10-Q 1 odfl-20220630.htm 10-Q 10-Q
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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 June 30, 2022

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 August 2, 2022 there were 111,773,874 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

 

 


 

INDEX

 

Part I – FINANCIAL INFORMATION

1

 

 

 

Item 1

Financial Statements

1

 

Condensed Balance Sheets – June 30, 2022 and December 31, 2021

1

 

Condensed Statements of Operations – For the three and six months ended June 30, 2022 and 2021

3

 

Condensed Statements of Changes in Shareholders’ Equity – For the three and six months ended June 30, 2022 and 2021

4

 

Condensed Statements of Cash Flows – For the six months ended June 30, 2022 and 2021

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

18

Item 4

Controls and Procedures

18

 

 

Part II – OTHER INFORMATION

19

 

 

 

Item 1

Legal Proceedings

19

Item 1A

Risk Factors

19

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

20

Item 6

Exhibits

20

 

 

Exhibit Index

21

Signatures

22

 

 


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

 

 

 

June 30,

 

 

 

 

 

 

2022

 

 

December 31,

 

(In thousands, except share and per share data)

 

(Unaudited)

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

196,134

 

 

$

462,564

 

Short-term investments

 

 

224,391

 

 

 

254,433

 

Customer receivables, less allowances of $11,855 and $9,855, respectively

 

 

680,096

 

 

 

567,474

 

Income taxes receivable

 

 

8,606

 

 

 

19,218

 

Other receivables

 

 

12,665

 

 

 

12,410

 

Prepaid expenses and other current assets

 

 

87,198

 

 

 

67,688

 

Total current assets

 

 

1,209,090

 

 

 

1,383,787

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

Revenue equipment

 

 

2,248,493

 

 

 

2,146,205

 

Land and structures

 

 

2,618,098

 

 

 

2,463,949

 

Other fixed assets

 

 

543,806

 

 

 

512,340

 

Leasehold improvements

 

 

13,486

 

 

 

13,131

 

Total property and equipment

 

 

5,423,883

 

 

 

5,135,625

 

Accumulated depreciation

 

 

(2,045,151

)

 

 

(1,919,939

)

Net property and equipment

 

 

3,378,732

 

 

 

3,215,686

 

 

 

 

 

 

 

 

Other assets

 

 

206,045

 

 

 

222,071

 

Total assets

 

$

4,793,867

 

 

$

4,821,544

 

 

Note: The Condensed Balance Sheet at December 31, 2021 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)

 

 

 

June 30,

 

 

 

 

 

 

2022

 

 

December 31,

 

(In thousands, except share and per share data)

 

(Unaudited)

 

 

2021

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

136,480

 

 

$

82,519

 

Compensation and benefits

 

 

264,070

 

 

 

257,905

 

Claims and insurance accruals

 

 

65,241

 

 

 

61,822

 

Other accrued liabilities

 

 

92,510

 

 

 

61,988

 

Income taxes payable

 

 

49,877

 

 

 

 

Current maturities of long-term debt

 

 

20,000

 

 

 

 

Total current liabilities

 

 

628,178

 

 

 

464,234

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt

 

 

79,955

 

 

 

99,947

 

Other non-current liabilities

 

 

281,187

 

 

 

328,838

 

Deferred income taxes

 

 

248,718

 

 

 

248,718

 

Total long-term liabilities

 

 

609,860

 

 

 

677,503

 

Total liabilities

 

 

1,238,038

 

 

 

1,141,737

 

 

 

 

 

 

 

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock - $0.10 par value, 280,000,000 shares authorized, 112,236,107 and 115,011,172 shares outstanding at June 30, 2022 and December 31, 2021, respectively

 

 

11,224

 

 

 

11,501

 

Capital in excess of par value

 

 

236,991

 

 

 

174,445

 

Retained earnings

 

 

3,307,614

 

 

 

3,493,861

 

Total shareholders’ equity

 

 

3,555,829

 

 

 

3,679,807

 

Total liabilities and shareholders’ equity

 

$

4,793,867

 

 

$

4,821,544

 

 

Note: The Condensed Balance Sheet at December 31, 2021 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

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

(In thousands, except share and per share data)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue from operations

 

$

1,667,448

 

 

$

1,319,409

 

 

$

3,164,728

 

 

$

2,445,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

705,710

 

 

 

611,518

 

 

 

1,385,899

 

 

 

1,157,177

 

Operating supplies and expenses

 

 

236,712

 

 

 

137,577

 

 

 

428,069

 

 

 

261,733

 

General supplies and expenses

 

 

39,116

 

 

 

34,427

 

 

 

74,629

 

 

 

65,595

 

Operating taxes and licenses

 

 

34,952

 

 

 

33,256

 

 

 

70,028

 

 

 

64,522

 

Insurance and claims

 

 

16,964

 

 

 

14,983

 

 

 

33,071

 

 

 

27,905

 

Communications and utilities

 

 

9,898

 

 

 

8,390

 

 

 

19,774

 

 

 

16,586

 

Depreciation and amortization

 

 

68,310

 

 

 

63,947

 

 

 

135,650

 

 

 

127,934

 

Purchased transportation

 

 

42,681

 

 

 

43,927

 

 

 

95,181

 

 

 

78,641

 

Miscellaneous expenses, net

 

 

4,400

 

 

 

5,340

 

 

 

8,104

 

 

 

10,130

 

Total operating expenses

 

 

1,158,743

 

 

 

953,365

 

 

 

2,250,405

 

 

 

1,810,223

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

508,705

 

 

 

366,044

 

 

 

914,323

 

 

 

635,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

213

 

 

 

465

 

 

 

286

 

 

 

972

 

Interest income

 

 

(471

)

 

 

(196

)

 

 

(600

)

 

 

(482

)

Other expense, net

 

 

750

 

 

 

1,387

 

 

 

1,355

 

 

 

1,515

 

Total non-operating expense

 

 

492

 

 

 

1,656

 

 

 

1,041

 

 

 

2,005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

508,213

 

 

 

364,388

 

 

 

913,282

 

 

 

633,696

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

132,135

 

 

 

94,812

 

 

 

237,453

 

 

 

164,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

376,078

 

 

$

269,576

 

 

$

675,829

 

 

$

468,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.33

 

 

$

2.33

 

 

$

5.94

 

 

$

4.04

 

Diluted

 

$

3.30

 

 

$

2.31

 

 

$

5.90

 

 

$

4.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

113,079,035

 

 

 

115,820,522

 

 

 

113,744,878

 

 

 

116,157,336

 

Diluted

 

 

113,805,149

 

 

 

116,561,242

 

 

 

114,484,894

 

 

 

116,906,572

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.30

 

 

$

0.20

 

 

$

0.60

 

 

$

0.40

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Retained

 

 

 

 

(In thousands)

Shares

 

 

Amount

 

 

Par Value

 

 

Earnings

 

 

Total

 

Balance as of December 31, 2021

 

115,011

 

 

$

11,501

 

 

$

174,445

 

 

$

3,493,861

 

 

$

3,679,807

 

Net income

 

 

 

 

 

 

 

 

 

 

299,751

 

 

 

299,751

 

Share repurchases, including settlements under accelerated share
     repurchase programs

 

(1,273

)

 

 

(127

)

 

 

62,500

 

 

 

(400,725

)

 

 

(338,352

)

Forward contract for accelerated share repurchases

 

 

 

 

 

 

 

(100,000

)

 

 

 

 

 

(100,000

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(34,128

)

 

 

(34,128

)

Share-based compensation and share issuances, net of forfeitures

 

50

 

 

 

5

 

 

 

4,286

 

 

 

 

 

 

4,291

 

Taxes paid in exchange for shares withheld

 

(27

)

 

 

(3

)

 

 

(8,059

)

 

 

 

 

 

(8,062

)

Balance as of March 31, 2022

 

113,761

 

 

$

11,376

 

 

$

133,172

 

 

$

3,358,759

 

 

$

3,503,307

 

Net income

 

 

 

 

 

 

 

 

 

 

376,078

 

 

 

376,078

 

Share repurchases, including settlements under accelerated share
     repurchase programs

 

(1,530

)

 

 

(153

)

 

 

100,000

 

 

 

(393,365

)

 

 

(293,518

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(33,858

)

 

 

(33,858

)

Share-based compensation and share issuances, net of forfeitures

 

5

 

 

 

1

 

 

 

3,881

 

 

 

 

 

 

3,882

 

Taxes paid in exchange for shares withheld

 

 

 

 

 

 

 

(62

)

 

 

 

 

 

(62

)

Balance as of June 30, 2022

 

112,236

 

 

$

11,224

 

 

$

236,991

 

 

$

3,307,614

 

 

$

3,555,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Retained

 

 

 

 

(In thousands)

Shares

 

 

Amount

 

 

Par Value

 

 

Earnings

 

 

Total

 

Balance as of December 31, 2020

 

117,058

 

 

$

11,706

 

 

$

226,451

 

 

$

3,088,131

 

 

$

3,326,288

 

Net income

 

 

 

 

 

 

 

 

 

 

199,359

 

 

 

199,359

 

Share repurchases

 

(1,127

)

 

 

(113

)

 

 

 

 

 

(240,102

)

 

 

(240,215

)

Forward contract for accelerated share repurchases

 

 

 

 

 

 

 

(68,750

)

 

 

 

 

 

(68,750

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(23,193

)

 

 

(23,193

)

Share-based compensation and share issuances, net of forfeitures

 

55

 

 

 

5

 

 

 

2,964

 

 

 

 

 

 

2,969

 

Taxes paid in exchange for shares withheld

 

(21

)

 

 

(2

)

 

 

(4,539

)

 

 

 

 

 

(4,541

)

Balance as of March 31, 2021

 

115,965

 

 

$

11,596

 

 

$

156,126

 

 

$

3,024,195

 

 

$

3,191,917

 

Net income

 

 

 

 

 

 

 

 

 

 

269,576

 

 

 

269,576

 

Share repurchases

 

(160

)

 

 

(16

)

 

 

 

 

 

(39,984

)

 

 

(40,000

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(23,194

)

 

 

(23,194

)

Share-based compensation and share issuances, net of forfeitures

 

5

 

 

 

1

 

 

 

4,078

 

 

 

 

 

 

4,079

 

Balance as of June 30, 2021

 

115,810

 

 

$

11,581

 

 

$

160,204

 

 

$

3,230,593

 

 

$

3,402,378

 

 

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

4


 

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

<

 

 

Six Months Ended

 

 

 

June 30,

 

(In thousands)

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

675,829

 

 

$

468,935

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

135,658

 

 

 

127,942

 

(Gain) Loss on disposal of property and equipment

 

 

(2,061

)

 

 

701

 

Other, net

 

 

15,649

 

 

 

15,352

 

Changes in operating assets and liabilities, net

 

 

(9,022

)

 

 

(104,639

)

Net cash provided by operating activities

 

 

816,053

 

 

 

508,291

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(323,063

)

 

 

(206,109

)

Proceeds from sale of property and equipment

 

 

18,928

 

 

 

15,512

 

Purchase of short-term investments

 

 

(99,997

)

 

 

(89,965

)

Proceeds from maturities of short-term investments

 

 

129,884

 

 

 

255,072

 

Net cash used in investing activities

 

 

(274,248

)

 

 

(25,490

)

 

 

 

 

 

 

 

Cash flows from financing activities: