Heartland Express, Inc. Reports Revenues and Earnings for

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.    

For the quarter, the Company posted an operating ratio (operating expenses as a percentage of operating revenues) of 80.1% and a 12.1% net margin (net income as a percentage of operating revenues) compared to 85.4% and 9.2%, respectively, in the third quarter of 2012. The Company posted an operating ratio of 78.5% and a 13.7% net margin for the nine month period ended September 30, 2013 compared to an 82.9% operating ratio and an 11.5% net margin for the same period of 2012. 

Improvements in our overall fleet fuel economy, largely the result of capital spending on a newer tractor fleet, lower fleet utilization, and decreases in fuel prices, all contributed in fuel expense decreases for both the quarterly period and year to date periods compared to the respective periods of 2012. Fuel expense decreased 7.5% or $3.2 million for the quarter ended September 30, 2013 and 4.3% or $5.4 million for the nine months ended September 30, 2013. The U.S. average cost of diesel fuel was $3.92 per gallon during the third quarter of 2013, a 1.0% decrease from the third quarter of the prior year. The U.S. average cost of diesel fuel for the first nine months of 2013 was $3.94 per gallon, a 0.5% decline from an average price of $3.96 for the comparable period of 2012. 

The average age of the Company's tractor fleet was 2.0 years as of September 30, 2013 compared to 2.4 years as of September 30, 2012. The Company took delivery of 303 new tractors during the third quarter of 2013 which included International ProStar Plus and Freightliner Cascadia models. The current tractor fleet upgrade will continue through the first quarter of 2014 which will complete the latest scheduled purchase of 1,100 new tractors. The average age of the Company's trailer fleet was 3.2 years at September 30, 2013 compared to 3.3 years at September 30, 2012, with 100% of our trailers being 2007 models and newer at the end of the quarter.    

The Company ended the quarter with cash, cash equivalents, and short and long-term investments totaling $175.4 million, a $35.5 million increase from the $139.9 million reported at December 31, 2012 despite spending $35.1 million (net of sales proceeds) for fleet equipment upgrades during the first nine months of the year. As of September 30, 2013, the Company's balance of auction rate securities, at par, was $11.4 million. The Company has received call notices, at par, of $6.9 million of auction rate securities which are expected to be received in early fourth quarter of 2013. Net cash flows from operations increased to 18.3% of operating revenues during the nine months ended September 30, 2013 compared with 16.5% for the same period of September 30, 2012. The Company continues to maintain a debt-free balance sheet with total assets of $537.5 million. The Company ended the trailing twelve months as of September 30, 2013 with a return on total assets of 13.6% and a 21.8% return on equity compared to 11.8% and 17.9%, respectively, during the trailing twelve months as of September 30, 2012.

A dividend of $0.02 per share was declared during the quarter and was paid on October 2, 2013. The Company has now paid cumulative cash dividends of $441.7 million, including three special dividends, over the past forty-one consecutive quarters. The Company has not purchased any shares of its common stock during the current fiscal year. As of September 30, 2013, there are 3.2 million shares remaining under the current repurchase authorization. 

Heartland Express continues to build on its reputation as a quality service provider. Providing excellent customer service has allowed us to build solid, long-term relationships. In addition to seven previously announced awards during 2013, we were recently recognized with the DuPont 2012 Outstanding Service Award, the FedEx 2013 Carrier of the Year Award, the FedEx 2013 Gold Award for 99.8% on time service, the FedEx Smartpost 2013 Peak Performance Award, the Niagara Waters East Region Carrier Partner of the Year Award, the Sonoco 2013 Helping Hands of the Year Award, the United Sugars 2013 Dry Van Carrier of the Year Award, the Whirlpool Corporation 2013 Carrier of the Year Award, and Logistics Management magazine's Dry Freight Carrier Quest for Quality award for the eleventh consecutive year. These awards are a direct reflection upon our operational excellence and our outstanding group of drivers.

This press release may contain statements that might be considered as forward-looking statements or predictions of future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission.

Heartland Express, Inc. Mike Gerdin, Chief Executive Officer John Cosaert, Chief Financial Officer 319-626-3600