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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Old Dominion Freight Line Inc | NASDAQ:ODFL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.66 | 0.91% | 185.06 | 185.00 | 187.18 | 189.60 | 184.33 | 185.05 | 1,640,296 | 23:48:51 |
Old Dominion Freight Line, Inc. (Nasdaq: ODFL) today announced financial results for the three-month and nine-month periods ended September 30, 2019, which include the following:
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands, except per share amounts)
2019
2018
%
Chg.
2019
2018
%
Chg.
Total revenue
$
1,048,457
$
1,058,233
(0.9
)%
$
3,099,905
$
3,016,751
2.8
%
LTL services revenue
$
1,035,093
$
1,041,854
(0.6
)%
$
3,058,864
$
2,971,399
2.9
%
Other services revenue
$
13,364
$
16,379
(18.4
)%
$
41,041
$
45,352
(9.5
)%
Operating income
$
217,527
$
228,385
(4.8
)%
$
630,442
$
598,206
5.4
%
Operating ratio
79.3
%
78.4
%
79.7
%
80.2
%
Net income
$
164,099
$
173,442
(5.4
)%
$
471,494
$
446,209
5.7
%
Diluted earnings per share
$
2.05
$
2.12
(3.3
)%
$
5.85
$
5.43
7.7
%
Diluted weighted average shares outstanding
79,989
81,976
(2.4
)%
80,589
82,166
(1.9
)%
“Old Dominion’s financial results for the third quarter of 2019 reflect the challenging operating environment,” said Greg C. Gantt, President and Chief Executive Officer of Old Dominion Freight Line. “The domestic economy remained sluggish during the quarter, and the general softness in demand contributed to our first quarter-over-quarter decline in revenue since the second quarter of 2016. While our tonnage declined as compared to the third quarter of 2018, we were pleased with the ongoing improvement in our yield. Importantly, we also maintained our superior service record with on‑time performance of 99% and a cargo claims ratio of 0.2%.
“Our revenue in the third quarter of 2019 included a 5.2% reduction in LTL tonnage per day that was partially offset by a 4.4% increase in LTL revenue per hundredweight. Excluding fuel surcharges, our LTL revenue per hundredweight increased 5.8%, as we maintained our disciplined approach to yield management despite the market competitiveness. We intend to continue with our same long-term approach by focusing on providing shippers with an unmatched value proposition that combines consistent, cost-based pricing with a commitment to superior service.
“Our operating ratio for the third quarter of 2019 was 79.3%, as the decline in revenue had a deleveraging effect on many of our operating expenses while certain employee benefit costs were higher due to the increase in the price of our common stock during the quarter. In addition, our miscellaneous expenses included a net loss of $4.9 million on the disposal of property and equipment. The resulting increase in our overhead costs as a percent of revenue more than offset the improvement in direct operating costs during the quarter. Our direct operating costs decreased as a percent of revenue primarily due to our continued focus on cost management and an increase in the efficiency of our operations.”
Cash Flow and Use of Capital
Old Dominion’s net cash provided by operating activities was $285.6 million for the third quarter of 2019 and $747.5 million for the first nine months of the year. The Company had $322.3 million in cash and cash equivalents at the end of the third quarter of 2019.
Capital expenditures were $140.4 million for the third quarter of 2019 and $370.3 million for the first nine months of the year. The Company expects its capital expenditures for 2019 to total approximately $480 million, including planned expenditures of $220 million for real estate and service center expansion projects; $165 million for tractors and trailers; and $95 million for information technology and other assets.
Old Dominion returned $54.2 million of capital to its shareholders in the third quarter of 2019 and $246.4 million for the first nine months of the year. For the first nine months, this total consisted of $205.3 million of share repurchases and $41.0 million of cash dividends.
Summary
Mr. Gantt concluded, “We are pleased with the consistent execution of our strategy this year. We will continue to focus on managing the fundamental aspects of our business that we can control and adhere to a proven business model that has served us well throughout many economic cycles. Our consistent ability to deliver superior service at a fair price has been a critical competitive differentiator in the LTL industry. In addition, the ongoing investment in our service center network provides us with the necessary capacity to win additional market share, especially in favorable economic conditions. We remain confident that through continued successful execution of this strategy, we will create further growth in long-term shareholder value.”
Old Dominion will hold a conference call to discuss this release today at 10:00 a.m. Eastern Time. Investors will have the opportunity to listen to the conference call live over the Internet by going to ir.odfl.com. Please log on at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at this website shortly after the call and will be available for 30 days. A telephonic replay will also be available through November 1, 2019, at (719) 457-0820, Confirmation Number 3218857.
Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We caution the reader that such forward-looking statements involve risks and uncertainties that could cause actual events and results to be materially different from those expressed or implied herein, including, but not limited to, the following: (1) the competitive environment with respect to industry capacity and pricing, including the use of fuel surcharges, which could negatively impact our total overall pricing strategy and our ability to cover our operating expenses; (2) our ability to collect fuel surcharges and the effectiveness of those fuel surcharges in mitigating the impact of fluctuating prices for diesel fuel and other petroleum-based products; (3) the negative impact of any unionization, or the passage of legislation or regulations that could facilitate unionization, of our employees; (4) the challenges associated with executing our growth strategy, including our ability to successfully consummate and integrate any acquisitions; (5) changes in our goals and strategies, which are subject to revision at any time at our discretion; (6) various economic factors such as recessions, downturns in the economy, global uncertainty and instability, changes in international trade policies, changes in U.S. social, political, and regulatory conditions or a disruption of financial markets, which may decrease demand for our services or increase our costs; (7) the impact of changes in tax laws, rates, guidance and interpretations, including those related to certain provisions of the Tax Cuts and Jobs Act; (8) increases in driver and maintenance technician compensation or difficulties attracting and retaining qualified drivers and maintenance technicians to meet freight demand; (9) our exposure to claims related to cargo loss and damage, property damage, personal injury, workers’ compensation, group health and group dental, including increased premiums, adverse loss development, increased self-insured retention or deductible levels and claims in excess of insured coverage levels; (10) cost increases associated with employee benefits, including costs associated with employee healthcare plans; (11) the availability and cost of capital for our significant ongoing cash requirements; (12) the availability and cost of new equipment and replacement parts, including regulatory changes and supply constraints that could impact the cost of these assets; (13) decreases in demand for, and the value of, used equipment; (14) the availability and cost of diesel fuel; (15) the costs and potential liabilities related to compliance with, or violations of, existing or future governmental laws and regulations, including environmental laws, engine emissions standards, hours-of-service for our drivers, driver fitness requirements and new safety standards for drivers and equipment; (16) the costs and potential liabilities related to various legal proceedings and claims that have arisen in the ordinary course of our business, some of which include collective and/or class action allegations; (17) the costs and potential liabilities related to governmental proceedings, inquiries, notices or investigations; (18) the costs and potential liabilities related to our international business relationships; (19) the costs and potential adverse impact of compliance with, or violations of, current and future rules issued by the Department of Transportation, the Federal Motor Carrier Safety Administration (the “FMCSA”) and other regulatory agencies; (20) the costs and potential adverse impact of compliance associated with FMCSA’s electronic logging device (“ELD”) regulations and guidance, including the transition of our fleet and safety management systems from our legacy electronic automatic on-board recording devices to a new ELD hardware and software platform; (21) seasonal trends in the less-than-truckload industry, including harsh weather conditions and disasters; (22) our ability to retain our key employees and continue to effectively execute our succession plan; (23) the concentration of our stock ownership with the Congdon family; (24) the costs and potential adverse impact associated with future changes in accounting standards or practices; (25) potential costs and liabilities associated with cyber incidents and other risks with respect to our systems and networks or those of our third-party service providers, including system failure, security breach, disruption by malware or ransomware or other damage; (26) failure to comply with data privacy, security or other laws and regulations; (27) failure to keep pace with developments in technology, any disruption to our technology infrastructure, or failures of essential services upon which our technology platforms rely, which could cause us to incur costs or result in a loss of business; (28) the costs and potential adverse impact associated with transitional challenges in upgrading or enhancing our technology systems; (29) damage to our reputation through unfavorable perceptions or publicity, including those related to environmental, social and governance issues, cybersecurity and data privacy concerns; (30) the costs and potential adverse impact of compliance with anti-terrorism measures on our business; (31) dilution to existing shareholders caused by any issuance of additional equity; (32) the impact of a quarterly cash dividend or the failure to declare future cash dividends; (33) recent and future volatility in the market value of our common stock; (34) the impact of certain provisions in our articles of incorporation, bylaws, and Virginia law that could discourage, delay or prevent a change in control of us or a change in our management; and (35) other risks and uncertainties described in our most recent Annual Report on Form 10-K and other filings with the SEC. Our forward-looking statements are based upon our beliefs and assumptions using information available at the time the statements are made. We caution the reader not to place undue reliance on our forward-looking statements as (i) these statements are neither a prediction nor a guarantee of future events or circumstances and (ii) the assumptions, beliefs, expectations and projections about future events may differ materially from actual results. We undertake no obligation to publicly update any forward-looking statement to reflect developments occurring after the statement is made, except as otherwise required by law.
Old Dominion Freight Line, Inc. is a leading, less-than-truckload (“LTL”), union-free motor carrier providing regional, inter-regional and national LTL services through a single integrated organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. Through strategic alliances, the Company also provides LTL services throughout North America. In addition to its core LTL services, the Company offers a range of value-added services including container drayage, truckload brokerage and supply chain consulting.
OLD DOMINION FREIGHT LINE, INC.
Statements of Operations
Third Quarter
Year to Date
(In thousands, except per share amounts)
2019
2018
2019
2018
Revenue
$
1,048,457
100.0
%
$
1,058,233
100.0
%
$
3,099,905
100.0
%
$
3,016,751
100.0
%
Operating expenses:
Salaries, wages & benefits
533,451
50.9
%
536,513
50.7
%
1,588,378
51.2
%
1,560,073
51.7
%
Operating supplies & expenses (1)
117,343
11.2
%
127,557
12.0
%
361,110
11.7
%
370,059
12.3
%
General supplies & expenses
33,633
3.2
%
31,209
3.0
%
97,584
3.2
%
91,076
3.0
%
Operating taxes & licenses
29,117
2.8
%
27,952
2.6
%
87,572
2.8
%
82,905
2.8
%
Insurance & claims
11,280
1.1
%
12,069
1.1
%
34,039
1.1
%
34,510
1.1
%
Communications & utilities
8,098
0.8
%
8,215
0.8
%
22,071
0.7
%
22,700
0.8
%
Depreciation & amortization
63,493
6.0
%
58,086
5.5
%
189,137
6.1
%
167,802
5.6
%
Purchased transportation
23,063
2.2
%
25,373
2.4
%
68,218
2.2
%
73,157
2.4
%
Miscellaneous expenses, net
11,452
1.1
%
2,874
0.3
%
21,354
0.7
%
16,263
0.5
%
Total operating expenses
830,930
79.3
%
829,848
78.4
%
2,469,463
79.7
%
2,418,545
80.2
%
Operating income
217,527
20.7
%
228,385
21.6
%
630,442
20.3
%
598,206
19.8
%
Non-operating (income) expense:
Interest expense
3
0.0
%
29
0.0
%
285
0.0
%
51
0.0
%
Interest income
(1,714
)
(0.2
)%
(778
)
(0.1
)%
(4,966
)
(0.2
)%
(1,902
)
(0.1
)%
Other expense (income), net
844
0.1
%
(70
)
(0.0
)%
768
0.0
%
1,895
0.1
%
Income before income taxes
218,394
20.8
%
229,204
21.7
%
634,355
20.5
%
598,162
19.8
%
Provision for income taxes
54,295
5.1
%
55,762
5.3
%
162,861
5.3
%
151,953
5.0
%
Net income
$
164,099
15.7
%
$
173,442
16.4
%
$
471,494
15.2
%
$
446,209
14.8
%
Earnings per share:
Basic
$
2.05
$
2.12
$
5.86
$
5.44
Diluted
2.05
2.12
5.85
5.43
Weighted average outstanding shares:
Basic
79,880
81,885
80,474
82,068
Diluted
79,989
81,976
80,589
82,166
(1)
Operating supplies and expenses includes building and office equipment rents that were separately disclosed on our Statements of Operations in prior periods.
OLD DOMINION FREIGHT LINE, INC.
Operating Statistics
Third Quarter
Year to Date
2019
2018
% Chg.
2019
2018
% Chg.
Work days
64
63
1.6
%
191
191
0.0
%
Operating ratio
79.3
%
78.4
%
79.7
%
80.2
%
LTL intercity miles (1) (2)
163,061
170,907
(4.6
)%
486,600
501,841
(3.0
)%
LTL tons (1)
2,279
2,367
(3.7
)%
6,792
7,104
(4.4
)%
LTL tonnage per day
35,609
37,571
(5.2
)%
35,560
37,194
(4.4
)%
LTL shipments (1)
2,951
3,042
(3.0
)%
8,740
8,879
(1.6
)%
LTL shipments per day
46,109
48,286
(4.5
)%
45,759
46,487
(1.6
)%
LTL revenue per intercity mile (2)
$
6.39
$
6.07
5.3
%
$
6.30
$
5.93
6.2
%
LTL revenue per hundredweight
$
22.87
$
21.90
4.4
%
$
22.57
$
20.94
7.8
%
LTL revenue per hundredweight, excluding fuel surcharges
$
19.95
$
18.86
5.8
%
$
19.65
$
18.13
8.4
%
LTL revenue per shipment
$
353.24
$
340.91
3.6
%
$
350.79
$
335.05
4.7
%
LTL revenue per shipment, excluding fuel surcharges
$
308.26
$
293.56
5.0
%
$
305.46
$
290.07
5.3
%
LTL weight per shipment (lbs.)
1,545
1,557
(0.8
)%
1,554
1,600
(2.9
)%
Average length of haul (miles)
918
920
(0.2
)%
918
917
0.1
%
Average full-time employees
20,421
21,214
(3.7
)%
20,733
20,434
1.5
%
(1) -
In thousands
(2) -
Prior year intercity mile statistics have been adjusted to exclude miles related to non-LTL shipments.
Note:
Our LTL operating statistics exclude certain transportation and logistics services where pricing is generally not determined by weight. These statistics also exclude adjustments to revenue for undelivered freight required for financial statement purposes in accordance with our revenue recognition policy.
OLD DOMINION FREIGHT LINE, INC.
Balance Sheets
September 30,
December 31,
(In thousands)
2019
2018
Cash and cash equivalents
$
322,286
$
190,282
Other current assets
484,692
515,947
Total current assets
806,978
706,229
Net property and equipment
2,927,894
2,754,943
Other assets (1)
157,546
84,111
Total assets
$
3,892,418
$
3,545,283
Current liabilities (1)
$
396,862
$
356,732
Long-term debt
45,000
45,000
Other non-current liabilities (1)
541,028
463,068
Total liabilities
982,890
864,800
Equity
2,909,528
2,680,483
Total liabilities & equity
$
3,892,418
$
3,545,283
(1)
On January 1, 2019, the Company adopted Accounting Standards Update 2016-02, “Leases” (Topic 842), which resulted in the recognition of right-of-use assets of approximately $67 million with corresponding lease liabilities on our Condensed Balance Sheet as of September 30, 2019.
Note: The financial and operating statistics in this press release are unaudited.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005347/en/
Adam N. Satterfield Senior Vice President, Finance and Chief Financial Officer (336) 822-5721
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