<PAGE>
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 March 31, 1996
[ ] 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 (910) 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 May 3, 1996, there were 8,345,608 shares of the registrant's Common
Stock ($.10 par value) outstanding.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------
MARCH 31, MARCH 31,
1996 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) (UNAUDITED) (UNAUDITED)
- --------------------------------------------------------------------- ------------------ -------------------
<S> <C> <C>
Revenue from operations $ 68,262 $ 57,744
------------------ -------------------
Operating expenses:
Salaries, wages and benefits 38,216 32,159
Purchased transportation 5,556 4,387
Operating supplies and expenses 7,198 5,060
Depreciation and amortization 3,772 3,173
Building and office equipment rents 1,679 1,352
Operating taxes and licenses 3,086 2,363
Insurance and claims 2,406 2,084
Communications and utilities 1,482 1,164
General supplies and expenses 2,724 2,422
Miscellaneous expenses 447 350
------------------ -------------------
Total operating expenses 66,566 54,514
------------------ -------------------
Operating income 1,696 3,230
------------------ -------------------
Other deductions:
Interest expense, net 546 275
Other expense, net 90 81
------------------ -------------------
Total other deductions 636 356
------------------ -------------------
Income before income taxes 1,060 2,874
Provision for income taxes 403 1,106
------------------ -------------------
Net income $ 657 $ 1,768
================== ===================
INCOME PER COMMON SHARE:
Net income $ 0.08 $ 0.21
Weighted average number of shares outstanding 8,345,608 8,364,314
</TABLE>
See notes to consolidated financial statements
2
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OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, December 31,
1996 1995
(In thousands, except share data) (UNAUDITED) (Audited)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,229 $ 986
Customer receivables, less allowances of $5,260
and $5,083, respectively 38,439 34,378
Other receivables 941 3,042
Tires on equipment 3,758 3,939
Prepaid expenses 3,843 5,221
Deferred income taxes 2,899 2,899
------------------ -------------------
Total current assets 51,109 50,465
------------------ -------------------
Property and equipment:
Revenue equipment 111,366 110,175
Land and structures 28,174 24,188
Other equipment 19,359 13,543
Leasehold improvements 530 508
------------------ -------------------
Total property and equipment 159,429 148,414
Less accumulated depreciation and amortization (64,043) (60,350)
------------------ -------------------
Net property and equipment 95,386 88,064
Other assets, less insurance policy loans of $1,733 at
March 31, 1996, and December 31, 1995, respectively 5,346 4,817
------------------ -------------------
Total assets $ 151,841 $ 143,346
================== ===================
</TABLE>
See notes to consolidated financial statements
3
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OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
MARCH 31, December 31,
1996 1995
(In thousands, except share data) (UNAUDITED) (Audited)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,932 $ 10,504
Compensation and benefits 6,463 5,095
Claims and insurance accruals 8,609 8,645
Other accrued liabilities 1,832 1,423
Income taxes payable 491 -
Current maturities of long-term debt 5,357 6,194
------------------ -------------------
Total current liabilities 38,684 31,861
------------------ -------------------
Long-term debt 25,457 24,022
Other non-current liabilities 7,862 8,383
Deferred income taxes 10,397 10,296
------------------ -------------------
Total long-term liabilities 43,716 42,701
------------------ -------------------
Stockholders' equity:
Common stock - $.10 par value, 25,000,000 shares
authorized, 8,345,608 shares outstanding at
March 31, 1996, and December 31, 1995, respectively 835 835
Capital in excess of par value 23,352 23,352
Retained earnings 45,254 44,597
------------------ -------------------
Total stockholders' equity 69,441 68,784
Commitments and contingencies - -
------------------ -------------------
Total liabilities and stockholders' equity $ 151,841 $ 143,346
================== ===================
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
OLD DOMINION FREIGHT LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------------
(In thousands) 1996 1995
- -------------------------------------------------------------------------- ---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 657 $ 1,768
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,772 3,173
Deferred income taxes 101 0
Loss (Gain) on sale of property and equipment 60 (424)
Changes in assets and liabilities:
Receivables, net (1,960) 252
Tires on equipment 181 405
Prepaid expenses and other assets 849 388
Accounts payable 5,428 636
Compensation, benefits and other accrued liabilities 1,777 1,271
Estimated liability for claims (36) (1,583)
Income taxes payable 491 72
Other liabilities (521) 1,490
---------------- ---------------
Net cash provided by operating activities 10,799 7,448
---------------- ---------------
Cash flows from investing activities:
Purchase of property and equipment (11,175) (3,094)
Proceeds from sale of property and equipment 21 592
---------------- ---------------
Net cash used in investing activities (11,154) (2,502)
---------------- ---------------
Cash flows from financing activities:
Principal payments under debt and capital lease agreements (1,852) (2,007)
Net proceeds (payments) on short-term revolving line of credit 2,450 (4,100)
---------------- ---------------
Net cash provided by (used in) financing activities 598 (6,107)
---------------- ---------------
Decrease in cash and cash equivalents 243 (1,161)
Cash and cash equivalents at beginning of period 986 2,393
---------------- ---------------
Cash and cash equivalents at end of period $ 1,229 $ 1,232
================ ===============
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated 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.
Certain prior year amounts have been reclassified to conform with the
current year presentation. 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, 1995. The results of operations for
the three months ended March 31, 1996, are not necessarily indicative
of the results for the entire fiscal year ending December 31, 1996.
2. Net income per share of common stock is based on the weighted average
number of shares outstanding during each period.
6
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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 ENDED MARCH 31, 1996, VS.
MARCH 31, 1995
EXPENSES AS A PERCENTAGE OF REVENUE FROM OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1996 1995
-------------------------------------------
<S> <C> <C>
Revenue from operations 100.0% 100.0%
----------------- -----------------
Operating expenses:
Salaries, wages and benefits 56.0 55.7
Purchased transportation 8.1 7.6
Operating supplies and expenses 10.5 8.8
Depreciation and amortization 5.5 5.5
Building and office equipment rents 2.5 2.3
Operating taxes and licenses 4.5 4.1
Insurance and claims 3.5 3.6
Communications and utilities 2.2 2.0
General supplies and expenses 4.0 4.2
Miscellaneous expenses 0.7 0.6
----------------- -----------------
Total operating expenses 97.5 94.4
----------------- -----------------
Operating income 2.5 5.6
Interest expense, net 0.8 0.5
Other expense, net 0.1 0.1
----------------- -----------------
Income before income taxes 1.6 5.0
Provision for income taxes 0.6 1.9
----------------- -----------------
Net income 1.0% 3.1%
================= =================
</TABLE>
7
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996, VERSUS THREE MONTHS ENDED MARCH 31, 1995
Net revenue for the first quarter of 1996 was $68,262,000, an increase of 18.2%,
compared to $57,744,000 for the first quarter of 1995. LTL tonnage increased
19.9% during the quarter primarily due to the expansion of the Company's
coverage into the Midwestern states of Minnesota, Wisconsin, Missouri, Indiana
and Kansas. In addition, the increased tonnage was also due to the October 1,
1995, acquisition of certain assets of Navajo LTL, Inc., a Colorado-based LTL
trucking firm with coverage primarily in the western half of the country.
Average LTL revenue per hundredweight was $11.04 for the quarter compared to
$10.88 for the first quarter of 1995, an increase of 1.5%. This increase
reflects a rate increase effective January 1, 1996. The rate per hundredweight
also was higher because of a 3.4% increase in the Company's average length of
haul.
Operating expenses as a percentage of net revenue (operating ratio) increased to
97.5% for the first quarter 1996 from 94.4% for the same period of 1995. The
increase in the operating ratio was due mainly to an increase in operating
supplies and expense to 10.5% of net revenue compared to 8.8% for the same
quarter of 1995. These higher costs were a result of an increase in fuel expense
to 4.8% of net revenue compared to 3.8% for the same quarter of the previous
year. In addition, outside equipment repairs increased to 1.5% of net revenue
from 1.0%. Many of these repairs were related to the harsh winter weather
experienced during the quarter.
Combined, purchased transportation and operating taxes and licenses increased to
12.6% of net revenue for the first quarter of 1996 compared to 11.7% for the
same quarter last year. During the quarter, the Company utilized more outside
purchased transportation in order to service some of the newly expanded
territory. Also, the Company experienced an increase in fuel tax and highway use
tax expense caused by higher state fuel tax rates per gallon, applicability of
additional use tax and an increase in fuel consumption due to the increased
length of haul.
Interest expense increased slightly to .8% of revenue in the quarter from .5%
for the same quarter of 1995. The increase was due primarily to an increase in
outstanding debt to $30,814,000 at March 31, 1996, from $12,518,000 at March 31,
1995.
Net income was $657,000 for the quarter ended March 31, 1996, a decrease of
62.8%, compared to $1,768,000 for the same quarter of the previous year. The
effective tax rate was 38.0% for the first quarter of 1996 compared to 38.5% for
the same period of 1995.
LIQUIDITY AND CAPITAL RESOURCES
Expansion in both the size and number of terminal facilities, as well as
maintaining the Company's asset turnover cycle (primarily tractors and
trailers), requires continued investment in property and equipment. In order to
accommodate this growth, the Company currently anticipates capital expenditures
of between $30,000,000 and $36,000,000 for 1996. This investment will be
financed principally by internally generated cash flow supplemented with
borrowings. Capital expenditures during the quarter ended March 31, 1996, were
approximately $11,175,000. Long-term debt including current maturities increased
to $30,814,000 at March 31, 1996, from $30,216,000 at December 31, 1995.
The Company generally meets its working capital needs with cash generated from
operations. Working capital requirements are generally higher during the first
and fourth quarters because of seasonal declines in revenue and annual payments
of property taxes, equipment tags and licenses. The Company currently maintains
a $40,000,000 credit agreement that provides a $25,000,000 line of credit and a
$15,000,000 letter of credit facility. The agreement is uncollateralized,
although total borrowings and issued letters of credit cannot exceed stated
percentages of certain unencumbered assets. Interest on the line of credit is
8
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charged at the lesser of the prime rate minus 1% or LIBOR plus .75%. In
addition, fees of .2% are charged on the unused portion of the $40,000,000 line
of credit and letter of credit facility, and a fee of .6% is charged on the
outstanding letters of credit. At March 31, 1996, there was $19,950,000
outstanding on the line of credit and $11,275,000 outstanding on the letter of
credit facility, which is required for self-insured retention reserves for
bodily injury, property damage and workers' compensation insurance. The Company
believes that there are sufficient credit lines and capacity to meet seasonal
and long-term financing needs.
INFLATION
Most of the Company's expenses are affected by inflation, which will generally
result in increased costs. During the first quarter, the effect of inflation on
the Company's results of operations was minimal.
SEASONALITY
The Company's operations are subject to seasonal trends common in the trucking
industry. Operating results in the first and fourth quarters are normally lower
due to reduced shipments during the winter months. The second and third quarters
are stronger due to increased demand for services during the spring and summer
months.
ENVIRONMENTAL
The Company is subject to federal, state and local environmental laws and
regulations, particularly relative to underground storage tanks ("UST's"). The
Company is in compliance with applicable environmental laws and regulations
relating to UST's and does not believe that the cost of future compliance would
have a material adverse effect on the Company's operations or financial
condition.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits: None.
b) Reports on Form 8-K: No reports on Form 8-K were filed during the
quarter ended March 31, 1996.
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: May 3, 1996 J. WES FRYE
J. Wes Frye
Treasurer (Principal Financial Officer)
DATE: May 3, 1996 JOHN P. BOOKER III
John P. Booker III
Controller (Principal Accounting Officer)
10
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,229
<SECURITIES> 0
<RECEIVABLES> 44,640
<ALLOWANCES> (5,260)
<INVENTORY> 3,758
<CURRENT-ASSETS> 51,109
<PP&E> 159,429
<DEPRECIATION> (64,043)
<TOTAL-ASSETS> 151,841
<CURRENT-LIABILITIES> 38,684
<BONDS> 0
0
0
<COMMON> 835
<OTHER-SE> 68,606
<TOTAL-LIABILITY-AND-EQUITY> 151,841
<SALES> 68,262
<TOTAL-REVENUES> 68,262
<CGS> 0
<TOTAL-COSTS> 66,566
<OTHER-EXPENSES> 90
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 546
<INCOME-PRETAX> 1,060
<INCOME-TAX> 403
<INCOME-CONTINUING> 657
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 657
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
