What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-18 compared with 2024-02-28 · 106 added, 138 removed, 780 unchanged (24% of the section changed)

15 unchanged sentences

The Company’s internal control over financial reporting as of December 31, 2024 has been audited by Grant Thornton LLP, an independent registered public accounting firm as stated in its report which is included herein.

Changes in Internal Control Over Financial Reporting – Except for the design, implementation, and testing of Smith Transport and CFI internal controls, there were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the twelve months ended December 31, 2023 that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

Changes in Internal Control Over Financial Reporting – There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the twelve months ended December 31, 2024 that have materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

During the quarter ended December 31, 2024, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The remaining information required by this Item will be included in the Company's definitive proxy statement to be filed with the SEC within 120 days after December 31, 2024, in connection with the solicitation of proxies for the Company's 2025 Annual Meeting of Stockholders (the "2025 Proxy Statement"), and is incorporated herein by reference.

Insider Trading Policies and Procedures

The Company has adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of the Company's securities by directors, officers and employees, and the Company, that are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to the Company.

EXECUTIVE COMPENSATION

64 unchanged sentences

Form Award Notice under the 2021 Restricted Stock Award Plan.

Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-K for the year ended December 31, 2024.

Heartland Express, Inc.

4 unchanged sentences

Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2022.

Insider Trading Policy.

Subsidiaries of the Registrant.

Consent of Grant Thornton LLP.

Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.

5 unchanged sentences

Clawback Policy.

Incorporated by reference to Exhibit 97 to the Company’s Form 10-K for the year ended December 31, 2024.

101.INS XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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Pratt Director February 18, 2025

/s/ Michael J.

Sullivan Director February 28, 2024

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We have audited the accompanying consolidated balance sheets of Heartland Express, Inc.

(a Nevada corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedule II (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(a Nevada corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule included under Item II (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 18, 2025 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Heartland auto liability claims accrual

Auto liability claims accrual

As described further in the notes to the consolidated financial statements, the Company is self-insured for a portion of its risk related to auto liability.

2 unchanged sentences

The actual cost to settle self-insured claim liabilities may differ from the Company’s reserve estimates due to legal costs, claims that have been incurred but not reported, and various other uncertainties, including the inherent difficulty in estimating the severity of the claims and the potential judgment or settlement amount to dispose of the claim.

We identified the estimation of the Heartland auto liability claims accrual subject to self-insured retention of $2.0 million or greater as a critical audit matter.

Auto liability unpaid claims liabilities are determined by projecting the estimated ultimate loss related to a claim, less actual costs paid to date.

These estimates rely on the assumption that historical claim patterns are an

accurate representation of future claims that have been incurred but not completely paid.

We identified the estimation of the auto liability claims accrual subject to self-insured retention of $2.0 million or greater as a critical audit matter.

Auto liability unpaid claims liabilities are determined by projecting the estimated ultimate loss related to a

claim, less actual costs paid to date.

These estimates rely on the assumption that historical claim patterns are an accurate representation of future claims that have been incurred but not completely paid.

The principal considerations for assessing auto liability claims as a critical audit matter are the high level of estimation uncertainty related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgement in estimating the total costs to settle or dispose of these claims.

113 unchanged sentences

1,067,747 1,165,073 779,638

Operating income 42,385 188,358 105,407

Operating (loss) income ( 20,236 ) 42,385 188,358

Interest income 1,143 1,655 1,288

Interest expense ( 17,582 ) ( 24,187 ) ( 8,555 )

Income before income taxes 19,853 181,091 106,047

Federal and state income tax expense 5,078 47,507 26,770

Net income $ 14,775 $ 133,584 $ 79,277

(Loss) income before income taxes ( 36,675 ) 19,853 181,091

Federal and state income tax (benefit) expense ( 6,953 ) 5,078 47,507

Net (loss) income $ ( 29,722 ) $ 14,775 $ 133,584

Other comprehensive income, net of tax — — —

Comprehensive income $ 14,775 $ 133,584 $ 79,277

Net income per share

Comprehensive (loss) income $ ( 29,722 ) $ 14,775 $ 133,584

Net (loss) income per share

Basic $ ( 0.38 ) $ 0.19 $ 1.69

15 unchanged sentences

Dividends on common stock, $0.08 per share — — ( 6,318 ) — ( 6,318 )

Repurchases of common stock — — — ( 31,540 ) ( 31,540 )

Stock-based compensation, net of tax — 24 — 1,085 1,109

6 unchanged sentences

Dividends on common stock, $0.08 per share — — ( 6,291 ) — ( 6,291 )

Repurchases of common stock — — — ( 7,281 ) ( 7,281 )

Stock-based compensation, net of tax — ( 1,352 ) — 1,985 633

7 unchanged sentences

OPERATING ACTIVITIES 2024 2023 2022

Net income $ 14,775 $ 133,584 $ 79,277

Adjustments to reconcile net income to net cash provided

Net (loss) income $ ( 29,722 ) $ 14,775 $ 133,584

Adjustments to reconcile net (loss) income to net cash provided

by operating activities:

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Repurchases of common stock ( 7,281 ) — —

Net cash provided by (used in) financing activities ( 120,690 ) 359,257 ( 78,144 )

Net increase (decrease) in cash and cash equivalents ( 23,290 ) ( 109,289 ) 42,627

Net cash (used in) provided by financing activities ( 112,713 ) ( 120,690 ) 359,257

Net decrease in cash and cash equivalents ( 14,904 ) ( 23,290 ) ( 109,289 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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Sold revenue equipment and property in other current assets $ 864 $ 2,516 $ 1,558

Common stock dividends declared in accounts payable $ 1,570 $ — $ —

Right-of-use assets obtained in exchange for operating lease liabilities $ — $ 8,236 $ 3,345

13 unchanged sentences

Heartland Express, Inc.

is a holding company incorporated in Nevada, which directly or indirectly owns all of the stock of the following active legal entities:

is a holding company incorporated in Nevada, which directly or indirectly owns all of the stock of the following legal entities:

Heartland Express, Inc.

of Iowa, Heartland Express Services, Inc., Heartland Express Maintenance Services, Inc.

("Heartland Express"), and Midwest Holding Group, LLC and Millis Transfer, LLC ("Millis Transfer"), and Smith Transport, LLC and Franklin Logistics, LLC ("Smith Transport"), and CFI entities, Transportation Resources, Inc.

("Heartland Express"), and Midwest Holding Group, LLC and Millis Transfer, LLC ("Millis Transfer"), and Smith Transport, LLC ("Smith Transport"), and CFI entities, Transportation Resources, Inc.

and Contract Freighters, Inc.

(collectively with certain Mexican entities, "CFI").

Effective December 31, 2024, Franklin Logistics, LLC was merged into Smith Transport, LLC.

Effective December 31, 2023, Smith Trucking, Inc.

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These truckload services are primarily asset-based transportation services in the dry van truckload market, and we also offer truckload temperature-controlled transportation services and Mexico logistics services, which are not significant to our operations.

Our Chief Operating Decision Maker oversees and manages all of our transportation services, on a combined basis, including previously acquired entities.

Our Chief Operating Decision Maker ("CODM") oversees and manages all of our transportation services, on a combined basis, including previously acquired entities.

In addition to consolidated data on a combined basis that has been historically used, our CODM also makes use of available disaggregated operating segment data as well.

However, those operating segments share similar economic characteristics and meet operating segment aggregation criteria.

As a result of the foregoing, we have determined that we have one reportable segment, consistent with the authoritative accounting guidance on disclosures about segments of an enterprise and related information.

The accounting policies for the reportable segment are the same as those for the Company described herein.

The CODM is our CEO and President.

The primary measure of profit or loss utilized by our CODM is operating ratio (operating expenses as a percentage of operating revenues) which is regularly reviewed to allocate resources and assess performance of our reportable segment.

In addition to operating ratio, our CODM also regularly reviews consolidated net income to allocate resources and assess performance of our reportable segment when we have significant non-operating activity as is the case currently given we have significant interest expense as a result of debt resulting from recent acquisitions in 2022.

The revenue, costs and expenses for the reportable segment are the same as those presented on the Consolidated Statements of Comprehensive Income as there are no other significant segment expenses that would require disclosure or other segment items needed to reconcile to the Consolidated Statements of Comprehensive Income.

There are no other segment items as there are no significant assets or operations not regularly reviewed by the CODM.

Cash and Cash Equivalents

2 unchanged sentences

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000.

At December 31, 2023, the Company had $ 12.8 million in excess of the FDIC insured limit.

At December 31, 2024, the Company had deposits over the the FDIC insured limit, with the largest excess at any financial institution amounting to $ 5.4 million in excess of the FDIC insured limit.

At December 31, 2024 and 2023, restricted and designated cash and investments totaled $ 13.5 million and $ 13.0 million, respectively.

2 unchanged sentences

The restricted and designated funds represent deposits required by state agencies for self-insurance purposes and funds that are earmarked for a specific purpose and not for general business use.

Municipal bonds of $ 0.3 million and $ 0.8 million at December 31, 2023 and 2022, respectively, are stated at amortized cost, are classified as held-to-maturity and are included in restricted cash in other assets presented as non-current.

Investment income received on held-to-maturity municipal bond investments is generally exempt from federal income taxes and is recognized as earned.

Fixed income investments of $ 0.9 million and $ 0.9 million at December 31, 2024 and 2023, respectively, are stated at amortized cost, are classified as held-to-maturity and are included in restricted cash in other assets presented as non-current.

The fixed income securities have maturities ranging from June 2025 to December 2029.

Investment income on our mix of held-to-maturity fixed income investments is primarily exempt from federal income taxes and is recognized as earned.

Trade Receivables

1 unchanged sentence

The delivery of the shipment and completion of the performance obligation allows for the collection of payment based on the credit terms for customer accounts which are predominantly on a net 30 day basis.

We use our write off history and our knowledge of uncollectible accounts in estimating the allowance for bad debts.

We use our write off history and our knowledge of uncollectible accounts in estimating the allowance for credit losses.

We review the adequacy of our allowance for credit losses on a monthly basis.

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Depreciation for financial statement purposes is computed by the straight-line method for all assets other than new tractors.

We recognize depreciation expense on new tractors (excluded tractors acquired through acquisition) at 125% declining balance method.

We recognize depreciation expense on new tractors (excluded tractors acquired through acquisition) using the declining balance method.

New tractors are depreciated to salvage values of $ 15,000 , while new trailers are depreciated to salvage values of $ 4,000 .

10 unchanged sentences

Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset group to future net undiscounted cash flows expected to be generated by the group.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount over which the carrying amount of the assets exceeds the fair value of the assets.

If such assets are considered to be impaired, the impairment to be recognized is

measured by the amount over which the carrying amount of the assets exceeds the fair value of the assets.

There were no impairment charges recognized during the years ended December 31, 2024, 2023, and 2022.

10 unchanged sentences

As of September 30, 2024, the Company’s assessment of qualitative factors informed its conclusion that a goodwill impairment did not occur.

The significant qualitative factors considered include the Company’s revenue growth, continued earnings and strong cash flow.

The significant qualitative factors considered include the Company’s continued strong cash flow.

Our reporting units had fair value in excess of their carrying value.

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The Company's operations are consistent with those in the trucking industry where freight is hauled twenty-four hours a day and seven days a week, subject to hours of service rules.

The Company’s average length of haul is approximately 400 miles per trip and each individual shipment accepted by the Company is considered a separate contract with the performance obligation

being the delivery of the freight.

The Company’s average length of haul is under 400 miles per trip and each individual shipment accepted by the Company is considered a separate contract with the performance obligation being the delivery of the freight.

Our average length of haul for each load of freight generally equals less than two days of continuous transit time.

10 unchanged sentences

Compensation expense for restricted stock grants is recognized over the requisite service period of each award and is included in salaries, wages and benefits in the consolidated statements of comprehensive income.

Total compensation of $ 17.5 million related to all awards granted under the 2011 and 2021 Restricted Stock Award Plans has been amortized over the requisite service period for each separate vesting period as if the award is, in substance, multiple awards between 2011 and 2026.

Earnings per Share

Basic earnings per share are based upon the weighted average common shares outstanding during each year.

Diluted earnings per share is based on the basic weighted earnings per share with additional weighted common shares for common stock equivalents.

(Loss) Earnings per Share

Basic (loss) earnings per share are based upon the weighted average common shares outstanding during each year.

Diluted (loss) earnings per share is based on the basic weighted (loss) earnings per share with additional weighted common shares for common stock equivalents.

During the years ended December 31, 2024, 2023, and 2022, we granted restricted shares of common stock to certain employees and Directors, under the Company's restricted stock award plans.

A reconciliation of the numerator (net income) and denominator (weighted average number of shares outstanding) of the basic and diluted earnings per share (“EPS”) for 2023, 2022, and 2021 is as follows (in thousands, except per share data):

Net Income (numerator) Shares (denominator) Per Share Amount

Basic EPS $ 14,775 79,010 $ 0.19

A reconciliation of the numerator (net (loss) income) and denominator (weighted average number of shares outstanding) of the basic and diluted (loss) earnings per share for 2024, 2023, and 2022 is as follows (in thousands, except per share data):

Net Loss (numerator) Shares (denominator) Per Share Amount

Basic loss per share $ ( 29,722 ) 78,733 $ ( 0.38 )

Effect of restricted stock — 42

Diluted EPS $ 14,775 79,079 $ 0.19

Diluted loss per share $ ( 29,722 ) 78,775 $ ( 0.38 )

Net Income (numerator) Shares (denominator) Per Share Amount

Basic EPS $ 133,584 78,941 $ 1.69

Basic earnings per share $ 14,775 79,010 $ 0.19

Effect of restricted stock — 69

Diluted EPS $ 133,584 78,974 $ 1.69

Diluted earnings per share $ 14,775 79,079 $ 0.19

Net Income (numerator) Shares (denominator) Per Share Amount

Basic EPS $ 79,277 79,573 $ 1.00

Basic earnings per share $ 133,584 78,941 $ 1.69

Effect of restricted stock — 33

Diluted EPS $ 79,277 79,612 $ 1.00

Diluted earnings per share $ 133,584 78,974 $ 1.69

We use the asset and liability method of accounting for income taxes.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amount of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse.

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Early adoption is permitted.

The Company is currently evaluating the impact of adopting this new standard.

The Company adopted ASU 2023-07 as of December 31, 2024 and concluded that the application of this guidance did not materially impact the Company's consolidated financial statements.

In December 2023, the FASB issued Update 2023-09, "Income Taxes (Topic 740):

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There were no customers that exceeded 10 % of operating revenues for the years ended December 31, 2024, 2023, and 2022, respectively.

During the year ended December 31, 2021 there was one single customer that accounted for 10 % of operating revenues.

There were no customers that exceeded 10 % of gross accounts receivable as of December 31, 2024 and 2023, respectively.

Revenue Recognition

1 unchanged sentence

Fuel surcharge revenues were $ 133.9 million, $ 173.8 million, and $ 169.2 million for the twelve months ended December 31, 2024, 2023, and 2022, respectively.

As a result of the CFI acquisition we now outsourced certain loads to third-party carriers in the U.S.

As of December 31, 2023 the Company is only outsourcing certain loads to third-party carriers in Mexico.

As a result of the CFI acquisition we acquired outsourcing of certain loads to third-party carriers in the U.S.

During the twelve months ended December 31, 2024 the Company only outsourced certain loads to third-party carriers in Mexico.

The Company is a principal in these arrangements resulting in revenue associated with these contracts being recorded on a gross basis.

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Accessorial, brokerage and other revenues recorded in the consolidated statements of comprehensive income collectively represented $ 78.0 million, $ 94.8 million, and $ 50.7 million for the twelve months ended December 31, 2024, 2023, and 2022, respectively.

Included in the accessorial, brokerage and other revenues is $ 31.8 million of logistics revenue within Mexico for the twelve months ended December 31, 2024.

We have property and equipment in Mexico in support of these operations with a net book value of $ 1.0 million as of December 31, 2024, which are the company's only foreign long-lived assets.

On May 31, 2022, Heartland Express, Inc.

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Gross cash paid was funded out of the Company’s available cash.

The Smith Transaction included the assumption of $ 46.8 million of Smith Transport's indebtedness, including finance leases, of which $ 26.2 million of the debt was outstanding at December 31, 2023.

The Smith Transaction included the assumption of $ 46.8 million of Smith Transport's indebtedness, including finance leases, of which $ 16.9 million of the debt and finance leases were outstanding at December 31, 2024.

The Smith Stock Purchase Agreement contains customary representations, warranties, covenants, escrow, and indemnification provisions.

The results of the Smith Transport acquired business have been included in the consolidated financial statements since the date of acquisition and represented 12.3 % of consolidated total assets as of December 31, 2022, and represented 13.3 % of operating revenue for the twelve months ended December 31, 2022.

The following unaudited pro forma consolidated results of operations for the years ended December 31, 2021 and 2022 assume that the acquisition of Smith Transport occurred as of January 1, 2021.

Year ended Year ended

December 31, 2021 December 31, 2022

The results of the Smith Transport acquired business have been included in the consolidated financial statements since the date of acquisition and represented 13.3 % of operating revenue for the twelve months ended December 31, 2022.

The following unaudited pro forma consolidated results of operations for the year ended December 31, 2022 assume that the acquisition of Smith Transport occurred as of January 1, 2022.

December 31, 2022

(in thousands)

1 unchanged sentence

Net income $ 140,647

These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred at the beginning of the periods presented or that may be obtained in the future.

The allocation of the Smith Transport purchase price is detailed in the table below.

The goodwill recognized represents expected synergies from combining the operations of the Company with Smith Transport, as well as other intangible assets that did not meet the criteria for separate recognition.

Goodwill and intangible assets recognized in the transaction are deductible for tax purposes.

The assets and liabilities associated with Smith Transport were recorded at their fair values as of the acquisition date and the amounts are as follows:

(in thousands)

Trade and other accounts receivable $ 32,300

Other current assets 6,238

Property and equipment 68,196

Operating lease right of use assets 26,661

Other non-current assets 4,079

Intangible assets 29,902

Goodwill 40,297

Total assets 207,673

Accounts payable and accrued expenses ( 7,917 )

Insurance accruals ( 4,263 )

Long-term debt ( 11,424 )

Finance lease liabilities ( 35,359 )

Operating lease liabilities ( 26,661 )

Net cash paid $ 122,049

These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred at the beginning of the period presented or that may be obtained in the future.

On August 31, 2022, Buyer and Heartland Express, Inc., as guarantor, entered into a Stock Purchase Agreement to acquire CFI, and related entities, from a subsidiary of TFI International, Inc.

CFI is a truckload carrier headquartered in Joplin, Missouri, providing asset-based dry van and temperature-controlled truckload transportation services, and asset-light logistics services in Mexico.

CFI is a truckload carrier headquartered in Joplin,

Missouri, providing asset-based dry van and temperature-controlled truckload transportation services, and asset-light logistics services in Mexico.

Pursuant to the CFI Stock Purchase Agreement, the Buyer acquired outstanding equity of CFI and related entities (the “CFI Transaction”).

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The CFI Stock Purchase Agreement contains customary representations, warranties, covenants, escrow, and indemnification provisions.

The results of the CFI acquired business have been included in the consolidated financial statements since the date of acquisition and represented 43.0 % of consolidated total assets as of December 31, 2022, and represented 21.6 % of operating revenue for the twelve months ended December 31, 2022.

The following unaudited pro forma consolidated results of operations for the year ended December 31, 2021 and 2022 assume that the acquisition of CFI occurred as of January 1, 2021.

Year ended Year ended

December 31, 2021 December 31, 2022

(in thousands) (in thousands)

The results of the CFI acquired business have been included in the consolidated financial statements since the date of acquisition and represented 21.6 % of operating revenue for the twelve months ended December 31, 2022.

The following unaudited pro forma consolidated results of operations for the year ended December 31, 2022 assume that the acquisition of CFI occurred as of January 1, 2022.

December 31, 2022

(in thousands)

Operating Revenue $ 1,394,552

Net Income $ 174,684

The allocation of the purchase price is detailed in the table below.

The goodwill recognized represents expected synergies from combining the operations of the Company with CFI, as well as other intangible assets that did not meet the criteria for separate recognition.

Goodwill and intangible assets recognized in the transaction are deductible for tax purposes.

During the twelve months ended December 31, 2023, the CFI goodwill asset increased by $ 1.9 million as a result of further valuation analysis with the finalization of purchase accounting for the CFI acquisition.

The purchase accounting adjustment is primarily associated with equipment valuation determinations made upon finalization of post acquisition equipment existence and condition analysis.

The assets and liabilities associated with CFI were recorded at their fair values as of the acquisition date and the amounts are as follows:

(in thousands)

Trade and other accounts receivable $ 74,740

Other current assets 12,596

Property and equipment 459,099

Other non-current assets 306

Deferred income taxes 2,018

Intangible assets 55,097

Goodwill 114,005

Total assets 717,861

Accounts payable and accrued expenses ( 47,819 )

Insurance accruals ( 1,621 )

Income taxes payable ( 765 )

Deferred income taxes ( 115,922 )

Purchase consideration net of cash on hand 551,734

Purchase adjustment receivable from seller 2,069

Net cash paid $ 553,803

Acquisition related expenses of $ 2.3 million related to both the Smith Transport and CFI acquisitions are included in the consolidated statement of comprehensive income for the twelve months ended December 31, 2022.

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Goodwill (in thousands)

Balance at January 1, 2023 $ 320,675

Purchase accounting 1,922

Balance at December 31, 2023 322,597

1 unchanged sentence

Balance at December 31, 2024 $ 322,597

Future amortization expense for intangible assets is estimated at $ 5.0 million for 2024, $ 5.0 million for 2025, $ 5.0 million for 2026, $ 5.0 million for 2027, and $ 4.9 million for 2028.

Future amortization expense for intangible assets is estimated at $ 5.0 million for 2025, $ 5.0 million for 2026, $ 5.0 million for 2027, $ 4.9 million for 2028, $ 4.7 million for 2029, and $ 37.3 thereafter.

Long-Term Debt

3 unchanged sentences

The Credit Facilities replaced the previous credit arrangements in place for the Company which consisted of a November 2013 Credit Agreement with Wells Fargo, along with an asset-based credit facility with Citizens Bank of Pennsylvania that was assumed as part of the acquisition of Smith Transport on May 31, 2022.

The full amount of the Term Facility was made in a single draw on August 31, 2022 and amounts borrowed under the Term Facility that are repaid or prepaid may not be reborrowed.

The full amount of the Term Facility was made in a single draw on the CFI Closing Date and amounts borrowed under the Term Facility that are repaid or prepaid may not be reborrowed.

The Term Facility amortizes in quarterly installments which began in September 2023, at 5% per annum through June 2025 and 10% per annum from September 2025 through June 2027, with the balance due on the date that is five years from the CFI Closing Date.

Based on debt repayments made through December 31, 2023, required minimum payments have been covered through March 31, 2027.

The Revolving Facility consists of a five-year revolving credit facility with aggregate commitments in an amount equal to $ 100.0 million, of which up to $ 50.0 million is available for the issuance of letters of credit, and including a swingline facility

in an amount equal to $ 20.0 million.

The Revolver will mature and the commitments thereunder will terminate on the date that is five years after the CFI Closing Date.

Based on debt repayments made through December 31, 2024, required minimum payments have been covered until the term loan maturity on August 31, 2027.

The Revolving Facility will mature and the commitments thereunder will terminate on the date that is five years after the CFI Closing Date.

Amounts repaid under the Revolving Facility may be reborrowed.

The Credit Facilities include an uncommitted accordion feature pursuant to which the Company may request up to $ 275.0 million in incremental revolving or term loans, subject to lender approvals.

The indebtedness, obligations, and liabilities under the Credit Facilities are unconditionally guaranteed, jointly and severally, on an unsecured basis by the Company, Borrower, and certain other subsidiaries of the Company.

The Borrower may voluntarily prepay outstanding loans under the Credit Facilities in whole or in part at any time without premium or penalty, subject to payment of customary breakage costs in the case of SOFR rate loans.

The indebtedness, obligations, and liabilities under the Credit Facilities are unconditionally guaranteed, jointly and severally, on an unsecured basis by the Company and certain other subsidiaries of the Company.

We may voluntarily prepay outstanding loans under the Credit Facilities in whole or in part at any time without premium or penalty, subject to payment of customary breakage costs in the case of SOFR rate loans.

The Credit Facilities contain usual and customary events of default and negative covenants for a facility of this nature including, among other things, restrictions on the Company’s ability to incur certain additional indebtedness or issue guarantees, to create liens on the Company’s assets, to make distributions on or redeem equity interests (subject to certain exceptions, including that (a) the Company may pay regularly scheduled dividends on the Company’s common stock not to exceed $ 10.0 million during any fiscal year and (b) the Company may make any other distributions so long as it maintains a net leverage ratio not greater than 2.50 to 1.00), to make investments and to engage in mergers, consolidations, or acquisitions.

1 unchanged sentence

We were in compliance with the respective financial covenants at December 31, 2024 and have been in compliance since the inception of the Credit Facilities.

Outstanding borrowings under the Credit Facilities will accrue interest, at the option of the Borrower, at a per annum rate of (i) for an “ABR Loan”, the alternate base rate (defined as the interest rate per annum equal to the highest of (a) the variable rate of interest announced by the administrative agent as its “prime rate”, (b) 0.50 % above the Federal Funds Rate, (c) the Term SOFR for an interest period of one-month plus 1.1 %, or (d) 1.00 %) plus the applicable margin or (ii) for a “SOFR Loan”, the Term SOFR Rate for an interest period of one, three or six-months as selected by Company plus the applicable margin.

Outstanding borrowings under the Credit Facilities will accrue interest, at our option, at a per annum rate of (i) for an “ABR Loan”, the alternate base rate (defined as the interest rate per annum equal to the highest of (a) the variable rate of interest announced by the administrative agent as its “prime rate”, (b) 0.50 % above the Federal Funds Rate, (c) the Term SOFR for an interest period of one-month plus 1.1 %, or (d) 1.00 %) plus the applicable margin or (ii) for a “SOFR Loan”, the Term SOFR Rate for an interest period of one, three or six-months as selected by Company plus the applicable margin.

The applicable margin for ABR Loans ranges from 0.250 % to 0.875 % and the applicable margin for SOFR Loans ranges from 1.250 % to 1.875 %, depending on the Company’s net leverage ratio.

4 unchanged sentences

The May 31, 2022 acquisition of Smith Transport included the assumption of $ 46.8 million of debt and financing lease obligations associated with the fleet of revenue equipment of which $ 16.9 million was outstanding at December 31, 2024, (the "Smith Debt").

The Smith Debt has $ 7.7 million of outstanding principal and is made up of installment notes with a weighted average interest rate of 4.4 % at December 31, 2023, due in monthly installments with final maturities at various dates ranging from March 2024 to January 2029, secured by related revenue equipment.

The remaining Smith Debt of $ 18.5 million are finance lease obligations with a weighted average interest rate of 3.9 % at December 31, 2023, due in monthly installments with final maturities at various dates ranging from October 2024 to April 2026 with the weighted average remaining lease term of 1.7 years.

The Smith Debt has $ 5.9 million of outstanding principal and is made up of installment notes with a weighted average interest rate of 4.4 % at December 31, 2024, due in monthly installments with final maturities at various dates ranging from February 2027 to January 2029, secured by related revenue equipment.

The remaining Smith Debt of $ 11.0 million are finance lease obligations with a weighted average interest rate of 4.0 % at December 31, 2024, due in monthly installments with final maturities at various dates ranging from August 2025 to April 2026 with the weighted average remaining lease term of 1.0 year.

The annual maturities of long term debt are as follows:

(in thousands)

2027 $ 276,589

Thereafter $ —

4 unchanged sentences

Lease Obligations

In May 2022, the Company completed a sale of an owned terminal property for a $ 73.2 million gain.

In a separate transaction related to the sale, we entered into a lease agreement with a base term of two years plus a five-year renewal option with the purchaser.

We have provided notice that we will not be exercising the five-year renewal option having entered into a separate lease agreement for a facility better suited to our current operations.

During 2023 we sold multiple properties for a combined $ 25.6 million gain.

3 unchanged sentences

These right-of-use operating lease assets have a total balance of $ 3.1 million and $ 8.1 million as of December 31, 2024 and 2023, respectively.

The equipment and property operating leases have a weighted average interest rate of 4.8 % at December 31, 2023, due in monthly installments with final maturities at various dates ranging from January 2024 to April 2027 with the weighted average remaining lease term of 2.0 years.

Smith Transport also has related party operating leases with the founder of Smith Transport, where Smith Transport is both a lessor and lessee of certain real estate properties.

These leases represent an insignificant portion of the right-of-use lease assets discussed above.

The equipment and property operating leases have a weighted average interest rate of 5.2 % at December 31, 2024, due in monthly installments with final maturities at various dates ranging from February 2025 to April 2027 with the weighted average remaining lease term of 1.4 years.

See Note 6 Long-Term Debt for additional details on the finance leases.

12 unchanged sentences

2026 1,497 3,840

2026 1,587 3,840

Thereafter — —

11 unchanged sentences

For the April 2023 renewal, liabilities in excess of the $ 3.0 million deductible and $ 3.5 million corridor are covered by insurance up to $ 80.0 million.

In April 2024, an additional corridor was added, where we retain liability of $5.0 million for any one accident or combination of accidents that exceed $ 10.0 million.

Liabilities in excess of the $ 3.0 million deductible, the $ 3.5 million corridor, and the $5.0 million corridor are covered by insurance up to $ 80.0 million.

We retain any liability in excess of $ 80.0 million.

3 unchanged sentences

We act as a self-insurer for property damage to our tractors and trailers.

We act as a self-insurer for workers’ compensation based on defined insurance retention of $1.0 million under our Heartland policy, which includes entities acquired in 2022.

We act as a self-insurer for workers’ compensation based on defined insurance retention of $1.0 million.

Liabilities in excess of insurance retention limits are covered by insurance.

1 unchanged sentence

As of December 31, 2024 and 2023 total deposits in this account were $ 0.9 million and $ 0.9 million, respectively.

This deposit is made up of $ 0.3 million in municipal bonds classified as held-to-maturity and $ 0.6 million of other investments stated at market value as of December 31, 2023 while the entire $ 0.8 million deposit was held in municipal bonds as of December 31, 2022.

This deposit is made up of fixed income investments classified as held-to-maturity.

The deposit is recorded in other non-current assets on the consolidated balance sheets.

7 unchanged sentences

These accruals are recorded on an undiscounted basis.

Estimated claim payments to be made within one year of the balance sheet date have been classified as insurance accruals within current liabilities as of December 31, 2023 and 2022.

Estimated claim payments to be made

within one year of the balance sheet date have been classified as insurance accruals within current liabilities as of December 31, 2024 and 2023.

Deferred tax assets and liabilities as of December 31 are as follows:

51 unchanged sentences

Of this amount, $ 4.1 million and $ 4.4 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate as of December 31, 2024 and December 31, 2023, respectively.

Unrecognized tax benefits were a net decrease of $ 0.2 million and a net increase of $ 1.1 million during the years ended December 31, 2023 and 2022, respectively.

The increase in 2022 is the result of non-recurring transactions occurring in 2022 that did not occur in 2023 more than offsetting the reduction to the liability due to the expiration of certain statutes of limitation and reductions to prior year tax positions, net of current year additions with respective states.

This had the effect of increasing the effective rate in 2022.

The total net amount of accrued interest and penalties for such unrecognized tax benefits was $ 0.7 million and $ 0.7 million at December 31, 2023 and December 31, 2022, respectively, and is included in income taxes payable in the consolidated balance sheets.

Net interest and penalties included in income tax expense for the years ended December 31, 2023, 2022 and 2021 was an expense of approximately zero , $ 0.1 million, and approximately zero , respectively.

Unrecognized tax benefits were a net decrease of $ 0.3 million and a net decrease of $ 0.2 million during the years ended December 31, 2024 and 2023, respectively.

The increased reduction in 2024 associated with unrecognized tax benefits is primarily due to a reduction in additions following pre-tax income.

This had the effect of decreasing the effective rate in 2024.

The total net amount of accrued interest and penalties for such unrecognized tax benefits was $ 1.0 million and $ 0.7 million at December 31, 2024 and December 31, 2023, respectively, and is included in long-term income taxes payable in the consolidated balance sheets.

Net interest and penalties included in income tax expense for the years ended December 31, 2024, 2023 and 2022 was an expense of $ 0.3 million, approximately zero , and $ 0.1 million, respectively.

Income tax expense is increased each period for the accrual of interest on outstanding positions and penalties when the uncertain tax position is initially recorded.

6 unchanged sentences

Additions based on tax positions related to current year 37 345

Additions for tax positions of prior years — 131

Reductions for tax positions of prior years — ( 176 )

Reductions due to lapse of applicable statute of limitations ( 362 ) ( 391 )

Settlements — ( 208 )

Balance at December 31, $ 5,197 $ 5,522

8 unchanged sentences

We have a stock repurchase program with 6.0 million shares remaining authorized for repurchase as of December 31, 2024, following the additional authorization of 3.0 million shares by our Board of Directors on August 20, 2021.

There were no shares repurchased in the open market during the years ended December 31, 2023 and 2022 while 1.8 million shares were repurchased in 2021.

There were 0.6 million shares repurchased in the open market during the year ended December 31, 2024 while no shares were repurchased in 2023 and 2022.

Repurchases are expected to continue from time to time, as determined by market conditions, cash flow requirements, securities law limitations, long-term debt balances, and other factors, until the number of shares authorized have been repurchased, or until the authorization is terminated.

1 unchanged sentence

During the years ended December 31, 2024, 2023 and 2022 our Board of Directors declared dividends totaling $ 6.3 million, $ 6.3 million, and $ 6.3 million for each year, respectively.

The 2021 dividends included a $0.50 per share special dividend totaling $ 39.5 million and regular quarterly dividends totaling $ 6.4 million, while the 2023 and 2022 dividends were regular quarterly dividends.

Future payment of cash dividends and the amount of such dividends will depend upon our financial conditions, our results of operations, our cash requirements, our tax treatment, and certain corporate law requirements, as well as factors deemed relevant by our Board of Directors.

43 unchanged sentences

Our contributions to the Retirement Savings Plans totaled approximately $ 2.3 million, $ 3.1 million, and $ 2.2 million, for the years ended December 31, 2024, 2023 and 2022, respectively.

Effective January 1, 2025 the Retirement Savings Plans were combined into a single existing plan.

Commitments and Contingencies

14 unchanged sentences

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-K

Item 9A. Controls and Procedures