PAMT CORP 10-K

Item 8. Financial Statements and Supplementary Data.   The following statements are filed with this report:   Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID Number 248 ) Consolidated Balance Sheets - December 31, 2022 and 2021 Consolidated Statements of Operations - Years ended December 31, 2022, 2021 and 2020 Consolidated Statements of Comprehensive Income - Years ended December 31, 2022, 2021 and 2020 Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2022, 2021 and 2020 Consolidated Statements of Cash Flows - Years ended December 31, 2022, 2021 and 2020 Notes to Consolidated Financial Statements   - 29 - Table of Contents   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   Board of Directors and Stockholders P.A.M. Transportation Services, Inc.   Opinion on the financial statements We have audited the accompanying consolidated balance sheets of P.A.M. Transportation Services, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes  (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.   We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 10, 2023 expressed an unqualified opinion.   Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   Critical audit matters   Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.   /S/ GRANT THORNTON LLP   We have served as the Company’s auditor since 2005.   Tulsa, Oklahoma March 10, 2022 - 30 - Table of Contents       - 31 - Table of Contents     P.A.M. TRANSPORTATION SERVICES, INC. AND SUBSIDIARIES   CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021 (in thousands, except share and per share data)       2022     2021   ASSETS                               CURRENT ASSETS:                 Cash and cash equivalents   $ 74,087     $ 18,509   Accounts receivable—net:                 Trade, less current estimated credit loss of $ 5,381 and $ 4,526 , respectively     134,739       121,854   Other     6,263       7,092   Inventories     2,570       1,456   Prepaid expenses and deposits     15,729       10,962   Marketable equity securities     41,728       39,424   Income taxes refundable     5,650       277                     Total current assets     280,766       199,574                     PROPERTY AND EQUIPMENT:                 Land     19,718       19,718   Structures and improvements     35,534       33,534   Revenue equipment     637,510       520,840   Office furniture and equipment     13,157       11,211                     Total property and equipment     705,919       585,303                     Accumulated depreciation     ( 242,324 )     ( 201,124 )                   Net property and equipment     463,595       384,179                     OTHER ASSETS     4,801       3,628                     TOTAL ASSETS   $ 749,162     $ 587,381     (Continued)   See notes to consolidated financial statements.   - 32 - Table of Contents   CONSOLIDATED BALANCE SHEETS   DECEMBER 31, 2022 AND 2021 (in thousands, except share and per share data)       2022     2021   LIABILITIES AND STOCKHOLDERS' EQUITY                                   CURRENT LIABILITIES:                 Accounts payable   $ 48,917     $ 43,381   Accrued expenses and other liabilities     34,233       14,114   Income taxes payable     -       4,364   Current maturities of long-term debt     58,815       49,544                     Total current liabilities     141,965       111,403                     Long-term debt—less current portion     205,466       172,733   Deferred income taxes     101,445       86,715   Other long-term liabilities     103       420                     Total liabilities     448,979       371,271                     COMMITMENTS AND CONTINGENCIES (Note 16)                                       STOCKHOLDERS’ EQUITY                 Preferred stock, $ .01 par value, 10,000,000 shares authorized; none issued     -       -   Common stock, $ .01 par value, 50,000,000 shares authorized; 22,293,687 and 34,574,807 shares issued; 22,166,450 and 22,348,022 shares outstanding at December 31, 2022 and 2021, respectively     223       234   Additional paid-in capital     40,472       84,472   Accumulated Other Comprehensive Income     -       -   Treasury stock, at cost; 127,237 and 12,226,785 shares at December 31, 2022 and 2021, respectively     ( 4,000 )     ( 169,946 ) Retained earnings     263,488       301,350                     Total stockholders’ equity     300,183       216,110                     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 749,162     $ 587,381     (Concluded)   See notes to consolidated financial statements.   - 33 - Table of Contents     P.A.M. TRANSPORTATION SERVICES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020 (in thousands, except per share data)       2022     2021     2020   OPERATING REVENUES:                         Revenue, before fuel surcharge   $ 818,751     $ 641,253     $ 438,987   Fuel surcharge     128,111       65,867       47,838                             Total operating revenues     946,862       707,120       486,825                             OPERATING EXPENSES AND COSTS:                         Salaries, wages and benefits     181,918       141,019       124,098   Operating supplies and expenses     166,005       102,228       84,275   Rents and purchased transportation     364,971       279,016       165,984   Depreciation     62,806       55,012       56,168   Insurance and claims     32,516       18,792       8,866   Other     18,128       12,294       13,138   (Gain) loss on disposition of equipment     ( 3,250 )     ( 1,446 )     373                             Total operating expenses and costs     823,094       606,915       452,902                             OPERATING INCOME     123,768       100,205       33,923                             NON-OPERATING INCOME (EXPENSE)     3,168       10,339       ( 1,699 ) INTEREST EXPENSE     ( 7,929 )     ( 8,039 )     ( 8,815 )                           INCOME BEFORE INCOME TAXES     119,007       102,505       23,409                             FEDERAL & STATE INCOME TAX EXPENSE:                         Current     13,794       8,157       220   Deferred     14,541       17,832       5,362                             Total federal & state income tax expense     28,335       25,989       5,582                             NET INCOME   $ 90,672     $ 76,516     $ 17,827                             EARNINGS PER COMMON SHARE:                         Basic   $ 4.08     $ 3.37     $ 0.77   Diluted   $ 4.04     $ 3.35     $ 0.77                             AVERAGE COMMON SHARES OUTSTANDING:                         Basic     22,246       22,715       23,008   Diluted     22,436       22,864       23,072     See notes to consolidated financial statements.   - 34 - Table of Contents     P.A.M. TRANSPORTATION SERVICES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’  EQUITY YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020 (in thousands, except per share data)       Common Stock Shares / Amount     Additional Paid-In Capital     Treasury Stock     Retained Earnings     Total                                                     BALANCE— January 1, 2020     22,996     $ 117     $ 83,688     $ ( 156,837 )   $ 207,007     $ 133,975                                                     Net income                                     17,827       17,827   Restricted stock issued     160                                           Treasury stock repurchases     ( 244 )                     ( 2,281 )             ( 2,281 ) Share-based compensation                   460                   460                                                     BALANCE— December 31, 2020     22,912     $ 117     $ 84,148     $ ( 159,118 )   $ 224,834     $ 149,981                                                     Net income                                     76,516       76,516   Stock Split             117       ( 117 )                         Restricted stock issued     18                                 Treasury stock repurchases     ( 582 )                 ( 10,828 )           ( 10,828 ) Share-based compensation                   441                   441                                                     BALANCE— December 31, 2021     22,348     $ 234     $ 84,472     $ (169,946 )   $ 301,350     $ 216,110                                                     Net income                               90,672       90,672   Stock Split             112       ( 111 )                 1   Restricted stock issued     29                                 Treasury stock repurchases     ( 211 )                 ( 7,000 )           ( 7,000 ) Treasury stock retired             ( 123 )     ( 44,289 )     172,946       ( 128,534 )       Restricted stock net settlement                   ( 315 )                 ( 315 ) Share-based compensation                   715                   715                                                     BALANCE— December 31, 2022     22,166     $ 223     $ 40,472     $ ( 4,000 )   $ 263,488     $ 300,183     See notes to consolidated financial statements.   - 35 - Table of Contents     P.A.M. TRANSPORTATION SERVICES, INC. AND SUBSIDIARIES   CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020 (in thousands)       2022     2021     2020   OPERATING ACTIVITIES:                         Net income   $ 90,672     $ 76,516     $ 17,827   Adjustments to reconcile net income to net cash provided by operating activities:                         Depreciation     62,806       55,012       56,168   Bad debt expense     917       1,044       530   Stock compensation—net of excess tax benefits     715       441       460   Provision for deferred income taxes     14,541       17,832       5,362   Recognized (gain) loss on marketable equity securities     ( 1,129 )     ( 8,197 )     3,463   (Gain) loss on sale or disposal of equipment     ( 3,250 )     ( 1,446 )     373   Changes in operating assets and liabilities:                         Accounts receivable     ( 2,152 )     ( 47,132 )     ( 17,835 ) Prepaid expenses, deposits, inventories, and other assets     ( 7,257 )     ( 865 )     ( 1,780 ) Income taxes refundable     ( 5,373 )     591       ( 60 ) Income taxes payable     ( 4,364 )     4,364       -   Trade accounts payable     2,198       5,945       20,880   Accrued expenses and other liabilities     20,491       ( 2,365 )     ( 17,798 ) Net cash provided by operating activities     168,815       101,740       67,590                             INVESTING ACTIVITIES:                         Purchases of property and equipment     ( 65,441 )     ( 19,144 )     ( 48,226 ) Purchase of a business, net of cash acquired     ( 64,317 )     -       -   Proceeds from disposition of equipment     17,406       31,680       17,418   Sales of marketable equity securities     -       3,109       2,039   Purchases of marketable equity securities, net of return of capital     ( 1,175 )     ( 6,395 )     ( 3,923 ) Net cash (used in) provided by investing activities     ( 113,527 )     9,250       ( 32,692 )                           FINANCING ACTIVITIES:                         Borrowings under line of credit     945,610       654,212       517,668   Repayments under line of credit     ( 945,610 )     ( 672,458 )     ( 516,468 ) Borrowings of long-term debt     74,925       21,408       26,837   Repayments of long-term debt     ( 67,335 )     ( 75,115 )     ( 64,411 ) Borrowings under margin account     1,229       6,510       7,068   Repayments under margin account     ( 1,529 )     ( 16,547 )     ( 3,292 ) Repurchases of treasury stock     ( 7,000 )     ( 10,828 )     ( 2,281 ) Net cash provided by (used in) financing activities     290       ( 92,818 )     ( 34,879 )                           NET INCREASE IN CASH AND CASH EQUIVALENTS     55,578       18,172       19                             CASH AND CASH EQUIVALENTS—Beginning of year     18,509       337       318   CASH AND CASH EQUIVALENTS—End of year   $ 74,087     $ 18,509     $ 337                             SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—                         Cash paid during the period for:                         Interest   $ 7,842     $ 8,144     $ 8,798   Income taxes   $ 23,342     $ 3,870     $ 281                             NON-CASH INVESTING AND FINANCING ACTIVITIES—                         Purchases of revenue equipment included in accounts payable   $ 431     $ 383     $ 9,050     See notes to consolidated financial statements.   - 36 - Table of Contents     P.A.M. TRANSPORTATION SERVICES, INC. AND SUBSIDIARIES   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020   1. ACCOUNTING POLICIES   Description of Business and Principles of Consolidation – P.A.M. Transportation Services, Inc. (the “Company”), through its subsidiaries, operates as a truckload transportation and logistics company.   The consolidated financial statements include the accounts of the Company and its wholly owned operating subsidiaries: P.A.M. Transport, Inc., P.A.M. Cartage Carriers, LLC, Met Express, Inc., Costar Equipment, Inc., Overdrive Leasing, LLC, Choctaw Express, LLC, Decker Transport Co., LLC, T.T.X., LLC, Transcend Logistics, Inc., and East Coast Transport and Logistics, LLC. The following subsidiaries were inactive during all periods presented: P.A.M. International, Inc., Choctaw Brokerage, Inc., S & L Logistics, Inc. and P.A.M. 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. The Company periodically reviews these estimates and assumptions. The most significant estimates that affect our financial statements are accrued liabilities for insurance claims, legal reserves, and useful lives and salvage values for property and equipment. The Company's estimates were based on its historical experience and various other assumptions that management believes to be reasonable under the circumstances. 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. 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. 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. The Company continually updates the history it uses to make these estimates so as to reflect the most recent trends, factors and other information available. In order to gather information regarding these trends and factors, the Company also performs ongoing credit evaluations of its customers. Customer receivables are considered to be past due when payment has not been received by the invoice due date. Write-offs occur when management determines an account to be uncollectible and could differ from the current expected credit losses estimate as a result of a number of factors, including unanticipated changes in the overall economic environment or factors and risks surrounding a particular customer. Management believes its methodology for estimating current expected credit losses to be reliable and consistent with prior periods. 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. 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; therefore, the outstanding checks represent bank overdrafts. Because the recipients of these checks have generally not yet received payment, the Company continues to classify bank overdrafts as accounts payable. Bank overdrafts are classified as changes in accounts payable in the cash flows from operating activities section of the Company’s Consolidated Statement of Cash Flows. There were no bank overdrafts as of December 31, 2022 or 2021.   - 37 - Table of Contents   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, 2022 and 2021, were approximately $ 135,000 and $ 43,000 , respectively. Accounts receivable from independent contractors as of December 31, 2022 and 2021, were approximately $ 1,379,000 and $ 1,037,000 , respectively. Independent contractors are allowed to purchase items such as fuel, repairs and tolls on Company accounts in order to share in favorable pricing negotiated by the Company. Independent contractors and trip lease carriers are also allowed to receive advances for a portion of the revenue that they expect to receive for loads that they transport for the Company.   Marketable Equity Securities – The Company’s investment in marketable equity securities is accounted for in accordance with ASC Topic 321, (“ASC Topic 321” ), Investments - Equity Securities. ASC Topic 321 requires companies to measure equity investments at fair value, with changes in fair value recognized in net income. The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method. Realized and unrealized gains and losses, interest and dividends on marketable equity securities are included in non-operating income (expense) in our consolidated statements of operations.   For additional information with respect to marketable equity securities, see Note 4 – 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. An impairment loss would be recognized if the carrying amount of the long-lived asset is not recoverable, and it exceeds its fair value. For long-lived assets classified as held and used, if the carrying value of the long-lived asset exceeds the sum of the future net undiscounted cash flows, it is not recoverable. No impairment losses were recorded during 2022 or 2021.   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. For tax reporting purposes, accelerated depreciation or applicable cost recovery methods are used. Depreciation is recognized over the estimated asset life, considering the estimated salvage value of the asset. Such salvage values are based on estimates using expected market values for used equipment and the estimated time of disposal which in many cases include guaranteed residual values by the manufacturers. Gains and losses are reflected in the year of disposal. The following is a table reflecting estimated ranges of asset useful lives by major class of depreciable assets:   Asset Class   Estimated Asset Life (in years)               Service vehicles   3 - 5   Office furniture and equipment   3 - 10   Revenue equipment   3 - 10   Structures and improvements   5 - 40     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 2022, 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. 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.   - 38 - Table of Contents   Advertising Expense – Advertising costs are expensed as incurred and totaled approximately $ 2,101,000 , $ 1,154,000 and $ 1,102,000 for the years ended December 31, 2022, 2021 and 2020, 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. An estimate of the incurred but not reported claims for each type of liability is made based on historical claims made, estimated frequency of occurrence, and considering changing factors that contribute to the overall cost of insurance. See Note 6 – 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. 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. See Note 12 – Federal and State Income Taxes for more information regarding income taxes.   The application of income tax law to multi-jurisdictional operations such as those performed by the Company is inherently complex. Laws and regulations in this area are voluminous and often ambiguous. As such, we may be required to make subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations may change over time which could cause changes in our assumptions and judgments that could materially affect amounts recognized in the consolidated financial statements.   We recognize the impact of tax positions in our financial statements. These tax positions must meet a more-likely-than- not recognition threshold to be recognized and tax positions that previously failed to meet the more-likely-than- not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than- not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. We recognize potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of income as income tax expense.   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. 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. As of December 31, 2022 and 2021, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.   Revenue Recognition – Revenue is recognized over time as the freight progresses towards its destination and the transportation service obligation is fulfilled. For loads picked up during the reporting period, but delivered in a subsequent reporting period, revenue is allocated to each period based on the transit time in each period as a percentage of total transit time. 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. 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. The difference between the Company's weighted-average shares outstanding and diluted shares outstanding is due to the dilutive effect of common stock equivalents for all periods presented. See Note 14 – Earnings per Share for more information regarding the computation of diluted EPS.   - 39 - Table of Contents   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. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For additional information with respect to fair value measurements, see Note 18 – Fair Value of Financial Instruments.   Reportable Segments – The Company's operations are all in the motor carrier segment and are aggregated into a single reportable 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. Truckload transportation services revenues, excluding fuel surcharges, represented 66.0 %, 67.0 % and 76.9 % of total revenues, excluding fuel surcharges, for the twelve months ended December 31, 2022, 2021 and 2020, respectively. 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. The Company maintains reserves for potential credit losses. In view of the concentration of the Company’s revenues and accounts receivable among a limited number of customers within the automobile industry, the financial health of this industry is a factor in the Company’s overall evaluation of accounts receivable.   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.   Risks and Uncertainties (COVID- 19 ) – In March 2020, the World Health Organization declared the novel strain of coronavirus (“COVID- 19” ) a global pandemic, and the President of the United States declared the COVID- 19 outbreak a national emergency.  The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy.  In view of the rapidly changing business environment, unprecedented market volatility and heightened degree of uncertainty resulting from COVID- 19, we are currently unable to fully determine its future impact on our business.  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 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. dollar. 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. Revenues and expenses recorded in the local currency during the period are remeasured using average exchange rates for each period. 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 in the Company’s consolidated statements of operations.   Business Combinations – The purchase price of an acquired businesses, or the purchase of substantially all of the assets of a business, is allocated to the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The calculation of the fair value of assets acquired, liabilities assumed and the potential value of any intangible assets involves many factors, some of which require estimates and judgement. In certain cases, valuation specialists may be engaged to assist in the determination of the fair value calculations. During 2022, we engaged valuation specialists to assist us in fair value determination for our acquisition of substantially all of the assets of Metropolitan Trucking, Inc. and related entities.   Recent Accounting Pronouncements – In  March 2020,  the FASB issued Accounting Standards Update  No.   2020 - 04,  (“ASU  2020 - 04” ), Reference Rate Reform (Topic 848 ): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU  2020 - 04  was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. ASU  2020 - 04  is effective as of  March 12, 2020  through  December 31, 2022 .  The adoption of this guidance on  January 1, 2022  did not  have a material impact on the Company’s financial condition, results of operations, or cash flows.   - 40 - Table of Contents     2. REVENUE RECOGNITION   The Company has a single performance obligation, to transport our customer’s freight from a specified origin to a specified destination. The Company has the discretion to choose to self-transport or to arrange for alternate transportation to fulfill the performance obligation. Where the Company decides to self-transport the freight, the Company classifies the service as truckload services, and where the Company arranges for alternate transportation of the freight, the Company classifies the service as brokerage and logistics services. In either case, the Company is paid a rate to transport freight from its origin location to a specified destination. Because the primary factors influencing revenue recognition, including performance obligation, customer base, and timing of revenue recognition are the same for both of its service categories, the Company utilizes the same revenue recognition method throughout its operations.   Company revenue is generated from freight transportation services performed utilizing heavy truck trailer combinations. While various ownership arrangements may exist for the equipment utilized to perform these services, including Company-owned or leased, owner-operator owned, and third -party carriers, revenue is generated from the same base of customers. Contracts with these customers establish rates for services performed, which are predominantly rates that will be paid to pick up, transport and drop off freight at various locations. In addition to transportation, revenue is also awarded for various accessorial services performed in conjunction with the base transportation service. The Company also has other revenue categories that are not discussed in this note or broken out in our consolidated statements of operations due to their immaterial amounts.   In fulfilling the Company’s obligation to transport freight from a specified origin to a specified destination, control of freight is transferred to the Company at the point it has been loaded into the driver’s trailer, the doors are sealed and the driver has signed a bill of lading, which is the basic transportation agreement that establishes the nature, quantity and condition of the freight loaded, responsibility for invoice payment, and pickup and delivery locations. The Company’s revenue is generated, and our customer receives benefit, as the freight progresses towards delivery locations. In the event the Company’s customer cancels the shipment at some point prior to the final delivery location and re-consigns the shipment to an alternate delivery location, the Company is entitled to receive payment for services performed for the partial shipment. Shipments are generally conducted over a relatively short time span, generally one to three days; however, freight is sometimes stored temporarily in our trailer at one of our drop yard locations or at a location designated by a customer. The Company’s revenue is categorized as either Freight Revenue or Fuel Surcharge Revenue, and both are earned by performing the same freight transportation services, as discussed further below.   Freight Revenue – revenue generated by the performance of the freight transportation service, including any accessorial service, provided to customers.   Fuel Surcharge Revenue – revenue designed to adjust freight revenue rates to an agreed-upon base cost for diesel fuel. Diesel fuel prices can fluctuate widely during the term of a contract with a customer. At the point that freight revenue rates are negotiated with customers, a sliding scale is agreed upon that approximately adjusts diesel fuel costs to an agreed-upon base amount. In general, as fuel prices increase, revenue from fuel surcharge increases, so that diesel fuel cost is adjusted to the approximate base amount agreed upon.   Revenue is recognized over time as the freight progresses towards its destination and the transportation service obligation is fulfilled. For loads picked up during the reporting period, but delivered in a subsequent reporting period, revenue is allocated to each period based on the transit time in each period as a percentage of total transit time. There are no assets or liabilities recorded in conjunction with revenue recognized, other than accounts receivable and current estimated credit losses.   - 41 - Table of Contents     3. TRADE ACCOUNTS RECEIVABLE   The Company's receivables result primarily from the sale of transportation and logistics services. The Company performs ongoing credit evaluations of its customers and generally does not require collateral for accounts receivable. Accounts receivable, which consist of both billed and unbilled receivables, are presented net of current estimated credit losses. Accounts outstanding longer than contractual payment terms are considered past due and are reviewed individually for collectability. Accounts receivable balances consist of the following components as of December 31, 2022 and 2021:       2022     2021       (in thousands)                     Billed   $ 119,552     $ 105,992   Unbilled     20,568       20,388   Current estimated credit losses     ( 5,381 )     ( 4,526 )                   Total accounts receivable—net   $ 134,739     $ 121,854     An analysis of changes in current estimated credit losses for the years ended December 31, 2022, 2021, and 2020 follows:       2022     2021     2020       (in thousands)                             Balance—beginning of year   $ 4,526     $ 3,482     $ 2,952   Provision for bad debts     917       1,044       530   Charge-offs     ( 62 )     -       -   Recoveries     -       -       -   Balance—end of year   $ 5,381     $ 4,526     $ 3,482       4. MARKETABLE EQUITY SECURITIES   The Company accounts for its marketable securities in accordance with ASC Topic 321, Investments - Equity Securities. ASC Topic 321 requires companies to measure equity investments at fair value, with changes in fair value recognized in net income. The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income (expense).   Marketable equity securities are carried at fair value, with changes in fair market value included in the determination of net income. The fair market value of marketable equity securities is determined based on quoted market prices in active markets. See Note 18 – Fair Value of Financial Instruments for additional information regarding the valuation of marketable equity securities.   The following table sets forth cost, market value and unrealized gain on equity securities classified as available-for-sale as of December 31, 2022 and 2021.       2022     2021       (in thousands)   Available-for-sale securities:                 Fair market value   $ 41,728     $ 39,424   Cost     30,350       29,385   Unrealized gain   $ 11,378     $ 10,039     - 42 - Table of Contents   The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of December 31, 2022 and 2021.       2022     2021       (in thousands)   Available-for-sale securities:                 Gross unrealized gains   $ 13,478     $ 12,458   Gross unrealized losses     2,100       2,419   Net unrealized gains   $ 11,378     $ 10,039     For the years ended December 31, 2022, 2021 and 2020, the Company recognized dividends of approximately $ 1,539,000 , $ 1,448,000 , and $ 1,266,000 in non-operating income in its consolidated statements of operations, respectively.   The following table shows the Company’s net realized (losses) gains during 2022, 2021 and 2020 on certain marketable equity securities.       2022     2021     2020       (in thousands)   Realized (losses) gains:                         Sale proceeds   $ -     $ 3,109     $ 2,039   Cost of securities sold     -       3,199       2,216                             Realized (losses) / gains   $ -     $ ( 90 )   $ ( 177 )   At December 31, 2022, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $ 7,875,000 and $ 2,100,000 , respectively. At December 31, 2021, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $ 7,373,000 and $ 2,419,000 , respectively.   The market value of the Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. As of December 31, 2022 and 2021, the Company had outstanding borrowings of $ 914,000 and $ 1,214,000 under its margin account, respectively, which is reflected in accrued expenses. The interest rates on margin account borrowings were 4.92 % and 0.68 % as of December 31, 2022 and 2021, respectively.   - 43 - Table of Contents     5. ACCRUED EXPENSES AND OTHER LIABILITIES   Accrued expenses and other liabilities at December 31 are summarized as follows:       2022     2021       (in thousands)                     Payroll   $ 1,995     $ 1,529   Accrued vacation     983       877   Taxes—other than income     3,369       2,674   Interest     283       196   Driver escrows     1,271       1,643   Margin account borrowings     914       1,214   Self-insurance claims and legal reserves     22,709       5,437   Current portion of Right-of-Use liability     340       544   Other liabilities     2,369       -                     Total accrued expenses and other liabilities   $ 34,233     $ 14,114     The Company’s accounts payable of $ 48,917,000 includes $ 431,000 in payables for purchases of revenue equipment.     6. CLAIMS LIABILITIES   The Company maintains cargo insurance coverage to protect it from certain business risks. This policy has a per occurrence deductible of $ 10,000 .   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. Prior to September 1, 2019, the Company maintained auto liability insurance coverage for these layers. The Company currently specifically reserves for claims that are expected to exceed $2.0 million when fully developed, based on the facts and circumstances of those claims.   The Company maintains workers’ compensation coverage in Arkansas, Florida, Ohio, Oklahoma, and Mississippi with a $ 0.5 million self-insured retention and a $ 0.5 million per occurrence excess policy. The Company has elected to opt out of workers’ compensation coverage in Texas and is providing coverage through the P.A.M. Texas Injury Plan. The Company has accrued for estimated losses to pay such claims as well as claims incurred but not yet reported. The Company has not experienced any adverse trends involving differences in claims experienced versus claims estimates for workers’ compensation claims. 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. The Company self-insures for employee health claims with a stop loss of $ 0.4 million per covered employee per year and estimates its liability for claims outstanding and claims incurred but not reported. See Note 5 – Accrued Expenses and Other Liabilities for additional information regarding self-insurance claims liabilities.   - 44 - Table of Contents     7. LONG-TERM DEBT   Long-term debt at December 31, consists of the following:       2022     2021       (in thousands)   Line of credit with a bank—due July 1, 2024, and collateralized by accounts receivable (1)     -       -   Equipment financing (2)     216,875       206,539   Real estate financing (3)     47,406       15,738   Total long-term debt     264,281       222,277   Less current maturities     ( 58,815 )     ( 49,544 )                   Long-term debt—net of current maturities   $ 205,466     $ 172,733       ( 1 ) 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 Term SOFR as of the first day of the month plus 1.35 %, ( 5.65 % at December  31, 2022 ) and are secured by our trade accounts receivable. An “unused fee” of 0.25 % is charged if average daily borrowings are less than $ 18.0 million in a given month. Monthly payments of interest are required under this agreement. Also, under the terms of the agreement the Company must maintain a debt to adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, excluding gains/losses on equity securities and extraordinary items) ratio of less than 4.00:1. The Company was in compliance with all provisions under this agreement throughout 2022. At December 31, 2022, outstanding advances on the line were approximately $ 0.4 million, including letters of credit totaling $ 0.3 million, with availability to borrow $ 59.6 million. At December 31, 2021, outstanding advances on the line were approximately $ 0.4 million, including letters of credit totaling $ 0.3 million.     ( 2 ) 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 3.16 % as of December 31, 2022 and collateralized by revenue equipment.     ( 3 ) 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, and an installment obligation for the financing of various company-owned terminals and office buildings payable in 120 installments at an interest rate of 3.62 % and maturing in March 2032. These obligations are collateralized by the underlying real estate and any rental income generated by the underlying real estate.   The Company has provided letters of credit to third parties totaling approximately $ 310,000 at December 31, 2022 and December 31, 2021, respectively. The letters are held by these third parties to assist such parties in collection of any amounts due by the Company should the Company default in its commitments to the parties.   Scheduled annual maturities on long-term debt outstanding at December 31, 2022, are:   2023   $ 58,815   2024     62,490   2025     53,038   2026     34,801   2027     32,491   Thereafter     22,646             Total   $ 264,281     - 45 - Table of Contents     8. NONCASH INVESTING AND FINANCING ACTIVITIES   The Company financed approximately $ 22.2 million and $ 36.1 million in equipment purchases during 2022 and 2021, respectively, utilizing noncash financing.     9. CAPITAL STOCK   The Company's authorized capital stock consists of 50,000,000 shares of common stock, par value $.01 per share, and 10,000,000 shares of preferred stock, par value $.01 per share. At December 31, 2022, there were 22,293,687 shares of our common stock issued and 22,166,450 shares outstanding. At December 31, 2021, there were 34,574,807 shares of our common stock issued and 22,348,022 shares outstanding. No shares of our preferred stock were issued or outstanding at December 31, 2022 or 2021.   Common Stock   The holders of our common stock, subject to such rights as may be granted to any preferred stockholders, elect all directors and are entitled to one vote per share. All shares of common stock participate equally in dividends when and as declared by the Board of Directors and in net assets on liquidation. The shares of common stock have no preference, conversion, exchange, preemptive, or cumulative voting rights.   Preferred Stock   Preferred stock may be issued from time to time by our Board of Directors, without stockholder approval, in such series and with such preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or other provisions, as may be fixed by the Board of Directors in the resolution authorizing their issuance. The issuance of preferred stock by the Board of Directors could adversely affect the rights of holders of shares of common stock; for example, the issuance of preferred stock could result in a class of securities outstanding that would have certain preferences with respect to dividends and in liquidation over the common stock, and that could result in a dilution of the voting rights, net income per share and net book value of the common stock. As of December 31, 2022, we have no agreements or understandings for the issuance of any shares of preferred stock.   Treasury Stock   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 2021 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, 2022.   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 168,847 shares and 18,732 shares of its common stock under this program during 2022 and 2021, respectively.   - 46 - Table of Contents   The Company accounts for Treasury stock using the cost method, and as of December 31, 2022, 127,237 shares were held in the treasury at an aggregate cost of approximately $ 4,000,000 .     10. SEGMENT INFORMATION, SIGNIFICANT CUSTOMERS, INDUSTRY CONCENTRATION AND GEOGRAPHIC AREAS   The Company's revenues for 2022, 2021 and 2020 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.   The table below presents revenue dollars and percentages by geographic area:       Year Ended December 31,       2022     2021     2020       (in thousands)       Amount     Percent     Amount     Percent     Amount     Percent   United States - domestic shipments   $ 629,921       66.5     $ 474,291       67.9     $ 316,542       66.1   Shipments to or from Mexico     313,885       33.2       223,315       32.0       161,412       33.7   Shipments to or from Canada     3,056       0.3       891       0.1       1,156       0.2                                                     Total   $ 946,862       100 %   $ 698,497       100 %   $ 479,110       100 %   Our five largest customers, for which we provide carrier services covering a number of geographic locations, accounted for approximately 39 %, 33 % and 35 % of our total revenues in 2022, 2021 and 2020, respectively. General Motors Company accounted for approximately 13 %, 11 % and 15 % of our revenues in 2022, 2021 and 2020, respectively.   We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers. Approximately 31 %, 27 % and 30 % of our revenues were derived from transportation services provided to the automobile industry during 2022, 2021 and 2020, respectively.   Accounts receivable from the three largest customers totaled approximately $ 36,622,000 and $ 31,049,000 at December 31, 2022 and 2021, respectively.     11. DIVIDENDS   The Company has paid cash dividends in the past; however, the Company currently intends to retain future earnings and does not anticipate paying cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of the Board and will depend on the Company’s financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends, and other factors the Board deems relevant.   - 47 - Table of Contents     12. FEDERAL AND STATE INCOME TAXES   Under GAAP, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax reporting purposes.   Significant components of the Company’s deferred tax liabilities and assets at December 31 are as follows:       2022     2021       (in thousands)                     Deferred tax liabilities:                 Property and equipment   $ 102,169     $ 84,081   Unrealized gains on securities     2,894       2,580   Prepaid expenses and other     3,836       2,783                     Total deferred tax liabilities     108,899       89,444                     Deferred tax assets:                 Current expected credit losses     1,385       1,165   Compensated absences     215       185   Self-insurance allowances     5,746       1,207   Other     108       172                     Total deferred tax assets     7,454       2,729                     Net deferred tax liability   $ 101,445     $ 86,715     The reconciliation between the effective income tax rate and the statutory Federal income tax rate for the years ended December  31, 2022, 2021 and 2020 is presented in the following table:       2022     2021     2020       (in thousands)       Amount     Percent     Amount     Percent     Amount     Percent                                                     Federal income tax at statutory rate   $ 24,991       21.0     $ 21,526       21.0     $ 4,916       21.0   Nondeductible per diem and meals     -       -       -       -       321       1.4   State income taxes/other, net     3,344       2.8       4,463       4.4       345       1.5                                                     Total income tax expense   $ 28,335       23.8     $ 25,989       25.4     $ 5,582       23.9     The provision (benefit) for income taxes consisted of the following:       2022     2021     2020       (in thousands)   Current:                         Federal   $ 10,673     $ 6,314     $ ( 62 ) State     3,121       1,843       282   Total current income tax provision     13,794       8,157       220   Deferred:                         Federal     12,920       13,720       4,860   State     1,621       4,112       502   Total deferred income tax provision     14,541       17,832       5,362                             Total income tax provision expense   $ 28,335     $ 25,989     $ 5,582     - 48 - Table of Contents   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. 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. As of December 31, 2022 and 2021, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary.   The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of December 31, 2022, an adjustment to the Company’s consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During 2022 and 2021, 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 the Company operates generally provide for a deficiency assessment statute of limitation period of three years, and as a result, the Company’s tax years 2019 and forward remain open to examination in those jurisdictions.     13. STOCK-BASED COMPENSATION   The Company maintains a stock incentive plan under which incentive and nonqualified stock options and other stock awards may be granted. 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, 3,000,000 shares (as adjusted for the Company’s 2 -for- 1 forward split of its common stock paid in August 2021 and the Company’s 2 -for- 1 forward split of its common stock paid in March 2022) 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 both August 2021 and March 2022.   During February 2022, the Company granted 29,120 shares of common stock to certain key employees. These stock awards had grant date fair values of $ 38.80 per share, based on the closing price of the Company’s stock on the date of grant, and vest in 25 % increments over four years, beginning one year from the anniversary date of the grant.   During May 2022, the Company granted 1,855 shares of common stock to non-employee directors. These stock awards had a grant date fair value of $ 29.60 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.   During June 2022, the Company granted 3,500 shares of common stock to a key employee. This stock award had a grant date fair value of $ 27.68 per share, based on the closing price of the Company’s stock on the date of grant, and vests in 25 % increments over four years, beginning one year from the anniversary date of the grant.   - 49 - Table of Contents   In March 2021, the Company granted 5,216 shares of common stock to non-employee directors. These restricted stock awards have a grant date fair value of $ 15.43 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 10,000 shares of common stock to a certain key employee. These stock awards have a grant date fair value of $ 15.09 per share, based on the closing price of the Company’s stock on the date of grant, and vests in 25% increments over four years, beginning one year from the anniversary date of the grant.   In January 2020, the Company granted 28,000 shares of common stock to certain key employees. These restricted stock awards have a grant date fair value of $ 14.11 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 March 2020, the Company granted 10,432 shares of common stock to non-employee directors. These stock awards have a grant date fair value of $ 7.69 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.   In April 2020, the Company granted 968 shares of common stock to a non-employee director. This stock award has a grant date fair value of $ 10.35 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.   In August 2020, the Company granted 160,000 restricted shares of common stock to the Company’s Chief Executive Officer. This restricted stock award has a grant date fair value of $ 8.84 , based on the closing price of the Company’s stock on the date of grant, and will vest in increments of 20,000 shares each in 2022, 2023, 2024 and 2027 and 40,000 shares each in 2025 and 2026.   In August 2020, the Company granted 53,328 shares of common stock to certain key employees. These restricted stock awards have a grant date fair value of $ 7.56 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.   During 2022 and 2021, there were no grants of stock options and there were no outstanding stock options at December 31, 2022 or December 31, 2021. At December 31, 2022, approximately 716,000 shares were available for granting future options or restricted stock.   The grant date fair value of stock and stock options vested during 2022, 2021 and 2020 was approximately $ 392,000 , $ 203,000 and $ 759,000 , respectively. Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $ 715,000 during 2022 and includes approximately $ 55,000 recognized as a result of the grant of a total of 1,855 shares of stock to four non-employee directors during the second quarter of 2022. The Company recognized a total income tax benefit of approximately $ 170,000 related to stock-based compensation expense during 2022. 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 2022. As of December  31, 2022, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 2,414,000 which is being amortized over the remaining vesting period. As a result, the Company expects to recognize the following approximate amounts of additional compensation expense related to unvested restricted stock awards during each of the years indicated:     2023   $ 649,000   2024   $ 641,000   2025   $ 670,000   2026   $ 343,000   2027   $ 111,000     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 652 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 diluted earnings per common share by $ 0.03 and basic earnings per common share by approximately $ 0.02 during 2021.   - 50 - Table of Contents   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 1,304 shares of stock to eight non-employee directors during the first quarter of 2020 and 968 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. The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.06 during 2020.   There were no options granted during 2022, 2021, or 2020.   A summary of the status of the Company’s non-vested restricted stock as of December 31, 2022 and changes during the year ended December 31, 2022, is presented below:       Restricted Stock       Number of Shares     Weighted- Average Grant Date Fair Value   Nonvested—January 1, 2022     239,212     $ 9.25   Granted     34,475       37.18   Canceled/forfeited/expired     -       -   Vested     ( 37,855 )     10.36   Nonvested—December 31, 2022:     235,832     $ 13.15       14. EARNINGS PER SHARE   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:       For the Year Ended December 31,       2022     2021     2020       (in thousands, except per share data)                             Net income   $ 90,672     $ 76,516     $ 17,827                             Basic weighted average common shares outstanding (1)     22,246       22,715       23,008   Dilutive effect of common stock equivalents     190       149       64                             Diluted weighted average common shares outstanding (1)     22,436       22,864       23,072                             Basic earnings per share   $ 4.08     $ 3.37     $ 0.77                             Diluted earnings per share   $ 4.04     $ 3.35     $ 0.77     ( 1 ) As adjusted for the Company’s 2 -for- 1 forward stock splits paid in August 2021 and March 2022, respectively.     15. BENEFIT PLAN   The Company sponsors a benefit plan for the benefit of all eligible employees. The plan qualifies under Section 401 (k) of the Internal Revenue Code thereby allowing eligible employees to make tax-deductible contributions to the plan. The plan provides for employer matching contributions of 50 % of each participant’s voluntary contribution up to 3 % of the participant’s compensation and vests at the rate of 20 % each year until fully vested after five years. Total employer matching contributions to the plan were approximately $ 212,000 , $ 190,000 and $ 190,000 in 2021, 2021 and 2020, respectively.   - 51 - Table of Contents     16. COMMITMENTS AND CONTINGENCIES   We were named a defendant in a putative class action lawsuit filed on August 6, 2021, in the United States District Court for the Western District of Arkansas. The complaint alleged failure to pay over-the-road drivers 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).  We denied liability on all claims.  On August 5, 2022, the parties filed a Joint Motion for Preliminary Approval of a Collective and Class Action Settlement.  On October 7, 2022, the parties submitted to the court an executed Settlement Agreement and Release, to resolve and release all claims asserted in the litigation from January 1, 2020 through July 31, 2022 for $ 4,750,000 .  We did not admit liability for any claim.  The District Court granted preliminary approval of the settlement on November 14, 2022.  Notice of the settlement has been sent to class and collective action members.  A final fairness hearing on the settlement is scheduled to be held by the District Court on April 5, 2023. Management has determined that any losses under this claim will not be covered by existing insurance policies. This loss has been accrued and is included in Insurance and Claims in our consolidated statement of operations.   We are involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. 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. 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. Based on our knowledge of the facts, and in certain cases, opinions of outside counsel, we believe the resolution of such claims and pending litigation will not have a material effect on our financial position, results of operations or cash flows. 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.     17. LEASES   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 2022 and 2021, 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 approximately $ 0.4 million as of December 31, 2022. 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. The right-of-use assets are recorded in other assets, and the lease liability is recorded in accrued expenses and other liabilities and in other long-term liabilities on our consolidated balance sheet. Lease expense is recorded on a straight-line basis over the lease term and is recorded in rent and purchased transportation in our consolidated statements of operations. While the lease agreements contain provisions to extend after the initial term for an additional five years, the Company is not reasonably certain these extension options will be exercised. Therefore, potential lease payments that might occur under this extension period are not included in amounts recorded in our consolidated balance sheets as of December 31, 2022.   - 52 - Table of Contents   Scheduled amounts and timing of cash flows arising from operating lease payments at December 31, 2022, are:       (in thousands)   Maturity of Lease Liabilities         2023   $ 340   2024     114   2025     -   2026     -   2027 and Thereafter     -   Total undiscounted operating lease payments   $ 454   Less: Imputed interest     ( 10 ) Present value of operating lease liabilities   $ 444             Balance Sheet Classification         Right-of-use assets (recorded in other non-current assets)   $ 444             Current lease liabilities (recorded in other current liabilities)   $ 340   Long-term lease liabilities (recorded in other long-term liabilities)     104   Total operating lease liabilities   $ 444             Other Information         Weighted-average remaining lease term for operating leases (in years)     1.33   Weighted-average discount rate for operating leases     3.74 %   Cash Flows   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, 2022 and December 31, 2021, respectively. Cash paid for amounts included in the present value of right-of-use lease liabilities was $ 0.5 and $ 0.6 million during the years ended December 31, 2022 and December 31, 2021, respectively, and is included in operating cash flows.   Cash Paid for Operating Leases       Twelve Months Ended       December 31,       2022     2021       (in thousands)   Right-of-Use leases   $ 515     $ 583   Short-term leases (1)     2,393       2,173   Total   $ 2,908     $ 2,756     ( 1 ) Short-term lease cost includes leases with a term of twelve months or less and leases with options for early cancellation.   Lease Revenue   The Company has a lease-purchase program whereby we offer independent contractors the opportunity to lease a Company-owned truck. The terms associated with these operating eases require weekly lease payments over the term of the leases which range from 5 to 60 months. The cost and carrying amount of Company-owned trucks in this program at December 31, 2022 were approximately $ 58,227,000 and $ 22,960,000 , respectively. The cost and carrying amount of the Company-owned trucks in this program at December 31, 2021 were approximately $ 55,986,000 and $ 28,951,000 , respectively. Payments under this program are classified in the Company’s financial statements under the consolidated statement of operations category Revenue.   - 53 - Table of Contents   Leases in our lease-purchase program expire at various dates through 2026. Future minimum lease receipts related to these operating leases at December 31, 2022 and 2021 were approximately $ 11,549,000 and $ 15,907,000 , respectively. Depreciation is calculated on a straight-line basis over the estimated useful life of the equipment, down to an estimated salvage value. In most cases, the Company has agreements in place with certain manufacturers whereby salvage values are guaranteed by the manufacturer. In other cases, where salvage values are not guaranteed, estimates of salvage value are based on the expected market values of equipment at the time of disposal. During the year ended December 31, 2022, the Company incurred $ 7.0 million of depreciation expense for these assets.   The Company leases dock space to a related party at our Laredo, Texas terminal and warehouse and office space to an unrelated lessee at a second Laredo, Texas terminal. At December 31, 2022, the cost and carrying amount of the facilities leased were approximately $ 13,738,000 and $ 11,674,000 , respectively. Future minimum lease receipts related to this operating lease at December 31, 2022 are approximately $ 32,100 . See Note 19 – Related Party Transactions for additional information regarding the Company’s transactions with related persons.   The Company's operating lease revenue is disclosed in the table below.       Twelve Months Ended       December 31,       2022     2021                     Leased truck revenue (recorded in revenue, before fuel surcharge)   $ 8,705     $ 7,747   Leased building space revenue (recorded in non-operating income)     525       735   Total lease revenue   $ 9,230     $ 8,482     Lease Receivable   Future minimum operating lease payments receivable at December 31, 2022:   2023   $ 7,637   2024     3,683   2025     221   2026     40   2027     -   Thereafter     -   Total future minimum lease payments receivable   $ 11,581     Lease Payments to Related Parties   Payments to related parties of $ 1,780,813 were made for real estate leases during 2022 which include maintenance facilities in one state and trailer drop yards in eleven states. The leases are generally month to month leases with automatic monthly renewal provisions.   During 2022 the Company leased office, shop and parking spaces from various lessors, including a related party. The initial term for the majority of these leases is one year, with an option for early cancellation and an option to renew for subsequent one -month periods. These leases can be terminated by either party by providing notice to the other party of the intent to cancel or to not extend. Relatively short lease durations for these properties are intended to provide flexibility to the Company as changing operational needs and shifting opportunities often result in cancellation or non-renewal of these leases by the Company or the lessor. The minimum operating lease payable under these arrangements was approximately $ 232,000 as of December 31, 2022.   The Company leases office and shop facilities to a related party. At December 31, 2022, the cost and carrying amount of the facilities leased were approximately $ 13,738,000 and $ 11,674,000 , respectively. Future minimum lease receipts related to this lease at December 31, 2022 were approximately $ 32,100 .   - 54 - Table of Contents     18. FAIR VALUE OF FINANCIAL INSTRUMENTS   The Company’s financial instruments consist of cash and cash equivalents, marketable equity securities, accounts receivable, trade accounts payable, and borrowings.   The Company follows the guidance for financial assets and liabilities measured on a recurring basis. The guidance defines fair value 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 and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.   The standard describes three levels of inputs that may be used to measure fair value:     Level 1: Quoted market prices in active markets for identical assets or liabilities.         Level 2: Inputs other than Level 1 inputs that are either directly or indirectly observable such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable; or other inputs not directly observable, but derived principally from, or corroborated by, observable market data.         Level 3: Unobservable inputs that are supported by little or no market activity.   The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.   At December 31, 2022 and 2021, the following items are measured at fair value on a recurring basis:       2022     2021                                                                         Total     Level 1     Level 2     Level 3     Total     Level 1     Level 2     Level 3                                                                     Marketable equity securities   $ 41,728     $ 41,728       -       -     $ 39,424     $ 39,424       -       -     During 2022 and 2021, there were no transfers of marketable securities between levels of fair value measurement.   The Company’s investments in marketable equity securities are recorded at fair value based on quoted market prices. The carrying value of cash and cash equivalents, accounts receivable, trade accounts payable, and accrued liabilities approximate fair value due to their short maturities.   The carrying amount for the line of credit approximates fair value because the line of credit interest rate is adjusted frequently.   For long-term debt other than the lines of credit, the fair values are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The carrying values and estimated fair values of this other long-term debt at December 31, 2022 and 2021 are summarized as follows:       2022     2021       Carrying Value     Estimated Fair Value     Carrying Value     Estimated Fair Value       (in thousands)   Long-term debt   $ 264,281     $ 253,762     $ 222,277     $ 224,191     The Company has not elected the fair value option for any of our financial instruments.   - 55 - Table of Contents     19. RELATED PARTY TRANSACTIONS   In the normal course of business, transactions for transportation and repair services, equipment, property leases and other services are conducted between the Company and companies affiliated with our Chairman and controlling stockholder. The Company recognized approximately $ 1,363,000 , $ 8,085,000 and $ 9,897,000 in operating revenue and approximately $ 21,438,000 , $ 11,103,000 and $ 6,791,000 in operating expenses in 2022, 2021, and 2020, respectively from related party transactions.   The Company purchased auto liability and workers’ compensation insurance through an insurance company affiliated with our Chairman and controlling stockholder. Premiums for auto liability coverage during 2022, 2021, and 2020 were approximately $ 11,437,000 , $ 9,851,000 , and $ 8,516,000 , respectively. Premiums for workers’ compensation coverage during 2022, 2021, and 2020 were approximately $ 338,000 , $ 300,000 and $ 299,000 , respectively.   Amounts owed to the Company by these affiliates were approximately $ 723,000 and $ 636,000 at December 31, 2022 and 2021, respectively. Of the accounts receivable at December 31, 2022 and 2021, approximately $ 382,000 and $ 448,000 represent freight transportation and approximately $ 341,000 and $ 188,000 represent revenue resulting from other services performed for related parties. Amounts payable to affiliates at December 31, 2022 and 2021 were approximately $ 1,290,000 and $ 1,276,000 respectively.     20. Acquisition of Assets from Metropolitan Trucking, Inc.   On June 14, 2022, subsidiaries of the Company, Met Express, Inc. and Costar Equipment, Inc. (collectively, the “Buyer”), entered into an Asset Purchase Agreement with Metropolitan Trucking, Inc., and related subsidiaries. Metropolitan Trucking, Inc. was a truckload carrier headquartered in Saddle Brook, New Jersey, providing asset-based dry van truckload transportation services, including local, regional, and dedicated services. The acquisition has been determined to be a business combination.   Pursuant to the Asset Purchase Agreement, the Buyer acquired substantially all the assets and assumed certain specified liabilities of Metropolitan Trucking, Inc., and its related entities (the “Transaction”). The Buyer paid $ 79.9 million of total consideration, including cash and certain assumed indebtedness of Metropolitan Trucking, Inc., and its related entities. The Transaction closed on June 14, 2022., subject to working capital adjustments.   Total cash paid of $ 64.3 million was funded out of the Company’s available cash. The Transaction included the assumption of $ 12.6 million of indebtedness and $ 2.9 million of other current liabilities. The Asset Purchase Agreement contains customary representations, warranties, covenants, escrow, and indemnification provisions.   The results of the acquired business have been included in the consolidated financial statements since the date of acquisition and represented 14.1 % of consolidated total assets as of December 31, 2022 and represented 5.7 % of revenues excluding fuel surcharge for the year ended December 31, 2022. Acquisition related expenses of $ 0.4 million are included in the condensed consolidated statements of operations for the year ended December 31, 2022.   The assets and liabilities associated with the acquisition were recorded at their fair values as of the acquisition date and the amounts are as follows:       (in thousands)             Trade and other accounts receivable   $ 10,821   Other current assets     316   Property and equipment     68,722   Total assets     79,859   Accounts payable     ( 2,915 ) Long-term debt     ( 12,627 ) Total cash paid   $ 64,317     - 56 - Table of Contents     Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.   None.