10-Q

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.

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 3, 2023 there were 109,113,654 shares of the registrant’s Common Stock ($0.10 par value) outstanding.

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.

Note 1. Significant Accounting Policies

Business

We are one of the largest North American less-than-truckload (“LTL”) motor carriers. We provide regional, inter-regional and national LTL services through a single integrated, union-free organization. Our service offerings, which include expedited transportation, are provided through an expansive network of service centers located throughout the continental United States. Through strategic alliances, we also provide LTL services throughout North America. In addition to our core LTL services, we offer a range of value-added services including container drayage, truckload brokerage and supply chain consulting. We have one operating segment and the composition of our revenue is summarized below:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2023		2022		2023		2022
LTL services	$	1,501,266	$	1,582,952	$	4,323,453	$	4,703,392
Other services		14,011		20,738		47,149		65,026
Total revenue from operations	$	1,515,277	$	1,603,690	$	4,370,602	$	4,768,418

Basis of Presentation

The accompanying unaudited, interim condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and, in management’s opinion, contain all adjustments (consisting of normal recurring items) necessary for a fair presentation, in all material respects, of the financial position and results of operations for the periods presented. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.

The preparation of condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our operating results are subject to seasonal trends; therefore, the results of operations for the interim period ended September 30, 2023 are not necessarily indicative of the results that may be expected for the subsequent quarterly period or the year ending December 31, 2023.

The condensed financial statements should be read in conjunction with the financial statements and related notes, which appear in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no significant changes in the accounting principles and policies, long-term contracts or estimates inherent in the preparation of the condensed financial statements of Old Dominion Freight Line, Inc. as previously described in our Annual Report on Form 10-K for the year ended December 31, 2022, unless otherwise disclosed in this Form 10-Q.

Unless the context requires otherwise, references in these Notes to “Old Dominion,” the “Company,” “we,” “us” and “our” refer to Old Dominion Freight Line, Inc.

Stock Repurchase Program

On July 28, 2021, we announced that our Board of Directors had approved a stock repurchase program authorizing us to repurchase up to an aggregate of $2.0 billion of our outstanding common stock (the “2021 Repurchase Program”). The 2021 Repurchase Program, which does not have an expiration date, began after the completion of our prior repurchase program in January 2022. Under our 2021 Repurchase Program, we may repurchase shares from time to time in open market purchases or through privately negotiated transactions. Shares of our common stock repurchased under our 2021 Repurchase Program are canceled at the time of repurchase and are classified as authorized but unissued shares of our common stock.

We entered into accelerated share repurchase agreements with a third-party financial institution on each of August 26, 2021 and February 24, 2022. The Company’s accelerated share repurchase agreements are each accounted for as a settled treasury stock purchase and a forward stock purchase contract. The par value of the initial shares received is recorded as a reduction to common stock, with the excess purchase price recorded as a reduction to retained earnings. The forward stock purchase contract is accounted for as a contract indexed to our own stock and is classified within capital in excess of par value on our Condensed Balance Sheets. The

Company's accelerated share repurchase agreements are each settled with the final number of shares received based on the daily volume-weighted average share price of our common stock over the term of the agreement, less a negotiated discount. The table below summarizes our accelerated share repurchase activity for the nine months ended September 30, 2022. There was no accelerated share repurchase activity for the nine months ended September 30, 2023.

Agreement

Agreement

Settlement

Amount

Initial Shares

Shares Received

Total Shares

Date

Date

(In millions)

Received

at Settlement

Received

August 2021

January 2022

250.0

655,365

123,410

778,775

February 2022

April 2022

400.0

1,018,157

372,809




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)


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


Part I – FINANCIAL INFORMATION		1

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


	September 30,
	2023			December 31,
(In thousands, except share and per share data)	(Unaudited)			2022
ASSETS
Current assets:
Cash and cash equivalents	$	206,601		$	186,312
Short-term investments		—			49,355
Customer receivables, less allowances of $11,432 and $10,689, respectively		632,874			578,648
Income taxes receivable		16,007			12,738
Other receivables		14,846			13,743
Prepaid expenses and other current assets		83,888			92,944
Total current assets		954,216			933,740

Property and equipment:
Revenue equipment		2,636,599			2,501,995
Land and structures		2,956,811			2,750,100
Other fixed assets		637,447			550,442
Leasehold improvements		14,497			13,516
Total property and equipment		6,245,354			5,816,053
Accumulated depreciation		(2,159,944	)		(2,128,985	)
Net property and equipment		4,085,410			3,687,068

Other assets		259,248			217,802
Total assets	$	5,298,874		$	4,838,610


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


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




Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐



	Three Months Ended September 30, 2023 and 2022
							Capital in
	Common Stock						Excess of			Retained
(In thousands)	Shares			Amount			Par Value			Earnings			Total
Balance as of June 30, 2023		109,337		$	10,934		$	239,039		$	3,582,062		$	3,832,035
Net income		—			—			—			339,287			339,287
Share repurchases, including net excise tax		(165	)		(17	)		—			(66,477	)		(66,494	)
Cash dividends declared ($0.40 per share)		—			—			—			(43,689	)		(43,689	)
Share-based compensation and share issuances, net of forfeitures		8			1			2,737			—			2,738
Taxes paid in exchange for shares withheld		(1	)		—			(754	)		—			(754	)
Balance as of September 30, 2023		109,179		$	10,918		$	241,022		$	3,811,183		$	4,063,123

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 ($0.30 per share)		—			—			—			(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


	Nine Months Ended September 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		—			—			—			916,687			916,687
Share repurchases, including net excise tax		(1,097	)		(110	)		—			(371,346	)		(371,456	)
Cash dividends declared ($1.20 per share)		—			—			—			(131,463	)		(131,463	)
Share-based compensation and share issuances, net of forfeitures		87			9			8,396			—			8,405
Taxes paid in exchange for shares withheld		(34	)		(3	)		(11,964	)		—			(11,967	)
Balance as of September 30, 2023		109,179		$	10,918		$	241,022		$	3,811,183		$	4,063,123

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	)		62,500			(1,139,392	)		(1,077,301	)
Cash dividends declared ($0.90 per share)		—			—			—			(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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands, except per share data)	2023			2022			2023			2022
Revenue from operations	$	1,515,277		$	1,603,690		$	4,370,602		$	4,768,418

Operating expenses:
Salaries, wages and benefits		663,810			675,084			1,958,726			2,060,983
Operating supplies and expenses		180,653			217,260			538,410			645,329
General supplies and expenses		41,745			45,951			119,896			120,580
Operating taxes and licenses		36,527			35,753			110,118			105,781
Insurance and claims		16,004			17,491			47,413			50,562
Communications and utilities		10,724			10,288			33,256			30,062
Depreciation and amortization		84,055			68,347			239,786			203,997
Purchased transportation		30,835			34,453			90,046			129,634
Miscellaneous expenses, net		5,905			2,983			13,289			11,087
Total operating expenses		1,070,258			1,107,610			3,150,940			3,358,015

Operating income		445,019			496,080			1,219,662			1,410,403

Non-operating (income) expense:
Interest expense		90			997			379			1,283
Interest income		(2,308	)		(1,333	)		(7,487	)		(1,933	)
Other expense, net		861			351			4,319			1,706
Total non-operating (income) expense		(1,357	)		15			(2,789	)		1,056

Income before income taxes		446,376			496,065			1,222,451			1,409,347

Provision for income taxes		107,089			118,664			305,764			356,117

Net income	$	339,287		$	377,401		$	916,687		$	1,053,230

Earnings per share:
Basic	$	3.11		$	3.38		$	8.37		$	9.32
Diluted	$	3.09		$	3.36		$	8.32		$	9.26

Weighted average shares outstanding:
Basic		109,193			111,569			109,554			113,012
Diluted		109,835			112,295			110,234			113,747