SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarter ended September 30, 2000 Commission File No. 0-15087
HEARTLAND EXPRESS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Nevada 93-0926999
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2777 Heartland Drive, Coralville, Iowa 52241
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (319) 545-2728
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 [ ]
At September 30, 2000, there were 25,366,582 shares of the Company's $.01 par
value common stock outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
Page
Number
Item 1. Financial statements
Consolidated balance sheets
September 30, 2000 (unaudited) and
December 31, 1999 2-3
Consolidated statements of income
(unaudited) for the three and nine month
periods ended September 30, 2000 and 1999 4
Consolidated statements of cash flows
(unaudited) for the nine months ended
September 30, 2000 and 1999 5
Notes to financial statements 6
Item 2. Management's discussion and analysis of
financial condition and results of
operations 7-12
PART II
OTHER INFORMATION
Item 1. Legal proceedings 13
Item 2. Changes in securities 13
Item 3. Defaults upon senior securities 13
Item 4. Submission of matters to a vote of 13
security holders
Item 5. Other information 13
Item 6. Exhibits and reports on Form 8-K 13-15
1
<PAGE>
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS September 30 December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ..................... $122,088,772 $126,211,056
Trade receivables, less allowance:
2000 and 1999 $402,812 ........................ 26,772,785 23,478,708
Prepaid tires ................................. 3,310,174 1,655,018
Investments ................................... 3,109,839 500,000
Deferred income taxes ......................... 16,479,000 15,979,000
Other current assets .......................... 1,029,373 359,472
------------ ------------
Total current assets .................. $172,789,943 $168,183,254
------------ ------------
PROPERTY AND EQUIPMENT
Land and land improvements .................... $ 3,237,875 $ 3,701,400
Buildings ..................................... 8,532,621 9,740,487
Furniture and fixtures ........................ 2,604,400 2,611,166
Shop and service equipment .................... 1,513,251 1,563,485
Revenue equipment ............................. 124,899,036 121,822,991
------------ ------------
$140,787,183 $139,439,529
Less accumulated depreciation & amortization .. 58,457,247 66,533,949
------------ ------------
Property and equipment, net ................... $ 82,329,936 $ 72,905,580
------------ ------------
OTHER ASSETS .................................. $ 5,253,846 $ 5,404,707
------------ ------------
$260,373,725 $246,493,541
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30 December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable & accrued liabilities ........ $ 7,853,276 $ 10,595,662
Compensation & benefits ....................... 5,416,630 4,225,023
Income taxes payable .......................... 5,627,468 4,974,341
Insurance accruals ............................ 35,399,542 34,285,500
Other ......................................... 2,962,090 2,427,464
------------ ------------
Total current liabilities .................. $ 57,259,006 $ 56,507,990
------------ ------------
DEFERRED INCOME TAXES ............................ $ 15,876,000 $ 15,146,000
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred, $.01 par value; authorized
5,000,000 shares; none issued .............. $ -- $ --
Common, $.01 par value; authorized
395,000,000 shares; issued and outstanding
25,366,582 in 2000 and
26,460,251 in 1999 ......................... 253,666 264,603
Additional paid in capital .................... 6,608,170 6,608,170
Retained earnings ............................. 180,376,883 167,966,778
------------ ------------
$187,238,719 $174,839,551
------------ ------------
$260,373,725 $246,493,541
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
OPERATING REVENUE ..................... $ 68,107,430 $ 65,350,697 $ 204,558,697 $ 194,542,137
------------- ------------- ------------- -------------
OPERATING EXPENSES:
Salaries, wages, benefits .......... $ 18,722,396 $ 15,640,809 $ 53,705,524 $ 44,474,681
Rent and purchased transportation .. 18,013,117 22,257,019 58,246,522 68,719,748
Operations and maintenance ......... 10,565,512 7,867,562 30,175,800 21,481,960
Taxes and licenses ................. 1,516,106 1,604,825 4,276,661 4,470,401
Insurance and claims ............... 1,591,330 1,395,942 5,090,063 4,625,863
Communications and utilities ....... 774,854 659,183 2,169,272 1,966,512
Depreciation ....................... 4,143,218 3,913,127 11,902,708 12,037,282
Other operating expenses ........... 1,685,214 1,364,868 4,740,272 4,476,752
(Gain) on sale of fixed assets ..... (23,235) (934,812) (1,516,913) (934,812)
------------- ------------- ------------- -------------
$ 56,988,512 $ 53,768,523 $ 168,789,909 $ 161,318,387
------------- ------------- ------------- -------------
Operating income ....... $ 11,118,918 $ 11,582,174 $ 35,768,788 $ 33,223,750
Interest income .................... 1,592,934 1,543,826 4,244,938 4,542,147
------------- ------------- ------------- -------------
Income before income taxes ......... $ 12,711,852 $ 13,126,000 $ 40,013,726 $ 37,765,897
Federal and state income taxes ..... 4,322,021 4,528,469 13,604,658 13,087,537
------------- ------------- ------------- -------------
Net income ......................... $ 8,389,831 8,597,531 $ 26,409,068 $ 24,678,360
============= ============= ============= =============
Earnings per common share:
Basic earnings per share ....... $ 0.33 $ 0.29 $ 1.03 $ 0.82
============= ============= ============= =============
Basic weighted average shares
outstanding ...................... 25,366,582 30,000,000 25,598,089 30,000,000
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
2000 1999
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income ................................... $ 26,409,068 $ 24,678,360
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization ............. 12,641,155 12,859,618
Deferred income taxes ..................... 230,000 (1,148,000)
Gain on sale of fixed assets .............. (1,516,913) (913,618)
Changes in certain working capital items:
Trade receivables ...................... (3,294,077) (1,954,500)
Other current assets ................... (669,901) (1,176,410)
Prepaid expenses ....................... (1,655,156) (577,317)
Accounts payable and accrued expenses .. 2,018,864 1,985,218
Accrued income tax ..................... 653,127 1,355,668
------------- -------------
Net cash provided by operating activities . $ 34,816,167 $ 35,109,019
------------- -------------
INVESTING ACTIVITIES
Proceeds from sale of prop. and equipment .... $ 2,140,220 $ 1,586,007
Capital additions ............................ (24,026,206) (14,490,375)
Net sales of municipal bonds ................. (2,609,839) (2,120,523)
Other ........................................ (432,726) (263,532)
------------- -------------
Net cash used in investing activities ........ $ (24,928,551) $ (15,288,423)
------------- -------------
FINANCING ACTIVITIES
Repurchase of common stock ................... $ (14,009,900) $ --
------------- -------------
Net cash used in financing activities ....... $ (14,009,900) $ --
------------- -------------
Net increase (decrease) in cash and cash
equivalents ............................... $ (4,122,284) $ 19,820,596
CASH AND CASH EQUIVALENTS
Beginning of period .......................... 126,211,056 143,434,594
------------- -------------
End of period ................................ $ 122,088,772 $ 163,255,190
============= =============
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash paid during the period for:
Income taxes ............................ $ 12,721,531 $ 12,879,869
Noncash investing activities:
Book value of revenue equipment traded .. $ 9,105,429 $ 3,607,676
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The consolidated financial statements include the accounts of Heartland
Express, Inc., a Nevada holding company, and its wholly-owned subsidiaries (the
Company). All significant intercompany balances and transactions have been
eliminated in consolidation.
The financial statements have been prepared, without audit, in accordance
with generally accepted accounting principles, pursuant to the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, the accompanying financial statements include all adjustments which
are necessary for a fair presentation of the results for the interim periods
presented, such adjustments being of a normal recurring nature. Certain
information and footnote disclosures have been condensed or omitted pursuant to
such rules and regulations. The December 31, 1999 Consolidated Balance Sheet was
derived from the audited balance sheet of the Company for the year then ended.
It is suggested that these consolidated financial statements and notes thereto
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Form 10-K for the year ended December 31,
1999. Results of operations in interim periods are not necessarily indicative of
results to be expected for a full year.
Note 2. Income Taxes
Income tax expense varies from the amount computed by applying the federal
corporate income tax rate of 35% to income before income taxes primarily due to
state income taxes, net of federal income tax effect, plus the effect of
interest earned exempt from federal taxes. Effective income tax expense
approximated 34% in the three and nine months periods ended September 30, 2000.
Effective income tax expense approximated 34.5% for the three months ended
September 30, 1999 and 34.7% for the nine months ended September 30, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following is a discussion of the results of operations of the three and
nine months periods ended September 30, 2000 compared with the same periods in
1999, and the changes in financial condition through the third quarter of 2000.
6
<PAGE>
Results of Operations:
Three Months Ended September 30, 2000 and 1999
Operating revenue increased $2.8 million (4.2%), to $68.1 million in the
third quarter of 2000 from $65.3 million in the third quarter of 1999. The
revenue increase was primarily attributable to increased freight rates, and fuel
surcharges resulting from high diesel prices.
Salaries, wages, and benefits increased $3.1 million (19.7%), to $18.7
million in the third quarter of 2000 from $15.6 million in the third quarter of
1999. As a percentage of revenue, salaries, wages and benefits increased to
27.5% in 2000 from 23.9% in 1999. These increases were a result of increased
reliance on employee drivers and a corresponding decrease in miles driven by
independent contractors. In addition, the Company increased employee driver pay
in June, 1999 and March, 2000. The increase in employee driver miles was
attributable to internal growth in the company tractor fleet. During the third
quarter of 2000, employee drivers accounted for 61% and independent contractors
39% of the total fleet miles, compared with 52% and 48%, respectively, in the
third quarter of 1999. The Company also experienced an increase in the frequency
and severity of workers' compensation and health insurance claims in comparison
to the 1999 period.
Rent and purchased transportation decreased $4.2 million (19.1%), to $18.0
million in the third quarter of 2000 from $22.2 million in the third quarter of
1999. As a percentage of revenue, rent and purchased transportation decreased to
26.4% in the third quarter of 2000 from 34.1% in the third quarter of 1999. This
reflects the Company's decreased reliance upon independent contractors.
Independent contractors own their own tractors and are responsible for
associated operating costs. Accordingly, the Company reimbursed independent
contractors for the high cost of diesel prices experienced during the third
quarter of 2000.
Operations and maintenance increased $2.7 million (34.3%) to $10.6 million
in the third quarter of 2000 from $7.9 million in the third quarter of 1999. As
a percentage of revenue, operations and maintenance increased to 15.5% in 2000
from 12.0% 1999. This increase is attributable to an increase in fuel prices and
increased reliance on the Company owned fleet. The fuel cost per gallon steadily
increased after the first quarter of 1999 with heavy increases experienced in
the fourth quarter of 1999 and the first nine months of 2000.
Taxes and licenses decreased $0.1 million (5.5%), to $1.5 million in the
third quarter of 2000 from $1.6 million in the third quarter of 1999. As a
percentage of revenue, taxes and licenses decreased to 2.2% in 2000 from 2.5% in
1999. These decreases resulted from increased fleet utilization and efficient
management of these costs.
7
<PAGE>
Insurance and claims increased $0.2 million (14.0%), to $1.6 million in the
third quarter of 2000 from $1.4 million in the third quarter of 1999. As a
percentage of revenue, insurance and claims increased to 2.3% in the third
quarter of 2000 from 2.1% in the third quarter of 1999. Insurance and claims
expense will vary as a percentage of operating revenue from period to period
based on the frequency and severity of claims incurred in a given period as well
as changes in claims development trends.
Communications and utilities increased $0.1 million (17.5%), to $0.8
million in the 2000 period from $0.7 million in the 1999 period. As a percentage
of revenue, communications and utilities increased to 1.1% in the third quarter
of 2000 from 1.0% in third quarter of 1999.
Depreciation increased $0.2 million (5.9%) to $4.1 million during the third
quarter of 2000 from $3.9 million in the third quarter of 1999. As a percentage
of revenue, depreciation increased to 6.1% of revenue during the third quarter
of 2000 from 6.0% during the third quarter of 1999. The increase was primarily
the result of increased company-owned tractors in the Company's fleet.
Other operating expenses increased $0.3 million (23.5%) to $1.7 million
during the third quarter of 2000 from $1.4 million in the third quarter of 1999.
As a percentage of revenue, other operating expenses increased to 2.5% of
revenue during the third quarter of 2000 from 2.1% during the third quarter of
1999. Other operating expenses consists primarily of pallet cost, driver
recruiting expense, and administrative costs.
Interest income increased $0.1 million (3.2%) to $1.6 million during the
third quarter of 2000 from $1.5 million in the third quarter of 1999.
The Company's effective tax rate was 34.0% for the three month period ended
September 30, 2000 and 34.5% in the 1999 period.
As a result of the foregoing, the Company's operating ratio (operating
expenses as a percentage of operating revenue) was 83.7% during the third
quarter of 2000 compared with 82.3% during the third quarter of 1999. Net income
decreased $0.2 million (2.4%), to $8.4 million during the three months ended
September 30, 2000 from $8.6 million in the 1999 period. The Company's operating
ratio and net income for the 1999 period were positively impacted by a $0.9
million gain recognized on the sale of three properties.
Nine Months Ended September 30, 2000 and 1999
Operating revenue increased $10.0 million (5.1%), to $204.5 million in the
nine months ended September 30, 2000 from $194.5 million in the compared 1999
period. The revenue increase was primarily attributable to increased freight
rates, and fuel surcharges resulting from high fuel prices.
8
<PAGE>
Salaries, wages, and benefits increased $9.2 million (20.8%), to $53.7
million in the nine months ended September 30, 2000 from $44.5 million in the
compared 1999 period. As a percentage of revenue, salaries, wages and benefits
increased to 26.3% in 2000 from 22.9% in 1999. These increases were a result of
increased reliance on employee drivers and a corresponding decrease in miles
driven by independent contractors. In addition, the Company increased employee
driver pay in June, 1999 and March, 2000. The increase in employee driver miles
was attributable to internal growth in the company tractor fleet. During the
first nine months of 2000, employee drivers accounted for 58% and independent
contractors 42% of the total fleet miles, compared with 50% and 50%,
respectively, in the compared 1999 period. The Company also experienced an
increase in the frequency and severity of workers' compensation and health
insurance claims in comparison to the compared 1999 period.
Rent and purchased transportation decreased $10.5 million (15.2%), to $58.2
million in the first nine months of 2000 from $68.7 million in the 1999 period.
As a percentage of revenue, rent and purchased transportation decreased to 28.5%
in the 2000 period from 35.3% in the compared 1999 period. This reflects the
Company's decreased reliance upon independent contractors. In addition, an
increased industry demand for independent contractors has negated the Company's
previous competitive advantage. Additionally, the high cost of fuel experienced
since the first quarter of 1999 has resulted in independent contractors leaving
the industry. Independent contractors own their own tractors and are responsible
for associated operating costs. Accordingly, the Company has reimbursed the
independent contractors for high fuel prices incurred during the 2000 period.
Operations and maintenance increased $8.7 million (40.5%) to $30.2 million
in the nine months ended September 30, 2000 from $21.5 million in the compared
1999 period. As a percentage of revenue, operations and maintenance increased to
14.8% of revenue in the nine months ended September 30, 2000 from 11.0% during
the compared 1999 period. This increase is attributable to an increase in fuel
prices and increased reliance on the Company owned fleet. The fuel cost per
gallon steadily increased after the first quarter of 1999 with heavy increases
experienced in the fourth quarter of 1999 and in 2000.
Taxes and licenses decreased $0.2 million (4.3%), to $4.3 million in the
nine months ended September 30, 2000 from $4.5 million in the compared 1999
period. As a percentage of revenue, taxes and licenses decreased to 2.1% of
revenue in the nine months ended September 30, 2000 from 2.3% during the
compared 1999 period. These decreases resulted from increased fleet utilization
and efficient management of these costs.
9
<PAGE>
Insurance and claims increased $0.5 million (10.0%), to $5.1 million in the
nine months ended September 30, 2000 from $4.6 million in the compared 1999
period. As a percentage of revenue, insurance and claims increased to 2.5% in
the nine months ended September 30, 2000 from 2.4% in the compared 1999 period.
Insurance and claims expense will vary as a percentage of operating revenue from
period to period based on the frequency and severity of claims incurred in a
given period as well as changes in claims development trends.
Communications and utilities increased $0.2 million (10.3%), to $2.2
million in the 2000 period from $2.0 million in 1999 period. As a percentage of
revenue, communications and utilities increased to 1.1% in the nine months ended
September 30, 2000 from 1.0% in the compared 1999 period.
Depreciation decreased $0.1 million (1.1%) to $11.9 million during the nine
months ended September 30, 2000 from $12.0 million in the compared 1999 period.
As a percentage of revenue, depreciation decreased to 5.8% of revenue during the
nine months ended September 30, 2000 from 6.2% during the compared 1999 period.
The decrease resulted from the increase in the number of trailers in the
Company's fleet becoming fully depreciated, and from the change in estimated
salvage value on the Company's revenue equipment.
Other operating expenses increased $0.2 million (5.9%) to $4.7 million
during the nine months ended September 30, 2000 from $4.5 million during the
compared 1999 period. As a percentage of revenue, other operating expenses was
2.3% for both periods. Other operating expenses consists primarily of pallet
cost, driver recruiting expense, and administrative costs.
Interest income decreased $0.3 million (6.5%) to $4.2 million during the
nine months ended September 30, 2000 from $4.5 million during the compared 1999
period. Interest income earned is primarily exempt from federal taxes and
therefore earned at a lower rate. The decrease is attributable to the repurchase
of 4.6 million shares of the Company's common stock for $59.1 million in the
fourth quarter of 1999 and first quarter of 2000, and a $9.5 million increase in
capital expenditures.
The Company's effective tax rate was 34.0% for the first nine months ended
September 30, 2000 and 34.7% for the nine months ended September 30, 1999.
As a result of the foregoing, the Company's operating ratio (operating
expenses as a percentage of operating revenue) was 82.5% during the nine months
ended September 30, 2000 compared with 82.9% during the compared 1999 period.
Net income increased $1.7 million (7.0%), to $26.4 million during the nine
months ended September 30, 2000 from $24.7 million during the compared 1999
period. In addition, the net income for the 2000 period includes gains of $1.5
million from the sale of two properties. The 1999 period was positively impacted
by the $0.9 million gain from the sale of three properties.
10
<PAGE>
Liquidity and Capital Resources
The growth of the Company's business has required significant investments
in new revenue equipment. Historically the Company has been debt-free, financing
revenue equipment through cash flow from operations. The Company also obtains
tractor capacity by utilizing independent contractors, who provide a tractor and
bear all associated operating and financing expenses. The Company's primary
source of liquidity at September 30, 2000, were funds provided by cash flow from
operating activities. The Company believes its sources of liquidity are adequate
to meet its current and projected needs.
The Company expects to finance further growth in its company-owned fleet
through cash flow from operations and cash equivalents currently on hand. Based
on the Company's strong financial position (current ratio of 3.0 and no debt),
management foresees no barrier to obtaining outside financing, if necessary, to
continue with its growth plans.
During the nine months ended September 30, 2000, the Company generated net
cash flow from operations of $34.8 million. Net cash provided by and used in
investing and financing activities included $24.0 million for capital
expenditures, primarily revenue equipment and $14.0 million for the repurchase
of 1,093,669 shares of the Company's outstanding common stock.
Working capital at September 30, 2000 was $115.5 million, including $125.2
million in cash, cash equivalents, and investments. These investments generated
$4.2 million in interest income (primarily tax-exempt) during the nine months
ended September 30, 2000. The Company's policy is to purchase only investment
quality, highly liquid investments.
11
<PAGE>
Forward Looking Information
Except for the historical information contained herein, the discussion in
this quarterly report contains forward-looking statements that involve risk,
assumptions, and uncertainties that are difficult to predict. Words such as
"believe," "may," "could," "expects," "likely," variations of these words, and
similar expressions, are intended to identify such forward-looking statements.
The Company's actual results could differ materially from those discussed
herein. Forward-looking information is subject to certain risks and
uncertainties that could cause actual results to differ materially from those
projected. Without limitation, these risks and uncertainties include economic
factors such as recessions, downturns in customers' business cycles, surplus
inventories, inflation, fuel price increases, and higher interest rates: the
resale value of the Company's used revenue equipment; the availability and
compensation of qualified drivers; competition from trucking, rail, and
intermodal competitors; and the ability to identify acceptable acquisition
targets and negotiate, finance, and consummate acquisitions and integrate
acquired companies. Readers should review and consider the various disclosures
made by the Company in its press releases, stockholders reports, and public
filings, as well as the factors explained in greater detail in the Company's
annual report of Form 10-K.
12
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in securities
Not applicable
Item 3. Defaults upon senior securities
Not applicable
Item 4. Submission of matters to a vote of security holders
Not applicable
Item 5. Other information
Not applicable
Item 6. Exhibits and reports on Form 8-K
None filed during the third quarter of 2000.
Page of Method of
Exhibit No. Document Filing
3.1 Articles of Incorporation Incorporated by Reference
to the Company's
registration statement on
Form S-1, Registration
No. 33-8165, effective
November 5, 1986.
3.2 Bylaws Incorporated by Reference
to the Company's
registration statement on
form S-1, Registration No.
33-8165, effective
November 5, 1986.
13
<PAGE>
3.3 Certificate of Amendment To Incorporated by Reference
Articles of Incorporation to the Company's form
10-QA, for the quarter
ended June 30, 1997,
dated March 26, 1998.
4.1 Articles of Incorporation Incorporated by Reference
to the Company's
registration statement on
form S-1 Registration No.
33-8165, effective
November 5, 1986.
4.2 Bylaws Incorporated by Reference
to the Company's
registration statement on
form S-1, Registration No.
33-8165, effective
November 5, 1986.
4.3 Certificate of Amendment to Incorporated by Reference
Articles of Incorporation to the Company's Form
10-QA, for the quarter
ended June 30, 1997,
dated March 26, 1998.
9.1 Voting Trust Agreement dated Incorporated by Reference
June 6, 1997 among the Gerdin to the Company's
Educational Trusts and Larry Form 10-K for the year
Crouse voting trustee. ended December 31, 1997.
Commission file no.
0-15087.
10.1 Business Property Lease Filed herewith.
between Russell A. Gerdin
as Lessor and the Company
as Lessee, regarding the
Company's headquarters at
2777 Heartland Drive
Coralville, Iowa 52241
14
<PAGE>
10.2 Form of Independent Contractor Incorporated by Reference
Operating Agreement between the to the Company's Form
Company and its independent 10-K for the year ended
contractor providers of tractors December 31, 1993.
Commission file no.
0-15087.
10.3 Description of Key Management Incorporated by Reference
Deferred Incentive Compensation to the Company's Form
Arrangement 10-K for the year ended
December 31, 1993.
Commission file no.
0-15087.
21 Subsidiaries of the Registrant Incorporated by Reference
to the Company's Form
10-K for the year ended
December 31, 1997.
Commission file no.
0-15087.
27 Financial Data Schedule Filed herewith.
15
<PAGE>
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.
HEARTLAND EXPRESS, INC.
BY: /s/ John P. Cosaert
JOHN P. COSAERT
Vice-President
Finance and Treasurer
16
<PAGE>
AMENDED AND RESTATED LEASE AGREEMENT
THIS AGREEMENT, effective as of September 15, 2000, is a Lease Agreement by
and between Russell A. Gerdin, a resident of Iowa ("Lessor") and Heartland
Express, Inc. of Iowa, an Iowa corporation ("Lessee").
THE PARTIES AGREE:
1. Description. The Lessor hereby leases to the Lessee the following described
real estate and improvements, all located in the City of Coralville, State
of Iowa (the "Property"):
(a) Office building at 2777 Heartland Drive;
(b) Office building at 2757 Heartland Drive; and
(c) Storage building at 2757 Heartland Drive (north of Office Building).
2. Term. The term of this Agreement shall be five (5) years from the 1st day
of June 2000, to the 31st day of May 2005.
3. Rent. The Lessee shall pay to the Lessor as rent, at such address as the
Lessor may from time to time designate in writing, the sum of $1,498,125.00
in monthly installments of $24,968.75, each payable in advance on the first
day of each month commencing on the first day of the term of this
Agreement.
4. Option to Renew Lease. The Lessee has the option to renew the lease at the
end of the term for an additional five (5) years at the existing monthly
rent plus a cost-of-living allowance.
5. Use. The Lessee shall use the Property for general office space and
storage. The Lessee will not, without the written consent of the Lessor,
use Property for any other purpose. The Lessee shall maintain the Property
in compliance with all applicable federal, state, and local laws, rules,
regulations, and ordinances (collectively, "Laws") including specifically
Laws involving protection of the environment and worker safety. Lessee
shall indemnify, defend, and hold Lessor harmless from and against any
violation of Law as well as any liability arising from the use of or
presence on the Property of employees, agents, invitees, or other person
connected with Lessee.
6. Lessee's Obligations. The Lessee shall:
(a) Maintain, at Lessee's expense, the Property in good condition and
repair, including windows but excluding the other exterior of the
Property;
(b) Pay from time to time, as the utility payments shall become due, all
utility payments including water, gas, electricity, sewer, trash
removal and similar payments;
(c) Pay all real estate taxes and special assessments levied against the
Property:
(d) Maintain, at Lessee's expense, general liability coverage and any
liability coverage which Lessor may require as a result of the
particular use of the Property; and
(e) Maintain, at Lessee's expense, insurance with respect to the Property
against loss by fire, lightning, and other perils covered by the
standard all-risk endorsement, in an amount equal to at least 100% of
the full replacement value thereof,with no deduction for depreciation,
and shall maintain, at Lessee's expense, insurance against such other
hazards and in such amounts as is customarily carried by operators of
similar properties. Lessee shall name Lessor as an additional insured
upon the policies.
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7. Lessee's Improvements. The Lessee shall not make any improvements or
alterations to the Property without submitting plans and specifications for
such improvements or alterations to the Lessor and securing the Lessor's
written consent. The Lessee shall pay all costs of such improvements and
alterations, shall provide evidence of such payment to the Lessor upon
request, and shall hold the Lessor harmless from any costs, liens, or
damages. Any improvement constructed on the Property by the Lessee shall
become the property of the Lessor upon the expiration of the term of this
Agreement. Any trade fixtures installed by the Lessee may be removed by the
Lessee upon the expiration of the term of this Agreement, but the Lessee
shall repair any damage arising from the removal of such trade fixtures.
8. Waste. The Lessee shall not commit or permit any waste of the Property, nor
any public or private nuisance on the Property, nor any use of the Property
which is contrary to any law, governmental regulation or insurance policy
affecting or covering the Property or which may be dangerous to persons or
property. The Lessor may enter and inspect the premises at any reasonable
time.
9. Assignment. The Lessee shall not assign this Agreement, nor allow any
transfer of or lien upon the Lessee's interest in this Agreement by
operation of law, nor sublet any portion of the Property, nor permit the
use of any portion of the Property by anyone other than the Lessee and the
employees, agents and business invitees of the Lessee, without securing the
written consent of the Lessor.
10. Condemnation. If all or a substantial portion of the Property shall be
taken or condemned for any public use to purpose, so as to render the
Property unsuitable for occupancy, this Agreement shall terminate on the
date when possession shall by required for such use, or purpose, at the
option of the Lessee, and the rent shall be prorated to the date of such
termination. The award for such taking or condemnation shall be apportioned
between the Lessor and the Lessee, and the Lessee shall be entitled to any
portion of the award made for improvements constructed on the Property.
11. Default. Each of the following acts and omissions shall constitute a
default by the Lessee and a breach of this Agreement:
(a) Voluntary or involuntary bankruptcy, assignment for benefit of
creditors, reorganization or rearrangement under the Bankruptcy Code,
receivership, dissolution or the commencement of any action or
proceeding for the dissolution or liquidation of the Lessee whether
instituted by or against the Lessee or any other similar action or
proceeding.
(b) The failure of the Lessee to pay the rent for a period of 15 days
after the rent shall have become due.
(c) The failure of the Lessee to perform any other agreement to be
performed on the part of the Lessee for a period of 30 days after
written notice of such failure.
12. Remedies. Upon a default by the Lessee, the Lessor may reenter and recover
possession of the Property with or without terminating this Agreement. If
delivery of possession of the Property refused by the Lessee, the Lessor
shall be entitled to the appointment of a receiver for the Property by any
court of competent jurisdiction, as a matter of right, without regard to
the solvency or insolvency of the Lessee, to collect the rents and profits
from the Property and apply such rents and profits according to the orders
of the court.
13. Termination. Upon termination of this Agreement, the Lessee shall deliver
possession of the Property to the Lessor.
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14. Miscellaneous. No waiver by the Lessor of a default by the Lessee shall be
implied, and no express waiver shall be extended beyond the default and
period specified. No term or condition of this Agreement shall be construed
to have been waived by the Lessor, unless the Lessee shall have secured
such waiver from Lessor in writing. The invalidity or unenforceability of
any term or condition of the Agreement shall not prejudice the
enforceability of any other term or condition.
15. Modification. This Agreement shall not be amended or modified, except by a
written instrument executed by both the Lessor and the Lessee.
16. Headings. The paragraph headings of this Lease Agreement are solely for the
convenience of reference and shall not in any way modify the terms and
conditions thereof.
17. Binding Effect. This Agreement shall be binding upon the successors in
interest of the parties.
LESSOR: LESSEE:
Heartland Express, Inc. of Iowa
By:
Russell A. Gerdin Russell A. Gerdin, President
<PAGE>
