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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

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

For the quarterly period ended September 30, 2022

or

 

 

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

For the transition period from ________ to ________ .

 

Commission File Number: 0-19582

 

OLD DOMINION FREIGHT LINE, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Virginia

 

56-0751714

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

 

500 Old Dominion Way

Thomasville, North Carolina

 

27360

(Address of principal executive offices)

 

(Zip Code)

(336) 889-5000

(Registrant’s telephone number, including area code)

 

 

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock ($0.10 par value)

ODFL

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

 

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

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

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

 

 

 

 

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

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

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

As of November 2, 2022 there were 110,481,622 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

 

 


 

INDEX

 

Part I – FINANCIAL INFORMATION

1

 

 

 

Item 1

Financial Statements

1

 

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

1

 

Condensed Statements of Operations – For the three and nine months ended September 30, 2022 and 2021

3

 

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

4

 

Condensed Statements of Cash Flows – For the nine months ended September 30, 2022 and 2021

5

 

Notes to the Condensed Financial Statements

6

Item 2

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

10

Item 3

Quantitative and Qualitative Disclosures about Market Risk

19

Item 4

Controls and Procedures

19

 

 

Part II – OTHER INFORMATION

20

 

 

 

Item 1

Legal Proceedings

20

Item 1A

Risk Factors

20

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

21

Item 6

Exhibits

21

 

 

Exhibit Index

22

Signatures

23

 

 


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

 

 

 

September 30,

 

 

 

 

 

 

2022

 

 

December 31,

 

(In thousands, except share and per share data)

 

(Unaudited)

 

 

2021

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

216,727

 

 

$

462,564

 

Short-term investments

 

 

158,829

 

 

 

254,433

 

Customer receivables, less allowances of $11,100 and $9,855, respectively

 

 

630,370

 

 

 

567,474

 

Income taxes receivable

 

 

10,097

 

 

 

19,218

 

Other receivables

 

 

13,327

 

 

 

12,410

 

Prepaid expenses and other current assets

 

 

81,847

 

 

 

67,688

 

Total current assets

 

 

1,111,197

 

 

 

1,383,787

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

Revenue equipment

 

 

2,344,781

 

 

 

2,146,205

 

Land and structures

 

 

2,670,604

 

 

 

2,463,949

 

Other fixed assets

 

 

568,131

 

 

 

512,340

 

Leasehold improvements

 

 

13,506

 

 

 

13,131

 

Total property and equipment

 

 

5,597,022

 

 

 

5,135,625

 

Accumulated depreciation

 

 

(2,105,511

)

 

 

(1,919,939

)

Net property and equipment

 

 

3,491,511

 

 

 

3,215,686

 

 

 

 

 

 

 

 

Other assets

 

 

208,685

 

 

 

222,071

 

Total assets

 

$

4,811,393

 

 

$

4,821,544

 

 

Note: The Condensed Balance Sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

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

1


 

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

(CONTINUED)

 

 

 

September 30,

 

 

 

 

 

 

2022

 

 

December 31,

 

(In thousands, except share and per share data)

 

(Unaudited)

 

 

2021

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

120,160

 

 

$

82,519

 

Compensation and benefits

 

 

293,688

 

 

 

257,905

 

Claims and insurance accruals

 

 

66,228

 

 

 

61,822

 

Other accrued liabilities

 

 

94,154

 

 

 

61,988

 

Income taxes payable

 

 

45,097

 

 

 

 

Current maturities of long-term debt

 

 

20,000

 

 

 

 

Total current liabilities

 

 

639,327

 

 

 

464,234

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

Long-term debt

 

 

79,959

 

 

 

99,947

 

Other non-current liabilities

 

 

265,553

 

 

 

328,838

 

Deferred income taxes

 

 

268,384

 

 

 

248,718

 

Total long-term liabilities

 

 

613,896

 

 

 

677,503

 

Total liabilities

 

 

1,253,223

 

 

 

1,141,737

 

 

 

 

 

 

 

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock - $0.10 par value, 280,000,000 shares authorized, 110,954,501 and 115,011,172 shares outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

11,095

 

 

 

11,501

 

Capital in excess of par value

 

 

240,790

 

 

 

174,445

 

Retained earnings

 

 

3,306,285

 

 

 

3,493,861

 

Total shareholders’ equity

 

 

3,558,170

 

 

 

3,679,807

 

Total liabilities and shareholders’ equity

 

$

4,811,393

 

 

$

4,821,544

 

 

Note: The Condensed Balance Sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.

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

2


 

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands, except share and per share data)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue from operations

 

$

1,603,690

 

 

$

1,400,046

 

 

$

4,768,418

 

 

$

3,845,970

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

 

675,084

 

 

 

649,685

 

 

 

2,060,983

 

 

 

1,806,862

 

Operating supplies and expenses

 

 

217,260

 

 

 

146,509

 

 

 

645,329

 

 

 

408,242

 

General supplies and expenses

 

 

45,951

 

 

 

37,312

 

 

 

120,580

 

 

 

102,907

 

Operating taxes and licenses

 

 

35,753

 

 

 

34,028

 

 

 

105,781

 

 

 

98,550

 

Insurance and claims

 

 

17,491

 

 

 

15,674

 

 

 

50,562

 

 

 

43,579

 

Communications and utilities

 

 

10,288

 

 

 

8,738

 

 

 

30,062

 

 

 

25,324

 

Depreciation and amortization

 

 

68,347

 

 

 

65,160

 

 

 

203,997

 

 

 

193,094

 

Purchased transportation

 

 

34,453

 

 

 

52,037

 

 

 

129,634

 

 

 

130,678

 

Miscellaneous expenses, net

 

 

2,983

 

 

 

7,493

 

 

 

11,087

 

 

 

17,623

 

Total operating expenses

 

 

1,107,610

 

 

 

1,016,636

 

 

 

3,358,015

 

 

 

2,826,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

496,080

 

 

 

383,410

 

 

 

1,410,403

 

 

 

1,019,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating expense (income):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

997

 

 

 

371

 

 

 

1,283

 

 

 

1,343

 

Interest income

 

 

(1,333

)

 

 

(178

)

 

 

(1,933

)

 

 

(660

)

Other expense, net

 

 

351

 

 

 

266

 

 

 

1,706

 

 

 

1,781

 

Total non-operating expense

 

 

15

 

 

 

459

 

 

 

1,056

 

 

 

2,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

496,065

 

 

 

382,951

 

 

 

1,409,347

 

 

 

1,016,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

118,664

 

 

 

96,317

 

 

 

356,117

 

 

 

261,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

377,401

 

 

$

286,634

 

 

$

1,053,230

 

 

$

755,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.38

 

 

$

2.48

 

 

$

9.32

 

 

$

6.52

 

Diluted

 

$

3.36

 

 

$

2.47

 

 

$

9.26

 

 

$

6.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

111,569,260

 

 

 

115,411,032

 

 

 

113,011,703

 

 

 

115,905,834

 

Diluted

 

 

112,294,938

 

 

 

116,161,555

 

 

 

113,746,887

 

 

 

116,655,504

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.30

 

 

$

0.20

 

 

$

0.90

 

 

$

0.60

 

 

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

3


 

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022 and 2021

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Retained

 

 

 

 

(In thousands)

Shares

 

 

Amount

 

 

Par Value

 

 

Earnings

 

 

Total

 

Balance as of June 30, 2022

 

112,236

 

 

$

11,224

 

 

$

236,991

 

 

$

3,307,614

 

 

$

3,555,829

 

Net income

 

 

 

 

 

 

 

 

 

 

377,401

 

 

 

377,401

 

Share repurchases

 

(1,282

)

 

 

(129

)

 

 

 

 

 

(345,302

)

 

 

(345,431

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(33,428

)

 

 

(33,428

)

Share-based compensation and share issuances, net of
      forfeitures

 

 

 

 

 

 

 

3,860

 

 

 

 

 

 

3,860

 

Taxes paid in exchange for shares withheld

 

 

 

 

 

 

 

(61

)

 

 

 

 

 

(61

)

Balance as of September 30, 2022

 

110,954

 

 

$

11,095

 

 

$

240,790

 

 

$

3,306,285

 

 

$

3,558,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2021

 

115,810

 

 

$

11,581

 

 

$

160,204

 

 

$

3,230,593

 

 

$

3,402,378

 

Net income

 

 

 

 

 

 

 

 

 

 

286,634

 

 

 

286,634

 

Share repurchases, including settlements under accelerated
      share repurchase programs

 

(796

)

 

 

(80

)

 

 

68,750

 

 

 

(256,170

)

 

 

(187,500

)

Forward contract for accelerated share repurchases

 

 

 

 

 

 

 

(62,500

)

 

 

 

 

 

(62,500

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(23,000

)

 

 

(23,000

)

Share-based compensation and share issuances, net of
      forfeitures

 

(3

)

 

 

 

 

 

3,886

 

 

 

 

 

 

3,886

 

Balance as of September 30, 2021

 

115,011

 

 

$

11,501

 

 

$

170,340

 

 

$

3,238,057

 

 

$

3,419,898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022 and 2021

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

 

 

 

Common Stock

 

 

Excess of

 

 

Retained

 

 

 

 

(In thousands)

Shares

 

 

Amount

 

 

Par Value

 

 

Earnings

 

 

Total

 

Balance as of December 31, 2021

 

115,011

 

 

$

11,501

 

 

$

174,445

 

 

$

3,493,861

 

 

$

3,679,807

 

Net income

 

 

 

 

 

 

 

 

 

 

1,053,230

 

 

 

1,053,230

 

Share repurchases, including settlements under accelerated
      share repurchase programs

 

(4,085

)

 

 

(409

)

 

 

162,500

 

 

 

(1,139,392

)

 

 

(977,301

)

Forward contract for accelerated share repurchases

 

 

 

 

 

 

 

(100,000

)

 

 

 

 

 

(100,000

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(101,414

)

 

 

(101,414

)

Share-based compensation and share issuances, net of
      forfeitures

 

55

 

 

 

6

 

 

 

12,027

 

 

 

 

 

 

12,033

 

Taxes paid in exchange for shares withheld

 

(27

)

 

 

(3

)

 

 

(8,182

)

 

 

 

 

 

(8,185

)

Balance as of September 30, 2022

 

110,954

 

 

$

11,095

 

 

$

240,790

 

 

$

3,306,285

 

 

$

3,558,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2020

 

117,058

 

 

$

11,706

 

 

$

226,451

 

 

$

3,088,131

 

 

$

3,326,288

 

Net income

 

 

 

 

 

 

 

 

 

 

755,569

 

 

 

755,569

 

Share repurchases, including settlements under accelerated
      share repurchase programs

 

(2,083

)

 

 

(209

)

 

 

68,750

 

 

 

(536,256

)

 

 

(467,715

)

Forward contract for accelerated share repurchases

 

 

 

 

 

 

 

(131,250

)

 

 

 

 

 

(131,250

)

Cash dividends declared

 

 

 

 

 

 

 

 

 

 

(69,387

)

 

 

(69,387

)

Share-based compensation and share issuances, net of
      forfeitures

 

57

 

 

 

6

 

 

 

10,928

 

 

 

 

 

 

10,934

 

Taxes paid in exchange for shares withheld

 

(21

)

 

 

(2

)

 

 

(4,539

)

 

 

 

 

 

(4,541

)

Balance as of September 30, 2021

 

115,011

 

 

$

11,501

 

 

$

170,340

 

 

$

3,238,057

 

 

$

3,419,898

 

 

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

4


 

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

(In thousands)

 

2022

 

 

2021

 

Cash flows from operating activities: