What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-13 compared with 2023-03-10 · 320 added, 433 removed, 518 unchanged (59% of the section changed)

1 unchanged sentence

The following statements are filed with this report:

Report of Independent Registered Public Accounting Firm –

Grant Thornton LLP (PCAOB ID Number 248 )

Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID Number 248 )

Consolidated Balance Sheets - December 31, 2023 and 2022

1 unchanged sentence

Consolidated Statements of Comprehensive Income - Years ended December 31, 2023, 2022 and 2021

Consolidated Statements of Stockholders’

Equity - Years ended December 31, 2022, 2021 and 2020

Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2023, 2022 and 2021

Consolidated Statements of Cash Flows - Years ended December 31, 2023, 2022 and 2021

6 unchanged sentences

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”).

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

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.

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, 2023, 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 13, 2024, expressed an unqualified opinion.

Basis for opinion

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

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

These 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.

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/S/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2005.

Tulsa, Oklahoma

5 unchanged sentences

(in thousands, except share and per share data)

ASSETS  

CURRENT ASSETS:

Cash and cash equivalents

$ 74,087  

$ 18,509  

Accounts receivable—net:

$ 100,614 $ 74,087

Accounts receivable—net:

Trade, less current estimated credit loss of $ 7,717 and $ 5,381 , respectively

134,739  

121,854  

80,604 134,739

Prepaid expenses and deposits

15,729  

10,962  

13,213 15,729

Marketable equity securities

41,728  

39,424  

43,203 41,728

Income taxes refundable

Total current assets

280,766  

199,574  

251,041 280,766

PROPERTY AND EQUIPMENT:

19,718  

23,078 19,718

Structures and improvements

35,534  

33,534  

43,552 35,534

Revenue equipment

637,510  

520,840  

689,173 637,510

Office furniture and equipment

13,157  

11,211  

15,328 13,157

Total property and equipment

705,919  

585,303  

771,131 705,919

Accumulated depreciation

( 242,324 )  

( 266,412 ) ( 242,324 )

Net property and equipment

463,595  

384,179  

$ 749,162  

$ 587,381  

504,719 463,595

$ 760,457 $ 749,162

See notes to consolidated financial statements.

2 unchanged sentences

(in thousands, except share and per share data)

LIABILITIES AND STOCKHOLDERS' EQUITY  

CURRENT LIABILITIES:

Accounts payable

$ 48,917  

$ 43,381  

$ 62,652 $ 48,917

Accrued expenses and other liabilities

34,233  

14,114  

Income taxes payable

16,799 34,233

Current maturities of long-term debt

58,815  

49,544  

57,645 58,815

Total current liabilities

141,965  

111,403  

Long-term debt—less current portion

205,466  

172,733  

137,096 141,965

Long-term debt—less current portion

204,064 205,466

Deferred income taxes

101,445  

86,715  

104,331 101,445

Other long-term liabilities

Total liabilities

448,979  

371,271  

446,241 448,979

COMMITMENTS AND CONTINGENCIES (Note 16)

STOCKHOLDERS’

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

Common stock, $ .01 par value, 50,000,000 shares authorized;

STOCKHOLDERS’ EQUITY

Preferred stock, $.

01 par value, 10,000,000 shares authorized;

Common stock, $.

01 par value, 50,000,000 shares authorized;

22,317,671 and 22,293,687 shares issued;

1 unchanged sentence

Additional paid-in capital

40,472  

84,472  

40,825 40,472

Accumulated Other Comprehensive Income

1 unchanged sentence

296,330 and 127,237 shares at December 31, 2023 and 2022, respectively

( 4,000 )  

( 8,736 ) ( 4,000 )

Retained earnings

263,488  

301,350  

Total stockholders’

300,183  

216,110  

281,904 263,488

Total stockholders’ equity

314,216 300,183

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 749,162  

$ 587,381  

$ 760,457 $ 749,162

See notes to consolidated financial statements.

6 unchanged sentences

Revenue, before fuel surcharge

$ 706,114 $ 818,751 $ 641,253

Fuel surcharge

104,693 128,111 65,867

Total operating revenues

810,807 946,862 707,120

OPERATING EXPENSES AND COSTS:

Salaries, wages and benefits

186,223 181,918 141,019

Operating supplies and expenses

160,527 166,005 102,228

Rents and purchased transportation

315,647 364,971 279,016

64,605 62,806 55,012

Insurance and claims

(Gain) loss on disposition of equipment

30,769 32,516 18,792

23,769 18,128 12,294

Gain on disposition of equipment

( 1,043 ) ( 3,250 ) ( 1,446 )

Total operating expenses and costs

780,497 823,094 606,915

OPERATING INCOME

NON-OPERATING INCOME (EXPENSE)

30,310 123,768 100,205

NON-OPERATING INCOME

7,446 3,168 10,339

INTEREST EXPENSE

( 9,177 ) ( 7,929 ) ( 8,039 )

INCOME BEFORE INCOME TAXES

28,579 119,007 102,505

FEDERAL & STATE INCOME TAX EXPENSE:

7,277 13,794 8,157

2,886 14,541 17,832

Total federal & state income tax expense

10,163 28,335 25,989

$ 18,416 $ 90,672 $ 76,516

EARNINGS PER COMMON SHARE:

$ 0.83 $ 4.08 $ 3.37

$ 0.83 $ 4.04 $ 3.35

AVERAGE COMMON SHARES OUTSTANDING:

22,056 22,246 22,715

22,197 22,436 22,864

See notes to consolidated financial statements.

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’

CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY

YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

(in thousands, except per share data)

Common Stock Additional

Treasury Retained

Shares / Amount

BALANCE—

January 1, 2020

BALANCE— January 1, 2021

22,912 $ 117 $ 84,148 $ ( 159,118 ) $ 224,834 $ 149,981

76,516 76,516

Restricted stock issued

Treasury stock repurchases

( 582 ) ( 10,828 ) ( 10,828 )

Share-based compensation

BALANCE—

December 31, 2020

BALANCE— December 31, 2021

22,348 $ 234 $ 84,472 $ ( 169,946 ) $ 301,350 $ 216,110

90,672 90,672

112 ( 111 ) 1

Restricted stock issued

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

BALANCE—

December 31, 2021

BALANCE— December 31, 2022

22,166 $ 223 $ 40,472 $ ( 4,000 ) $ 263,488 $ 300,183

18,416 18,416

Restricted stock issued

Treasury stock repurchases

Treasury stock retired

( 169 ) ( 4,736 ) ( 4,736 )

Restricted stock net settlement

( 199 ) ( 199 )

Share-based compensation

BALANCE—

December 31, 2022

BALANCE— December 31, 2023

22,021 $ 223 $ 40,825 $ ( 8,736 ) $ 281,904 $ 314,216

See notes to consolidated financial statements.

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OPERATING ACTIVITIES:

$ 18,416 $ 90,672 $ 76,516

Adjustments to reconcile net income to net cash provided by operating activities:

64,605 62,806 55,012

Bad debt expense

Stock compensation—net of excess tax benefits

2,396 917 1,044

Stock compensation—net of excess tax benefits

Provision for deferred income taxes

Recognized (gain) loss on marketable equity securities

(Gain) loss on sale or disposal of equipment

2,886 14,541 17,832

Recognized (gain) on marketable equity securities

( 1,618 ) ( 1,129 ) ( 8,197 )

Gain on sale or disposal of equipment

( 1,043 ) ( 3,250 ) ( 1,446 )

Changes in operating assets and liabilities:

Accounts receivable

50,798 ( 2,152 ) ( 47,132 )

Prepaid expenses, deposits, inventories, and other assets

2,538 ( 7,257 ) ( 865 )

Income taxes refundable

1,768 ( 5,373 ) 591

Income taxes payable

- ( 4,364 ) 4,364

Trade accounts payable

( 10,980 ) 2,198 5,945

Accrued expenses and other liabilities

( 15,742 ) 20,491 ( 2,365 )

Net cash provided by operating activities

114,577 168,815 101,740

INVESTING ACTIVITIES:

Purchases of property and equipment

( 34,060 ) ( 63,961 ) ( 19,144 )

Purchase of a business, net of cash acquired

- ( 65,797 ) -

Proceeds from disposition of equipment

22,622 17,406 31,680

Sales of marketable equity securities

Purchases of marketable equity securities, net of return of capital

- ( 1,175 ) ( 6,395 )

Net cash (used in) provided by investing activities

( 11,295 ) ( 113,527 ) 9,250

FINANCING ACTIVITIES:

Borrowings under line of credit

879,191 945,610 654,212

Repayments under line of credit

( 879,191 ) ( 945,610 ) ( 672,458 )

Borrowings of long-term debt

- 74,925 21,408

Repayments of long-term debt

( 71,105 ) ( 67,335 ) ( 75,115 )

Borrowings under margin account

46 1,229 6,510

Repayments under margin account

( 960 ) ( 1,529 ) ( 16,547 )

Repurchases of treasury stock

Net cash provided by (used in) financing activities

( 4,736 ) ( 7,000 ) ( 10,828 )

Net cash (used in) provided by financing activities

( 76,755 ) 290 ( 92,818 )

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS—Beginning of year

CASH AND CASH EQUIVALENTS—End of year

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—

26,527 55,578 18,172

CASH AND CASH EQUIVALENTS—Beginning of year

74,087 18,509 337

CASH AND CASH EQUIVALENTS—End of year

$ 100,614 $ 74,087 $ 18,509

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION—

Cash paid during the period for:

NON-CASH INVESTING AND FINANCING ACTIVITIES—

$ 9,762 $ 7,842 $ 8,144

$ 5,510 $ 23,243 $ 3,870

NON-CASH INVESTING AND FINANCING ACTIVITIES—

Purchases of revenue equipment included in accounts payable

$ 25,147 $ 431 $ 383

See notes to consolidated financial statements.

4 unchanged sentences

ACCOUNTING POLICIES

Description of Business and Principles of Consolidation –

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:

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.

Cartage Carriers, LLC, Met Express, Inc., Choctaw Brokerage, Inc., Costar Equipment, Inc., Costar Real Estate Holdings, Inc., Costar Management, Inc., Select CDL Driving School, Inc., Overdrive Leasing, LLC, Choctaw Express, LLC, Decker Transport Co., LLC, T.T.X., LLC, Transcend Logistics, Inc., Unmoored Realty, LLC and East Coast Transport and Logistics, LLC.

The following subsidiaries were inactive during all periods presented:

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

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

Mexico Holdings, LLC.

Use of Estimates –

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

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

The Company periodically reviews these estimates and assumptions.

2 unchanged sentences

Actual results could differ from those estimates.

Cash and Cash Equivalents –

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

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

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

Accounts Receivable and Current Expected Credit Losses –

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

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

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

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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;

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, 2023 or 2022.

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 Other – The components of accounts receivable other consist primarily of amounts representing downtime reimbursements due from our equipment partners, company driver advances, independent contractor advances, and equipment manufacturer warranties.

Equipment downtime reimbursements due from our equipment partners were approximately $ 2,100,000 and $ 994,000 as of December 31, 2023 and December 31, 2022, respectively.

Accounts receivable from independent contractors as of December 31, 2023 and 2022, were approximately $ 768,000 and $ 1,379,000 , 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.

Advances receivable from company drivers as of December 31, 2023 and 2022, were approximately $ 182,000 and $ 135,000 , respectively.

Independent contractors and trip lease carriers are 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.

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.

1 unchanged sentence

No impairment losses were recorded during 2023 or 2022.

Property and Equipment –

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

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

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

7 unchanged sentences

Office furniture and equipment

3 - 10  

Revenue equipment

3 - 10  

Structures and improvements

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.

During the 2023 evaluation, management determined it necessary to adjust the estimated useful lives and salvage values of trucks and trailers to reflect the current market conditions more accurately.

These adjustments did not have a material impact on the Company’s financial condition, results of operations, and cash flows as of December 31, 2023.

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

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

Prepaid Tires –

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

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

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

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

Advertising Expense –

Advertising costs are expensed as incurred and totaled approximately $ 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.

Advertising Expense – Advertising costs are expensed as incurred and totaled approximately $ 2,014,000 , $ 2,101,000 and $ 1,154,000 for the years ended December 31, 2023, 2022 and 2021, 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.

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.

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.

9 unchanged sentences

As of December 31, 2023 and 2022, 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.

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.

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.

Fair Value Measurements –

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

See Note 14 – Earnings per Share for more information regarding the computation of diluted EPS.

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

Fair value 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”).

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.

1 unchanged sentence

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

Concentrations of Credit Risk –

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

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

The Company maintains reserves for potential credit losses.

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.

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.

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

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

1 unchanged sentence

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

Any resulting exchange gain or loss from the remeasurement process is included in non-operating income 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.

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 business, 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 –

March 2020, 

the FASB issued Accounting Standards Update 

2020 - 04,  (“ASU 

2020 - 04”

), Reference Rate Reform (Topic 848 ):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

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.

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.

Recent Accounting Pronouncements – In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update, (“ASU”) No.

2023 - 09, (“ASU 2023 - 09” ), Improvements to Income Tax Disclosures.

ASU 2023 - 09 was issued to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

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

REVENUE RECOGNITION

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.

7 unchanged sentences

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.

The Company’s revenue is generated, and our customer receives benefit, as the freight progresses towards delivery locations.

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.

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.

11 unchanged sentences

(in thousands)

$ 119,552  

$ 105,992  

20,568  

20,388  

$ 75,653 $ 119,552

12,668 20,568

Current estimated credit losses

( 5,381 )  

Total accounts receivable—net

$ 134,739  

$ 121,854  

( 7,717 ) ( 5,381 )

Total accounts receivable—net

$ 80,604 $ 134,739

An analysis of changes in current estimated credit losses for the years ended December 31, 2023, 2022, and 2021 follows:

(in thousands)

Balance—beginning of year

$ 4,526  

$ 3,482  

$ 2,952  

Balance—beginning of year

$ 5,381 $ 4,526 $ 3,482

Provision for bad debts

( 62 )  

Balance—end of year

$ 5,381  

$ 4,526  

$ 3,482  

2,396 917 1,044

( 60 ) ( 62 ) -

Balance—end of year

$ 7,717 $ 5,381 $ 4,526

MARKETABLE EQUITY SECURITIES

1 unchanged sentence

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).

1 unchanged sentence

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.

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, 2023 and 2022.

2 unchanged sentences

Fair market value

$ 41,728  

$ 39,424  

30,350  

29,385  

$ 43,203 $ 41,728

30,294 30,350

Unrealized gain

$ 11,378  

$ 10,039  

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of December 31, 2022 and 2021.

$ 12,909 $ 11,378

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of December 31, 2023 and 2022.

(in thousands)

1 unchanged sentence

Gross unrealized gains

$ 13,478  

$ 12,458  

$ 15,539 $ 13,478

Gross unrealized losses

Net unrealized gains

$ 11,378  

$ 10,039  

$ 12,909 $ 11,378

For the years ended December 31, 2023, 2022 and 2021, the Company recognized dividends of approximately $ 1,557,000 , $ 1,539,000 and $ 1,448,000 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.

The following table shows the Company’s net realized (losses) gains during 2023, 2022 and 2021 on certain marketable equity securities.

(in thousands)

1 unchanged sentence

Sale proceeds

$ 3,109  

$ 2,039  

$ 343 $ - $ 3,109

Cost of securities sold

Realized (losses) / gains

$ ( 90 )  

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.

$ 88 $ - $ ( 90 )

At December 31, 2023, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $ 8,099,000 and $ 2,630,000 , respectively.

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.

The market value of the Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings.

At December 31, 2023, the Company had no outstanding borrowings under its margin account.

At December 31, 2022, the company had outstanding borrowings of $ 914,000 under its margin account, which was reflected in accrued expenses.

The interest rate on margin account borrowings were 4.92 % as of December 31, 2022, respectively.

ACCRUED EXPENSES AND OTHER LIABILITIES

1 unchanged sentence

(in thousands)

$ 1,995  

$ 1,529  

$ 3,105 $ 1,995

Accrued vacation

Taxes—other than income

Driver escrows

1 unchanged sentence

Self-insurance claims and legal reserves

22,709  

Current portion of Right-of-Use liability

1 unchanged sentence

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.

$ 16,799 $ 34,233

The Company’s accounts payable of $ 62,652,000 includes $ 25,147,000 in payables for purchases of revenue equipment.

CLAIMS LIABILITIES

5 unchanged sentences

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.

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 has not experienced any adverse trends involving differences in claims experienced versus claims estimates 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.

See Note 5 – Accrued Expenses and Other Liabilities for additional information regarding self-insurance claims liabilities.

LONG-TERM DEBT

1 unchanged sentence

(in thousands)

Line of credit with a bank—due July 1, 2024, and collateralized by accounts receivable (1)

Line of credit with a bank—due July 1, 2026, and collateralized by accounts receivable (1)

Equipment financing (2)

216,875  

206,539  

219,033 216,875

Real estate financing (3)

47,406  

15,738  

42,676 47,406

Total long-term debt

264,281  

222,277  

261,709 264,281

Less current maturities

( 58,815 )  

Long-term debt—net of current maturities

$ 205,466  

$ 172,733  

( 57,645 ) ( 58,815 )

Long-term debt—net of current maturities

$ 204,064 $ 205,466

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.

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 %, ( 6.66 % at December 31, 2023 ) 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.

6 unchanged sentences

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.

The Company has provided a letter of credit to a third party totaling approximately $ 100,000 and $ 310,000 at December 31, 2023 and December 31, 2022, respectively.

The letter is held by the third party to assist such party in collection of any amounts due by the Company should the Company default in its commitments to the party.

Scheduled annual maturities on long-term debt outstanding at December 31, 2023, are:

$ 58,815  

62,490  

53,038  

34,801  

32,491  

22,646  

$ 264,281  

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.

The Company financed approximately $ 68.5 million, $ 22.2 million, and $ 36.1 million in equipment purchases during 2023, 2022 and 2021, respectively, utilizing noncash financing.

CAPITAL STOCK

12 unchanged sentences

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’s stock repurchase program has been extended and expanded several times, most recently in July 2023, when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011 authorization.

The Company repurchased 169,093 shares and 168,847 shares of its common stock under this program during 2023 and 2022, respectively.

6 unchanged sentences

United States - domestic shipments

$ 629,921  

$ 474,291  

$ 316,542  

$ 512,552 63.2 $ 629,921 66.5 $ 474,291 67.9

Shipments to or from Mexico

313,885  

223,315  

161,412  

296,696 36.6 313,885 33.2 223,315 32.0

Shipments to or from Canada

$ 946,862  

$ 698,497  

$ 479,110  

1,559 0.2 3,056 0.3 891 0.1

$ 810,807 100 % $ 946,862 100 % $ 698,497 100 %

Our five largest customers, for which we provide carrier services covering a number of geographic locations, accounted for approximately 34 %, 39 % and 33 % of our total revenues in 2023, 2022 and 2021, respectively.

5 unchanged sentences

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.

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:

(in thousands)

1 unchanged sentence

Property and equipment

$ 102,169  

$ 84,081  

$ 101,623 $ 102,169

Unrealized gains on securities

1 unchanged sentence

Total deferred tax liabilities

108,899  

89,444  

108,208 108,899

Deferred tax assets:

4 unchanged sentences

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:

$ 104,331 $ 101,445

The reconciliation between the effective income tax rate and the statutory Federal income tax rate for the years ended December 31, 2023, 2022 and 2021 is presented in the following table:

(in thousands)

Federal income tax at statutory rate

$ 24,991  

$ 21,526  

$ 4,916  

$ 6,002 21.0 $ 24,991 21.0 $ 21,526 21.0

Nondeductible per diem and meals

371 1.3 - - - -

State income taxes/other, net

3,790 13.3 3,344 2.8 4,463 4.4

Total income tax expense

$ 28,335  

$ 25,989  

$ 5,582  

$ 10,163 35.6 $ 28,335 23.8 $ 25,989 25.4

The provision (benefit) for income taxes consisted of the following:

(in thousands)

$ 10,673  

$ 6,314  

$ 4,697 $ 10,673 $ 6,314

2,580 3,121 1,843

Total current income tax provision

13,794  

12,920  

13,720  

7,277 13,794 8,157

944 12,920 13,720

1,942 1,621 4,112

Total deferred income tax provision

14,541  

17,832  

2,886 14,541 17,832

Total income tax provision expense

$ 28,335  

$ 25,989  

$ 5,582  

$ 10,163 $ 28,335 $ 25,989

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.

2 unchanged sentences

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.

As of December 31, 2023, 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.

2 unchanged sentences

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.

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 2020 and forward remain open to examination in those jurisdictions.

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.

1 unchanged sentence

During February 2023, the Company granted 28,313 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.

These stock awards had grant date fair values of $ 28.30 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 2023, the Company granted 2,295 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.

These stock awards had a grant date fair value of $ 23.95 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately.

During February 2022, the Company granted 29,120 shares of common stock to certain key employees.

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.

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 2023 and 2022, there were no grants of stock options and there were no outstanding stock options at December 31, 2023 or December 31, 2022.

4 unchanged sentences

The recognition of stock-based compensation expense decreased diluted earnings per common share by $ 0.02 and basic earnings per common share by approximately $ 0.02 during 2023.

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 of December 31, 2023, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 2,134,000 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:

$ 649,000  

$ 641,000  

$ 670,000  

$ 343,000  

$ 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.

2024 $ 728,000

2025 $ 777,000

2026 $ 493,000

2027 $ 136,000

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 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.

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 $ 110,000 related to stock-based compensation expense during 2021.

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

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

There were no options granted during 2023, 2022, or 2021.

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:

A summary of the status of the Company’s non-vested restricted stock as of December 31, 2023 and changes during the year ended December 31, 2023, is presented below:

Restricted Stock

1 unchanged sentence

Date Fair Value

Nonvested—January 1, 2022

239,212  

$ 9.25  

34,475  

Nonvested—January 1, 2023

235,832 $ 13.15

Canceled/forfeited/expired

( 37,855 )  

Nonvested—December 31, 2022:

235,832  

$ 13.15  

( 34,627 ) 16.85

( 32,954 ) 17.49

Nonvested—December 31, 2023:

198,859 $ 14.07

EARNINGS PER SHARE

3 unchanged sentences

(in thousands, except per share data)

$ 90,672  

$ 76,516  

$ 17,827  

$ 18,416 $ 90,672 $ 76,516

Basic weighted average common shares outstanding (1)

22,246  

22,715  

23,008  

22,056 22,246 22,715

Dilutive effect of common stock equivalents

Diluted weighted average common shares outstanding (1)

22,436  

22,864  

23,072  

22,197 22,436 22,864

Basic earnings per share

$ 4.08  

$ 3.37  

$ 0.77  

$ 0.83 $ 4.08 $ 3.37

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.

$ 0.83 $ 4.04 $ 3.35

( 1 ) As adjusted for the Company’s 2 -for- 1 forward stock splits paid in August 2021 and March 2022, respectively.

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 $ 245,000 , $ 212,000 and $ 190,000 in 2023, 2022 and 2021, respectively.

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.

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During 2023 and 2022, 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.

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 $ 0.1 million as of December 31, 2023.

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.

24 unchanged sentences

Short-term leases (1)

$ 2,908  

$ 2,756  

$ 3,445 $ 2,908

( 1 ) Short-term lease cost includes leases with a term of twelve months or less and leases with options for early cancellation.

1 unchanged sentence

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 terms associated with these leases 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, 2023 were approximately $ 57,790,000 and $ 32,595,000 , respectively.

The cost and carrying amount of the Company-owned trucks in this program at December 31, 2022 were approximately $ 58,227,000 and $ 22,960,000 , respectively.

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

Leases in our lease-purchase program expire at various dates through 2027.

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At December 31, 2023, the cost and carrying amount of the facilities leased were approximately $ 13,738,000 and $ 11,305,000 , 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.

Future minimum lease receipts related to this operating lease at December 31, 2023 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

(in thousands)

Leased truck revenue (recorded in revenue, before fuel surcharge)

$ 8,705  

$ 7,747  

$ 7,850 $ 8,705

Leased building space revenue (recorded in non-operating income)

Total lease revenue

$ 9,230  

$ 8,482  

$ 8,245 $ 9,230

Lease Receivable

Future minimum operating lease payments receivable at December 31, 2023:

$ 7,637  

(in thousands)

2028 & 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.

Payments to related parties of $ 1,540,102 were made for real estate leases during 2023 which include maintenance facilities in one state and trailer drop yards in nine states.

The leases are generally month to month leases with automatic monthly renewal provisions.

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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.

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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.

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, 2023 and 2022, the following items are measured at fair value on a recurring basis:

Marketable equity securities

$ 41,728  

$ 39,424  

$ 43,203 $ 43,203 - - $ 41,728 $ 41,728 - -

During 2023 and 2022, 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, 2023 and 2022 are summarized as follows:

1 unchanged sentence

Long-term debt

$ 264,281  

$ 253,762  

$ 222,277  

$ 224,191  

$ 261,709 $ 251,352 $ 264,281 $ 253,762

The Company has not elected the fair value option for any of our financial instruments.

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 $ 8,321,000 , $ 1,363,000 and $ 8,085,000 in operating revenue and approximately $ 27,286,000 , $ 21,438,000 and $ 11,103,000 in operating expenses in 2023, 2022, and 2021, 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.

The Company purchased auto liability and workers’ compensation insurance through an insurance company affiliated with our Chairman and controlling stockholders.

Premiums for auto liability coverage during 2023, 2022, and 2021 were approximately $ 13,307,000 , $ 11,437,000 , and $ 9,851,000 , respectively.

Premiums for workers’

compensation coverage during 2022, 2021, and 2020 were approximately $ 338,000 , $ 300,000 and $ 299,000 , respectively.

Premiums for workers’ compensation coverage during 2023, 2022, and 2021 were approximately $ 298,000 , $ 338,000 and $ 300,000 , respectively.

Amounts owed to the Company by these affiliates were approximately $ 1,809,000 and $ 723,000 at December 31, 2023 and 2022, respectively.

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and Costar Equipment, Inc.

(collectively, the “Buyer”), entered into an Asset Purchase Agreement with Metropolitan Trucking, Inc., and related subsidiaries.

Metropolitan Trucking, Inc.

1 unchanged sentence

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 results of the acquired business have been included in the consolidated financial statements since the date of acquisition and represented 2.1 % of consolidated total assets as of December 31, 2023 and represented 9.7 % of revenues excluding fuel surcharge for the year ended December 31, 2023, respectively.

Acquisition related expenses of $ 0.4 million were 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:

1 unchanged sentence

Trade and other accounts receivable

$ 10,821  

Other current assets

Property and equipment

68,722  

79,859  

Accounts payable

1 unchanged sentence

Total cash paid

$ 64,317  

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

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data