Value of shares repurchased | $8.9 million | $7.3 million | | Total shares repurchased (past 5 years) | 4.2 million | N/A | | Total value of shares repurchased (past 5 years) | $61.6 million | N/A | | Remaining repurchase authorization | 5.0 million shares | N/A | | Outstanding shares (June 30, 2025) | 77.6 million | N/A | [Awards and Recognition](index=3&type=section&id=Awards%20and%20Recognition) Heartland Express and its operating brands received multiple awards during the second quarter of 2025, recognizing their commitment to service and fleet safety - Awards received in Q2 2025 include[13](index=13&type=chunk)[15](index=15&type=chunk) - Georgia-Pacific - OTR Van National Carrier of the Year[15](index=15&type=chunk) - Mars Pet Nutrition - Carrier of the Year[15](index=15&type=chunk) - Molson Coors - National Transportation Supplier of the Year[15](index=15&type=chunk) - Shaw Floors - Outbound "Class B" Carrier of the Year[15](index=15&type=chunk) - WK Kellogg - WKKC CS&L Supplier Founders Award[15](index=15&type=chunk) [Legal & Contact Information](index=3&type=section&id=Legal%20%26%20Contact%20Information) This section provides disclaimers regarding forward-looking statements and essential contact information for investor and media inquiries [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains a standard disclaimer regarding forward-looking statements, emphasizing that actual events may differ materially from projections due to various risks and uncertainties - The press release contains forward-looking statements identified by terms like 'expects,' 'estimates,' 'anticipates,' and 'outlook,' relating to freight supply/demand, market conditions, operational improvements, capital expenditures, profitability, stock repurchases, dividends, and debt repayment[14](index=14&type=chunk) - Such statements are based on management's current beliefs and involve risks and uncertainties, and actual events may differ materially due to factors outlined in the company's SEC filings (10-K, 10-Q)[14](index=14&type=chunk) - The company assumes no obligation to update any forward-looking statements[14](index=14&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Contact details are provided for investor and media inquiries - Contact for Heartland Express, Inc. (319-645-7060)[15](index=15&type=chunk) - Mike Gerdin, Chief Executive Officer[15](index=15&type=chunk) - Chris Strain, Chief Financial Officer[15](index=15&type=chunk)

Core Insights - Heartland Express reported a revenue of $210.39 million for the quarter ended June 2025, which is a decrease of 23.4% compared to the same period last year [1] - The company's EPS was -$0.14, worsening from -$0.04 in the year-ago quarter, and the EPS surprise was -75% against a consensus estimate of -$0.08 [1] - The reported revenue fell short of the Zacks Consensus Estimate of $236.65 million, resulting in a surprise of -11.1% [1] Financial Metrics - The operating ratio was reported at 105.9%, which is higher than the estimated average of 102.3% by two analysts [4] - Fuel surcharge revenue was $24.51 million, below the average estimate of $27.13 million, marking a year-over-year decline of 33.5% [4] - Operating revenue, excluding fuel surcharge revenue, was $185.88 million, significantly lower than the estimated $209.53 million, representing a year-over-year decrease of 21.9% [4] Stock Performance - Over the past month, shares of Heartland Express returned +0.1%, while the Zacks S&P 500 composite increased by +5.7% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

分组1 - Heartland Express reported a quarterly loss of $0.14 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.08, and compared to a loss of $0.04 per share a year ago, indicating a significant earnings surprise of -75.00% [1] - The company posted revenues of $210.39 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 11.1%, and this represents a decline from year-ago revenues of $274.75 million [2] - Heartland Express shares have declined approximately 22.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.1% [3] 分组2 - The earnings outlook for Heartland Express is currently unfavorable, with a Zacks Rank of 5 (Strong Sell), suggesting that the shares are expected to underperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $249.87 million, and for the current fiscal year, it is -$0.26 on revenues of $950.84 million [7] - The Transportation - Truck industry, to which Heartland Express belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, indicating a challenging environment for the company [8]

Core Viewpoint - Heartland Express, Inc. reported financial results for the three and six months ended June 30, 2025, indicating a challenging operating environment with weak freight demand and rising costs, leading to operating losses despite positive cash flows from operations [1][2][3]. Financial Results - For the three months ended June 30, 2025, operating revenue was $210.4 million, down from $274.8 million in the same period of 2024, with a net loss of $10.9 million compared to a net loss of $3.5 million in Q2 2024 [6][7]. - For the six months ended June 30, 2025, operating revenue was $429.8 million, down from $545.1 million in the same period of 2024, with a net loss of $24.7 million compared to a net loss of $18.6 million in the prior year [7][8]. Operating Performance - The operating ratio for Q2 2025 was 105.9%, compared to 99.9% in Q2 2024, indicating increased operational inefficiencies [6][7]. - The Heartland Express and Millis Transfer fleets operated profitably, improving their operating ratios by approximately 400 basis points in Q2 2025 compared to Q1 2025 [2][3]. Debt and Capital Management - The company reduced debt and financing lease obligations from $494 million in 2022 to $194 million as of June 30, 2025, reflecting a $300 million reduction in less than three years [5][8]. - Cash balances increased to $22.9 million as of June 30, 2025, up by $10.1 million since December 31, 2024 [8][9]. Shareholder Returns - The company repurchased 1 million shares of common stock for $8.9 million during Q2 2025, continuing its commitment to return capital to shareholders [5][11]. - A regular dividend of $0.02 per share was declared and paid on July 3, 2025, contributing to cumulative cash dividends of $558.3 million since 2003 [11][12]. Operational Initiatives - The CFI fleet is undergoing a full fleet telematics transition, approximately 75% complete, aimed at improving driver utilization and experience [2][3]. - The company continues to strategically reduce underperforming freight lanes and align fleet size with current demand [3][4].

Group 1 - The article highlights Heartland Express, Inc. (NASDAQ: HTLD) as an under-the-radar stock in the US freight and logistics market, which faces ongoing challenges similar to other truckload companies [1] - The author has nearly two decades of experience in the logistics sector and has been involved in stock investing and macroeconomic analysis for almost a decade, focusing on various markets including ASEAN and NYSE/NASDAQ [1] - The author emphasizes the importance of portfolio diversification, having transitioned from investing solely in banks and properties to including stocks across different industries and market capitalizations [1] Group 2 - The author began trading in the US market in 2020 and has holdings in US banks, hotels, shipping, and logistics companies, indicating a broad investment strategy [1] - The article reflects the author's journey of learning and sharing knowledge about the stock market, particularly through platforms like Seeking Alpha, which has been instrumental in comparing analyses across different markets [1]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) For the first quarter ended March 31, 2025, Heartland Express reported a decrease in operating revenue to $219.4 million from $270.3 million in the prior year's quarter, recording a net loss of $13.9 million, or ($0.18) per diluted share, a slight improvement from Q1 2024 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $140,418 | $129,448 | | Cash and cash equivalents | $23,873 | $12,812 | | Property and equipment, net | $766,762 | $764,407 | | Goodwill | $322,597 | $322,597 | | **Total Assets** | **$1,344,711** | **$1,334,192** | | **Total Current Liabilities** | $155,501 | $119,559 | | Long-term debt and finance lease liabilities | $188,842 | $191,707 | | **Total Liabilities** | **$536,986** | **$511,593** | | **Total Stockholders' Equity** | **$807,725** | **$822,599** | Consolidated Statement of Comprehensive Income (Loss) (in thousands, except per share data) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Operating Revenue | $219,420 | $270,320 | | Operating Expenses | $234,318 | $284,703 | | **Operating Loss** | **($14,898)** | **($14,383)** | | **Net Loss** | **($13,873)** | **($15,108)** | | Diluted Net Loss Per Share | ($0.18) | ($0.19) | | Dividends Declared Per Share | $0.02 | $0.02 | Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,843 | $30,976 | | Net cash provided by (used in) investing activities | ($11,499) | $1,952 | | Net cash used in financing activities | ($3,008) | ($36,723) | | **Net increase (decrease) in cash** | **$11,336** | **($3,795)** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes clarify that the company operates as a single reportable segment providing truckload services, with Q1 2025 total revenues of $219.4 million, and an effective tax rate of 22.4% - The company operates as a single reportable segment, providing asset-based dry van truckload services across the U.S., Mexico, and parts of Canada[26](index=26&type=chunk) - Total revenues for Q1 2025 were **$219.4 million**, down from **$270.3 million** in Q1 2024, with fuel surcharge revenues decreasing to **$26.3 million** from **$36.2 million**[29](index=29&type=chunk) - As of March 31, 2025, the company had **$184.0 million** outstanding on its Term Facility and nothing outstanding under its **$100.0 million** Revolving Facility, with a weighted average interest rate of **6.0%**[49](index=49&type=chunk) - The effective tax rate was **22.4%** for Q1 2025, compared to **21.8%** for Q1 2024, attributed to fewer permanent differences offsetting the tax benefit in 2025[54](index=54&type=chunk) - As of March 31, 2025, the company had purchase commitments for tractors and trailers totaling **$38.8 million** for the remainder of 2025[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q1 2025 net loss to a prolonged weak freight environment, where operating cost inflation outpaced freight rates, compounded by adverse weather, leading to an operating ratio of 106.8% - The freight market remained weak through Q1 2025, though management sees encouraging signs of a potential recovery, and the company is strategically shrinking its fleet to align with current freight demand[67](index=67&type=chunk) Q1 2025 vs. Q1 2024 Performance | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Revenue | $219.4M | $270.3M | | Net Loss | ($13.9M) | ($15.1M) | | Basic Net Loss per Share | ($0.18) | ($0.19) | | Operating Ratio | 106.8% | 105.3% | | Non-GAAP Adjusted Operating Ratio | 107.1% | 105.6% | - Operating revenue decreased by **$50.9 million (18.8%)** due to a weak freight environment, fewer drivers, and significant winter weather disruptions[79](index=79&type=chunk) - Salaries, wages, and benefits decreased **17.3%** to **$93.2 million** due to lower company miles, while fuel costs decreased **19.9%** to **$37.9 million** due to lower diesel prices and fewer miles driven[81](index=81&type=chunk)[83](index=83&type=chunk) - For the full year 2025, the company anticipates net capital expenditures of approximately **$40 to $50 million** and gains on disposal of property and equipment of **$10 to $15 million**[104](index=104&type=chunk) - The company ended Q1 2025 with **$23.9 million** in cash and cash equivalents, **$189.5 million** in outstanding debt, and **$88.3 million** available borrowing capacity on its Revolving Facility[102](index=102&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are related to interest rate fluctuations on its variable-rate debt and commodity price volatility for fuel and tires, with no derivative instruments currently used for risk management - The company has **$184.0 million** in debt subject to variable interest rates, where a hypothetical **1.0%** increase in the SOFR rate would decrease annual income before taxes by approximately **$1.8 million**[112](index=112&type=chunk) - The company is exposed to commodity price risk for fuel, where a **$1.00** increase in the average price of fuel per gallon would decrease annual income before taxes by approximately **$14.4 million**[113](index=113&type=chunk) - A **10%** increase in the price of tires would increase tire purchase expense by **$2.2 million**, correspondingly decreasing income before income taxes[113](index=113&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation by management, including the CEO and CFO, the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[115](index=115&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[117](index=117&type=chunk) [PART II - OTHER INFORMATION](index=27&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary and routine litigation incidental to its business, primarily related to personal injury, property damage, cargo, and workers' compensation claims, maintaining insurance coverage for liabilities exceeding its self-insured retention amounts - The company is a party to ordinary, routine litigation and administrative proceedings incidental to its business, mainly involving claims from transportation of freight[120](index=120&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) This section updates the risk factor concerning self-insurance, noting that the company self-insures a significant portion of its claims, which increases earnings volatility, and recent changes to its insurance program could lead to increased volatility in insurance and claims expenses - The company self-insures for a significant portion of its claims exposure, which could significantly increase the volatility of its earnings[122](index=122&type=chunk) - In April 2025, the company's auto liability retention limit was increased, and an additional corridor was added where the company retains liability of **$5.0 million** for the first accident exceeding **$20.0 million**[124](index=124&type=chunk) - Aggregate excess liability coverage was reduced from **$80.0 million** to **$75.0 million** in April 2025, with the company retaining any liability in excess of **$75.0 million**[124](index=124&type=chunk)[125](index=125&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) None reported for the period - None[127](index=127&type=chunk) [Defaults Upon Senior Securities](index=29&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported for the period - None[128](index=128&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[129](index=129&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025[130](index=130&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act, and XBRL data files - The report includes a list of filed exhibits, such as CEO and CFO certifications and XBRL data files[132](index=132&type=chunk)

Financial Performance - Operating revenues for Q1 2025 were $219.4 million, down from $270.3 million in Q1 2024, representing a decrease of approximately 18.8%[2] - The net loss for Q1 2025 was $13.9 million, an improvement from a net loss of $15.1 million in Q1 2024, indicating a reduction of about 8%[2] - Basic loss per share was $0.18 in Q1 2025, compared to $0.19 in the same period of 2024, reflecting a slight improvement[2] - Operating revenue for Q1 2025 was $219,420,000, down from $270,320,000 in Q1 2024, representing a decrease of approximately 18.9%[17] - Operating revenue excluding fuel surcharge revenue was $193,099,000 in Q1 2025, compared to $234,108,000 in Q1 2024, a decline of about 17.5%[17] - Adjusted operating loss for Q1 2025 was $(13,644,000), slightly worse than the $(13,129,000) loss in Q1 2024[17] - The operating loss for Q1 2025 was $(14,898,000), compared to $(14,383,000) in Q1 2024, indicating a slight deterioration in performance[17] Operational Efficiency - The operating ratio for Q1 2025 was 106.8%, compared to 105.3% in Q1 2024, indicating a decline in operational efficiency[2] - The adjusted operating ratio increased to 107.1% in Q1 2025 from 105.6% in Q1 2024, indicating a decline in operational efficiency[17] - Operating expenses for Q1 2025 totaled $234,318,000, down from $284,703,000 in Q1 2024, a reduction of approximately 17.7%[17] Cash Flow and Assets - Cash balances increased to $23.9 million as of March 31, 2025, up by $11.1 million since December 31, 2024[3] - Total assets were reported at $1.3 billion, with stockholders' equity at $807.7 million as of March 31, 2025[3] - Net cash flows from operations for Q1 2025 were $25.8 million, representing 11.8% of operating revenue[5] Capital Expenditures and Dividends - The company expects net capital expenditures of approximately $40 to $50 million for the calendar year 2025[6] - A regular dividend of $0.02 per share was declared and paid during Q1 2025, maintaining a commitment to stockholders[7] Fleet Information - The average age of the consolidated tractor fleet was 2.6 years, while the trailer fleet averaged 7.4 years as of March 31, 2025[6] Non-GAAP Measures - The company emphasizes that non-GAAP measures like adjusted operating income provide better comparability for underlying operations, despite limitations[17] - Management continues to rely primarily on GAAP results while using non-GAAP measures as supplemental information[17] - The company aims to mitigate the volatility of fuel prices in its financial reporting to better reflect operational performance[17] Fuel Surcharge Revenue - The company reported a fuel surcharge revenue of $26,321,000 in Q1 2025, compared to $36,212,000 in Q1 2024, reflecting a decrease of about 27.4%[17]

Core Viewpoint - Heartland Express reported a quarterly loss of $0.18 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.13, marking an earnings surprise of -38.46% [1] - The company's revenues for the quarter were $219.42 million, missing the Zacks Consensus Estimate by 9.20% and down from $270.32 million a year ago [2] Financial Performance - Over the last four quarters, Heartland Express has only surpassed consensus EPS estimates once [2] - The company has not beaten consensus revenue estimates in the last four quarters [2] - Year-to-date, Heartland Express shares have declined approximately 30.1%, compared to a 5.5% decline in the S&P 500 [3] Future Outlook - The company's earnings outlook will be crucial for investors, particularly in light of recent earnings report and future expectations [4] - Current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $275.22 million, and for the current fiscal year, it is $0.06 on revenues of $1.07 billion [7] Industry Context - The Transportation - Truck industry, to which Heartland Express belongs, is currently ranked in the bottom 1% of over 250 Zacks industries, indicating a challenging environment [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Heartland Express's stock performance [5][6]