SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended September 30, 2001 Commission File No. 0-15087 HEARTLAND EXPRESS, INC. (Exact Name of Registrant as Specified in Its Charter) Nevada 93-0926999 (State or Other Jurisdiction of (IRS Employer Incorporation or Organization) Identification Number) 2777 Heartland Drive, Coralville, Iowa 52241 (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code (319)545-2728 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] At September 30, 2001, there were 31,708,131 shares of the Company's $.01 par value common stock outstanding.
PART I FINANCIAL INFORMATION Page Number Item 1. Financial statements Consolidated balance sheets September 30, 2001 (unaudited) and December 31, 2000 2 - 3 Consolidated statements of income (unaudited) for the three and nine month periods ended September 30, 2001 and 2000 4 Consolidated statements of cash flows (unaudited) for the nine months ended September 30, 2001 and 2000 5 Notes to financial statements 6 Item 2. Management's discussion and analysis of financial condition and results of operations 7 - 11 Item 3. Quantitative and qualitative disclosures about market risk 11 PART II OTHER INFORMATION Item 1. Legal proceedings 12 Item 2. Changes in securities 12 Item 3. Defaults upon senior securities 12 Item 4. Submission of matters to a vote of 12 security holders Item 5. Other information 12 Item 6. Exhibits and reports on Form 8-K 12 - 13 1
HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS September 30, December 31, 2001 2000 ------------ ------------- (Unaudited) CURRENT ASSETS Cash and cash equivalents ................... $129,064,985 $ 128,027,076 Trade receivables, less allowance: $402,812 at both 2001 and 2000 .............. 27,364,115 24,954,681 Prepaid tires ............................... 4,168,816 3,780,644 Investments ................................. 23,875,039 -- Deferred income taxes ....................... 17,101,000 16,846,000 Other current assets ........................ 1,150,836 328,273 ------------ ------------- Total current assets ....... $202,724,791 $ 173,936,674 ------------ ------------- PROPERTY AND EQUIPMENT Land and land improvements .................. $ 4,185,288 $ 3,237,875 Buildings ................................... 8,532,621 8,532,621 Furniture and fixtures ...................... 1,777,558 2,604,400 Shop and service equipment .................. 1,556,774 1,459,862 Revenue equipment ........................... 131,083,677 129,572,317 ------------ ------------- $147,135,918 $ 145,407,075 Less accumulated depreciation & amortization. 48,873,067 56,329,103 ------------ ------------- Property and equipment, net ................ $ 98,262,851 $ 89,077,972 ------------ ------------- OTHER ASSETS ............................... $ 4,357,928 $ 5,040,358 ------------ ------------- $305,345,570 $ 268,055,004 ============ ============= The accompanying notes are an integral part of these consolidated financial statements. 2
HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY September 30, December 31, 2001 2000 ------------ ------------- (Unaudited) CURRENT LIABILITIES Accounts payable & accrued liabilities ..... $ 9,920,905 $ 6,712,053 Compensation & benefits .................... 6,122,557 5,132,589 Income taxes payable ....................... 7,003,185 4,618,882 Insurance accruals ......................... 36,025,668 35,657,944 Other ...................................... 3,994,477 3,308,925 ------------ ------------ Total current liabilities . $ 63,066,792 $ 55,430,393 ------------ ------------ DEFERRED INCOME TAXES ........................ $ 19,343,000 $ 17,491,000 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Capital Stock: Preferred, $.01 par value; authorized 5,000,000 share; none issured ............ $ -- $ -- Common, $.01 par value; authorized 395,000,000 shares; issued and Outstanding 31,708,131 and 25,366,582, respectively ................. 317,081 253,666 Additional paid in capital ................. 6,608,170 6,608,170 Retained earnings .......................... 216,010,527 188,271,775 ------------ ------------ $222,935,778 $195,133,611 ------------ ------------ $305,345,570 $268,055,004 ============ ============ The accompanying notes are an integral part of these consolidated financial statements. 3
HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) <TABLE> <CAPTION> Three months ended Nine months ended September 30, September 30, 2001 2000 2001 2000 <S> <C> <C> <C> <C> OPERATING REVENUE ................................... $ 73,917,920 $ 68,107,430 $ 221,092,616 $ 204,558,697 ------------- ------------- ------------- ------------- OPERATING EXPENSES: Salaries, wages, benefits ........................ $ 21,969,335 $ 18,722,396 $ 65,188,099 $ 53,705,524 Rent and purchased transportation ................ 16,474,914 18,013,117 50,664,406 58,246,522 Operations and maintenance ....................... 12,405,409 10,565,512 36,714,887 30,175,800 Taxes and licenses ............................... 1,586,127 1,516,106 4,489,242 4,276,661 Insurance and claims ............................. 1,726,834 1,591,330 5,382,925 5,090,063 Communications and utilities ..................... 698,956 774,854 2,320,610 2,169,272 Depreciation ..................................... 4,279,356 4,143,218 12,723,996 11,902,708 Other operating expenses ......................... 1,785,209 1,685,214 5,036,289 4,740,272 (Gain) loss on sale of fixed assets .............. 52,371 (23,235) 16,913 (1,516,913) ------------- ------------- ------------- ------------- $ 60,978,511 $ 56,988,512 $ 182,537,367 $ 168,789,909 ------------- ------------- ------------- ------------- Operating income ....................... $ 12,939,409 $ 11,118,918 $ 38,555,249 $ 35,768,788 Interest income ................................... 1,022,472 1,592,934 3,569,134 4,244,938 ------------- ------------- ------------- ------------- Income before income taxes ..................... $ 13,961,881 $ 12,711,852 $ 42,124,383 $ 40,013,726 Income taxes ...................................... 4,746,965 4,322,021 14,322,216 13,604,658 ------------- ------------- ------------- ------------- Net income ..................................... $ 9,214,916 8,389,831 $ 27,802,167 $ 26,409,068 ============= ============= ============= ============= Earnings per common share: Basic earnings per share ...................... $ 0.29 $ 0.26 $ 0.88 $ 0.82 ============= ============= ============= ============= Basic weighted average shares outstanding ......... 31,708,131 31,708,131 31,708,131 31,997,534 ============= ============= ============= ============= </TABLE> The accompanying notes are an integral part of these consolidated financial statements. 4
HEARTLAND EXPRESS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended September 30, 2001 2000 ------------- -------------- OPERATING ACTIVITIES Net Income ................................. $ 27,802,167 $ 26,409,068 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization ............ 13,307,583 12,641,155 Deferred income taxes .................... 1,597,000 230,000 Gain on sale of fixed assets ............. 16,913 (1,516,913) Changes in certain working capital items: Trade receivables ...................... (2,409,434) (3,294,077) Other current assets ................... (450,501) (669,901) Prepaid expenses ....................... (388,172) (1,655,156) Accounts payable and accrued expenses .. 4,462,893 2,018,864 Accrued income tax ..................... 2,384,303 653,127 ------------- ------------- Net cash provided by operating activities. $ 46,322,752 $ 34,816,167 ------------- ------------- INVESTING ACTIVITIES Proceeds from sale of prop. and equipment .. $ 182,795 $ 2,140,220 Capital additions .......................... (21,691,442) (24,026,206) Net purchases of municipal bonds ........... (23,875,039) (2,609,839) Other ...................................... 98,843 (432,726) ------------- ------------- Net cash used in investing activities ...... $ (45,284,843) $ (24,928,551) ------------- ------------- FINANCING ACTIVITIES Repurchase of common stock ................. $ -- $ (14,009,900) ------------- ------------- Net cash used in financing activities .... $ -- $ (14,009,900) ------------- ------------- Net increase (decrease) in cash and cash equivalents ....................... $ 1,037,909 $ (4,122,284) CASH AND CASH EQUIVALENTS Beginning of period ........................ 128,027,076 126,211,056 ------------- ------------- End of period .............................. $ 129,064,985 $ 122,088,772 ============= ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Income taxes ............................. $ 10,340,913 $ 12,721,531 Noncash investing activities: Book value of revenue equipment traded ... $ 9,250,948 $ 9,105,429 The accompanying notes are an integral part of these consolidated financial statements. 5
HEARTLAND EXPRESS, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (Unaudited) Note 1. Basis of Presentation The consolidated financial statements include the accounts of Heartland Express, Inc., a Nevada holding company, and its wholly-owned subsidiaries ("Heartland" or the "Company"). All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements have been prepared, without audit, in accordance with generally accepted accounting principles, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments which are necessary for a fair presentation of the results for the interim periods presented, such adjustments being of a normal recurring nature. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 2000 Consolidated Balance Sheet was derived from the audited balance sheet of the Company for the year then ended. It is suggested that these consolidated financial statements and notes thereto be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 2000. Results of operations in interim periods are not necessarily indicative of results to be expected for a full year. Note 2. Income Taxes Income taxes for the nine month period ended September 30, 2001 are based on the Company's estimated effective tax rates. The rate for the nine months ended September 30, 2001 and 2000 was 34%. Note 3. Common Stock On May 10, 2001, the Company effected a five-for-four common stock split in the form of a 25% stock dividend to stockholders of record as of May 21, 2001, payable on May 31, 2001. All share and per share information included in the accompanying financial statements have been adjusted to reflect the stock split. Note 4. Commitments and Contingencies The Company is involved in certain legal proceedings arising in the normal course of business. In the opinion of management, the Company's potential exposure under pending legal proceedings is adequately provided for in the accompanying consolidated financial statements. Note 5. Segment Information The Company has eight operating divisions; however, it has determined that it has one reportable segment. All of the divisions are managed based on similar economic characteristics. Each of the regional operating divisions provides short to medium-haul truckload carrier services of general commodities to a similar class of customers. In addition, each division exhibits similar financial performance, including average revenue per mile and operating ratio. As a result of the foregoing, the Company has determined that it is appropriate to aggregate its operating divisions into one reportable segment consistent with the guidance in SFAS No. 131. Accordingly, the Company has not presented separate financial information for each of its operating divisions as the Company's consolidated financial statements present its one reportable segment. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward Looking Information Except for the historical information contained herein, the discussion in this quarterly report contains forward-looking statements that involve risk, assumptions, and uncertainties that are difficult to predict. Words such as "believe," "may," "could," "expects," "likely," variations of these words, and similar expressions, are intended to identify such forward-looking statements. The Company's actual results could differ materially from those discussed herein. Forward-looking information is subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Without limitation, these risks and uncertainties include economic factors such as recessions, downturns in customers' business cycles, surplus inventories, inflation, fuel price increases, and higher interest rates: the resale value of the Company's used revenue equipment; the availability and compensation of qualified drivers, competition from trucking, rail, and intermodal competitors; and the ability to identify acceptable acquisition targets and negotiate, finance, and consummate acquisitions and integrate acquired companies. Readers should review and consider the various disclosures made by the Company in its press releases, stockholders reports, and public filings, as well as the factors explained in greater detail in the Company's annual report on Form 10-K. Results of Operations: The following table sets forth the percentage relationship of expense items to operating revenue for the periods indicated. Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 ------ ------ ------ ------ Operating revenue .................... 100.0% 100.0% 100.0% 100.0% ------ ------ ------ ------ Operating expenses: Salaries, wages, and benefits ...... 29.8% 27.5% 29.5% 26.2% Rent and purchased transportation .. 26.5 22.9 28.5 22.3 Operations and maintenance ......... 16.8 15.5 16.7 14.7 Taxes and licenses ................. 2.1 2.2 2.0 2.1 Insurance and claims................ 2.3 2.3 2.4 2.5 Communications and utilities........ 0.9 1.1 1.0 1.1 Depreciation ....................... 5.8 5.8 6.1 5.8 Other operating expenses ........... 2.4 2.5 2.3 2.3 (Gain) loss on sales of fixed assets 0.1 -- -- (0.7) ------ ------ ------ ------ Total operating expenses ........... 82.5% 83.7% 82.6% 82.5% ------ ------ ------ ------ Operating income ................. 17.5% 16.3% 17.4% 17.5% Interest income ...................... 1.4 2.3 1.6 2.1 ------ ------ ------ ------ Income before income taxes ....... 18.9% 18.6% 19.0% 19.6% Income taxes.......................... 6.4 6.3 6.4 6.7 ------ ------ ------ ------ Net income ....................... 12.5% 12.3% 12.6% 12.9% ====== ====== ====== ====== The following is a discussion of the results of operations of the three and nine months periods ended September 30, 2001 compared with the same periods in 2000, and the changes in financial condition through the third quarter of 2001. 7
Three Months Ended September 30, 2001 and 2000 Operating revenue increased $5.8 million (8.5%), to $73.9 million in the third quarter of 2001 from $68.1 million in the third quarter of 2000. The revenue increase was primarily attributable to the expansion of the Company's customer base as well as increased volume from existing customers. Operating revenue for both compared periods was also positively impacted by fuel surcharges assessed to customers. Salaries, wages, and benefits increased $3.2 million (17.3%), to $21.9 million in the third quarter of 2001 from $18.7 million in the third quarter of 2000. As a percentage of revenue, salaries, wages and benefits increased to 29.8% in 2001 from 27.5% in 2000. These increases were a result of increased reliance on employee drivers and a corresponding decrease in miles driven by independent contractors. The increase in employee driver miles was attributable to internal growth in the company tractor fleet. During the third quarter of 2001, employee drivers accounted for 68% and independent contractors 32% of the total fleet miles, compared with 61% and 39%, respectively, in the third quarter of 2000. The Company also experienced an increase in the frequency and severity of workers' compensation and health insurance claims in comparison to the 2000 period. Rent and purchased transportation decreased $1.5 million (8.5%), to $16.5 million in the third quarter of 2001 from $18.0 million in the third quarter of 2000. As a percentage of revenue, rent and purchased transportation decreased to 22.3% in the third quarter of 2001 from 26.5% in the third quarter of 2000. This reflects the Company's decreased reliance upon independent contractors. In addition, the extended period of high fuel prices has resulted in a reduction of the number of available independent contractors in the industry. During both periods, the Company has reimbursed independent contractors for the higher cost of fuel based on fuel surcharges collected from customers. Operations and maintenance increased $1.8 million (17.4%) to $12.4 million in the third quarter of 2001 from $10.6 million in the third quarter of 2000. As a percentage of revenue, operations and maintenance increased to 16.8% during the third quarter of 2001 from 15.5% in the third quarter of 2000. This increase is attributable to increased reliance on the company-owned fleet. Taxes and licenses increased $0.1 million (4.6%), to $1.6 million in the third quarter of 2001 from $1.5 million in the third quarter of 2000. As a percentage of revenue, taxes and licenses decreased to 2.1% in the third quarter of 2001 from 2.2% in the third quarter of 2000. Insurance and claims increased $0.1 million (8.5%), to $1.7 million in the third quarter of 2001 from $1.6 million in the third quarter of 2000. As a percentage of revenue, insurance and claims remained the constant at 2.3% for both compared periods. Insurance and claims expense will vary as a percentage of operating revenue from period to period based on the frequency and severity of claims incurred in a given period as well as changes in claims development trends. Communications and utilities decreased $0.1 million (9.8%), to $0.7 million in the 2001 period from $0.8 million in the 2000 period. As a percentage of revenue, communications and utilities decreased to 0.9% in the third quarter of 2001 from 1.1% in the third quarter of 2000. Depreciation increased $0.1 million (3.3%) to $4.3 million during the third quarter of 2001 from $4.2 million in the third quarter of 2000. As a percentage of revenue, depreciation decreased to 5.8% of revenue during the third quarter of 2001 from 6.1% during the third quarter of 2000. Depreciation increased because of increased reliance on company owned tractors. 8
Other operating expenses increased $0.1 million (6.0%) to $1.8 million during the third quarter of 2001 from $1.7 million during the third quarter 2000. As a percentage of revenue, other operating expenses decreased to 2.4% from 2.5% in the third quarter of 2000. Other operating expenses consists primarily of pallet cost, driver recruiting expense, goodwill, and administrative costs. Interest income decreased $0.6 (35.8%) to $1.0 million in the third quarter of 2001 from $1.6 million in the third quarter of 2000. Interest income earned is primarily exempt from federal taxes and therefore earned at a lower pre-tax rate. Interest earned has been negatively impacted by Federal Reserve Bank reductions in short term interest rates. The Company's effective tax rate was 34.0% for both compared periods. As a result of the foregoing, the Company's operating ratio (operating expenses as a percentage of operating revenue) was 82.5% during the third quarter of 2001 compared with 83.7% during the third quarter of 2000. Net income increased $0.8 million (9.8%), to $9.2 million during the third quarter of 2001 from $8.4 million during the third quarter of 2000. Nine Months Ended September 30, 2001 and 2000 Operating revenue increased $16.5 million (8.1%), to $221.1 million in the nine months ended September 30, 2001 from $204.6 million in the 2000 period. The revenue increase was primarily attributable to the expansion of the Company's customer base as well as increased volume from existing customers. Operating revenue for both periods was also positively impacted by fuel surcharges assessed to customers. Salaries, wages, and benefits increased $11.5 million (21.4%), to $65.2 million in the nine months ended September 30, 2001 from $53.7 million in the 2000 period. As a percentage of revenue, salaries, wages and benefits increased to 29.5% in 2001 from 26.2% in 2000. These increases were a result of increased reliance on employee drivers and a corresponding decrease in miles driven by independent contractors. In addition, the Company increased employee driver pay in March, 2000. The increase in employee driver miles was attributable to internal growth in the company tractor fleet. During the first nine months of 2001, employee drivers accounted for 67% and independent contractors 33% of the total fleet miles, compared with 58% and 42%, respectively, in the compared 2000 period. The Company also experienced an increase in the frequency and severity of workers' compensation and health insurance claims in comparison to the compared 2000 period. Rent and purchased transportation decreased $7.5 million (13.0%), to $50.7 million in the first nine months of 2001 from $58.2 million in the 2000 period. As a percentage of revenue, rent and purchased transportation decreased to 22.9% in the 2001 period from 28.5% in the compared 2000 period. This reflects the Company's decreased reliance upon independent contractors. The extended period of high fuel has resulted in a reduction of the number of available independent contractors in the industry. During both periods, the Company has reimbursed independent contractors for the higher cost of fuel based on fuel surcharges collected from customers. Operations and maintenance increased $6.5 million (21.7%) to $36.7 million in the nine months ended September 30, 2001 from $30.2 million in the 2000 period. As a percentage of revenue, operations and maintenance increased to 16.7% in the 2001 period from 14.7% during the 2000 period. This increase is attributable to increased reliance on the company-owned fleet. Taxes and licenses increased $0.2 million (5.0%), to $4.5 million in the first nine months of 2001 from $4.3 million in the compared 2000 period. As a percentage of revenue, taxes and licenses decreased to 2.0% in the 2001 period from 2.1% in the compared 2000 period. 9
Insurance and claims increased $0.3 million (5.8%), to $5.4 million in the first nine months of 2001 from $5.1 million in the compared 2000 period. As a percentage of revenue, insurance and claims decreased to 2.4% in the 2001 period from 2.5% in the 2000 period. Insurance and claims expense will vary as a percentage of operating revenue from period to period based on the frequency and severity of claims incurred in a given period as well as changes in claims development trends. Communications and utilities increased $0.1 million (7.0%), to $2.3 million in the 2001 period from $2.2 million in 2000 period. As a percentage of revenue, communications and utilities decreased to 1.0% in the 2001 period from 1.1% in the 2000 periods. Depreciation increased $0.8 million (6.9%) to $12.7 million during the first nine months of 2001 from $11.9 million in the compared 2000 period. As a percentage of revenue, depreciation remained constant at 5.8% of revenue for both compared periods. Depreciation expense increased due to growth in the company owned tractor fleet and the replacement of fully-depreciated trailers. Other operating expenses increased $0.3 million (6.3%) to $5.0 million during the first nine months 2001 from $4.7 million during the compared 2000 period. As a percentage of revenue, other operating expenses remained constant at 2.3% for both compared periods. Other operating expenses consists primarily of pallet cost, driver recruiting expense, goodwill, and administrative costs. Interest income decreased $0.6 (15.9%) to $3.6 million in the first nine months of 2001 from $4.2 million in the compared 2000 period. Interest income earned is primarily exempt from federal taxes and therefore earned at a lower pre-tax rate. Interest earned has been negatively impacted by the Federal Reserve Bank reductions in short-term interest rates. The Company's effective tax rate is 34.0% for both the nine months ended September 30, 2001 and 2000. As a result of the foregoing, the Company's operating ratio (operating expenses as a percentage of operating revenue) was 82.6% during the first nine months of 2001 compared with 82.5% during the first nine months of 2000. Net income increased $1.4 million (5.3%), to $27.8 million during the first nine months of 2001 from $26.4 million during the compared 2000 period. The Company's operating ratio and net income for the first nine months of 2000 were positively impacted by a $1.5 million gain recognized on the sale of two properties. Liquidity and Capital Resources The growth of the Company's business has required significant investments in new revenue equipment. Historically the Company has been debt-free, financing revenue equipment through cash flow from operations. The Company also obtains tractor capacity by utilizing independent contractors, who provide a tractor and bear all associated operating and financing expenses. The Company's primary source of liquidity at September 30, 2001, were funds provided by cash flow from operating activities. The Company believes its sources of liquidity are adequate to meet its current and projected needs. The Company expects to finance future growth in its company-owned fleet through cash flow from operations, cash, cash equivalents, and investments. Based on the Company's strong financial position (current ratio of 3.2 and no debt), management foresees no barrier to obtaining outside financing, if necessary, to continue with its growth plans. During the nine months ended September 30, 2001, the Company generated net cash flow from operations of $46.3 million. Net cash used in investing and financing activities included $21.7 million for capital expenditures, primarily revenue equipment. 10
Working capital at September 30, 2001 was $139.7 million, including $152.9 million in cash, cash equivalents, and investments. The cash and investments generated $3.6 million in interest income (primarily tax-exempt) during the nine months ended September 30, 2001. The Company's policy is to purchase only investment quality, highly liquid investments. Recently Issued Accounting Pronouncements In the third quarter, the Financial Accounting Standards Board (FASB) issued SFAS No. 142, Goodwill and Other Intangible Assets, that will be adopted by the Company on January 1, 2002. SFAS No. 142 requires that at least annually, the Company assess goodwill impairment by applying a fair value based test. With the adoption of SFAS No. 142, goodwill will no longer be subject to amortization resulting in a decrease in annualized operating expenses of $778,116. The Company is in the process of determining the impact of this new statement to the net book value for goodwill currently recorded of $609,126. Also, in the third quarter, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations, and SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets. SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. SFAS No. 144 addresses financial accounting and reporting for impairment or disposal of long-lived assets, superceding FASB Statement 121, Accounting for the Impairment of Long-lived Assets to be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual, and Infrequently Occurring Events and Transactions. SFAS No. 143 and SFAS No. 144 are effective for the Company as of January 1, 2003 and 2002, respectively. At present, the Company is currently assessing, but has not yet determined, the complete impact the adoption of SFAS No. 143 and SFAS No. 144 will have on its financial position and results of operations. Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company purchases only high quality, liquid investments. Primarily all investments as of September 30, 2001 have an original maturity of three months or less. The Company holds all investments to maturity and therefore, is exposed to minimal market risk related to its cash equivalents. The Company has no debt outstanding as of September 30, 2001 and therefore, has no market risk related to debt. As of September 30, 2001, the Company has no derivative financial instruments to reduce its exposure to fuel price fluctuations. 11
PART II OTHER INFORMATION Item 1. Legal proceedings Not applicable Item 2. Changes in securities Not applicable Item 3. Defaults upon senior securities Not applicable Item 4. Submission of matters to a vote of security holders Not applicable Item 5. Other information None Item 6. Exhibits and reports on Form 8-K The Company filed a report on Form 8-K on September 18,2001 reporting a stock repurchase program. Page of Method of Exhibit No. Document Filing 3.1 Articles of Incorporation Incorporated by Reference to the Company's registration statement on Form S-1, Registration No.33- 8165, effective November 5, 1986. 3.2 Bylaws Incorporated by Reference to the Company's registration statement on Form S-1, Registration No. 33- 8165, effective November 5, 1986. 3.3 Certificate of Amendment Incorporated by To Articles of Incorporation Reference to the Company's Form 10-QA, for the quarter ended June 30, 1997, dated March 26, 1998. 12
4.1 Articles of Incorporation Incorporated by Reference to the Company's registration statement on Form S-1, Registration No. 33- 8165, effective November 5, 1986. 4.2 Bylaws Incorporated by Reference to the Company's registration statement of Form S-1, Registration No. 33- 8165, effective November 5, 1986. 4.3 Certificate of Amendment Incorporated by to Articles of Incorporation Reference to the Company's Form 10-QA, for the quarter ended June 30, 1997, dated March 26, 1998. 10.1 Business Property Lease Incorporated by between Russell A. Gerdin Reference to the as Lessor and the Company Company's Form 10-Q as Lessee, regarding the for the year ended Company's headquarters at September 30, 2000. 2777 Heartland Drive, Commission file no. Coralville, Iowa 52241 0-15087. 10.2 Form of Independent Incorporated by Contractor Operating Reference to the Agreement between the Company's Form 10-K Company and its for the year ended independent contractor December 31, 1993. providers of tractors Commission file no. 0-15087. 10.3 Description of Key Incorporated by Management Deferred Reference to the Incentive Compensation Company's Form 10-K Arrangement for the year ended December 31, 1993. Commission file no. 0-15087. 13
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. HEARTLAND EXPRESS, INC. BY: /s/ John P. Cosaert_____ JOHN P. COSAERT Vice-President Finance and Treasurer 14