COVENANT LOGISTICS GROUP, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) March 31, 2024 December 31, 2023 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,952 $ 2,294 Accounts receivable, net of allowance of $ 2,434 in 2024 and $ 2,449 in 2023 143,975 142,504 Drivers' advances and other receivables, net of allowance of $ 589 in 2024 and $ 591 in 2023 6,020 4,367 Inventory and supplies 5,127 4,848 Prepaid expenses 13,562 17,880 Assets held for sale 7,950 6,782 Income taxes receivable 322 6,739 Other short-term assets 536 531 Total current assets 180,444 185,945 Property and equipment, at cost 690,996 692,532 Less: accumulated depreciation and amortization ( 188,011 ) ( 177,877 ) Net property and equipment 502,985 514,655 Goodwill 80,303 75,747 Other intangibles, net 97,242 99,615 Other assets, net 82,098 78,067 Noncurrent assets of discontinued operations 359 409 Total assets $ 943,431 $ 954,438 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Checks outstanding in excess of bank balances $ 918 $ - Accounts payable 31,605 33,155 Accrued expenses 49,194 59,067 Current maturities of long-term debt 60,964 47,651 Current portion of finance lease obligations 922 781 Current portion of operating lease obligations 8,959 11,950 Current portion of insurance and claims accrual 20,841 17,687 Total current liabilities 173,403 170,291 Long-term debt 187,400 196,894 Long-term portion of finance lease obligations 5,802 5,296 Long-term portion of operating lease obligations 27,328 30,892 Insurance and claims accrual 17,902 15,746 Deferred income taxes 110,543 116,095 Other long-term liabilities 12,371 14,169 Long-term liabilities of discontinued operations 1,435 1,635 Total liabilities 536,184 551,018 Stockholders' equity: Class A common stock, $. 01 par value; 40,000,000 shares authorized; 16,125,786 shares issued and 10,764,360 outstanding as of March 31, 2024; and 16,125,786 shares issued and 10,721,517 outstanding as of December 31, 2023 161 161 Class B common stock, $. 01 par value; 5,000,000 shares authorized; 2,350,000 shares issued and outstanding 24 24 Additional paid-in-capital 156,695 155,846 Treasury stock at cost; 5,361,426 and 5,404,269 shares as of March 31, 2024 and December 31, 2023, respectively ( 132,159 ) ( 132,346 ) Accumulated other comprehensive income 1,076 816 Retained earnings 381,450 378,919 Total stockholders' equity 407,247 403,420 Total liabilities and stockholders' equity $ 943,431 $ 954,438 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 3 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE three months ended March 31, 2024 and 2023 (In thousands, except per share data) Three Months Ended March 31, (unaudited) 2024 2023 Revenues Freight revenue $ 247,685 $ 233,422 Fuel surcharge revenue 31,078 33,429 Total revenue $ 278,763 $ 266,851 Operating expenses: Salaries, wages, and related expenses $ 100,335 $ 99,159 Fuel expense 30,952 34,091 Operations and maintenance 13,596 17,109 Revenue equipment rentals and purchased transportation 66,751 63,016 Operating taxes and licenses 3,361 3,463 Insurance and claims 15,390 12,693 Communications and utilities 1,403 1,284 General supplies and expenses 20,830 13,620 Depreciation and amortization 21,108 14,575 Loss (gain) on disposition of property and equipment, net 702 ( 9,791 ) Total operating expenses 274,428 249,219 Operating income 4,335 17,632 Interest expense, net 3,338 769 Income from equity method investment ( 3,676 ) ( 5,943 ) Income before income taxes 4,673 22,806 Income tax expense 849 6,321 Income from continuing operations, net of tax 3,824 16,485 Income from discontinued operations, net of tax 150 150 Net income $ 3,974 $ 16,635 Basic income per share (1) : Income from continuing operations $ 0.29 $ 1.23 Income from discontinued operations 0.01 0.01 Net income per share $ 0.30 $ 1.25 Diluted income per share: Income from continuing operations $ 0.28 $ 1.19 Income from discontinued operations 0.01 0.01 Net income per share $ 0.29 $ 1.20 Basic weighted average shares outstanding 13,087 13,361 Diluted weighted average shares outstanding 13,800 13,877 (1) Total may not sum due to rounding. The accompanying notes are an integral part of these condensed consolidated financial statements. Page 4 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE three months ended March 31, 2024 and 2023 (Unaudited and in thousands ) Three Months Ended March 31, 2024 2023 Net income $ 3,974 $ 16,635 Other comprehensive income: Unrealized gain (loss) on effective portion of cash flow hedges, net of tax of ($ 126 ) in 2024 and $ 114 in 2023, respectively 359 ( 325 ) Reclassification of cash flow hedge gains into statement of operations, net of tax of $ 35 in 2024 and $ 27 in 2023, respectively (99 ) ( 78 ) Total other comprehensive income 260 ( 403 ) Comprehensive income $ 4,234 $ 16,232 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 5 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE three months ended March 31, 2024 and 2023 (Unaudited and in thousands) For the Three Months Ended Accumulated Additional Other Total Common Stock Paid-In Treasury Comprehensive Retained Stockholders' Class A Class B Capital Stock Income Earnings Equity Balances at December 31, 2023 $ 161 $ 24 $ 155,846 $ ( 132,346 ) $ 816 $ 378,919 $ 403,420 Net income - - - - - 3,974 3,974 Cash dividend ($ 0.11 per common share) - - - - - ( 1,443 ) ( 1,443 ) Other comprehensive income - - - - 260 - 260 Stock-based employee compensation expense - - 947 - - - 947 Exercise of stock options - - 150 278 - - 428 Issuance of restricted shares, net - - ( 248 ) ( 91 ) - - ( 339 ) Balances at March 31, 2024 $ 161 $ 24 $ 156,695 $ ( 132,159 ) $ 1,076 $ 381,450 $ 407,247 For the Three Months Ended Accumulated Additional Other Total Common Stock Paid-In Treasury Comprehensive Retained Stockholders' Class A Class B Capital Stock Loss Earnings Equity Balances at December 31, 2022 $ 161 $ 24 $ 152,886 $ ( 106,500 ) $ 1,086 $ 329,471 $ 377,128 Net income - - - - - 16,635 16,635 Cash dividend ($ 0.11 per common share) - - - - - ( 1,466 ) ( 1,466 ) Other comprehensive income - - - - ( 403 ) - ( 403 ) Share repurchase - - - ( 20,805 ) - - ( 20,805 ) Stock-based employee compensation expense - - 1,558 - - - 1,558 Issuance of restricted shares, net - - ( 1,523 ) 38 - - ( 1,485 ) Balances at March 31, 2023 $ 161 $ 24 $ 152,921 $ ( 127,267 ) $ 683 $ 344,640 $ 371,162 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 6 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE three months ended March 31, 2024 and 2023 (Unaudited and in thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net income $ 3,974 $ 16,635 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses on accounts receivable - ( 3 ) Reversal of gain on sales to equity method investee ( 3 ) - Depreciation and amortization 21,108 14,575 Deferred income tax expense ( 5,259 ) ( 1,185 ) Income tax expense arising from restricted share vesting and stock options exercised ( 333 ) ( 587 ) Stock-based compensation expense 947 1,558 Income from equity method investment ( 3,676 ) ( 5,943 ) Gain on disposition of property and equipment 702 ( 9,791 ) Changes in operating assets and liabilities: Receivables and advances 3,812 2,863 Prepaid expenses and other assets 3,946 2,555 Inventory and supplies ( 279 ) 208 Insurance and claims accrual 5,310 ( 324 ) Accounts payable and accrued expenses ( 8,548 ) ( 13,313 ) Net cash flows provided by operating activities 21,701 7,248 Cash flows from investing activities: Acquisition, net of cash acquired ( 4,556 ) - Other investments ( 156 ) ( 1,108 ) Purchase of property and equipment ( 48,362 ) ( 16,221 ) Proceeds from disposition of property and equipment 9,593 24,407 Net cash flows (used) provided by investing activities ( 43,481 ) 7,078 Cash flows from financing activities: Change in checks outstanding in excess of bank balances 918 - Cash dividend ( 1,443 ) ( 1,466 ) Proceeds from issuance of notes payable 52,179 12,795 Repayments of notes payable ( 10,540 ) ( 4,902 ) Repayments of finance lease obligations ( 162 ) ( 3,357 ) Proceeds under revolving credit facility 14,550 10,665 Repayments under revolving credit facility and draw note ( 26,130 ) ( 10,665 ) Payment of contingent consideration liability ( 7,023 ) ( 9,187 ) Proceeds from exercise of stock options 428 - Payment of minimum tax withholdings on stock compensation ( 339 ) ( 1,485 ) Common stock repurchased - ( 20,805 ) Net cash flows provided (used) by financing activities 22,438 ( 28,407 ) Net change in cash and cash equivalents 658 ( 14,081 ) Cash and cash equivalents at beginning of period 2,294 68,665 Cash and cash equivalents at end of period $ 2,952 $ 54,584 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 7 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of Covenant Logistics Group, Inc., a Nevada holding company, and its wholly owned subsidiaries. References in this report to "we," "us," "our," the "Company," and similar expressions refer to Covenant Logistics Group, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10 -Q and Article 10 of Regulation S- X promulgated under the Securities Act of 1933. In preparing finan cial statem ents, it is necessary for management to make assumptions and estimates affecting the amounts reported in the condensed consolidated financial statements and related notes. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts. In the opinion of management, the accompanying financial statements include all adjustments that are necessary for a fair presentation of the results for the interim periods presented, such adjustments being of a normal recurring nature. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 2023 , condensed consolidated balance sheet was derived from our audited balance sheet as of that date. Our operating results are subject to seasonal trends when measured on a quarterly basis; therefore, operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 . These condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10 -K for the year ended December 31, 2023 . Results of operations in interim periods are not necessarily indicative of results to be expected for a full year. Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation for book purposes is determined using the straight-line method over the estimated useful lives of the assets. Depreciation of revenue equipment is our largest item of depreciation. We generally depreciate new tractors over five years to salvage values ranging from 0 % to 35 % of their cost, depending on the reportable segment profile of the equipment. We generally depreciate new trailers over seven years for refrigerated trailers and ten years for dry van trailers to salvage values of approximately 28 % and 25 % of their cost, respectively. We annually review the reasonableness of our estimates regarding useful lives and salvage values of our revenue equipment and other long-lived assets based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. Changes in the useful life or salvage value estimates, or fluctuations in market values that are not reflected in our estimates, could have a material effect on our results of operations. During the three months ended March 31, 2023, we sold a Tennessee terminal resulting in a $ 7.6 million gain which is included in gain on disposition of property and equipment, net in the condensed consolidated statements of operations. Recent Accounting Pronouncements Accounting Standards not yet adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023 - 07, Improvements to Reportable Segment Disclosures (Topic 280 ). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024. In December 2023, the FASB issued ASU 2023 - 09, Improvements to Income Tax Disclosures. This new guidance is designed to enhance the transparency and decision usefulness of income tax disclosures. The amendments of this update are related to the rate reconciliation and income taxes paid, requiring ( 1 ) consistent categories and greater disaggregation of information in the rate reconciliation and ( 2 ) income taxes paid disaggregated by jurisdiction. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements. Page 8 Table of Contents Note 2. Income Per Share Basic income per share excludes dilution and is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted income per share reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. There were approximately 79,000 shares issuable upon conversion of unvested restricted shares for the three months ended March 31, 2024 , and 288,000 shares issuable upon conversion of unvested restricted shares for the three months ended March 31, 2023 . There were no unvested shares excluded from the calculation of diluted earnings per share as anti-dilutive for either of the three months ended March 31, 2024 and 2023. There were 634,000 shares issuable upon conversion of unvested employee stock options for the three months ended March 31, 2024 and 228,000 shares issuable upon conversion of unvested employee stock options for the three months ended March 31, 2023 . There were no unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three months ended March 31, 2024 , and 51,000 unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three months ended March 31, 2023 . Income per share is the same for both Class A and Class B shares. The following table sets forth, for the periods indicated, the calculation of net income per share included in the condensed consolidated statements of operations: (in thousands except per share data) Three Months Ended March 31, 2024 2023 Numerators: Income from continuing operations $ 3,824 $ 16,485 Income from discontinued operations 150 150 Net income $ 3,974 $ 16,635 Denominator: Denominator for basic income per share – weighted-average shares 13,087 13,361 Effect of dilutive securities: Equivalent shares issuable upon conversion of unvested restricted shares 79 288 Equivalent shares issuable upon conversion of unvested employee stock options 634 228 Denominator for diluted income per share adjusted weighted-average shares and assumed conversions 13,800 13,877 Basic income per share (1) : Income from continuing operations $ 0.29 $ 1.23 Income from discontinued operations 0.01 0.01 Net income per share $ 0.30 $ 1.25 Diluted income per share: Income from continuing operations $ 0.28 $ 1.19 Income from discontinued operations 0.01 0.01 Net income per share $ 0.29 $ 1.20 ( 1 ) Total may not sum due to rounding. Page 9 Table of Contents Note 3. Fair Value of Financial Instruments Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Accordingly, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The fair value of our interest rate swap agreements is determined using the market-standard methodology of netting the discounted future fixed-cash payments and the discounted expected variable-cash receipts. The variable-cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These analyses reflect the contractual terms of the swap, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value calculation also includes an amount for risk of non-performance of our counterparties using "significant unobservable inputs" such as estimates of current credit spreads to evaluate the likelihood of default, which we have determined to be insignificant to the overall fair value of our interest rate swap agreements. The fair value of the contingent consideration arrangement is based on inputs that are not observable in the market and is estimated using a probability-weighted method. The significant unobservable inputs used in the fair value of the contingent consideration liability include the financial projections over the earn-out period, the volatility of the underlying financial metrics, and estimated discount rates. A three -tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: ● Level 1. Observable inputs such as quoted prices in active markets; ● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial Instruments Measured at Fair Value on a Recurring Basis (in thousands) March 31, 2024 December 31, 2023 Input Level Interest rate swaps 1,452 1,101 2 Contingent consideration ( 19,896 ) ( 21,802 ) 3 The carrying amount of cash and cash equivalents, certificates of deposit, accounts receivable, accounts payable, and current debt approximates their fair value because of the short-term maturity of these instruments. Interest rates that are currently available to us for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of our long-term debt, which primarily consists of revenue equipment installment notes. The fair value of our revenue equipment installment notes approximated the carrying value as of March 31, 2024 , as the weighted average interest rate on these notes approximates the market rate for similar debt. Borrowings under our revolving Credit Facility (as defined herein) approximate fair value due to the variable interest rate on that facility. Contingent consideration arrangements require us to pay up to $ 20.0 million of additional consideration to AAT Carriers, Inc.'s ("AAT's") former shareholders based on AAT's results during the first two post-acquisition years, of which the final installment was made during 2024, up to $ 30.0 million of additional consideration to Lew Thompson & Son Trucking, Inc.'s ("LTST's") former shareholders based on LTST's results during the first three calendar years following closing, and up to $ 12.0 million of additional consideration to Sims Transport Services, LLC's ("Sims") former shareholders based on Sims' results during the first four calendar years following closing. Refer to Note 13, "Acquisition of Lew Thompson & Son Trucking, Inc.", for additional information regarding the LTST acquisition and Note 12, "Acquisition of Sims Transport Services, LLC", for additional information regarding the Sims acquisition. The fair value of the contingent consideration is adjusted at each reporting period based on changes to the expected cash flows and related assumptions. During the three months ended March 31, 2024 and 2023, we paid $ 10.0 million and $ 10.0 million, respectively, based on AAT's results for the first and second post-acquisition years. Of the $ 10.0 million paid for the contingent consideration liability during 2024, $ 7.0 million was classified as financing cash flows and $ 3.0 million was classified as operating cash flows within the condensed consolidated statements of cash flows. Of the $ 10.0 million paid for the contingent consideration liability during 2023, $ 9.2 million was classified as financing cash flows and $ 0.8 million was classified as operating cash flows within the condensed consolidated statements of cash flows. The fair value of the contingent consideration increased by $ 8.1 million related to a change in the fair value for the LTST contingent consideration arrangement and $ 1.5 million related to the AAT contingent consideration arrangement for the three months ended March 31, 2024 and 2023 , respectively. The adjustment to the fair value of the contingent consideration liability was recorded as a component of general supplies and expenses within the condensed consolidated statements of operations. The contingent consideration liability is included in accounts payable and other long-term liabilities in our condensed consolidated balance sheets. The following table provides a summary (in thousands) of the activity for the contingent consideration liability for 2024: December 31, 2023 Additions Adjustments to fair market value Payments March 31, 2024 Contingent consideration $ ( 21,802 ) $ - $ ( 8,094 ) $ 10,000 $ ( 19,896 ) Page 10 Table of Contents Note 4. Discontinued Operations As of June 30, 2020, our former Factoring reportable segment was classified as discontinued operations as it: (i) was a component of the entity, (ii) met the criteria as held for sale, and (iii) had a material effect on the Company's operations and financial results. On July 8, 2020, we closed on the disposition of substantially all of the operations and assets of Transport Financial Services ("TFS"), which included substantially all of the assets and operations of our Factoring reportable segment. The sale consisted primarily of $ 103.3 million of net accounts receivable, which included $ 108.7 million of gross accounts receivable, less advances and rebates of $ 5.4 million. We have reflected the former Factoring reportable segment as discontinued operations in the condensed consolidated statements of operations for all periods presented. The following table summarizes the results of our discontinued operations for the three months ended March 31, 2024 and 2023 : (in thousands) Three Months Ended March 31, 2024 2023 Reversal of contingent loss liability $ ( 200 ) $ ( 200 ) Income before income taxes 200 200 Income tax expense 50 50 Income from discontinued operations, net of tax $ 150 $ 150 Reversal of contingent liability for the three months ended March 31, 2024, relates to the reduced exposure of future indemnification by the Company to the purchaser of TFS, Triumph Bancorp, Inc. ("Triumph"), as a result of the collection of covered receivables identified in the amended purchase agreement. The following table summarizes the major classes of assets and liabilities included as discontinued operations as of March 31, 2024 and December 31, 2023 : (in thousands) March 31, 2024 December 31, 2023 Noncurrent deferred tax asset $ 359 $ 409 Noncurrent assets from discontinued operations 359 409 Total assets from discontinued operations $ 359 $ 409 Liabilities: Long-term contingent loss liability $ 1,435 $ 1,635 Long-term liabilities of discontinued operations 1,435 1,635 Total liabilities from discontinued operations $ 1,435 $ 1,635 There were no operating cash outflows for the three months ended March 31, 2024 and 2023 . Page 11 Table of Contents Note 5. Segment Information We have four reportable segments: ● Expedited: The Expedited reportable segment primarily provides truckload services to customers with high service freight and delivery standards, such as 1,000 miles in 22 hours, or 15 -minute delivery windows. Expedited services generally require two -person driver teams on equipment either owned or leased by the Company. ● Dedicated: The Dedicated reportable segment provides customers with committed truckload capacity over contracted periods with the goal of three to five years in length. Equipment is either owned or leased by the Company. ● Managed Freight: The Managed Freight reportable segment includes our brokerage and transport management services (“TMS”). Brokerage services provide logistics capacity by outsourcing the carriage of customers’ freight to third parties. TMS provides comprehensive logistics services on a contractual basis to customers who prefer to outsource their logistics needs. ● Warehousing: The Warehousing reportable segment provides day-to-day warehouse management services to customers who have chosen to outsource this function. We also provide shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in our Form 10 -K for the year ended December 31, 2023 . Substantially all intersegment sales prices are market based. We evaluate performance based on operating income of the respective business units. The following table summarizes our total revenue by our four reportable segments, as used by our chief operating decision maker in making decisions regarding allocation of resources etc., for the three months ended March 31, 2024 and 2023 : (in thousands) Three Months Ended March 31, 2024 Expedited Dedicated Managed Freight Warehousing Consolidated Total revenue from external customers $ 105,471 $ 84,482 $ 62,917 $ 25,893 $ 278,763 Intersegment revenue 642 - - - 642 Operating income (loss) 4,784 ( 4,697 ) 2,269 1,979 4,335 Three Months Ended March 31, 2023 Expedited Dedicated Managed Freight Warehousing Consolidated Total revenue from external customers $ 100,896 $ 80,244 $ 60,874 $ 24,837 $ 266,851 Intersegment revenue 4,462 - - - 4,462 Operating income 9,276 7,147 1,218 ( 9 ) 17,632 (in thousands) For the Three Months Ended March 31, 2024 2023 Total external revenues for reportable segments $ 278,763 $ 266,851 Intersegment revenues for reportable segments 642 4,462 Elimination of intersegment revenues ( 642 ) ( 4,462 ) Total consolidated revenues $ 278,763 $ 266,851 Page 12 Table of Contents Note 6. Income Taxes Income tax expense in both 2024 and 2023 varies from the amount computed by applying the federal corporate income tax rates of 21 % to income before income taxes, primarily due to state income taxes, net of federal income tax effect, adjusted for permanent differences the most significant of which is the effect of the per diem pay structure for drivers. Drivers who meet the requirements to receive per diem receive non-taxable per-diem pay in lieu of a portion of their taxable wages. This per diem program increases our drivers' net pay per mile, after taxes, while decreasing gross pay, before taxes. As a result, salaries, wages, and related expenses are slightly lower and our effective income tax rate is higher than the statutory rate. Generally, as pre-tax income increases, the impact of the driver per diem program on our effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pre-tax income, while in periods where earnings are at or near breakeven the impact of the per diem program on our effective tax rate is significant. Due to the partially nondeductible effect of per diem pay, our tax rate will fluctuate in future periods based on fluctuations in earnings. Our liability recorded for uncertain tax positions as of March 31, 2024 is unchanged since December 31, 2023 . The net deferred tax liability of $ 110.2 million primarily relates to differences in cumulative book versus tax depreciation of property and equipment, partially off-set by net operating loss carryovers and insurance claims that have been reserved but not paid. The carrying value of our deferred tax assets assumes that we will be able to generate, based on certain estimates and assumptions, sufficient future taxable income in certain tax jurisdictions to utilize these deferred tax benefits. If these estimates and related assumptions change in the future, we may be required to establish a valuation allowance against the carrying value of the deferred tax assets, which would result in additional income tax expense. On a periodic basis, we assess the need for adjustment of the valuation allowance. The Company has determined that a valuation allowance was not necessary at March 31, 2024 for its deferred tax assets since it is more likely than not they will be realized from the future reversals of temporary differences. If these estimates and related assumptions change in the future, we may be required to modify our valuation allowance against the carrying value of the deferred tax assets. On March 11, 2021, President Biden signed the American Rescue Plan ("ARPA") into law. The law includes several provisions meant to stimulate the U.S. economy. Of relevance to the Company, ARPA extended the reach of IRC Section 162 (m) to include compensation paid to the eight highest-paid individuals other than the chief executive officer and the chief financial officers (rather than the three highest), however, this change is not effective until 2027. There is no material impact to the financial statements at this time. President Biden signed the Inflation Reduction Act (the "IRA") into law on August 16, 2022. We do not anticipate the IRA will have a significant impact on income tax expense or on other taxes. One of the most impactful provisions of the IRA includes the establishment of a Corporate Alternative Minimum Tax ("CAMT"). However, this tax only applies to corporations with three -year average earnings in excess of $1.0 billion. We will continue to monitor the CAMT each year to determine if we will become an applicable corporation. Additionally, the IRA enacted an excise tax on stock buybacks, which imposes a 1% tax on stock buybacks, subject to netting provisions regarding stock awarded to employees as part of their compensation. We do not believe this will have a material impact on our active buyback program, but will continue to monitor IRS guidance and regulations on how the buyback tax will be imposed and administered. Page 13 Table of Contents Note 7. Debt Current and long-term debt and lease obligations consisted of the following as of March 31, 2024 and December 31, 2023 : (in thousands) March 31, 2024 December 31, 2023 Current Long-Term Current Long-Term Borrowings under Credit Facility $ - $ - $ - $ 11,579 Borrowings under the Draw Note - - - - Revenue equipment installment notes; weighted average interest rate of 5.2 % at March 31, 2024, and 5.2% at December 31, 2023, due in monthly installments with final maturities at various dates ranging from October 2024 to March 2029, secured by related revenue equipment 59,656 169,926 46,357 167,509 Real estate notes; interest rate of 7.1% at March 31, 2024 and 7.1 % at December 31, 2023 due in monthly installments with a fixed maturity at August 2035, secured by related real estate 1,308 17,474 1,294 17,806 Total debt 60,964 187,400 47,651 196,894 Principal portion of finance lease obligations, secured by related revenue equipment 922 5,802 781 5,296 Principal portion of operating lease obligations, secured by related real estate and revenue equipment 8,959 27,328 11,950 30,892 Total debt and lease obligations $ 70,845 $ 220,530 $ 60,382 $ 233,082 We and substantially all of our subsidiaries are parties to the Third Amended and Restated Credit Agreement (the "Credit Facility") with Bank of America, N.A., as agent (the "Agent") and JPMorgan Chase Bank, N.A. (together with the Agent, the "Lenders"). The Credit Facility is a $ 110.0 million revolving credit facility, with an uncommitted accordion feature that, so long as no event of default exists, allows us to request an increase in the revolving credit facility of up to $ 75.0 million subject to Lender acceptance of the additional funding commitment. The Credit Facility includes a letter of credit sub facility in an aggregate amount of $ 105.0 million and a swing line sub facility in an aggregate amount equal to the greater of $ 10.0 million or 10 % of the Lenders' aggregate commitments under the Credit Facility from time-to-time. The Credit Facility matures in May 2027. Borrowings under the Credit Facility are classified as either "base rate loans" or "SOFR loans." Base rate loans accrue interest at a base rate equal to the greater of the Agent’s prime rate, the federal funds rate plus 0.5 %, or SOFR for a one month period as of such day, plus an applicable margin ranging from 0.25 % to 0.75%; while SOFR loans accrued interest at SOFR, plus an applicable margin ranging from 1.25 % to 1.75 %. The applicable rates are adjusted quarterly based on average pricing availability. The unused line fee is the product of 0.25 % times the average daily amount by which the Lenders' aggregate revolving commitments under the Credit Facility exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility. The obligations under the Credit Facility are guaranteed by us and secured by a pledge of substantially all of our assets, with the notable exclusion of any real estate, revenue equipment pledged under other financing agreements, including revenue equipment installment notes and finance leases, and revenue equipment that we do not designate as being included in the borrowing base. Borrowings under the Credit Facility are subject to a borrowing base limited to the lesser of (A) $110.0 million, minus the sum of the stated amount of all outstanding letters of credit; or (B) the sum of (i) 87.5 % of eligible accounts receivable, plus (ii) the least of (a) 85 % of the appraised net orderly liquidation value of eligible revenue equipment, (b) 100 % of the net book value of eligible revenue equipment, (c) 60.0 % of the Lenders' aggregate revolving commitments under the Credit Facility, or (d) $ 65.0 million. We had no borrowings outstanding under the Credit Facility as of March 31, 2024 , undrawn letters of credit outstanding of approximately $ 21.0 million, and available borrowing capacity of $ 89.0 million. As of March 31, 2024 , there were no base rate and no SOFR loans. Based on availability as of March 31, 2024 and 2023 , there was no fixed charge coverage requirement. Page 14 Table of Contents The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the Lenders' commitments may be terminated. If an event of default occurs under the Credit Facility and the Lenders cause, or have the ability to cause, all of the outstanding debt obligations under the Credit Facility to become due and payable, this could result in a default under other debt instruments that contain acceleration or cross-default provisions. The Credit Facility contains certain restrictions and covenants relating to, among other things, debt, dividends, liens, acquisitions and dispositions outside of the ordinary course of business, and affiliate transactions. Failure to comply with the covenants and restrictions set forth in the Credit Facility could result in an event of default. Pricing for the revenue equipment installment notes is quoted by the respective financial affiliates of our primary revenue equipment suppliers and other lenders at the funding of each group of equipment acquired and include fixed annual rates for new equipment under retail installment contracts. The notes included in the funding are due in monthly installments with final maturities at various dates ranging from October 2024 to March 2029 . The notes contain certain requirements regarding payment, insuring of collateral, and other matters, but do not have any financial or other material covenants or events of default except certain notes totaling $ 35.9 million are cross-defaulted with the Credit Facility. Additional borrowings from the financial affiliates of our primary revenue equipment suppliers and other lenders are expected to be available to fund new tractors expected to be delivered in 2024 , while any other property and equipment purchases, including trailers, are expected to be funded with a combination of available cash, notes, operating leases, finance leases, and/or from the Credit Facility. In August 2015, we financed a portion of the purchase of our corporate headquarters, a maintenance facility, and certain surrounding property in Chattanooga, Tennessee by entering into a $ 28.0 million variable rate note with a third -party lender. The note contains certain restrictions and covenants that are usual and customary for a note of this nature. Failure to comply with the covenants and restrictions set forth in the note could result in an event of default. Concurrently with entering into the note, we entered into an interest rate swap to effectively fix the related interest rate to 4.2 %. We expect to be in compliance with our debt covenants for the next 12 months. In connection with the settlement of a dispute related to the sale of TFS (the "TFS Settlement"), in September 2020, TBK Bank, SSB, as lender and agent for Triumph (“TBK Bank”), provided the Company with a $ 45 million line of credit (the “Draw Note”), the proceeds of which are to be used solely to satisfy our indemnification obligations under the TFS Settlement. We may borrow pursuant to the Draw Note until September 23, 2025. Page 15 Table of Contents Note 8. Lease Obligations The finance leases in effect at March 31, 2024 terminate from June 2028 through November 2033 and contain guarantees of the residual value of the related equipment by us. A summary of our lease obligations at March 31, 2024 and 2023 are as follows: (dollars in thousands) Three Months Ended Three Months Ended March 31, 2024 March 31, 2023 Finance lease cost: Amortization of right-of-use assets $ 123 $ 256 Interest on lease liabilities 199 9 Operating lease cost 3,634 4,620 Variable lease cost 24 497 Short-term lease cost 1,060 1,610 Total lease cost $ 5,040 $ 6,992 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases 199 9 Operating cash flows from operating leases 2,929 3,861 Financing cash flows from finance leases 162 3,358 Right-of-use assets obtained in exchange for new finance lease liabilities 810 - Right-of-use assets obtained in exchange for new operating lease liabilities - 146 Weighted-average remaining lease term—finance leases (in years) 3.4 Weighted-average remaining lease term—operating leases (in years) 4.9 Weighted-average discount rate—finance leases 13.4 % Weighted-average discount rate—operating leases 10.4 % As of March 31, 2024 , and December 31, 2023 , right-of-use assets of $ 34.5 million and $ 41.2 million for operating leases and $ 6.9 million and $ 6.4 million for finance leases, respectively, are included in net property and equipment in our condensed consolidated balance sheets. Operating lease right-of-use asset amortization is included in revenue equipment rentals and purchased transportation and general supplies and expenses, depending on the underlying asset, in the condensed consolidated statement of operations. Amortization of finance leased assets is included in depreciation and amortization expense in the condensed consolidated statement of operations. Our future minimum lease payments as of March 31, 2024 , are summarized as follows by lease category: (in thousands) Operating Finance 2024 (1) $ 8,943 $ 1,768 2025 9,870 1,768 2026 8,399 1,768 2027 7,530 1,768 2028 3,604 1,306 Thereafter 7,211 1,441 Total minimum lease payments $ 45,557 $ 9,819 Less: amount representing interest ( 9,270 ) ( 3,095 ) Present value of minimum lease payments $ 36,287 $ 6,724 Less: current portion ( 8,959 ) ( 922 ) Lease obligations, long-term $ 27,328 $ 5,802 ( 1 ) Excludes the three months ended March 31, 2024 . Page 16 Table of Contents Note 9. Stock -Based Compensation Our Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (the "Incentive Plan") governs the issuance of equity awards and other incentive compensation to management and members of the Board of Directors (the "Board"). On May 17, 2023, the stockholders, upon recommendation of the Board, approved the Third Amendment (the “Third Amendment”) to our Third Amended and Restated 2006 Omnibus Incentive Plan (the "Incentive Plan"). The Third Amendment (i) increased the number of shares of Class A common stock available for issuance under the Incentive Plan by an additional 575,000 shares, (ii) re-set the term of the plan to expire on May 1, 2033, and (iii) made other miscellaneous, administrative and conforming changes as necessary. The Incentive Plan includes (i) a fungible share reserve feature, under which shares subject to stock options and stock appreciation rights will be counted as one share for every share granted and shares subject to all other awards will be counted as 1.80 shares for every share granted, (ii) a double-trigger vesting requirement upon a change in control, and (iii) a maximum award granted or payable to any one participant under the Incentive Plan for a calendar year of 500,000 shares of Class A common stock or $ 4,000,000 , in the event the award is paid in cash. The Incentive Plan permits annual awards of shares of our Class A common stock to executives, other key employees, consultants, non-employee directors, and eligible participants under various types of options, restricted stock, or other equity instruments. As of March 31, 2024 , there were 1,228,434 shares remaining of the 4,775,000 shares available for award under the Incentive Plan. No awards may be made under the Incentive Plan after May 1, 2033. To the extent available, we have issued treasury stock to satisfy all share-based incentive plans. Included in salaries, wages, and related expenses within the condensed consolidated statements of operations is stock-based compensation expense of $ 0.8 million and $ 1.5 million for the three months ended March 31, 2024 and 2023 , respectively. Included in general supplies and expenses within the condensed consolidated statements of operations is stock-based compensation expense for non-employee directors of $ 0.2 million and $ 0.1 million for each of the three months ended March 31, 2024 and 2023 , respectively. Of the stock compensation expense recorded for the three months ended March 31, 2024 and March 31, 2023 , $ 0.1 million and $ 0.5 million relates to restricted shares, respectively, and $ 0.7 million and $ 1.0 million relates to unvested employee stock options, respectively. The Incentive Plan allows participants to pay the federal and state minimum statutory tax withholding requirements related to awards that vest or allows participants to deliver to us shares of Class A common stock having a fair market value equal to the minimum amount of such required withholding taxes. To satisfy withholding requirements for shares that vested through March 31, 2024 , certain participants elected to forfeit receipt of an aggregate of 6,879 shares of Class A common stock at a weighted average per share price of $ 49.27 based on the closing price of our Class A common stock on the dates the shares vested in 2024 , in lieu of the federal and state minimum statutory tax withholding requirements. We remitted $ 0.3 million to the proper taxing authorities in satisfaction of the employees' minimum statutory withholding requirements. Note 10. Commitments and Contingencies From time-to-time, we are a party to ordinary, routine litigation arising in the ordinary course of business, most of which involves claims for personal injury and/or property damage incurred in connection with the transportation of freight. We had $ 21.0 million and $ 21.8 million of outstanding and undrawn letters of credit as of March 31, 2024 and December 31, 2023 . The letters of credit are maintained primarily to support our insurance programs. Additionally, we had $ 45.0 million of availability on a line of credit from Triumph solely to fund any indemnification owed to Triumph in relation to the sale of TFS. As of March 31, 2024 the remaining contingent liability was $ 1.4 million. Note 11. Equity Method Investment We own a 49.0 % interest in Transport Enterprise Leasing, LLC ("TEL"), a tractor and trailer equipment leasing company and used equipment reseller. There is no loss limitation on our 49.0% interest in TEL. We have not guaranteed any of TEL's debt and have no obligation to provide funding, services, or assets. There are no current put rights to purchase or sell with any owners. TEL’s majority owners are generally restricted from transferring their interests in TEL, other than to certain permitted transferees, without our consent. There are no third -party liquidity arrangements, guarantees, and/or other commitments that may affect the fair value or risk of our interest in TEL. During the quarter ended March 31, 2024, we sold revenue equipment to TEL in exchange for the assumption of the related notes payable of $ 26.2 million and $ 0.5 million of cash. No other transactions with TEL were material for the three months ended March 31, 2024 and 2023 . Page 17 Table of Contents We have accounted for our investment in TEL using the equity method of accounting, and thus our financial results include our proportionate share of TEL's 2024 net income through March 31, 2024 , or $ 3.7 million. Our accounts receivable from TEL, accounts payable to TEL, and investment in TEL as of March 31, 2024 and December 31, 2023 are as follows (in thousands): Description: Balance Sheet Line Item: March 31, 2024 December 31, 2023 Accounts receivable from TEL Driver advances and other receivables $ 79 $ 37 Accounts payable to TEL Accrued expenses $ 35 $ 460 Investment in TEL Other assets $ 70,005 $ 66,327 Operating lease obligations Current and long-term portion of operating lease obligations $ 74 $ 4,100 Our accounts receivable from TEL related to cash disbursements made pursuant to our performance of certain back-office and maintenance functions on TEL’s behalf. Page 18 Table of Contents Note 12. Acquisition of Sims Transport Services, LLC On August 18, 2023, we acquired 100 % of the equity interests of Sims, a specialized brokerage company, headquartered in Maysville, GA. The acquisition date fair value of the consideration transferred was $ 9.8 million. The Stock Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. The Stock Purchase Agreement includes an earnout component of up to an aggregate of $ 12.0 million based on Sims' adjusted earnings before interest, taxes, depreciation, and amortization reported for the first through fourth calendar years following closing. The total purchase price, including any earnout achieved, is expected to range from $ 9.8 million to $ 20.0 million depending on the results achieved by Sims. Sims' results have been included in the consolidated financial statements since the date of acquisition and are reported within our Managed Freight reportable segment. The acquisition date fair value of the consideration transferred consisted of the following: August 18, 2023 (in thousands) Cash paid pursuant to Stock Purchase Agreement $ 8,573 Cash acquired included in historical book value of Sims' assets and liabilities ( 526 ) Contingent consideration 1,786 Net purchase price $ 9,833 The contingent consideration arrangement requires us to pay up to $ 12.0 million of additional consideration to Sim's former equity-holders based on Sims' results during the first four calendar years following closing. We estimated the fair value of the contingent consideration using a probability-weighted model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Refer to Note 3, "Fair Value of Financial Instruments" for information regarding changes in the contingent consideration arrangement. Goodwill related to the acquisition is not tax deductible. A deferred tax liability of $ 1.6 million was recorded arising from the intangible assets related to the acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date. August 18, 2023 Accounts receivable $ 735 Other intangibles, net 6,090 Total identifiable assets acquired 6,825 Accounts payable ( 457 ) Accrued expenses ( 4 ) Deferred tax liability ( 1,614 ) Total liabilities assumed ( 2,075 ) Net identifiable assets acquired 4,750 Goodwill 5,083 Net assets acquired $ 9,833 The goodwill recognized is attributable primarily to expected cost synergies as a result of overhead support. Refer to Note 14, "Goodwill and Other Assets" for a summary of changes to goodwill during the period as well as information related to the identifiable intangible asset acquired. Page 19 Table of Contents Note 13. Acquisition of Lew Thompson & Son Trucking, Inc. On April 26, 2023, we acquired 100 % of the outstanding stock of LTST and related entities, headquartered in Huntsville, AR. LTST is a dedicated contract carrier specializing in poultry feed and live haul transportation in Northwest Arkansas and surrounding areas and was acquired to expand the Dedicated reportable segment into this niche market. The acquisition date fair value of the consideration transferred was $ 114.5 million. The Stock Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. The Stock Purchase Agreement includes an earnout component of up to an aggregate of $ 30.0 million based on LTST's adjusted earnings before interest, taxes, depreciation, and amortization reported for the first, second, and third calendar years following closing. The total purchase, including any earnout achieved, is expected to range from $ 114.5 million to $ 134.5 million depending on the results achieved by LTST. LTST's results have been included in the condensed consolidated financial statements since the date of acquisition and are reported within our Dedicated reportable segment. The acquisition date fair value of the consideration transferred consisted of the following: April 26, 2023 (in thousands) Cash paid pursuant to Stock Purchase Agreement $ 105,282 Cash acquired included in historical book value of LTST's assets and liabilities ( 839 ) Contingent consideration 10,016 Net purchase price $ 114,459 The contingent consideration arrangement requires us to pay up to $ 30.0 million of additional consideration to LTST's former shareholders based on LTST's results during the first three calendar years following closing. We estimated the fair value of the contingent consideration using a probability-weighted model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Because of our 338 (h) 10 election, all goodwill related to the acquisition is deductible for tax purposes and there are no deferred income taxes arising from the acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date: April 26, 2023 Accounts receivable $ 5,100 Driver advances and other receivables 98 Inventory and supplies 1,015 Prepaid expenses 561 Net property and equipment 42,277 Other assets, net 120 Other intangibles, net 52,870 Total identifiable assets acquired 102,041 Accounts payable ( 565 ) Accrued expenses ( 1,465 ) Current portion of operating lease obligations ( 396 ) Current portion of insurance and claims accrual ( 56 ) Long-term portion of operating lease obligations ( 2,103 ) Total liabilities assumed ( 4,585 ) Net identifiable assets acquired 97,456 Goodwill 17,003 Net assets acquired $ 114,459 During the quarter ended March 31, 2024 we recognized measurement period adjustments related to the Section 338 (h) 10 election which increased goodwill recognized for LTST by $ 4.6 million from $ 12.4 million as of December 31, 2023 to $ 17.0 million as of March 31, 2024. The goodwill recognized is attributable primarily to expected cost synergies in the areas of fuel and purchases of revenue equipment. Refer to Note 14, "Goodwill and Other Assets" for a summary of changes to goodwill during the period as well as information related to the identifiable intangible asset acquired. Note 14. Goodwill and Other Assets The Landair Holdings, Inc. ("Landair") trade name has a residual value of $ 0.5 million. Amortization expense of $ 2.4 million and $ 1.1 million for the three months ended March 31, 2024 and 2023 , respectively, was included in depreciation and amortization in the condensed consolidated statements of operations. Page 20 Table of Contents A summary of other intangible assets as of March 31, 2024 and December 31, 2023 is as follows: (in thousands) March 31, 2024 Gross intangible assets Accumulated amortization Net intangible assets Remaining life (months) Trade name: Dedicated $ 4,502 $ ( 2,322 ) $ 2,180 Managed Freight 1,089 ( 897 ) 192 Warehousing 999 ( 885 ) 114 Total trade name 6,590 ( 4,104 ) 2,486 107 Non-compete agreement: Dedicated 4,670 ( 1,070 ) 3,600 Managed Freight 380 ( 55 ) 325 Total non-compete agreement 5,050 ( 1,125 ) 3,925 37 Customer relationships: Dedicated 60,172 ( 9,229 ) 50,943 Managed Freight 7,312 ( 1,279 ) 6,033 Warehousing 12,436 ( 5,959 ) 6,477 Total customer relationships: 79,920 ( 16,467 ) 63,453 156 Credentialing: Expedited 32,000 ( 4,622 ) 27,378 154 Total credentialing 32,000 ( 4,622 ) 27,378 Total other intangible assets $ 123,560 $ ( 26,318 ) $ 97,242 149 (in thousands) December 31, 2023 Gross intangible assets Accumulated amortization Net intangible assets Remaining life (months) Trade name: Dedicated $ 4,502 $ ( 2,269 ) $ 2,233 Managed Freight 1,089 ( 891 ) 198 Warehousing 999 ( 885 ) 114 Total trade name 6,590 ( 4,045 ) 2,545 110 Non-compete agreement: Dedicated 4,670 ( 778 ) 3,892 Managed Freight 380 ( 32 ) 348 Total non-compete agreement 5,050 ( 810 ) 4,240 40 Customer relationships: Dedicated 60,172 ( 8,258 ) 51,914 Managed Freight 7,312 ( 1,043 ) 6,269 Warehousing 12,436 ( 5,700 ) 6,736 Total customer relationships: 79,920 ( 15,001 ) 64,919 159 Credentialing: Expedited 32,000 ( 4,089 ) 27,911 157 Total credentialing 32,000 ( 4,089 ) 27,911 Total other intangible assets $ 123,560 $ ( 23,945 ) $ 99,615 151 The expected amortization of these assets for the next five successive years is as follows: (in thousands) 2024 (1) 7,116 2025 9,488 2026 9,488 2027 8,678 2028 8,220 Thereafter 53,752 ( 1 ) Excludes the three months ended March 31, 2024 . Page 21 Table of Contents The carrying amount of goodwill and other intangible assets for 2024 is subject to change upon the completion of the purchase accounting for the Sims acquisition. The carrying amount of goodwill increased to $ 80.3 million at March 31, 2024 from $ 75.7 million at December 31, 2023 . A summary of the changes in carrying amount of goodwill is as follows: (in thousands) March 31, 2024 Expedited Dedicated Managed Freight Warehousing Balance at December 31, 2023 $ 15,699 $ 27,767 $ 10,531 $ 21,750 Post-acquisition goodwill adjustments - 4,556 - - Goodwill $ 15,699 $ 32,323 $ 10,531 $ 21,750 Note 15. Equity On May 18, 2022, our Board approved a stock repurchase authorization of up to $ 75.0 million of our Class A common stock, with any remaining amount available under prior authorizations being excluded and no longer available. Under such authorization, we repurchased 2.0 million shares of our Class A common stock for $ 54.7 million during 2022. On January 30, 2023, the Board approved an amendment to the Company's stock repurchase program authorizing the purchase of up to an aggregate $ 55.0 million of our Class A common stock. The amendment added an incremental approximately $ 37.5 million to the approximately $ 17.5 million that was then-remaining under the program. Between May 2022 and April 2023, we repurchased a total of 2.7 million shares of our Class A common stock. The program expired January 31, 2024. On February 15, 2023, our Board declared a cash dividend of $ 0.11 per share, which was paid on March 31, 2023, to stockholders of record on March 3, 2023. On May 17, 2023, our Board declared a cash dividend of $ 0.11 per share which was paid on June 30, 2023, to stockholders of record on June 2, 2023. On August 16, 2023, our Board declared a cash dividend of $ 0.11 per share which was paid on September 29, 2023, to stockholders of record on September 1, 2023. On November 15, 2023, our Board declared a cash dividend of $ 0.11 per share which was paid on December 29, 2023, to stockholders of record on December 1, 2023. On February 13, 2024, our Board declared a cash dividend of $ 0.11 per share which was paid on March 29, 2024, to stockholders of record on March 1, 2024. Page 22 Table of Contents