What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-11 compared with 2021-03-05 · 155 added, 228 removed, 951 unchanged (29% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm –

Grant Thornton LLP

Grant Thornton LLP (PCAOB ID Number 248 )

Consolidated Balance Sheets - December 31, 2021 and 2020

27 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

Critical audit matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

4 unchanged sentences

compensation.

Self-insurance results when the Company insures itself by maintaining funds to cover possible losses rather than by purchasing an insurance policy.

Self-insurance results when the Company insures itself by maintaining funds to cover possible losses rather than purchasing an insurance policy.

The Company accrues for the cost of the self-insured portion of unpaid claims by evaluating the nature and severity of individual claims and by estimating future claims development based upon historical development trends.

1 unchanged sentence

We identified the estimation of auto liability and workers’

compensation claims accruals subject to exposure at claim dollar value layers ranging from $1.0 to $2.0 million depending on the specific coverages for auto liability, workers' compensation claims subject to self-insurer retention of $0.5 million, as a critical audit matter.

compensation claims accruals, subject to certain self-insured retention, as a critical audit matter.

Auto liability and workers’

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

compensation unpaid claim 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 for future claims that have been incurred but not completely paid.

3 unchanged sentences

We tested the design and operating effectiveness of controls over auto liability and workers’ compensation claims, including the completeness and accuracy of claim expenses and payments.

We tested management’s process for determining the auto liability and workers’ compensation accrual, including evaluating the reasonableness of the methods and assumptions used in estimating the ultimate claim losses with the assistance of an internal specialist.

We tested management’s process for determining the auto liability and workers’ compensation accruals, including evaluating the reasonableness of the methods and assumptions used in estimating the ultimate claim losses.

We tested the claims data used in the reserve calculation by inspecting source documents to test key attributes of the claims data.

8 unchanged sentences

(in thousands, except share and per share data)

ASSETS  

CURRENT ASSETS:

Cash and cash equivalents

$ 18,509  

Accounts receivable—net:

4 unchanged sentences

10,962  

10,172  

Marketable equity securities

7 unchanged sentences

19,718  

18,486  

Structures and improvements

21 unchanged sentences

(in thousands, except share and per share data)

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

5 unchanged sentences

26,601  

Income taxes payable

Current maturities of long-term debt

16 unchanged sentences

STOCKHOLDERS’

Preferred stock, $.01 par value, 10,000,000 shares

Preferred stock, $ .01 par value, 10,000,000 shares authorized;

Common stock, $ .01 par value, 40,000,000 shares authorized;

58 unchanged sentences

13,761  

Loss (gain) on disposition of equipment

(Gain) Loss on disposition of equipment

( 1,446 )  

Total operating expenses and costs

6 unchanged sentences

12,547  

NON-OPERATING (EXPENSE) INCOME

NON-OPERATING INCOME (EXPENSE)

10,339  

( 1,699 )  

INTEREST EXPENSE

6 unchanged sentences

FEDERAL & STATE INCOME TAX EXPENSE:

17,832  

Total federal & state income tax expense

2 unchanged sentences

$ 17,827  

$ 7,900  

EARNINGS PER COMMON SHARE:

6 unchanged sentences

AVERAGE COMMON SHARES OUTSTANDING:

See notes to consolidated financial statements.

TRANSPORTATION SERVICES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018

(in thousands)

11,357  

1 unchanged sentence

11,663  

Other comprehensive income, net of tax:

Other comprehensive income (1)

COMPREHENSIVE INCOME

11,432  

1 unchanged sentence

11,760  

_______________

(1) Other comprehensive income for 2020, 2019 and 2018 was $0, $0, and $0, respectively.

See notes to consolidated financial statements.

5 unchanged sentences

Shares / Amount

Comprehensive

BALANCE—

5 unchanged sentences

$ 139,447  

23,994  

Exercise of stock options-shares issued including tax benefits

Restricted stock issued

3 unchanged sentences

Share-based compensation

Cumulative effect adjustment –

( 7,444 )  

BALANCE—

4 unchanged sentences

$ 207,007  

$ 133,975  

17,827  

Restricted stock issued

11 unchanged sentences

76,516  

( 117 )  

Restricted stock issued

9 unchanged sentences

$ 301,350  

$ 216,110  

See notes to consolidated financial statements.

15 unchanged sentences

Provision for deferred income taxes

Recognized loss (gain) on marketable equity securities

17,832  

Loss (gain) on sale or disposal of equipment

Recognized (gain) loss on marketable equity securities

( 8,197 )  

(Gain) loss on sale or disposal of equipment

( 1,446 )  

Changes in operating assets and liabilities:

1 unchanged sentence

( 47,132 )  

( 17,835 )  

Prepaid expenses, deposits, inventories, and other assets

( 865 )  

( 1,780 )  

Income taxes refundable

( 60 )  

Income taxes payable

Trade accounts payable

20,880  

( 2,233 )  

Accrued expenses and other liabilities

1 unchanged sentence

( 17,798 )  

20,307  

Net cash provided by operating activities

14 unchanged sentences

( 3,923 )  

Net cash used in investing activities

( 32,692 )  

Net cash provided by (used in) investing activities

( 32,692 )  

21 unchanged sentences

( 2,281 )  

Proceeds from exercise of stock options

Net cash used in financing activities

2 unchanged sentences

NET INCREASE IN CASH AND CASH EQUIVALENTS

18,172  

CASH AND CASH EQUIVALENTS—Beginning of year

CASH AND CASH EQUIVALENTS—End of year

$ 18,509  

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—

3 unchanged sentences

$ 8,612  

NONCASH INVESTING AND FINANCING ACTIVITIES—

Purchases of revenue equipment included in accounts payable

$ 3,870  

NON-CASH INVESTING AND FINANCING ACTIVITIES—

Purchases of revenue equipment included in accounts payable

$ 9,050  

4 unchanged sentences

YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019

ACCOUNTING POLICIES

Description of Business and Principles of Consolidation –P.A.M.

Description of Business and Principles of Consolidation –

Transportation Services, Inc.

4 unchanged sentences

The following subsidiaries were inactive during all periods presented:

International, Inc., P.A.M.

Logistics Services, Inc., Choctaw Brokerage, Inc., S & L Logistics, Inc.

International, Inc., Choctaw Brokerage, Inc., S & L Logistics, Inc.

Mexico Holdings, LLC.

Use of Estimates –The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period.

Use of Estimates –

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period.

The Company periodically reviews these estimates and assumptions.

2 unchanged sentences

Actual results could differ from those estimates.

Cash and Cash Equivalents –The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Cash and Cash Equivalents –

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

At times cash held at banks may exceed FDIC insured limits.

Accounts Receivable and Current Expected Credit Losses –Accounts receivable are presented in the Company’s consolidated financial statements net of current expected credit losses.

Accounts Receivable and Current Expected Credit Losses –

Accounts receivable are presented in the Company’s consolidated financial statements net of current expected credit losses.

Management estimates current expected credit losses based upon an evaluation of the aging of our customer receivables and historical write-offs, as well as other trends and factors surrounding the credit risk of specific customers.

5 unchanged sentences

However, additional credit losses may be incurred if the financial condition of our customers were to deteriorate, and could have a material effect on the Company’s consolidated financial statements in future periods.

Bank Overdrafts –The Company classifies bank overdrafts in current liabilities as accounts payable and does not offset other positive bank account balances located at the same or other financial institutions.

Bank overdrafts generally represent checks written that have not yet cleared the Company’s bank accounts.

Bank Overdrafts –

The Company classifies bank overdrafts in current liabilities as accounts payable.

Bank overdrafts generally represent checks written in excess of available cash that have not yet cleared the Company’s bank accounts.

The majority of the Company’s bank accounts are zero balance accounts that are funded at the time items clear against the account by drawings against a line of credit;

3 unchanged sentences

Bank overdrafts as of December 31, 2021 and 2020 were approximately $ 0 and $ 7,638,000 , respectively.

Accounts Receivable Other –The components of accounts receivable other consist primarily of amounts representing company driver advances, independent contractor advances, and equipment manufacturer warranties.

Accounts Receivable Other –

The components of accounts receivable other consist primarily of amounts representing company driver advances, independent contractor advances, and equipment manufacturer warranties.

Advances receivable from company drivers as of December 31, 2021 and 2020, were approximately $ 43,000 and $ 136,000 , respectively.

11 unchanged sentences

Marketable Equity Securities.

Impairment of Long-Lived Assets –The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable.

Impairment of Long-Lived Assets –

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable.

An impairment loss would be recognized if the carrying amount of the long-lived asset is not recoverable, and it exceeds its fair value.

1 unchanged sentence

No impairment losses were recorded during 2021 or 2020.

Property and Equipment –Property and equipment is recorded at historical cost, less accumulated depreciation.

Property and Equipment –

Property and equipment is recorded at historical cost, less accumulated depreciation.

For financial reporting purposes, the cost of such property is depreciated principally by the straight-line method.

7 unchanged sentences

Office furniture and equipment

3 - 10  

Revenue equipment

3 - 10  

Structures and improvements

1 unchanged sentence

The Company’s management periodically evaluates whether changes to estimated useful lives and/or salvage values are necessary to ensure its estimates accurately reflect the economic use of the assets.

During 2020 and 2019, management determined that an adjustment to the estimated useful lives or salvage values of trucks or trailers was not necessary based on such an evaluation.

Inventory –Inventories consist primarily of revenue equipment parts, tires, supplies, and fuel.

During 2021, management determined that no material adjustments to the estimated useful lives or salvage values of trucks or trailers were necessary based on such an evaluation.

Inventory –

Inventories consist primarily of revenue equipment parts, tires, supplies, and fuel.

Inventories are carried at the lower of cost or market with cost determined using the first in, first out method.

Prepaid Tires –Tires purchased with revenue equipment are capitalized as a cost of the related equipment.

Prepaid Tires –

Tires purchased with revenue equipment are capitalized as a cost of the related equipment.

Replacement tires are included in prepaid expenses and deposits and are amortized over a 24 -month period.

Amounts paid for the recapping of tires are expensed when incurred.

Advertising Expense –Advertising costs are expensed as incurred and totaled approximately $ 1,102,000 , $ 1,269,000 and $ 1,234,000 for the years ended December 31, 2020, 2019 and 2018, respectively.

Repairs and Maintenance –Repairs and maintenance costs are expensed as incurred.

Self-Insurance Liability –A liability is recognized for known health, workers’

Advertising Expense –

Advertising costs are expensed as incurred and totaled approximately $ 1,154,000 , $ 1,102,000 and $ 1,269,000 for the years ended December 31, 2021, 2020 and 2019, respectively.

Repairs and Maintenance –

Repairs and maintenance costs are expensed as incurred.

Self-Insurance Liability –

A liability is recognized for known health, workers’

compensation, cargo damage, property damage, and auto liability damage claims.

2 unchanged sentences

Claims Liabilities for more information regarding insurance and claims liability.

Income Taxes –The Company applies the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse.

Income Taxes –

The Company applies the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse.

A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

16 unchanged sentences

There are no assets or liabilities recorded in conjunction with revenue recognized, other than accounts receivable and current expected credit losses.

Earnings Per Share –The Company computes basic earnings per share (“EPS”) by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.

Earnings Per Share –

The Company computes basic earnings per share (“EPS”) by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted EPS includes the potential dilution that could occur from stock-based awards and other stock-based commitments using the treasury stock or the as if converted methods, as applicable.

2 unchanged sentences

Earnings per Share for more information regarding the computation of diluted EPS.

Fair Value Measurements –Certain financial assets and liabilities are measured at fair value within the financial statements on a recurring basis.

Fair Value Measurements –

Certain financial assets and liabilities are measured at fair value within the financial statements on a recurring basis.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

2 unchanged sentences

Fair Value of Financial Instruments.

Reporting Segments –The Company's operations are all in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under United States generally accepted accounting principles (“GAAP”).

Reporting Segments –

The Company's operations are all in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under United States generally accepted accounting principles (“GAAP”).

The Company provides truckload transportation services as well as brokerage and logistics services to customers throughout the United States and portions of Canada and Mexico.

1 unchanged sentence

Remaining revenues, excluding fuel surcharges, for each respective year were generated by brokerage and logistics services.

Concentrations of Credit Risk –The Company performs ongoing credit evaluations and generally does not require collateral from its customers.

Concentrations of Credit Risk –

The Company performs ongoing credit evaluations and generally does not require collateral from its customers.

The Company maintains reserves for potential credit losses.

1 unchanged sentence

Subsequent Events –

We have evaluated subsequent events for recognition and disclosure through the date these financial statements were filed with the United States Securities and Exchange Commission and concluded that no subsequent events or transactions have occurred that require recognition or disclosure in our financial statements.

On March 8, 2022, the Company retired 12,268,395 shares of its treasury stock.

When treasury shares are retired, we allocate the excess of the repurchase price over the par value of shares acquired to both retained earnings and paid-in capital.

The portion allocated to paid-in capital is determined by applying the average paid-in capital per share, and the remaining portion is recorded to retained earnings.

There was no effect on the Company’s overall equity position as a result of the retirement.      

On March 8, 2022, the Company’s Board of Directors declared a 2 -for- 1 forward stock split of its common stock in the form of a 100% stock dividend, payable on March 29, 2022, to stockholders of record on March 18, 2022.

Under the terms of the stock split, the Company’s stockholders will receive a dividend of one share for every share held on the record date. The dividend will be paid in authorized but unissued shares of common stock of the Company. The additional shares will be distributed by the Company’s transfer agent, Computershare, and the per share price of the Company’s common stock will adjust accordingly on The Nasdaq Stock Market.   

Risks and Uncertainties (COVID- 19 ) –

4 unchanged sentences

 We continue to monitor the progression of the pandemic, further government responses and development of treatments and vaccines and the resulting potential effect on our financial position, results of operations, cash flows and liquidity.

 These events could have an impact in future periods on certain estimates used in the preparation of our financial results, including, but not limited to impairment of goodwill, other intangible assets and other long-lived assets, income tax provision and recoverability of certain receivables.

 Should the pandemic continue for an even further extended period of time, the impact on our operations could have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.

Foreign Currency Transactions –The functional currency of the Company’s foreign branch office in Mexico is the U.S.

 These events could have an impact in future periods on certain estimates used in the preparation of our financial results, including, but not limited to impairment of long-lived assets, income tax provision and recoverability of certain receivables.

Foreign Currency Transactions –

The functional currency of the Company’s foreign branch office in Mexico is the U.S.

The Company remeasures the monetary assets and liabilities of this branch office, which are maintained in the local currency ledgers, at the rates of exchange in effect at the end of the reporting period.

1 unchanged sentence

Non-monetary assets and liabilities are remeasured using historical rates.

Any resulting exchange gain or loss from the remeasurement process is included in non-operating income (loss) in the Company’s consolidated statements of operations.

Any resulting exchange gain or loss from the remeasurement process is included in non-operating income in the Company’s consolidated statements of operations.

Recent Accounting Pronouncements –

In June 2016, the FASB issued ASU No.

2016 - 13, (“ASU 2016 - 13”

), Accounting for Credit Losses (Topic 326 ).

ASU 2016 - 13 requires the use of an “expected loss”

model on certain types of financial instruments.

The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to the amortized cost of the securities.

For smaller reporting companies, ASU 

2016 - 13  is effective for fiscal years, and interim periods within those years, beginning after 

December 15, 2022 ,  with early adoption permitted.

The adoption of this guidance on 

January 1, 2020 

did not  have a material impact on the Company’s financial condition, results of operations, or cash flows.

March 2020, 

9 unchanged sentences

 The Company has evaluated the provisions of this standard and determined that it is applicable to our line of credit and investment margin account.

The London Interbank Offered Rate (“LIBOR”) is the basis for interest charges on outstanding borrowings for both our line of credit and investment margin account.

The scheduled discontinuation of LIBOR is 

not  expected to materially alter any provisions of either of these debt instruments, except for the identification of a replacement reference rate.

The Company has evaluated the new guidance and does 

not  expect it to have a material impact on its financial condition, results of operations, or cash flows.

The London Interbank Offered Rate (“LIBOR”) is the basis for interest charges on outstanding borrowings for our line of credit.

During the year 2021, the index for interest charges on the Company’s investment margin accounts was transitioned to the Secured Overnight Financing Rate (“SOFR”).

The new index rate did not vary materially from LIBOR at the time of transition.

The scheduled discontinuation of LIBOR is not expected to materially alter any provisions of either of these debt instruments, except for the identification of a replacement reference rate for our line of credit.

The Company has evaluated the new guidance and does not expect it to have a material impact on its financial condition, results of operations, or cash flows.

REVENUE RECOGNITION

35 unchanged sentences

20,388  

12,629  

Current estimated credit losses

14 unchanged sentences

$ 2,952  

MARKETABLE EQUITY SECURITIES

40 unchanged sentences

$ ( 177 )  

Realized (losses) / gains, net of taxes

$ 1,055  

6 unchanged sentences

The interest rates on margin account borrowings were 0.68 % and 0.75 % as of December 31, 2021 and 2020, respectively.

ACCRUED EXPENSES AND OTHER LIABILITIES

8 unchanged sentences

11,251  

Self-insurance claims

Legal reserves

19,901  

Current portion of Right-of-Use asset

Self-insurance claims and legal reserves

Current portion of Right-of-Use liability

Total accrued expenses and other liabilities

5 unchanged sentences

This policy has a per occurrence deductible of $ 10,000 .

On September 1, 2020, the Company elected to become self-insured for certain layers of auto liability claims in excess of $ 2.0 million.

Since September 1, 2020, the Company has been self-insured for certain layers of auto liability claims in excess of $ 2.0 million.

Between September 1, 2019 and August 31, 2020, the Company was self-insured for certain layers of auto liability claims in excess of $ 1.0 million.

9 unchanged sentences

compensation claims.

Letters of credit aggregating approximately $ 310,000 and certificates of deposit totaling $ 300,000 are held by banks as security for workers’

Letters of credit aggregating approximately $ 0.3 million and certificates of deposit totaling $ 0.3 million are held by banks as security for workers’

compensation claims.

7 unchanged sentences

18,246  

17,047  

Equipment financing (2)

3 unchanged sentences

15,738  

17,288  

Total long-term debt

7 unchanged sentences

Line of credit agreement with a bank provides for maximum borrowings of $ 60.0 million and contains certain restrictive covenants that must be maintained by the Company on a consolidated basis.

Borrowings on the line of credit are at an interest rate of LIBOR as of the first day of the month plus 1.25 % ( 1.40 % at December 

Borrowings on the line of credit are at an interest rate of LIBOR as of the first day of the month (with a floor of 0.5 %) plus 1.25 %, ( 1.75 % at December 

31, 2021 ) and are secured by our trade accounts receivable.

5 unchanged sentences

At December 31, 2020, outstanding advances on the line were approximately $ 18.6 million, including letters of credit totaling $ 0.3 million.

Equipment financings consist of installment obligations for revenue equipment purchases, payable in various monthly installments with various maturity dates through September 2026, at a weighted average interest rate of 3.30 % as of December 31, 2020 and collateralized by revenue equipment.

Equipment financings consist of installment obligations for revenue equipment purchases, payable in various monthly installments with various maturity dates through March 2028, at a weighted average interest rate of 2.81 % as of December 31, 2021 and collateralized by revenue equipment.

Real estate financing consisting of an installment obligation for the purchase of real estate in Laredo, TX, payable in 120 installments at an interest rate of 3.02 % and maturing in August 2030.

9 unchanged sentences

11,713  

$ 222,277  

NONCASH INVESTING AND FINANCING ACTIVITIES

14 unchanged sentences

Treasury Stock

In May 2019, our Board of Directors authorized the repurchase of up to 200,000 shares of our common stock through a Dutch auction tender offer (the “2019 tender offer”).

Subject to certain limitations and legal requirements, the Company could repurchase up to an additional 2 % of its outstanding shares, which totaled 118,996 shares.

The 2019 tender offer commenced on May 13, 2019 and expired on June 11, 2019.

Through this tender offer, the Company’s shareholders had the opportunity to tender some or all of their shares at a price within the range of $ 55.00 to $ 60.00 per share.

Upon expiration, 192,743 shares were purchased through this offer at a final purchase price of $ 60.00 per share for a total of approximately $ 11.6 million, including fees and commission.

The repurchase was settled on June 13, 2019.

In July 2021, our Board of Directors authorized the repurchase of up to 200,000 shares (as adjusted for the Company’s 2 -for- 1 forward split of its common stock in the form of a 100% stock dividend paid on August 16, 2021), of our common stock through a Dutch auction tender offer (the “2021 tender offer”).

Subject to certain limitations and legal requirements, the Company could repurchase up to an additional 2.0 % of its outstanding shares.

The 2021 tender offer commenced on July 27, 2021 and expired on August 26, 2021.

Through this tender offer, the Company’s shareholders had the opportunity to tender some or all of their shares at a price within the range of $ 32.00 to $ 37.00 per share (as adjusted for the stock split).

Upon expiration, 272,405 shares were purchased through this offer at a final purchase price of $ 37.00 per share for a total of approximately $ 10.1 million, excluding fees and commission.

The repurchase was settled on August 31, 2021.

The Company accounted for the repurchase of these shares as treasury stock on the Company’s consolidated balance sheet as of December 31, 2021.

6 unchanged sentences

The Company accounted for the repurchase of these shares as treasury stock on the Company’s consolidated balance sheet as of December 31, 2019.

The Company’s stock repurchase program has been extended and expanded several times, most recently in April 2017, when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011 authorization.

The Company’s stock repurchase program has been extended and expanded several times, most recently in November 2021, when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011 authorization.

The Company repurchased 18,732 shares and 60,561 shares of its common stock under this program during 2021 and 2020, respectively.

The Company accounts for Treasury stock using the cost method, and as of December 31, 2021, 12,226,785 shares were held in the treasury at an aggregate cost of approximately $ 169,946,199 .

SEGMENT INFORMATION, SIGNIFICANT CUSTOMERS, INDUSTRY CONCENTRATION AND GEOGRAPHIC AREAS DIVIDENDS

SEGMENT INFORMATION, SIGNIFICANT CUSTOMERS, INDUSTRY CONCENTRATION AND GEOGRAPHIC AREAS

The Company's revenues for 2021, 2020 and 2019 were all generated from operations in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under GAAP.

17 unchanged sentences

General Motors Company accounted for approximately 11 %, 15 % and 19 % of our revenues in 2021, 2020 and 2019, respectively.

Fiat Chrysler Automobiles accounted for approximately 6 %, 9 % and 16 % of our revenues in 2020, 2019 and 2018, respectively.

Ford Motor Company accounted for approximately 5 %, 7 % and 8 % of our revenues in 2020, 2019 and 2018, respectively.

We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers.

25 unchanged sentences

32,031  

15,364  

Total deferred tax assets

37,032  

24,704  

Net deferred tax liability

12 unchanged sentences

( 251 )  

( 2.5 )  

Total income tax expense

9 unchanged sentences

Total deferred income tax provision

17,832  

Total income tax provision expense

4 unchanged sentences

The CARES Act temporarily suspends and modifies certain tax laws established by the TCJA, including, but not limited to, modifications to net operating loss limitations, business interest limitations and alternative minimum tax.

The CARES Act did not have a material impact on the Company’s current year provision or the Company’s consolidated financial statements.

The Company has general business credits of approximately $ 988,000 at December 31, 2018, which begin to expire after the year 2030.

The Company also has net operating loss carryovers for federal income purposes of approximately $ 59,715,000 of which $ 30,835,000 will begin to expire after the year 2030 while the remaining balance does not expire and can be carried forward indefinitely.

The CARES Act did not have a material impact on the Company’s prior year provision or the Company’s consolidated financial statements.

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC 740 - 10 - 30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary.

11 unchanged sentences

On March 13, 2014, the Company’s Board of Directors adopted, and on May 29, 2014 our shareholders approved, the 2014 Amended and Restated Stock Option and Incentive Plan (the “Plan”) which amended and restated the Company’s 2006 Stock Option Plan.

Under the Plan, 750,000 shares are reserved for the issuance of stock awards to directors, officers, key employees, and others.

Under the Plan, 1,500,000 shares (as adjusted for the Company’s 2 -for- 1 forward split of its common stock paid in August 2021) are reserved for the issuance of stock awards to directors, officers, key employees, and others.

The stock option exercise price and the restricted stock purchase price under the 2014 Plan shall not be less than 85 % of the fair market value of the Company’s common stock on the date the award is granted.

The fair market value is determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award is granted.

The Company granted unrestricted shares of its common stock to its non-employee directors and granted restricted shares of common stock to certain key employees during all periods presented.

All share and per share amounts set forth below have been adjusted to reflect the impact of the 2 -for- 1 forward stock split in August 2021.

In March 2021, the Company granted 2,608 shares of common stock to non-employee directors.

These restricted stock awards have a grant date fair value of $ 30.85 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.

In April 2021, the Company granted 5,000 shares of common stock to a certain key employee.

These stock awards have a grant date fair value of $ 30.17 per share, based on the closing price of the Company’s stock on the date of grant, and vest on the four year anniversary date of the award.

In January 2020, the Company granted 14,000 shares of common stock to certain key employees.

12 unchanged sentences

These stock awards have a grant date fair value of $ 23.53 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.

In December 2018, the Company granted 33,000 restricted shares of common stock to certain key employees.

These restricted stock awards have a grant date fair value of $ 36.35 per share, based on the closing price of the Company’s stock on the date of grant, with one fourth of the award vesting each of the next four years on the anniversary date.

In March 2018, the Company granted 1,932 shares of common stock to non-employee directors.

These stock awards have a grant date fair value of $ 36.35 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.

During 2021 and 2020, there were no grants of stock options and there were no outstanding stock options at December 31, 2021 or December 31, 2020.

1 unchanged sentence

The grant date fair value of stock and stock options vested during 2021, 2020 and 2019 was approximately $ 203,000 , $ 759,000 and $ 953,000 , respectively.

Total pre-tax stock-based compensation expense, recognized in Salaries, wages and benefits was approximately $ 461,000 during 2020 and includes approximately $ 90,000 recognized as a result of the grant of 326 shares of stock to eight non-employee directors during the first quarter of 2020 and 242 shares of stock to one non-employee director during the second quarter of 2020.

Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $ 441,000 during 2021 and includes approximately $ 80,000 recognized as a result of the grant of 326 shares of stock to eight non-employee directors during the first quarter of 2021.

The Company recognized a total income tax benefit of approximately $ 110,000 related to stock-based compensation expense during 2021.

The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.06 during 2020.

The recognition of stock-based compensation expense decreased diluted earnings per common share by $ 0.03 and basic earnings per common share by approximately $ 0.02 during 2021.

As of December 

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$ 111,000  

Total pre-tax stock-based compensation expense, recognized in Salaries, wages and benefits was approximately $ 912,000 during 2019 and included approximately $ 100,000 recognized as a result of the grant of 205 shares of stock to each non-employee director during the first quarter of 2019.

Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $ 461,000 during 2020 and includes approximately $ 90,000 recognized as a result of the grant of 652 shares of stock to eight non-employee directors during the first quarter of 2020 and 484 shares of stock to one non-employee director during the second quarter of 2020.

The Company recognized a total income tax benefit of approximately $ 100,000 related to stock-based compensation expense during 2020.

2 unchanged sentences

The Company recognized a total income tax benefit of approximately $ 200,000 related to stock-based compensation expense during 2019.

The recognition of stock-based compensation expense decreased diluted and basic earnings per common share by approximately $ 0.09 and $ 0.10 , respectively, during 2018.

Transactions in stock options under these plans are summarized as follows:

Exercise Price

Outstanding—January 1, 2018:

45,068  

$ 10.79  

( 45,005 )  

( 63 )  

Outstanding—December 31, 2018:

Outstanding—December 31, 2019:

Outstanding—December 31, 2020:

Options exercisable—December 31, 2020:

The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.12 during 2019.

There were no options granted during 2021, 2020, or 2019.

The weighted-average grant-date fair value of options canceled, forfeited, or expired during 2018 was $ 6.34 .

The total intrinsic value of options exercised during 2018 were approximately $ 1,406,000 .

A summary of the status of the Company’s non-vested restricted stock as of December 31, 2021 and changes during the year ended December 31, 2021, is presented below:

Restricted Stock

Average Grant

Date Fair Value

Average Grant Date Fair Value

Nonvested—January 1, 2021

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$ 18.06  

63,182  

Canceled/forfeited/expired

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$ 18.5  

Cash received from option exercises totaled approximately $ 0 , $ 0 and $ 485,000 during the years ended December 31, 2020, 2019 and 2018, respectively.

The Company issued new shares upon option exercise.

EARNINGS PER SHARE

Basic earnings per common share was computed by dividing net income by the weighted average number of shares outstanding during the period.

Basic earnings per common share was computed by dividing net income by the weighted average number of shares outstanding (on a stock split adjusted basis) during the period.

Diluted earnings per common share was calculated as follows:

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Basic weighted average common shares outstanding (1)

11,357  

11,504  

11,663  

Dilutive effect of common stock equivalents

Diluted weighted average common shares outstanding (1)

11,432  

11,536  

11,760  

Basic earnings per share

6 unchanged sentences

$ 0.67  

As adjusted for the Company’s 2 -for- 1 forward stock split paid in August 2021

The Company sponsors a benefit plan for the benefit of all eligible employees.

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COMMITMENTS AND CONTINGENCIES

We are a defendant in a lawsuit which was filed on August 6, 2021, in the United States District Court for the Western District of Arkansas.

The plaintiff is a former driver and is seeking class certification.

The Complaint alleges failure to pay minimum wage under the Fair Labor Standards Act and the Arkansas Minimum Wage Act, violations of the Electronic Funds Transfer Act (EFTA), violations of the Arkansas Wage Payment Law (discharge pay and unlawful, usurious advance fees), violations of the Arkansas Common Law, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO). 

Should this lawsuit be certified as a class action, to include similarly situated drivers as the Plaintiff, the class will seek actual and liquated damages to include court costs and legal fees associated with the lawsuit.

The class, if certified, will include any company driver employed from January 1, 2020 through the present and ongoing.

A mediation was held on January 14, 2022 in an attempt to resolve the case but was unsuccessful.

Management has determined that any losses under this claim will not be covered by existing insurance policies.

We were a defendant in a collective- and class-action lawsuit which was filed on December 9, 2016, in the United States District Court for the Western District of Arkansas.

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During July 2020, the United States District Court for the Western District of Arkansas granted final approval of a $ 16.5 million settlement reached with the plaintiffs and the settlement payment was disbursed by the Company during August 2020.

Management has determined that the loss under this claim will not be covered by existing insurance policies.

This claim was not covered by existing insurance policies.

On March 31, 2020, the United States District Court for the Western District of Arkansas dismissed the collective- and class-action lawsuit filed against the Company on May 29, 2019 by plaintiffs who were independent contractors alleging violations under the Fair Labor Standards Act and the Arkansas Minimum Wage Law.

5 unchanged sentences

On September 1, 2019, we elected to become self-insured for certain layers of auto liability claims in excess of $ 1.0 million for which we previously maintained auto liability insurance coverage.

On September 1, 2020, we elected to become self-insured for certain layers of auto liability claims in excess of $ 2.0 million.

Since September 1, 2020, we have been self-insured for certain layers of auto liability claims in excess of $ 2.0 million.

We currently specifically reserve for claims that are expected to exceed $ 2.0 million when fully developed, based on the facts and circumstances of those claims.

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However, if we experience claims that are not covered by our insurance or that exceed our estimated claim reserve, it could increase the volatility of our earnings and have a materially adverse effect on our financial condition, results of operations or cash flows.

Total rental expense, net of amounts reimbursed, for the years ended December 31, 2020, 2019 and 2018 related to truck leases was approximately $ 0 , $ 0 , and $ 47,000 , respectively.

Right-of-Use Leases

During 2019, the Company entered into operating leases which include initial terms of approximately five years and which do not include an option for early cancellation.

During 2020, the Company did not enter into any new leases with similar provisions.

In accordance with the provisions of ASC Topic 842, these leases resulted in the recognition of right-of-use assets and corresponding operating lease liabilities, respectively, valued at $ 1.5 million as of December 31, 2020.

During 2021 and 2020, the Company did not enter into any new leases with similar provisions.

These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using the Company’s incremental borrowing rate as of the respective dates of lease inception, as the rate implicit in each lease is not readily determinable.

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Maturity of Lease Liabilities

2026 and Thereafter

Total undiscounted operating lease payments

$ 1,625  

Imputed interest

Present value of operating lease liabilities

$ 1,546  

Balance Sheet Classification

Right-of-use assets (recorded in other non-current assets)

$ 1,546  

Current lease liabilities (recorded in other current liabilities)

1 unchanged sentence

Total operating lease liabilities

$ 1,546  

Other Information

Weighted-average remaining lease term for operating leases (in years)

Weighted-average remaining lease term for operating leases

Weighted-average discount rate for operating leases

Right-of-use assets of $ 0 and $ 2.4 million were recognized as non-cash asset additions that resulted from new operating lease liabilities during the years ended December 31, 2020 and December 31, 2019, respectively.

No new right-of-use assets were recognized as non-cash asset additions that resulted from new operating lease liabilities during the years ended December 31, 2021 and December 31, 2020, respectively.

Cash paid for amounts included in the present value of right-of-use lease liabilities was $ 0.6 and $ 0.6 million during the years ended December 31, 2021 and December 31, 2020, respectively, and is included in operating cash flows.

1 unchanged sentence

Twelve Months Ended

(in thousands)

Right-of-Use leases

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Leases in our lease-purchase program expire at various dates through 2025.

Payments received under this program are classified in the Company’s financial statements under the consolidated statements of operations category Revenue.

Future minimum lease receipts related to these leases at December 31, 2021 and 2020 were approximately $ 15,907,000 and $ 15,242,000 , respectively.

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The Company recognized approximately $ 8,085,000 , $ 9,897,000 and $ 2,691,000 in operating revenue and approximately $ 11,103,000 , $ 6,791,000 and $ 9,190,000 in operating expenses in 2021, 2020, and 2019, respectively.

The Company purchased physical damage, auto liability, general liability, and workers’

The Company purchased auto liability and workers’

compensation insurance through an unaffiliated insurance broker which was written by an insurance company affiliated with our Chairman and controlling stockholder.

The premiums for physical damage coverage were approximately $ 0 , $ 0 and $ 1,271,000 for 2020, 2019, and 2018, respectively.

Premiums for auto liability coverage during 2021, 2020, and 2019 were approximately $ 9,851,000 , $ 8,516,000 , and $ 10,345,000 , respectively.

Premiums for general liability coverage during 2020, 2019, and 2018 were approximately $ 0 , $ 0 and $ 24,000 , respectively.

Premiums for workers’

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Amounts payable to affiliates at December 31, 2021 and 2020 were approximately $ 1,276,000 and $ 1,864,000 respectively.

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The tables below present quarterly financial information for 2020 and 2019:

Three Months Ended

(in thousands, except per share data)

Operating revenues

$ 129,155  

$ 92,979  

$ 121,942  

$ 142,750  

Operating expenses and costs

119,669  

94,986  

111,868  

126,380  

Operating income (loss)

( 2,007 )  

10,074  

16,370  

Non-operating (loss) income

( 9,076 )  

( 94 )  

Interest expense

( 2,212 )  

( 2,179 )  

( 2,211 )  

Income tax benefit (expense)

( 1,769 )  

Net (loss) income

$ ( 1,304 )  

$ ( 823 )  

$ 6,000  

$ 13,953  

Net (loss) income per common share:

$ ( 0.23 )  

$ ( 0.14 )  

$ 1.04  

$ 2.43  

$ ( 0.23 )  

$ ( 0.14 )  

$ 1.04  

$ 2.43  

Average common shares outstanding:

Three Months Ended

(in thousands, except per share data)

Operating revenues

$ 128,686  

$ 133,000  

$ 128,994  

$ 123,497  

Operating expenses and costs

118,999  

119,789  

121,461  

141,381  

Operating income (loss)

13,211  

Non-operating income (loss)

( 197 )  

Interest expense

( 2,040 )  

( 2,059 )  

( 2,178 )  

Income tax (expense) benefit

( 2,818 )  

( 2,301 )  

( 1,264 )  

Net income (loss)

$ 8,301  

$ 8,654  

$ 4,581  

Net income (loss) per common share:

$ 1.40  

$ 1.47  

$ 0.80  

$ 1.39  

$ 1.45  

$ 0.79  

Average common shares outstanding:

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data