Old Dominion Freight Line today, April 26, announced financial results for the first quarter ended March 31. Revenue was $319.9 million for the quarter, a 9.7 percent increase from $291.6 million for the first quarter of 2006. Net income for the first quarter of 2007 was $13.6 million, compared with $13.0 million for the first quarter of 2006. Old Dominion’s operating ratio increased to 92.2 percent for the first quarter of 2007 from 91.9 percent for the first quarter of 2006.
“Old Dominion’s results for the first quarter reflect a difficult operating environment due to slower domestic economic growth and harsh winter weather,” said Earl E. Congdon, chairman and chief executive officer of Thomasville, N.C.-based Old Dominion. “Despite these challenges, Old Dominion increased its revenue by 9.7 percent through a 7.4 percent increase in tonnage and 1.4 percent improvement in revenue per hundredweight.” Although the increased tonnage improved service center and linehaul density, the improved efficiency was not sufficient to offset increased operating expenses, resulting in a 30 basis point increase in the company’s operating ratio for the quarter, Congdon said.
“While we believe the economic environment will remain challenging during the second quarter, we remain committed to our long-term growth objectives that include steady geographic expansion through the opening of new service centers and accretive acquisitions,” Congdon said. Old Dominion recently announced a definitive agreement to purchase selected assets from Priority Freight Lines, which operates eight LTL service centers in Washington, Oregon, Idaho and Utah.
“Upon the completion of this transaction, which we expect to occur later this month, we plan to operate three of these service centers located in Yakima and Pasco, Washington, and Medford, Oregon, while consolidating the remainder of Priority Freight’s operations into our existing network,” Congdon said. “As a result of this acquisition, we will initiate full-state coverage in Washington, the 38th state with such coverage, and enhance our direct service in Oregon. We will also increase the number of our service centers in operation to 187 from 182 at December 31, 2006, with the addition of these three service centers and the West Atlanta, Georgia, and Cedar Rapids, Iowa, service centers that we opened in the first quarter.”
Congdon said Old Dominion’s cautious near-term outlook does not diminish the company’s opportunities to achieve long-term secular growth. “We will continue pursuing these opportunities from our strong, differentiated market position as a single-source, nonunion provider of comprehensive and high-quality regional and interregional LTL services,” he said.