Stock Quote

Old Dominion Freight Line Reports Second Quarter 2022 Earnings Per Diluted Share Of $3.30

Operating Ratio Improves to 69.5%

Old Dominion Freight Line, Inc. (Nasdaq: ODFL) today announced financial results for the three-month and six-month periods ended June 30, 2022.

 

 

Three Months Ended

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

June 30,

 

(In thousands, except per share amounts)

 

2022

 

2021

 

% Chg.

 

2022

 

2021

 

% Chg.

Total revenue

 

$

1,667,448

 

 

$

1,319,409

 

 

 

26.4

%

 

$

3,164,728

 

 

$

2,445,924

 

 

 

29.4

%

LTL services revenue

 

$

1,644,659

 

 

$

1,299,760

 

 

 

26.5

%

 

$

3,120,440

 

 

$

2,409,382

 

 

 

29.5

%

Other services revenue

 

$

22,789

 

 

$

19,649

 

 

 

16.0

%

 

$

44,288

 

 

$

36,542

 

 

 

21.2

%

Operating income

 

$

508,705

 

 

$

366,044

 

 

 

39.0

%

 

$

914,323

 

 

$

635,701

 

 

 

43.8

%

Operating ratio

 

 

69.5

%

 

 

72.3

%

 

 

 

 

 

71.1

%

 

 

74.0

%

 

 

 

Net income

 

$

376,078

 

 

$

269,576

 

 

 

39.5

%

 

$

675,829

 

 

$

468,935

 

 

 

44.1

%

Diluted earnings per share

 

$

3.30

 

 

$

2.31

 

 

 

42.9

%

 

$

5.90

 

 

$

4.01

 

 

 

47.1

%

Diluted weighted average shares outstanding

 

 

113,805

 

 

 

116,561

 

 

 

(2.4

)%

 

 

114,485

 

 

 

116,907

 

 

 

(2.1

)%

“Old Dominion’s financial results for the second quarter of 2022 include new Company records for revenue and profitability,” said Greg C. Gantt, President and Chief Executive Officer. “We produced these results by continuing to execute on our long-term strategic plan and delivering superior service at a fair price. Demand for our service remained strong throughout the quarter, which helped support a steady trend with our volumes and consistent yield improvement. The quality of our revenue growth, combined with our disciplined control over costs, allowed us to produce a sub-70% quarterly operating ratio for the first time in our Company’s history.

“The 26.4% increase in revenue for the second quarter was primarily due to a 22.6% increase in LTL revenue per hundredweight and a 2.8% increase in LTL tons per day. While the significant increase in the price of diesel fuel impacted our yield metrics, the 9.3% increase in LTL revenue per hundredweight, excluding fuel surcharges, reflects the success of our long-term pricing strategy. We remain focused on consistently increasing our yield to offset cost inflation and to support our ongoing investments in capacity, which we believe are necessary to achieve our long-term market share initiatives.

“Our operating ratio improved to 69.5% for the second quarter of 2022, with most of our cost categories improving as a percent of revenue. Our salaries, wages and benefit costs as a percent of revenue improved to 42.3% from 46.4% in the second quarter of 2021, and our purchased transportation costs improved 70 basis points to 2.6% of revenue. These changes more than offset the increase in operating supplies and expenses as a percent of revenue that primarily resulted from the significant increase in the cost of diesel fuel and other petroleum-based products during the quarter. The combination of revenue growth and improved operating ratio drove the 42.9% increase in our earnings per diluted share to $3.30 for the second quarter.”

Cash Flow and Use of Capital

Old Dominion’s net cash provided by operating activities was $427.3 million for the second quarter of 2022 and $816.1 million for the first half of the year. The Company had $196.1 million in cash and cash equivalents at June 30, 2022.

Capital expenditures were $229.4 million for the second quarter of 2022 and $323.1 million for the first half of the year. The Company expects its aggregate capital expenditures for 2022 to total approximately $835 million, including planned expenditures of $300 million for real estate and service center expansion projects; $485 million for tractors and trailers; and $50 million for information technology and other assets.

Old Dominion continued to return capital to shareholders during the second quarter of 2022 through its share repurchase and dividend programs. For the first six months of this year, the cash utilized for shareholder return programs included $731.9 million of share repurchases and $68.0 million of cash dividends.

Summary

Mr. Gantt concluded, “Old Dominion produced strong profitable growth during the second quarter by consistently executing on our long-term strategic plan. Our relentless focus on providing superior service at a fair price has created an unmatched value proposition within our industry. This value offering, combined with our available network capacity, has positioned us to win additional market share in the future. To support our long-term growth initiatives, however, we must continue to consistently invest in our OD Family of employees, our fleet, and our service center network. We are committed to the disciplined execution of these business fundamentals and, as a result, we are confident that we can drive additional growth in our earnings and 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 August 3, 2022, at (877) 344-7529, Access Code 7163281.

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 challenges associated with executing our growth strategy, and developing, marketing and consistently delivering high-quality services that meet customer expectations; (2) various risks related to public health epidemics, pandemics and similar outbreaks, including the continuing impact of the COVID-19 pandemic; (3) changes in our relationships with significant customers; (4) our exposure to claims related to cargo loss and damage, property damage, personal injury, workers’ compensation and healthcare, increased self-insured retention or deductible levels or premiums for excess coverage, and claims in excess of insured coverage levels; (5) the availability and cost of new equipment, including regulatory changes and supply constraints that could impact the cost of these assets; (6) the availability and cost of third-party transportation used to supplement our workforce and equipment needs; (7) the availability and price of diesel fuel and 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; (8) seasonal trends in the LTL industry, including harsh weather conditions and disasters; (9) the availability and cost of capital for our significant ongoing cash requirements; (10) decreases in demand for, and the value of, used equipment; (11) our ability to successfully consummate and integrate acquisitions; (12) the costs and potential liabilities related to our international business relationships; (13) the costs and potential adverse impact of compliance with anti-terrorism measures on our business; (14) the competitive environment with respect to our industry, including pricing pressures; (15) 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; (16) the negative impact of any unionization, or the passage of legislation or regulations that could facilitate unionization, of our employees; (17) increases in the cost of employee compensation and benefit packages used to address general labor market challenges and to attract or retain qualified employees, including drivers and maintenance technicians; (18) our ability to retain our key employees and continue to effectively execute our succession plan; (19) potential costs and liabilities associated with cyber incidents and other risks with respect to our information technology systems or those of our third-party service providers, including system failure, security breach, disruption by malware or ransomware or other damage; (20) the failure to adapt to new technologies implemented by our competitors in the LTL and transportation industry, which could negatively affect our ability to compete; (21) 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; (22) the Compliance, Safety, Accountability initiative of the Federal Motor Carrier Safety Administration (“FMCSA”) could adversely impact our ability to hire qualified drivers, meet our growth projections and maintain our customer relationships; (23) the costs and potential adverse impact of compliance with, or violations of, current and future rules issued by the Department of Transportation, the FMCSA and other regulatory agencies; (24) the costs and potential liabilities related to compliance with, or violations of, existing or future governmental laws and regulations, including environmental laws; (25) the effects of legal, regulatory or market responses to climate change concerns; (26) the increase in costs associated with healthcare legislation and other mandated benefits; (27) the costs and potential liabilities related to legal proceedings and claims, governmental inquiries, notices and investigations; (28) the impact of changes in tax laws, rates, guidance and interpretations; (29) the concentration of our stock ownership with the Congdon family; (30) the ability or the failure to declare future cash dividends; (31) fluctuations in the amount and frequency of our stock repurchases; (32) volatility in the market value of our common stock; (33) 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 (34) 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 one of the largest North American LTL motor carriers and provides regional, inter-regional and national LTL services through a single integrated, union-free organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. The Company also maintains strategic alliances with other carriers to provide 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

 

 

Second Quarter

 

Year to Date

(In thousands, except per share amounts)

2022

 

2021

 

2022

 

2021

Revenue

$

1,667,448

 

 

 

100.0

%

 

$

1,319,409

 

 

 

100.0

%

 

$

3,164,728

 

 

 

100.0

%

 

$

2,445,924

 

 

 

100.0

%

 

Operating expenses:

Salaries, wages & benefits

 

705,710

 

 

 

42.3

%

 

 

611,518

 

 

 

46.4

%

 

 

1,385,899

 

 

 

43.8

%

 

 

1,157,177

 

 

 

47.3

%

Operating supplies & expenses

 

236,712

 

 

 

14.2

%

 

 

137,577

 

 

 

10.4

%

 

 

428,069

 

 

 

13.5

%

 

 

261,733

 

 

 

10.7

%

General supplies & expenses

 

39,116

 

 

 

2.3

%

 

 

34,427

 

 

 

2.6

%

 

 

74,629

 

 

 

2.4

%

 

 

65,595

 

 

 

2.7

%

Operating taxes & licenses

 

34,952

 

 

 

2.1

%

 

 

33,256

 

 

 

2.5

%

 

 

70,028

 

 

 

2.2

%

 

 

64,522

 

 

 

2.6

%

Insurance & claims

 

16,964

 

 

 

1.0

%

 

 

14,983

 

 

 

1.2

%

 

 

33,071

 

 

 

1.0

%

 

 

27,905

 

 

 

1.2

%

Communications & utilities

 

9,898

 

 

 

0.6

%

 

 

8,390

 

 

 

0.6

%

 

 

19,774

 

 

 

0.6

%

 

 

16,586

 

 

 

0.7

%

Depreciation & amortization

 

68,310

 

 

 

4.1

%

 

 

63,947

 

 

 

4.9

%

 

 

135,650

 

 

 

4.3

%

 

 

127,934

 

 

 

5.2

%

Purchased transportation

 

42,681

 

 

 

2.6

%

 

 

43,927

 

 

 

3.3

%

 

 

95,181

 

 

 

3.0

%

 

 

78,641

 

 

 

3.2

%

Miscellaneous expenses, net

 

4,400

 

 

 

0.3

%

 

 

5,340

 

 

 

0.4

%

 

 

8,104

 

 

 

0.3

%

 

 

10,130

 

 

 

0.4

%

 

Total operating expenses

 

1,158,743

 

 

 

69.5

%

 

 

953,365

 

 

 

72.3

%

 

 

2,250,405

 

 

 

71.1

%

 

 

1,810,223

 

 

 

74.0

%

 

Operating income

 

508,705

 

 

 

30.5

%

 

 

366,044

 

 

 

27.7

%

 

 

914,323

 

 

 

28.9

%

 

 

635,701

 

 

 

26.0

%

 

Non-operating expense (income):

Interest expense

 

213

 

 

 

0.0

%

 

 

465

 

 

 

0.0

%

 

 

286

 

 

 

0.0

%

 

 

972

 

 

 

0.0

%

Interest income

 

(471

)

 

 

(0.0

)%

 

 

(196

)

 

 

(0.0

)%

 

 

(600

)

 

 

(0.0

)%

 

 

(482

)

 

 

(0.0

)%

Other expense, net

 

750

 

 

 

0.0

%

 

 

1,387

 

 

 

0.1

%

 

 

1,355

 

 

 

0.0

%

 

 

1,515

 

 

 

0.1

%

 

Income before income taxes

 

508,213

 

 

 

30.5

%

 

 

364,388

 

 

 

27.6

%

 

 

913,282

 

 

 

28.9

%

 

 

633,696

 

 

 

25.9

%

 

Provision for income taxes

 

132,135

 

 

 

7.9

%

 

 

94,812

 

 

 

7.2

%

 

 

237,453

 

 

 

7.5

%

 

 

164,761

 

 

 

6.7

%

 

Net income

$

376,078

 

 

 

22.6

%

 

$

269,576

 

 

 

20.4

%

 

$

675,829

 

 

 

21.4

%

 

$

468,935

 

 

 

19.2

%

 

Earnings per share:

Basic

$

3.33

 

 

 

 

 

$

2.33

 

 

 

 

 

$

5.94

 

 

 

 

 

$

4.04

 

 

 

 

 

Diluted

$

3.30

 

 

 

 

 

$

2.31

 

 

 

 

 

$

5.90

 

 

 

 

 

$

4.01

 

 

 

 

 

 

Weighted average outstanding shares:

Basic

 

113,079

 

 

 

 

 

 

115,821

 

 

 

 

 

 

113,745

 

 

 

 

 

 

116,157

 

 

 

 

 

Diluted

 

113,805

 

 

 

 

 

 

116,561

 

 

 

 

 

 

114,485

 

 

 

 

 

 

116,907

 

 

 

 

 

OLD DOMINION FREIGHT LINE, INC.

Operating Statistics

 

 

Second Quarter

 

Year to Date

 

2022

 

2021

 

% Chg.

 

2022

 

2021

 

% Chg.

Work days

 

64

 

 

 

64

 

 

 

0.0

%

 

 

128

 

 

 

127

 

 

 

0.8

%

Operating ratio

 

69.5

%

 

 

72.3

%

 

 

 

 

 

71.1

%

 

 

74.0

%

 

 

 

LTL intercity miles (1)

 

194,726

 

 

 

178,938

 

 

 

8.8

%

 

 

378,333

 

 

 

340,111

 

 

 

11.2

%

LTL tons (1)

 

2,672

 

 

 

2,598

 

 

 

2.8

%

 

 

5,325

 

 

 

4,930

 

 

 

8.0

%

LTL tonnage per day

 

41,746

 

 

 

40,600

 

 

 

2.8

%

 

 

41,600

 

 

 

38,819

 

 

 

7.2

%

LTL shipments (1)

 

3,398

 

 

 

3,307

 

 

 

2.8

%

 

 

6,738

 

 

 

6,211

 

 

 

8.5

%

LTL shipments per day

 

53,096

 

 

 

51,672

 

 

 

2.8

%

 

 

52,643

 

 

 

48,903

 

 

 

7.6

%

LTL revenue per intercity mile

$

8.45

 

 

$

7.29

 

 

 

15.9

%

 

$

8.29

 

 

$

7.12

 

 

 

16.4

%

LTL revenue per hundredweight

$

30.78

 

 

$

25.10

 

 

 

22.6

%

 

$

29.46

 

 

$

24.56

 

 

 

20.0

%

LTL revenue per hundredweight, excluding fuel surcharges

$

23.69

 

 

$

21.67

 

 

 

9.3

%

 

$

23.40

 

 

$

21.36

 

 

 

9.6

%

LTL revenue per shipment

$

484.08

 

 

$

394.49

 

 

 

22.7

%

 

$

465.63

 

 

$

389.94

 

 

 

19.4

%

LTL revenue per shipment, excluding fuel surcharges

$

372.56

 

 

$

340.48

 

 

 

9.4

%

 

$

369.84

 

 

$

339.06

 

 

 

9.1

%

LTL weight per shipment (lbs.)

 

1,572

 

 

 

1,571

 

 

 

0.1

%

 

 

1,580

 

 

 

1,588

 

 

 

(0.5

)%

Average length of haul (miles)

 

934

 

 

 

930

 

 

 

0.4

%

 

 

937

 

 

 

929

 

 

 

0.9

%

Average active full-time employees

 

24,893

 

 

 

21,621

 

 

 

15.1

%

 

 

24,585

 

 

 

21,050

 

 

 

16.8

%

(1) -

In thousands

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

 

 

 

 

 

 

 

June 30,

 

December 31,

(In thousands)

2022

 

2021

Cash and cash equivalents

$

196,134

 

 

$

462,564

 

Short-term investments

 

224,391

 

 

 

254,433

 

Other current assets

 

788,565

 

 

 

666,790

 

Total current assets

 

1,209,090

 

 

 

1,383,787

 

Net property and equipment

 

3,378,732

 

 

 

3,215,686

 

Other assets

 

206,045

 

 

 

222,071

 

Total assets

$

4,793,867

 

 

$

4,821,544

 

 

 

 

 

 

 

Current maturities of long-term debt

$

20,000

 

 

$

 

Other current liabilities

 

608,178

 

 

 

464,234

 

Total current liabilities

 

628,178

 

 

 

464,234

 

Long-term debt

 

79,955

 

 

 

99,947

 

Other non-current liabilities

 

529,905

 

 

 

577,556

 

Total liabilities

 

1,238,038

 

 

 

1,141,737

 

Equity

 

3,555,829

 

 

 

3,679,807

 

Total liabilities & equity

$

4,793,867

 

 

$

4,821,544

 

Note: The financial and operating statistics in this press release are unaudited.

Contacts

Adam N. Satterfield

Senior Vice President, Finance and Chief Financial Officer

(336) 822-5721

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