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Heartland Express, Inc. Reports Revenues And Earnings For The Third Quarter Of 2013

Stocks in this article: HTLD

NORTH LIBERTY, Iowa, Oct. 16, 2013 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq:HTLD) announced today financial results for the quarter ended September 30, 2013. For the quarter, net income increased $3.4 million to $15.9 million compared to $12.4 million in the 2012 period, a 27.6% increase. Basic earnings per share increased 26.7% to $0.19 from $0.15 reported in the third quarter of 2012. For the nine months ended September 30, 2013 net income increased $7.5 million to $54.7 million compared to $47.2 million for the same period of 2012, a 15.9% increase. Basic earnings per share increased 18.2% to $0.65 from $0.55 reported in the nine months ended September 30, 2012.

For the quarter ended September 30, 2013, operating revenues decreased to $130.6 million from $135.0 million in the third quarter of 2012. Improvements in rates were more than offset by new government regulations on hours of service which began July 1, 2013, a competitive environment for the high quality, professional truck drivers who meet our hiring requirements, an inconsistent freight environment, and slightly lower fuel surcharge revenue. Fuel surcharge revenues were $26.7 million for the quarter, a 1.6% decline from $27.1 million in the same period of 2012.

For the nine months ended September 30, 2013 operating revenues decreased to $398.9 million from $409.6 million in the 2012 period, including a decline in fuel surcharge revenues to $82.0 million in the 2013 period compared with $84.4 million in the 2012 period. Operating income for the three and nine month periods was positively impacted by a $2.8 million and a $14.9 million increase in gains, respectively, on disposal of property and equipment as Heartland Express, Inc. (the "Company") continued to upgrade its fleet and the used equipment market remained strong. 

Effective July 1, 2013, the Company adjusted its depreciation estimate for tractors to the 125% declining balance method from the 150% declining balance method. Under the declining balance method, depreciation for each tractor is highest in the first year and declines in each year throughout the useful life.  This differs from the straight line method used by many other trucking companies, and the Company believes that the declining balance method better matches the actual declines in value of new tractors over their useful lives. Beginning in 2009, the Company changed its estimate of depreciation from the 125% method to the 150% declining balance method because of sharply lower used truck values, higher prices for new equipment, and uncertainty surrounding the reliability and resale value of tractors with 2010 emission-compliant engines. The Company believes a more stable used equipment market now supports a return to the Company's historical estimate of depreciation on tractor equipment over its expected useful life as well as estimated values of such equipment at the end of the equipment's useful life. In future periods, depreciation expense per tractor and gain on sale per tractor are expected to be lower than under the 150% declining balance method, assuming the Company's average fleet age remains relatively young.  Changing to the 125% declining balance method from the 150% declining balance method increased operating income and decreased depreciation expense by approximately $2.1 million during the three and nine months ended September 30, 2013.    

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