FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
[ ] 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 (I.R.S. Employer
incorporation or organization) Identification No.)
500 Old Dominion Way
Thomasville, NC 27360
(Address of principal executive offices)
Registrant's Telephone Number (336) 889-5000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($.10 par value)
(Title of class)
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 X No___ .
---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 19, 2002, was $17,769,010.
As of March 25, 2002, the registrant had 8,315,240 outstanding shares of Common
Stock ($.10 par value).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's Proxy Statement for the 2002 Annual Meeting of
Stockholders are incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
General
Old Dominion Freight Line, Inc. ("Old Dominion", the "Company" or the
"Registrant", as appropriate for this report) is an interregional and
multi-regional motor carrier transporting primarily less-than-truckload ("LTL")
shipments of general commodities, including consumer goods, textiles and capital
goods to a diversified customer base. In 2001, 97.8% of the Company's shipments
were LTL shipments, which are defined as shipments weighing less than 10,000
lbs. LTL revenue comprised 90.8%, 89.4% and 88.9% of the Company's operating
revenue in 2001, 2000 and 1999, respectively. The Company serves regional
markets in the Southeast, South Central, Northeast, Midwest and West regions of
the country. Old Dominion connects these geographic regions with high quality
interregional service. The Company has also developed strategic partnerships
with foreign-based motor carriers, particularly in Canada and Mexico, to provide
its customers with service to destinations outside the United States.
Old Dominion transports shipping containers between several port cities and
inland points, primarily in its core southeastern service area. For the year
ended December 31, 2001, container services accounted for 2.1% of the Company's
operating revenue. Old Dominion also provides assembly and distribution services
primarily to its retail customers.
Old Dominion's operating strategy is to provide high quality and timely service,
including time definite, guaranteed and expedited delivery services, at
competitive prices, while maintaining low operating costs. Along key
interregional lanes, Old Dominion maintains published service standards that
generally provide for delivery time schedules that are faster than those of its
principal national competitors, in part, because of its more efficient service
center network and use of team drivers. The Company's service standards
generally provide for delivery times of between two and three days along key
interregional lanes between 500 and 1,500 miles. The Company also provides for
one or two-day delivery along regional lanes of less than 500 miles, which Old
Dominion believes is highly competitive.
The Company seeks to reduce unit operating costs and improve service by building
freight volume, or density, in its markets. Increasing density reduces unloading
and reloading at breakbulk facilities, resulting in faster transit times,
reduced cargo claims and more efficient equipment utilization. Old Dominion also
lowers its cost structure and reduces cargo claims by using twin 28-foot
trailers exclusively in its linehaul operations. Use of twin 28-foot trailers
permits the Company to transport freight directly from its point of origin to
destination with minimal unloading and reloading, and permits more freight to be
hauled behind a tractor than could be hauled if the Company used one larger
trailer. Approximately 53% of the Company's LTL tonnage moves directly from the
origination service center to its destination without being reloaded to another
trailer at a breakbulk facility, with a substantial majority of the remaining
tonnage experiencing no more than one breakbulk handling per shipment. Further,
management believes that it gains an operating advantage by maintaining a
flexible work force, which permits service center employees to perform several
functions that result in reliable deliveries and a higher level of customer
satisfaction.
The LTL Industry
LTL companies are generally categorized as regional, interregional or national
motor carriers based upon length of haul. Carriers with average lengths of haul
less than 500 miles are referred to as regional carriers. Carriers with average
lengths of haul between 500 and 1,000 miles are referred to as interregional
carriers. National carriers generally have average lengths of haul that exceed
1,000 miles. For the year ended December 31, 2001, Old Dominion's average length
of haul was 877 miles.
In the motor carrier industry, revenue is primarily a function of weight, length
of haul and commodity class, and is frequently described in terms of revenue per
hundredweight. The Company tracks revenue per hundredweight as a measure of
pricing, commodity mix and rate trends.
2
LTL carriers can improve profitability by increasing lane and service center
density. Increased lane density lowers unit operating costs and improves
service. Increased service center density, by increasing the amount of freight
handled at a given service center location, improves utilization of assets and
other fixed costs.
In recent years, many shippers have attempted to simplify their transportation
requirements by reducing the number of carriers they use by establishing
service-based, long-term relationships with a small group of preferred or "core
carriers" or by the use of third party logistics providers. This trend toward
the use of "core carriers" and third party logistics offers significant growth
opportunities for carriers that possess financial stability and can provide both
regional and interregional, high quality service with low costs. The Company
believes that this trend has created an opportunity for it to increase lane and
service center density along key interregional lanes in which a relatively small
number of carriers offer high quality service. Old Dominion's strategy is to
continue to capitalize on its ability to build its market share in key
interregional and regional lanes. From time to time, certain national carriers
have sought to compete in selected interregional markets and along selected
interregional lanes and may seek to do so in the future as national markets
mature, but the Company believes that it holds a key competitive advantage over
its principal national competitors due to its more efficient service center
network.
Revenue Equipment and Maintenance
At December 31, 2001, the Company operated 2,544 tractors. The Company generally
uses new tractors in linehaul operations for approximately three to five years
and then transfers those tractors to pickup and delivery operations for the
remainder of their useful lives. In a number of Company service centers,
tractors perform pickup and delivery functions during the day and linehaul
functions at night to maximize tractor utilization.
At December 31, 2001, the Company operated a fleet of 10,180 trailers. As the
Company has expanded and its needs for equipment have increased, the Company has
purchased new trailers as well as trailers meeting its specifications from other
trucking companies that have ceased operations. These purchases of pre-owned
equipment, though providing an excellent value, have the effect of increasing
the trailer fleet's average age; however, the Company believes the age of its
trailer fleet compares favorably with its competitors.
The Company develops certain specifications for revenue equipment, the
production and purchase of which are negotiated with several manufacturers.
These purchases are planned well in advance of anticipated delivery dates in
order to accommodate manufacturers' production schedules. The Company believes
that there is sufficient capacity among suppliers to ensure an uninterrupted
flow of equipment.
The table below reflects, as of December 31, 2001, the average age of Old
Dominion's revenue equipment:
Type of Equipment Number
(Categorized by Primary Use) of Units Average Age
---------------------------- -------- -----------
Linehaul tractors 1,742 3.7 years
Pickup and delivery tractors 802 8.5 years
Pickup and delivery trucks 31 6.1 years
Linehaul trailers 8,241 8.4 years
Pickup and delivery trailers 1,939 12.9 years
The Company currently has major maintenance operations at its service centers in
Atlanta, Georgia; Dallas, Texas; Chicago and Des Plaines, Illinois; Harrisburg,
Pennsylvania; Jersey City, New Jersey; Morristown and Memphis, Tennessee; Los
Angeles and Rialto, California; Columbus, Ohio; Greensboro, North Carolina; and
Greenville, South Carolina. In addition, five other service center
locations are equipped to perform routine and preventive maintenance checks and
repairs on the Company's equipment.
3
The Company has an established scheduled maintenance policy and procedure that
is administered by the Vice President - Equipment and Maintenance. Linehaul
tractors are routed to appropriate maintenance facilities at designated mileage
intervals ranging from 12,500 to 25,000 miles, depending upon how the equipment
was utilized. Pickup and delivery tractors and trailers are scheduled for
maintenance every 90 days.
The table below sets forth the Company's capital expenditures for certain
revenue equipment during 2001, 2000 and 1999:
Year Land & Structures Tractors Trailers Total
---- ----------------- -------- -------- -----
2001 $ 33,178,000 $ 5,478,000 $ 2,972,000 $ 41,628,000
2000 $ 21,189,000 $ 21,546,000 $ 9,291,000 $ 52,026,000
1999 $ 17,015,000 $ 7,886,000 $ 4,360,000 $ 29,261,000
Service Center Operations
At December 31, 2001, Old Dominion conducted operations through 115 service
center locations, of which it owns 45 and leases 70. The Company operates major
breakbulk facilities in Atlanta, Georgia; Greensboro, North Carolina;
Harrisburg, Pennsylvania; Indianapolis, Indiana; Morristown, Tennessee; and
Rialto, California, while using some smaller service centers for limited
breakbulk activity. Old Dominion's service centers are strategically located to
permit the Company to provide the highest quality service and minimize freight
rehandling costs.
Each service center is responsible for the pickup and delivery of freight for
its own service area. All inbound freight received by the service center in the
evening or during the night is scheduled for local delivery the next business
day, unless a customer requests a different delivery schedule. Each service
center loads the freight by destination the day it is picked up. Management
reviews the productivity and service performance of each service center on a
daily basis in order to ensure quality service.
The Company also has established primary responsibility for customer service at
the local level. Service center employees trace freight movements using the
Company's automated tracing system, which provides for immediate response to
customer requests for delivery information. Customers may also trace shipments,
obtain copies of documents and initiate other inquires on the Company's website.
While the Company maintains primary accountability for customer service at the
local service center, the Company has established a customer service function at
the corporate offices to offer additional customer support.
The Company plans to expand capacity at existing service centers as well as
expand the number of service centers geographically as opportunities arise that
provide for profitable growth and fit the needs of its customers.
Linehaul Transportation
The Company's Linehaul Transportation Department is responsible for directing
the movement of freight among the Company's service centers. Linehaul
dispatchers control the movement of freight among service centers through
real-time, integrated freight movement systems. The Company also utilizes
load-planning software to optimize efficiencies in its linehaul operations.
Senior management continuously monitors freight movements, transit times, load
factors and other productivity measurements to ensure the Company maintains its
highest levels of service and efficiency.
4
The Company uses scheduled dispatches, and schedules additional dispatches as
necessary, to meet its published service standards. The Company uses twin
trailers exclusively in its linehaul operations to reduce breakbulk handling and
to increase linehaul productivity.
Marketing and Customers
At December 31, 2001, the Company had a sales staff of 268 employees. The
Company compensates its sales force, in part, based upon revenue generated,
Company and service center profitability and on-time service performance, which
the Company believes helps to motivate those employees.
The Company utilizes a computerized freight costing model to determine the price
level at which a particular shipment of freight will be profitable. Elements of
this freight costing model may be modified, as necessary, to simulate the actual
conditions under which the freight will be moved. From time to time, the Company
also competes for business by participating in bid solicitations. Customers
generally solicit bids for relatively large numbers of shipments for a period of
from one to two years and typically choose to enter into a contractual
arrangement with a limited number of motor carriers based upon price and
service.
For the year ended December 31, 2001, Old Dominion's largest 20, 10, and 5
customers accounted for approximately 18.5%, 12.7% and 7.7%, respectively, of
the Company's operating revenue. The Company's largest customer for 2001
accounted for approximately 2.3% of operating revenue. While the Company is not
dependent upon one customer, a reduction or termination of services provided by
the Company to a large group of customers could have an adverse effect on the
Company's business and operating results.
Competition
The transportation industry is highly competitive on the basis of both price and
service. Old Dominion competes with regional, interregional and national LTL and
truckload carriers and, to a lesser extent, with air freight carriers and
railroads, a number of which have greater financial resources, operate more
equipment and have larger freight capacity than the Company. The Company
believes that it is able to compete effectively in its markets by providing high
quality and timely service at competitive prices.
Seasonality
The Company's tonnage levels and revenue mix are subject to seasonal trends
common in the motor carrier industry. Financial results in the first and fourth
quarters are normally lower due to reduced shipments during the winter months.
Harsh winter weather can also adversely impact the Company's performance by
reducing demand and increasing operating expenses. The second and third quarters
reflect increased demand for services during the spring and summer months, which
generally result in improved operating margins.
Safety and Insurance
The Company's Vice President - Safety and Personnel and Vice President - Field
Services implement and monitor its safety and loss prevention programs with the
assistance of 15 field supervisors. The Company's accident frequency, as defined
by the National Safety Council (including minor and unavoidable accidents), was
7.8, 7.4 and 7.3 accidents per million miles for the years ended December 31,
2001, 2000 and 1999, respectively.
The Company is self-insured for bodily injury and property damage claims up to
$250,000 per occurrence. Cargo claims are self-insured up to $100,000; however,
after the first two losses exceed $100,000 in a policy year, the retention under
the Company's excess insurance policy is reduced to $50,000 per occurrence. The
Company also is self-insured for workers' compensation in certain states and has
first dollar or high deductible plans in the other states. The Company believes
that its policy of self-insuring up to set limits, together with its safety and
loss prevention programs, is an effective means of managing insurance costs.
5
Old Dominion believes that its current insurance coverage is adequate to cover
its liability risks.
Fuel Availability and Cost
The motor carrier industry is dependent upon the availability of diesel fuel.
Increases in fuel prices and fuel taxes, to the extent not offset by rate
increases or fuel surcharges to customers, shortages of fuel or rationing of
petroleum products could have a material adverse effect on the operations and
profitability of the Company. The Company has not experienced difficulties in
maintaining a consistent and ample supply of fuel. In periods of extreme price
increases, the Company has implemented a fuel surcharge to offset the additional
cost of fuel, which is consistent with other competitors. Management believes
that the Company's operations and financial condition are susceptible to the
same fuel price increases or fuel shortages as those of its competitors. Fuel
costs, excluding fuel taxes, averaged 5.1% of revenue in 2001. In response to
fuel price fluctuations, the Company implemented a fuel surcharge in August
1999, which has remained in effect since that time.
Employees
At December 31, 2001, the Company employed 6,106 individuals in the following
categories:
Number of
Category Employees
-------- ---------
Drivers 3,082
Platform 1,077
Mechanics 194
Sales 268
Salaried, clerical and other 1,485
At December 31, 2001, the Company employed 1,344 linehaul drivers and 1,738 city
drivers. All drivers hired by the Company are selected based upon driving
records and experience. Drivers are required to pass drug tests at employment
and are later required to take such tests periodically, by random selection.
Competition for drivers is intense within the trucking industry, and the Company
periodically experiences difficulties in attracting and retaining qualified
drivers. There can be no assurance that the Company's operations will not be
affected by a shortage of qualified drivers in the future which could result in
temporary under-utilization of revenue equipment, difficulty in meeting shipper
demands and increased compensation levels for drivers. Difficulty in attracting
or retaining qualified drivers could require the Company to limit growth and
have a material adverse effect on the Company's operations.
To help fulfill driver needs, the Company offers employees and their families
the opportunity to become drivers through the "Old Dominion Driver Training
Program". Since its inception in 1988, 1,112 individuals have graduated from
that program, from which the Company has experienced an annual turnover rate of
approximately 9%. In management's opinion, driver qualification programs, which
are required to be taken by all Company drivers, have been important factors in
improving the Company's safety record. Drivers with safe driving records are
rewarded with bonuses of up to $1,000 annually. Driver safety bonuses paid for
2001 were approximately $622,000.
Management believes that relations with employees are excellent and there are no
employees represented under a collective bargaining agreement. However, there
can be no assurance that a substantial number of the Company's employees will
not unionize in the future, which could increase the Company's operating costs
and force it to alter its operating methods. Any significant unionization of the
Company's workforce could have a materially adverse effect on the Company's
operating results.
6
Regulation
The Surface Transportation Board, an independent entity within the United States
Department of Transportation ("DOT"), regulates and monitors certain activities
within the motor carrier industry. The Company is also regulated by various
state agencies. These regulatory authorities have broad powers, generally
governing matters such as authority to engage in motor carrier operations,
rates, certain mergers, consolidations and acquisitions, and periodic financial
reporting. The motor carrier industry is subject to regulatory and legislative
changes that can affect the economics of the industry by requiring changes in
operating practices or influencing the demand and costs of providing services to
shippers.
Interstate motor carrier operations are subject to safety requirements
prescribed by the DOT. Such matters as weight and dimensions of equipment are
also subject to federal and state regulation. The Company is subject to federal,
state and local environmental laws and regulations, particularly relating to
underground fuel storage tanks ("USTs"). The Company believes it is in
compliance with applicable environmental laws and regulations, including those
relating to USTs, and does not believe that the cost of future compliance will
have a material adverse effect on the Company's operations or financial
condition.
Executive Officers of the Company
The following table sets forth information regarding the executive officers of
the Company:
Name and Age Positions and Offices with the Company
------------ --------------------------------------
Earl E. Congdon (71) Chairman of the Board of Directors and Chief
Executive Officer
John R. Congdon (69) Vice Chairman of the Board of Directors
David S. Congdon (45) President, Chief Operating Officer
John B. Yowell (50) Executive Vice President
J. Wes Frye (54) Sr. Vice President - Finance, Treasurer,
Chief Financial Officer and Assistant
Secretary
Joel B. McCarty, Jr. (64) Sr. Vice President, General Counsel and
Secretary
Earl E. Congdon has been employed by the Company since 1950 and has served as
Chairman of the Board and Chief Executive Officer since 1985 and as a director
since 1952. He is a son of E. E. Congdon, one of the founders of Old Dominion.
John R. Congdon joined the Company in 1953, was appointed a director in 1955 and
has served as Vice Chairman of the Board since 1985. He is also the Chairman of
Old Dominion Truck Leasing, Inc., a North Carolina corporation that is engaged
in the full service leasing of tractors, trailers and other equipment, to which
he devotes more than half of his time. He is a son of E. E. Congdon, one of the
founders of Old Dominion, and the brother of Earl E. Congdon.
David S. Congdon has been employed by the Company since 1978 and, since May
1997, has served as President and Chief Operating Officer. He has held various
positions in the Company including Vice President - Quality and Field Services,
Vice President - Quality, Vice President - Transportation and other positions in
operations and engineering. He is the son of Earl E. Congdon.
John B. Yowell joined the Company in February 1983 and has served as Executive
Vice President since May 1997. He has held the positions of Vice President -
Corporate Services, Vice President - Central Region, Assistant to the President
and Vice President - Management Information Systems. He is a son-in-law of Earl
E. Congdon.
7
J. Wes Frye has served as Sr. Vice President - Finance since May 1997. He has
also served as Chief Financial Officer and Treasurer since joining the Company
in February 1985 and has held the position of Assistant Secretary since December
1987. Mr. Frye was formerly employed as the Vice President of Finance of
Builders Transport, Inc., from 1982 to 1985, and held various positions,
including Vice President - Controller, with Johnson Motor Lines from 1975 to
1980. Mr. Frye is a Certified Public Accountant.
Joel B. McCarty, Jr., was appointed Sr. Vice President in May 1997 and has
served as General Counsel and Secretary since joining the Company in June 1987.
Before joining Old Dominion, he was Assistant General Counsel of McLean Trucking
Company and was in private law practice prior to 1985.
ITEM 2. PROPERTIES
The Company owns its general offices located in Thomasville, North Carolina,
consisting of a two-story office building of approximately 160,000 square feet
on 23.6 acres of land. The Company also owns service center facilities in
Birmingham, Dothan and Huntsville, Alabama; Tucson, Arizona; Los Angeles and
Rialto, California; South Windsor, Connecticut; Atlanta, Georgia; Jacksonville,
Miami, Orlando and Tampa, Florida; Des Plaines, Illinois; Kansas City, Kansas;
Baltimore, Maryland; Detroit, Michigan; Minneapolis, Minnesota; Tupelo,
Mississippi; Syracuse, New York; Asheville, Charlotte, Fayetteville, Hickory,
Wilmington and Wilson, North Carolina; Cincinnati and Columbus, Ohio; Oklahoma
City, Oklahoma; Pittsburgh, Pennsylvania; Providence, Rhode Island; Charleston,
Columbia and Greenville, South Carolina; Chattanooga, Memphis, Morristown and
Nashville, Tennessee; Amarillo, Dallas and Houston, Texas; Richmond, Manassas,
Martinsville and Norfolk, Virginia; and Milwaukee, Wisconsin.
The Company also owns non-operating properties in Jacksonville, Florida; Tupelo,
Mississippi; St. Louis, Missouri; Cincinnati, Ohio; Fayetteville and Hickory,
North Carolina; Memphis, Morristown, and Nashville, Tennessee; and two
properties in Houston, Texas, all of which are held for lease. Currently, the
Jacksonville property is leased until December 2002; the St. Louis property is
leased until February 2004; the Hickory property is leased until June 2002; the
Nashville property is leased month to month; one of the Houston properties is
leased until December 2003; and the Cincinnati, Fayetteville, Memphis,
Morristown, Tupelo and second Houston property are not under lease.
At December 31, 2001, Old Dominion leased 70 of its 115 service centers. These
leased facilities are dispersed over the 35 states in which the Company operates
service center facilities in the Southeast, Northeast, Midwest, South Central
and West regions of the country. The length of these leases ranges from
month-to-month to a lease that expires in July 2008. The Company believes that
as current leases expire, it will be able either to renew them or find
comparable facilities without incurring any material negative impact on service
to customers or its operating results.
The Company believes that all of its properties are in good repair and are
capable of providing the level of service required by current business levels
and customer demands.
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Company is a party or of which any of
its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
8
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Common Stock and Dividend Information
The common stock of Old Dominion Freight Line, Inc. is traded on the Nasdaq
National Market under the symbol ODFL. At March 18, 2002, there were
approximately 749 holders of the common stock, including 125 stockholders of
record. No dividends were paid on the Company's common stock in 2001. The
information concerning restrictions on dividend payments required by Item 5 of
Form 10-K appears in Note 2 of the Notes to Consolidated Financial Statements
under Item 8 of this report.
The following table sets forth the high and low share sales prices of the
Company's common stock for the periods indicated, as reported by the Nasdaq
National Market:
2001
--------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------
High $ 10.750 $ 13.500 $ 14.950 $ 13.370
Low $ 9.250 $ 8.560 $ 9.780 $ 10.250
2000
-------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------
High $ 13.000 $ 12.500 $ 11.000 $ 10.500
Low $ 10.750 $ 8.875 $ 8.750 $ 8.500
Market Makers:
Spear, Leeds & Kellogg L.P.; Sherwood Securities Corp.; Knight Securities, L.P.;
ABN AMRO Securities LLC; BB&T Investment Services, Inc.; Davenport & Company,
LLC; The BRUT ECN, L.L.C.
9
ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
For the Year Ended December 31,
-------------------------------------------------------------
(In thousands, except per share amounts
and operating statistics) 2001 2000 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------
Operating Data:
Revenue from operations $ 502,239 $ 475,803 $ 426,385 $ 383,078 $ 328,844
Operating expenses:
Salaries, wages and benefits 306,361 283,121 258,900 229,188 193,523
Purchased transportation 18,553 19,547 14,504 15,696 15,494
Operating supplies and expenses 50,788 50,074 36,749 31,485 30,311
Depreciation and amortization 29,888 27,037 25,295 21,887 17,173
Building and office equipment rents 7,499 7,196 7,330 7,285 6,921
Operating taxes and licenses 20,525 18,789 17,699 16,791 13,968
Insurance and claims 13,229 12,465 10,200 12,277 10,033
Communications and utilities 9,623 8,488 7,532 7,011 6,152
General supplies and expenses 17,510 18,527 15,852 15,000 11,976
Miscellaneous expenses, net 3,538 3,806 4,268 3,881 3,282
---------------------------------------------------------
Total operating expenses 477,514 449,050 398,329 360,501 308,833
---------------------------------------------------------
Operating income 24,725 26,753 28,056 22,577 20,011
Interest expense, net 5,899 4,397 4,077 4,331 3,547
Other (income) expense, net (691) (97) 522 311 273
---------------------------------------------------------
Income before income taxes 19,517 22,453 23,457 17,935 16,191
Provision for income taxes 7,612 8,757 9,056 6,815 6,153
---------------------------------------------------------
Net income $ 11,905 $ 13,696 $ 14,401 $ 11,120 $ 10,038
=========================================================
Earnings Per Share:
Basic $ 1.43 $ 1.65 $ 1.73 $ 1.34 $ 1.21
Diluted $ 1.43 $ 1.65 $ 1.73 $ 1.34 $ 1.21
Weighted Average Shares Outstanding:
Basic 8,313 8,313 8,312 8,312 8,312
Diluted 8,314 8,314 8,316 8,323 8,322
Operating Statistics:
Operating ratio 95.1% 94.4% 93.4% 94.1% 93.9%
LTL revenue per hundredweight $ 13.09 $ 12.83 $ 11.82 $ 11.28 $ 11.37
Revenue per intercity mile $ 3.37 $ 3.43 $ 3.26 $ 3.09 $ 2.99
Intercity miles (in thousands) 149,100 138,848 130,648 123,816 110,120
LTL tonnage (in thousands) 1,788 1,697 1,644 1,527 1,334
Shipments (in thousands) 3,463 3,278 3,140 2,980 2,607
Average length of haul (miles) 877 869 844 853 869
Balance Sheet Data: As of December 31,
---------------------------------------------------------
2001 2000 1999 1998 1997
---------------------------------------------------------
Current assets $ 73,866 $ 80,196 $ 76,254 $ 69,789 $ 59,860
Current liabilities 50,566 63,410 71,582 54,481 39,084
Total assets 310,840 296,591 257,579 241,799 191,061
Long-term debt (including current maturities) 98,422 83,542 64,870 70,589 47,301
Stockholders' equity 136,639 124,734 111,038 96,637 85,501
10
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth, for the years indicated, expenses and other
items as a percentage of revenue from operations:
2001 2000 1999
- ------------------------------------------------------------------------------------------------------------------
Revenue from operations 100.0% 100.0% 100.0%
---------- ---------- ----------
Salaries, wages and benefits 61.0 59.5 60.7
Purchased transportation 3.7 4.1 3.4
Operating supplies and expenses 10.1 10.5 8.6
Depreciation and amortization 6.0 5.7 5.9
Building and office equipment rents 1.5 1.5 1.7
Operating taxes and licenses 4.1 4.0 4.2
Insurance and claims 2.6 2.6 2.4
Communication and utilities 1.9 1.8 1.8
General supplies and expenses 3.5 3.9 3.7
Miscellaneous expenses, net .7 .8 1.0
---------- ---------- ----------
Total operating expenses 95.1 94.4 93.4
---------- ---------- ----------
Operating income 4.9 5.6 6.6
Interest expense, net 1.2 .9 1.0
Other (income) expense, net (.2) - .1
---------- ---------- ----------
Income before income taxes 3.9 4.7 5.5
Provision for income taxes 1.5 1.8 2.1
---------- ---------- ----------
Net income 2.4% 2.9% 3.4%
========== ========== ==========
Results of Operations
2001 Compared to 2000
While lower demand for transportation products was experienced industry-wide,
the Company continued to implement its long-term strategy to increase market
share through improved service products and selective geographic expansion. On
February 10, 2001, the Company purchased selected assets of Carter & Sons
Freightways, Inc. of Carrollton, Texas. Carter & Sons operated a regional
less-than-truckload network of 23 service centers, primarily in Texas and
surrounding states. As a result, the Company opened 13 new service centers and
merged the remaining 10 service centers into its existing operations. This
acquisition allowed the Company to expand its full-state coverage to 23 states
and enhanced its regional and interregional markets in the continental United
States. The Company estimates that the acquisition generated approximately
$23,000,000 of additional revenue in 2001.
A weak national economy, compounded by the terrorist attacks on September 11,
2001, impacted the Company's ability to reach its financial performance goals
for 2001. While revenue grew to $502,239,000, or 5.6% over 2000, increases in
operating costs outpaced revenue growth and resulted in a 13.1% decline in net
income to $11,905,000 compared to $13,696,000 in 2000. Diluted earnings per
share for the year was $1.43 compared to $1.65, a decrease of 13.3%. The
Company's operating ratio for 2001, a measure of profitability calculated by
dividing operating costs by revenue, increased to 95.1% from 94.4% in 2000.
11
In 2001, the Company continued its process of improving its service products and
transit times. Between January 1 and May 30, the Company reduced standard
transit times in approximately 25% of its more than 13,000 service lanes. In
early 2002, the Company announced reductions in transcontinental transit times
by one day in approximately 200 service lanes. The Company believes that it can
continue to increase its market share by providing superior transit times,
offering flexible and guaranteed service options through its Speed Service
products and through competitive pricing.
Although total tonnage decreased .4% in 2001 when compared with 2000, LTL
tonnage, or shipments weighing less than 10,000 lbs., increased 5.4%. Because
LTL shipments generally are priced at a higher revenue per hundredweight, the
Company's revenue increased while tonnage decreased. Net revenue per
hundredweight was $10.11 compared to $9.54 for the prior year, an increase of
6.0%.
The Company operated 115 service centers at year-end 2001 compared to 104
service centers in 2000. These additional service centers required the Company
to increase its tractor and trailer fleet by 6.6% and 6.1%, respectively.
Increases in the number of service centers and the equipment fleet, combined
with relatively flat tonnage between 2001 and 2000, generated excess capacity
and a resulting increase in depreciation and amortization expense to 6.0% of
revenue from 5.7% for 2000.
Linehaul driver pay increased to 12.3% of revenue from 11.8% in 2000, a result
of an increase in intercity miles driven without a comparable increase in
revenue per mile. Intercity miles increased 7.4% while revenue per intercity
mile decreased 1.7%, an indication that linehaul density declined between the
two periods.
The Company self-insures a significant portion of the group health benefits it
provides for its employees and their families. These costs increased 24.5% or
$4,269,000 over the prior year and significantly contributed to the increase in
the Company's operating ratio. Although the Company anticipates the trend of
escalating health care costs to continue for the immediate future, consistent
with national trends, it has identified opportunities to offset a portion of
these higher costs and has implemented those changes in January 2002.
Fuel expense decreased to 5.1% of revenue from 5.6% in 2000. The Company's
general tariffs and contracts generally include provisions for a fuel surcharge,
recorded in net revenue, which has effectively offset significant diesel fuel
price fluctuations. The Company seeks to apply these surcharges until prices
fall below certain floor levels.
Results for 2001 also include the sale and disposition of land and structures,
which included both operating and non-operating properties. Operating properties
were sold for gains before taxes totaling $2,114,000 and were recorded in
"Miscellaneous expenses, net". "Other (income) expense, net" included the sale
and disposal of non-operating properties for a net gain before taxes of
$772,000.
As a result of a higher average level of debt outstanding during 2001, interest
expense increased to 1.2% of revenue from .9%. Outstanding debt was $98,422,000
at December 31, 2001 compared to $83,542,000 at December 31, 2000, an increase
of 17.8%. This increase in debt is primarily due to increased working capital
requirements and to additional financing required to fund $46,963,000 of net
capital expenditures in 2001. The Company capitalized $232,000 in interest
charges in 2001 compared to $1,031,000 in 2000.
The tax rate for both 2001 and 2000 was 39%.
2000 Compared to 1999
Revenue for 2000 was $475,803,000, an increase of 11.6 % over 1999 revenue of
$426,385,000. The Company met its targeted revenue growth of between 10% to 15%
by expanding its market share in its existing markets, through selected
geographic expansion, by increasing its service product offerings and by
implementing a fuel surcharge on its base tariffs and contract pricing.
12
In January 2000, the Company intensified its strategy to increase market share
within existing areas of operations by implementing full state coverage in 16
states east of the Mississippi River. By the end of the second quarter, the
Company implemented full state coverage in 5 additional states, bringing the
total to 21 states. In addition, the Company opened 6 new service centers in
2000, including openings in West Virginia and Oklahoma. These openings increased
the number of states in which the Company has service center facilities to 35.
The Company also introduced its new guaranteed and expedited service product,
Speed Service in early 2000. Speed Service is anticipated to grow significantly
as more customers demand service sensitive and customized delivery services.
In response to the rising costs of petroleum products, particularly diesel fuel,
the Company implemented a fuel surcharge on its tariffs in August 1999.
Generally, this surcharge was designed to offset the cost of fuel above a base
price and increases as fuel prices escalate over the base. The fuel surcharge
accounted for approximately 3.4% of revenue for 2000 while accounting for
approximately .4% of revenue for 1999.
LTL revenue per shipment in 2000 increased 7.3% to $136.36 from $127.13 for 1999
while LTL shipments increased 4.5%. The increase in revenue per shipment was a
result of an 8.5% increase in LTL revenue per LTL hundredweight to $12.83 from
$11.82 and a 1.2% decrease in LTL weight per shipment to 1,063 lbs. from 1,076
lbs. In addition, the Company's average length of haul increased 3.0% to 869
miles from 844 miles, which generally increases both LTL revenue per
hundredweight and LTL revenue per shipment.
The operating ratio increased to 94.4% in 2000 from 93.4% in 1999. Increases in
operating supplies, purchased transportation, insurance and claims liabilities,
and general supplies and expenses contributed to the increased operating ratio,
the 4.6% decline in operating income and the 4.9% decline in net income in 2000
compared to 1999. Diesel fuel, which is expensed in operating supplies,
increased in 2000 to 5.6% of revenue from 3.7% in 1999. While this cost element
reflected the most significant and dramatic increase over the prior year, the
Company was able to offset its impact with the implementation of fuel
surcharges.
Purchased transportation increased to 4.1% of revenue from 3.4%, due to an
increase in cartage expense. Cartage expense, or outsourced pickup and delivery
services, increased to 1.8% of revenue from 1.3% as a result of two factors.
First, the implementation of full-state coverage in 21 states required the
Company to service certain remote locations that were more economically served
by third party agent partners who had more operating density in those areas. As
market share builds, Company personnel and equipment will replace these agents.
Second, growth in certain markets exceeded the Company's operating capacity
resulting in the use of more expensive outside pickup and delivery services to
maintain quality service standards during peak shipping periods. The Company is
addressing these situations by either constructing or leasing larger facilities
to accommodate this growth.
The Company self-insures a portion of its bodily injury, property damage and
cargo claims liabilities. In 2000, the cost of self-insurance increased to 2.4%
of revenue compared to 2.1% for 1999 due to a slight increase in the number and
severity of claims.
General supplies and expenses increased to 3.9% of revenue from 3.7% in 2000,
due in part to the Company's change in its capitalization policy to require a
minimum expenditure of $1,000 before recognizing a depreciable asset, compared
to a minimum expenditure of $500 in 1999. In 2000, the Company continued to
upgrade its desktop equipment and software, much of which fell below the new
capitalization level of $1,000 and was therefore expensed.
The Company's strategy to grow existing markets has resulted in improvements in
asset utilization. These improvements were reflected as decreases in certain
fixed costs as a percent of revenue when compared to the prior year.
Depreciation and amortization decreased to 5.7% of revenue from 5.9%, building
and office equipment rents decreased to 1.5% from 1.7%, and operating taxes and
licenses decreased to 4.0% from 4.2%.
13
Net interest expense decreased slightly to .9% of revenue from 1.0%. While
outstanding debt at year-end 2000 increased $18,672,000 from year-end 1999 and
interest rates generally increased on the Company's variable rate debt
instrument, $1,031,000 in interest charges were capitalized as part of the
construction of service centers in 2000 as compared to $230,000 in 1999.
Net income for 2000 was $13,696,000, a 4.9% decrease from $14,401,000 in 1999.
The effective tax rate was 39.0% for 2000 compared to 38.6% for 1999.
Liquidity and Capital Resources
Expansion in both the size and number of service center facilities, the planned
tractor and trailer replacement cycle and revenue growth have required continued
investment in property and equipment. In order to support these requirements,
the Company incurred net capital expenditures of $46,963,000 during 2001. Cash
flows generated internally funded 68.7% of the required capital expenditures for
the year while the remainder was funded through additional borrowings. At
December 31, 2001, long-term debt including current maturities increased to
$98,422,000 from $83,542,000 at December 31, 2000.
The Company estimates net capital expenditures to be approximately $55,000,000
to $60,000,000 for the year ending December 31, 2002. Of that, approximately
$18,000,000 is planned to be used for the purchase or construction of larger
replacement service centers or expansion of existing service centers,
$29,000,000 is planned to be used to purchase revenue equipment and the balance
is planned to be used for investments in technology and other assets. The
Company plans to fund these expenditures primarily through cash flows from
operations supplemented by additional borrowings.
On May 31, 2000 the Company entered into a $62,500,000 uncollateralized
committed credit facility consisting of a $50,000,000 line of credit and a
$12,500,000 line to support standby letters of credit. This facility has a term
of three years that expires on May 31, 2003. Interest on the line of credit is
charged at rates that vary based upon a certain financial performance ratio. The
applicable interest rate for 2001 under this agreement was based upon LIBOR plus
.70% to .85%. A fee ranging from .20% to .25% was charged on the unused portion
of the line of credit, and fees ranging between .60% to .71% were charged on
outstanding standby letters of credit. Standby letters of credit are primarily
issued as collateral for self-insured retention reserves for bodily injury,
property damage and workers' compensation claims. Effective May 7, 2001, the
agreement was amended to decrease the line of credit from $50,000,000 to
$20,000,000 for the remainder of the term. At December 31, 2001, there were
$12,260,000 outstanding on the line of credit and $6,781,000 outstanding on the
standby letter of credit facility.
On May 4, 2001, the Company entered into a $65,000,000 Note Purchase and Shelf
Agreement with The Prudential Insurance Company of America ("Prudential"). Under
this agreement, the Company assumed senior notes totaling $50,000,000 issued by
Prudential and its associates, all of which bear an interest rate of 6.93% and a
maturity date of August 10, 2008. The notes call for quarterly interest payments
beginning on August 10, 2001 and 10 semi-annual principal payments of $5,000,000
beginning on February 10, 2004. The proceeds from this agreement were used to
reduce the outstanding balance on the Company's revolving line of credit. The
terms of the agreement allow the Company to authorize the issuance and sale of
amounts not to exceed $15,000,000 in additional senior notes. The applicable
interest rate and payment schedules for any new notes will be determined and
mutually agreed upon at the time of issuance.
With the exception of the Company's line of credit, interest rates are fixed on
all of its debt instruments. Therefore, short-term exposure to fluctuations in
interest rates is limited to the outstanding balance of its line of credit
facility, which was $12,260,000 at December 31, 2001. The Company does not
currently use interest rate derivative instruments to manage exposure to
interest rate changes. Also, the Company is not using fuel hedging instruments
as its tariff provisions generally allow for fuel surcharges to be implemented
in the event that fuel prices exceed stipulated levels.
14
A significant decrease in demand for the Company's services could limit its
ability to generate cash flow and effect profitability. Most of the Company's
debt agreements have covenants that require stated levels of financial
performance, which if not achieved, could cause acceleration of the payment
schedules. The Company does not anticipate a dramatic decline in business levels
or financial performance and believes the combination of its existing credit
facilities along with its additional borrowing capacity are sufficient to meet
seasonal and long-term needs.
Critical Accounting Policies
In preparing the consolidated financial statements, the Company applies the
following critical accounting policies that affect judgements and estimates of
amounts recorded in certain assets, liabilities, revenue and expenses:
Revenue and Expense Recognition - Operating revenue is recognized on a
percentage of completion method based on average transit time. Expenses
associated with operating revenue are recognized when incurred.
Allowance for Uncollectible Accounts - The Company maintains an allowance for
uncollectible accounts for estimated losses resulting from the inability of its
customers to make required payments. If the financial condition of the Company's
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required.
Claims and Insurance Accruals - The Company is self-insured for bodily injury
and property damage claims up to $250,000 per occurrence. Cargo claims are
self-insured up to $100,000; however, after the first two losses exceed $100,000
in a policy year, the retention under the Company's excess insurance policy is
reduced to $50,000 per occurrence. The Company also is self-insured for workers'
compensation in certain states and has first dollar or high deductible plans in
the other states.
Claims and insurance accruals reflect the estimated ultimate total cost of
claims, including amounts for claims incurred but not reported, for cargo loss
and damage, bodily injury and property damage, workers' compensation, long-term
disability and group health not covered by insurance. These costs are charged to
insurance and claims expense except for workers' compensation, long-term
disability and group health, which are charged to employee benefits expense.
Inflation
Most of the Company's expenses are affected by inflation, which will generally
result in increased costs. In response to the rising cost of petroleum products,
particularly diesel fuel, the Company has implemented a fuel surcharge in its
tariffs and contractual agreements. The fuel surcharge is designed to offset the
cost of fuel above a base price and increases as fuel prices escalate over the
base. For the year ending December 31, 2001, the net effect of inflation on the
Company's results of operations was minimal.
Environmental
The Company is subject to federal, state and local environmental laws and
regulations, particularly relative to underground storage tanks. The Company
believes it is in compliance with applicable environmental laws and regulations,
including those relating to underground storage tanks, and does not believe that
the cost of future compliance will have a material adverse effect on the
Company's operations or financial condition.
15
Forward-Looking Information
Forward-looking statements in this report, including, without limitation,
statements relating to future events or the future financial performance of the
Company appear in the preceding Management's Discussion and Analysis of
Financial Condition and Results of Operations and in other written and oral
statements made by or on behalf of the Company, including, without limitation,
statements relating to the Company's goals, strategies, expectations,
competitive environment, regulation and availability of resources. Such
forward-looking statements 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) changes in
the Company's goals, strategies and expectations, which are subject to change at
any time at the discretion of the Company; (2) the Company's ability to maintain
a nonunion, qualified work force; (3) the competitive environment with respect
to industry capacity and pricing; (4) the availability and cost of fuel,
additional revenue equipment and other significant resources; (5) the ability to
impose and maintain fuel surcharges to offset increases in fuel prices; (6) the
impact of regulatory bodies; (7) various economic factors such as insurance
costs, liability claims, interest rate fluctuations, the availability of
qualified drivers or owner-operators, fluctuations in the resale value of
revenue equipment, increases in fuel or energy taxes, economic recessions and
downturns in customers' business cycles and shipping requirements; (8) the
Company's ability to raise capital or borrow funds on satisfactory terms, which
could limit growth and require the Company to operate its revenue equipment for
longer periods of time; (9) the Company's ability to purchase, build or lease
facilities suitable for its operations; and (10) other risks and uncertainties
indicated from time to time in the Company's filings with the Securities and
Exchange Commission.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by Item 7A of Form 10-K appears in Item 7 of this
report under the heading "Liquidity and Capital Resources".
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
-------------------------------------
(In thousands, except share data) 2001 2000
- ----------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 761 $ 585
Customer receivables, less allowances of $6,816
and $6,068, respectively 51,061 54,273
Other receivables 1,097 4,450
Tires on equipment 7,346 6,912
Prepaid expenses 12,728 12,499
Deferred income taxes 873 1,477
--------------- ----------------
Total current assets 73,866 80,196
Property and equipment:
Revenue equipment 204,416 198,131
Land and structures 117,570 90,469
Other equipment 42,851 38,430
Leasehold improvements 4,679 4,338
--------------- ----------------
Total property and equipment 369,516 331,368
Less accumulated depreciation (151,333) (130,018)
--------------- ----------------
Net property and equipment 218,183 201,350
Other assets 18,791 15,045
--------------- ----------------
Total assets $ 310,840 $ 296,591
=============== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,799 $ 26,515
Compensation and benefits 9,942 11,298
Claims and insurance accruals 14,958 14,128
Other accrued liabilities 3,034 2,434
Income taxes payable 425 -
Current maturities of long-term debt 8,408 9,035
--------------- ----------------
Total current liabilities 50,566 63,410
Long-term debt 90,014 74,507
Other non-current liabilities 12,840 12,295
Deferred income taxes 20,781 21,645
--------------- ----------------
Total long-term liabilities 123,635 108,447
Stockholders' equity:
Common stock - $.10 par value, 25,000,000 shares
Authorized, 8,312,840 shares outstanding at
December 31, 2001 and December 31, 2000 831 831
Capital in excess of par value 23,907 23,907
Retained earnings 111,901 99,996
--------------- ----------------
Total stockholders' equity 136,639 124,734
Commitments and contingencies - -
--------------- ----------------
Total liabilities and stockholders' equity $ 310,840 $ 296,591
=============== ================
The accompanying notes are an integral part of these financial statements.
17
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31,
-------------------------------------------------
(In thousands, except share and per share data) 2001 2000 1999
- -------------------------------------------------- -------------- --------------- --------------
Revenue from operations $ 502,239 $ 475,803 $ 426,385
Operating expenses:
Salaries, wages and benefits 306,361 283,121 258,900
Purchased transportation 18,553 19,547 14,504
Operating supplies and expenses 50,788 50,074 36,749
Depreciation and amortization 29,888 27,037 25,295
Building and office equipment rents 7,499 7,196 7,330
Operating taxes and licenses 20,525 18,789 17,699
Insurance and claims 13,229 12,465 10,200
Communications and utilities 9,623 8,488 7,532
General supplies and expenses 17,510 18,527 15,852
Miscellaneous expenses, net 3,538 3,806 4,268
-------------- --------------- --------------
Total operating expenses 477,514 449,050 398,329
-------------- --------------- --------------
Operating income 24,725 26,753 28,056
Other deductions:
Interest expense, net 5,899 4,397 4,077
Other (income) expense, net (691) (97) 522
-------------- --------------- --------------
Total other deductions 5,208 4,300 4,599
-------------- --------------- --------------
Income before income taxes 19,517 22,453 23,457
Provision for income taxes 7,612 8,757 9,056
-------------- --------------- --------------
Net income $ 11,905 $ 13,696 $ 14,401
============== =============== ==============
Basic and diluted earnings per share $ 1.43 $ 1.65 $ 1.73
============== =============== ==============
Weighted average shares outstanding:
Basic 8,312,840 8,312,840 8,312,457
Diluted 8,314,197 8,313,866 8,316,329
The accompanying notes are an integral part of these financial statements.
18
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Capital in
Common excess of Retained
(In thousands) stock par value earnings Total
- ----------------------------------------------------------------------------------------------------------
Balance as of December 31, 1998 $ 831 $ 23,907 $ 71,899 $ 96,637
Net income - - 14,401 14,401
------------------------------------------------------
Balance as of December 31, 1999 831 23,907 86,300 111,038
Net income - - 13,696 13,696
------------------------------------------------------
Balance as of December 31, 2000 831 23,907 99,996 124,734
Net income - - 11,905 11,905
------------------------------------------------------
Balance as of December 31, 2001 $ 831 $ 23,907 $111,901 $136,639
======================================================
The accompanying notes are an integral part of these financial statements.
19
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
-------------------------------------
(In thousands) 2001 2000 1999
- ------------------------------------------------------------------- --------- -------- --------
Cash flows from operating activities:
Net income $ 11,905 $ 13,696 $ 14,401
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 29,888 27,037 25,295
Deferred income taxes (260) 1,640 1,192
(Gain) loss on sale of property and equipment (2,763) 27 243
Changes in assets and liabilities:
Customer and other receivables, net 6,565 (2,579) (4,965)
Tires on equipment (434) (484) (103)
Prepaid expenses and other assets (970) (2,972) (1,923)
Accounts payable (12,716) 3,571 1,594
Compensation, benefits and other accrued liabilities (756) (547) 2,701
Claims and insurance accruals 862 2,620 1,458
Income taxes payable 425 - (499)
Other liabilities 513 153 595
-------- -------- --------
Net cash provided by operating activities 32,259 42,162 39,989
-------- -------- --------
Cash flows from investing activities:
Acquisition of business assets, net (10,055) - (1,100)
Purchase of property and equipment (43,614) (63,083) (35,992)
Proceeds from sale of property and equipment 6,706 2,053 2,943
-------- -------- --------
Net cash used in investing activities (46,963) (61,030) (34,149)
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 52,563 1,626 553
Principal payments under long-term debt agreements (10,693) (10,629) (9,537)
Net (payments) proceeds from revolving line of credit (26,990) 27,675 3,265
-------- -------- --------
Net cash provided by (used in) financing activities 14,880 18,672 (5,719)
-------- -------- --------
Increase (decrease) in cash and cash equivalents 176 (196) 122
Cash and cash equivalents at beginning of period 585 781 659
-------- -------- --------
Cash and cash equivalents at end of period $ 761 $ 585 $ 781
======== ======== ========
Cash paid for interest was approximately $5,968,000, $5,553,000 and $4,802,000
for the years ended December 31, 2001, 2000 and 1999, respectively. Interest of
$232,000 and $1,031,000 was capitalized during 2001 and 2000, respectively.
The accompanying notes are an integral part of these financial statements.
20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
Business
The Company is an interregional and multi-regional motor carrier transporting
primarily less-than-truckload shipments of general commodities, such as consumer
goods, textiles and capital goods, to a diversified customer base. The Company
serves regional markets in the Southeast, Northeast, Midwest, South Central, and
West regions of the country. Old Dominion also serves interregional routes
connecting these geographic regions and major metropolitan markets throughout
most of the continental United States.
Basis of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiary. All significant intercompany balances and transactions are
eliminated in consolidation.
Segments
The Company operates one business segment, within the continental United States,
and has no customer that exceeds 10% of its operating revenue.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
Revenue and Expense Recognition
Operating revenue is recognized on a percentage of completion method based on
average transit time. Expenses associated with operating revenue are recognized
when incurred.
Allowance for Uncollectible Accounts
The Company maintains an allowance for uncollectible accounts for estimated
losses resulting from the inability of its customers to make required payments.
If the financial condition of the Company's customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required.
Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of customer receivables. Credit risk is
generally diversified due to the large number of entities comprising the
Company's customer base and their dispersion across many different industries
and geographic regions.
Cash and Cash Equivalents
The Company considers cash on hand and deposits in banks along with certificates
of deposit and short-term marketable securities with original maturities of
three months or less as cash and cash equivalents for the purpose of the
statements of cash flows.
Tires on Equipment
The cost of tires on equipment is amortized over the estimated tire life of 18
to 24 months.
21
Property and Equipment
Property and equipment is stated at cost. Major additions and improvements are
capitalized, while maintenance and repairs that do not improve or extend the
lives of the respective assets are charged to expense as incurred.
Depreciation is provided by the straight-line method over the following
estimated useful lives:
Structures 5 to 25 years
Revenue equipment 2 to 12 years
Other equipment 2 to 10 years
Leasehold improvements Lesser of 10 years or life of lease
Depreciation expense was $29,163,000, $26,615,000 and $24,842,000 for 2001, 2000
and 1999, respectively.
Intangible Assets
The excess cost over net assets acquired in connection with acquisitions is
recorded in "Other Assets". These intangible assets are amortized using a
straight-line method over their estimated useful lives of 3 to 25 years.
Accumulated amortization at December 31, 2001 and 2000 was $1,667,000 and
$1,054,000, respectively.
Long-Lived Assets
The Company periodically assesses the realizable value of its long-lived assets
and evaluates such assets for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable.
Claims and Insurance Accruals
The Company is self-insured for bodily injury and property damage claims up to
$250,000 per occurrence. Cargo claims are self-insured up to $100,000; however,
after the first two losses exceed $100,000 in a policy year, the retention under
the Company's excess insurance policy is reduced to $50,000 per occurrence. The
Company also is self-insured for workers' compensation in certain states and has
first dollar or high deductible plans in the other states.
Claims and insurance accruals reflect the estimated ultimate total cost of
claims, including amounts for claims incurred but not reported, for cargo loss
and damage, bodily injury and property damage, workers' compensation, long-term
disability and group health not covered by insurance. These costs are charged to
insurance and claims expense except for workers' compensation, long-term
disability and group health, which are charged to employee benefits expense.
Advertising
The costs of advertising the Company's products are generally expensed as
incurred. Advertising costs charged to expense amounted to $ 1,555,000,
$1,364,000 and $1,153,000 for 2001, 2000 and 1999, respectively.
Earnings Per Share
Net income per common share is computed using the weighted average number of
common shares outstanding during the period. The effect of dilutive employee
stock options in Note 7 is immaterial to the calculation of diluted earnings per
share for the years ended December 31, 2001, 2000 and 1999.
Fair Values of Financial Instruments
At December 31, 2001 and 2000, the carrying value of financial instruments such
as cash and cash equivalents, customer and other receivables, trade payables and
long-term debt approximated their fair values. Fair value is determined based on
expected future cash flows, discounted at market interest rates, and other
appropriate valuation methodologies.
22
Stock Based Compensation
Stock based compensation expense for the Company's employee stock option plan is
recognized under the provisions of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB 25"), and related
interpretations. Consistent with APB 25, the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant; therefore, no compensation expense is recognized. Pro forma
information regarding net income and earnings per share required by Statement of
Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation, is not significant.
Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations ("SFAS No. 141"),
and No. 142, Goodwill and Other Intangible Assets ("SFAS No. 142"). SFAS No. 141
requires that the purchase method of accounting be used for all business
combinations subsequent to June 30, 2001, and specifies criteria for recognizing
intangible assets acquired in a business combination. SFAS No. 142 requires that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead be tested for impairment at least annually. Intangible
assets with definite useful lives will continue to be amortized over their
respective estimated useful lives. The Company adopted SFAS No. 142 effective
January 1, 2002. During 2002, the Company will perform the first of the required
impairment tests of goodwill and indefinite lived assets as of January 1, 2002
and has not yet determined what effect, if any, these tests will have on the
earnings and financial condition of the Company.
In October 2001, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets ("SFAS No. 144"). This Statement establishes a single
accounting model for the impairment or disposal of long-lived assets. As
required by SFAS No. 144, the Company will adopt this new accounting standard on
July 1, 2002. The Company believes the adoption of SFAS No. 144 will not have a
material impact on its financial statements.
Reclassifications
Certain amounts in prior years have been reclassified to conform with the
current period presentation.
Note 2. Long-Term Debt
Long-term debt consisted of the following:
December 31,
-------------------------------
(In thousands) 2001 2000
- ---------------------------------------------------------------------------------------------------------
Senior notes $84,286 $41,143
Revolving credit facility 12,260 39,250
Equipment obligations, principal payable in monthly installments
plus interest ranging from 6.26% to 6.90% 160 1,669
Capitalized lease obligations 1,716 1,480
------------------------------
98,422 83,542
Less current maturities 8,408 9,035
------------------------------
$90,014 $74,507
==============================
Senior notes consist of five individual debt agreements with interest rates
ranging from 6.35% to 7.59%. The notes call for periodic principal payments with
maturities ranging from 2002 to 2008.
23
On May 31, 2000 the Company entered into a $62,500,000 uncollateralized
committed credit facility consisting of a $50,000,000 line of credit and a
$12,500,000 line to support standby letters of credit. This facility has a term
of three years that expires on May 31, 2003. Interest on the line of credit is
charged at rates that vary based upon a certain financial performance ratio. The
applicable interest rate for 2001 under this agreement was based upon LIBOR plus
.70% to .85%. A fee ranging from .20% to .25% was charged on the unused portion
of the line of credit and fees ranging between .60% to .71% were charged on
outstanding standby letters of credit. Effective May 7, 2001, the agreement was
amended to decrease the line of credit from $50,000,000 to $20,000,000 for the
remainder of the term. At December 31, 2001, there were $12,260,000 outstanding
on the line of credit and $6,781,000 outstanding on the standby letter of credit
facility.
On May 4, 2001, the Company entered into a $65,000,000 Note Purchase and Shelf
Agreement with The Prudential Insurance Company of America ("Prudential"). Under
this agreement, the Company assumed senior notes totaling $50,000,000 issued by
Prudential and its associates, all of which bear an interest rate of 6.93% and a
maturity date of August 10, 2008. The notes call for quarterly interest payments
beginning on August 10, 2001 and 10 semi-annual principal payments of $5,000,000
beginning on February 10, 2004. The proceeds from this agreement were used to
reduce the outstanding balance on the Company's revolving line of credit. The
terms of the agreement allow the Company to authorize the issuance and sale of
amounts not to exceed $15,000,000 in additional senior notes. The applicable
interest rate and payment schedules for any new notes will be determined and
mutually agreed upon at the time of issuance.
Both the Company's senior notes and credit agreement limit the amount of
dividends that may be paid to stockholders pursuant to certain financial ratios.
At December 31, 2001, the Company's debt instruments limited the amount of
dividends that could be paid to stockholders to $21,627,000. The Company did not
declare or pay a dividend on its common stock in 2001 and has no plans to
declare or pay a dividend in 2002.
Equipment and capitalized lease obligations are collateralized by property and
equipment with a net book value Book value of $1,941,000 at December 31, 2001.
As of December 31, 2001, aggregate maturities of long-term debt are as follows:
(In thousands)
- ----------------------------------------------------------------------------
2002 $ 8,408
2003 6,692
2004 17,348
2005 16,607
2006 14,107
Thereafter 23,000
--------
86,162
Borrowings outstanding under the revolving credit agreement 12,260
--------
$ 98,422
========
24
Note 3. Leases
The Company leases certain revenue equipment and information systems under
capital leases. These assets are included in property and equipment as follows:
December 31,
----------------------------
(In thousands) 2001 2000
- --------------------------------------------------------------------------
Revenue equipment $ 1,547 $ 599
Information systems 1,760 1,760
----------------------------
3,307 2,359
Less accumulated amortization (1,421) (614)
----------------------------
$ 1,886 $ 1,745
============================
Future minimum annual lease payments as of December 31, 2001, are as follows:
Capital Operating
(In thousands) leases leases Total
- -----------------------------------------------------------------------------------------
2002 $ 983 $ 9,284 $ 10,267
2003 611 6,584 7,195
2004 249 2,300 2,549
2005 - 1,302 1,302
2006 - 909 909
Thereafter - 668 668
----------------------------------
Total minimum lease payments 1,843 $ 21,047 $ 22,890
======================
Less amount representing interest (127)
-------
Present value of capitalized lease obligations $ 1,716
=======
Aggregate expense under operating leases approximated $11,680,000, $12,061,000
and $11,891,000 for 2001, 2000 and 1999, respectively.
Note 4. Income Taxes
The components of the provision for income taxes are as follows:
Year ended December 31,
-----------------------------
(In thousands) 2001 2000 1999
- -------------------------------------------------------------------------
Current:
Federal $ 7,327 $ 6,691 $ 7,382
State 545 426 482
-----------------------------
7,872 7,117 7,864
Deferred:
Federal (219) 1,381 1,005
State (41) 259 187
-----------------------------
(260) 1,640 1,192
-----------------------------
Total provision for income taxes $ 7,612 $ 8,757 $ 9,056
=============================
Net cash paid for income taxes during 2001, 2000, and 1999 aggregated
$4,340,000, $10,666,000, and $8,586,000, respectively.
25
A reconciliation of the statutory federal income tax rates with the Company's
effective income tax rates for 2001, 2000, and 1999 is as follows:
Year ended December 31,
-----------------------------
(In thousands) 2001 2000 1999
- ------------------------------------------------------------------------------------------------------
Tax provision at statutory rate on income before income taxes $ 6,831 $ 7,859 $ 8,210
State income taxes, net of federal benefit 327 450 435
Meals and entertainment disallowance 305 326 319
Other, net 149 122 92
-----------------------------
Total provision for income taxes $ 7,612 $ 8,757 $ 9,056
=============================
Deferred tax assets and liabilities consist of the following:
December 31,
------------------------
(In thousands) 2001 2000
- ---------------------------------------------------------------------------
Deferred tax assets:
Claims and insurance reserves $ 9,855 $ 9,447
Allowance for doubtful accounts 2,659 2,367
Accrued vacation 1,969 1,742
Other 1,210 1,004
---------------------
15,693 14,560
Deferred tax liabilities:
Depreciation 27,235 26,431
Tires on equipment 2,988 3,020
Employee benefits 3,131 2,861
Other 2,247 2,416
---------------------
35,601 34,728
---------------------
Net deferred tax liability $ 19,908 $ 20,168
=====================
Note 5. Related Party Transactions
The Company leases revenue equipment and a service center facility from certain
stockholders, employees and other affiliates under short-term operating leases.
Lease payments to these affiliates of the Company were $781,000, $778,000 and
$773,000 in 2001, 2000 and 1999, respectively.
The Company purchased fuel, equipment repairs and other services from an
affiliate for which it paid $295,000, $248,000 and $197,000 in 2001, 2000 and
1999, respectively. Charges to the affiliate for rent, equipment repairs, fuel
and other services provided by the Company were $23,000, $27,000 and $32,000
during 2001, 2000 and 1999, respectively.
Note 6. Employee Retirement Plan Contribution Expense
Substantially all employees meeting certain service requirements are eligible to
participate in the Company's 401(k) employee retirement plan. Employee
contributions are limited to a percentage of their compensation, as defined in
the plan. The Company makes contributions based upon the greater of a percentage
of employee contributions or ten percent of net income. Company contributions
for 2001, 2000 and 1999 were $1,253,000, $1,370,000 and $1,440,000,
respectively.
26
Note 7. Stock Options
In 1991, the Board of Directors and stockholders adopted the 1991 Employee Stock
Option Plan ("Plan") under which 250,000 shares of common stock are reserved for
stock option grants to certain officers and employees. Options granted under the
Plan may be incentive stock options or nonqualified stock options. The Plan
provides that options may be granted at prices not less than the fair market
value on the date the option is granted, which means the closing price of a
share of common stock as reported on the Nasdaq National Market on such day or
the preceding day if the shares are not traded in the Nasdaq system on the grant
day. On the date the option is granted, the Stock Option Plan Committee of the
Board of Directors determines the period during which the option may be
exercised; however, under the terms of the Plan, the option period cannot extend
more than ten years from the date on which the option is granted. Options may
not be granted under the Plan after August 31, 2001. A summary of the changes in
the number of common shares under option during the years ended December 31,
2001, 2000 and 1999 follows:
Number of Per share Weighted average
options option price exercise price
- -----------------------------------------------------------------------------------------
Balance as of December 31, 1998 177,500 $10.00 - $19.25 $16.40
Granted - - -
Exercised (2,000) $10.00 $10.00
Canceled - - -
------------------------------------------------
Balance as of December 31, 1999 175,500 $10.00 - $19.25 $16.47
Granted - - -
Exercised - - -
Canceled (27,000) $10.00 - $19.25 $17.06
------------------------------------------------
Balance as of December 31, 2000 148,500 $10.00 - $19.25 $16.37
Granted - - -
Exercised - - -
Canceled (37,000) $13.88 $13.88
------------------------------------------------
Balance as of December 31, 2001 111,500 $10.00 - $19.25 $17.19
==========
At December 31, 2001 there were 111,500 options exercisable. The weighted
average remaining contractual life of outstanding options is 2.0 years.
Note 8. Acquisitions of Business Assets
On February 10, 2001, the Company purchased selected assets, consisting
primarily of revenue equipment and real estate, from Carter & Sons Freightway,
Inc. of Carrollton, Texas. This acquisition consisted of cash outlays and the
present value of assumed equipment leases totaling $10,055,000.
On January 12, 1999, Old Dominion acquired selected assets of Skyline
Transportation, Inc.'s LTL operations for $1,100,000. This transaction was
funded through cash outlays of $1,050,000 and through assumption of $50,000 in
liabilities.
These acquisitions have been accounted for as purchase transactions and the
results of operations have been included in the Company's financial statements
beginning on the date the acquisitions were consummated. The aggregate pro forma
impact on the Company's revenue from operations, operating income and earnings
per share is not material to the consolidated results of operations.
Note 9. Commitments and Contingencies
The Company is involved in various legal proceedings and claims that have arisen
in the ordinary course of its business that have not been fully adjudicated.
Many of these are covered in whole or in part by insurance. These actions, when
finally concluded and determined, will not, in the opinion of management, have
an adverse effect upon the financial position or results of operations of the
Company.
27
Note 10. Quarterly Financial Information (Unaudited)
Quarter
------------------------------------------------------
(In thousands, except per share data) First Second Third Fourth Total
- ----------------------------------------------------------------------------------------------------
2001
- ----
Revenue $120,270 $128,605 $128,960 $124,404 $502,239
Operating income 3,205 6,037 7,681 7,802 24,725
Net income 1,001 3,097 3,659 4,148 11,905
Net income per share:
Basic and diluted 0.12 0.37 0.44 0.50 1.43
2000
- ----
Revenue $112,799 $120,144 $122,385 $120,475 $475,803
Operating income 4,723 8,615 8,260 5,155 26,753
Net income 2,327 4,576 4,293 2,500 13,696
Net income per share:
Basic and diluted 0.28 0.55 0.52 0.30 1.65
Report of Independent Auditors
The Board of Directors and Stockholders
Old Dominion Freight Line, Inc.
We have audited the accompanying consolidated balance sheets of Old Dominion
Freight Line, Inc. and subsidiary as of December 31, 2001 and 2000, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
2001. Our audits also include the financial statement schedule of Old Dominion
Freight Line, Inc. and subsidiary listed in Item 14(a). These financial
statements and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Old Dominion
Freight Line, Inc. and subsidiary as of December 31, 2001 and 2000, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States. Also, in our opinion, the
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
Ernst & Young LLP
Greensboro, North Carolina
January 29, 2002
28
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning the Company's directors required by Item 10 of Form
10-K is incorporated by reference to the Company's proxy statement for the 2002
Annual Meeting of its Stockholders under the caption's "Election of Directors"
and "Principal Stockholders - Section 16 Beneficial Ownership Reporting
Compliance", reference to which is hereby made, and the information there is
incorporated herein by reference.
The information concerning the Company's executive officers required by Item 10
of Form 10-K appears in Item 1 of this report under the heading "Executive
Officers of the Company".
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 of Form 10-K appears in the Company's proxy
statement for the 2002 Annual Meeting of its Stockholders under the caption
"Executive Compensation", reference to which is hereby made, and the information
there is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 of Form 10-K appears in the Company's proxy
statement for the 2002 Annual Meeting of its Stockholders under the captions
"Election of Directors" and "Principal Stockholders", reference to which is
hereby made, and the information there is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 of Form 10-K appears in the Company's proxy
statement for the 2002 Annual Meeting of its Stockholders under the caption
"Executive Compensation - Compensation Committee Interlocks and Insider
Participation", reference to which is hereby made, and the information there is
incorporated herein by reference.
29
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) Financial Statements.
The following consolidated financial statements of Old Dominion Freight
Line, Inc. are included in Item 8:
Consolidated Balance Sheets - December 31, 2001, and December 31, 2000
Consolidated Statements of Operations - Years ended December 31, 2001,
December 31, 2000, and December 31, 1999
Consolidated Statements of Changes in Stockholders' Equity - Years
ended December 31, 2001, December 31, 2000, and December 31, 1999
Consolidated Statements of Cash Flows - Years ended December 31, 2001,
December 31, 2000, and December 31, 1999
Notes to the Consolidated Financial Statements
(a)(2) Financial Statement Schedules.
The following financial statement schedule of Old Dominion Freight
Line, Inc., is included in response to Item 14(d):
Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the instructions or are inapplicable and, therefore,
have been omitted.
The documents listed below are filed under subsection (d) of Item 14:
(a)(3) Exhibits Filed. The exhibits listed in the accompanying Exhibit Index
are filed as a part of this report.
(b) Reports on Form 8-K. None filed during the last quarter of the period
covered by this report.
(c) Exhibits. See Exhibit Index.
(d) Financial Statement Schedules.
30
SCHEDULE II
OLD DOMINION FREIGHT LINE, INC.
VALUATION AND QUALIFYING ACCOUNTS
Allowance for Doubtful Accounts
-----------------------------------------------------------------------
Additions Amounts
Beginning Charged Written Ending
Description Balance To Expense Off Balance
- -----------------------------------------------------------------------------------------------------
Year ended
December 31, 1999 $ 5,702,000 $ 2,840,000 $ 2,047,000 $ 6,495,000
Year ended
December 31, 2000 $ 6,495,000 $ 3,167,000 $ 3,594,000 $ 6,068,000
Year ended
December 31, 2001 $ 6,068,000 $ 4,340,000 $ 3,592,000 $ 6,816,000
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
OLD DOMINION FREIGHT LINE, INC.
Dated: March 25, 2002 By: EARL E. CONGDON
---------------
Earl E. Congdon
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Name and Signature Position Date
- ------------------ -------- ----
EARL E. CONGDON Chairman of the Board and March 25, 2002
- ------------------
Earl E. Congdon Chief Executive Officer
JOHN R. CONGDON Vice Chairman of the Board March 25, 2002
- ------------------
John R. Congdon and Director
JOHN A. EBELING Director March 25, 2002
- ------------------
John A. Ebeling
JOHN R. CONGDON, JR. Director March 25, 2002
- --------------------
John R. Congdon, Jr.
HAROLD G. HOAK Director March 25, 2002
- ------------------
Harold G. Hoak
FRANZ F. HOLSCHER Director March 25, 2002
- ------------------
Franz F. Holscher
DAVID S. CONGDON President and Chief Operating Officer March 25, 2002
- ------------------
David S. Congdon
J. WES FRYE Senior Vice President - Finance March 25, 2002
- ---------------------------
J. Wes Frye (Principal Financial Officer)
JOHN P. BOOKER III Vice President - Controller March 25, 2002
- ---------------------------
John P. Booker III (Principal Accounting Officer)
32
EXHIBIT INDEX
TO ANNUAL REPORT ON FORM 10-K
OLD DOMINION FREIGHT LINE, INC.
FOR YEAR ENDED DECEMBER 31, 2001
Exhibit No. Description
- ----------- ----------------------------------------------------------------
3.1.1(a) Articles of Incorporation (as amended and restated September 18,
1991)
3.2(a) Bylaws of Old Dominion Freight Line, Inc.
4.1(a) Specimen certificate of Common Stock
4.4(b) Credit Agreement between First Union National Bank of North
Carolina and Old Dominion Freight Line, Inc., dated June 14,
1995
4.4.1(b) Form of note issued by Company pursuant to the Credit Agreement
between First Union National Bank of North Carolina and Old
Dominion Freight Line, Inc., dated June 14, 1995
4.4.2(c) First Amendment to Credit Agreement between First Union National
Bank of North Carolina and Old Dominion Freight Line, Inc.,
dated February 2, 1996
4.4.3(d) Second Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated April 29, 1996
4.4.4(d) Third Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated June 15, 1996
4.4.5(f) Fourth Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated April 22, 1997
4.4.6(i) Fifth Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated January 14, 2000
4.5(d) Note Purchase Agreement between Nationwide Life Insurance
Company, New York Life Insurance Company and Old Dominion
Freight Line, Inc., dated June 15, 1996
4.5.1(d) Forms of notes issued by Company pursuant to Note Purchase
Agreement between Nationwide Life Insurance Company, New York
Life Insurance Company and Old Dominion Freight Line, Inc.,
dated June 15, 1996
4.6(g) Note Purchase Agreement between Nationwide Life Insurance
Company, New York Life Insurance Company and Old Dominion
Freight Line, Inc., dated February 25, 1998
4.6.1(g) Forms of notes issued by Company pursuant to Note Purchase
Agreement between Nationwide Life Insurance Company, New York
Life Insurance Company and Old Dominion Freight Line, Inc.,
dated February 25, 1998
4.6.2(l) Note Purchase and Shelf Agreement between Old Dominion Freight
Line, Inc. and Prudential Insurance Company of America, dated
May 1, 2001
4.7.1(j) Credit Agreement between Old Dominion Freight Line, Inc. and
First Union National Bank, dated May 31, 2000
4.7.2(k) First Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank, dated February
1, 2001
4.7.3(l) Second Amendment to the Credit Agreement between Old Dominion
Freight Line, Inc. and First Union National Bank of North
Carolina, dated May 31, 2001
33
Exhibit No. Description
- ----------- ----------------------------------------------------------------
10.4(a) 1991 Employee Stock Option Plan of Old Dominion Freight Line,
Inc.
10.5(a) Stock Option Agreement pursuant to the 1991 Employee Stock
Option Plan of Old Dominion Freight Line, Inc. (included in
Exhibit 10.4)
10.9(a) E & J Enterprises Trailer Lease Agreement, effective August 1,
1991
10.9.1(e) Extension of E & J Trailer Lease Agreement, effective August 1,
1996
10.9.2(h) Extension of E & J Trailer Lease Agreement, effective August 1,
1999
10.15(c) Lease Agreement between Robert A. Cox, Jr., Trustee, and Old
Dominion Freight Line, Inc., dated October 31, 1995
22.1(a) Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
- --------------------------------------------------
(a) Incorporated by reference to the exhibit of the same number contained in
the Company's registration statement on Form S-1 filed under the Securities
Act of 1933 (SEC File: 33-42631)
(b) Incorporated by reference to the exhibit contained in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995
(c) Incorporated by reference to the exhibit of the same number contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
1995
(d) Incorporated by reference to the exhibit of the same number contained in
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1996
(e) Incorporated by reference to the exhibit of the same number contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
1996
(f) Incorporated by reference to the exhibit of the same number contained in
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1997
(g) Incorporated by reference to the exhibit of the same number contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
1997
(h) Incorporated by reference to the exhibit of the same number contained in
the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1999
(i) Incorporated by reference to the exhibit of the same number contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
1999
(j) Incorporated by reference to the exhibit of the same number contained in
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2000
(k) Incorporated by reference to the exhibit of the same number contained in
the Company's Annual Report on Form 10-K for the year ended December 31,
2000
(l) Incorporated by reference to the exhibit of the same number contained in
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2001
34