OLD DOMINION FREIGHT LINE INC

Previous wording

Key financial and operating metrics for the three-month periods ended March 31, 2024 and 2023 are presented below:

Current wording

Key financial and operating metrics for the three- and six-month periods ended June 30, 2024 and 2023 are presented below:

Previous wording

Our financial results for the first quarter of 2024 include growth in revenue, net income and earnings per diluted share despite continued softness in the domestic economy. We improved our financial results for the quarter by continuing to execute our long-term strategic plan, which is centered on our ability to provide customers with superior service at a fair price. We also maintained our focus on operating efficiently and controlling our discretionary spending. Our operating ratio increased by 10 basis point to 73.5% for the first quarter, however, due primarily to an increase in our overhead expenses as a percent of revenue. We were still able to increase our net income and diluted earnings per share by 2.5% and 3.9%, respectively, for the first quarter of 2024 as compared to the same period last year.

Current wording

Our financial results for the second quarter and first six months of 2024 include growth in revenue, net income and earnings per diluted share, despite continued softness in the domestic economy. We improved our financial results for the second quarter and first six months of 2024 by continuing to execute our long-term strategic plan, which is centered on our ability to provide customers with superior service at a fair price. This has created an unmatched value proposition in our industry and allowed us to both win market share and improve our revenue quality. Our operating ratio improved in both the second quarter and first six months of 2024, primarily due to the quality of our revenue growth and continued focus on operating efficiencies. Our net income and earnings per diluted share increased by 10.2% and 11.3%, respectively, for the second quarter of 2024 and 6.4% and 8.0%, respectively, for the first six months of 2024 as compared to the same periods of 2023.

Previous wording

Revenue per day increased 6.3% in April 2024 compared to the same month last year. LTL tons per day increased 2.3%, due to a 3.3% increase in LTL shipments per day, partially offset by a 1.0% decrease in LTL weight per shipment. LTL revenue per hundredweight increased 4.2% as compared to the same month last year. LTL revenue per hundredweight, excluding fuel surcharges, increased 4.7% as compared to the same month last year.

Current wording

Revenue per day increased 4.6% in July 2024 as compared to the same month last year due primarily to a 5.7% increase in LTL revenue per hundredweight that was partially offset by a 0.9% decrease in LTL tons per day. The decrease in LTL tons per day resulted from a 2.2% decrease in LTL weight per shipment that was partially offset by a 1.3% increase in LTL shipments per day. LTL revenue per hundredweight, excluding fuel surcharges, increased 5.9% as compared to the same month last year.

Previous wording

Our productive labor costs, which include wages for drivers, platform employees, and fleet technicians, increased as a percent of revenue to 24.1% in the first quarter of 2024 as compared to 23.8% in the first quarter of 2023. This slight increase reflects our commitment to delivering superior service while also operating efficiently despite the decrease in volumes during the quarter. Our P&D shipments per hour increased during the first quarter of 2024 as compared to the first quarter of 2023. We had decreases, however, in our platform productivity metrics and our linehaul laden load factor. These metrics were negatively impacted by the ongoing expansion of our service center network as well as the decrease in our LTL weight per shipment. We were still able to reduce our total intercity miles, which allowed us to manage our linehaul costs as a percent of revenue while also reducing the number of gallons of diesel fuel consumed during the quarter. Our other salaries and wages as a percent of revenue increased to 9.7% in the first quarter of 2024 as compared to 9.2% in the first quarter of 2023.

Current wording

Our productive labor costs, which include wages for drivers, platform employees, and fleet technicians, decreased as a percent of revenue to 23.7% in the second quarter of 2024 and increased as a percent of revenue to 23.9% in the first six months of 2024 as compared to 23.8% for the same periods of 2023. While our P&D productivity metrics improved, we had decreases in our platform shipments per hour and our linehaul laden load factor. Our other salaries and wages as a percent of revenue also increased to 9.5% in the second quarter of 2024 and increased to 9.6% in the first six months of 2024 as compared to 9.3% for the same periods of 2023.

Previous wording

Operating supplies and expenses decreased $19.9 million, or 10.4%, in the first quarter of 2024 as compared to the first quarter of 2023. The cost of diesel fuel, excluding fuel taxes, represents the largest component of operating supplies and expenses, and can vary based on both average price per gallon and consumption. Our average cost per gallon of diesel fuel decreased 12.1% in the first quarter of 2024 as compared to the first quarter of 2023. We do not use diesel fuel hedging instruments; therefore, our costs are subject to market price fluctuations. Our gallons consumed decreased 4.4% in the first quarter of 2024 as compared to the first quarter of 2023 due primarily to a decrease in miles driven as well as an improvement in our miles per gallon. Our other operating supplies and expenses also decreased as a percent of revenue between the periods compared, due primarily to lower maintenance and repair costs, as we improve the average age of our fleet by consistently executing our capital expenditure programs.

Current wording

Operating supplies and expenses decreased $4.4 million and $24.3 million in the second quarter and first six months of 2024, respectively, as compared to the same periods of 2023, due to decreases in our costs for diesel fuel used in our vehicles and lower maintenance and repair costs. The cost of diesel fuel, excluding fuel taxes, represents the largest component of operating supplies and expenses, and can vary based on both average price per gallon and consumption. Our average cost per gallon of diesel fuel decreased 3.4% and 8.3% in the second quarter and first six months of 2024, respectively, as compared to the same periods last year. We do not use diesel fuel hedging instruments; therefore, our costs are subject to market price fluctuations. Our gallons consumed increased 0.6% in the second quarter of 2024, as compared to the same period in 2023, due to an increase in miles driven that was partially offset by an improvement in our miles per gallon. Our gallons consumed decreased 2.0% in the first six months of 2024, as compared to the same period in 2023, due to a decrease in miles driven as well as an improvement in our miles per gallon. Our other operating supplies and expenses as a percent of revenue decreased in the second quarter and first six months of 2024 as compared to the same periods of 2023 due to lower maintenance and repair costs, as we improved the average age of our fleet by consistently executing our capital expenditure programs.

Previous wording

Depreciation and amortization costs increased $8.6 million, or 11.3%, in the first quarter of 2024 as compared to the first quarter of 2023, due primarily to the increases in depreciation and amortization costs of the assets acquired as part of our 2023 and 2024 capital expenditure programs. We believe depreciation costs will continue to increase in future periods based on our 2024 capital expenditure plan. While our investments in real estate, equipment, and technology can increase our costs in the short-term, we believe these investments are necessary to support our continued long-term growth and strategic initiatives.

Current wording

Depreciation and amortization costs increased $4.8 million and $13.4 million in the second quarter and first six months of 2024, respectively, as compared to the same periods of 2023. The increases in depreciation and amortization were due primarily to the assets acquired as part of our 2023 and 2024 capital expenditure programs. We believe depreciation costs will increase in future periods based on our 2024 capital expenditure plan. While our investments in real estate, equipment, and technology can increase our costs in the short-term, we believe these investments are necessary to support our continued long-term growth and strategic initiatives.

Previous wording

Our effective tax rate for the first quarter of 2024 was 25.6% as compared to 25.8% for the first quarter of 2023. Our effective tax rate generally exceeds the federal statutory rate due to the impact of state taxes and, to a lesser extent, certain other discrete or non-deductible items.

Current wording

Our effective tax rate for both the second quarter and first six months of 2024 was 24.5% and 25.0%, respectively, as compared to 25.4% and 25.6% for both the second quarter and first six months of 2023. Our effective tax rate generally exceeds the federal statutory rate due to the impact of state taxes and, to a lesser extent, certain other non-deductible items.

Previous wording

The change in our cash flows provided by operating activities during the first quarter of 2024 as compared to the first quarter of 2023 was due primarily to increases in net income and depreciation, as well as fluctuations in certain working capital accounts.

Current wording

The change in our cash flows provided by operating activities during the first half of 2024 as compared to the first half of 2023 was due primarily to increases in net income and depreciation, as well as fluctuations in certain working capital accounts.

Previous wording

The decline in our cash flows used in investing activities during the first quarter of 2024 as compared to the first quarter of 2023 was due primarily to fluctuations in the timing of our expenditures under our capital expenditure programs. Capital expenditures for tractors and trailers were higher in the first quarter of 2023, due to delivery delays under our 2022 capital expenditure program. The majority of our equipment is generally delivered during the second and third quarters, and our deliveries under our 2024 capital expenditure program are in line with our historical trend. Changes in our capital expenditures are more fully described below in “Capital Expenditures.”

Current wording

The change in our cash flows used in investing activities during the first half of 2024 as compared to the first half of 2023 was impacted by the timing of expenditures under our 2023 and 2024 capital expenditure programs and the timing of purchases and maturities of short-term investments. Changes in our capital expenditures are more fully described below in “Capital Expenditures."

Previous wording

The decrease in our cash flows used in financing activities during the first quarter of 2024 as compared to the first quarter of 2023 was due primarily to lower repurchases of our common stock, the impact of which was partially offset by higher cash utilized for dividend payments to our shareholders. Our return of capital to shareholders is more fully described below under “Stock Repurchase Program” and “Dividends to Shareholders.”

Current wording

The change in our cash flows used in financing activities during the first half of 2024 as compared to the first half of 2023 was due primarily to higher repurchases of our common stock, as well as an increase in dividend payments to our shareholders. Our return of capital to shareholders is more fully described below under “Stock Repurchase Program” and “Dividends to Shareholders.”

Previous wording

The table below sets forth our net capital expenditures for property and equipment for the three-month period ended March 31, 2024 and the years ended December 31, 2023 and 2022:

Current wording

The table below sets forth our net capital expenditures for property and equipment for the six-month period ended June 30, 2024 and the years ended December 31, 2023 and 2022:

Previous wording

We currently estimate capital expenditures will be approximately $750 million for the year ending December 31, 2024. Approximately $350 million is allocated for the purchase of service center facilities, construction of new service center facilities or expansion of existing service center facilities, subject to the availability of suitable real estate and the timing of construction projects; approximately $325 million is allocated for the purchase of tractors and trailers; and approximately $75 million is allocated for investments in technology and other assets. We expect to fund these capital expenditures primarily through cash flows from operations, our existing cash and cash equivalents and, if needed, borrowings available under our Credit Agreement or Note Agreement. We believe our current sources of liquidity will be sufficient to satisfy our expected capital expenditures.

Current wording

approximately $325 million is allocated for the purchase of tractors and trailers; and approximately $75 million is allocated for investments in technology and other assets. We expect to fund these capital expenditures primarily through cash flows from operations, our existing cash and cash equivalents and, if needed, borrowings available under our Credit Agreement or Note Agreement. We believe our current sources of liquidity will be sufficient to satisfy our expected capital expenditures.

Previous wording

On July 28, 2021, we announced that our Board of Directors had approved a stock repurchase program authorizing us to repurchase up to an aggregate of $2.0 billion of our outstanding common stock (the “2021 Repurchase Program”). The 2021 Repurchase Program, which does not have an expiration date, began after completion of our prior repurchase program in January 2022. At March 31, 2024, our 2021 Repurchase Program had $140.2 million remaining authorized.

Current wording

On July 28, 2021, we announced that our Board of Directors had approved a stock repurchase program authorizing us to repurchase up to an aggregate of $2.0 billion of our outstanding common stock (the “2021 Repurchase Program”). The 2021 Repurchase Program began after completion of our prior repurchase program in January 2022 and was completed in May 2024.

Previous wording

On July 26, 2023, we announced that our Board of Directors had approved a new stock repurchase program authorizing us to repurchase up to an aggregate of $3.0 billion of our outstanding common stock. The new repurchase program, which does not have an expiration date, will be effective upon the completion of our 2021 Repurchase Program.

Current wording

On July 26, 2023, we announced that our Board of Directors had approved a stock repurchase program authorizing us to repurchase up to an aggregate of $3.0 billion of our outstanding common stock (the “2023 Repurchase Program”). The 2023 Repurchase Program, which does not have an expiration date, began after the completion of the 2021 Repurchase Program in May 2024. At June 30, 2024, our 2023 Repurchase Program had $2.63 billion remaining available. The amount available and uncommitted is $2.59 billion, which reflects the $40.0 million forward stock purchase contract under the ASR Agreement.

Previous wording

All references in this report to dividend amounts have been restated retroactively to reflect this stock split.

Current wording

All references in this report to dividend amounts have been restated retroactively to reflect this stock split. Split-adjusted per-share metrics may not recalculate precisely due to rounding.

Previous wording

Our Board of Directors also declared a cash dividend of $0.26 per share for the first quarter of 2024, and declared a cash dividend of $0.20 per share for each quarter of 2023.

Current wording

Our Board of Directors also declared a cash dividend of $0.26 per share for each of the first three quarters of 2024 and declared a cash dividend of $0.20 per share for each quarter of 2023.

Previous wording

Although we intend to pay a quarterly cash dividend on our common stock for the foreseeable future, the declaration and amount of any future dividend is subject to approval by our Board of Directors, and is restricted by applicable state law limitations on distributions to shareholders as well as certain covenants under our Credit Agreement and Note Agreement. We anticipate that any future quarterly cash dividends will be funded through cash flows from operations, our existing cash and cash equivalents, short-term investments, and, if needed, borrowings under our Credit Agreement or Note Agreement.

Current wording

Although we intend to pay a quarterly cash dividend on our common stock for the foreseeable future, the declaration and amount of any future dividend is subject to approval by our Board of Directors, and is restricted by applicable state law limitations on distributions to shareholders as well as certain covenants under our Credit Agreement and Note Agreement. We anticipate that any future quarterly cash dividends will be funded through cash flows from operations, our existing cash and cash equivalents and, if needed, borrowings under our Credit Agreement or Note Agreement.

Previous wording

The Series B Notes bear interest at 3.10% per annum and mature on May 4, 2027, unless prepaid. Our first principal payment of $20.0 million was paid on May 4, 2023. The remaining $80.0 million will be paid in four equal annual installments of $20.0 million through May 4, 2027. The Series B Notes are senior unsecured obligations and rank pari passu with borrowings under the Credit Agreement or other senior promissory notes issued pursuant to the Note Agreement.

Current wording

The Series B Notes bear interest at 3.10% per annum and mature on May 4, 2027, unless prepaid. The second principal payment of $20.0 million was paid on May 4, 2024. The remaining $60.0 million will be paid in three equal annual installments of $20.0 million through May 4, 2027. The Series B Notes are senior unsecured obligations and rank pari passu with borrowings under the Credit Agreement or other senior promissory notes issued pursuant to the Note Agreement.

Previous wording

For periods covered under the Credit Agreement, the applicable margin on SOFR loans and letter of credit fees were 1.000% and commitment fees were 0.09%.

Current wording

For periods covered under the Credit Agreement, the applicable margin on SOFR loans and letter of credit fees were 1.000% and commitment fees were 0.090%.

Previous wording

Agreement also include a provision limiting our ability to make restricted payments, including dividends and payments for share repurchases, unless, among other conditions, no defaults or events of default are ongoing (or would be caused by such restricted payment). We were in compliance with all covenants in our outstanding debt instruments for the period ended March 31, 2024.

Current wording

The Credit Agreement and Note Agreement contain customary covenants, including financial covenants that require us to observe a maximum ratio of debt to total capital and a minimum fixed charge coverage ratio. The Credit Agreement and Note Agreement also include a provision limiting our ability to make restricted payments, including dividends and payments for share repurchases, unless, among other conditions, no defaults or events of default are ongoing (or would be caused by such restricted payment). We were in compliance with all covenants in our outstanding debt instruments for the period ended June 30, 2024.

Previous wording

Our tonnage levels and revenue mix are subject to seasonal trends common in our industry, although other factors, such as macroeconomic changes, could cause variation in these trends. Our revenue and operating margins in the first and fourth quarters are typically lower than those during the second and third quarters due to reduced shipments during the winter months. We believe seasonal trends will continue to impact our business. Harsh winter weather, hurricanes, tornadoes, floods and other natural disasters can also adversely impact our performance by reducing demand and increasing operating expenses.

Current wording

Our tonnage levels and revenue mix are subject to seasonal trends common in our industry, although other factors, such as macroeconomic changes, could cause variation in these trends. Our revenue and operating margins in the first and fourth quarters are typically lower than those during the second and third quarters due to reduced shipments during the winter months. We believe seasonal trends will continue to impact our business; however, our tonnage trends could continue to be inconsistent with historical trends until there is a sustained improvement in the domestic economy. Harsh winter weather, hurricanes, tornadoes, floods and other natural disasters can also adversely impact our performance by reducing demand and increasing operating expenses.