Heartland Express
(NASDAQ:HTLD)
CEO: Mike Gerdin
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Juan Costello: Good day from Wall Street, this is Juan Costello, Senior Analyst at the Wall Street Reporter and joining us today is Mike Gerdin the CEO for Heartland Express. The company trades on NASDAQ and their Ticker Symbol is HTLD. Thanks for joining us today, Mike.
Mike Gerdin: Good morning.
Juan Costello: Great, always good having you on and starting off, give us a brief history and overview there of the company for some of our listeners that are new to your story.
Mike Gerdin: We are a truckload carrier based in Iowa City, Iowa. We went public in 1986. We are focused on regional truckload and short-haul truckload, so we don’t have a lot of competition from intermodal or long-haul carriers. We focus on the short to medium-haul. Our average length of haul is about 500 miles. Service and safety are our biggest priorities. If you look at our CSA scores, we are one of the safest carriers in the nation, we focus on service and safety daily.
Juan Costello: And what are some of the drivers there behind the company’s recently announced quarterly results?
Mike Gerdin: You know the freight environment this year has been very flat our economy has been pretty much flat as well. The positive thing is that rates and pricing are still favorable and going in a positive direction. We don’t have shippers beating us up and trying to reduce rates at this point like they were going through in ’09, ’10, and ’11. People hammering us on rates but at this point, the pricing environment is good. In the freight environment it’s decent, we are not blowing the doors off in freight by any means but it’s also not like it was in 2009 and in 2010. So it is kind of nice and steady.
Juan Costello: And so what would you say makes the company unique from some of the other players in the sector?
Mike Gerdin: I think there are many things that make Heartland Express unique. Number one is, we are debt-free. We own every tractor, every trailer, every facility that we have. Almost all of our competition has some debt, many have to much. We also hire only experienced drivers; many in the industry hire inexperience drivers and students, where our drivers must have 1 year over-the-road experience with a good driving record and a good safety record as well.
The other thing we excel at is on-time service which is our calling card. Last year, we won over 18 different service awards from shippers starting with Federal Express, Quaker Oats, Schneider Logistics, Ford, Lowe’s, Home Depot and many other Fortune 500 companies. We have a lot of things that we believe are unique to our company. We are only a truckload carrier, we don’t have warehouses, we don’t do brokerage, we don’t do reefers, we don’t do flatbeds, we don’t have logistics companies; all the things that tend to let others lose focus on their core business. We are always focused on our core business, which is short to medium-haul truckloads.
Juan Costello: Certainly and perhaps you could walk us through your background and experience there Mike and talk a little bit about the management team running things behind the scenes?
Mike Gerdin: We have got a great management team that’s been in place at Heartland Express for many years. My whole life has been at Heartland Express. My dad founded the company when I was a young boy. I started out washing trucks in the shop and then moved up to changing oil, tires, and greasing trucks. I went to college and after college I started working here. My whole life has been working at Heartland Express and we have a great senior management team that’s been in place for almost 30 years. We also have a great second-line team of employees, 20 to 30 different people that have been here anywhere from 10 to 15 years that are 40 years old or younger. The management team and those involved in running the business day-to-day are very experienced and know what we want to do each day.
Juan Costello: Excellent. And so what are some of the goals and milestones that you guys are hoping to accomplish here over the course of the next year?
Mike Gerdin: You know our goals are always still operating in the low 80’s, 15 to 20 percent growth, do it debt free and we have been successful in doing that for many, many years. Give the best service to our customers that we can possibly give and to be the safest carrier that we can possibly be on the road, those are our goals and objectives. We also like to grow by adding acquisitions, we have done 5 acquisitions since we have been a public carrier or by growing organically. We opened Phoenix in 2006 with 0 trucks and organically over the last 6 years we have grown that fleet to over 350 trucks. So whether it’s through acquisition or through internal growth, we grow the company.
Juan Costello: And as far as investors in the financial community are concerned, Mike do you believe that the Heartland Express storing your message and upside are completely understood and appreciated by them and is not what you wish investors better understood about either the company or your sector?
Mike Gerdin: I would say that people think most of the trucking stocks move together up and down and there is not a lot of differentiation. That’s one thing that I wish investors would take a closer look at Heartland Express and see how financially strong we are and what a good record we have on safety and service scores. That this the long term game and we are going to be around for a long time. We are going to be trucking for a long time. You know there are many in the industry that can’t say that and we believe that puts us in a great position for a long term investment.
Juan Costello: Well, good and so once again joining us today is Mike Gerdin, the CEO for a Heartland Express Inc. the company trades on NASDAQ, ticker symbol is HTLD currently trading at $13.39 a share the market cap is north of $1.1 billion. And before we conclude here Mike to briefly recap some of your key points why do you believe investor should consider the company as a good investment opportunity today?
Mike Gerdin: I think it’s a great investment opportunity today because we are in a very good position. Whether the economy picks up or the economy goes backwards, we are in a great position. If it goes backwards we have got a brand new fleet of trucks and trailers out there. We don’t have any debt. We don’t owe anybody anything. We have got a great group of solid customers that we service. If the economy goes north and gets better you know the same thing plays towards us. We have already invested in a new fleet, many in the industry haven’t spent any money on their fleet in a long time. We have put the investment forward so that if the economy picks up and people start buying trucks to refresh their fleet, they are going to be doing that while we are out hauling freight. I just really like the position that we are in and I think it’s a good play whether the economy gets better or gets worse.
Juan Costello: Well, we certainly look forward to continue to track the company’s growth and reporting your upcoming progress and we would like to thank you for taking the time to join us today Mike and update on the rest of audience on Heartland Express it’s always good to have you on?
Mike Gerdin: Great, thank-you, Juan.