HEARTLAND EXPRESS INC 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Trading Symbol Our common stock trades on The NASDAQ Global Select Market under the symbol HTLD. As of February 15, 2021, we had 272 stockholders of record of our common stock. However, we estimate that we have a significantly greater number of stockholders because a substantial number of our shares of record are held by brokers or dealers for their customers in street names. Dividend Policy We currently intend to continue the quarterly cash dividend program. However, future payments of cash dividends will depend upon our financial condition, results of operations and capital requirements, as well as other factors deemed relevant by the Board of Directors. Stock Repurchase We have a stock repurchase program with 5.4 million shares remaining authorized for repurchase as of December 31, 2020. There were 1.5 million shares repurchased in the open market during the year ended December 31, 2020 and no shares repurchased in 2019. Shares repurchased during 2020 were accounted for as treasury stock. Shares repurchased during the three month period ended December 31, 2020 are as follows: (a) Total number of shares purchased (b) Average price paid per share (c) Total number of shares purchased as part of publicly announced plans or programs (d) Maximum number of shares that may yet be purchased under the plans or programs 6,187,085 October 1, 2020 - October 31, 2020 417,039 18.62 417,039 5,770,046 November 1, 2020 - November 30, 2020 162,038 18.53 162,038 5,608,008 December 1, 2020 - December 31, 2020 168,433 18.36 168,433 5,439,575 Subsequent to December 31, 2020, we have repurchased 0.7 million shares of our common stock for $12.9 million. This has reduced the remaining authorized shares for repurchase to 4.7 million shares as of February 15, 2021. The specific timing and amount of future repurchases will be determined by market conditions, cash flow requirements, securities law limitations, and other factors. Repurchases are expected to continue from time to time, as conditions permit, until the number of shares authorized to be repurchased have been bought, or until the authorization to repurchase is terminated, whichever occurs first. The share repurchase authorization is discretionary and has no expiration date. The repurchase program may be suspended, modified, or discontinued at any time without prior notice. Stock-Based Compensation In July 2011, a Special Meeting of Stockholders of Heartland Express, Inc. was held, at which meeting the approval of the Heartland Express, Inc. 2011 Restricted Stock Award Plan (the “Plan”) was ratified. The Plan authorized the issuance of up to 0.9 million shares and is administered by the Compensation Committee of our Board of Directors (the “Committee”). In accordance with and subject to the provisions of the Plan, the Committee has the authority to determine all provisions of awards of restricted stock, including, without limitation, the employees who will receive awards, the number of shares awarded to individual employees, the time or times when awards will be granted, restrictions and other conditions (including, for example, the lapse of time) to which the vesting of awards may be subject, and other terms and conditions and form of agreement to be entered into by us and employees subject to awards of restricted stock. Per the terms of the awards, employees receiving awards 25 will have all of the rights of a stockholder with respect to the unvested restricted shares including, but not limited to, the right to receive such cash dividends, if any, as may be declared on such shares from time to time and the right to vote such shares at any meeting of our stockholders. The following table summarizes, as of December 31, 2020, information about the Plan: Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Stock Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (a) (b) (c) Equity compensation plan approved by stockholders 59,700 — 117,886 Total 59,700 — 117,886 Column (a) represents unvested restricted stock awards outstanding under the Plan as of December 31, 2020. The weighted average stock price on the date of grant for outstanding restricted stock awards was $20.29, which is not reflected in column (b), because restricted stock awards do not have an exercise price. Column (c) represents the maximum aggregate number of shares of restricted stock that can be issued under the Plan as of December 31, 2020. We do not have any equity compensation plans that were not approved by stockholders. ITEM 6. SELECTED FINANCIAL DATA The selected consolidated financial data presented below is derived from our consolidated financial statements. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto within this Annual Report. 26 Year Ended December 31, (in thousands, except per share amounts) 2020 2019 (1) 2018 2017 (2) 2016 Statements of Income Data : Operating revenue $ 645,262 $ 596,815 $ 610,803 $ 607,336 $ 612,937 Operating expenses: Salaries, wages, and benefits 269,482 240,139 227,872 236,872 231,980 Rent and purchased transportation 4,643 7,984 18,700 30,002 23,485 Fuel 86,094 101,871 110,536 104,381 91,494 Operations and maintenance 27,647 24,479 27,143 29,609 26,159 Operating taxes and licenses 14,962 14,459 16,390 16,615 15,559 Insurance and claims 22,229 17,003 17,227 18,850 24,449 Communications and utilities 5,281 4,953 6,086 5,781 4,485 Depreciation and amortization 109,937 100,212 100,519 103,690 105,578 Other operating expenses 26,398 22,781 21,506 24,666 13,385 Gain on disposal of property and equipment (14,830) (31,341) (24,963) (26,674) (9,205) 551,843 502,540 521,016 543,792 527,369 Operating income 93,419 94,275 89,787 63,544 85,568 Interest income 842 3,955 2,130 1,129 481 Interest expense — (1,052) — (175) — Income before income taxes 94,261 97,178 91,917 64,498 86,049 Federal and state income (benefit) taxes 23,455 24,211 19,240 (10,675) 29,663 Net income $ 70,806 $ 72,967 $ 72,677 $ 75,173 $ 56,386 Weighted average shares outstanding (3) Basic 81,388 81,980 82,378 83,298 83,297 Diluted 81,444 82,024 82,410 83,336 83,365 Earnings per share Basic $ 0.87 $ 0.89 $ 0.88 $ 0.90 $ 0.68 Diluted $ 0.87 $ 0.89 $ 0.88 $ 0.90 $ 0.68 Dividends declared per share $ 0.08 $ 0.08 $ 0.08 $ 0.08 $ 0.08 Balance Sheet data : Net working capital $ 121,970 $ 88,407 $ 167,813 $ 95,514 $ 136,577 Total assets $ 951,176 $ 898,931 $ 806,213 $ 789,127 $ 738,228 Long-term debt (4) $ — $ — $ — $ — $ — Stockholders' equity $ 724,334 $ 684,659 $ 615,972 $ 574,645 $ 505,826 (1) We acquired 100% of the outstanding stock of Millis Transfer in August 2019. Therefore, our operating results for the year ended December 31, 2019, include the operating results of Millis Transfer for only the period of August 26, 2019 to December 31, 2019. (2) We acquired 100% of the outstanding stock of IDC in July 2017. Therefore, our operating results for the year ended December 31, 2017, include the operating results of IDC for only the period of July 6, 2017 to December 31, 2017. (3) The difference between basic and diluted weighted average shares outstanding is due to the effect of unvested restricted stock granted under the 2011 Restricted Stock Award Plan. (4) During 2013 we entered into an unsecured reducing line of credit agreement and was later amended to provide an unsecured revolving line of credit. Maximum borrowing capacity as of December 31, 2020 was $100.0 million. Based on outstanding letters of credit, we had available borrowing capacity of $88.5 million under such line of credit. 27