OLD DOMINION FREIGHT LINE INC

Previous wording

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

Current wording

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

Previous wording

Revenue increased $85.5 million, or 6.1%, and $103.4 million, or 3.6%, in the second quarter and first six months of 2024, respectively, as compared to the same periods of 2023. LTL tonnage per day increased 1.9% in the second quarter of 2024 due primarily to increases in LTL shipments per day that were partially offset by a decrease in LTL weight per shipment. LTL tonnage per day decreased 0.7% for the first half of 2024 due primarily to a decrease in LTL weight per shipment, partially offset by an increase in LTL shipments per day.

Current wording

Revenue decreased $45.1 million, or 3.0%, in the third quarter of 2024 as compared to the same period of 2023 due to a decrease in volumes that was partially offset by an increase in LTL revenue per hundredweight. LTL tonnage per day decreased 4.8% in the third quarter of 2024 due primarily to a decrease in LTL shipments per day and a decrease in LTL weight per shipment. Revenue increased $58.4 million, or 1.3%, in the first nine months of 2024 as compared to the same period of 2023 due to an increase in LTL revenue per hundredweight that was partially offset by a decrease in volumes. LTL tonnage per day decreased 2.0% for the first nine months of 2024 due primarily to a decrease in LTL weight per shipment and a decrease in LTL shipments per day. Both the third quarter and first nine months of 2024 had one additional operating day compared to the same periods in 2023.

Previous wording

Our LTL revenue per hundredweight increased 4.4% and 4.2% in the second quarter and first six months of 2024, respectively, as compared to the same periods of 2023. Excluding fuel surcharges, LTL revenue per hundredweight increased 4.9% and 5.8% in the second quarter and first six months of 2024, respectively, as compared to the same periods in 2023 due primarily to the success of our long-term yield management strategy. Our consistent, cost-based approach to pricing focuses on offsetting our cost inflation while also supporting additional investment back into our business to expand capacity and enhance our technology.

Current wording

Our LTL revenue per hundredweight increased 1.5% and 3.3% in the third quarter and first nine months of 2024, respectively, as compared to the same periods of 2023. Excluding fuel surcharges, LTL revenue per hundredweight increased 4.6% and 5.3% in the third quarter and first nine months of 2024, respectively, as compared to the same periods in 2023 due primarily to the success of our long-term yield management strategy. Our consistent, cost-based approach to pricing focuses on offsetting our cost inflation while also supporting additional investments into our business to expand capacity and enhance our technology.

Previous 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.

Current wording

Revenue per day decreased 10.9% in October 2024 as compared to the same month last year due primarily to a 9.1% decrease in LTL tons per day and a 2.0% decrease in LTL revenue per hundredweight. The decrease in LTL tons per day resulted from an 8.9% decrease in LTL shipments per day and a 0.2% decrease in LTL weight per shipment. LTL revenue per hundredweight, excluding fuel surcharges, increased 3.2% as compared to the same month last year.

Previous wording

Salaries, wages and benefits increased $40.9 million, or 6.4%, in the second quarter of 2024 as compared to the second quarter of 2023, due to a $31.2 million increase in salaries and wages and a $9.7 million increase in employee benefit costs. Salaries, wages and benefits increased $57.3 million, or 4.4%, for the first six months of 2024 as compared to the same period of 2023, due to a $48.1 million increase in salaries and wages and a $9.2 million increase in employee benefit costs.

Current wording

Salaries, wages and benefits increased $17.4 million, or 2.6%, in the third quarter of 2024 as compared to the third quarter of 2023, due to a $8.3 million increase in salaries and wages and a $9.1 million increase in employee benefit costs. Salaries, wages and benefits increased $74.7 million, or 3.8%, for the first nine months of 2024 as compared to the same period of 2023, due to a $56.4 million increase in salaries and wages and a $18.3 million increase in employee benefit costs.

Previous wording

Our salaries and wages expenses were higher for both the second quarter and first six months of 2024 as compared to the same periods of 2023 resulting from the annual wage increase provided to employees in September 2023 and higher performance-based bonus compensation. In addition, our average number of active full-time employees increased 1.2% and 0.4% for the second quarter and first six months of 2024, respectively, as we balanced our workforce with current shipping trends.

Current wording

Our salaries and wages expenses were higher for both the third quarter and first nine months of 2024 as compared to the same periods of 2023, which was attributable to the annual wage increase provided to employees in September 2024 and 2023. In addition, our average number of active full-time employees increased 0.8% and 0.5% for the third quarter and first nine months of 2024, respectively, as we balanced our workforce with anticipated shipment trends.

Previous 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.

Current wording

Our productive labor costs, which include wages for drivers, platform employees, and fleet technicians, increased as a percent of revenue to 24.0% in both the third quarter and first nine months of 2024 as compared to 23.1% and 23.5% for the same periods of 2023. We continued to operate efficiently during the third quarter, despite the decrease in network density that generally resulted from the decline in volumes. Our P&D and platform shipments per hour both improved in the third quarter of 2024 as compared to the third quarter of 2023, which helped offset the reduction in our linehaul laden load factor. Our other salaries and wages as a percent of revenue also increased to 9.4% and 9.5% in the third quarter and first nine months of 2024, respectively, as compared to 8.8% and 9.1% for the same periods of 2023.

Previous wording

The costs attributable to employee benefits were higher for both the second quarter and first six months of 2024 as compared to the same periods of 2023 due primarily to the annual wage increase and the slight increase in our average number of active full-time employees. These increases were partially offset by lower costs for employee group health benefits. The decrease in group health benefit costs were due to decreases in both costs per claim and claim volumes in the second quarter and first six months of 2024 as compared to the same periods of 2023. Employee benefit costs as a percent of salaries and wages decreased to 37.2% and 36.4% for the second quarter and first six months of 2024, respectively, from 37.6% and 37.3% for the comparable periods of 2023.

Current wording

The costs attributable to employee benefits were higher for both the third quarter and first nine months of 2024 as compared to the same periods of 2023, due primarily to the annual wage increase and the slight increase in our average number of active full-time employees. As a result, our employee benefit costs as a percent of salaries and wages increased to 38.6% for the third quarter of 2024 from 37.3% in the comparable period of 2023 and decreased to 37.1% for the first nine months of 2024 from 37.3% in the comparable period of 2023. Our costs attributable to employee benefits for the third quarter of 2024 were also negatively impacted by higher costs associated with our group health and dental plans, which contributed to the increase in these costs as a percent of salaries and wages.

Previous 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.

Current wording

Operating supplies and expenses decreased $24.5 million and $48.7 million in the third quarter and first nine 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 20.5% and 12.4% in the third quarter and first nine 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 decreased 4.2% and 2.7% in the third quarter and first nine months of 2024, respectively, as compared to the same periods last year, due primarily to a decrease in miles driven. Our other operating supplies and expenses as a percent of revenue was relatively consistent in the third quarter of 2024 compared to the same period in 2023, but decreased in the first nine months of 2024 as compared to the same period of 2023. This year-to-date decrease is due primarily to lower maintenance and repair costs, as we improved the average age of our fleet by consistently executing on our capital expenditure programs.

Previous 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.

Current wording

Depreciation and amortization costs increased $2.6 million and $16.0 million in the third quarter and first nine 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 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.

Current wording

Our effective tax rate for the third quarter and first nine months of 2024 was 23.4% and 24.5%, respectively, as compared to 24.0% and 25.0% for the third quarter and first nine 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 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.

Current wording

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

Previous 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."

Current wording

The change in our cash flows used in investing activities during the first nine months of 2024 as compared to the first nine months 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 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.”

Current wording

The change in our cash flows used in financing activities during the first nine months of 2024 as compared to the first nine months 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

We have four primary sources of available liquidity: cash flows from operations, our existing cash and cash equivalents, available borrowings under our third amended and restated credit agreement with Wells Fargo Bank, National Association serving as administrative agent for the lenders, dated March 22, 2023 (the “Credit Agreement”), and our Note Purchase and Private Shelf Agreement with PGIM, Inc. (“Prudential”) and certain affiliates and managed accounts of Prudential, as amended by the First Amendment dated March 22, 2023 (as amended, the “Note Agreement”). The Credit Agreement and the Note Agreement are described in more detail below under “Financing Arrangements.” We believe we also have sufficient access to debt and equity markets to provide other sources of liquidity, if needed.

Current wording

We have four primary sources of available liquidity: cash flows from operations, our existing cash and cash equivalents, available borrowings under our third amended and restated credit agreement with Wells Fargo Bank, National Association serving as administrative agent for the lenders, dated March 22, 2023, as amended by the First Amendment dated August 28, 2024 (as amended, the “Credit Agreement”), and our Note Purchase and Private Shelf Agreement with PGIM, Inc. (“Prudential”) and certain affiliates and managed accounts of Prudential, as amended by the First Amendment dated March 22, 2023 and the Second Amendment dated August 28, 2024 (as amended, the “Note Agreement”). The Credit Agreement and the Note Agreement are described in more detail below under “Financing Arrangements.” We believe we also have sufficient access to debt and equity markets to provide other sources of liquidity, if needed.

Previous 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:

Current wording

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

Previous wording

Our capital expenditures vary based upon the change in the number and size of our service center facilities necessary to support our plan for long-term growth, our planned tractor and trailer replacement cycle, and forecasted tonnage and shipment growth. Expenditures for land and structures can be dependent upon the availability of land in the geographic areas where we are looking to expand. We historically spend 10% to 15% of our revenue on capital expenditures each year. We expect to continue to maintain a high level of capital expenditures in order to support our long-term plan for market share growth.

Current wording

Our capital expenditures vary based upon the change in the number and size of our service center facilities necessary to support our plan for long-term growth, our planned tractor and trailer replacement cycle, and forecasted tonnage and shipment growth. Expenditures for land and structures can be dependent upon the availability of land in the geographic areas where we are looking to expand. We historically spend 10% to 15% of our revenue on capital expenditures each year, and we generally expect to continue to maintain this level of capital expenditures in order to support our long-term plan for market share growth. There could be years, however, where our annual capital expenditures plan is above or below this range as we balance the size of our service center network and operating fleet with anticipated growth.

Previous 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.

Current 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.

Previous 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.

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.

Previous 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.

Current wording

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