10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended June 30, 2023


☐	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

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

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

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




Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

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

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

As of August 3, 2023 there were 109,268,081 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

INDEX


Part I – FINANCIAL INFORMATION		1

Item 1	Financial Statements	1
	Condensed Balance Sheets – June 30, 2023 and December 31, 2022	1
	Condensed Statements of Operations – For the three and six months ended June 30, 2023 and 2022	3
	Condensed Statements of Changes in Shareholders’ Equity – For the three and six months ended June 30, 2023 and 2022	4
	Condensed Statements of Cash Flows – For the six months ended June 30, 2023 and 2022	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 5	Other Information	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


	June 30,
	2023			December 31,
(In thousands, except share and per share data)	(Unaudited)			2022
ASSETS
Current assets:
Cash and cash equivalents	$	55,141		$	186,312
Short-term investments		—			49,355
Customer receivables, less allowances of $10,016 and $10,689, respectively		543,767			578,648
Income taxes receivable		9,359			12,738
Other receivables		15,620			13,743
Prepaid expenses and other current assets		106,722			92,944
Total current assets		730,609			933,740

Property and equipment:
Revenue equipment		2,620,882			2,501,995
Land and structures		2,898,475			2,750,100
Other fixed assets		613,381			550,442
Leasehold improvements		14,427			13,516
Total property and equipment		6,147,165			5,816,053
Accumulated depreciation		(2,146,066	)		(2,128,985	)
Net property and equipment		4,001,099			3,687,068

Other assets		247,224			217,802
Total assets	$	4,978,932		$	4,838,610

Note: The Condensed Balance Sheet at December 31, 2022 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.

OLD DOMINION FREIGHT LINE, INC.

CONDENSED BALANCE SHEETS

(CONTINUED)


	June 30,
	2023		December 31,
(In thousands, except share and per share data)	(Unaudited)		2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	96,661	$	106,275
Compensation and benefits		249,922		288,278
Claims and insurance accruals		60,837		63,307
Other accrued liabilities		75,598		51,933
Current maturities of long-term debt		20,000		20,000
Total current liabilities		503,018		529,793

Long-term liabilities:
Long-term debt		59,970		79,963
Other non-current liabilities		273,394		265,422
Deferred income taxes		310,515		310,515
Total long-term liabilities		643,879		655,900
Total liabilities		1,146,897		1,185,693

Commitments and contingent liabilities

Shareholders’ equity:
Common stock - $0.10 par value, 280,000,000 shares authorized, 109,337,474 and 110,222,819 shares outstanding at June 30, 2023 and December 31, 2022, respectively		10,934		11,022
Capital in excess of par value		239,039		244,590
Retained earnings		3,582,062		3,397,305
Total shareholders’ equity		3,832,035		3,652,917
Total liabilities and shareholders’ equity	$	4,978,932	$	4,838,610

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share data)	2023			2022			2023			2022
Revenue from operations	$	1,413,189		$	1,667,448		$	2,855,325		$	3,164,728

Operating expenses:
Salaries, wages and benefits		642,841			705,710			1,294,916			1,385,899
Operating supplies and expenses		165,373			236,712			357,757			428,069
General supplies and expenses		38,606			39,116			78,151			74,629
Operating taxes and licenses		36,890			34,952			73,591			70,028
Insurance and claims		15,381			16,964			31,409			33,071
Communications and utilities		11,515			9,898			22,532			19,774
Depreciation and amortization		79,784			68,310			155,731			135,650
Purchased transportation		28,596			42,681			59,211			95,181
Miscellaneous expenses, net		2,609			4,400			7,384			8,104
Total operating expenses		1,021,595			1,158,743			2,080,682			2,250,405

Operating income		391,594			508,705			774,643			914,323

Non-operating (income) expense:
Interest expense		89			213			289			286
Interest income		(2,368	)		(471	)		(5,179	)		(600	)
Other expense, net		1,947			750			3,458			1,355
Total non-operating (income) expense		(332	)		492			(1,432	)		1,041

Income before income taxes		391,926			508,213			776,075			913,282

Provision for income taxes		99,564			132,135			198,675			237,453

Net income	$	292,362		$	376,078		$	577,400		$	675,829

Earnings per share:
Basic	$	2.67		$	3.33		$	5.26		$	5.94
Diluted	$	2.65		$	3.30		$	5.23		$	5.90

Weighted average shares outstanding:
Basic		109,521			113,079			109,737			113,745
Diluted		110,199			113,805			110,438			114,485

Dividends declared per share	$	0.40		$	0.30		$	0.80		$	0.60

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)



	Three Months Ended June 30, 2023 and 2022
							Capital in
	Common Stock						Excess of			Retained
(In thousands)	Shares			Amount			Par Value			Earnings			Total
Balance as of March 31, 2023		109,831		$	10,983		$	240,024		$	3,495,492		$	3,746,499
Net income		—			—			—			292,362			292,362
Share repurchases, including net excise tax		(502	)		(50	)		—			(162,012	)		(162,062	)
Cash dividends declared ($0.40 per share)		—			—			—			(43,780	)		(43,780	)
Share-based compensation and share issuances, net of forfeitures		17			2			1,869			—			1,871
Taxes paid in exchange for shares withheld		(9	)		(1	)		(2,854	)		—			(2,855	)
Balance as of June 30, 2023		109,337		$	10,934		$	239,039		$	3,582,062		$	3,832,035

Balance as of March 31, 2022		113,761		$	11,376		$	133,172		$	3,358,759		$	3,503,307
Net income		—			—			—			376,078			376,078
Share repurchases		(1,530	)		(153	)		—			(293,365	)		(293,518	)
Forward contract for accelerated share repurchases settled in 2023		—			—			100,000			(100,000	)		—
Cash dividends declared ($0.30 per share)		—			—			—			(33,858	)		(33,858	)
Share-based compensation and share issuances, net of forfeitures		5			1			3,881			—			3,882
Taxes paid in exchange for shares withheld		—			—			(62	)		—			(62	)
Balance as of June 30, 2022		112,236		$	11,224		$	236,991		$	3,307,614		$	3,555,829


	Six Months Ended June 30, 2023 and 2022
							Capital in
	Common Stock						Excess of			Retained
(In thousands)	Shares			Amount			Par Value			Earnings			Total
Balance as of December 31, 2022		110,223		$	11,022		$	244,590		$	3,397,305		$	3,652,917
Net income		—			—			—			577,400			577,400
Share repurchases, including net excise tax		(932	)		(93	)		—			(304,869	)		(304,962	)
Cash dividends declared ($0.80 per share)		—			—			—			(87,774	)		(87,774	)
Share-based compensation and share issuances, net of forfeitures		79			8			5,659			—			5,667
Taxes paid in exchange for shares withheld		(33	)		(3	)		(11,210	)		—			(11,213	)
Balance as of June 30, 2023		109,337		$	10,934		$	239,039		$	3,582,062		$	3,832,035

Balance as of December 31, 2021		115,011		$	11,501		$	174,445		$	3,493,861		$	3,679,807
Net income		—			—			—			675,829			675,829
Share repurchases, including settlements under accelerated share repurchase programs		(2,803	)		(280	)		62,500			(794,090	)		(731,870	)
Cash dividends declared ($0.60 per share)		—			—			—			(67,986	)		(67,986	)
Share-based compensation and share issuances, net of forfeitures		55			6			8,167			—			8,173
Taxes paid in exchange for shares withheld		(27	)		(3	)		(8,121	)		—			(8,124	)
Balance as of June 30, 2022		112,236		$	11,224		$	236,991		$	3,307,614		$	3,555,829

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

OLD DOMINION FREIGHT LINE, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	June 30,
(In thousands)	2023			2022
Cash flows from operating activities:
Net income	$	577,400		$	675,829
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		155,738			135,658
Gain on disposal of property and equipment		(6,431	)		(2,061	)
Other, net		14,871			15,649
Changes in operating assets and liabilities, net		(38,371	)		(9,022	)
Net cash provided by operating activities		703,207			816,053

Cash flows from investing activities:
Purchase of property and equipment		(