Old Dominion posts lower 4Q, full-year net income

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Old DominionOld Dominion Freight Line Inc. on Thursday, Jan. 28, announced financial results for the fourth quarter and year ended Dec. 31, 2009.

Revenue for the quarter was $310.9 million compared with $335.8. Net income was $9.7 million compared with $11.0 million. Old Dominion’s operating ratio was 93.9 percent versus 93.2 percent.

Revenue for 2009 was $1.25 billion compared with $1.54 billion for 2008. Net income was $34.9 million compared with $68.7 million. The company’s operating ratio was 94.3 percent compared with 91.6 percent.

“Consistent with our results throughout 2009, Old Dominion continued to perform relatively well during the fourth quarter despite the weak economic environment,” said Earl Congdon, executive chairman of the Thomasville, N.C.-based company. “Once again we produced solid profitability and continued to improve the productivity of our linehaul, pickup-and-delivery and dock operations. Although our tonnage declined 4.4 percent as compared with the fourth quarter of 2008, the rate of decline was much lower than the double-digit declines experienced for the preceding three quarters of 2009. Year-over-year tonnage also improved slightly in December, which was the first month of 2009 without a decline.”

Congdon said Old Dominion’s revenue for the fourth quarter reflects the tonnage decline and a reduction in the company’s fuel surcharges due to the decrease in the average price of diesel fuel as compared to the fourth quarter of 2009. “Although industry-wide pricing continued to be highly competitive, we remained committed to our yield management strategies,” he said. “We expect the company’s performance for the fourth quarter will again compare favorably with our industry peer group. We believe we have differentiated Old Dominion from its competitors by achieving outstanding service performance throughout the economic downturn. We expect this continued service commitment will enhance our prospects for producing stronger financial results as the economic environment improves.”

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Congdon said Old Dominion completed 2009 with a strong balance sheet. “Our long-term debt-to-total capitalization ratio was 34.0 percent at year end, and we had available borrowing capacity of $109.7 million on our revolving credit facility,” he said. “We completed 2009 with capital expenditures of approximately $211 million, which included the relocation of five service centers to larger facilities during the fourth quarter and 27 for the year. We also opened four new service centers during 2009, completing the year with a total of 210. We expect our capital expenditures for 2010 to total $90 million to $100 million, reflecting reduced equipment and real estate purchases, and we expect to fund these expenditures primarily through cash provided by operating activities.”

Congdon said the company saw signs of market stabilization in the fourth quarter of 2009, although industry demand remains significantly below pre-recession levels and overcapacity in the industry persists. “Since we have limited visibility with regard to the competitive landscape or the prospect of an economic recovery in 2010, we will continue to balance the investment in our expansion plans carefully against our profit objectives,” he said. “However, we plan to maintain the operating capacity and capital to act decisively on industry consolidation and strategic growth opportunities. We believe the strength Old Dominion has demonstrated in this economic downturn has positioned us well competitively to take advantage of an improving economic and industry environment.”