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Growth achieved despite a significant decline in fuel surcharges
Old Dominion Freight Line, Inc. reported a 6.6% increase in revenue in 2015, to US$2,972.4 million, as operating income climbed 12.9% to US$498.2 million. Net income increased 13.9% to US$304.7 million.
Old Dominion produced solid financial results for the fourth quarter, despite a soft economic environment and strong comparable results for Q4, 2014. The Company believes that it gained market share during the fourth quarter based on increases in both shipments and tonnage, as customers continued to respond favourably. Revenue increased 1.9% to US$734.6 million, as operating income increased 1.4% to US$113.9 million. Net income grew 3.4% to US$72.2 million.
Old Dominion’s revenues for the fourth quarter reflect the combined impact of a 3.0% increase in LTL tons and a 0.2% decline in LTL revenue per hundredweight. Tonnage in the fourth quarter included an increase in LTL shipments of 8.2% that was partially offset by the 4.8% decrease in LTL weight per shipment. The pricing environment remained relatively stable during the quarter, however, and the Company achieved a 6.1% increase in LTL revenue per hundredweight, excluding fuel surcharges. The Company’s operating ratio increased slightly to 84.5% for Q4, 2015 as compared to the same quarter of last year, primarily due to higher costs for salaries, wages and benefits as well as increased depreciation.
These changes were partially offset by the reduction in operating supplies and expenses as well as productivity improvements in platform and pickup and delivery operations. The Company finished the year with 17,931 full-time employees who achieved a 99.0% on-time delivery percentage and a cargo claims ratio of 0.33%.
Old Dominion remained well-positioned at the end of 2015 to finance its growth strategies. The Company’s net cash provided by operating activities was US$553.9 million for 2015, an increase of 41.4% over 2014. The Company had US$11.5 million in cash and cash equivalents at year end, and its debt to total capitalisation was 7.4% compared with 9.4% at the end of 2014.
Capital expenditures for 2015 were US$462.1 million as compared to US$367.7 million for 2014. The Company currently expects capital expenditures for 2016 to total approximatelyUS $440.0 million, including planned expenditures of US$180.0 million for real estate and service centre expansion projects, US$220.0 million for tractors and trailers and US$40.0 million for technology and other assets.