Company Quick10K Filing
Old Dominion Freight Line
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 81 $11,912
10-Q 2019-11-04 Quarter: 2019-09-30
10-Q 2019-08-07 Quarter: 2019-06-30
10-Q 2019-05-07 Quarter: 2019-03-31
10-K 2019-02-27 Annual: 2018-12-31
10-Q 2018-11-05 Quarter: 2018-09-30
10-Q 2018-08-07 Quarter: 2018-06-30
10-Q 2018-05-07 Quarter: 2018-03-31
10-K 2018-02-27 Annual: 2017-12-31
10-Q 2017-11-07 Quarter: 2017-09-30
10-Q 2017-08-07 Quarter: 2017-06-30
10-Q 2017-05-10 Quarter: 2017-03-31
10-K 2017-02-27 Annual: 2016-12-31
10-Q 2016-11-07 Quarter: 2016-09-30
10-Q 2016-08-08 Quarter: 2016-06-30
10-Q 2016-05-06 Quarter: 2016-03-31
10-K 2016-02-29 Annual: 2015-12-31
10-Q 2015-11-09 Quarter: 2015-09-30
10-Q 2015-08-06 Quarter: 2015-06-30
10-Q 2015-05-07 Quarter: 2015-03-31
10-K 2015-02-26 Annual: 2014-12-31
10-Q 2014-11-05 Quarter: 2014-09-30
10-Q 2014-08-07 Quarter: 2014-06-30
10-Q 2014-05-06 Quarter: 2014-03-31
10-K 2014-02-28 Annual: 2013-12-31
10-Q 2013-11-08 Quarter: 2013-09-30
10-Q 2013-08-08 Quarter: 2013-06-30
10-Q 2013-05-08 Quarter: 2013-03-31
10-K 2013-02-28 Annual: 2012-12-31
10-Q 2012-11-06 Quarter: 2012-09-30
10-Q 2012-08-09 Quarter: 2012-06-30
10-Q 2012-05-08 Quarter: 2012-03-31
10-K 2012-02-29 Annual: 2011-12-31
10-Q 2011-11-08 Quarter: 2011-09-30
10-Q 2011-08-09 Quarter: 2011-06-30
10-Q 2011-05-09 Quarter: 2011-03-31
10-K 2011-02-28 Annual: 2010-12-31
10-Q 2010-08-06 Quarter: 2010-06-30
10-Q 2010-05-07 Quarter: 2010-03-31
10-K 2010-03-01 Annual: 2009-12-31
8-K 2019-12-16 Regulation FD, Exhibits
8-K 2019-12-03 Regulation FD, Exhibits
8-K 2019-11-21 Off-BS Arrangement, Exhibits
8-K 2019-10-24 Earnings, Exhibits
8-K 2019-10-17 Other Events, Exhibits
8-K 2019-09-04 Regulation FD, Exhibits
8-K 2019-07-25 Earnings, Exhibits
8-K 2019-07-18 Other Events, Exhibits
8-K 2019-06-05 Regulation FD, Exhibits
8-K 2019-05-15 Shareholder Vote, Other Events, Exhibits
8-K 2019-04-25 Earnings, Exhibits
8-K 2019-03-05 Regulation FD, Exhibits
8-K 2019-02-07 Earnings, Exhibits
8-K 2018-12-06 Regulation FD, Exhibits
8-K 2018-10-31 Officers, Other Events, Exhibits
8-K 2018-10-25 Earnings, Exhibits
8-K 2018-09-05 Regulation FD, Exhibits
8-K 2018-07-30 Other Events, Exhibits
8-K 2018-07-26 Earnings, Exhibits
8-K 2018-06-05 Regulation FD, Exhibits
8-K 2018-05-16 Shareholder Vote, Other Events, Exhibits
8-K 2018-04-30 Officers, Other Events, Exhibits
8-K 2018-04-26 Earnings, Exhibits
8-K 2018-03-09 Officers, Other Events, Exhibits
8-K 2018-03-05 Regulation FD, Exhibits
8-K 2018-02-08 Earnings, Exhibits
ODFL 2019-09-30
Part I. Financial Information
Item 1. Financial Statements
Note 1. Significant Accounting Policies
Note 2. Earnings per Share
Note 3. Long-Term Debt
Note 4. Leases
Note 5. Commitments and Contingencies
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
EX-31.1 odfl-ex311_9.htm
EX-31.2 odfl-ex312_6.htm
EX-32.1 odfl-ex321_7.htm
EX-32.2 odfl-ex322_8.htm

Old Dominion Freight Line Earnings 2019-09-30

ODFL 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
ZTO 12,043 39,683 5,413 0 0 0 0 7,420 0%
ODFL 11,912 3,759 960 4,137 0 640 1,109 11,730 0% 10.6 17%
JBHT 9,778 5,421 3,285 8,879 0 473 1,125 11,143 0% 9.9 9%
KNX 5,361 8,214 2,682 5,188 0 426 990 5,618 0% 5.7 5%
LSTR 4,216 1,349 620 4,462 0 260 379 3,966 0% 10.5 19%
SNDR 3,878 3,893 1,707 5,008 2,976 227 652 3,903 59% 6.0 6%
WERN 2,167 2,129 1,096 2,500 0 181 233 2,120 0% 9.1 9%
HTLD 1,778 860 207 580 0 81 204 1,553 0% 7.6 9%
SAIA 1,655 1,352 595 1,707 0 113 262 1,834 0% 7.0 8%
MRTN 974 797 194 815 0 60 80 892 0% 11.2 7%

odfl-10q_20190930.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

or

 

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________ .

 

Commission File Number: 0-19582

 

OLD DOMINION FREIGHT LINE, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

VIRGINIA

 

56-0751714

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

 

 

500 Old Dominion Way

Thomasville, North Carolina

 

27360

(Address of principal executive offices)

 

(Zip Code)

(336) 889-5000

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock ($0.10 par value)

ODFL

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

 

As of November 1, 2019 there were 79,823,521 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

  


INDEX

 

Part I – FINANCIAL INFORMATION

 

 

 

 

Item 1

Financial Statements

1

 

Condensed Balance Sheets – September 30, 2019 and December 31, 2018

1

 

Condensed Statements of Operations – For the three and nine months ended September 30, 2019 and 2018

3

 

Condensed Statements of Changes in Shareholders’ Equity – For the three and nine months ended September 30, 2019 and 2018

4

 

Condensed Statements of Cash Flows – For the nine months ended September 30, 2019 and 2018

5

 

Notes to the Condensed Financial Statements

6

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

10

Item 3

Quantitative and Qualitative Disclosures about Market Risk

17

Item 4

Controls and Procedures

18

 

 

Part II – OTHER INFORMATION

 

 

 

 

Item 1

Legal Proceedings

19

Item 1A

Risk Factors

19

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

19

Item 6

Exhibits

19

 

 

Exhibit Index

20

Signatures

21

 

 


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

 

 

 

September 30,

 

 

 

 

 

 

2019

 

December 31,

(In thousands, except share and per share data)

 

(Unaudited)

 

2018

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

322,286

 

 

$

190,282

 

Customer receivables, less allowances of $9,279 and $9,913, respectively

 

 

425,850

 

 

 

427,569

 

Other receivables

 

 

12,225

 

 

 

40,691

 

Prepaid expenses and other current assets

 

 

46,617

 

 

 

47,687

 

Total current assets

 

 

806,978

 

 

 

706,229

 

 

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

 

 

Revenue equipment

 

 

1,916,392

 

 

 

1,811,233

 

Land and structures

 

 

1,972,038

 

 

 

1,796,868

 

Other fixed assets

 

 

487,635

 

 

 

454,432

 

Leasehold improvements

 

 

11,538

 

 

 

10,619

 

Total property and equipment

 

 

4,387,603

 

 

 

4,073,152

 

Accumulated depreciation

 

 

(1,459,709

)

 

 

(1,318,209

)

Net property and equipment

 

 

2,927,894

 

 

 

2,754,943

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

19,463

 

 

 

19,463

 

Other assets

 

 

138,083

 

 

 

64,648

 

Total assets

 

$

3,892,418

 

 

$

3,545,283

 

 

Note: The Condensed Balance Sheet at December 31, 2018 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

1


OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

(CONTINUED)

 

 

 

September 30,

 

 

 

 

 

 

2019

 

December 31,

(In thousands, except share and per share data)

 

(Unaudited)

 

2018

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

81,269

 

 

$

78,518

 

Compensation and benefits

 

 

201,122

 

 

 

198,456

 

Claims and insurance accruals

 

 

51,613

 

 

 

53,263

 

Other accrued liabilities

 

 

53,728

 

 

 

26,495

 

Income taxes payable

 

 

9,130

 

 

 

 

Total current liabilities

 

 

396,862

 

 

 

356,732

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Long-term debt

 

 

45,000

 

 

 

45,000

 

Other non-current liabilities

 

 

293,359

 

 

 

215,399

 

Deferred income taxes

 

 

247,669

 

 

 

247,669

 

Total long-term liabilities

 

 

586,028

 

 

 

508,068

 

Total liabilities

 

 

982,890

 

 

 

864,800

 

 

 

 

 

 

 

 

 

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common stock - $0.10 par value, 140,000,000 shares authorized, 79,884,372

   and 81,231,131 shares outstanding at September 30, 2019 and December

   31, 2018, respectively

 

 

7,988

 

 

 

8,123

 

Capital in excess of par value

 

 

146,085

 

 

 

142,176

 

Retained earnings

 

 

2,755,455

 

 

 

2,530,184

 

Total shareholders’ equity

 

 

2,909,528

 

 

 

2,680,483

 

Total liabilities and shareholders’ equity

 

$

3,892,418

 

 

$

3,545,283

 

 

Note: The Condensed Balance Sheet at December 31, 2018 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

2


OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

(In thousands, except share and per share data)

 

2019

 

2018

 

2019

 

2018

Revenue from operations

 

$

1,048,457

 

 

$

1,058,233

 

 

$

3,099,905

 

 

$

3,016,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

533,451

 

 

 

536,513

 

 

 

1,588,378

 

 

 

1,560,073

 

Operating supplies and expenses

 

 

117,343

 

 

 

127,557

 

 

 

361,110

 

 

 

370,059

 

General supplies and expenses

 

 

33,633

 

 

 

31,209

 

 

 

97,584

 

 

 

91,076

 

Operating taxes and licenses

 

 

29,117

 

 

 

27,952

 

 

 

87,572

 

 

 

82,905

 

Insurance and claims

 

 

11,280

 

 

 

12,069

 

 

 

34,039

 

 

 

34,510

 

Communications and utilities

 

 

8,098

 

 

 

8,215

 

 

 

22,071

 

 

 

22,700

 

Depreciation and amortization

 

 

63,493

 

 

 

58,086

 

 

 

189,137

 

 

 

167,802

 

Purchased transportation

 

 

23,063

 

 

 

25,373

 

 

 

68,218

 

 

 

73,157

 

Miscellaneous expenses, net

 

 

11,452

 

 

 

2,874

 

 

 

21,354

 

 

 

16,263

 

Total operating expenses

 

 

830,930

 

 

 

829,848

 

 

 

2,469,463

 

 

 

2,418,545

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

217,527

 

 

 

228,385

 

 

 

630,442

 

 

 

598,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

3

 

 

 

29

 

 

 

285

 

 

 

51

 

Interest income

 

 

(1,714

)

 

 

(778

)

 

 

(4,966

)

 

 

(1,902

)

Other expense (income), net

 

 

844

 

 

 

(70

)

 

 

768

 

 

 

1,895

 

Total non-operating (income) expense

 

 

(867

)

 

 

(819

)

 

 

(3,913

)

 

 

44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

218,394

 

 

 

229,204

 

 

 

634,355

 

 

 

598,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

54,295

 

 

 

55,762

 

 

 

162,861

 

 

 

151,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

164,099

 

 

$

173,442

 

 

$

471,494

 

 

$

446,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.05

 

 

$

2.12

 

 

$

5.86

 

 

$

5.44

 

Diluted

 

$

2.05

 

 

$

2.12

 

 

$

5.85

 

 

$

5.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

79,880,281

 

 

 

81,885,262

 

 

 

80,474,342

 

 

 

82,067,519

 

Diluted

 

 

79,989,435

 

 

 

81,975,774

 

 

 

80,588,557

 

 

 

82,165,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.17

 

 

$

0.13

 

 

$

0.51

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

3


OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(In thousands)

2019

 

2018

 

2019

 

2018

Common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

$

8,014

 

 

$

8,208

 

 

$

8,123

 

 

$

8,238

 

Share repurchases

 

(26

)

 

 

(19

)

 

 

(141

)

 

 

(52

)

Share-based compensation and restricted share issuances,

   net of taxes

 

 

 

 

 

 

 

6

 

 

 

3

 

Ending Balance

 

7,988

 

 

 

8,189

 

 

 

7,988

 

 

 

8,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in excess of par value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

144,938

 

 

 

139,557

 

 

 

142,176

 

 

 

138,359

 

Share-based compensation and restricted share issuances,

   net of taxes

 

1,147

 

 

 

1,284

 

 

 

3,909

 

 

 

2,482

 

Ending Balance

 

146,085

 

 

 

140,841

 

 

 

146,085

 

 

 

140,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

2,645,533

 

 

 

2,334,286

 

 

 

2,530,184

 

 

 

2,130,257

 

Share repurchases

 

(40,588

)

 

 

(29,176

)

 

 

(205,205

)

 

 

(76,537

)

Cash dividends declared

 

(13,589

)

 

 

(10,650

)

 

 

(41,018

)

 

 

(32,027

)

Net income

 

164,099

 

 

 

173,442

 

 

 

471,494

 

 

 

446,209

 

Ending Balance

 

2,755,455

 

 

 

2,467,902

 

 

 

2,755,455

 

 

 

2,467,902

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

$

2,909,528

 

 

$

2,616,932

 

 

$

2,909,528

 

 

$

2,616,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

4


OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended

 

 

September 30,

(In thousands)

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

471,494

 

 

$

446,209

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

189,137

 

 

 

167,802

 

Loss (gain) on disposal of property and equipment

 

 

5,624

 

 

 

(72

)

Share-based compensation

 

 

5,363

 

 

 

3,559

 

Other operating activities, net

 

 

75,897

 

 

 

57,920

 

Net cash provided by operating activities

 

 

747,515

 

 

 

675,418

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(370,310

)

 

 

(469,866

)

Proceeds from sale of property and equipment

 

 

2,598

 

 

 

3,329

 

Other investing, net

 

 

 

 

 

799

 

Net cash used in investing activities

 

 

(367,712

)

 

 

(465,738

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal payments under long-term debt agreements

 

 

 

 

 

(50,000

)

Payments for share repurchases

 

 

(205,346

)

 

 

(76,589

)

Dividends paid

 

 

(41,005

)

 

 

(32,011

)

Other financing activities, net

 

 

(1,448

)

 

 

(1,074

)

Net cash used in financing activities

 

 

(247,799

)

 

 

(159,674

)

 

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

 

132,004

 

 

 

50,006

 

Cash and cash equivalents at beginning of period

 

 

190,282

 

 

 

127,462

 

Cash and cash equivalents at end of period

 

$

322,286

 

 

$

177,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

 

5


NOTES TO THE CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Significant Accounting Policies

Business

We are 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, we also provide LTL services throughout North America. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage and supply chain consulting. We have one operating segment and the composition of our revenue is summarized below:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

(In thousands)

 

2019

 

2018

 

2019

 

2018

LTL services

 

$

1,035,093

 

 

$

1,041,854

 

 

$

3,058,864

 

 

$

2,971,399

 

Other services

 

 

13,364

 

 

 

16,379

 

 

 

41,041

 

 

 

45,352

 

Total revenue from operations

 

$

1,048,457

 

 

$

1,058,233

 

 

$

3,099,905

 

 

$

3,016,751

 

 

Basis of Presentation

The accompanying unaudited, interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and, in management’s opinion, contain all adjustments (consisting of normal recurring items) necessary for a fair presentation, in all material respects, of the financial position and results of operations for the periods presented. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.

The preparation of condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our operating results are subject to seasonal trends; therefore, the results of operations for the interim period ended September 30, 2019 are not necessarily indicative of the results that may be expected for the subsequent quarterly period or the year ending December 31, 2019.

The condensed financial statements should be read in conjunction with the financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no significant changes in the accounting principles and policies, long-term contracts or estimates inherent in the preparation of the condensed financial statements of Old Dominion Freight Line, Inc. as previously described in our Annual Report on Form 10-K for the year ended December 31, 2018, other than those disclosed in this Form 10-Q.

Certain amounts in prior years have been reclassified to conform prior years’ financial statements to the current presentation.

Unless the context requires otherwise, references in these Notes to “Old Dominion,” the “Company,” “we,” “us” and “our” refer to Old Dominion Freight Line, Inc.

Fair Values of Financial Instruments

The carrying values of financial instruments in current assets and current liabilities approximate their fair value due to the short maturities of these instruments. The carrying value of our total long-term debt was $45.0 million at each of September 30, 2019 and December 31, 2018. The estimated fair value of our total long-term debt was $46.2 million and $45.6 million at September 30, 2019 and December 31, 2018, respectively. The fair value measurement of our senior notes was determined using a discounted cash flow analysis that factors in current market yields for comparable borrowing arrangements under our credit profile. Since this methodology is based upon market yields for comparable arrangements, the measurement is categorized as Level 2 under the three-level fair value hierarchy as established by the Financial Accounting Standards Board (the “FASB”).

6


Stock Repurchase Program

 During the second quarter of 2019, we completed our stock repurchase program, previously announced on May 17, 2018, to repurchase up to an aggregate of $250.0 million of our outstanding common stock. On May 16, 2019, we announced that our Board of Directors had approved a new two-year stock repurchase program authorizing us to repurchase up to an aggregate of $350.0 million of our outstanding common stock (the “2019 Repurchase Program”). Under the 2019 Repurchase Program, which became effective upon the expiration of our prior stock repurchase program, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions. Shares of our common stock repurchased under our repurchase programs are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock.

During the three and nine months ended September 30, 2019, we repurchased 254,294 shares of our common stock for $40.6 million and 1,406,208 shares of our common stock for $205.3 million under our repurchase programs, respectively. As of September 30, 2019, we had $276.4 million remaining authorized under the 2019 Repurchase Program.

Recent Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases” (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability on its balance sheet for most operating leases. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which provided companies with an additional optional transition method to apply the new standard to leases in effect at the adoption date through a cumulative effect adjustment. We adopted the new lease standard on January 1, 2019 using this optional transition method.

We elected the package of practical expedients referenced in ASU 2016-02, which permits companies to retain original lease identification and classification without reassessing initial direct costs for existing leases. We also elected (i) the practical expedient that exempts leases with an initial lease term of twelve months or less, (ii) the practical expedient that allows companies to select, by class of underlying asset, not to separate lease and non-lease components, and (iii) the practical expedient that allows companies to apply hindsight in determining lease terms. Our adoption of this standard resulted in the recognition of right-of-use assets and corresponding lease liabilities of $68.0 million and $69.1 million, respectively, as of January 1, 2019. There were no material impacts to our results of operations or our cash flows. Disclosures related to the amount, timing, and uncertainty of cash flows arising from our leases are included in Note 4.

Note 2. Earnings Per Share

Basic earnings per share is computed by dividing net income by the daily weighted average number of shares of our common stock outstanding for the period, excluding shares of unvested restricted stock and contingently-issuable shares. Unvested restricted stock is included in shares of common stock outstanding on our Condensed Balance Sheets.

Diluted earnings per share is computed using the treasury stock method. The denominator used in calculating diluted earnings per share includes shares of unvested restricted stock, but excludes contingently-issuable shares under performance-based award agreements when the performance target has not yet been deemed achieved.

The following table provides a reconciliation of the number of shares of common stock used in computing basic and diluted earnings per share:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2019

 

2018

 

2019

 

2018

Weighted average shares outstanding - basic

 

 

79,880,281

 

 

 

81,885,262

 

 

 

80,474,342

 

 

 

82,067,519

 

Dilutive effect of share-based awards

 

 

109,154

 

 

 

90,512

 

 

 

114,215

 

 

 

98,212

 

Weighted average shares outstanding - diluted

 

 

79,989,435

 

 

 

81,975,774

 

 

 

80,588,557

 

 

 

82,165,731

 

 

7


Note 3. Long-Term Debt

Long-term debt consisted of the following:

 

(In thousands)

 

September 30,

2019

 

December 31,

2018

Senior notes

 

$

45,000

 

 

$

45,000

 

Revolving credit facility

 

 

 

 

 

 

Total long-term debt

 

 

45,000

 

 

 

45,000

 

Less: Current maturities

 

 

 

 

 

 

Total maturities due after one year

 

$

45,000

 

 

$

45,000

 

 

We had one unsecured senior note agreement with an amount outstanding of $45.0 million at each of September 30, 2019 and December 31, 2018. Our unsecured senior note agreement calls for a scheduled principal payment of $45.0 million due on January 3, 2021. The interest rate on the January 3, 2021 scheduled principal payment is 4.79%. 

On December 15, 2015, we entered into an amended and restated credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) serving as administrative agent for the lenders (the “Credit Agreement”). The Credit Agreement originally provided for a five-year, $250.0 million senior unsecured revolving line of credit and a $100.0 million accordion feature, which if fully exercised and approved, would expand the total borrowing capacity up to an aggregate of $350.0 million.

On September 9, 2016, we exercised a portion of the accordion feature and entered into an amendment to the Credit Agreement to increase the aggregate commitments from existing lenders by $50.0 million to an aggregate of $300.0 million. Of the $300.0 million line of credit commitments under the Credit Agreement, as amended, up to $100.0 million may be used for letters of credit.

At our option, borrowings under the Credit Agreement bear interest at either: (i) LIBOR plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 1.0% to 1.50%; or (ii) a Base Rate plus an applicable margin (based on our ratio of net debt-to-total capitalization) that ranges from 0.0% to 0.5%. Letter of credit fees equal to the applicable margin for LIBOR loans are charged quarterly in arrears on the daily average aggregate stated amount of all letters of credit outstanding during the quarter. Commitment fees ranging from 0.125% to 0.2% (based upon the ratio of net debt-to-total capitalization) are charged quarterly in arrears on the aggregate unutilized portion of the Credit Agreement.

For periods covered under the Credit Agreement, the applicable margin on LIBOR loans and letter of credit fees were 1.0% and commitment fees were 0.125%. There were $49.0 million and $61.5 million of outstanding letters of credit at September 30, 2019 and December 31, 2018, respectively.

Note 4. Leases

We lease certain assets under operating leases, which at September 30, 2019 primarily consist of real estate leases for 31 of our 235 service center locations and automotive leases for private passenger vehicles. Certain operating leases provide for renewal options, which can vary by lease and are typically offered at their fair rental value. We have not made any residual value guarantees related to our operating leases; therefore, we have no corresponding liability recorded on our Condensed Balance Sheets.

The right-of-use assets and corresponding lease liabilities on our Condensed Balance Sheet represent payments over the lease term, which includes renewal options for certain real estate leases that we are likely to exercise. These renewal options begin in 2020 and continue through 2033, and range from one to ten years in length. Short-term leases, which have an initial term of 12 months or less, are not included in our right-of-use assets.

Of our total lease liabilities, $10.7 million is classified as current and is presented within “Other accrued liabilities,” and $57.9 million is classified as non-current and is presented within “Other non-current liabilities,” on our Condensed Balance Sheet as of September 30, 2019. Our right-of-use assets totaled $67.4 million and are presented within “Other assets,” which is classified as long-term, on our Condensed Balance Sheet as of September 30, 2019.


8


Future lease payments for assets under operating leases, as well as a reconciliation to our total lease liabilities as of September 30, 2019, are as follows:

 

(In thousands)

Lease Payments (a)

Remainder of 2019

$

3,470

 

2020

 

12,672

 

2021

 

10,066

 

2022

 

7,727

 

2023

 

6,288

 

Thereafter

 

47,776

 

Total lease payments

$

87,999

 

Less: Imputed interest

 

(19,446

)

Total lease liabilities

$

68,553

 

 

(a)

Lease payments include lease extensions that are reasonably certain to be exercised and exclude $44.8 million in lease payments for leases that have been executed but not yet commenced.

The weighted average lease term for our operating leases was 9.3 years as of September 30, 2019. The discount rate used in the calculation of our right-of-use assets and corresponding lease liabilities was determined based on the stated rate within each contract when available, or our collateralized borrowing rate from lending institutions. The weighted average discount rate for our operating leases was 4.0% as of September 30, 2019.

For the three- and nine-month periods ended September 30, 2019, cash paid for amounts included in the measurement of our operating leases was $3.5 million and $10.7 million, respectively, while the aggregate lease expense under operating leases was $3.7 million and $11.0 million, respectively. Certain operating leases include rent escalation provisions, which we recognize as expense on a straight-line basis. Lease expense is presented within “Operating supplies and expenses” or “General supplies and expenses,” depending on the nature of the use of the leased asset.

Note 5. Commitments and Contingencies

We are involved in or addressing various legal proceedings and claims, governmental inquiries, notices and investigations that have arisen in the ordinary course of our business and have not been fully adjudicated, some of which may be covered in whole or in part by insurance.  Certain of these matters include collective and/or class action allegations. We do not believe that the resolution of any of these matters will have a material adverse effect upon our financial position, results of operations or cash flows.

9


ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS