FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 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.)
1730 Westchester Drive
High Point, NC 27262
(Address of principal executive offices)
Telephone Number (336) 889-5000
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
--- ___.
As of August 9, 2001, there were 8,312,840 shares of the registrant's
Common Stock ($.10 par value) outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
------------------------------ ---------------------------------------
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
(In thousands, except share and per share data) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
- ---------------------------------------------------------------------- -------------- ------------------- -------------------
Revenue from operations $ 128,605 $ 120,144 $ 248,875 $ 232,943
Operating expenses:
Salaries, wages and benefits 77,917 70,766 152,024 138,510
Purchased transportation 4,959 4,905 9,561 9,655
Operating supplies and expenses 13,560 11,555 26,262 24,052
Depreciation and amortization 7,521 6,635 14,809 13,090
Building and office equipment rents 1,847 1,777 3,815 3,686
Operating taxes and licenses 5,204 4,778 10,437 9,404
Insurance and claims 3,435 3,112 6,306 5,882
Communications and utilities 2,308 2,141 4,877 4,241
General supplies and expenses 4,602 4,792 8,759 8,998
Miscellaneous expenses 1,215 1,068 2,783 2,087
--------------- -------------- ------------------- -------------------
Total operating expenses 122,568 111,529 239,633 219,605
--------------- -------------- ------------------- -------------------
Operating income 6,037 8,615 9,242 13,338
Other deductions:
Interest expense, net 1,532 1,033 3,026 1,932
Other (income) expense, net (572) 80 (502) 89
--------------- -------------- ------------------- -------------------
Total other deductions 960 1,113 2,524 2,021
--------------- -------------- ------------------- -------------------
Income before income taxes 5,077 7,502 6,718 11,317
Provision for income taxes 1,980 2,926 2,620 4,414
--------------- -------------- ------------------- -------------------
Net income $ 3,097 $ 4,576 $ 4,098 $ 6,903
=============== ============== =================== ===================
Basic and diluted earnings per share: $ 0.37 $ 0.55 $ 0.49 $ 0.83
Weighted average shares outstanding:
Basic 8,312,840 8,312,840 8,312,840 8,312,840
Diluted 8,313,491 8,313,228 8,313,166 8,314,891
The accompanying notes are an integral part of these financial statements.
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OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2001 2000
(In thousands, except share data) (Unaudited) (Audited)
- -------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,896 $ 585
Customer receivables, less allowances of $5,791
and $6,068, respectively 58,856 54,273
Other receivables 4,789 4,450
Tires on equipment 6,984 6,912
Prepaid expenses 6,306 12,499
Deferred income taxes 1,477 1,477
------------------ --------------------
Total current assets 81,308 80,196
Property and equipment:
Revenue equipment 201,716 198,131
Land and structures 93,420 90,469
Other equipment 48,408 38,430
Leasehold improvements 4,339 4,338
------------------ --------------------
Total property and equipment 347,883 331,368
Less accumulated depreciation and amortization (141,490) (130,018)
------------------ --------------------
Net property and equipment 206,393 201,350
Other assets 18,248 15,045
------------------ --------------------
Total assets $ 305,949 $ 296,591
================== ====================
The accompanying notes are an integral part of these financial statements.
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OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
(CONTINUED)
June 30, December 31,
2001 2000
(In thousands, except share data) (Unaudited) (Audited)
- -------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,672 $ 26,515
Compensation and benefits 13,237 11,298
Claims and insurance accruals 13,921 14,128
Other accrued liabilities 4,311 2,434
Income taxes payable 739 -
Current maturities of long-term debt 8,196 9,035
----------------- -------------------
Total current liabilities 60,076 63,410
Long-term debt 82,745 74,507
Other non-current liabilities 12,651 12,295
Deferred income taxes 21,645 21,645
----------------- -------------------
Total long-term liabilities 117,041 108,447
Stockholders' equity:
Common stock - $.10 par value, 25,000,000 shares
Authorized, 8,312,840 outstanding 831 831
Capital in excess of par value 23,907 23,907
Retained earnings 104,094 99,996
----------------- -------------------
Total stockholders' equity 128,832 124,734
Commitments and contingencies - -
----------------- -------------------
Total liabilities and stockholders' equity $ 305,949 $ 296,591
================= ===================
The accompanying notes are an integral part of these financial statements.
-4-
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
----------------------------------
2001 2000
(In thousands) (Unaudited) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $ 4,098 $ 6,903
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 14,809 13,090
Deferred income taxes
Loss (gain) on sale of property and equipment 120 (28)
Changes in assets and liabilities:
Customer and other receivables, net (4,922) (3,127)
Tires on equipment (72) 259
Prepaid expenses and other assets 5,681 4,037
Accounts payable (6,843) (4,488)
Compensation, benefits and other accrued liabilities 3,816 2,459
Claims and insurance accruals 67 1,162
Income taxes payable 739 609
Other liabilities 82 205
--------------- ---------------
Net cash provided by operating activities 17,575 21,081
--------------- ---------------
Cash flows from investing activities:
Acquisition of business assets, net (9,385) -
Purchase of property and equipment (13,505) (28,763)
Proceeds from sale of property and equipment 227 817
--------------- ---------------
Net cash used in investing activities (22,663) (27,946)
--------------- ---------------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 52,563 1,626
Principal payments under long-term debt agreements (7,389) (6,494)
Net (payments) proceeds on revolving line of credit (37,775) 11,825
--------------- ---------------
Net cash provided by financing activities 7,399 6,957
--------------- ---------------
Increase in cash and cash equivalents 2,311 92
Cash and cash equivalents at beginning of period 585 781
--------------- ---------------
Cash and cash equivalents at end of period $ 2,896 $ 873
=============== ===============
The accompanying notes are an integral part of these financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The consolidated interim financial statements are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000. The results of
operations for the quarter ended June 30, 2001, are not necessarily indicative
of the results for the entire fiscal year ending December 31, 2001.
There have been no significant changes in the accounting policies of the
Company, or significant changes in the Company's commitments and contingencies
as previously described in the 2000 Annual Report to Stockholders and related
annual report to the Securities and Exchange Commission on Form 10-K.
ACQUISITION OF BUSINESS ASSETS
On January 26, 2001 the Company entered into an agreement to purchase selected
assets, consisting primarily of revenue equipment and real estate, from Carter &
Sons Freightways, Inc. of Carrollton, Texas. While the purchase price has not
been fully allocated, the Company anticipates cash outlays and the present value
of assumed equipment leases to approximate $9,385,000. The pro forma effects of
the acquisition are not material to the operations of the Company.
NOTE PURCHASE AND SHELF AGREEMENT
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 five 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. According to terms of the agreement the Company may 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 these shelf notes
will be determined and mutually agreed upon at the time of issuance.
EARNINGS PER SHARE
Net income per share of common stock is based on the weighted average number of
shares outstanding during each period
RECENT ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board issued Statements for
Financial Accounting Standards No. 141, Business Combinations ("Statement 141"),
and No. 142, Goodwill and Other Intangible Assets ("Statement 142"). These
Statements change the accounting for business combinations, goodwill, and
intangible assets
The Company is required to and will adopt Statements 141 and 142 in the third
quarter of 2001 except with respect to the provisions of Statement 142 relating
to goodwill and intangibles acquired prior to July 1, 2001 that will be adopted
in the first quarter of 2002. Management is evaluating Statements 141 and 142
and believes that the adoptions will not have a significant effect on its
consolidated results of operations or financial position.
SUBSEQUENT EVENTS
None
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations for the Three Months and Six Months Ended June 30, 2001,
- --------------------------------------------------------------------------------
Compared to the Three Months and Six Months Ended June 30, 2000
- ---------------------------------------------------------------
Expenses as a Percentage of Revenue from Operations
---------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------- --------------------------------
2001 2000 2001 2000
------------- ------------- -------------- ------------
Revenue from operations 100.0% 100.0% 100.0% 100.0%
------------- ------------- -------------- ------------
Operating expenses:
Salaries, wages and benefits 60.6 58.9 61.1 59.5
Purchased transportation 3.9 4.1 3.8 4.1
Operating supplies and expenses 10.5 9.6 10.6 10.3
Depreciation and amortization 5.8 5.5 6.0 5.6
Building and office equipment rents 1.4 1.5 1.5 1.6
Operating taxes and licenses 4.0 4.0 4.2 4.0
Insurance and claims 2.7 2.6 2.5 2.5
Communications and utilities 1.8 1.8 2.0 1.8
General supplies and expenses 3.6 4.0 3.5 3.9
Miscellaneous expenses 1.0 .8 1.1 1.0
------------- ------------- -------------- -------------
Total operating expenses 95.3 92.8 96.3 94.3
------------- ------------- -------------- -------------
Operating income 4.7 7.2 3.7 5.7
Interest expense, net 1.2 .9 1.2 .8
Other expense, net (.4) .1 (.2) -
------------- ------------- --------------- -------------
Income before income taxes 3.9 6.2 2.7 4.9
Provision for income taxes 1.5 2.4 1.1 1.9
------------- ------------- --------------- -------------
Net income 2.4% 3.8% 1.6% 3.0%
============= ============= ============== =============
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RESULTS OF OPERATIONS
- ---------------------
Three Months Ended June 30, 2001 Compared to Three Months Ended June 30, 2000
Net revenue for the second quarter of 2001 was $128,605,000, an increase of 7.0%
from $120,144,000 for the second quarter 2000. This growth in revenue resulted
from a 6.5% increase in net revenue per hundredweight combined with a .5%
increase in total freight tonnage. The improvement in pricing can be attributed
to an increase in less-than-truckload ("LTL") tonnage, which generally is priced
at a higher revenue per hundredweight than truckload shipments weighing over
10,000 lbs. LTL tonnage increased to 463,219 tons, or 6.9%, from 433,081 tons in
the same quarter of the prior year. In addition, LTL revenue per hundredweight
increased 1.7% primarily as a result of an increase in the Company's general
tariffs that was implemented in September 2000.
The deceleration in the national economy negatively impacted the Company's
growth rate for both revenue and freight volumes. As a result of the severity
and length of the current economic slowdown, the Company will likely not achieve
its 10% to 15% targeted revenue growth rate for the year. Pricing, as reflected
in LTL revenue per hundredweight, decreased 2.3% from the fourth quarter of
2000, a trend that has continued through July 2001. Generally, a reduction in
demand for transportation services has a negative impact on pricing as carriers
compete for available tonnage to fill excess capacity.
While lower demand and generally weaker financial results remain an industry
problem, the Company has continued to implement its long-term strategic plan to
increase market share through improved service products and selective geographic
expansion. During the second quarter, the Company continued to benefit from its
acquisition of selected assets of Carter & Sons Freightways Inc. of Carrollton,
Texas, on February 12, 2001. As a result of this acquisition, the Company opened
13 new service centers and expanded its full state coverage to 23 states with
the addition of Texas and Oklahoma. These new service centers and the
consolidation of 10 more service centers formerly operated by Carter & Sons
provided an additional source of revenue and tonnage for the second quarter.
Intra-regional revenue within the Company's South Central Area, which contains
most of the newly acquired service centers, increased 120.4%, or $4,147,000,
over the prior-year quarter.
The Company's operating ratio, operating expenses as a percentage of revenue,
increased to 95.3% in the second quarter of 2001 from 92.8%. The Company
experienced increases in labor costs, health expenses and certain equipment
operating costs, which contributed to the erosion in operating income to
$6,037,000 from $8,615,000.
Linehaul driver labor increased to 12.4% of revenue compared to 11.7% for the
second quarter 2000. This increase is due, in part, to the lack of linehaul
density in the Company's newer service centers and full state coverage markets.
Until these markets mature and market share increases, the Company may
experience underutilized linehaul trailer capacity as it continues to meet its
published service standards. For the quarter, net revenue per mile decreased to
$3.35 from $3.43, a reduction of 2.3%.
The Company self-insures a significant portion of the group health benefits it
provides for its employees and their families. This cost increased $1,182,000 to
4.6% of revenue, an increase of 25.1% over the prior-year period. While the
Company anticipates the trend of escalating health costs to continue for the
immediate future, it is currently analyzing its most recent claims experience
for opportunities to lower its costs.
Since the end of the second quarter 2000, the Company has increased its tractor
fleet 12.3%, its trailer fleet 10.0% and has expanded its service center network
to 116 locations from 104. This increase in capacity, when combined with only a
.5% increase in total tonnage, has caused certain operating costs to increase as
a percentage of revenue. Depreciation and amortization expenses increased to
5.8% of revenue from 5.5%, repair parts increased to 2.2% of revenue from 1.9%
and tire expense increased to 1.0% of revenue from .6%.
As a result of increases in diesel fuel prices, fuel expenses increased to 5.5%
of revenue from 5.1% for the second quarter of 2000. However, the average weekly
retail price of diesel fuel in the U.S., as reported by the U.S. Department of
Energy, has reflected a relatively steady decline in price since May
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2001. To offset the price volatility of petroleum based products such as diesel
fuel, the Company has implemented a fuel surcharge on most of its tariffs and
contracts. Generally, the surcharge provides for increases in revenue as fuel
costs increase above certain benchmark price levels.
Net interest expense for the second quarter of 2001 increased to 1.2% of revenue
from .9% for the prior-year comparable period, primarily as a result of an
increase in the amount of debt outstanding between the quarters. Outstanding
debt was $90,941,000 at June 30, 2001 compared to $71,827,000 at June 30, 2000,
an increase of 26.6%. This increase is primarily due to the additional financing
required to fund $61,030,000 of net capital expenditures in 2000 of which
$21,189,000 which was used to construct, purchase or expand service center
facilities.
In the second quarter 2001, the Company recorded non-operating income of
$660,000 as beneficiary of life insurance policy proceeds. The Company utilizes
life insurance contracts as a method of funding its deferred compensation
liabilities.
Net income was $3,097,000 compared to $4,576,000, a decrease of 32.3%. The
effective tax rate for both the second quarter of 2001 and 2000 was 39.0%.
Six Months Ended June 30, 2001, Compared to Six Months Ended June 30, 2000
Revenue for the first half of the year increased 6.8% to $248,875,000 compared
to $232,943,000 for the prior-year period. The Company's operating ratio,
operating expenses as a percentage of revenue, increased to 96.3% from 94.3%.
The increase in operating expenses contributed to a decline in net income to
$4,098,000 from $6,903,000, a reduction of 40.6%.
The Company's financial results for the first six months of 2001 were impacted
by two significant factors, the slowing national economy and the acquisition of
selected assets of Carter & Sons Freightways Inc. In the first half of the year,
economic factors depressed demand for transportation services as reflected by
only a .1% increase in tonnage between the two periods. Although total tonnage
growth was relatively flat, LTL tonnage grew 5.6% while tonnage from shipments
weighing more than 10,000 lbs. declined. Because LTL shipments generally are
priced at a higher revenue per hundredweight, the Company's revenue growth
outperformed its tonnage growth. Net revenue per hundredweight was $9.96 for the
first half of 2001 compared to $9.32 for the prior-year period, an increase of
6.9%. This increase reflects both the change in tonnage mix and a rate increase
on the Company's general tariffs implemented in September 2000.
The Carter & Sons acquisition in February 2001 contributed to the Company's
ability to grow tonnage and revenue in a period where industry levels declined.
As a result of this acquisition, the Company opened 13 new service centers,
primarily in Texas and Oklahoma. Combined with its existing operations, this
expansion generated a 109.8% increase in intra-regional revenue for the
Company's South Central Region.
The Company targeted revenue growth in the range of 10% to 15% for the current
year, a goal that will be difficult to obtain in the current economic
environment. As a result, the Company is experiencing excess capacity or lack of
density in its operations which has resulted in an increase in its operating
ratio. Also contributing to the cost increases are markets acquired in the
Carter acquisition, which have yet to mature and supply the Company with the
density required to contribute to profitability. The Company expects that as
those markets mature and the economy improves, its historic levels of density,
operating ratio and profitability will return. Excess capacity is also evident
by the increase in depreciation and amortization expense to 6.0% of revenue from
5.6% in the prior-year period. These increases are due to underutilization of a
larger revenue equipment fleet and operating more owned service center
facilities in the first six months of 2001.
In addition to these factors, the Company also experienced increases in certain
costs that impacted its first half results. Linehaul driver pay increased to
12.4% of revenue from 11.9% for the prior-year period, a result of a general
wage increase in September 2000 and an increase in intercity miles without a
comparable increase in revenue per mile. Intercity miles driven increased 8.4%
while revenue per mile decreased 1.5%, an indication that linehaul density
declined between the two periods.
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Workers compensation and group health expenses increased 26.5% and 18.3%,
respectively, when compared with the prior-year period. The Company monitors
these expenses for opportunities to prevent and minimize these costs; however,
health care costs continue to escalate disproportionately to other cost
increases incurred by the Company.
As a result of increases in diesel fuel prices, fuel expense increased to 5.6%
from 5.3% of revenue for the two comparable periods. The Company has implemented
a fuel surcharge in its general tariffs and contracts, which has effectively
offset the increase in the price of petroleum products required by the Company's
operations. The fuel surcharge is recorded in net revenue. The Company seeks to
continue to apply these surcharges until prices fall below certain floor levels.
As a result of a higher average level of debt outstanding for the first half of
2001, interest expense increased to 1.2% of revenue from .8%. The increase in
debt to $90,941,000 at June 30, 2001 from $71,827,000 at the end of the second
quarter 2000 was primarily due to the additional financing required to fund
$61,030,000 of net capital expenditures in 2000. Of these expenditures,
$21,189,000 was used to construct, purchase or expand service center facilities
that were critical in the Company's strategic plan for future growth, improved
customer service and profitability.
The effective tax rate for both periods was 39%.
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 $22,663,000 during the first
half of 2001. Cash flows generated internally funded 77.5% of the required
capital expenditures for the first six months of the year while the remainder
was funded through additional borrowings. At June 30, 2001, long-term debt
including current maturities increased to $90,941,000 from $83,542,000 at
December 31, 2000.
The Company estimates net capital expenditures to be approximately $40,000,000
to $45,000,000 for the year ending December 31, 2001. Of that, approximately
$28,000,000 is planned to be used for purchase or construction of larger
replacement service centers or expansion of existing service centers, $6,000,000
is planned to be used to purchase revenue equipment, $9,000,000 is planned to be
used for investments in technology and the balance is planned to be used to
purchase other assets. The Company plans to fund these expenditures 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 that consists 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 the second quarter of 2001 under this agreement was
based upon LIBOR plus .85%. A fee of .25% was charged on the unused portion of
the line of credit and fees ranging between .70% to .71% were charged on
outstanding standby letters of credit. At June 30, 2001, there were $1,475,000
outstanding borrowings on the line of credit and $6,040,000 outstanding on the
standby letter of credit facility. Standby letters of credit are primarily
issued as collateral for self-insured retention reserves for bodily injury,
property damage and workers' compensation claims. On May 31, 2001 this credit
agreement was amended, effective May 7, 2001, to decrease the line of credit
facility to $20,000,000 for the remainder of the term.
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 five 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. According to terms of the agreement the Company may authorize
the issuance and sale of amounts not to exceed $15,000,000 in additional senior
notes. The
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applicable interest rate and payment schedules for these shelf notes will be
determined and mutually agreed upon at the time of issuance. The Company's
exposure to changes in interest rates is minimal and limited to the outstanding
balance of its line of credit facility, which represents 1.6% of total long-term
debt at June 30, 2001. The Company does not currently use interest rate
derivative instruments to manage exposure to interest rate changes. Also, the
Company is not using any fuel hedging instruments as its tariff provisions
generally allow for fuel surcharges to be implemented in the event that fuel
prices exceed stipulated levels.
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 quarter ending June 30, 2001, the net effect of inflation on the
Company's results of operations was minimal.
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.
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.
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.
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Item 3. Quantitative and Qualitative Disclosure of Market Risk
The information called for by this item is provided under the caption "Liquidity
and Capital Resources" under Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit No. Description
----------- -------------------------------------------------------
4.6.2 Note Purchase and Shelf Agreement between Old Dominion
Freight Line, Inc. and The Prudential Insurance Company
of America dated May 1, 2001
4.7.3 Credit Agreement between First Union National Bank and
Old Dominion Freight Line, Inc., dated May 7, 2001
b) Reports on Form 8-K: No reports on Form 8-K were filed during the
quarter ended June 30, 2001.
SIGNATURES
Pursuant to the requirements 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.
DATE: AUGUST 9, 2001 J. WES FRYE
----------------------------------- -----------------------------------
J. Wes Frye
Senior Vice President - Finance
(Principal Financial Officer)
DATE: AUGUST 9, 2001 JOHN P. BOOKER III
----------------------------------- -----------------------------------
John P. Booker III
Vice President - Controller
(Principal Accounting Officer)
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