The decline in operating cash flow in Q1 2024 was primarily due to a **$23.2 million reduction in net income net of non-working capital items** combined with a **$12.3 million decrease in cash provided by working capital items**, which together contributed to the steep drop in net cash provided by operating activities from Q1 2023 to Q1 2024.  **[0000799233-24-000020_htld-20240331.htm:4]** **[0000799233-24-000020_htld-20240331.htm:29]** 

Why did operating cash flow decline so steeply in Q1 2024?

The sharp decrease in capital expenditures in Q1 2024 was primarily due to a **low volume of normal tractor and trailer fleet replacement activity** compared to the previous year. Additionally, the company shifted its focus toward **reducing capital expenditures** and prioritizing **debt repayment** following its recent acquisitions, contributing further to the lower spending levels.  **[0000799233-24-000020_htld-20240331.htm:4]** **[0000799233-24-000020_htld-20240331.htm:23]** **[0000799233-24-000018_htld2024q1earningsrelease.htm:0]** **[0000799233-24-000020_htld-20240331.htm:29]** 

What caused the sharp decrease in capital expenditures in Q1 2024?

The significantly higher capital expenditures in **FY 2023** were primarily driven by **strategic acquisitions**—including the integrations of Smith Transport and Contract Freighters, Inc. (CFI)—which necessitated additional investments, **real estate portfolio upgrades** involving the divestiture of non-aligned assets and reinvestment in terminal upgrades, and **cyclical industry challenges** that led the company to enhance its operational readiness in anticipation of improved freight demand by mid-to-late 2024.  **[0000799233-24-000005_htld-20231231.htm:113]** **[0000799233-24-000005_htld-20231231.htm:77]** **[0000799233-24-000002_a2023q4earningsrelease.htm:0]** 

What factors led to significantly higher capital expenditures in FY 2023?

**In Q1 2024, net income turned negative due to a combination of adverse factors. The company experienced **weak freight demand** caused by excess industry capacity, which led to a drop in total miles driven. This was accompanied by a **decrease in fuel surcharge revenue by $13.4 million (27.1%)** as a result of lower diesel prices and fewer loaded miles. Additionally, **operating cost inflation**, including a **32.5% increase in insurance and claims costs** and an **8.2% rise in operations and maintenance expenses**, further strained profitability. Strategic changes targeting unprofitable customers and freight lanes, compounded by **unfavorable weather conditions** and a deterioration in the operating ratio from **93.1% in Q1 2023 to 105.3% in Q1 2024**, collectively contributed to a **$27.7 million swing** from a previous profit to a net loss in Q1 2024.  **[0000799233-24-000005_htld-20231231.htm:113]** **[0000799233-24-000020_htld-20240331.htm:4]** **[0000799233-24-000018_htld2024q1earningsrelease.htm:0]**  **

Why did net income turn negative in Q1 2024?

The dramatic reversal was primarily driven by the **increased volume of restricted stock awards granted** and the **vesting conditions** associated with those awards. In 2023, the company granted **118.9 thousand awards** with a weighted average grant date fair value of **$14.53**, significantly higher than the **106.0 thousand awards** granted in 2022. This higher volume and the timing of expense recognition due to varying vesting terms directly impacted the amount recognized in Q4 2023, leading to the noted reversal in stock‐based compensation expense.  **[0000799233-24-000005_htld-20231231.htm:133]** 

What drove the dramatic reversal in stock-based compensation expense in Q4 2023?

64b233e19fbd52298abad01bf5a4515a9eca275d11968c7056a7519fde7af760

The noticeable jump in **cash and cash equivalents** for Q3 2024 is primarily driven by several factors. Firstly, HTLD generated **$106.6 million** from operating activities during the first nine months of 2024, which substantially boosted inflows despite outflows. Additionally, while the company made significant **debt repayments of $94.0 million** and spent on **stock repurchases ($7.3 million) and dividend payments ($3.2 million)**, these were offset by net gains in investing activities and overall strong operational cash flow, resulting in a **net increase of $3.2 million** in cash balances during the period.  **[0000799233-24-000041_htld-20240930.htm:25]** **[0000799233-24-000038_htld2024q3earningsrelease.htm:2]** **[0000799233-24-000041_htld-20240930.htm:5]** 

Why did Cash and cash equivalents jump noticeably in Q3 2024?

The sharp decline in long‑term debt in Q3 2024 was driven by **strategic debt repayment activities**. The company repaid **$94.0 million** in debt and financing leases during the first nine months of 2024, which significantly reduced its long‑term debt and finance lease liabilities less the current portion. Additionally, it reduced acquisition-related debt from previous purchases such as Smith Transport and Contract Freighters, and focused on lowering its variable rate term debt and fixed‑rate equipment financing liabilities to strengthen its financial health.  **[0000799233-24-000041_htld-20240930.htm:2]** **[0000799233-24-000038_htld2024q3earningsrelease.htm:2]** **[0000799233-24-000038_htld2024q3earningsrelease.htm:0]** 

What drove the sharp decline in long-term debt in Q3 2024?

Total assets were significantly lower in Q3 2024 primarily due to a reduction in **property and equipment, net** as a result of **depreciation** and a **low volume of fleet replacement activity**, along with declines in **current assets** (including **trade receivables** and **prepaid tires**) and a decrease in **operating lease right of use assets**. These changes collectively led to a decline of **$148,193 thousand** when compared to the previous period.  **[0000799233-24-000041_htld-20240930.htm:2]** **[0000799233-24-000038_htld2024q3earningsrelease.htm:5]** 

Why are total assets significantly lower in Q3 2024?

The drop in **Additional Paid-In Capital** in Q3 2024 is primarily due to **stock-based compensation adjustments**, which led to a net reduction of **$1,018 thousand** during the quarter.  **[0000799233-24-000041_htld-20240930.htm:4]** 

What explains the drop in additional paid-in capital in Q3 2024?

8b527f19ffa85d2653738e610d6916d0e095ad5dda8cde90ead6bce39be7c041

The **operating revenue declined in Q3 2024** primarily due to a **weak freight environment** that reduced total miles driven, a **significant drop in fuel surcharge revenue**—from **$42,928 thousand** in Q3 2023 to **$32,820 thousand** in Q3 2024 (about a **23.5% decline**)—and **strategic changes** that targeted unprofitable customers and freight lanes to support long-term profitability.  **[0000799233-24-000038_htld2024q3earningsrelease.htm:1]** **[0000799233-24-000041_htld-20240930.htm:30]** 

Why did Operating Revenue decline in Q3 2024?

The operating income turned negative in Q1 2024 primarily due to a **sharp decline in operating revenue**—a drop of **$60,596 thousand**—combined with a **disproportionately smaller decrease in operating expenses** (a reduction of **$23,323 thousand**) which resulted in a much higher operating ratio. Additionally, increased costs from **higher empty mile moves** amid weak freight demand, **rising operating cost inflation** (notably in insurance and claims), and integration expenses from recent acquisitions further pressured the margins, collectively driving the operating income to turn negative.  **[0000799233-24-000018_htld2024q1earningsrelease.htm:0]** **[0000799233-24-000018_htld2024q1earningsrelease.htm:3]** **[0000799233-24-000020_htld-20240331.htm:22]** 

What drove the operating income to turn negative in Q1 2024?

The net income swing in Q1 2024 from a **net profit of $12,612K** in Q1 2023 to a **net loss of $15,108K** is mainly due to several factors. **Weak freight demand** resulted in lower total miles driven and diminished operating revenue. Additionally, there was a **significant operating revenue decline** with a decrease of **$60.6 million (18.3%)**, including a drop in both trucking and fuel surcharge revenues. The company also experienced **higher operating expenses**, leading to a worsened operating ratio (rising from **93.1% to 105.3%**), and inflationary pressures increased costs such as salaries, wages, and benefits. Strategic adjustments, including the reduction of unprofitable freight and avoidance of unsustainable freight rates, along with **adverse weather conditions**, further contributed to the decline in profitability.  **[0000799233-24-000018_htld2024q1earningsrelease.htm:0]** **[0000799233-24-000020_htld-20240331.htm:24]** 

Why did net income swing from profit to loss in Q1 2024?

The EPS decline in Q1 2024 was primarily driven by **weak freight demand and excess capacity**, **operating cost inflation** (including higher expenses such as insurance and claims), and a **significant decline in operating revenues** due to reduced freight volumes and lower fuel surcharge incomes. Additionally, strategic decisions to avoid lowering freight rates, the impact of **acquisition-related debt and interest expenses**, along with **operational challenges** such as unfavorable weather and integration issues with recent acquisitions, also contributed to the decline.  **[0000799233-24-000018_htld2024q1earningsrelease.htm:0]** **[0000799233-24-000018_htld2024q1earningsrelease.htm:3]** 

What factors contributed to the EPS decline in Q1 2024?

9c1eaf912ae0365896929f11a74a4ffa7e3491b7f74bb5f6f4c0b2cd557b2f80

098791bbecffa00566f8d2382be975190db041c9bdb7085060c42af4953a2a2e

OPERATING REVENUE (USD, thousands)

OPERATING EXPENSES (USD, thousands)

Salaries, wages, and benefits (USD, thousands)

Rent and purchased transportation (USD, thousands)

Fuel (USD, thousands)

Operations and maintenance (USD, thousands)

Operating taxes and licenses (USD, thousands)

Insurance and claims (USD, thousands)

Communications and utilities (USD, thousands)

Depreciation and amortization (USD, thousands)

Other operating expenses (USD, thousands)

Gain on disposal of property and equipment (USD, thousands)

Operating (loss) income (USD, thousands)

Interest income (USD, thousands)

Interest expense (USD, thousands)

(Loss) income before income taxes (USD, thousands)

Federal and state income taxes (benefit) (USD, thousands)

Net (loss) income (USD, thousands)

Comprehensive (loss) income (USD, thousands)

Net (loss) income per share - Basic (USD)

Net (loss) income per share - Diluted (USD)

Weighted average shares outstanding - Basic (thousands)

Weighted average shares outstanding - Diluted (thousands)

Dividends declared per share (USD)

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43ee38b879faf81bfb06ce3b0cbd4c1b651ecd555d58c7175af9b8d6e58856dd

Current Assets (USD, thousands)

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (USD, thousands)

Goodwill (USD, thousands)

Intangible Assets (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Short-term Debt (USD, thousands)

Accrued Expenses (USD, thousands)

Non-Current Liabilities (USD, thousands)

Long-term Debt (USD, thousands)

Lease Liabilities (USD, thousands)

Deferred Tax Liabilities (USD, thousands)

Shareholders' Equity (USD, thousands)

Retained Earnings (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

f6dd8b6bc0764b54c5978dc85550007e9782ec4b15aa99af10399ce5d40e582e

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

Selling, General, and Administrative Expenses (USD, thousands)

Research and Development (R&D) (USD, thousands)

Depreciation and Amortization (D&A) (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

Earnings Per Share (EPS) - Basic (USD)

Earnings Per Share (EPS) - Diluted (USD)

6b9ef365807992e2ccd64c3fb73383b4888f804cb41e0bb73f67c6adb1128f2b

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

b18f214b0f1562fe1c76e36dc592d8845e512720fdcdb83fe54b9513d6f80358

Fuel Surcharge Revenue

Accessorial, Brokerage, and Other

Operating Revenue Excl. Fuel

Total Revenue

3fd17aeda6cfa791510f7788e7aebc610cb1d67dfc5eef490687aaa128cdbc51

HEARTLAND EXPRESS (HTLD)

Financials