2011 Q4 Earnings Release

January 20, 2012 For Immediate Release Press Release Heartland Express, Inc. Reports Revenues and Earnings for the Fourth Quarter of 2011

NORTH LIBERTY, IOWA - January 20, 2012 - Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter ended December 31, 2011. Operating revenues for the quarter increased 1.5% to $131.2 million from $129.2 million in the fourth quarter of 2010. Net income was $17.1 million compared to $15.4 million in the 2010 period, an
11.3% increase. Earnings per diluted share increased 17.6% to $0.20 from $0.17 reported in the fourth quarter of 2010. Fuel surcharge revenues for the quarter increased 30.5% to $26.5 million from $20.3 million in the fourth quarter of 2010. For the quarter, Heartland Express, Inc. (the "Company") posted an operating ratio (operating expenses as a percentage of operating revenues) of 79.5% and a 13.0% net margin (net income as a percentage of operating revenues) compared to 81.0% and 11.9%, respectively, in the fourth quarter of last year.
Operating revenues for the year increased 5.8% to $528.6 million from $499.5 million in the prior year. Net income was $70 million compared to $62.2 million in the 2010 period, a 12.4% increase. Earnings per diluted share increased 13.0% to $0.78 from $0.69 reported in 2010. Fuel surcharge revenues for the year increased 43.2% to $107.8 million from $75.3 million in the prior year. For the year, the Company posted an operating ratio of 79.8% and a 13.2% net margin compared to 81.7% and 12.5%, respectively, reported last year.
Safety and customer service continue to be the two primary objectives in our driver recruiting and retention efforts. Improved utilization is a primary focus as we continue to be challenged by tight driver capacity. Fuel expense increased $5.3 million or 15.4% during the quarter and $35.4 million or 28.0% during the year, primarily due to an increase in average fuel prices over the similar prior periods. The U.S. average cost of fuel was $3.870 per gallon during the fourth quarter of 2011, a 22.5% increase over the fourth quarter of the prior year and $3.848 for the year, a 28.4% increase from the prior year. The Company continues to focus on fuel surcharge pricing, truck idling hours, and fuel purchasing decisions in an effort to lessen the impact of higher fuel costs. Our new tractor fleet is one of the most fuel-efficient in the industry and is fully equipped with idle management controls.
The average age of the Company's tractor fleet was 1.7 years as of December 31, 2011 with all of the fleet being 2010 models and newer. The Company took delivery of 844 new ProStar Plus Internationals during the year including 302 in the fourth quarter. An additional 27 new trucks will be received in January to complete this upgrade. These new trucks are fuel efficient and meet new emissions standards while providing comfort for our drivers. The average age of the Company's trailer fleet improved to 4.1 years at December 31, 2011 compared to 6.0 years at December 31, 2010, with 80% of our trailers being 2007 models and newer. The Company took delivery of 2,600 new Great Dane and Wabash trailers during the year including149 new Great Danes during the fourth quarter. The Company sold 2,813 trailers during the year including 360 trailers during the fourth quarter. Fleet utilization was negatively impacted throughout the year due to routing sold trailers to various drop locations, while taking advantage of an unusually favorable used trailer market. Management plans to take advantage of the used trailer market in
2012 to continue the upgrade of its trailer fleet. These fleet upgrades keep our tractor and trailer
fleet new, and positions the Company for growth opportunities while allowing us to maintain our strong industry CSA (Compliance, Safety, Accountability) scores.
The Company ended the year with cash, cash equivalents, and short-term and long-term investments totaling $190.3 million, a $19.5 million decrease from the $209.8 million reported at December 31, 2010. Capital expenditures for the year include $53.2 million primarily for new tractors and trailers, net of equipment sale proceeds. Long-term and short-term investments include $53.7 million of illiquid auction rate securities, at par, which was down from $91.8 million at December 31, 2010. Since February 2008, the Company has received $144.8 million in calls, all at par, including $38.1 million received during the year. Net cash flows from operations continue to be strong at 18.7% of operating revenues. The Company's balance sheet continues to be debt-free with total assets of $525.7 million. The Company ended the year with a return on total assets of 13.0% and a 19.9% return on equity compared to 11.8% and 17.7%, respectively, during 2010.
Commitment to our shareholders continues through the payment of cash dividends and the repurchase of common stock. A dividend of $0.02 per share was declared and paid during the quarter. The Company has now paid cumulative cash dividends of $344.6 million, including two special dividends, over the past thirty-four consecutive quarters. In addition, the Company purchased 4.6% of its outstanding shares during the year at a cost of $56.4 million. Total shares repurchased were 4.2 million including 2.0 million in the fourth quarter.
Thirteen customer service awards were received in 2011 because of our dependability and performance. Outstanding customer service has allowed us to build solid, long-term relationships and brand ourselves as an industry leader for on-time service. These awards include the Cost Plus World Market 2010 Premier Carrier Partner Award, the Eastman Chemical 2010 Supplier Excellence Award for the eighth consecutive year, the 2010 Kellogg Komplete Carrier of the Year for the second time in three years, the Lowe's 2010 Gold Carrier Award, the Transplace Platinum Seal of Approval award for the sixth year in a row, the Walmart Transportation 2010
General Merchandise Platinum Carrier of the Year Award for the second consecutive year, the FedEx Carrier of the Year, FedEx Gold Award for 99.83% on time service, FedEx Smartpost National Carrier of the Year, FedEx Smartpost Peak Performance Award, Schneider Logistics National Carrier of the Year for the sixth year in a row, the first recipient of the Schneider Logistics Commercial Growth Award, and Logistics Management magazine's Quest for Quality award for the ninth consecutive year.
This press release may contain statements that might be considered as forward-looking statements or predictions of future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission.
Contact: Heartland Express, Inc. Mike Gerdin, Chief Executive Officer John Cosaert, Chief Financial Officer
319-626-3600

HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

Three Months Ended December 31, Twelve Months Ended December 31, 2011 2010 2011 2010 (unaudited) (unaudited)

OPERATING REVENUE

$

131,209

$

129,244

$

528,623

$

499,516

Salaries, wages, and benefits	$ 41,885	$ 42,541	$ 166,717	$ 167,980
Fuel	39,494	34,234	161,915	126,477
Operating taxes and licenses	2,272	2,289	9,225	8,480
Communications and utilities	816	519	2,957	3,187
Other operating expenses	4,432	3,433	14,552	14,239

) )

104,344

104,719

422,066

408,067

Operating income

26,865

24,525

106,557

91,449

Interest income

153

258

773

1,424

Income before income taxes

27,018

24,783

107,330

92,873

Federal and state income taxes

9,897

9,403

37,398

30,657

Net income

$

17,121

$

15,380

$

69,932

$

62,216

Earnings per share

Basic

Diluted

$

0.20

$

0.17

$

0.78

$

0.69

Weighted average shares outstanding

Basic 87,150 90,689 89,656 90,689

Diluted

87,219

90,689

89,673

90,689

HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

December 31, December 31, CURRENT ASSETS

Cash and cash equivalents $ 139,770 $ 121,120

Short-term investments - 8,300

Trade receivables, net

44,198

41,619

Prepaid tires 12,820 6,570

Other current assets

1,932

1,725

Income tax receivable 314 2,052

Deferred income taxes, net

14,401

12,400

Total current assets 213,435 193,786

PROPERTY AND EQUIPMENT 409,710 386,188

Less accumulated depreciation

161,269

165,736

248,441 220,452

LONG-TERM INVESTMENTS

50,569

80,394

OTHER ASSETS 13,221 11,403

$ 525,666 $ 506,035

LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES

Accounts payable and accrued liabilities $ 9,088 $ 10,972

Compensation and benefits

15,493

14,823

Insurance accruals 13,997 16,341

Other accruals

7,085

6,764

Total current liabilities 45,663 48,900

LONG-TERM LIABILITIES

Income taxes payable 24,077 27,313

Deferred income taxes, net

57,661

40,917

Insurance accruals less current portion 57,494 54,718

Total long-term liabilities

139,232

122,948

COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY

Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in

2011 and 2010; outstanding 86,475 and 90,689 in 2011 and 2010, respectively 907 907

Additional paid-in capital

589

439

Retained earnings 398,706 335,922

Treasury stock, at cost; 4,214 shares in 2011 (56,350 ) -

Accumulated other comprehensive loss (3,081 ) (3,081 )

340,771

334,187

$ 525,666 $ 506,035