What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 195 added, 130 removed, 654 unchanged (33% of the section changed)

4 unchanged sentences

(In thousands, except share data)

March 31, 2024

June 30, 2024

December 31, 2023

37 unchanged sentences

Current portion of operating lease obligations

10,612 11,950

Current portion of insurance and claims accrual

17 unchanged sentences

Stockholders' equity:

Class A common stock, $.

01 par value;

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;

16,125,786 shares issued and 10,820,868 outstanding as of June 30, 2024;

and 16,125,786 shares issued and 10,721,517 outstanding as of December 31, 2023

Class B common stock, $.

01 par value;

Class B common stock, $ .01 par value;

5,000,000 shares authorized;

3 unchanged sentences

Treasury stock at cost;

5,361,426 and 5,404,269 shares as of March 31, 2024 and December 31, 2023, respectively

5,304,918 and 5,404,269 shares as of June 30, 2024 and December 31, 2023, respectively

( 131,566 ) ( 132,346 )

10 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE three months ended March 31, 2024 and 2023

FOR THE three and six months ended June 30, 2024 and 2023

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

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

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

Insurance and claims

15,390 12,693

Communications and utilities

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

1 unchanged sentence

Income from equity method investment

( 3,676 ) ( 5,943 )

Income before income taxes

2 unchanged sentences

Income from discontinued operations, net of tax

$ 3,974 $ 16,635

Basic income per share:

Income from continuing operations

$ 0.29 $ 1.23

Income from discontinued operations

Net income per share

$ 0.30 $ 1.25

Diluted income per share:

Income from continuing operations

$ 0.28 $ 1.19

Income from discontinued operations

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

Total may not sum due to rounding.

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE three months ended March 31, 2024 and 2023

FOR THE three and six months ended June 30, 2024 and 2023

(Unaudited and in thousands )

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

$ 12,194 $ 12,293 $ 16,168 $ 28,928

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

Reclassification of cash flow hedge gains into statement of operations, net of tax of $ 35 in 2024 and $ 27 in 2023, respectively

Total other comprehensive income

Unrealized gain on effective portion of cash flow hedges, net of tax of ($ 47 ) and ($ 172 ) in 2024 and ($ 158 ) and ($ 44 ) in 2023, respectively

133 452 492 127

Reclassification of cash flow hedge gains into statement of operations, net of tax of $ 34 and $ 69 in 2024 and $ 33 and $ 60 in 2023, respectively

( 99 ) ( 93 ) ( 198 ) ( 171 )

Total other comprehensive income (loss)

34 359 294 ( 44 )

Comprehensive income

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE three months ended March 31, 2024 and 2023

FOR THE three and six months ended June 30, 2024 and 2023

(Unaudited and in thousands)

For the Three Months Ended

For the Three and Six Months Ended June 30, 2024

Comprehensive

15 unchanged sentences

$ 161 $ 24 $ 156,695 $ ( 132,159 ) $ 1,076 $ 381,450 $ 407,247

For the Three Months Ended

- - - - - 12,194 12,194

Cash dividend ($ 0.11 per common share)

- - - - - ( 1,448 ) ( 1,448 )

Other comprehensive income

- - - - 34 - 34

Stock-based employee compensation expense

- - 765 - - - 765

Exercise of stock options

- - 195 386 - - 581

Issuance of restricted shares, net

- - ( 207 ) 207 - - -

Balances at June 30, 2024

$ 161 $ 24 $ 157,448 $ ( 131,566 ) $ 1,110 $ 392,196 $ 419,373

For the Three and Six Months Ended June 30, 2023

Comprehensive

5 unchanged sentences

- - - - - ( 1,466 ) ( 1,466 )

Other comprehensive income

Other comprehensive loss

- - - - ( 403 ) - ( 403 )

7 unchanged sentences

$ 161 $ 24 $ 152,921 $ ( 127,267 ) $ 683 $ 344,640 $ 371,162

- - - - - 12,293 12,293

Cash dividend ($ 0.11 per common share)

- - - - - ( 1,442 ) ( 1,442 )

Other comprehensive income

- - - - 359 - 359

Share repurchase

- - - ( 4,683 ) - - ( 4,683 )

Stock-based employee compensation expense reversal

- - 1,774 - - - 1,774

Exercise of stock options

- - 42 194 - - 236

Issuance of restricted shares, net

- - ( 389 ) 354 - - ( 35 )

Balances at June 30, 2023

$ 161 $ 24 $ 154,348 $ ( 131,402 ) $ 1,042 $ 355,491 $ 379,664

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE three months ended March 31, 2024 and 2023

FOR THE six months ended June 30, 2024 and 2023

(Unaudited and in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

$ 3,974 $ 16,635

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

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

Income from equity method investment

( 3,676 ) ( 5,943 )

Gain on disposition of property and equipment

702 ( 9,791 )

Loss (gain) on disposition of property and equipment

Changes in operating assets and liabilities:

3 unchanged sentences

Insurance and claims accrual

5,310 ( 324 )

Accounts payable and accrued expenses

( 8,548 ) ( 13,313 )

Net cash flows provided by operating activities

Cash flows from investing activities:

Cash flows used by investing activities:

Acquisition, net of cash acquired

Other investments

( 156 ) ( 1,108 )

Purchase of property and equipment

( 48,362 ) ( 16,221 )

Proceeds from disposition of property and equipment

Net cash flows (used) provided by investing activities

( 43,481 ) 7,078

Net cash flows used by investing activities

Cash flows from financing activities:

1 unchanged sentence

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

Payment of minimum tax withholdings on stock compensation

( 339 ) ( 1,485 )

Common stock repurchased

Net cash flows provided (used) by financing activities

22,438 ( 28,407 )

Net cash flows provided by financing activities

Net change in cash and cash equivalents

658 ( 14,081 )

Cash and cash equivalents at beginning of period

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.

16 unchanged sentences

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 .

therefore, operating results for the six months ended June 30, 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 .

4 unchanged sentences

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 tractors over five years to salvage values ranging from approximately 0 % to 35 % of their cost, depending on the utilization 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.

We annually, or whenever events or changes in circumstances indicate that a review is warranted, 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.

We performed a review of our estimates during the quarter ended June 30, 2024 and, due to a weak used revenue equipment market, we increased the rate of depreciation on these units in the period.

This change resulted in an additional $2.6 million of depreciation expense during the three months ended June 30, 2024.

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.

20 unchanged sentences

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 .

There were approximately 64,000 and 71,000 shares issuable upon conversion of unvested restricted shares for the three and six months ended June 30, 2024 , respectively, and 235,000 and 251,000 shares issuable upon conversion of unvested restricted shares for the three and six months ended June 30, 2023 , respectively.

There were no unvested shares excluded from the calculation of diluted earnings per share as anti-dilutive for either of the three and six months ended June 30, 2024 and 2023.

There were approximately 621,000 and 614,000 shares issuable upon conversion of unvested employee stock options for the three and six months ended June 30, 2024 , respectively, and 400,000 and 365,000 shares issuable upon conversion of unvested employee stock options for the three and six months ended June 30, 2023 , respectively.

There were no unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three and six months ended June 30, 2024 , respectively, and no and 35,000 unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three and six months ended June 30, 2023 , respectively.

Income per share is the same for both Class A and Class B shares.

2 unchanged sentences

Three Months Ended

Six Months Ended

Income from continuing operations

2 unchanged sentences

150 150 300 300

$ 12,194 $ 12,293 $ 16,168 $ 28,928

Denominator for basic income per share – weighted-average shares

2 unchanged sentences

Equivalent shares issuable upon conversion of unvested restricted shares

64 235 71 251

Equivalent shares issuable upon conversion of unvested employee stock options

621 400 614 365

Denominator for diluted income per share adjusted weighted-average shares and assumed conversions

4 unchanged sentences

Income from discontinued operations

0.01 0.01 0.02 0.02

Net income per share

4 unchanged sentences

Income from discontinued operations

0.01 0.01 0.02 0.02

Net income per share

10 unchanged sentences

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.

The fair value of the life insurance policies was determined by the underwriting insurance company’s valuation models and represents the guaranteed value we would receive upon surrender of these policies as of the reporting date.

A three -tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:

4 unchanged sentences

(in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

3 unchanged sentences

( 20,616 ) ( 21,802 ) 3

Cash surrender value life insurance policies

2,887 2,424 2

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.

The fair value of our revenue equipment installment notes approximated the carrying value as of June 30, 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.

2 unchanged sentences

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.

There were no contingent consideration payments made during the three months ended June 30, 2024 or 2023, and $ 10.0 million and $ 10.0 million paid during the six months ended June 30, 2024 and 2023, 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 fair value of the contingent consideration increased during the three and six months ended June 30, 2024 by $ 0.7 million and $ 8.8 million, respectively, related to a change in the fair value for the LTST contingent consideration arrangement and by $ 0.5 million and $ 2.0 million during the three and six months ended June 30, 2023, respectively, related to a change in the fair value for the AAT contingent consideration arrangement.

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.

1 unchanged sentence

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

December 31, 2023 Additions Adjustments to fair market value Payments June 30, 2024

Contingent consideration $ ( 21,802 ) $ - $ ( 8,814 ) $ 10,000 $ ( 20,616 )

5 unchanged sentences

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 :

The following table summarizes the results of our discontinued operations for the three and six months ended June 30, 2024 and 2023 :

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Reversal of contingent loss liability

1 unchanged sentence

Income before income taxes

200 200 400 400

Income tax expense

50 50 100 100

Income from discontinued operations, net of tax

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.

$ 150 $ 150 $ 300 $ 300

Reversal of contingent loss liability for the three and six months ended June 30, 2024 and 2023 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 :

The following table summarizes the major classes of assets and liabilities included as discontinued operations as of June 30, 2024 and December 31, 2023 :

(in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

7 unchanged sentences

$ 1,235 $ 1,635

There were no operating cash outflows for the three months ended March 31, 2024 and 2023 .

There were no operating cash outflows for the three and six months ended June 30, 2024 and 2023 .

Segment Information

13 unchanged sentences

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

Three Months Ended June 30, 2024

Managed Freight

3 unchanged sentences

886 - - - 886

Operating income (loss)

Operating income

4,768 5,450 3,330 2,029 15,577

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

Managed Freight

5 unchanged sentences

9,552 753 5,599 4,008 19,912

Three Months Ended June 30, 2023

Managed Freight

Total revenue from external customers

$ 104,073 $ 81,194 $ 63,281 $ 25,468 $ 274,016

Intersegment revenue

3,915 - - - 3,915

Operating income

5,815 3,243 1,945 780 11,783

Six Months Ended June 30, 2023

Managed Freight

Total revenue from external customers

$ 204,969 $ 161,438 $ 124,155 $ 50,305 $ 540,867

Intersegment revenue

8,377 - - - 8,377

Operating income

15,091 10,390 3,163 771 29,415

(in thousands)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Total external revenues for reportable segments

1 unchanged sentence

Intersegment revenues for reportable segments

886 3,915 1,527 8,377

Elimination of intersegment revenues

8 unchanged sentences

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 .

Our liability recorded for uncertain tax positions as of June 30, 2024 is unchanged since December 31, 2023 .

The net deferred tax liability of $ 119.9 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.

2 unchanged sentences

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.

The Company has determined that a valuation allowance was not necessary at June 30, 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.

10 unchanged sentences

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.

Current and long-term debt and lease obligations consisted of the following as of March 31, 2024 and December 31, 2023 :

Current and long-term debt and lease obligations consisted of the following as of June 30, 2024 and December 31, 2023 :

(in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

3 unchanged sentences

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

weighted average interest rate of 5.3 % at June 30, 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

69,416 180,208 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

interest rate of 7.1 % at June 30, 2024 and 7.1 % at December 31, 2023 due in monthly installments with a fixed maturity at August 2035, secured by related real estate

1,322 17,138 1,294 17,806

18 unchanged sentences

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.

We had no borrowings outstanding under the Credit Facility as of June 30, 2024 , undrawn letters of credit outstanding of approximately $ 20.8 million, and available borrowing capacity of $ 88.8 million.

As of June 30, 2024 , there were no base rate and no SOFR loans.

Based on availability as of June 30, 2024 and 2023 , there was no fixed charge coverage requirement.

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.

14 unchanged sentences

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:

The finance leases in effect at June 30, 2024 terminate from May 2025 through November 2033 and contain guarantees of the residual value of the related equipment by us.

A summary of our lease obligations at June 30, 2024 and 2023 are as follows:

(dollars in thousands)

1 unchanged sentence

Three Months Ended

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Finance lease cost:

Amortization of right-of-use assets

$ 123 $ 257 $ 246 $ 513

Interest on lease liabilities

222 57 421 66

Operating lease cost

3,325 4,639 6,959 9,245

Variable lease cost

125 388 149 885

Short-term lease cost

914 2,509 1,974 4,133

Total lease cost

3 unchanged sentences

Operating cash flows from finance leases

222 57 421 66

Operating cash flows from operating leases

2,505 3,329 5,435 7,178

Financing cash flows from finance leases

203 151 365 3,509

Right-of-use assets obtained in exchange for new finance lease liabilities

5 3,139 815 3,139

Right-of-use assets obtained in exchange for new operating lease liabilities

8,970 3,846 8,970 3,992

Weighted-average remaining lease term—finance leases (in years)

2 unchanged sentences

Weighted-average discount rate—operating leases

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.

As of June 30, 2024 , and December 31, 2023 , right-of-use assets of $ 40.9 million and $ 41.2 million for operating leases and $ 6.7 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:

Our future minimum lease payments as of June 30, 2024 , are summarized as follows by lease category:

(in thousands)

10 unchanged sentences

$ 32,044 $ 5,571

( 1 ) Excludes the three months ended March 31, 2024 .

( 1 ) Excludes the six months ended June 30, 2024 .

Stock -Based Compensation

4 unchanged sentences

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.

As of June 30, 2024 , there were 1,063,228 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.

Included in salaries, wages, and related expenses within the condensed consolidated statements of operations is stock-based compensation expense of $ 0.6 million and $ 1.6 million for the three months ended June 30, 2024 and 2023 , respectively, and expense of $ 1.3 million and $ 3.0 million for the six months ended June 30, 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 $ 0.2 million for each of the three months ended June 30, 2024 and 2023 , respectively, and $ 0.4 million and $ 0.3 million for the six months ended June 30, 2024 and 2023 , respectively.

Of the stock compensation expense recorded for the three months ended June 30, 2024 and June 30, 2023 , $ 0.6 million and $ 0.6 million relates to restricted shares, respectively, and $ 0.0 million and $ 1.0 million relates to unvested employee stock options, respectively.

Of the stock compensation expense recorded for the six months ended June 30, 2024 and 2023 , $ 0.7 million and $ 1.1 million relates to restricted shares, respectively, and $ 0.6 million and $ 1.9 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.

To satisfy withholding requirements for shares that vested through June 30, 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.

1 unchanged sentence

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 .

We had $ 20.8 million and $ 21.8 million of outstanding and undrawn letters of credit as of June 30, 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.

As of June 30, 2024 the remaining contingent liability was $ 1.2 million.

Equity Method Investment

6 unchanged sentences

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 .

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):

During the quarter ended June 30, 2024, we entered into revenue equipment operating leases with TEL, which resulted in an operating lease obligation to TEL of $ 6.7 million as of June 30, 2024 .

No other transactions with TEL were material for the six months ended June 30, 2024 and 2023 .

Our accounts receivable from TEL, accounts payable to TEL, and investment in TEL as of June 30, 2024 and December 31, 2023 are as follows (in thousands):

Balance Sheet Line Item:

March 31, 2024

June 30, 2024

December 31, 2023

7 unchanged sentences

Current and long-term portion of operating lease obligations

$ 6,651 $ 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.

17 unchanged sentences

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.

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.

5 unchanged sentences

Accrued expenses

Deferred tax liability ( 1,614 )

Total liabilities assumed

1 unchanged sentence

Net assets acquired

During the six months ended June 30, 2024 we recognized measurement period adjustments of $ 1.6 million, primarily related to the deductibility of goodwill and other intangibles, which decreased goodwill from $ 5.1 million as of December 31, 2023 to $ 3.5 million as of June 30, 2024.

The goodwill recognized is attributable primarily to expected cost synergies as a result of overhead support.

37 unchanged sentences

Net assets acquired

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.

During the six months ended June 30, 2024 we recognized measurement period adjustments of $ 4.8 million, primarily related to the Section 338 (h) 10 election which increased goodwill from $ 12.4 million as of December 31, 2023 to $ 17.3 million as of June 30, 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.

The amounts of revenue and earnings of LTST included in the Company’s consolidated results of operations from the acquisition date of April 26, 2023, to the periods ended June 30, 2024 and 2023 are as follows:

(in thousands)

Three months ended

Six months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Total revenue

$ 31,398 $ 10,809 $ 53,127 $ 10,809

$ 3,534 $ 1,878 $ 5,152 $ 1,878

The following unaudited pro forma consolidated results of operations assume that the acquisition of LTST occurred as of January 1, 2023:

(in thousands)

Three months ended

Six months ended

June 30, 2023

Total revenue

$ 279,421 $ 562,485

$ 12,976 $ 31,659

Basic net income per share

$ 1.00 $ 2.41

Diluted net income per share

$ 0.96 $ 2.30

The pro forma financial information for all periods presented above has been calculated after adjusting the results of LTST to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets as though the acquisition occurred as of the beginning of the Company’s fiscal year 2023.

The Company's historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable.

The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the Company’s 2023 fiscal year.

Goodwill and Other Assets

1 unchanged sentence

("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.

A summary of other intangible assets as of March 31, 2024 and December 31, 2023 is as follows:

Amortization expense of $ 4.7 million and $ 2.9 million for the six months ended June 30, 2024 and 2023 , respectively, was included in depreciation and amortization in the condensed consolidated statements of operations.

A summary of other intangible assets as of June 30, 2024 and December 31, 2023 is as follows:

(in thousands)

March 31, 2024

June 30, 2024

Gross intangible assets

60 unchanged sentences

(in thousands)

( 1 ) Excludes the three months ended March 31, 2024 .

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 .

( 1 ) Excludes the six months ended June 30, 2024 .

The carrying amount of goodwill increased to $ 78.9 million at June 30, 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

June 30, 2024

Managed Freight

3 unchanged sentences

- 4,808 ( 1,614 ) -

$ 15,699 $ 32,575 $ 8,917 $ 21,750

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.

3 unchanged sentences

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.

The program expired on 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.

On May 15, 2024, our Board declared a cash dividend of $ 0.11 per share which was paid on June 28, 2024, to stockholders of record on June 7, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements