What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-08 compared with 2023-08-07 · 112 added, 92 removed, 505 unchanged (29% of the section changed)

2 unchanged sentences

CONSOLIDATED CONDENSED BALANCE SHEETS

September 30,

(In thousands, except share information)

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192,000,000 shares authorized;

81,301,468 shares at June 30, 2023, and 81,115,132 shares at December 31, 2022, issued and outstanding

81,308,968 shares at September 30, 2023, and 81,115,132 shares at December 31, 2022, issued and outstanding

Additional paid-in capital

5 unchanged sentences

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Ended June 30,

Ended September 30,

(In thousands, except per share information)

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Balance at June 30, 2023

Issuance of common stock from share-based payment arrangement exercises

Share-based payment arrangement compensation expense

Dividends on common stock

Balance at September 30, 2023

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

15 unchanged sentences

Balance at June 30, 2022

Issuance of common stock from share-based payment arrangement exercises

Share-based payment arrangement compensation expense

Dividends on common stock

Balance at September 30, 2022

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

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Ended June 30,

Ended September 30,

(In thousands)

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Change in property and equipment not yet paid

Operating lease assets and liabilities acquired

Supplemental disclosure of cash flow information:

Cash paid for income taxes

Cash paid for:

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

1 unchanged sentence

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 30, 2023

NINE MONTHS ENDED SEPTEMBER 30, 2023

(1) Consolidated Condensed Financial Statements

6 unchanged sentences

(2) Earnings per Common Share

Basic and diluted earnings per common share were computed as follows:

Ended June 30,

Basic and diluted earnings per common share were computed as follows:  

Ended September 30,

(In thousands, except per share amounts)

4 unchanged sentences

Diluted earnings per common share

Options totaling 132,000 equivalent shares for each of the three-month and six-month periods ended June 30, 2023, and 486,000 and 495,500 equivalent shares for the three-month and six-month periods ended June 30, 2022, respectively, were outstanding but were not included in the calculation of diluted earnings per share because including the options in the denominator would be antidilutive, or decrease the number of weighted-average shares, due to their exercise prices exceeding the average market price of the common shares, or because inclusion of average unrecognized compensation expense in the calculation would cause the options to be antidilutive.

Unvested performance unit awards totaling 106,582 equivalent shares for each of the three-month and six-month periods ended June 30, 2023 were considered outstanding but were not included in the calculation of diluted earnings per share because inclusion of average unrecognized compensation expense in the calculation would cause the performance units to be antidilutive.

There were no such equivalent shares for each of the three-month and six-month periods ended June 30, 2022.

Options totaling 157,000 equivalent shares for each of the three-month and nine-month periods ended September 30, 2023, and 512,500 and 535,600 equivalent shares for the three-month and nine-month periods ended September 30, 2022, respectively, were outstanding but were not included in the calculation of diluted earnings per share because including the options in the denominator would be antidilutive, or decrease the number of weighted-average shares, due to their exercise prices exceeding the average market price of the common shares, or because inclusion of average unrecognized compensation expense in the calculation would cause the options to be antidilutive.

Unvested performance unit awards totaling 106,582 equivalent shares for each of the three-month and nine-month periods ended September 30, 2023, and 16,590 equivalent shares for each of the three-month and nine-month periods ended September 30, 2022, were considered outstanding but were not included in the calculation of diluted earnings per share because inclusion of average unrecognized compensation expense in the calculation would cause the performance units to be antidilutive.

(3) Long-Term Debt

1 unchanged sentence

The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended.

At June 30, 2023, there was no outstanding principal balance on the facility.

At September 30, 2023, there was no outstanding principal balance on the facility.

As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $ 19.5 million and remaining borrowing availability of $ 10.5 million.

2 unchanged sentences

This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins.

The interest rate for the facility that would apply to outstanding principal balances was 8.25 % at June 30, 2023.

The interest rate for the facility that would apply to outstanding principal balances was 8.5 % at September 30, 2023.

Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $ 150 million.

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The current and previous credit agreements also contain restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios.

We were in compliance with all covenants at June 30, 2023 and December 31, 2022.

We were in compliance with all covenants at September 30, 2023 and December 31, 2022.

(4) Related Party Transactions

1 unchanged sentence

Bauer, the chairman of the board and chief executive officer of BBI, is one of our directors.

We paid BBI $ 141,000 in the first six months of 2023 and $ 252,000 in the first six months of 2022 for fuel, tires and related services.

In addition, we paid $ 1.1 million in the first six months of 2023 and $ 790,000 in the first six months of 2022 to tire manufacturers for tires that were provided by BBI.

We paid BBI $ 194,000 in the first nine months of 2023 and $ 377,000 in the first nine months of 2022 for fuel, tires and related services.

In addition, we paid $ 1.6 million in the first nine months of 2023 and $ 1.4 million in the first nine months of 2022 to tire manufacturers for tires that were provided by BBI.

BBI received commissions from the tire manufacturers related to these purchases.

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We repurchased and retired 1.3 million shares of common stock for $ 25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $ 16.8 million in the second quarter of 2022.

We did not repurchase any shares in the third or fourth quarters of 2022 or in the first six months of 2023.

As of June 30, 2023, future repurchases of up to $ 33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.

We did not repurchase any shares in the third or fourth quarters of 2022 or in the first nine months of 2023.

As of September 30, 2023, future repurchases of up to $ 33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.

(6) Dividends

In 2010, we announced that our Board of Directors approved a regular cash dividend program to our stockholders, subject to approval each quarter.

Quarterly cash dividends of $ 0.06 per share of common stock were paid in each of the first two quarters of both 2023 and 2022, and totaled $ 9.8 million in each of the six-month periods.

Quarterly cash dividends of $ 0.06 per share of common stock were paid in each of the first three quarters of both 2023 and 2022, and totaled $ 14.6 million and $ 14.7 million in the first nine months of 2023 and 2022, respectively.

(7) Accounting for Share-based Payment Arrangement Compensation

1 unchanged sentence

Stock Compensation .

During the first six months of 2023, there were no significant changes to the structure of our stock-based award plans.

Pre-tax compensation expense related to stock options and performance unit awards recorded in the first six months of 2023 and 2022 was $ 1.4 million and $ 1.6 million, respectively.

During the first nine months of 2023, there were no significant changes to the structure of our stock-based award plans.

Pre-tax compensation expense related to stock options and performance unit awards recorded in the first nine months of 2023 and 2022 was $ 1.9 million and $ 2.2 million, respectively.

(8) Termination of Deferred Compensation Plan

6 unchanged sentences

(10) Commitments and Contingencies

We are committed to new revenue equipment purchases of $ 84.2 million and building construction obligations of $ 2.5 million through the remainder of 2023.

We are committed to new revenue equipment purchases of $ 63.2 million and building construction obligations of $ 292,000 for the remainder of 2023.

Operating lease obligation expenditures through 2028 total $ 566,000 .

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We base our calculation of the amount of revenue to record in each period for individual loads picking up in one period and delivering in the following period using the number of hours estimated to be incurred within each period applied to each estimated transaction price.

Contract assets for this estimated revenue which are classified within prepaid expenses and other within our consolidated condensed balance sheets were $ 2.2 million and $ 2.7 million as of June 30, 2023 and December 31, 2022, respectively.

We had no impairment losses on contract assets in the first six months of 2023 or in 2022.

Contract assets for this estimated revenue which are classified within prepaid expenses and other within our consolidated condensed balance sheets were $ 2.7 million as of each of September 30, 2023 and December 31, 2022.

We had no impairment losses on contract assets in the first nine months of 2023 or in 2022.

We bill our customers for loads after delivery is complete with standard payment terms of 30 days.

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We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment.

Ended June 30,

Ended September 30,

(In thousands)

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Total operating revenue

Operating income:

Operating income/(loss):

Total operating income

Truckload segment depreciation expense was $ 15.3 million and $ 13.5 million, Dedicated segment depreciation expense was $ 11.9 million and $ 11.2 million, Intermodal segment depreciation expense was $ 1.8 million and $ 1.9 million, and Brokerage segment depreciation expense was $ 454,000 and $ 349,000 in the three-month periods ended June 30, 2023 and 2022, respectively.

Truckload segment depreciation expense was $ 30.6 million and $ 26.4 million, Dedicated segment depreciation expense was $ 23.7 million and $ 22.3 million, Intermodal segment depreciation expense was $ 3.7 million and $ 3.6 million, and Brokerage segment depreciation expense was $ 903,000 and $ 687,000 in the six-month periods ended June 30, 2023 and 2022, respectively.

Truckload segment depreciation expense was $ 15.3 million and $ 14.5 million, Dedicated segment depreciation expense was $ 11.5 million and $ 11.5 million, Intermodal segment depreciation expense was $ 1.7 million and $ 2.0 million, and Brokerage segment depreciation expense was $ 462,000 and $ 383,000 in the three-month periods ended September 30, 2023 and 2022, respectively.

Truckload segment depreciation expense was $ 45.9 million and $ 40.9 million, Dedicated segment depreciation expense was $ 35.2 million and $ 33.8 million, Intermodal segment depreciation expense was $ 5.5 million and $ 5.6 million, and Brokerage segment depreciation expense was $ 1.4 million and $ 1.1 million in the nine-month periods ended September 30, 2023 and 2022, respectively.

(12) Use of Estimates

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In addition to the factors discussed above, our operating revenue is also affected by, among other things, the United States economy, inventory levels, the level of truck and rail capacity in the transportation market, a contracting driver market, severe weather conditions and specific customer demand.

Our operating revenue decreased $33.2 million, or 5.4%, in the first six months of 2023 from the first six months of 2022.

Our operating revenue, net of fuel surcharges, decreased $10.9 million, or 2.1%, compared with the first six months of 2022.

Truckload segment revenue, net of fuel surcharges, increased 3.4% from the first six months of 2022, primarily due to an increase in our fleet size, partially offset by a decrease in our average revenue per tractor.

Dedicated segment revenue, net of fuel surcharges, increased 7.0% from the first six months of 2022, primarily due to an increase in our fleet size.

Intermodal segment revenue, net of fuel surcharges, decreased 20.9% from the first six months of 2022, primarily due to decreases in both our number of loads and our revenue per load.

Brokerage segment revenue decreased 17.6% from the first six months of 2022, primarily due to decreases in both our revenue per load and our number of loads.

Fuel surcharge revenue decreased to $80.1 million in the first six months of 2023 from $102.4 million in the first six months of 2022.

Our operating revenue decreased $78.1 million, or 8.3%, in the first nine months of 2023 from the first nine months of 2022.

Our operating revenue, net of fuel surcharges, decreased $41.2 million, or 5.3%, compared with the first nine months of 2022.

Truckload segment revenue, net of fuel surcharges, decreased 0.9% from the first nine months of 2022, primarily due to a decrease in our average revenue per tractor, despite an increase in our fleet size.

Dedicated segment revenue, net of fuel surcharges, increased 3.3% from the first nine months of 2022, primarily due to an increase in our fleet size.

Intermodal segment revenue, net of fuel surcharges, decreased 22.3% from the first nine months of 2022, primarily due to decreases in both our number of loads and our revenue per load.

Brokerage segment revenue decreased 19.0% from the first nine months of 2022, primarily due to decreases in both our revenue per load and our number of loads.

Fuel surcharge revenue decreased to $120.6 million in the first nine months of 2023 from $157.5 million in the first nine months of 2022.

Our profitability is impacted by the variable costs of transporting freight for our customers, fixed costs, and expenses containing both fixed and variable components.

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This expense is included within purchased transportation in our consolidated condensed statements of operations.

Our operating income declined 25.5% to $57.2 million in the first six months of 2023 from $76.8 million in the first six months of 2022.

Our operating income declined 32.7% to $74.5 million in the first nine months of 2023 from $110.6 million in the first nine months of 2022.

Our operating expenses as a percentage of operating revenue, or “operating ratio,”

was 90.2% in the first six months of 2023 and 87.6% in the first six months of 2022.

Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 88.6% in the first six months of 2023 from 85.1% in the first six months of 2022.

Our net income declined 25.0% to $44.4 million, or $0.55 per diluted share, in the first six months of 2023 from $59.2 million, or $0.72 per diluted share, in the first six months of 2022.

was 91.4% in the first nine months of 2023 and 88.3% in the first nine months of 2022.

Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 90.0% in the first nine months of 2023 from 85.9% in the first nine months of 2022.

Our net income declined 31.7% to $58.0 million, or $0.71 per diluted share, in the first nine months of 2023 from $84.8 million, or $1.03 per diluted share, in the first nine months of 2022.

Our business requires substantial, ongoing capital investments, particularly for new tractors and trailers.

At June 30, 2023, we had $80.5 million of cash and cash equivalents, $740.0 million in stockholders’

At September 30, 2023, we had $68.1 million of cash and cash equivalents, $749.4 million in stockholders’

equity and no long-term debt outstanding.

In the first six months of 2023, net cash flows provided by operating activities of $98.2 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $84.3 million, to pay cash dividends of $9.8 million, and to construct and upgrade regional operating facilities in the amount of $4.3 million, resulting in a $72,000 decrease in cash and cash equivalents.

In the first nine months of 2023, net cash flows provided by operating activities of $126.3 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $116.9 million, to pay cash dividends of $14.6 million, and to construct and upgrade regional operating facilities in the amount of $7.6 million, resulting in a $12.5 million decrease in cash and cash equivalents.

We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $76 million for the remainder of 2023.

Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first two quarters of 2023 which totaled $9.8 million.

Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first three quarters of 2023 which totaled $14.6 million.

We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months.

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The following table sets forth for the periods indicated certain operating statistics regarding our revenue and operations:

Ended June 30,

Ended September 30,

Truckload Segment:

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Includes tractors driven by both company-employed drivers and independent contractors.

Independent contractors provided 98 and 85 tractors as of June 30, 2023 and 2022, respectively.

Comparison of Three Months Ended June 30, 2023 to Three Months Ended June 30, 2022

Independent contractors provided 99 and 90 tractors as of September 30, 2023 and 2022, respectively.

Comparison of Three Months Ended September 30, 2023 to Three Months Ended September 30, 2022

The following table sets forth for the periods indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component:

September 30,

(Dollars in thousands)

11 unchanged sentences

Total operating revenue

Operating income:

Operating income/(loss):

Total operating income

5 unchanged sentences

Our operating revenue, net of fuel surcharges, decreased $30.3 million, or 11.2%, to $239.1 million in the 2023 period from $269.3 million in the 2022 period.

This decrease in the 2023 period was due to a $14.1 million decrease in Brokerage revenue, an $8.9 million decrease in Intermodal revenue, net of fuel surcharges, and a $540,000 decrease in Truckload revenue, net of fuel surcharges, partially offset by a $3.0 million increase in Dedicated revenue, net of fuel surcharges.

This decrease in the 2023 period was due to an $11.5 million decrease in Brokerage revenue, a $9.4 million decrease in Truckload revenue, net of fuel surcharges, a $6.2 million decrease in Intermodal revenue, net of fuel surcharges, and a $3.2 million decrease in Dedicated revenue, net of fuel surcharges.

Fuel surcharge revenue decreased to $40.5 million in the 2023 period from $55.1 million in the 2022 period.

1 unchanged sentence

Truckload segment revenue decreased $15.1 million, or 11.7%, to $114.2 million in the 2023 period from $129.4 million in the 2022 period.

Truckload segment revenue, net of fuel surcharges, decreased $540,000, or 0.5%, to $101.3 million in the 2023 period from $101.8 million in the 2022 period primarily due to a decrease in our average revenue per tractor despite an increase in our fleet size.

Truckload segment revenue, net of fuel surcharges, decreased $9.4 million, or 8.9%, to $96.5 million in the 2023 period from $105.9 million in the 2022 period primarily due to a decrease in our average revenue per tractor, despite an increase in our fleet size.

The operating ratio increased to 97.6% in the 2023 period from 88.9% in the 2022 period.

Impacting the 2023 period operating ratio was a decrease in our average revenue per tractor along with higher company driver compensation, depreciation and maintenance costs as a percentage of revenue.

Impacting the 2023 period operating ratio was a decrease in our average revenue per tractor along with higher net fuel, depreciation, company driver compensation and maintenance costs as a percentage of revenue.

Dedicated segment revenue decreased $8.4 million, or 7.6%, to $101.8 million in the 2023 period from $110.2 million in the 2022 period.

Dedicated segment revenue, net of fuel surcharges, increased 3.6% primarily due to an increase in our fleet size.

The operating ratio in the 2023 period improved to 86.5% from 87.3% in the 2022 period.

The 2023 period was positively impacted by a reduction in driver recruiting costs and non-driver bonus compensation expense, partially offset by higher maintenance costs as a percentage of revenue.

Dedicated segment revenue, net of fuel surcharges, decreased 3.7% primarily due to a decrease in our average revenue per tractor coupled with a slight decrease in our fleet size.

The operating ratio in the 2023 period increased to 88.9% from 88.2% in the 2022 period.

The 2023 period was impacted by a decrease in our average revenue per tractor along with higher maintenance, net fuel and depreciation costs as a percentage of revenue.

Intermodal segment revenue decreased $9.9 million, or 30.9%, to $22.0 million in the 2023 period from $31.9 million in the 2022 period.

1 unchanged sentence

The operating ratio in the 2023 period increased to 104.9% from 97.6% in the 2022 period.

Impacting the 2023 period operating ratio was a decrease in our revenue per load along with higher company driver compensation, net fuel, chassis rental and depreciation costs as a percentage of revenue.

Impacting the 2023 period operating ratio was a decrease in our revenue per load along with higher net fuel, purchased transportation, depreciation, maintenance and chassis rental costs as a percentage of revenue.

Brokerage segment revenue decreased $11.5 million, or 21.7%, to $41.5 million in the 2023 period from $53.0 million in the 2022 period primarily due to decreases in both our revenue per load and our number of loads.

3 unchanged sentences

Operating Revenue

September 30,

(Dollars in thousands)

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health insurance claims, changes in health care premiums and other factors.

Salaries, wages and benefits expense decreased $128,000, or 0.1%, in the 2023 period from the 2022 period.

This decrease resulted primarily from multiple items including a $3.2 million decrease in bonus compensation expense for our non-driver employees, partially offset by additional company driver compensation expense of $1.7 million and a $1.8 million increase in non-driver compensation expense.

Salaries, wages and benefits expense decreased $7.2 million, or 7.2%, in the 2023 period from the 2022 period.

This decrease resulted primarily from a $4.9 million decrease in company driver compensation expense along with a $1.9 million decrease in bonus compensation expense for our non-driver employees.

Purchased transportation consists of amounts payable to railroads and carriers for transportation services we arrange in connection with Brokerage and Intermodal operations and to independent contractor providers of revenue equipment.

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Fuel and fuel taxes decreased by $8.6 million, or 15.0%, in the 2023 period from the 2022 period.

Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) increased $559,000, or 7.0%, to $8.6 million in the 2023 period from $8.0 million in the 2022 period.

Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) increased $3.6 million, or 41.5%, to $12.1 million in the 2023 period from $8.6 million in the 2022 period.

Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $3.9 million from $6.4 million in the 2022 period.

The United States Department of Energy, or DOE, national average cost of fuel decreased to $4.24 per gallon from $5.15 per gallon in the 2022 period.

Our net fuel expense increased to 4.1% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2023 period from 3.8% in the 2022 period.

Despite this price decrease, our net fuel expense increased to 6.1% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2023 period from 4.0% in the 2022 period, primarily due to the record heat in the 2023 period.

We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’

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Supplies and maintenance consist of repairs, maintenance, tires, parts, oil and engine fluids, along with load-specific expenses including loading/unloading, tolls, pallets and trailer hostling.

Our supplies and maintenance expense increased $4.1 million, or 30.4%, from the 2022 period primarily due to higher outside repair, parts, tires and loading/unloading costs.

Our supplies and maintenance expense increased $3.0 million, or 20.5%, from the 2022 period primarily due to higher outside repair, loading/unloading and parts costs.

Depreciation relates to owned tractors, trailers, containers, auxiliary power units, communication units, terminal facilities and other assets.

The $2.6 million, or 9.5%, increase in depreciation in the 2023 period was primarily due to an increase in the size of our tractor and trailer fleets along with higher prices of new equipment.

The $636,000, or 2.2%, increase in depreciation in the 2023 period was primarily due to an increase in our average tractor and trailer fleets along with higher prices of new equipment.

We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of continued higher prices of new equipment, which will result in greater depreciation over the useful life.

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These expenses will vary primarily based upon the frequency and severity of our accident experience, our self-insured retention levels and the market for insurance.

The $962,000, or 7.2%, decrease in insurance and claims in the 2023 period was primarily due to a decrease in our self-insured auto liability claim costs, partially offset by increases in our workers’

compensation claim costs and in the cost of physical damage claims related to our revenue equipment.

The $1.3 million, or 10.9%, increase in insurance and claims in the 2023 period was primarily due to increases in the cost of physical damage claims related to our revenue equipment and insurance premiums, partially offset by a decrease in our self-insured auto liability claim costs.

Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods which could materially impact our financial results depending on the frequency, severity and timing of claims.

Gain on disposition of revenue equipment was $3.6 million in the 2023 period, down from $4.8 million in the 2022 period primarily due to a decrease in the average gain for our tractor and trailer sales, partially offset by an increase in the number of units sold.

Gain on disposition of revenue equipment was $3.0 million in the 2023 period, up from $1.1 million in the 2022 period primarily due to an increase in the number of units sold, partially offset by a decrease in the average gain for our tractor and trailer sales.

Future gains or losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control.

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As a result of the factors described above, net income declined 47.0% to $13.6 million, or $0.17 per diluted share, in the 2023 period from $25.6 million, or $0.32 per diluted share, in the 2022 period.

Comparison of Six Months Ended June 30, 2023 to Six Months Ended June 30, 2022

Comparison of Nine Months Ended September 30, 2023 to Nine Months Ended September 30, 2022

The following table sets forth for the periods indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component:

September 30,

(Dollars in thousands)

11 unchanged sentences

Total operating revenue

Operating income:

Operating income/(loss):

Total operating income

5 unchanged sentences

Our operating revenue, net of fuel surcharges, decreased $41.2 million, or 5.3%, to $742.6 million in the 2023 period from $783.8 million in the 2022 period.

This decrease in the 2023 period was due to a $17.8 million decrease in Brokerage revenue and an $11.1 million decrease in Intermodal revenue, net of fuel surcharges, partially offset by an $11.5 million increase in Dedicated revenue, net of fuel surcharges, and a $6.6 million increase in Truckload revenue, net of fuel surcharges.

This decrease in the 2023 period was due to a $29.3 million decrease in Brokerage revenue, a $17.3 million decrease in Intermodal revenue, net of fuel surcharges, and a $2.8 million decrease in Truckload revenue, net of fuel surcharges, partially offset by an $8.2 million increase in Dedicated revenue, net of fuel surcharges.

Fuel surcharge revenue decreased to $120.6 million in the 2023 period from $157.5 million in the 2022 period.

1 unchanged sentence

Truckload segment revenue decreased $17.1 million, or 4.6%, to $352.0 million in the 2023 period from $369.1 million in the 2022 period.

Truckload segment revenue, net of fuel surcharges, increased $6.6 million, or 3.4%, to $203.6 million in the 2023 period from $197.0 million in the 2022 period primarily due to an increase in our fleet size, partially offset by a decrease in our average revenue per tractor.

Truckload segment revenue, net of fuel surcharges, decreased $2.8 million, or 0.9%, to $300.1 million in the 2023 period from $302.9 million in the 2022 period primarily due to a decrease in our average revenue per tractor, despite an increase in our fleet size.

The operating ratio increased to 93.7% in the 2023 period from 87.5% in the 2022 period.

Dedicated segment revenue increased $4.3 million, or 2.1%, to $211.4 million in the 2023 period from $207.1 million in the 2022 period.

Impacting the 2023 period operating ratio was a decrease in our average revenue per tractor along with higher company driver compensation, depreciation, maintenance and net fuel costs as a percentage of revenue.

Dedicated segment revenue decreased $4.1 million, or 1.3%, to $313.2 million in the 2023 period from $317.3 million in the 2022 period.

Dedicated segment revenue, net of fuel surcharges, increased 3.3% primarily due to an increase in our fleet size.

4 unchanged sentences

The operating ratio in the 2023 period increased to 100.6% from 90.1% in the 2022 period.

Impacting the 2023 period operating ratio was a decrease in our revenue per load along with higher net fuel, company driver compensation, purchased transportation, chassis rental and depreciation costs as a percentage of revenue.

Impacting the 2023 period operating ratio was a decrease in our revenue per load along with higher net fuel, company driver compensation, depreciation, purchased transportation, maintenance and chassis rental costs as a percentage of revenue.

Brokerage segment revenue decreased $29.3 million, or 19.0%, to $125.0 million in the 2023 period from $154.3 million in the 2022 period primarily due to decreases in both our revenue per load and our number of loads.

3 unchanged sentences

Operating Revenue

September 30,

(Dollars in thousands)

17 unchanged sentences

Amounts payable to carriers for transportation services we arranged in our Brokerage segment decreased $26.3 million to $102.4 million in the 2023 period from $128.7 million in the 2022 period, primarily due to decreases in both our cost per load and number of loads.

Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $26.3 million in the 2023 period from $33.6 million in the 2022 period primarily due to a decrease in our number of loads.

The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, increased $913,000 in the 2023 period.

Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $37.9 million in the 2023 period from $49.9 million in the 2022 period primarily due to decreases in both our number of loads and cost per load.

The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, increased $1.2 million in the 2023 period.

We expect our purchased transportation expense to increase as we grow our Intermodal and Brokerage segments.

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Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $12.4 million from $18.0 million in the 2022 period.

The United States DOE national average cost of fuel decreased to $4.18 per gallon from $4.87 per gallon in the 2022 period.

Our net fuel expense increased to 4.1% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2023 period from 3.6% in the 2022 period.

Our supplies and maintenance expense increased $7.7 million, or 30.1%, from the 2022 period primarily due to higher outside repair, parts, tires and loading/unloading costs.

The $5.9 million, or 11.2%, increase in depreciation in the 2023 period was primarily due to an increase in the size of our tractor and trailer fleets along with higher prices of new equipment.

The $1.4 million, or 5.4%, increase in insurance and claims in the 2023 period was primarily due to increases in the cost of physical damage claims related to our revenue equipment and workers’

compensation claim costs, partially offset by a reduction in our self-insured auto liability claim costs.

Gain on disposition of revenue equipment was $8.8 million in the 2023 period, down from $9.4 million in the 2022 period primarily due to a decrease in the average gain for our tractor and trailer sales, despite an increase in the number of units sold.

The DOE national average cost of fuel decreased to $4.20 per gallon from $4.96 per gallon in the 2022 period.

Despite this price decrease, our net fuel expense increased to 4.8% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2023 period from 3.7% in the 2022 period, primarily due to the record heat in the third quarter of 2023.

Our supplies and maintenance expense increased $10.8 million, or 26.6%, from the 2022 period primarily due to higher outside repair, loading/unloading, parts and tires costs.

The $6.6 million, or 8.1%, increase in depreciation in the 2023 period was primarily due to an increase in our average tractor and trailer fleets along with higher prices of new equipment.

The $2.7 million, or 7.1%, increase in insurance and claims in the 2023 period was primarily due to increases in the cost of physical damage claims related to our revenue equipment, workers’

compensation claim costs and insurance premiums, partially offset by a reduction in our self-insured auto liability claim costs.

Gain on disposition of revenue equipment was $11.8 million in the 2023 period, up from $10.4 million in the 2022 period, primarily due to an increase in the number of units sold, partially offset by a decrease in the average gain for our tractor and trailer sales.

Our operating income declined 32.7% to $74.5 million in the 2023 period from $110.6 million in the 2022 period as a result of the foregoing factors.

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The table below reflects our net cash flows provided by operating activities, net cash flows used for investing activities and net cash flows used for financing activities for the periods indicated.

Ended June 30,

Ended September 30,

(In thousands)

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We repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million in the second quarter of 2022.

We did not repurchase any shares in the third or fourth quarters of 2022 or in the first six months of 2023.

As of June 30, 2023, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.

In the first six months of 2022, net cash flows provided by operating activities of $98.7 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $30.3 million, to repurchase and retire 2.3 million shares of our common stock for $41.8 million, to pay cash dividends of $9.8 million, and to construct and upgrade regional operating facilities in the amount of $3.8 million, resulting in an $11.4 million increase in cash and cash equivalents.

We did not repurchase any shares in the third or fourth quarters of 2022 or in the first nine months of 2023.

As of September 30, 2023, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.

In the first nine months of 2022, net cash flows provided by operating activities of $163.2 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $82.0 million, to repurchase and retire 2.3 million shares of our common stock for $41.8 million, to pay cash dividends of $14.7 million, and to construct and upgrade regional operating facilities in the amount of $8.7 million, resulting in a $14.5 million increase in cash and cash equivalents.

We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $76 million for the remainder of 2023.

This amount includes commitments to purchase $84.2 million of new revenue equipment and $2.5 million in building construction through the remainder of 2023.

This amount includes commitments to purchase $63.2 million of new revenue equipment and $292,000 in building construction for the remainder of 2023.

Additionally, operating lease obligations total $566,000 through 2028.

Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first two quarters of both 2023 and 2022, which totaled $9.8 million in each of the six-month periods.

Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first three quarters of both 2023 and 2022, which totaled $14.6 million and $14.7 million in the first nine months of 2023 and 2022, respectively.

We currently expect to continue to pay quarterly cash dividends in the future.

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The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended.

At June 30, 2023, there was no outstanding principal balance on the facility.

At September 30, 2023, there was no outstanding principal balance on the facility.

As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $19.5 million and remaining borrowing availability of $10.5 million.

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This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins.

The interest rate for the facility that would apply to outstanding principal balances was 8.25% at June 30, 2023.

The interest rate for the facility that would apply to outstanding principal balances was 8.5% at September 30, 2023.

Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million.

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The current and previous credit agreements also contain restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios.

We were in compliance with all covenants at June 30, 2023 and December 31, 2022.

Other than our obligations for revenue equipment and building construction purchases and operating lease expenditures, along with our outstanding standby letters of credit to guarantee settlement of self-insurance claims, which are each mentioned above, we did not have any material off-balance sheet arrangements at June 30, 2023.

We were in compliance with all covenants at September 30, 2023 and December 31, 2022.

Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments.

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

What changed 10-Q

Item 1. Financial Statements