What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2023-03-10 compared with 2022-03-11 · 58 added, 67 removed, 197 unchanged (39% of the section changed)

3 unchanged sentences

As of February 20, 2023, there were approximately 62 holders of record of our common stock.

The Company paid cash dividends of $1.00 per common share during each of the months of April 2012 and December 2012.

No dividends were paid during any year prior to 2012 or subsequent to 2012.

No dividends were paid during any year subsequent to 2012.

Future dividend policy and the payment of dividends, if any, will be determined by the Board of Directors in light of circumstances then existing, including our earnings, financial condition and other factors deemed relevant by the Board of Directors.

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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.

No shares were repurchased under the Company’s stock repurchase program during the fourth quarter of 2021.

In addition, during 2021, 2020 and 2019 the Company repurchased 272,405 shares, 0 shares and192,743 shares, respectively, through publicly announced Dutch auction tender offers.

See “Item 8.

Financial Statements and Supplementary Data, Note 9 to the Consolidated Financial Statements –

Capital Stock”

for additional information regarding these tender offers.

The Company did not engage in any tender offers during 2020.

On July 27, 2021, the Company commenced a tender offer to repurchase up to 200,000 shares of the Company’s outstanding common stock at a price of not greater than $37.00 nor less than $32.00 per share.

Following the expiration of the tender offer on August 31, 2021, the Company accepted 272,405 shares, including 72,405 oversubscribed shares tendered, of its common stock (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, to stockholders of record on July 30,2021) for purchase at $37.00 per share, at an aggregate purchase price of approximately $10.1 million, excluding fees and expenses related to the offer.

The Company funded the purchase of the accepted shares tendered with available cash and accounted for the repurchase of these shares as treasury stock on the Company’s condensed consolidated balance sheet as of September 30, 2021.

The following table summarizes the Company’s common stock repurchases during the fourth quarter of 2022.

No shares were purchased during the quarter other than through the repurchase program described above, and all purchases were made by or on behalf of the Company and not by any “affiliated purchaser.”

Total number of

shares purchased as

part of publicly

announced plans or

Maximum number of

shares that may yet

be purchased under

October 1-31, 2022

November 1-30, 2022

December 1-31, 2022

The Company’s stock repurchase program does not have an expiration date.

Securities Authorized for Issuance Under Equity Compensation Plans

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For the year ended December 31, 2022, truckload services revenue, before fuel surcharges, increased 25.9% to $540.9 million as compared to $429.6 million for the year ended December 31, 2021.

The increase relates primarily to a 13.5% increase in our rate per loaded mile, from $2.58 for the year ended December 31, 2021 to $2.92 for the year ended December 31, 2022 and to a 10.9% increase in loaded miles from 166.8 million for the year ended December 31, 2021 to 185.0 million for the year ended December 31, 2022.

Salaries, wages and benefits increased from 30.6% of revenues, before fuel surcharges, during 2021 to 31.3% of revenues, before fuel surcharges, during 2022.

The percentage-based increase relates primarily to the increase in employees combined with a decrease in independent contractors.

Operating supplies and expenses decreased from 8.3% of revenues, before fuel surcharges, during 2021 to 6.8% of revenues, before fuel surcharges, during 2022.

The decrease relates primarily to a decrease in the average surcharge-adjusted fuel price paid per gallon of diesel fuel, due to increased fuel surcharge collections from customers for the year ended December 31, 2022 compared to December 31, 2021.

The decrease also relates to the interaction of expenses with fixed-cost characteristics, such as rents, driver training schools and operating taxes and licenses.

Rent and purchased transportation increased from 24.3% of revenues, before fuel surcharges, during 2021 to 26.0% of revenues, before fuel surcharges, during 2022.

The increase was primarily due to an increase in the rates paid to third-party owner-operators for the year ended December 31, 2022 compared to the year ended December 31, 2021.

Depreciation decreased from 12.5% of revenues, before fuel surcharges, during 2021 to 11.3% of revenues, before fuel surcharges, during 2022.

The decrease relates primarily to the interaction of an increase in operating revenues with the fixed-cost nature of depreciation expense.

Insurance and claims increased from 4.4% of revenues, before fuel surcharges, during 2021 to 6.0% of revenues, before fuel surcharges, during 2022.

This increase relates primarily to an increase in accident and legal reserves, recognized in 2022 as compared to 2021 and to an increase in the premiums paid for auto liability and cargo insurance.

Non-operating income decreased from 1.9% of revenues, before fuel surcharges, during 2021 to 0.5% of revenues, before fuel surcharges, during 2022.

This decrease resulted primarily from a smaller increase in the market value of our marketable equity securities portfolio at December 31, 2022 as compared to December 31, 2021.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 83.7% for 2022 from 82.3% for 2021.

2021 Compared to 2020

For the year ended December 31, 2021, truckload services revenue, before fuel surcharges, increased 27.3% to $429.6 million as compared to $337.5 million for the year ended December 31, 2020.

The increase relates primarily to a 34.6% increase in our rate per loaded mile, from $1.91 for the year ended December 31, 2020 to $2.58 for the year ended December 31, 2021 and to temporary plant shutdowns in early 2020 experienced by some of our major customers due to COVID-19.

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The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, improved to 82.3% for 2021 from 92.0% for 2020.

2020 Compared to 2019

For the year ended December 31, 2020, truckload services revenue, before fuel surcharges, decreased 7.2% to $337.5 million as compared to $363.6 million for the year ended December 31, 2019.

The decrease relates primarily to temporary plant shutdowns in early 2020 experienced by some of our major customers due to COVID-19, and to a decrease in the average number of trucks in service from 2,075 during 2019 to 2,004 during 2020.

These decreases were partially offset by a 3.9% increase in our rate per loaded mile, from $1.84 for the year ended December 31, 2019 to $1.91 for the year ended December 31, 2020

Salaries, wages and benefits increased from 34.5% of revenues, before fuel surcharges, during 2019 to 35.3% of revenues, before fuel surcharges, during 2020.

The percentage-based increase relates primarily to an increase in amounts expensed for group health insurance expense and workers compensation claims expense.

Also contributing to the percentage-based increase was the interaction of expenses with fixed-cost characteristics, such as general and administrative wages, maintenance wages, and operations wages with a decrease in revenues for the periods compared.

In addition, the proportion of total miles driven by company drivers increased as the number of company drivers increased year-over-year.

Operating supplies and expenses increased from 6.5% of revenues, before fuel surcharges, during 2019 to 10.7% of revenues, before fuel surcharges, during 2020.

The increase relates primarily to an increase in the proportion of total miles driven by company drivers for the year ended December 31, 2020 compared to December 31, 2019.

This increase in miles driven by company drivers has the effect of increasing our net operating supplies and expenses while decreasing the Rent and purchased transportation category, as fuel surcharge revenue generated from transportation services performed by owner-operators is reflected as a reduction in net operating supplies and expenses, while fuel surcharges paid to owner-operators for their services is reported along with their base rate of pay in the Rent and purchased transportation category.

Rent and purchased transportation decreased from 28.3% of revenues, before fuel surcharges, during 2019 to 23.2% of revenues, before fuel surcharges, during 2020.

The decrease was primarily due to a reduction in the proportion of total miles driven by owner-operators for the year ended December 31, 2020 compared to the year ended December 31, 2019.

Depreciation increased from 15.0% of revenues, before fuel surcharges, during 2019 to 16.5% of revenues, before fuel surcharges, during 2020.

The increase relates primarily to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense.

Also contributing to the increase was an increase in the average number of trailers owned by the company and to a general increase in truck and trailer replacement costs.

During 2020, the average number of company-owned trailers increased by 634 as compared to 2019.

Insurance and claims decreased from 9.8% of revenues, before fuel surcharges, during 2019 to 2.6% of revenues, before fuel surcharges, during 2020.

This decrease relates primarily to the negative impact, recognized in 2019, of the settlement of a lawsuit which claimed that the Company was in violation of minimum wage laws with regard to certain activities performed by employee drivers and for a lawsuit brought against the Company by certain individuals who asserted that they were misclassified as owner-operators.

In addition, the Company became self-insured for certain lower layers of auto liability claims commencing September 1, 2019.

During the first nine months of 2019, the Company paid for auto liability insurance coverage in these lower levels through various third-party insurance carriers.

The decision to self-insure these layers reduced insurance premium costs from that point through to the annual renewal date of September 1, 2020.

Non-operating income decreased from a gain of 1.5% of revenues, before fuel surcharges, during 2019 to a loss of 0.5% of revenues, before fuel surcharges, during 2020.

This decrease resulted primarily from a decrease in the market value of our marketable equity securities portfolio at December 31, 2020 as compared to December 31, 2019.

Results of Operations - Logistics and Brokerage Services

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Operating income

Non-operating income (expense)

Non-operating income

Interest expense

2 unchanged sentences

For the year ended December 31, 2022, logistics and brokerage services revenues, before fuel surcharges, increased 31.3% to $277.8 million as compared to $211.7 million for the year ended December 31, 2021.

The increase was primarily related to a 69.5% increase in the number of loads carried for customers during 2021 as compared to 2020, coupled with a 23.1% increase in revenue per load.

Salaries, wages and benefits decreased from 5.0% of revenues, before fuel surcharges, in 2020 to 4.6% of revenues, before fuel surcharges, in 2021.

The decrease relates primarily to the effect of higher revenues without a corresponding increase in those wages with fixed cost characteristics, such as general and administrative wages.

The increase was primarily related to a 35.8% increase in the number of loads carried for customers during 2022 as compared to 2021, offset by a 3.5% decrease in revenue per load.

Rent and purchased transportation decreased from 82.5% of revenues, before fuel surcharges, in 2021 to 80.8% of revenues, before fuel surcharges, in 2022.

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For the year ended December 31, 2021, logistics and brokerage services revenues, before fuel surcharges, increased 108.6% to $211.7 million as compared to $101.5 million for the year ended December 31, 2020.

The increase was primarily related to a 36.0% increase in the number of loads carried for customers during 2020 as compared to 2019.

The increase was primarily related to a 69.5% increase in the number of loads carried for customers during 2021 as compared to 2020, coupled with a 23.1% increase in revenue per load.

Salaries, wages and benefits decreased from 5.0% of revenues, before fuel surcharges, in 2020 to 4.6% of revenues, before fuel surcharges, in 2021.

The decrease relates primarily to the effect of higher revenues without a corresponding increase in those wages with fixed cost characteristics, such as general and administrative wages.

Rent and purchased transportation increased from 86.4% of revenues, before fuel surcharges, in 2019 to 86.5% of revenues, before fuel surcharges, in 2020.

The increase results from paying third-party carriers a larger percentage of customer revenue.

Rent and purchased transportation decreased from 86.5% of revenues, before fuel surcharges, in 2020 to 82.5% of revenues, before fuel surcharges, in 2021.

The decrease results from paying third-party carriers a smaller percentage of customer revenue.

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, improved to 88.7% for 2021 from 93.3% for 2020.

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Income tax expense was approximately $26.0 million in 2021, resulting in an effective rate of 25.4%, as compared to approximately $5.6 million, or an effective tax rate of 23.8% in 2020.

The effective tax rate is impacted by the existence of partially non-deductible meal and incidental expense per-diem payments to company drivers.

Per-diem payments may cause a significant difference in the Company’s effective tax rate from period-to-period as the proportion of non-deductible expenses to pre-tax net income increases or decreases.

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.

The effective tax rate is impacted by the effect of state taxes and other factors.

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of Accounting Standards Codification (“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.

If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance.

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During 2021 and 2020, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

The Company and its subsidiaries are subject to U.S.

and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions.

The major tax jurisdictions in which we operate generally provide for a deficiency assessment statute of limitation period of three years and as a result, the Company’s tax years 2017 and forward remain open to examination in those jurisdictions.

The combined net income for all divisions was $76.5 million, or 11.9% of revenues, before fuel surcharge, for 2021 as compared to the combined net income for all divisions of $17.8 million or 4.1% of revenues, before fuel surcharge, for 2020.

4 unchanged sentences

During 2022, we generated $168.8 million in cash from operating activities compared to $101.7 million and $67.6 million in 2021 and 2020, respectively.

Investing activities generated $9.3 million in cash during 2021 compared to using $32.7 million and $62.3 million in 2020 and 2019, respectively.

The cash used for investing activities relates primarily to the purchase of revenue equipment such as trucks and trailers.

Financing activities used $92.8 million in cash during 2021 compared to using $34.9 million during 2020 and $22.0 million during 2019.

Investing activities used $113.5 million in cash during 2022 compared to generating $9.3 million and using $32.7 million in 2021 and 2020, respectively.

The cash used for investing activities relates primarily to the purchase of Metropolitan Trucking, Inc.

during the second quarter of 2022, coupled with purchases of revenue equipment such as trucks and trailers.

Financing activities generated $0.3 million in cash during 2022 compared to using $92.8 million during 2021 and $34.9 million during 2020.

See the Consolidated Statements of Cash Flows in Item 8 of this Report.

2 unchanged sentences

During 2022 and 2021, we utilized cash on hand, installment notes, and our lines of credit to finance revenue equipment purchases of approximately $82.6 million and $51.9 million, respectively.

During 2022, we also utilized $64.3 million of cash for the acquisition of the assets of Metropolitan Trucking, Inc.

and related subsidiaries.

We often finance the acquisition of revenue equipment through installment notes with fixed interest rates and terms ranging from 36 to 84 months.

8 unchanged sentences

During 2022, we maintained a revolving line of credit with a borrowing limit of $60.0 million.

Under this credit facility, amounts outstanding under the line bear interest at LIBOR (with a floor of 0.5%, determined as of the first day of each month) plus 1.25% (1.75% at December 31, 2021), are secured by our trade accounts receivable and mature on July 1, 2024.

Under this credit facility, amounts outstanding under the line bear interest at Term SOFR plus 1.35% (5.65% at December 31, 2022), are secured by our trade accounts receivable and mature on July 1, 2024.

The credit facility also establishes an “unused fee”

2 unchanged sentences

In February 2022, we borrowed $35.5 million under a term loan secured by our real estate.

This term loan bears interest at a fixed rate of 2.95%, with principal and interest payable monthly, and matures on January 1, 2032.

This term loan bears interest at a fixed rate of 3.62%, with principal and interest payable monthly, and matures on March 1, 2032.

The loan is secured by mortgages and assignments of rents on the Company’s principal office and four terminal locations.

2 unchanged sentences

Marketable equity securities at December 31, 2022 increased approximately $2.3 million as compared to December 31, 2021.

The increase resulted from purchases of marketable equity securities of approximately $6.4 million and an increase in the market value of the portfolio of approximately $8.2 million, offset by sales of marketable equity securities of $3.1 million.

The increase resulted from purchases of marketable equity securities of approximately $1.2 million and an increase in the market value of the portfolio of approximately $1.1 million.

At December 31, 2022, the remaining marketable equity securities have a combined cost basis of approximately $30.3 million and a combined fair market value of approximately $41.7 million.

2 unchanged sentences

The holding term of these securities depends largely on the general economic environment, the equity markets, borrowing rates, and the Company's cash requirements.

Revenue equipment at December 31, 2021, which generally consists of trucks, trailers, and revenue equipment accessories such as Qualcomm™

satellite tracking units and auxiliary power units, decreased approximately $71.6 million as compared to December 31, 2020.

The decrease relates primarily to a delay in the trade-in or used trade trucks in exchange for the new replacement trucks.

These delayed trades were disposed when payment was received during 2021, which reduced the balance in the Revenue equipment category.

Accounts payable decreased from $46.1 million at December 31, 2020 to $43.4 million at December 31, 2021.

This decrease was primarily attributable to the decrease in amounts accrued for fixed asset purchases from $9.1 million at the end of 2020 to $0.3 million at the end of 2021.

Revenue equipment at December 31, 2022, which generally consists of trucks, trailers, and revenue equipment accessories such as satellite tracking units and auxiliary power units, increased approximately $116.7 million as compared to December 31, 2021.

The increase relates primarily to the purchase of assets from Metropolitan Trucking, Inc.

and related subsidiaries, and the purchase of new replacement trucks.

Accounts payable increased from $43.4 million at December 31, 2021 to $48.9 million at December 31, 2022.

This increase was primarily attributable to the increase in amounts accrued for commissions and parts at the end of 2022.

Accounts payable accruals can vary significantly at the end of each reporting period depending on the timing of the actual date of payment in relation to the last day of the reporting period.

Accrued expenses and other liabilities decreased from $26.6 million at December 31, 2020 to $14.1 million at December 31, 2021.

The decrease was primarily related to the use of available cash to pay off the majority of the balance on the Company’s investment margin account.

Accrued expenses and other liabilities increased from $14.1 million at December 31, 2021 to $34.2 million at December 31, 2022.

The increase was primarily related to claims accruals.

Current maturities of long term-debt and long-term debt fluctuations are reviewed on an aggregate basis as the classification of amounts in each category are typically affected merely by the passage of time.

Current maturities of long-term debt and long-term debt, on an aggregate basis, at December 31, 2021, decreased approximately $63.8 million as compared to December 31, 2020.

The decrease relates primarily to the use of available cash to pay down the borrowings on our revolving line of credit and other installment notes.

Current maturities of long-term debt and long-term debt, on an aggregate basis, at December 31, 2022, increased approximately $42.0 million as compared to December 31, 2021.

The increase relates primarily to the financing of real estate and note financing for the purchase of assets from Metropolitan Trucking, Inc.

and of new equipment during 2022.

For 2023, we expect to purchase 680 new trucks and 1,000 trailers while continuing to sell or trade equipment that has reached the end of its life cycle, which we expect to result in net capital expenditures of approximately $124.3 million.

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Inflation has an impact on most of our operating costs.

Over the past three years, the effect of inflation has been minimal.

Over the past three years, the effect of inflation has been significant.

If the current rate of inflation persists, inflation, coupled with supply chain issues and international events could continue to result in increased costs for drivers, employee wages, equipment, fuel and other costs.

35 unchanged sentences

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity