Heartland Express Inc (HTLD)

Interest coverage

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	-19,093	44,040	91,452	106,047	94,261
Interest expense	US$ in thousands	17,582	24,187	8,555	179,748	125,211
Interest coverage		-1.09	1.82	10.69	0.59	0.75

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $-19,093K ÷ $17,582K
= -1.09

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a company is more capable of covering its interest expenses.

Looking at the data provided for Heartland Express Inc, we observe fluctuations in the interest coverage ratio over the years:

1. As of December 31, 2020, the interest coverage ratio was 0.75, indicating that the company's earnings were only sufficient to cover its interest expenses less than one time. This suggests potential financial strain and a risk of defaulting on interest payments.

2. By December 31, 2021, the interest coverage ratio decreased further to 0.59, which is a concerning trend as the company's ability to cover interest payments deteriorated.

3. However, there was a significant improvement by December 31, 2022, with the interest coverage ratio jumping to 10.69. This sharp increase indicates a substantial enhancement in the company's ability to cover interest expenses, potentially reflecting increased profitability or decreased debt levels.

4. The ratio decreased to 1.82 by December 31, 2023, but it still remained above 1, indicating that the company's earnings were able to cover its interest costs. However, it is lower than the peak in 2022.

5. Finally, by December 31, 2024, the interest coverage ratio turned negative at -1.09. A negative interest coverage ratio implies that the company's earnings were insufficient to cover its interest expenses, raising concerns about the company's financial health and ability to meet debt obligations.

Overall, the analysis shows fluctuations in Heartland Express Inc's interest coverage ratio over the years, indicating varying levels of ability to cover interest payments. It is important for investors and stakeholders to closely monitor this ratio to assess the company's financial stability and debt management.