What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 193 added, 189 removed, 406 unchanged (48% of the section changed)

11 unchanged sentences

Prepaid expenses and deposits

10,820 13,213

Marketable equity securities

40 unchanged sentences

22,336,597 and 22,317,671 shares issued;

22,034,762 and 22,021,341 shares outstanding at March 31, 2024 and December 31, 2023, respectively

21,755,011 and 22,021,341 shares outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

1 unchanged sentence

Treasury stock, at cost;

296,330 and 296,330 shares at March 31, 2024 and December 31, 2023, respectively

581,586 and 296,330 shares at June 30, 2024 and December 31, 2023, respectively

( 13,995 ) ( 8,736 )

11 unchanged sentences

Three Months Ended

Six Months Ended

OPERATING REVENUES:

Revenue, before fuel surcharge

$ 160,969 $ 193,454

Fuel surcharge

21,623 28,270

Total operating revenues

182,592 221,724

OPERATING EXPENSES AND COSTS:

Salaries, wages and benefits

44,063 48,278

Operating supplies and expenses

34,712 41,073

Rent and purchased transportation

73,279 87,096

18,935 16,497

Insurance and claims

Loss (Gain) on sale or disposition of equipment

(Gain)/Loss on disposition of equipment

Total operating expenses and costs

183,269 213,225

OPERATING INCOME

( 677 ) 8,499

OPERATING (LOSS)/INCOME

NON-OPERATING INCOME

INTEREST EXPENSE

( 2,883 ) ( 2,356 )

INCOME BEFORE INCOME TAXES

FEDERAL AND STATE INCOME TAX EXPENSE (BENEFIT):

( 8 ) ( 560 )

Total federal and state income tax expense

$ 281 $ 5,231

INCOME PER COMMON SHARE:

$ 0.01 $ 0.24

$ 0.01 $ 0.23

(LOSS)/INCOME BEFORE INCOME TAXES

FEDERAL AND STATE INCOME TAX (BENEFIT)/EXPENSE:

Total federal and state income tax (benefit)/expense

NET (LOSS)/INCOME

(LOSS)/INCOME PER COMMON SHARE:

AVERAGE COMMON SHARES OUTSTANDING:

22,031 22,148

22,127 22,317

See notes to condensed consolidated financial statements.

3 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

OPERATING ACTIVITIES:

$ 281 $ 5,231

Net Income/(Loss)

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

18,935 16,497

Bad debt expense

Stock compensation-net of excess tax benefits

(Benefit) / Provision for deferred income taxes

( 8 ) ( 560 )

Provision for deferred income taxes

(Gain) Loss on marketable equity securities

( 2,586 ) 288

Loss (Gain) on sale or disposition of equipment

1 unchanged sentence

Accounts receivable

( 13,253 ) 1,826

Prepaid expenses, deposits, inventories, and other assets

1 unchanged sentence

Trade accounts payable

355 ( 2,783 )

Accrued expenses and other liabilities

( 315 ) 9,474

Net cash provided by operating activities

1 unchanged sentence

Purchases of property and equipment

( 21,824 ) ( 6,108 )

Proceeds from disposition of equipment

Net cash (used in) / provided by investing activities

( 9,802 ) 1,084

Sales of marketable equity securities

Net cash used in investing activities

FINANCING ACTIVITIES:

Borrowings under line of credit

207,854 282,515

Repayments under line of credit

( 207,854 ) ( 282,515 )

Borrowings under lines of credit

Repayments under lines of credit

Borrowings of long-term debt

Repayments of long-term debt

( 20,431 ) ( 13,024 )

Borrowings under margin account

1 unchanged sentence

Repurchases of common stock

Net cash used in by financing activities

( 20,431 ) ( 16,905 )

Net cash (used in) / provided by financing activities

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

( 20,648 ) 18,386

CASH, CASH EQUIVALENTS AND RESTRICTED CASH -Beginning of period

100,614 74,087

CASH, CASH EQUIVALENTS AND RESTRICTED CASH -End of period

$ 79,966 $ 92,473

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the period for:

$ 2,933 $ 2,353

NONCASH INVESTING AND FINANCING ACTIVITIES:

8 unchanged sentences

Balance at January 1, 2024

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

- - - - 281 281

Restricted stock issued

14 - ( 46 ) - - ( 46 )

Stock based compensation

- - 192 - - 192

Balance at March 31, 2024

22,035 $ 223 $ 40,971 $ ( 8,736 ) $ 282,185 $ 314,643

Treasury stock repurchases

Restricted stock issued

Stock based compensation

Balance at June 30, 2024

Shares / Amount

1 unchanged sentence

Balance at January 1, 2023

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

- - - - 5,231 5,231

Treasury stock repurchases

( 123 ) - - ( 3,516 ) - ( 3,516 )

Restricted stock issued

Stock based compensation

- - 208 - - 208

Balance at March 31, 2024

22,050 $ 223 $ 40,680 $ ( 7,516 ) $ 268,719 $ 302,106

Treasury stock repurchases

Restricted stock issued

Stock based compensation

Balance at June 30, 2023

See notes to condensed consolidated financial statements.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited)

March 31, 2024

June 30, 2024

BASIS OF PRESENTATION

9 unchanged sentences

The consolidated balance sheet at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Operating results for the three -month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the six -month period ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

For further information, refer to the consolidated financial statements and the footnotes thereto included in the Company’s annual report on Form 10 -K for the year ended December 31, 2023.

5 unchanged sentences

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

The Company considered the applicability and impact of ASU 2023 - 09 and all other accounting standard updates issued by the Financial Accounting Standards Board to the Accounting Standards Codification ("ASC") and determined there are not any ASUs that have not already been adopted which require significant consideration for disclosure as of March 31, 2024.

Additionally, the Company did not adopt any new ASUs during the quarter ended March 31, 2024.

Additionally, the Company did not adopt any new ASUs during the quarter ended June 30, 2024.

REVENUE RECOGNITION

10 unchanged sentences

In fulfilling the Company’s obligation to transport freight from a specified origin to a specified destination, control of freight is transferred to us 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, the responsibility for invoice payment and the pickup and delivery locations.

Our revenue is generated, and our customer receives benefit, as the freight progresses towards delivery locations.

Our revenue is generated, and our customers receive benefit, as the freight progresses towards delivery locations.

In the event our customer cancels the shipment at some point prior to the final delivery location and re-consigns the shipment to an alternate delivery location, we are entitled to receive payment for services performed for the partial shipment.

12 unchanged sentences

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).

The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income.

Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income.

The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note J.

The following table sets forth market value, cost, and unrealized gains on equity securities as of March 31, 2024 and December 31, 2023.

March 31, 2024

The following table sets forth market value, cost, and unrealized gains on equity securities as of June 30, 2024 and December 31, 2023.

June 30, 2024

December 31, 2023

5 unchanged sentences

$ 14,513 $ 12,909

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of March 31, 2024 and December 31, 2023.

March 31, 2024

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of June 30, 2024 and December 31, 2023.

June 30, 2024

December 31, 2023

5 unchanged sentences

$ 14,513 $ 12,909

The Company did not sell any marketable equity securities and had no realized gains or losses during the quarter ending on March 31, 2024 or 2023, respectively.

For the quarter ended March 31, 2024, the Company recognized dividends received of approximately $ 349,000 in non-operating income in its condensed consolidated statements of operations.

For the quarter ended March 31, 2023, the Company recognized dividends received of approximately $ 377,000 in non-operating income in its condensed consolidated statements of operations.

The following table shows the Company’s net realized gains during the three and six months ending on June 30, 2024 and 2023, respectively, on certain marketable equity securities.

Three Months Ended

Six Months Ended

(in thousands)

Sales proceeds

$ 2,631 $ - $ 2,631 $ -

Cost of securities sold

2,815 - 2,815 -

Realized gain / (loss)

$ ( 184 ) $ - $ ( 184 ) $ -

For the quarter ended June 30, 2024, the Company recognized dividends received of approximately $ 399,000 in non-operating income in its condensed consolidated statements of operations.

For the six months ended June 30, 2024, the Company recognized dividends received of approximately $ 747,000 in non-operating income in its condensed consolidated statements of operations.

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

As of March 31, 2024, the Company had no outstanding borrowings under its margin account, which is no change from December 31, 2023, when the Company had no outstanding borrowings under the same account.

As of June 30, 2024, the Company had no outstanding borrowings under its margin account, which is no change from December 31, 2023, when the Company had no outstanding borrowings under the same account.

Margin account borrowings, when utilized, are used for the purchase of marketable equity securities and as a source of short-term liquidity and are included in accrued expenses and other liabilities on our condensed consolidated balance sheets.

Our marketable equity securities portfolio had a net unrealized pre-tax gain in market value of approximately $ 2,586,000 during the first quarter of 2024, and a net unrealized pre-tax loss in market value of approximately $ 288,000 during the first quarter of 2023, which were reported as non-operating income in its condensed consolidated statements of operations for the respective periods.

Our marketable equity securities portfolio had a net unrealized pre-tax loss in market value of approximately $ 1,153,000 during the second quarter of 2024, and a net unrealized pre-tax loss in market value of approximately $ 165,000 during the second quarter of 2023, which were reported as non-operating income in its condensed consolidated statements of operations for the respective periods.

STOCK-BASED COMPENSATION

The Company maintains a stock incentive plan (the “Plan”) under which incentive and nonqualified stock options and other stock awards may be granted.

Under the Plan, 3,000,000 shares are reserved for the issuance of stock awards to directors, officers, key employees, and others.

The Company has maintained a stock incentive plan (the “Plan”) under which incentive and nonqualified stock options and other stock awards may be granted.

Under the Plan, 3,000,000 shares were reserved for the issuance of stock awards to directors, officers, key employees, and others.

The stock option exercise price and the restricted stock value under the 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 did not grant any shares of common stock during the first three months of 2024.

The total grant date fair value of stock vested during the first three months of 2024 was approximately $ 450,000 .

The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first three months of 2024, was approximately $ 192,000 and includes approximately $ 0 recognized as a result of the grant of shares to certain non-employee directors.

The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.01 during the first three months of 2024.

As of March 31, 2024, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 1,942,000 , which is being amortized on a straight-line basis over the remaining vesting period.

This Plan expired on March 13, 2024, and no further grants may be made under the Plan.

All outstanding unvested awards granted under the Plan, however, remain subject to the terms and conditions of the Plan.

On February 15, 2024, the Company’s Board of Directors adopted a new 2024 Equity Incentive Plan (the “2024 Plan”), under which 1,600,000 shares are reserved for issuance of stock awards to employees, officers, directors, consultants and advisors of the Company.

The 2024 Plan is subject to and will become effective upon approval by the Company’s shareholders at its upcoming annual meeting of shareholders.

During May 2024, the Company issued 2,130 unrestricted shares of common stock to non-employee directors.

These shares had a grant date fair value of $ 17.60 per share, based on the closing price of the Company’s stock on the date of issuance.

The total grant date fair value of stock vested during the first six months of 2024 was approximately $ 550,000 .

The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first six months of 2024, was approximately $ 393,000 and includes approximately $ 38,000 recognized as a result of the issuance of shares to certain non-employee directors.

The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.01 during the first six months of 2024.

As of June 30, 2024, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 1,779,000 , which is being amortized on a straight-line basis over the remaining vesting period.

As a result, the Company expects to recognize approximately $ 373,000 in additional compensation expense related to unvested stock awards during the remainder of 2024 and to recognize approximately $ 777,000 , $ 494,000 , and $ 136,000 in additional compensation expense related to unvested stock awards during the years 2025, 2026, and 2027, respectively.

During the first three months of 2023, the Company granted 28,313 shares of common stock to key employees.

Those stock awards had a grant date fair value 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.

The total grant date fair value of stock vested during the first three months of 2023 was approximately $ 206,000 .

The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first three months of 2023, was approximately $ 208,000 and includes approximately $ 0 recognized as a result of the grant of shares to certain non-employee directors.

The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.01 during the first three months of 2023.

As of March 31, 2023, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 2,999,000 , which is being amortized on a straight-line basis over the remaining vesting period.

A summary of the status of the Company’s non-vested restricted stock as of March 31, 2024, and changes during the three months ended March 31, 2024, is as follows:

Restricted Stock

The total grant date fair value of stock vested during the first six months of 2023 was approximately $ 400,000 .

The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first six months of 2023, was approximately $ 242,000 and includes approximately $ 55,000 recognized as a result of the grant of shares to certain non-employee directors.

The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $ 0.01 during the first six months of 2023.

As of June 30, 2023, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 2,482,000 , which was being amortized on a straight-line basis over the remaining vesting period.

A summary of the status of the Company’s non-vested stock awards as of June 30, 2024, and changes during the six months ended June 30, 2024, is as follows:

Average Grant

2 unchanged sentences

198,859 $ 14.07

Unrestricted Shares Issued

Canceled/forfeited/expired

( 21,351 ) 25.74

Non-vested at March 31, 2024

Non-vested at June 30, 2024

179,638 $ 12.73

4 unchanged sentences

Truckload Services revenues and Brokerage and Logistics Services revenues, each before fuel surcharges, were as follows:

Three Months Ended March 31,

(in thousands, except percentage data)

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Truckload Services revenue

6 unchanged sentences

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.

As of March 31, 2024, there remain 475,066 shares of common stock authorized for repurchase under this plan.

During the six months ended June 30, 2024, the Company repurchased 1,050 shares of its common stock at an aggregate cost of approximately $ 17,000 under this program.

As of June 30, 2024, there remain 474,016 shares of common stock authorized for repurchase under this plan.

On April 24, 2024, the Company commenced a tender offer to repurchase up to 550,000 shares of the Company’s outstanding common stock at a price of not greater than $ 18.00 nor less than $ 15.50 per share.

Following the expiration of the tender offer on May 22, 2024, the Company accepted 284,206 shares of its common stock for purchase at $ 18.00 per share, at an aggregate purchase price of approximately $ 5.1 million, excluding fees and expenses related to the offer.

The Company funded the purchase of the accepted shares tendered with available cash and accounted for the repurchase of these shares as treasury stock on the Company’s condensed consolidated balance sheet as of June 30, 2024.

The Company accounts for treasury stock using the cost method.

As of March 31, 2024, 296,330 shares were held in the treasury at an aggregate cost of approximately $ 8,736,000 .

As of June 30, 2024, 581,586 shares were held in the treasury at an aggregate cost of approximately $ 13,995,000 .

EARNINGS PER SHARE

4 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands, except per share data)

Net (Loss)/Income

$ ( 2,910 ) $ 9,319 $ ( 2,629 ) $ 14,550

4 unchanged sentences

21,932 22,182 21,981 22,253

Basic earnings per share

Basic (loss)/earnings per share

$ ( 0.13 ) $ 0.42 $ ( 0.12 ) $ 0.66

Diluted earnings per share

Diluted (loss)/earnings per share

$ ( 0.13 ) $ 0.42 $ ( 0.12 ) $ 0.65

4 unchanged sentences

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 March 31, 2024, 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.

As of June 30, 2024, 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 March 31, 2024, an adjustment to the Company’s condensed 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 June 30, 2024, an adjustment to the Company’s condensed 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 the three months ended March 31, 2024 and 2023, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

The Company’s effective income tax rates were 25.7 % and 25.7 % for the three months ended March 31, 2024 and 2023, respectively.

Our effective tax rate for the three months ended March 31, 2024 differs from amounts computed by applying the United States federal statutory rates to pre-tax income primarily due to state income taxes.

During the six months ended June 30, 2024 and 2023, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions.

The Company’s effective income tax rates were 22.7 % and 26.7 % for the six months ended June 30, 2024 and 2023, respectively.

Our effective tax rate for the six months ended June 30, 2024 differs from amounts computed by applying the United States federal statutory rates to pre-tax income primarily due to state income taxes.

FAIR VALUE OF FINANCIAL INSTRUMENTS

11 unchanged sentences

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

At March 31, 2024, the following items are measured at fair value on a recurring basis:

At June 30, 2024, the following items are measured at fair value on a recurring basis:

(in thousands)

5 unchanged sentences

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 value and estimated fair value of this other long-term debt at March 31, 2024 was as follows:

The carrying value and estimated fair value of this other long-term debt at June 30, 2024 was as follows:

(in thousands)

3 unchanged sentences

NOTES PAYABLE

During the first three months of 2024, the Company’s subsidiaries entered into installment obligations totaling approximately $ 30.3 million for the purpose of purchasing revenue equipment and other assets.

During the first six months of 2024, the Company’s subsidiaries entered into installment obligations totaling approximately $ 39.9 million for the purpose of purchasing revenue equipment and other assets.

These obligations are payable in monthly installments and are recorded in long-term debt and current maturities on the condensed consolidated balance sheets.

16 unchanged sentences

Right-of-Use Leases

The Company is party to operating leases which include initial terms ranging from three to five years and which do not include an option for early cancellation.

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 $ 0.03 million as of March 31, 2024.

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 condensed consolidated balance sheets.

Lease expense is recorded on a straight-line basis over the lease term and is recorded in rent and purchased transportation in our condensed consolidated statements of operations.

While these lease agreements may 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 condensed consolidated balance sheets as of March 31, 2024.

Scheduled amounts and timing of cash flows arising from future right-of-use operating lease payments at March 31, 2024, are:

Maturity of Lease Liabilities

(in thousands)

2024 (remaining)

2026 and thereafter

Total undiscounted operating lease payments

Imputed interest

Present value of operating lease liabilities

Balance Sheet Classification

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

Current lease liabilities (recorded in other current liabilities)

Long-term lease liabilities (recorded in other long-term liabilities)

Total operating lease liabilities

Other Information

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

Weighted-average discount rate for operating leases

No new right-of-use assets were recognized as a non-cash asset addition that resulted from new operating lease liabilities during the three months ended March 31, 2024.

Cash paid for amounts included in the present value of operating lease liabilities was $ 0.1 million during the three months ended March 31, 2024, and is included in operating cash flows within the condensed consolidated statement of cash flows.

The Company was party to operating leases that included initial terms ranging from three to five years.

The initial terms of these leases have expired, and the leases are now subject to terms not exceeding one year.

In accordance with the provisions of ASC Topic 842, because all of our leased properties are currently subject to leases not exceeding one year, we do not recognize any right-of-use assets or corresponding operating lease liability as of June 30, 2024.

No new right-of-use asset was recognized as a non-cash asset addition that resulted from new operating lease liabilities during the six months ended June 30, 2024.

Cash paid for amounts included in the present value of operating lease liabilities was $ 0.1 million during the six months ended June 30, 2024, and is included in operating cash flows within the condensed consolidated statement of cash flows.

Operating Lease Costs

Three Months Ended

Six Months Ended

(in thousands)

$ 29 $ 82 $ 114 $ 163

825 761 1,680 1,499

$ 854 $ 843 $ 1,794 $ 1,662

Lease Revenue

1 unchanged sentence

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

$ 2,501 $ 2,069 $ 4,492 $ 4,118

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

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

111 99 239 197

Total lease revenue

2 unchanged sentences

In the event that an independent contractor defaults on their lease, the Company generally leases the truck to another independent contractor.

As of March 31, 2024, the gross carrying value of trucks underlying these leases was $ 58.6 million and accumulated depreciation was $ 24.4 million.

As of June 30, 2024, the gross carrying value of trucks underlying these leases was $ 66.1 million and accumulated depreciation was $ 28.5 million.

Depreciation is calculated on a straight-line basis over the estimated useful life of the equipment, down to an estimated salvage value.

1 unchanged sentence

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 quarter ended March 31, 2024, the Company incurred $ 2.0 million of depreciation expense for these assets.

During the quarter ended June 30, 2024, the Company incurred $ 2.2 million of depreciation expense for these assets.

The Company leases dock space to a related party at our Laredo, Texas, terminal.

2 unchanged sentences

Lease Receivables

Future minimum operating lease payments receivable at March 31, 2024:

Future minimum operating lease payments receivable at June 30, 2024:

(in thousands)

3 unchanged sentences

NONCASH INVESTING AND FINANCING ACTIVITIES

The Company financed approximately $ 30.3 million in equipment purchases during the first three months of 2024 utilizing noncash financing.

The Company financed approximately $ 39.9 million in equipment purchases during the first six months of 2024 utilizing noncash financing.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

39 unchanged sentences

These aspects of our business are carefully managed, and efforts are continuously underway to achieve favorable results.

Truckload services revenues, excluding fuel surcharges, represented 63.5% and 64.7% of total revenues, excluding fuel surcharges, for the quarters ended March 31, 2024, and 2023, respectively.

Truckload services revenues, excluding fuel surcharges, represented 66.5% and 66.0% of total revenues, excluding fuel surcharges, for the quarters ended June 30, 2024, and 2023, respectively.

The remaining revenues, excluding fuel surcharges, were generated from brokerage and logistics services.

2 unchanged sentences

In discussing our results of operations, we use revenue, before fuel surcharge (and fuel expense, net of fuel surcharge), because management believes that eliminating the impact of this sometimes volatile source of revenue allows a more consistent basis for comparing our results of operations from period to period.

During the three months ended March 31, 2024 and 2023, approximately $21.6 million and $28.3 million, respectively, of the Company’s total revenue was generated from fuel surcharges.

During the three months ended June 30, 2024 and 2023, approximately $22.7 million and $25.3 million, respectively, of the Company’s total revenue was generated from fuel surcharges.

During the six months ended June 30, 2024 and 2023, approximately $44.4 million and $53.6 million, respectively, of the Company’s total revenue was generated from fuel surcharges.

We may also discuss certain changes in our expenses as a percentage of revenue, before fuel surcharge, rather than absolute dollar changes.

4 unchanged sentences

Three Months Ended

Six Months Ended

(percentages)

5 unchanged sentences

Insurance and claims

Loss (gain) on sale or disposal of property

(Gain)/loss on sale or disposal of property

Total operating expenses

Operating (loss)/income

Non-operating income

Non-operating income / (expense)

Interest expense

(Loss)/Income before income taxes

THREE MONTHS ENDED MARCH 31, 2024 VS.

THREE MONTHS ENDED MARCH 31, 2023

During the first quarter of 2024, truckload services revenue, before fuel surcharges, decreased by 18.4% to $102.2 million as compared to $125.2 million during the first quarter of 2023.

The decrease relates primarily to a 14.0% decrease in loaded miles travelled from 48.9 million for the first quarter of 2023 to 42.1 million for the first quarter of 2024 and to a 5.2% decrease in our rate per loaded mile, from $2.56 for the first quarter of 2023 to $2.43 for the first quarter of 2024.

The reduction in loaded miles was primarily driven by a 7.5% reduction in the average number of trucks operated combined with a 4.3% reduction in average miles driven by each truck for the first quarter of 2024 compared to the first quarter of 2023.

THREE MONTHS ENDED JUNE 30, 2024 VS.

THREE MONTHS ENDED JUNE 30, 2023

During the second quarter of 2024, truckload services revenue, before fuel surcharges, decreased 11.4% to $106.6 million as compared to $120.2 million during the second quarter of 2023.

The decrease relates primarily to a 9.3% decrease in total miles travelled from 50.5 million for the second quarter of 2023 to 45.8 million for the second quarter of 2024 and to a 3.7% decrease in our rate per mile, from $2.17 for the second quarter of 2023 to $2.09 for the second quarter of 2024.

The reduction in total mile s was primarily driven by a 4.0% reduction in the average number of trucks operated combined with a 5.5% reduction in average miles driven by each truck for the second quarter of 2024 compared to the second quarter of 2023.

The reduction in truck count and miles resulted from a less favorable freight market year over year, characterized by an oversupply of available trucks in the market compared to available freight.

Salaries, wages and benefits increased from 36.2% of revenues, before fuel surcharges, in the first quarter of 2023 to 40.5% of revenues, before fuel surcharges, during the first quarter of 2024.

This percentage-based increase relates primarily to an increase in the percentage of miles driven by company-employed drivers, as opposed to third-party owner-operators during the first quarter of 2024 compared to the first quarter of 2023.

In addition, the interaction of salaries and wages with fixed-cost characteristics combined with the year to year reduction in first quarter revenue, resulted in an increase in this category when measured as a percentage of revenue.

Operating supplies and expenses increased from 10.0% of revenues, before fuel surcharges, during the first quarter of 2023 to 12.4% of revenues, before fuel surcharges, during the first quarter of 2024.

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

The increase also relates to an increase in the average surcharge-adjusted fuel price paid per gallon of diesel fuel, due to decreased fuel surcharge collections from customers for the quarter ended March 31, 2024 compared to March 31, 2023.

Rent and purchased transportation decreased from 24.6% of revenues, before fuel surcharges, during the first quarter of 2023 to 22.2% of revenues, before fuel surcharges, during the first quarter of 2024.

The decrease was primarily due to a decrease in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers, as well as a decrease in the rates paid to third-party owner-operators for the quarter-ended March 31, 2024 compared to March 31, 2023.

Depreciation increased from 12.9% of revenues, before fuel surcharges, during the first quarter of 2023 to 18.3% of revenues, before fuel surcharges, during the first quarter of 2024.

Salaries, wages and benefits increased from 37.1% of revenues, before fuel surcharges, in the second quarter of 2023 to 38.6% of revenues, before fuel surcharges, during the second quarter of 2024.

This percentage-based increase is explained by the interaction of salaries and wages with fixed-cost characteristics combined with the year to year reduction in second quarter revenue resulting in a year to year increase in this category when measured as a percentage of revenue.

Rent and purchased transportation increased from 21.7% of revenues, before fuel surcharges, during the second quarter of 2023 to 26.7% of revenues, before fuel surcharges, during the second quarter of 2024.

The increase was primarily attributable to an increase in the proportion of miles driven by third-party carriers quarter over quarter, as the average number of third-party trucks increased from 367 during the second quarter of 2023 to 413 during the second quarter of 2024, while the average number of company trucks decreased from 2,061 to 1,920 during that same period.

Depreciation increased from 12.8% of revenues, before fuel surcharges, during the second quarter of 2023 to 17.3% of revenues, before fuel surcharges, during the second quarter of 2024.

The increase relates primarily to an increase in cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense.

Insurance and claims decreased from 12.3% of revenues, before fuel surcharges, during the first quarter 2023 to 4.7% of revenues, before fuel surcharges, during the first quarter 2024.

This decrease relates primarily to specific auto liability claims being settled in the latter half of 2023, and a reduction of the auto liability claims reserved in the first quarter of 2024, as compared to the first quarter of 2023.

While our claims reserve did decrease quarter over quarter, we still saw an increase in the rate per mile paid for auto liability insurance in the first quarter of 2024 compared to the first quarter of 2023.

Non-operating income increased from 0.6% of revenues, before fuel surcharges, during the first quarter of 2023 to 3.7% of revenues, before fuel surcharges, during the first quarter of 2024.

This increase resulted primarily from an increase in interest income recognized, combined with a larger increase in the market value of our marketable equity securities portfolio as of March 31, 2024 as compared to March 31, 2023.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased from 99.3% for the first quarter of 2023 to 104.2% for the first quarter of 2024.

Insurance and claims increased from 4.2% of revenues, before fuel surcharges, during the second quarter 2023 to 5.1% of revenues, before fuel surcharges, during the second quarter 2024.

This increase relates to a 12.8% increase in auto liability premiums paid in the second quarter of 2024 compared to the second quarter of 2023.

Interest expense increased from 1.4% of revenues, before fuel surcharges, during the second quarter of 2023 to 2.9% of revenues, before fuel surcharges, during the second quarter of 2024.

This increase is attributed to an increase in equipment note debt and to an increase in average borrowing rates from 3.49% during the second quarter of 2023 to 4.55% during the second quarter of 2024.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased from 92.7% for the second quarter of 2023 to 103.7% for the second quarter of 2024.

SIX MONTHS ENDED JUNE 30, 2024 VS.

SIX MONTHS ENDED JUNE 30, 2023

For the six months ended June 30, 2024, truckload services revenue, before fuel surcharges, decreased 15.0% to $208.8 million as compared to $245.4 million for the six months ended June 30, 2023.

The decrease relates primarily to a 11.1% decrease in total miles travelled from 101.1 million during the first six months of 2023 to 89.9 million for the first six months of 2024 and to a 4.1% decrease in our rate per mile, from $2.19 for the first six months of 2023 to $2.10 for the first six months of 2024.

The reduction in total mile s was primarily driven by a 5.9% reduction in the average number of trucks operated combined with a 5.5% reduction in average miles driven by each truck for the first half of 2024 compared to the second half of 2023.

The reduction in truck count and miles resulted from a less favorable freight market year over year, characterized by an oversupply of available trucks in the market compared to available freight.

Salaries, wages and benefits increased from 36.6% of revenues, before fuel surcharges, in the first six months of 2023 to 39.5% of revenues, before fuel surcharges, during the first six months of 2024.

This year to year percentage-based increase is explained by the interaction of salaries and wages with fixed-cost characteristics combined with the year to year reduction in revenue recognized during the first half of the year.

Depreciation increased from 12.9% of revenues, before fuel surcharges, during the first six months of 2023 to 17.8% of revenues, before fuel surcharges, during the first six months of 2024.

Insurance and claims expense decreased from 8.2% of revenues, before fuel surcharges, during the first six months of 2023 to 4.9% of revenues before fuel surcharges, during the first six months of 2024.

This decrease relates primarily to specific auto liability claims being settled in the latter half of 2023.

This decrease was partially offset by a 12.8% increase in auto liability premiums year over year.

Non-operating income increased from 0.7% of revenues, before fuel surcharges, during the first six months of 2023 to 1.8% of revenues, before fuel surcharges, during the first six months of 2024.

This increase resulted primarily from an increase in the market value of our marketable equity securities portfolio as of June 30, 2024 as compared to June 30, 2023.

Interest expense increased from 1.5% of revenues, before fuel surcharges, during the first six months of 2023 to 2.7% of revenues, before fuel surcharges, during the first six months of 2024.

This increase is attributed to an increase in equipment note debt and to an increase in average borrowing rates from 3.49% as of June 30, 2023 to 4.55% as of June 30, 2024.

The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased from 96.1% for the first six months of 2023 to 103.9% for the first six months of 2024.

RESULTS OF OPERATIONS – LOGISTICS AND BROKERAGE SERVICES

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Three Months Ended

Six Months Ended

(percentages)

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Income before income taxes

THREE MONTHS ENDED MARCH 31, 2024 VS.

THREE MONTHS ENDED MARCH 31, 2023

During the first quarter of 2024, logistics and brokerage services revenue, before fuel surcharges, decreased 13.9% to $58.8 million as compared to $68.3 million during the first quarter of 2023.

The decrease was primarily related to a 23.4% decrease in revenue per load, partially offset by a 12.4% increase in the number of loads during the first quarter 2024 as compared to 2023.

The decrease in revenue per load was due to a reduction in rates paid for brokered loads, as spot market rates were negatively impacted by downward rate pressure driven by the challenging truckload freight rate environment across our industry year to year.

Rents and purchased transportation increased from 82.4% of revenues, before fuel surcharges, during the first quarter of 2023 to 86.1% of revenues, before fuel surcharges, during the first quarter of 2024.

The increase results from paying third-party carriers a larger percentage of customer revenue, coupled with the interaction of a decrease in operating revenues with the need for purchased transportation.

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased from 88.8% for the first quarter of 2023 to 93.9% for the first quarter of 2024.

THREE MONTHS ENDED JUNE 30, 2024 VS.

THREE MONTHS ENDED JUNE 30, 2023

During the second quarter of 2024, logistics and brokerage services revenue, before fuel surcharges, decreased 13.3% to $53.7 million as compared to $61.9 million during the second quarter of 2023.

The decrease relates to a decrease in the average rates charged to customers, partially offset by an increase in the number of loads serviced during the second quarter of 2024 as compared to the second quarter of 2023.

Rents and purchased transportation increased from 84.4% of revenues, before fuel surcharges, during the second quarter of 2023 to 86.4% of revenues, before fuel surcharges, during the second quarter of 2024.

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

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased from 91.8% for the second quarter of 2023 to 93.9% for the second quarter of 2024.

SIX MONTHS ENDED JUNE 30, 2024 VS.

SIX MONTHS ENDED JUNE 30, 2023

During the first six months of 2024, logistics and brokerage services revenue, before fuel surcharges, decreased 13.6% to $112.4 million as compared to $130.1 million during the first six months of 2023.

The decrease relates to a decrease in the average rates charged to customers, partially offset by an increase in the number of loads serviced during the first six months of 2024 as compared to the first six months of 2023.

Rents and purchased transportation increased from 83.4% of revenues, before fuel surcharges, during the first six months of 2023 to 86.2% of revenues, before fuel surcharges, during the first six months of 2024.

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

The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased from 90.2% for the first six months of 2023 to 93.9% for the first six months of 2024.

RESULTS OF OPERATIONS – COMBINED SERVICES

THREE MONTHS ENDED MARCH 31, 2024 VS.

THREE MONTHS ENDED MARCH 31, 2023

Net income for all divisions was approximately $0.3 million, or 0.2% of revenues, before fuel surcharges, for the first quarter of 2024 as compared to net income of $5.2 million, or 2.7% of revenues, before fuel surcharges, for the first quarter of 2023.

The decrease in net income resulted in diluted earnings per share of $0.01 for the first quarter of 2024 as compared to diluted earnings per share of $0.23 for the first quarter of 2023.

THREE MONTHS ENDED JUNE 30, 2024 VS.

THREE MONTHS ENDED JUNE 30, 2023

In the second quarter of 2024, all divisions recognized a combined net loss of approximately $2.9 million, or 1.8% in excess of revenues, before fuel surcharges as compared to net income of $9.3 million, or 5.1% of revenues, before fuel surcharges for the second quarter of 2023.

The decrease in net income resulted in diluted loss per share of $(0.13) for the second quarter of 2024 as compared to diluted earnings per share of $0.42 for the second quarter of 2023.

SIX MONTHS ENDED JUNE 30, 2024 VS.

SIX MONTHS ENDED JUNE 30, 2023

For the first six months of 2024, all divisions recognized a combined net loss of approximately $2.6 million, or 0.8% in excess of revenues, before fuel surcharges as compared to net income of $14.6 million, or 3.8% of revenues, before fuel surcharges for the first six months of 2024.

The decrease in net income resulted in a diluted loss per share of $(0.12) for the first six months of 2024 as compared to diluted earnings per share of $0.65 for the first six months of 2023.

LIQUIDITY AND CAPITAL RESOURCES

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Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, and borrowings under our credit facilities, installment notes, and investment margin account.

During the first three months of 2024, we generated $9.6 million in cash from operating activities.

Investing activities used $9.8 million in cash in the first three months of 2024.

Financing activities used $20.4 million in cash in the first three months of 2024.

During the first six months of 2024, we generated $28.3 million in cash from operating activities.

Investing activities used $16.1 million in cash in the first six months of 2024.

Financing activities used $40.8 million in cash in the first six months of 2024.

Our primary use of funds is for the purchase of revenue equipment.

We typically use installment notes with fixed interest rates and terms ranging from 36 to 84 months, our existing line of credit on an interim basis, proceeds from the sale or trade of equipment, and cash flows from operations to finance capital expenditures and repay long-term debt.

During the first three months of 2024, we utilized cash on hand, installment notes, and our line of credit to finance purchases of revenue equipment and other assets of approximately $21.8 million.

During the remainder of 2024, we expect to purchase approximately 519 new trucks and 1,196 new trailers while continuing to sell or trade older equipment, which we expect to result in net capital expenditures of approximately $82.5 million.

During the first six months of 2024, we utilized cash on hand, our line of credit and long-term debt to finance purchases of revenue equipment and other assets of approximately $36.4 million.

During the remainder of 2024, we expect to purchase approximately 430 trucks and 1,000 trailers while continuing to sell or trade older equipment, which we expect to result in net capital expenditures of approximately $66.5 million.

On April 24, 2024, we commenced a tender offer to repurchase up to 550,000 shares of the Company’s outstanding common stock at a price of not greater than $18.00 nor less than $15.50 per share.

Following the expiration of the tender offer on May 22, 2024, we accepted 284,206 shares of our common stock for purchase at $18.00 per share, at an aggregate purchase price of approximately $5.1 million, excluding fees and expenses related to the offer.

The Company funded the purchase of the accepted shares tendered with available cash.

We currently intend to retain our future earnings to finance our growth and do not anticipate paying cash dividends in the foreseeable future.

During the first three months of 2024, we maintained a revolving line of credit.

Amounts outstanding under the line bear interest at Term SOFR plus 1.35% (6.68% at March 31, 2024), are secured by our trade accounts receivable and mature on July 1, 2026.

During the first six months of 2024, we maintained a revolving line of credit.

Amounts outstanding under the line bear interest at Term SOFR plus 1.35% (6.68% at June 30, 2024), are secured by our trade accounts receivable and mature on July 1, 2026.

An “unused fee” of 0.25% is charged if average borrowings are less than $18.0 million.

At March 31, 2024 outstanding advances on the line of credit were approximately $0.1 million, consisting of letters of credit, with availability to borrow $59.9 million.

Trade accounts receivable increased from $80.6 million at December 31, 2023 to $92.3 million at March 31, 2024.

The increase resulted from an increase in freight revenues, which flow through accounts receivable, coupled with the reduction of receivables held in suspense during the first quarter of 2024 as compared to the fourth quarter of 2023.

Prepaid expenses and deposits decreased from $13.2 million at December 31, 2023 to $10.8 million at March 31, 2024.

At June 30, 2024 outstanding advances on the line of credit were approximately $0.1 million, consisting of letters of credit, with availability to borrow $59.9 million.

Trade accounts receivable increased from $80.6 million at December 31, 2023 to $92.3 million at June 30, 2024.

The increase was a result of an increase in revenues, which flow through accounts receivable, during the final month of the quarter ending June 30, 2024 compared to the final month of the year ending December 31, 2023.

Additionally, the company’s cash suspense decreased during the first six months of 2024 as compared to the fourth quarter of 2023.

Prepaid expenses and deposits decreased from $13.2 million at December 31, 2023 to $9.4 million at June 30, 2024.

The decrease relates to the normal amortization of items prepaid as of December 31, 2023.

Revenue equipment decreased from $689.2 million at December 31, 2023 to $675.5 million at March 31, 2024.

The decrease is primarily due to the disposition of aging trucks and trailers during the first quarter of 2024, partially offset by purchases of new trucks and trailers during the first quarter of 2024.

Land increased from $23.1 million at December 31, 2023 to $36.5 million at March 31, 2024.

The increase is primarily due to the purchase of 16.23 acres in El Paso, TX that will serve as an additional terminal for our truckload operations.

Accounts payable decreased from $62.7 million at December 31, 2023 to $38.7 million at March 31, 2024.

This decrease was primarily attributable to payments made in the first quarter of 2024 on contracts for revenue equipment placed in service, but not yet paid for at December 31,2023.

There are no outstanding invoices for revenue equipment at March 31, 2024.

Revenue equipment decreased from $689.2 million at December 31, 2023 to $682.1 million at June 30, 2024.

The decrease is primarily due to the disposition of aging trucks and trailers during the first six months of 2024, partially offset by purchases of new trucks and trailers during the first six months of 2024.

Land increased from $23.1 million at December 31, 2023 to $30.4 million at June 30, 2024.

The increase is primarily due to the purchase of land in El Paso, Texas that will serve as an additional terminal for our truckload operations.

Accounts payable decreased from $62.7 million at December 31, 2023 to $40.0 million at June 30, 2024.

This decrease was primarily attributable to payments made in the first six months of 2024 on contracts for revenue equipment placed in service, but not yet paid for at December 31, 2023.

As of June 30, 2024, our accounts payable includes outstanding invoices for revenue equipment totaling $1.4 million.

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

Long-term debt and current maturities of long-term debt, on an aggregate basis, increased from $261.7 million at December 31, 2023 to $271.6 million at March 31, 2024.

The increase was primarily related to the financing of additional revenue equipment during the first quarter of 2024.

Long-term debt and current maturities of long-term debt, on an aggregate basis, increased from $261.7 million at December 31, 2023 to $266.0 million at June 30, 2024.

The increase was primarily related to the financing of additional revenue equipment during the first six months of 2024.

NEW ACCOUNTING PRONOUNCEMENTS

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

What changed 10-Q

Item 1. Financial Statements