Old Dominion Freight Line reports Q1 net income up 180.1% year-over-year to US$21.6M on increase in shipments; revenue up 33% to US$422.7M

Andrew Rogers

THOMASVILLE, North Carolina , April 27, 2011 (press release) – Old Dominion Freight Line, Inc. (NASDAQ:ODFL - News) today announced financial results for the first quarter ended March 31, 2011. Revenue increased 33.0% for the quarter to $422.7 million from $317.8 million for the first quarter of 2010. Net income rose 180.1% to $21.6 million from $7.7 million, while earnings per diluted share increased 171.4% to $0.38 from $0.14. For the first quarter of 2011, Old Dominion’s operating ratio improved to 91.0% from 94.8% for the first quarter of 2010. The Company’s per share results reflect an increase in weighted average shares outstanding that resulted from the issuance of 1,516,379 shares in March 2011 under a previously announced “at the market” stock offering program. Currently, the Company has 57,443,324 shares of common stock outstanding. All prior-period share and per share data in this release have been adjusted to reflect the Company’s three-for-two stock split in August 2010.

“Old Dominion’s 33.0% year-over-year increase in revenue for the first quarter of 2011 was primarily driven by a 20.9% increase in shipments, both of which are the highest comparative quarterly increases we have achieved since going public in 1991,” said David S. Congdon, President and Chief Executive Officer of Old Dominion. “While our weight per shipment declined by 0.6%, our tonnage increased 20.3%, which was our third consecutive quarter of tonnage growth in excess of 20% over the prior-year comparative quarter. Revenue per hundredweight increased 11.1% over the prior-year quarter and reflected both improvements in our base pricing and an increase in our fuel surcharges. Excluding fuel surcharges, revenue per hundredweight increased 6.4% for the first quarter compared with the first quarter last year. Our revenue per hundredweight metrics also benefited from a 0.7% increase in our average length of haul and the 0.6% decline in weight per shipment.

“The combination of strong tonnage growth and significantly improved revenue yield produced substantial operating leverage that was primarily accountable for a 380 basis point improvement in our first-quarter operating ratio compared with the first quarter of 2010. The impact of this operating leverage was modestly offset by the costs associated with expanding our workforce to match our record growth in shipments. As a result, our measures of productivity for the quarter were mixed when compared with the prior-year period, with incremental improvements in pickup and delivery (“P&D”) shipments per hour and linehaul laden load averages but declines in P&D stops per hour and platform pounds per hour. Throughout the quarter and consistent with our long-term growth strategy, we continued to provide industry-leading service, with on-time deliveries nearing 99% and a cargo-claims ratio of 0.47%.”

Old Dominion’s capital expenditures for the first quarter of 2011 were approximately $58 million of its $265 million to $300 million capital budget for the year. These planned capital expenditures include $120 million to $140 million for real estate purchases and expansion projects at our existing facilities, subject to the availability of suitable real estate and the timing of construction projects. In addition, $130 million to $140 million of capital expenditures are planned for the purchase of tractors, trailers and other equipment, and $15 million to $20 million are planned for investments in technology.

Old Dominion remains well-positioned to fund its planned capital expenditures. In addition to continuing strong cash flow from operations, the Company’s total debt to capitalization improved to 28.1% at the end of the first quarter of 2011 from 28.9% at the end of 2010 and 34.0% at the end of the first quarter last year. In January 2011, Old Dominion completed a $95 million private placement of senior notes and used a portion of the net proceeds to pay off its revolving credit facility. In addition, the Company raised net proceeds of $48.4 million in March 2011 under its “at the market” stock offering program. As a result, at the end of the first quarter of 2011, the Company had $175.4 million of availability on its revolving credit facility and $88.1 million in cash and cash equivalents.

Mr. Congdon concluded, “After an exceptional performance for the first quarter of 2011, we are confident about Old Dominion’s continuing growth potential in 2011. Our consistent market share gains reflect the value of our high-quality, integrated and comprehensive services. We are also investing in future growth, as our capital expenditure plans clearly indicate, which should enhance our ability to deliver our proven value proposition of superior service at a fair and equitable price. We will continue to focus on organic growth opportunities to increase density within our service center network, thereby improving revenue yield. We also plan to further enhance our products and services to satisfy even more of our customers’ needs. In an industry characterized by increasing consolidation pressure, we also have the experience and resources to act on appropriate strategic opportunities.”

Old Dominion Freight Line, Inc. is a leading, less-than-truckload, non-union motor carrier providing regional, inter-regional and national LTL service and value-added logistics services. In addition to its core LTL services, the Company offers its customers a broad range of logistics services including ground and air expedited transportation, supply chain consulting, transportation management, truckload brokerage, container delivery and warehousing services. Through marketing and carrier relationships, the Company also offers door-to-door international freight services to and from all of North America, Central America, South America and the Far East.

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