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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 

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

For the quarterly period ended June 30, 2023

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

 

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.

1


 

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

 

 

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.

2


 

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.

3


 

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.

4


 

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

 

 

(