What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-09 · 351 added, 130 removed, 261 unchanged (65% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We are a leading asset-light freight and logistics company providing less-than-truckload (“LTL ” ), truckload, final mile and intermodal drayage services across the United States and in Canada.

We are a leading asset-light freight provider of transportation services, including less-than-truckload (“LTL ” ), truckload, final mile and intermodal drayage services across the United States and in Canada.

We offer premium services that typically require precision execution, such as expedited transit, delivery during tight time windows and special handling.

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Expedited Freight also offers customers local pick-up and delivery and other services including final mile, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling.

We plan to grow our LTL and final mile geographic footprints through greenfield start-ups as well as acquisitions.

We plan to grow our LTL and final mile geographic footprints through greenfield start-ups as well as through acquisitions.

Our Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads.

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Additionally, our earnings depend on the growth of other services, such as LTL pickup and delivery, which will allow us to maintain revenue growth in a challenging freight environment.

We continue to execute synergies across our services, particularly with services offered in the Expedited Freight segment.

We continue to execute synergies across our services, particularly with services offered in the Expedited Freight reportable segment.

Synergistic opportunities include the ability to share resources, particularly our fleet resources.

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Trends and Developments

Our business is highly susceptible to changes in the economic conditions.

Our business is highly susceptible to changes in economic conditions.

Our products and services are directly tied to the production and sale of goods and, more generally, to the North American economy.

The COVID-19 pandemic has adversely impacted economic activity and conditions worldwide and created significant volatility and disruption to the financial markets.

The COVID-19 pandemic adversely impacted economic activity and conditions worldwide and created significant volatility and disruption to the financial markets.

Efforts to control the spread of COVID-19 led governments and other authorities to impose restrictions which resulted in business closures and disrupted supply chains worldwide.

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These measures have increased costs in certain areas of our business.

We will continue to mitigate the effects of the labor shortages and other inflationary conditions through similar actions.

We will continue our efforts to mitigate the effects of the labor shortages and other inflationary conditions through similar actions.

We depend heavily upon the availability of adequate diesel fuel supplies, and recently, fuel availability and prices have fluctuated significantly.

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Department of Energy and our fuel surcharge table.

In periods of changing fuel prices, our fuel surcharges vary by different degrees and may not fully offset fuel price fluctuations.

In periods of changing fuel prices, our fuel surcharges vary by different degrees and may not fully offset fuel price fluctuations or may result in higher than expected increases in revenue.

Fuel shortages, changes in fuel prices, and the potential volatility in fuel surcharge revenue may impact our results of operations and overall profitability.

Fuel surcharge revenue as a percentage of operating revenues increased to 18.4% for the three months ended June 30, 2022 compared to 11.6% for the three months ended June 30, 2021, as a result of the changes in fuel prices.

Environmental Protection and Community Support

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Forward Freedom, a manifestation of our ongoing commitment to Veteran-related causes.

Operation Forward Freedom’s largest fundraising event is intended to be The Inaugural Drive for Hope Golf tournament.

In 2020 and 2021, the Inaugural Drive For Hope Golf Tournament was postponed due to COVID-19.

The Drive For Hope Golf Tournament is scheduled to take place in May 2022.

Operation Forward Freedom’s largest fundraising event was The Inaugural Drive for Hope Golf tournament.

The Drive For Hope Golf Tournament which took place on May 19, 2022 was a huge success, raising $375,000 for injured service members and veterans.

In addition, we partner with non-profit organizations that positively impact our communities and our industry.

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Results from Operations

The following table sets forth our consolidated financial data for the three months ended March 31, 2022 and 2021 (unaudited and in thousands):

The following table sets forth our consolidated financial data for the three months ended June 30, 2022 and 2021 (unaudited and in thousands):

Three Months Ended

2022 March 31,

2022 June 30,

2021 Change Percent Change

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Net income and comprehensive income $ 55,430 $ 30,677 $ 24,753 80.7 %

Operating revenues increased $104,759, or 28.9%, to $466,961 for the three months ended March 31, 2022 compared to $362,202 for the three months ended March 31, 2021.

The increase was driven by an increase in our Expedited Freight segment of $72,405 due to increased Network, Truckload and Final Mile revenue and in our Intermodal segment of $31,926 due to increased drayage and accessorial revenues.

Operating Revenues

Operating revenues increased $94,548, or 22.5%, to $515,219 for the three months ended June 30, 2022 compared to $420,671 for the three months ended June 30, 2021.

The increase was primarily due to an increase in our Expedited Freight segment of $57,122 driven by Network, Truckload and Final Mile revenue, and in our Intermodal segment of $37,278, driven by increased drayage and accessorial revenues.

Operating Expenses

Operating expenses increased $70,132, or 20.7%, to $409,610 for the three months ended March 31, 2022 compared to $339,478 for the three months ended March 31, 2021.

The increase was primarily driven by an increase in purchased transportation expense of $40,224, salaries, wages and employee benefits of $11,184 and other operating expenses of $8,935 in both our Expedited Freight and Intermodal segments.

Operating expenses increased $61,127, or 16.1%, to $439,674 for the three months ended June 30, 2022 compared to $378,547 for the three months ended June 30, 2021.

The increase was primarily due to an increase in purchased transportation expense of $24,273, fuel expense of $4,255 and other operating expenses of $23,307 in both our Expedited Freight and Intermodal segments.

Purchased transportation expense includes our independent contractor fleet owners and owner-operators, who lease their equipment to our motor carrier (“Leased Capacity Providers ”) and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.

Purchased transportation expense increased due to the utilization of more third party carriers over the prior year and higher third party carrier costs.

Salaries, wages and employee benefits increased primarily due to the additional employees hired in response to the increase in volumes for the first quarter of 2022, and an increased reserve for incentive compensation.

Other operating expenses increased due to higher bad debt expense, travel expenses, recruiting costs, and terminal and office expenses, offset by lower legal and professional fees.

Other operating expenses also increased due to additional expenses incurred to support the increased accessorial revenues as noted above for the Intermodal segment.

Purchased transportation expense increased due to higher Leased Capacity Provider and third party carrier costs, and the utilization of more third party carriers over the prior year.

Fuel expense increased due to rise in the average price of fuel in the second quarter of 2022.

Other operating expenses increased due to higher bad debt expense, travel expenses, recruiting costs, terminal and office expenses, and legal and professional fees.

Other operating expenses also increased due to additional expenses incurred in support of the higher accessorial revenues as noted above for the Intermodal segment.

Income from Continuing Operations and Segment Operations

Income from continuing operations increased $34,627, or 152.4%, to $57,351 for the three months ended March 31, 2022 compared to $22,724 for the three months ended March 31, 2021.

Income from continuing operations increased $33,421, or 79.3%, to $75,545 for the three months ended June 30, 2022 compared to $42,124 for the three months ended June 30, 2021.

The increase was primarily driven by an increase in income from continuing operations in our Expedited Freight segment and Intermodal segment of $28,419 and $6,863, respectively.

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Interest Expense

Interest expense was $784 for the three months ended March 31, 2022 compared to $1,165 for the three months ended March 31, 2021.

The decrease in interest expense was due to a lower variable interest rate during the first quarter of 2022, partially offset by higher borrowings outstanding under our credit facility during the first quarter of 2022.

The interest rate on the outstanding borrowings under our credit facility was 1.44% and 3.25% during the three months ended March 31, 2022 and 2021, respectively.

Interest expense was $1,193 for the three months ended June 30, 2022 compared to $1,323 for the three months ended June 30, 2021.

The decrease in interest expense was due to a lower variable interest rate during the second quarter of 2022 as compared to the same period in the prior year.

The interest rate on the outstanding borrowings under our credit facility was 2.14% and 3.25% during the three months ended June 30, 2022 and 2021, respectively.

Income Taxes on a Continuing Basis

The effective tax rate on a continuing basis for the three months ended March 31, 2022 was 24.5% compared to 22.5% for the three months ended March 31, 2021.

The higher effective tax rate for the three months ended March 31, 2022 was primarily due to decreased excess tax benefits realized on share-based awards in 2022 compared to the same period in 2021.

Loss from Discontinued Operation, net of tax

Loss from discontinued operation, net of tax was $— for the three months ended March 31, 2022 compared to a loss from discontinued operation, net of tax of $5,533 for the three months ended March 31, 2021.

Loss from discontinued operation includes our Pool business and, as discussed above, the Pool business was sold on February 12, 2021.

As a result of the foregoing factors, net income increased $31,505, or 281.8%, to $42,686 for the three months ended March 31, 2022 compared to $11,181 for the three months ended March 31, 2021.

Expedited Freight - Three Months Ended March 31, 2022 compared to Three Months Ended March 31, 2021

The following table sets forth the financial data of our Expedited Freight segment for the three months ended March 31, 2022 and 2021 (unaudited and in thousands):

The effective tax rate on a continuing basis for the three months ended June 30, 2022 was 25.4% compared to 24.8% for the three months ended June 30, 2021.

The higher effective tax rate for the three months ended June 30, 2022 was primarily due to decreased excess tax benefits realized on share-based awards in 2022 compared to the same period in 2021.

As a result of the foregoing factors, net income increased $24,753, or 80.7%, to $55,430 for the three months ended June 30, 2022 compared to $30,677 for the three months ended June 30, 2021.

Expedited Freight - Three Months Ended June 30, 2022 compared to Three Months Ended June 30, 2021

The following table sets forth the financial data of our Expedited Freight segment for the three months ended June 30, 2022 and 2021 (unaudited and in thousands):

Three Months Ended

2022 Percent of Revenue March 31,

2022 Percent of Revenue June 30,

2021 Percent of Revenue Change Percent Change

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Three Months Ended

2022 March 31,

2022 June 30,

2021 Percent Change

18 unchanged sentences

Operating Revenues

Expedited Freight operating revenues increased $72,405, or 23.8%, to $376,591 for the three months ended March 31, 2022 from $304,186 for the three months ended March 31, 2021.

The increase was attributable to increased Network, Truckload and Final Mile revenue.

Network revenue increased due to a 10.2% increase in tonnage and an 18.5% increase in revenue per hundredweight as compared to the prior year.

Expedited Freight operating revenues increased $57,122, or 16.2%, to $408,857 for the three months ended June 30, 2022 from $351,735 for the three months ended June 30, 2021.

The increase was attributable to higher Network, Truckload and Final Mile revenue.

Network revenue increased due to a 0.3% increase in tonnage and a 9.9% increase in revenue per hundredweight ex fuel as compared to the prior year.

The increase in tonnage reflects an increase in weight per shipment of 14.5% on 12.3% fewer number of shipments.

The increase in the weight per shipment was the result of more dense freight in our network driven by our freight rationalization actions to capture higher quality freight.

The increase in the revenue per hundredweight was driven by the execution of our revenue growth strategies, pricing initiatives, including our general rate increase, and continued strong demand for our services.

Fuel surcharge revenue increased $22,119, or 80.5% as a result of the rise in diesel fuel prices and an increase in tonnage.

Truckload and Final Mile revenue increased $3,528 and $3,502, respectively, primarily due to continued strong demand for our services.

Other revenue, which includes warehousing and terminal handling, increased $588 due to higher linehaul tonnage.

The increase in the revenue per hundredweight ex fuel was driven by the execution of our revenue growth strategies, pricing initiatives, including our general rate increase, and continued strong demand for our services.

Network fuel surcharge revenue increased $29,950, or 86.3% as a result of the rise in rise in the average price of fue l.

Truckload and Fina l Mile revenue increased $3,176 and $3,145, respectively, primarily due to continued strong demand for our services.

Other revenue, which includes warehousing and terminal handling, decreased $2,536 due to the lower number of shipments.

Purchased Transportation

Expedited Freight purchased transportation increased $35,670, or 21.7%, to $200,034 for the three months ended March 31, 2022 from $164,364 for the three months ended March 31, 2021.

Purchased transportation was 53.1% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 54.0% for the same period in 2021.

Expedited Freight purchased transportation increased $20,927, or 10.9%, to $212,575 for the three months ended June 30, 2022 from $191,648 for the three months ended June 30, 2021.

Purchased transportation was 52.0% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 54.5% for the same period in 2021.

Expedited Freight purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.

The increase in purchased transportation was due to the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers for Network and Truckload services, and higher third party carrier costs.

In the first quarter of 2022, we purchased 62.5%, 34.0% and 3.5% of our freight capacity from Leased Capacity Providers, third party carriers and Company-employed drivers, respectively.

The increase in purchased transportation expense was primarily due to higher Leased Capacity Provider and third party carrier costs, partially offset by the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers for Network and Truckload services.

In the second quarter of 2022, we purchased 64.5%, 32.3% and 3.2% of our freight capacity from Leased Capacity Providers, third party carriers and Company-employed drivers, respectively.

This compares to 63.0%, 33.7% and 3.3% in the same period in 2021.

Salaries, Wages and Employee Benefits

Expedited Freight salaries, wages and employee benefits increased $6,533, or 10.6%, to $68,220 for the three months ended March 31, 2022 from $61,687 for the three months ended March 31, 2021.

Salaries, wages and employee benefits were 18.1% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 20.3% for the same period in 2021.

The increase in salaries, wages and employee benefits expense was due to the additional employees hired in response to the increased volumes in the first quarter of 2022 and an increased reserve for incentive compensation as compared to the same period in 2021.

Expedited Freight salaries, wages and employee benefits increased $1,937, or 2.9%, to $69,497 for the three months ended June 30, 2022 from $67,560 for the three months ended June 30, 2021.

Salaries, wages and employee benefits were 17.0% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 19.2% for the same period in 2021.

The increase in salaries, wages and employee benefits expense was primarily due to additional employees hired in response to the increased volumes in the second quarter of 2022 and higher salaries and wages as compared to the same period in 2021.

Operating Leases

Expedited Freight operating leases increased $1,513, or 10.6%, to $15,731 for the three months ended March 31, 2022 from $14,218 for the three months ended March 31, 2021.

Operating leases were 4.2% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 4.7% for the same period in 2021.

The increase in operating leases expense was primarily due to higher facility expense in the first quarter of 2022 as compared to the same period in 2021 .

Expedited Freight operating leases increased $1,065, or 7.2%, to $15,933 for the three months ended June 30, 2022 from $14,868 for the three months ended June 30, 2021.

Operating leases were 3.9% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 4.2% for the same period in 2021.

The increase in operating leases expense was primarily due to higher facility expense in the second quarter of 2022 as compared to the same period in 2021.

Depreciation and Amortization

Expedited Freight depreciation and amortization increased $683, or 10.0%, to $7,481 for the three months ended March 31, 2022 from $6,798 for the three months ended March 31, 2021.

Depreciation and amortization was 2.0% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 2.2% for the same period in 2021.

The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation in the first quarter of 2022 as compared to the same period in 2021 .

Expedited Freight depreciation and amortization increased $1,038, or 15.3%, to $7,817 for the three months ended June 30, 2022 from $6,779 for the three months ended June 30, 2021.

Depreciation and amortization was 1.9% of Expedited Freight operating revenues for both the three months ended June 30, 2022 and 2021.

The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation in the second quarter of 2022 as compared to the same period in 2021 .

Insurance and Claims

Expedited Freight insurance and claims increased $1,140, or 15.0%, to $8,751 for the three months ended March 31, 2022 from $7,611 for the three months ended March 31, 2021.

Insurance and claims was 2.3% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 2.5% for the same period in 2021.

The increase in insurance and claims expense was primarily due to an increase in vehicle repairs and cargo claims in the first quarter of 2022 as compared to the same period in 2021 .

Expedited Freight insurance and claims decreased $74, or 0.9%, to $8,311 for the three months ended June 30, 2022 from $8,385 for the three months ended June 30, 2021.

Insurance and claims was 2.0% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 2.4% for the same period in 2021.

The decrease in insurance and claims expense was primarily due to a decrease in vehicle liability and cargo claims, offset by an increase in vehicle repairs and insurance premiums in the second quarter of 2022 as compared to the same period in 2021 .

See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations ” section below.

Expedited Freight fuel expense increased $657, or 33.0%, to $2,650 for the three months ended March 31, 2022 from $1,993 for the three months ended March 31, 2021.

Fuel expense was 0.7% of Expedited Freight operating revenues for both the three months ended March 31, 2022 and 2021.

Expedited Freight fuel expense increased due to a rise in the average price of fuel in the first quarter of 2022 as compared to the same period in 2021.

Expedited Freight fuel expense increased $1,082, or 50.4%, to $3,229 for the three months ended June 30, 2022 from $2,147 for the three months ended June 30, 2021.

Fuel expense was 0.8% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 0.6% for the same period in 2021.

Fuel expense increased primarily due to a rise in the average price of fuel in the second quarter of 2022 as compared to the same period in 2021.

Other Operating Expenses

Expedited Freight other operating expenses increased $3,059, or 13.3%, to $26,044 for the three months ended March 31, 2022 from $22,985 for the three months ended March 31, 2021.

Other operating expenses were 6.9% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 7.6% for the same period in 2021.

Expedited Freight other operating expenses increased $2,728, or 10.6%, to $28,388 for the three months ended June 30, 2022 from $25,660 for the three months ended June 30, 2021.

Other operating expenses were 7.0% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 7.3% for the same period in 2021.

Other operating expenses include equipment maintenance, facility expenses, legal and professional fees, and other over-the-road costs.

The increase in other operating expenses was driven by an increase in equipment maintenance costs, terminal and office expenses, recruiting costs, legal and professional fees and travel expenses in the first quarter of 2022 as compared to the same period in 2021.

The increase in other operating expenses was primarily due to an increase in equipment maintenance costs, terminal and office expenses, recruiting costs, professional fees and travel expenses in the second quarter of 2022 as compared to the same period in 2021.

Income from Operations

Expedited Freight income from operations increased $23,150, or 94.4%, to $47,680 for the three months ended March 31, 2022 compared to $24,530 for the three months ended March 31, 2021.

Income from operations was 12.7% of Expedited Freight operating revenues for the three months ended March 31, 2022 compared to 8.1% for the same period in 2021.

The increase in income from operations as a percentage of operating revenues was driven by increased tonnage and revenue per hundredweight combined with higher fuel surcharge revenue, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers and higher third party carrier costs.

Intermodal - Three Months Ended March 31, 2022 compared to Three Months Ended March 31, 2021

The following table sets forth the financial data of our Intermodal segment for the three months ended March 31, 2022 and 2021 (unaudited and in thousands):

Expedited Freight income from operations increased $28,419, or 81.9%, to $63,107 for the three months ended June 30, 2022 compared to $34,688 for the three months ended June 30, 2021.

Income from operations was 15.4% of Expedited Freight operating revenues for the three months ended June 30, 2022 compared to 9.9% for the same period in 2021.

Intermodal - Three Months Ended June 30, 2022 compared to Three Months Ended June 30, 2021

The following table sets forth the financial data of our Intermodal segment for the three months ended June 30, 2022 and 2021 (unaudited and in thousands):

Three Months Ended

2022 Percent of Revenue March 31,

2022 Percent of Revenue June 30,

2021 Percent of Revenue Change Percent Change

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Three Months Ended

2022 March 31,

2022 June 30,

2021 Percent Change

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1 Excludes revenue derived from container freight station warehouse and handling, and linehaul and LTL services.

Intermodal operating revenues increased $31,926, or 54.6%, to $90,440 for the three months ended March 31, 2022 from $58,514 for the three months ended March 31, 2021.

The increase in operating revenues was primarily attributable to a 60.9% increase in drayage revenue per shipment over the same period in 2021.

The increase in drayage per shipment was driven by execution of our growth strategies, pricing initiatives, the acquisition of BarOle Trucking, Inc.

in November 2021, higher accessorial revenue to support our customers and continued strong demand for our services.

Operating Revenues

Intermodal operating revenues increased $37,278, or 53.9%, to $106,411 for the three months ended June 30, 2022 from $69,133 for the three months ended June 30, 2021.

The increase in operating revenue was primarily due to a 58.4% increase in drayage revenue per shipment as compared to the same period in 2021.

The increase in drayage revenue per shipment was driven by the execution of our pricing initiatives, the acquisition of BarOle in November 2021 and Edgmon in May 2022, higher accessorial revenue in support of our customers and continued strong dem and for our services.

In addition, fuel surcharge revenue increased $7,710, or 109.3% as a result of the rise in rise in the average price of fue l.

Purchased Transportation

Intermodal purchased transportation increased $4,265, or 20.7%, to $24,868 for the three months ended March 31, 2022 from $20,603 for the three months ended March 31, 2021.

Purchased transportation was 27.5% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 35.2% for the same period in 2021.

Intermodal purchased transportation increased $3,196, or 13.4%, to $26,963 for the three months ended June 30, 2022 from $23,767 for the three months ended June 30, 2021.

Purchased transportation was 25.3% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 34.4% for the same period in 2021.

Intermodal purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.

The increase in purchased transportation costs was primarily due to the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers, and higher third party carrier costs.

The increase in purchased transportation costs was primarily due to higher Leased Capacity Provider and third party carrier costs, and the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers.

Salaries, Wages and Employee Benefits

Intermodal salaries, wages and employee benefits increased $3,872, or 27.5%, to $17,935 for the three months ended March 31, 2022 compared to $14,063 for the three months ended March 31, 2021.

Salaries, wages and employee benefits were 19.8% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 24.0% for the same period in 2021.

The increase in salaries, wages and employee benefits expense was primarily due to the additional employees hired in response to the increase in drayage shipments in the first quarter of 2022 and an increased reserve for incentive compensation as compared to the same period in 2021.

Intermodal salaries, wages and employee benefits increased $2,601, or 16.0%, to $18,831 for the three months ended June 30, 2022 compared to $16,230 for the three months ended June 30, 2021.

Salaries, wages and employee benefits were 17.7% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 23.5% for the same period in 2021.

The increase in salaries, wages and employee benefits expense was primarily due to additional employees hired in the second quarter of 2022 and an increased reserve for incentive compensation as compared to the same period in 2021.

Operating Leases

Intermodal operating leases increased $2,104, or 43.5%, to $6,941 for the three months ended March 31, 2022 compared to $4,837 for the three months ended March 31, 2021.

Operating leases were 7.7% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 8.3% for the same period in 2021.

The increase in operating leases expense was primarily due to new equipment leases in the first quarter of 2022 as compared to the same period in 2021.

Intermodal operating leases increased $2,026, or 36.8%, to $7,526 for the three months ended June 30, 2022 compared to $5,500 for the three months ended June 30, 2021.

Operating leases were 7.1% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 8.0% for the same period in 2021.

The increase in operating leases expense was primarily due to additional equipment leases in the second quarter of 2022 as compared to the same period in 2021.

Depreciation and Amortization

Intermodal depreciation and amortization increased $1,174, or 48.2%, to $3,610 for the three months ended March 31, 2022 from $2,436 for the three months ended March 31, 2021.

Depreciation and amortization was 4.0% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 4.2% for the same period in 2021 .

The increase in depreciation and amortization expense was primarily due to the additional depreciation and amortization expense as result of the equipment and intangible assets acquired in connection with the acquisitions completed in 2021.

Intermodal depreciation and amortization increased $1,104, or 42.3%, to $3,716 for the three months ended June 30, 2022 from $2,612 for the three months ended June 30, 2021.

Depreciation and amortization was 3.5% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 3.8% for the same period in 2021 .

The increase in depreciation and amortization expense was primarily due to the equipment and intangible assets acquired in connection with the acquisitions completed in the fourth quarter of 2021 and the second quarter of 2022.

Insurance and Claims

Intermodal insurance and claims decreased $342, or 14.2%, to $2,060 for the three months ended March 31, 2022 from $2,402 for the three months ended March 31, 2021.

Insurance and claims were 2.3% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 4.1% for the same period in 2021.

The decrease in insurance and claims expense was primarily due to a decrease in insurance premiums and vehicle liability claims during the first quarter of 2022 as compared to the same period in 2021.

Intermodal insurance and claims decreased $17, or 0.7%, to $2,338 for the three months ended June 30, 2022 from $2,355 for the three months ended June 30, 2021.

Insurance and claims were 2.2% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 3.4% for the same period in 2021.

The decrease in insurance and claims expense was primarily due to the decrease in insurance premiums, offset by an increase in vehicle liability claims and vehicle repairs during the second quarter of 2022 as compared to the same period in 2021.

See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations ” section below.

Intermodal fuel expense increased $1,505, or 88.0%, to $3,215 for the three months ended March 31, 2022 from $1,710 for the three months ended March 31, 2021.

Fuel expense was 3.6% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 2.9% for the same period in 2021.

Intermodal fuel expense increased due to the rise in the average price of fuel in the first quarter of 2022 as compared to the same period in 2021.

Intermodal fuel expense increased $3,172, or 165.9%, to $5,084 for the three months ended June 30, 2022 from $1,912 for the three months ended June 30, 2021.

Fuel expense was 4.8% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 2.8% for the same period in 2021.

Intermodal fuel expense increased primarily due to the rise in the average price of fuel in the second quarter of 2022 as compared to the same period in 2021.

Other Operating Expenses

Intermodal other operating expenses increased $12,711, or 159.8%, to $20,665 for the three months ended March 31, 2022 from $7,954 for the three months ended March 31, 2021.

Other operating expenses were 22.8% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 13.6% for the same period in 2021.

The increase in Intermodal other operating expenses was driven by additional expenses incurred to support the increased accessorial revenues, increased bad debt expense and higher travel expenses in the first quarter of 2022 as compared to the same period in 2021.

Intermodal other operating expenses increased $18,333, or 219.0%, to $26,704 for the three months ended June 30, 2022 from $8,371 for the three months ended June 30, 2021.

Other operating expenses were 25.1% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 12.1% for the same period in 2021.

The increase in Intermodal other operating expenses was primarily due to additional expenses incurred in support of the increased accessorial revenues, increased bad debt expense and higher professional fees in the second quarter of 2022 as compared to the same period in 2021.

Income from Operations

Intermodal income from operations increased $6,637, or 147.2%, to $11,146 for the three months ended March 31, 2022 compared to $4,509 for the three months ended March 31, 2021.

Income from operations was 12.3% of Intermodal operating revenues for the three months ended March 31, 2022 compared to 7.7% for the same period in 2021.

The increase in income from operations as a percentage of operating revenues was driven by increased drayage revenue per shipment, partially offset by partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers and higher third party carrier costs.

Other Operations - Three Months Ended March 31, 2022 compared to Three Months Ended March 31, 2021

Other operations included an $1,475 operating loss during the three months ended March 31, 2022 compared to an $6,315 operating loss during the three months ended March 31, 2021.

The change in the operating loss was driven by decreased professional fees related to cybersecurity and shareholder engagement activities, partially offset by an increased reserve for an incentive program established for employees in 2021 and higher self-insurance reserves for vehicle liability claims.

The change in self-insurance reserves for vehicle liability claims was due to the unfavorable loss development factor of historical claims.

Intermodal income from operations increased $6,863, or 81.8%, to $15,249 for the three months ended June 30, 2022 compared to $8,386 for the three months ended June 30, 2021.

Income from operations was 14.3% of Intermodal operating revenues for the three months ended June 30, 2022 compared to 12.1% for the same period in 2021.

The increase in income from operations as a percentage of operating revenues was primarily due to increased drayage revenue per shipment, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers and higher Leased Capacity Provider and third party carrier costs.

Other Operations - Three Months Ended June 30, 2022 compared to Three Months Ended June 30, 2021

Other operations included an $2,811 operating loss during the three months ended June 30, 2022 compared to a $950 operating loss during the three months ended June 30, 2021.

The change in the operating loss was primarily due to an increase in self-insurance reserves for vehicle liability claims, legal reserves, bad debt expense related to other receivables and professional fees, partially offset by a decrease in the reserves for group health insurance claims.

The increase in the self-insurance reserves for vehicle liability claims was due to the unfavorable loss development factor of historical claims.

Results from Operations

The following table sets forth our consolidated financial data for the six months ended June 30, 2022 and 2021 (unaudited and in thousands):

Six Months Ended

2022 June 30,

2021 Change Percent Change

Operating revenues:

Expedited Freight $ 785,448 $ 655,921 $ 129,527 19.7 %

Intermodal 196,851 127,647 69,204 54.2

Eliminations and other operations (119) (695) 576 (82.9)

Operating revenues 982,180 782,873 199,307 25.5

Operating expenses:

Purchased transportation 464,322 399,825 64,497 16.1

Salaries, wages, and employee benefits 172,439 159,538 12,901 8.1

Operating leases 46,132 39,537 6,595 16.7

Depreciation and amortization 22,725 18,651 4,074 21.8

Insurance and claims 25,164 20,632 4,532 22.0

Fuel expense 14,179 7,761 6,418 82.7

Other operating expenses 104,323 72,081 32,242 44.7

Total operating expenses 849,284 718,025 131,259 18.3

Income (loss) from continuing operations:

Expedited Freight 110,787 59,218 51,569 87.1

Intermodal 26,395 12,895 13,500 104.7

Other Operations (4,286) (7,265) 2,979 (41.0)

Income from continuing operations 132,896 64,848 68,048 104.9

Other expense:

Interest expense (1,977) (2,488) 511 (20.5)

Total other expense (1,977) (2,488) 511 (20.5)

Income from continuing operations before income taxes 130,919 62,360 68,559 109.9

Income tax expense 32,803 14,969 17,834 119.1

Net income from continuing operations 98,116 47,391 50,725 107.0

Loss from discontinued operation, net of tax — (5,533) 5,533 (100.0)

Net income and comprehensive income $ 98,116 $ 41,858 $ 56,258 134.4 %

Operating Revenues

Operating revenues increased $199,307, or 25.5% to $982,180 for the six months ended June 30, 2022 compared to $782,873 for the six months ended June 30, 2021.

The increase was primarily due to an increase in our Expedited Freight segment of $129,527, driven by increased Network, Truckload and Final Mile revenue, and in our Intermodal segment of $69,204 driven by increased drayage and accessorial revenues.

Operating Expenses

Operating expenses increased $131,259, or 18.3%, to $849,284 for the six months ended June 30, 2022 compared to $718,025 for the six months ended June 30, 2021.

The increase was primarily due to an increase in purchased transportation expense of $64,497, salaries, wages and employee benefits of $12,901 and other operating expenses of $32,242 in both our Expedited Freight and Intermodal segments.

Purchased transportation expense includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.

Purchased transportation expense increased due to higher Lease Capacity Provider and third party carrier costs, and the utilization of more third party carriers over the prior year.

Salaries, wages and employee benefits increased primarily due to the additional employees hired in response to the increase in volumes in 2022, higher salaries and wages, and an increased reserve for incentive compensation.

Other operating expenses increased due to higher bad debt expense, travel expenses, recruiting costs, and terminal and office expenses, partially offset by lower professional fees.

Other operating expenses also increased due to additional expenses incurred in support of the increased accessorial revenues as noted above for the Intermodal segment.

Income from Continuing Operations and Segment Operations

Income from continuing operations increased $68,048, or 104.9%, to $132,896 for the six months ended June 30, 2022 compared to $64,848 for the six months ended June 30, 2021.

The increase was primarily driven by an increase in income from continuing operations in our Expedited Freight segment and Intermodal segment of $51,569 and $13,500, respectively.

The results of our two reportable segments are discussed below in the following sections.

Interest Expense

Interest expense was $1,977 for the six months ended June 30, 2022 compared to $2,488 for the six months ended June 30, 2021.

The decrease in interest expense was due to a lower variable interest rate during the six months ended June 30, 2022 as compared to the same period in the prior year.

The interest rate on the outstanding borrowings under our credit facility was 1.80% and 3.25 % during the six months ended June 30, 2022 and 2021, respectively.

Income Taxes on a Continuing Basis

The effective tax rate on a continuing basis for the six months ended June 30, 2022 was 25.1% compared to a rate of 24.0% for the six months ended June 30, 2021.

The higher effective tax rate for the six months ended June 30, 2022 was primarily due to decreased excess tax benefits realized on share-based awards in 2022 compared to the same period in 2021.

Loss from Discontinued Operation, net of tax

There was no loss from discontinued operation, net of tax for the six months ended June 30, 2022 compared to a loss from discontinued operation, net of tax of $5,533 for the six months ended June 30, 2021.

Loss from discontinued operation includes our Pool business and, as discussed above, the Pool business was sold on February 12, 2021.

As a result of the foregoing factors, net income increased by $56,258, or 134.4%, to $98,116 for the six months ended June 30, 2022 compared to $41,858 for the six months ended June 30, 2021.

Expedited Freight - Six Months Ended June 30, 2022 compared to Six Months Ended June 30, 2021

The following table sets forth the financial data of our Expedited Freight segment for the six months ended June 30, 2022 and 2021 (unaudited and in thousands):

Six Months Ended

2022 Percent of Revenue June 30,

2021 Percent of Revenue Change Percent Change

Operating revenues:

$ 506,839 64.5 % $ 388,715 59.3 % $ 118,124 30.4 %

Truckload 116,052 14.8 109,348 16.7 6,704 6.1

Final Mile 138,786 17.7 132,139 20.1 6,647 5.0

Other 23,771 3.0 25,719 3.9 (1,948) (7.6)

Total operating revenues 785,448 100.0 655,921 100.0 129,527 19.7

Operating expenses:

Purchased transportation 412,609 52.5 356,012 54.3 56,597 15.9

Salaries, wages and employee benefits 137,717 17.5 129,247 19.7 8,470 6.6

Operating leases 31,664 4.0 29,086 4.4 2,578 8.9

Depreciation and amortization 15,298 1.9 13,577 2.1 1,721 12.7

Insurance and claims 17,062 2.2 15,996 2.4 1,066 6.7

Fuel expense 5,879 0.7 4,140 0.6 1,739 42.0

Other operating expenses 54,432 6.9 48,645 7.4 5,787 11.9

Total operating expenses 674,661 85.9 596,703 91.0 77,958 13.1

Income from operations $ 110,787 14.1 % $ 59,218 9.0 % $ 51,569 87.1 %

1 Network revenue is comprised of all revenue, including linehaul, pickup and/or delivery, and fuel surcharge revenue, excluding accessorial, Truckload and Final Mile revenue.

Expedited Freight Operating Statistics

Six Months Ended

2022 June 30,

2021 Percent Change

Business days 128 127 0.8 %

Total pounds 1,447,740 1,379,530 4.9

Pounds per day 11,310 10,862 4.1

Shipments 1,2

Total shipments 1,853 2,122 (12.7)

Shipments per day 14.5 16.7 (13.2)

Weight per shipment 781 650 20.2

Revenue per hundredweight 3

$ 35.19 $ 28.30 24.3

Revenue per hundredweight, ex fuel 3

$ 26.94 $ 24.30 10.9

Revenue per shipment 3

$ 275.01 $ 183.98 49.5

Revenue per shipment, ex fuel 3

$ 210.51 $ 157.94 33.3

1 In thousands

2 Excludes accessorial, Truckload and Final Mile products

3 Includes intercompany revenue between the Network and Truckload revenue streams

Operating Revenues

Expedited Freight operating revenues increased $129,527, or 19.7%, to $785,448 for the six months ended June 30, 2022 from $655,921 for the six months ended June 30, 2021.

The increase was attributable to higher Network, Truckload and Final Mile revenue.

Network revenue increased due to a 4.9% increase in tonnage and a 10.9% increase in revenue per hundredweight ex fuel as compared to the prior year.

The increase in tonnage reflects an increase in weight per shipment of 20.2% on 12.7% fewer number of shipments.

The increase in the weight per shipment was the result of more dense freight in our network driven by our freight rationalization actions to capture higher quality freight.

Network fuel surcharge revenue increased $52,070, or 83.7% as a result of the rise in the average price of fuel and an increase in tonnage.

Truckload and Final Mile revenue increased $6,704 and $6,647, respectively, primarily due to continued strong demand for our services.

Other revenue, which includes warehousing and terminal handling, decreased $1,948 due to the lower number of shipments.

Purchased Transportation

Expedited Freight purchased transportation increased $56,597, or 15.9%, to $412,609 for the six months ended June 30, 2022 from $356,012 for the six months ended June 30, 2021.

Purchased transportation was 52.5% of Expedited Freight operating revenue for the six months ended June 30, 2022 compared to 54.3% for the same period in 2021.

Expedited Freight purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.

The increase in purchased transportation expense was primarily due to higher Leased Capacity Provider and third party carrier costs, and the change in the mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers for Network and Truckl oad services.

For the six months ended June 30, 2022, we purchased 62.6%, 34.1% and 3.3% of our freight capacity from Leased Capacity Providers, third party carriers and Company-employed drivers, respectively.

This compares to 63.8%, 32.6% and 3.6% in the same period in 2021.

Salaries, Wages, and Employee Benefits

Expedited Freight salaries, wages and employee benefits increased $8,470, or 6.6%, to $137,717 for the six months ended June 30, 2022 from $129,247 for the six months ended June 30, 2021.

Salaries, wages and employee benefits were 17.5% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 19.7% for the same period in 2021.

The increase in salaries, wages and employee benefits expense was primarily due to additional employees hired in response to the increased volumes for the six months ended June 30, 2022, higher salaries and wages and an increased reserve for incentive compensation as compared to the same period in 2021.

Operating Leases

Expedited Freight operating leases increased $2,578, or 8.9%, to $31,664 for the six months ended June 30, 2022 from $29,086 for the six months ended June 30, 2021.

Operating leases were 4.0% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 4.4% for the same period in 2021.

The increase in operating leases expense was primarily due to higher facility expense, partially offset by fewer equipment leases for the six months ended June 30, 2022 as compared to the same period in 2021.

Depreciation and Amortization

Expedited Freight depreciation and amortization increased $1,721, or 12.7%, to $15,298 for the six months ended June 30, 2022 from $13,577 for the six months ended June 30, 2021.

Depreciation and amortization was 1.9% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 2.1% for the same period in 2021.

The increase in depreciation and amortization expense was primarily due to an increase in equipment depreciation for the six months ended June 30, 2022 as compared to the same period in 2021 .

Insurance and Claims

Expedited Freight insurance and claims increased $1,066, or 6.7%, to $17,062 for the six months ended June 30, 2022 from $15,996 for the six months ended June 30, 2021.

Insurance and claims were 2.2% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 2.4% for the same period in 2021.

The increase in insurance and claims expense was primarily due to an increase in vehicle repairs and insurance premiums, partially offset by a decrease in cargo claims for the six months ended June 30, 2022 as compared to the same period in 2021 .

See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations ” section below.

Expedited Freight fuel expense increased $1,739, or 42.0%, to $5,879 for the six months ended June 30, 2022 from $4,140 for the six months ended June 30, 2021.

Fuel expense was 0.7% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 0.6% for the same period in 2021.

Fuel expense increased primarily due to the rise in the average price of fuel during the six months ended June 30, 2022.

Other Operating Expenses

Expedited Freight other operating expenses increased $5,787, or 11.9%, to $54,432 for the six months ended June 30, 2022 from $48,645 for the six months ended June 30, 2021.

Other operating expenses were 6.9% of Expedited Freight operating revenues for the six months ended June 30, 2022 compared to 7.4% for the same period in 2021.

Other operating expenses include equipment maintenance, facility expenses, legal and professional fees, and other over-the-road costs.

The increase in other operating expenses was primarily due to an increase in equipment maintenance costs, terminal and office expenses, recruiting costs, professional fees and travel expenses for the six months ended June 30, 2022 as compared to the same period in 2021 .

Income from Operations

Expedited Freight income from operations increased $51,569, or 87.1%, to $110,787 for the six months ended June 30, 2022 compared to $59,218 for the six months ended June 30, 2021.

Income from operations was 14.1% of Expedited Freight operating revenues in the six months ended June 30, 2022 compared to 9.0% for the same period in 2021.

The increase in income from operations as a percentage of operating revenues was primarily due to increased tonnage and revenue per hundredweight ex fuel combined with higher fuel surcharge revenue, partially offset by the change in mix of freight capacity purchased from Leased Capacity Providers, third party carriers and Company-employed drivers, and higher Leased Capacity Provider and third party carrier costs.

Intermodal - Six Months Ended June 30, 2022 compared to Six Months Ended June 30, 2021

The following table sets forth the financial data of our Intermodal segment for the six months ended June 30, 2022 and 2021 (unaudited and in thousands):

Six Months Ended

2022 Percent of Revenue June 30,

2021 Percent of Revenue Change Percent Change

Operating revenues $ 196,851 100.0 % $ 127,647 100.0 % $ 69,204 54.2 %

Operating expenses:

Purchased transportation 51,831 26.3 44,370 34.8 7,461 16.8

Salaries, wages and employee benefits 36,766 18.7 30,293 23.7 6,473 21.4

Operating leases 14,467 7.3 10,337 8.1 4,130 40.0

Depreciation and amortization 7,326 3.7 5,048 4.0 2,278 45.1

Insurance and claims 4,398 2.2 4,757 3.7 (359) (7.5)

Fuel expense 8,299 4.2 3,622 2.8 4,677 129.1

Other operating expenses 47,369 24.1 16,325 12.8 31,044 190.2

Total operating expenses 170,456 86.6 114,752 89.9 55,704 48.5

Income from operations $ 26,395 13.4 % $ 12,895 10.1 % $ 13,500 104.7 %

Intermodal Operating Statistics

Six Months Ended

2022 June 30,

2021 Percent Change

Drayage shipments 181,098 186,714 (3.0) %

Drayage revenue per shipment 1

$ 936 $ 587 59.5

1 Excludes revenue derived from container freight station warehouse and handling, and linehaul and LTL services.

Operating Revenues

Intermodal operating revenues increased $69,204, or 54.2%, to $196,851 for the six months ended June 30, 2022 from $127,647 for the six months ended June 30, 2021.

The increase in operating revenue was primarily attributable to a 59.5% increase in drayage revenue per shipment as compared to the same period in 2021.

The increase in drayage revenue per shipment was driven by execution of our pricing initiatives, the acquisition of BarOle in November 2021 and Edgmon in May 2022, higher accessorial revenue in support of our customers and continued strong demand for our services.

In addition, fuel surcharge revenue increased $11,660, or 94.0% as a result of the rise in the average price of fuel.

Purchased Transportation

Intermodal purchased transportation increased $7,461, or 16.8%, to $51,831 for the six months ended June 30, 2022 from $44,370 for the six months ended June 30, 2021.

Purchased transportation was 26.3% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 34.8% for the same period in 2021.

Intermodal purchased transportation includes Leased Capacity Providers and third party carriers, while Company-employed drivers are included in salaries, wages and employee benefits.

Salaries, Wages, and Employee Benefits

Intermodal salaries, wages and employee benefits increased $6,473, or 21.4%, to $36,766 for the six months ended June 30, 2022 compared to $30,293 for the six months ended June 30, 2021.

Salaries, wages and employee benefits were 18.7% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 23.7% for the same period in 2021.

The increase in salaries, wages and employee benefits expense was primarily due to additional employees hired for the six months ended June 30, 2022 and an increased reserve for incentive compensation as compared to the same period in 2021.

Operating Leases

Intermodal operating leases increased $4,130, or 40.0%, to $14,467 for the six months ended June 30, 2022 from $10,337 for the six months ended June 30, 2021.

Operating leases were 7.3% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 8.1% for the same period in 2021.

The increase in operating leases expense was primarily due to additional equipment leases for the six months ended June 30, 2022 as compared to the same period in 2021.

Depreciation and Amortization

Intermodal depreciation and amortization increased $2,278, or 45.1%, to $7,326 for the six months ended June 30, 2022 from $5,048 for the six months ended June 30, 2021.

Depreciation and amortization was 3.7% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 4.0% for the same period in 2021 .

Insurance and Claims

Intermodal insurance and claims decreased $359, or 7.5%, to $4,398 for the six months ended June 30, 2022 from $4,757 for the six months ended June 30, 2021.

Insurance and claims were 2.2% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 3.7% for the same period in 2021.

The decrease in insurance and claims expense was primarily due to the decrease in insurance premiums and vehicle liability claims, partially offset by an increase in vehicle repairs during the six months ended June 30, 2022 as compared to the same period in 2021.

See additional discussion over the consolidated change in self-insurance reserves in the “Other Operations ” section below.

Intermodal fuel expense increased $4,677, or 129.1%, to $8,299 for the six months ended June 30, 2022 from $3,622 for the six months ended June 30, 2021.

Fuel expense was 4.2% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 2.8% for the same period in 2021.

Intermodal fuel expense increased primarily due to the rise in the average price of fuel for the six months ended June 30, 2022 as compared to the same period in 2021.

Other Operating Expenses

Intermodal other operating expenses increased $31,044, or 190.2%, to $47,369 for the six months ended June 30, 2022 compared to $16,325 for the six months ended June 30, 2021.

Other operating expenses were 24.1% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 12.8% for the same period in 2021.

The increase in Intermodal other operating expenses was primarily due to additional expenses incurred in support of the increased accessorial revenues, increased bad debt expense and higher legal and professional fees for the six months ended June 30, 2022 as compared to the same period in 2021.

Income from Operations

Intermodal income from operations increased by $13,500, or 104.7%, to $26,395 for the six months ended June 30, 2022 compared to $12,895 for the six months ended June 30, 2021.

Income from operations was 13.4% of Intermodal operating revenues for the six months ended June 30, 2022 compared to 10.1% for the same period in 2021.

Other Operations - Six Months Ended June 30, 2022 compared to Six Months Ended June 30, 2021

Other operating included an $4,286 operating loss during the six months ended June 30, 2022 compared to a $7,265 operating loss during the six months ended June 30, 2021.

The change in the operating loss was primarily due to an increase in s elf-insurance reserves for vehicle liability claims, reserve for an incentive program established for certain employees in 2021, legal reserves and bad debt expense related to other receivables, partially offset by a decrease in the reserves for group health insurance claims and professional fees.

The increase in the self-insurance reserves for vehicle liability claims was due to the unfavorable loss development factor of historical claims.

Professional fees related to cybersecurity and shareholder engagement activities in the amount of $6,955 were incurred during the six months ended June 30, 2021.

Similar professional fees were not incurred during the six months ended June 30, 2022.

Critical Accounting Policies

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We believe that borrowings under our credit facility, together with available cash and internally generated funds, will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future.

To further support liquidity and cash reserves, in December 2021, we entered into a third amendment to our credit facility, which increased the amount available for borrowing to $450,000, consisting of $300,000 revolving line of credit and a term loan of $150,000.

To further support liquidity and cash reserves, in December 2021, we entered into a third amendment to our credit facility, which increased the amount available for borrowing to $450,000, consisting of a $300,000 revolving line of credit and a term loan of $150,000.

The amendment establishes annual mandatory repayment of the principal amount of the term loan of:

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with the remaining unpaid principal being due on July 20, 2026.

As of March 31, 2022, we were in compliance with our financial convents contained in the credit facility and expect to maintain such compliance.

As of June 30, 2022, we were in compliance with our financial covenants contained in the credit facility and expect to maintain such compliance.

In the event that we encounter difficulties, our historical relationships with our lenders has been strong and we anticipate their continued long-term support of our business.

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Continuing Operations

Net cash provided by operating activities of continuing operations was $62,486 for the three months ended March 31, 2022 compared to $16,913 for the three months ended March 31, 2021.

The increase in net cash provided by operating activities of continuing operations was primarily due to the increase in net income from continuing operations after consideration of non-cash items, and accounts payable and accrued expenses, partially offset by an increase in accounts receivable.

The accounts payable and accrued expenses changed primarily due to an increase in estimated taxes payables, and the accounts receivable balance changed due to the increase in operating revenues.

Net cash used in investing activities of continuing operations was $9,397 for the three months ended March 31, 2022 compared to $17,030 for the three months ended March 31, 2021.

Capital expenditures for the first three months of 2022 were $9,908, which primarily related to the organic investment in the expansion of our national hub in Columbus, Ohio and for the purchase of technology equipment.

Capital expenditures for the first three months of 2021 were $2,695, which primarily related to the organic investment in the expansion of our national hub in Columbus, Ohio.

Investing activities of continuing operations for the first three months of 2021 included the acquisition of Proficient Transport for a preliminary purchase price of $15,000.

Net cash used in financing activities of continuing operations was $28,775 for the three months ended March 31, 2022 compared to $15,741 for the three months ended March 31, 2021.

The change in the net cash used in financing activities of continuing operations was primarily due to increased repurchases and retirement of common stock for the first three months of 2022 as compared to the same period in 2021.

Net cash provided by operating activities of continuing operations was $112,820 for the six months ended June 30, 2022 compared to $39,661 for the six months ended June 30, 2021.

The increase in net cash provided by operating activities of continuing operations was primarily due to the increase in net income from continuing operations after consideration of non-cash items and a decrease in other receivables, partially offset by a decrease in accounts payable, accrued expenses and other long-term liabilities.

Other receivables changed due to the completion of the services rendered under the Transition Services Agreement with the buyer of the Pool business in October 2021.

Accounts payable, accrued expenses and other long-term liabilities changed due to the number of days to accrue for payroll expense.

Net cash used in investing activities of continuing operations was $58,339 for the six months ended June 30, 2022 compared to $29,804 for the six months ended June 30, 2021.

Capital expenditures for the first six months of 2022 were $18,673, which primarily related to the purchase of technology and operating equipment, and the investment in the expansion of our national hub in Columbus, Ohio.

Capital expenditures for the first six months of 2021 were $8,575, which primarily related to the investment in the expansion of our national hub in Columbus, Ohio.

Investing activities of continuing operations for the first six months of 2022 included the acquisition of Edgmon Trucking, LLC for a preliminary purchase price of $40,433 while investing activities for the first six months of 2021 included the acquisition of Proficient Transport for $15,000 and J&P Hall Express Delivery for $7,543.

Net cash used in financing activities of continuing operations was $44,411 for the six months ended June 30, 2022 compared to cash provided by financing activities of continuing operations of $733 for the six months ended June 30, 2021.

The change in the net cash used in financing activities of continuing operations was primarily due to the decreased proceeds from the credit facility, partially offset by the decreased repurchases and retirement of common stock for the first six months of 2022 as compared to the same period in 2021.

During the first six month of 2021, proceeds from the credit facility were $45,000 as compared to during the first six months of 2022 payments on the credit facility were $8,250.

Discontinued Operation

Net cash used in operating activities of discontinued operation was $— for the three months ended March 31, 2022 compared to $6,902 for the three months ended March 31, 2021.

Net cash used in operating activities of discontinued operation was $— for the six months ended June 30, 2022 compared to $6,902 for the six months ended June 30, 2021.

The change in net cash used in operating activities of discontinued operation was primarily related to a decrease in net income of discontinued operation after consideration of non-cash items.

The sale of Pool was completed on February 12, 2021.

Net cash provided by investing activities of discontinued operation was $— for the three months ended March 31, 2022 compared to $8,020 for the three months ended March 31, 2021.

The change in the net cash provided by investing activities of discontinued operation was due to the proceeds received from the sale of the Pool business during the first three months of 2021 .

Net cash provided by investing activities of discontinued operation was $— for the six months ended June 30, 2022 compared to $8,020 for the six months ended June 30, 2021.

The change in the net cash provided by investing activities of discontinued operation was due to the proceeds received from the sale of the Pool business during the first six months of 2021 .

The sale of Pool was completed on February 12, 2021.

Net cash used in financing activities of discontinued operation was $— for the three months ended March 31, 2022 compared to $1,118 for the three months ended March 31, 2021.

Net cash used in financing activities of discontinued operation was $— for the six months ended June 30, 2022 compared to $1,118 for the six months ended June 30, 2021.

The change in the net cash used in financing activities of discontinued operation was due to decreased contributions to the parent.

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Share Repurchase Program

During the three months ended March 31, 2022 and 2021, we repurchased 176 and 114 shares of our common stock, respectively, for approximately $17,780 and $9,997, respectively, through open market transactions.

During the six months ended June 30, 2022 and 2021, we repurchased 176 and 366 shares of our common stock, respectively, for approximately $17,780 and $33,992, respectively, through open market transactions.

All shares received were retired upon receipt, and the excess of the purchase price over the par value per share was recorded to “Retained Earnings” in our Condensed Consolidated Balance Sheets.

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Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance.

In this Form 10-Q, forward-looking statements include, but are not limited to, any statements regarding the impact of the COVID-19 pandemic on our business, results of operations and financial condition, our pursuit of new revenue opportunities and steps to bolster our liquidity;

any projections of earnings, revenues, dividends, or other financial items or methods of interpretation or measurement;

plans, strategies, and objectives of management for future operations;

future performance, including our ability to grow profitability;

future insurance, claims and litigation and any associated estimates or projections;

proposed or intended new services or developments and related integration costs;

intended expansion, future economic conditions or performance based on our business strategy, including acquisitions;

future macroeconomic conditions, including but not limited to, labor shortages and our ability to successfully address such conditions;

the sufficiency of our credit facility;

our ESG and sustainability initiatives and operations;

certain tax and accounting matters, including the impact on our financial statements;

Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.” .” In this Form 10-Q, forward-looking statements include, but are not limited to, any statements regarding (i) the impact of the COVID-19 pandemic on our business or our liquidity;

(ii) results of operations and financial condition;

(iii) any projections of earnings, revenues, dividends, or other financial items or methods of interpretation or measurement;

(iv) plans, strategies, and objectives of management for future operations;

(v) growing our less-than-truckload, final mile geographic footprint and Intermodal geographic footprint through greenfield start-ups as well as acquisitions;

(vi) future and pending insurance, claims and litigation and any associated estimates or reserves;

(vii) yield management;

(viii) intentions to promote a healthier natural environment;

(ix) proposed or intended new services, or developments, and related integration costs;

(x) expected expansion and potential performance based on our business strategy, including acquisitions;

(xi) future macroeconomic conditions, including but not limited to, labor shortages and other inflationary conditions and our ability to successfully address such conditions;

(xii) the sufficiency of our credit facility;

(xiii) our ESG and sustainability initiatives and operations;

(xiv) plans to incorporate data requirements identified by widely accepted sustainability frameworks and set measurable targets and goals for our priority areas;

and (xv) certain tax and accounting matters, including the impact on our financial statements;

and any belief and any assumptions underlying any of the foregoing.

Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements:

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What changed 10-Q

Item 2. Management’s Discussion and Analysis