Old Dominion Freight Line Reports Earnings of $0.69 Per Diluted Share for the Fourth Quarter of 2011

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THOMASVILLE, N.C.--(BUSINESS WIRE)-- 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

Source: Old Dominion Freight Line, Inc.

Released February 2, 2012