Old Dominion Freight Line : Reports Earnings of $0.69 Per Diluted Share for the Fourth Quarter of 2011
02/02/2012 | 07:05am
Revenue Growth Exceeds 20% for the Sixth Consecutive Quarter
Old Dominion Freight Line, Inc. (NASDAQ: ODFL) today announced financial
results for the fourth quarter and year ended December 31, 2011. Revenue
increased 21.6% to $485.1 million for the quarter from $399.0 million
for the fourth quarter of 2010. Net income increased 80.8% to $39.9
million for the latest quarter from $22.1 million for the fourth quarter
of 2010. Earnings per diluted share rose 76.9% to $0.69 for the quarter
from $0.39 for the same period in 2010. Old Dominion's operating ratio
improved to 86.9% for the fourth quarter from 90.5% for the fourth
quarter of 2010. Weighted average shares outstanding for the fourth
quarter of 2011 rose 2.7% compared with the fourth quarter of 2010.
For 2011, revenue increased 27.1% to $1.88 billion from $1.48 billion
for 2010. Net income increased 84.4% to $139.5 million for 2011 from
$75.7 million for 2010, and earnings per diluted share grew 80.7% to
$2.44 for 2011 from $1.35 for 2010. Old Dominion's operating ratio
improved to 87.6% for 2011 from 90.7% for 2010.
David S. Congdon, President and Chief Executive Officer of Old Dominion,
said, "Throughout the fourth quarter, Old Dominion continued to sustain
the operating strength and financial momentum that we generated during
the first nine months of 2011. As a result, we produced record revenues,
profit margins and earnings for both the fourth quarter and the full
year. Our record performance reflects the commitment by our dedicated
employees to fulfill our promise of on-time, claims-free service at a
fair and equitable price. The efforts of our entire team create the
value proposition that allows us to continue to win market share.
"During the fourth quarter we experienced a quarter-over-quarter
increase of 9.7% in our tonnage, which reflects a 9.8% increase in
shipments and a 0.2% decline in average weight per shipment. We achieved
this growth while maintaining our focus on yields, as evidenced by a
10.7% increase in revenue per hundredweight, or a 6.4% increase
excluding fuel surcharges. Revenue per hundredweight, excluding fuel
surcharges, for each quarter of 2011 exceeded the prior-year comparable
quarter by more than 6.0%.
"Old Dominion's operating ratio for the fourth quarter of 2011 improved
360 basis points from the fourth quarter of 2010 to an 86.9%. We also
produced the best annual operating ratio in our Company's history at
87.6%. This performance was driven primarily by operating leverage
generated by the growth in tonnage and further improvement in our
revenue per hundredweight. In addition, we improved the productivity of
our linehaul, pickup and delivery and platform operations during the
fourth quarter at a significantly stronger rate than what we achieved
for the full year. Our industry-leading performance for on-time and
claims-free service remained strong during the fourth quarter and has
contributed significantly to our ability to expand our market share."
Capital expenditures for the fourth quarter were $40.3 million, bringing
the total for the year to $250.2 million. These expenditures included
the opening of the Canton, Ohio service center in October, bringing the
total number of service centers in operation to 216 at year end. The
Company also relocated and expanded four service centers during the
fourth quarter. For 2012, capital expenditures are anticipated to range
between $300 million to $350 million. This estimate includes $90 million
to $120 million for real estate purchases and expansion projects at
existing facilities, subject to the availability of suitable real estate
and the timing of construction projects, $195 million to $210 million
for the purchase of tractors, trailers and other equipment, and $15
million to $20 million for investments in technology.
Old Dominion expects to continue to fund capital expenditures primarily
with cash flow from operations. In addition, the Company's financial
position at the end of 2011 was stronger than at any time in its history
as a public company. Total debt to capitalization improved to 23.9% at
the end of 2011 from 24.5% at the end of the third quarter of 2011 and
28.9% at the end of 2010. The Company also had $75.9 million in cash and
cash equivalents at the end of 2011 compared with $5.5 million at the
end of 2010. In August 2011, Old Dominion entered into a new five-year,
$200 million senior unsecured revolving credit facility. At December 31,
2011, there were $49.9 million of outstanding letters of credit, but no
borrowings outstanding on this facility.
Mr. Congdon concluded, "2011 was a great year for Old Dominion. Our
record results and industry leadership validate the strengths of our
value proposition, business model, competitive market positioning and
the entire OD team. We believe we will continue to build market share by
maintaining superior service levels, while remaining disciplined with
our yield management. We also have the financial strength to expand the
capacity of our operations to benefit from organic growth or industry
consolidation, and to invest in other value-added services. As a result,
we are confident in our ability to produce further profitable growth."
Old Dominion will hold a conference call to discuss this release today
at 10:00 a.m. Eastern Standard Time. Investors will have the opportunity
to listen to the conference call live over the Internet by going to www.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 through February 12, 2012. A telephonic replay will also be
available through February 12, 2012 at (719) 457-0820, Confirmation
Number 5684951.
Forward-looking statements in this news release are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned 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, such that our total overall
pricing is sufficient 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 fuel and
other petroleum-based products; (3) the negative impact of any
unionization, or the passage of legislation that could facilitate
unionization, of our employees; (4) the challenges associated with
executing our growth strategy, including the inability to successfully
consummate and integrate acquisitions, if any; (5) changes in our goals
and strategies, which are subject to change at any time at our
discretion; (6) various economic factors such as economic recessions and
downturns in customers' business cycles and shipping requirements; (7)
increases in driver compensation or difficulties attracting and
retaining qualified drivers to meet freight demand; (8) our exposure to
claims related to cargo loss and damage, property damage, personal
injury, workers' compensation, long-term disability and group health,
including increased premiums, adverse loss development, increased
self-insured retention levels, and claims in excess of coverage levels;
(9) the availability and cost of capital for our significant ongoing
cash requirements; (10) the availability and cost of replacement parts
and new equipment, particularly in light of regulatory changes and
supply constraints impacting the cost of these assets; (11) decreases in
demand for, and the value of, used equipment; (12) the availability and
cost of diesel fuel; (13) 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, and new safety standards
for drivers and equipment; (14) the costs and potential adverse impact
associated with the implementation of the new safety monitoring system
of the Federal Motor Carrier Safety Administration; (15) seasonal trends
in the industry, including the possibility of harsh weather conditions;
(16) our dependence on key employees; (17) the concentration of our
stock ownership with the Congdon family; (18) the costs and potential
adverse impact associated with potential future changes in accounting
standards or practices; (19) the impact caused by potential disruptions
to our information technology systems; (20) dilution to existing
shareholders caused by any issuance of additional equity; and (21) other
risks and uncertainties indicated from time to time in our filings with
the Securities and Exchange Commission. 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 (i) as 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 service and value-added logistics services. In addition to
its core LTL services, the Company offers its customers a broad range of
logistics services including ground and air expedited transportation,
supply chain consulting, transportation management, truckload brokerage,
container delivery and warehousing services, as well as consumer
household services. Through marketing and carrier relationships, the
Company also offers door-to-door international freight services to and
from all of North America, Central America, South America and the Far
East.
OLD DOMINION FREIGHT LINE, INC.
Financial Highlights
(Dollars in thousands, except per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
%
December 31,
%
2011
2010
Chg.
2011
2010
Chg.
Revenue from operations
$
485,132
$
398,972
21.6
%
$
1,882,541
$
1,480,998
27.1
%
Operating income
$
63,312
$
37,969
66.7
%
$
234,072
$
137,739
69.9
%
Operating ratio
86.9
%
90.5
%
87.6
%
90.7
%
Net income
$
39,883
$
22,056
80.8
%
$
139,470
$
75,651
84.4
%
Basic and diluted earnings per share
$
0.69
$
0.39
76.9
%
$
2.44
$
1.35
80.7
%
Basic and diluted weighted average shares outstanding
57,443
55,927
2.7
%
57,146
55,927
2.2
%
OLD DOMINION FREIGHT LINE, INC.
Statements of Operations
(In thousands, except per share amounts)
Fourth Quarter
Year To Date
2011
2010
% Chg.
2011
2010
% Chg.
Revenue
$
485,132
100.0
%
$
398,972
100.0
%
21.6
%
$
1,882,541
100.0
%
$
1,480,998
100.0
%
27.1
%
Operating expenses:
Salaries, wages & benefits
248,048
51.1
%
218,378
54.7
%
13.6
%
956,079
50.8
%
808,819
54.6
%
18.2
%
Operating supplies & expenses
90,435
18.6
%
69,271
17.4
%
30.6
%
355,186
18.9
%
244,291
16.5
%
45.4
%
General supplies & expenses
12,485
2.6
%
10,429
2.6
%
19.7
%
49,900
2.6
%
41,580
2.8
%
20.0
%
Operating taxes & licenses
15,737
3.2
%
14,349
3.6
%
9.7
%
63,284
3.4
%
55,420
3.8
%
14.2
%
Insurance & claims
4,818
1.0
%
6,491
1.6
%
(25.8
%)
27,693
1.5
%
25,329
1.7
%
9.3
%
Communications & utilities
4,603
1.0
%
3,955
1.0
%
16.4
%
18,104
1.0
%
15,218
1.0
%
19.0
%
Depreciation & amortization
24,290
5.0
%
19,862
5.0
%
22.3
%
90,820
4.8
%
80,362
5.4
%
13.0
%
Purchased transportation
15,561
3.2
%
13,664
3.4
%
13.9
%
63,257
3.4
%
50,489
3.4
%
25.3
%
Building and office equipment rents
3,390
0.7
%
3,476
0.9
%
(2.5
%)
13,689
0.7
%
15,244
1.0
%
(10.2
%)
Miscellaneous expenses, net
2,453
0.5
%
1,128
0.3
%
117.5
%
10,457
0.5
%
6,507
0.5
%
60.7
%
Total operating expenses
421,820
86.9
%
361,003
90.5
%
16.8
%
1,648,469
87.6
%
1,343,259
90.7
%
22.7
%
Operating income
63,312
13.1
%
37,969
9.5
%
66.7
%
234,072
12.4
%
137,739
9.3
%
69.9
%
Other deductions:
Interest expense, net
3,186
0.7
%
2,944
0.7
%
8.2
%
13,887
0.7
%
12,465
0.8
%
11.4
%
Other expense, net
(521
)
(0.1
%)
(76
)
(0.0
%)
585.5
%
101
0.0
%
848
0.1
%
(88.1
%)
Income before income taxes
60,647
12.5
%
35,101
8.8
%
72.8
%
220,084
11.7
%
124,426
8.4
%
76.9
%
Provision for income taxes
20,764
4.3
%
13,045
3.3
%
59.2
%
80,614
4.3
%
48,775
3.3
%
65.3
%
Net income
$
39,883
8.2
%
$
22,056
5.5
%
80.8
%
$
139,470
7.4
%
$
75,651
5.1
%
84.4
%
Earnings per share:
Basic and Diluted
$
0.69
$
0.39
76.9
%
$
2.44
$
1.35
80.7
%
Weighted average outstanding shares:
Basic and Diluted
57,443
55,927
2.7
%
57,146
55,927
2.2
%
OLD DOMINION FREIGHT LINE, INC.
Fourth Quarter
Year to Date
Operating Statistics
2011
2010
% Chg.
2011
2010
% Chg.
Operating ratio
86.9
%
90.5
%
(4.0
%)
87.6
%
90.7
%
(3.4
%)
Intercity miles *
99,782
91,050
9.6
%
389,588
338,504
15.1
%
Total tons *
1,598
1,457
9.7
%
6,397
5,656
13.1
%
Total shipments *
1,802
1,641
9.8
%
7,256
6,327
14.7
%
Revenue per intercity mile
$
4.86
$
4.38
11.0
%
$
4.83
$
4.38
10.3
%
Rev/cwt ?
$
15.00
$
13.55
10.7
%
$
14.72
$
13.09
12.5
%
Rev/cwt excluding fuel surcharges ?
$
12.55
$
11.79
6.4
%
$
12.31
$
11.49
7.1
%
Rev/shp ?
$
266.05
$
240.72
10.5
%
$
259.50
$
234.09
10.9
%
Rev/shp excluding fuel surcharges ?
$
222.63
$
209.39
6.3
%
$
217.04
$
205.38
5.7
%
Weight per shipment (lbs.)
1,774
1,777
(0.2
%)
1,763
1,788
(1.4
%)
Average length of haul (miles)
946
953
(0.7
%)
952
948
0.4
%
* - In thousands
? - For statistical purposes only, revenue does not include
adjustments for undelivered freight required for financial
statement purposes in accordance with the Company's revenue
recognition policy.
December 31,
December 31,
Balance Sheets
2011
2010
(In thousands)
Cash and cash equivalents
$
75,850
$
5,450
Other current assets
256,002
217,132
Total current assets
331,852
222,582
Net property and equipment
1,126,950
964,216
Other assets
54,272
53,083
Total assets
$
1,513,074
$
1,239,881
Current maturities of long-term debt
$
39,354
$
37,130
Other current liabilities
165,456
132,916
Total current liabilities
204,810
170,046
Long-term debt
229,831
234,087
Other non-current liabilities
221,914
167,099
Total liabilities
656,555
571,232
Equity
856,519
668,649
Total liabilities & equity
$
1,513,074
$
1,239,881
Note: Financial and operating data are unaudited.
Old Dominion Freight Line, Inc. J. Wes Frye, 336-822-5305 Senior
Vice President, Finance and Chief Financial Officer
