What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-06 compared with 2024-08-06 · 183 added, 171 removed, 428 unchanged (45% of the section changed)

4 unchanged sentences

(in thousands, except share and per share data)

September 30,

Current assets:

47 unchanged sentences

22,364,120 and 22,317,671 shares issued;

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

21,782,534 and 22,021,341 shares outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

1 unchanged sentence

Treasury stock, at cost;

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

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

( 13,996 ) ( 8,736 )

11 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

OPERATING REVENUES:

7 unchanged sentences

Insurance and claims

(Gain)/Loss on disposition of equipment

Gain on disposition of equipment

Total operating expenses and costs

OPERATING (LOSS)/INCOME

OPERATING INCOME

NON-OPERATING INCOME

INTEREST EXPENSE

(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:

INCOME/(LOSS) BEFORE INCOME TAXES

FEDERAL AND STATE INCOME TAX EXPENSE/(BENEFIT):

Total federal and state income tax expense/(benefit)

NET INCOME/(LOSS)

INCOME/(LOSS) PER COMMON SHARE:

AVERAGE COMMON SHARES OUTSTANDING:

4 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

OPERATING ACTIVITIES:

Net Income/(Loss)

Net (loss)/income

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

3 unchanged sentences

(Gain)/loss on marketable equity securities

Loss (Gain) on sale or disposition of equipment

Gain on sale or disposition of equipment

Loss/(gain) on sale of marketable equity securities

Changes in operating assets and liabilities:

11 unchanged sentences

FINANCING ACTIVITIES:

Borrowings under lines of credit

Repayments under lines of credit

Borrowings under line of credit

Repayments under line of credit

Borrowings of long-term debt

3 unchanged sentences

Repurchases of common stock

Net cash (used in) / provided by financing activities

Net cash used in financing activities

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

20 unchanged sentences

Balance at June 30, 2024

Treasury stock repurchases

Restricted stock issued

Restricted stock net settlement

Stock based compensation

Balance at September 30, 2024

Shares / Amount

9 unchanged sentences

Balance at June 30, 2023

Treasury stock repurchases

Restricted stock issued

Restricted stock net settlement

Stock based compensation

Balance at September 30, 2023

See notes to condensed consolidated financial statements.

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited)

June 30, 2024

September 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 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.

Operating results for the nine -month period ended September 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.

RECENT ACCOUNTING PRONOUNCEMENTS

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

In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update (“ASU”) 2023 - 07, Improvements to Reportable Segment Disclosures (Topic 280 ).

ASU 2023 - 07 expands disclosures related to a public entity's reportable segment and requires more enhanced information about significant segment expenses, including in interim periods.

This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, using a retrospective approach.

Early adoption is permitted.

We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures.

In December 2023, the FASB issued Accounting Standards Update, (“ASU”) No.

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

2 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 June 30, 2024.

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

The Company considered the applicability and impact of ASU’s 2023 - 07, 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 September 30, 2024.

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

REVENUE RECOGNITION

28 unchanged sentences

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 June 30, 2024 and December 31, 2023.

June 30, 2024

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

September 30, 2024

December 31, 2023

1 unchanged sentence

Fair market value

$ 42,005 $ 43,203

27,492 30,294

Unrealized gain

$ 14,513 $ 12,909

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

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

September 30, 2024

December 31, 2023

1 unchanged sentence

Gross unrealized gains

$ 16,443 $ 15,539

Gross unrealized losses

Net unrealized gain

$ 14,513 $ 12,909

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.

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(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.

For the quarter ended September 30, 2024, the Company recognized dividend income of approximately $ 356,000 in non-operating income in its condensed consolidated statements of operations.

For the nine months ended September 30, 2024, the Company recognized dividend income of approximately $ 1,104,000 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 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 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.

As of September 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 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 $ 2,365,000 during the third quarter of 2024, and a net unrealized pre-tax gain in market value of approximately $ 119,000 during the third quarter of 2023, which were reported as non-operating income in its condensed consolidated statements of operations for the respective periods.

STOCK-BASED COMPENSATION

9 unchanged sentences

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.

The total grant date fair value of stock vested during the first nine months of 2024 was approximately $ 928,000 .

The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first nine months of 2024, was approximately $ 550,000 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 $ 0.02 during the first nine months of 2024.

As of September 30, 2024, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 1,536,000 , which is being amortized on a straight-line basis over the remaining vesting period.

As a result, the Company expects to recognize approximately $ 186,000 in additional compensation expense related to unvested stock awards during the remainder of 2024 and to recognize approximately $ 741,000 , $ 476,000 , and $ 133,000 in additional compensation expense related to unvested stock awards during the years 2025, 2026, and 2027, respectively.

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:

The total grant date fair value of stock vested during the first nine months of 2023 was approximately $ 576,000 .

The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first nine months of 2023, was approximately $ 387,000 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 nine months of 2023.

As of September 30, 2023, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 2,687,000 , 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 restricted stock as of September 30, 2024, and changes during the nine months ended September 30, 2024, is as follows:

Restricted Stock

Average Grant

1 unchanged sentence

Non-vested at January 1, 2024

198,859 $ 14.07

Unrestricted Shares Issued

Canceled/forfeited/expired

( 21,351 ) 25.74

Non-vested at June 30, 2024

179,638 $ 12.73

Non-vested at September 30, 2024

SEGMENT INFORMATION

3 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Truckload Services revenue

$ 106,554 66.5 $ 120,226 66.0 $ 208,754 65.0 $ 245,424 65.4

Brokerage and Logistics Services revenue

53,659 33.5 61,856 34.0 112,428 35.0 130,112 34.6

Total revenues

$ 160,213 100.0 $ 182,082 100.0 $ 321,182 100.0 $ 375,536 100.0

TREASURY STOCK

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.

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.

During the nine months ended September 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 September 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 June 30, 2024, 581,586 shares were held in the treasury at an aggregate cost of approximately $ 13,995,000 .

As of September 30, 2024, 581,586 shares were held in the treasury at an aggregate cost of approximately $ 13,996,000 .

EARNINGS PER SHARE

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands, except per share data)

Net (Loss)/Income

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

Basic weighted average common shares outstanding

21,932 22,036 21,981 22,092

Dilutive effect of common stock equivalents

Diluted weighted average common shares outstanding

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

Basic (loss)/earnings per share

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

Diluted (loss)/earnings per share

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

Basic earnings per share

Diluted earnings per share

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

3 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 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.

As of September 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 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.

As of September 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 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.

During the nine months ended September 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 23.8 % and 27.0 % for the nine months ended September 30, 2024 and 2023, respectively.

Our effective tax rate for the nine months ended September 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 June 30, 2024, the following items are measured at fair value on a recurring basis:

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

(in thousands)

Marketable equity securities

$ 42,005 $ 42,005 - -

The Company’s investments in marketable securities are recorded at fair value based on quoted market prices.

2 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 June 30, 2024 was as follows:

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

(in thousands)

Long-term debt

$ 266,021 $ 253,993

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

NOTES PAYABLE

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.

During the first nine months of 2024, the Company’s subsidiaries entered into installment obligations totaling approximately $ 75.0 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 was party to operating leases that included initial terms ranging from three to five years.

The Company is 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.

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

Cash paid for amounts included in the present value of operating lease liabilities was $ 0.1 million during the nine months ended September 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

Nine Months Ended

September 30,

(in thousands)

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

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

As of September 30, 2024, the gross carrying value of trucks underlying these leases was $ 66.6 million and accumulated depreciation was $ 28.7 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 June 30, 2024, the Company incurred $ 2.2 million of depreciation expense for these assets.

During the quarter ended September 30, 2024, the Company incurred $ 2.0 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 June 30, 2024:

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

(in thousands)

3 unchanged sentences

NONCASH INVESTING AND FINANCING ACTIVITIES

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

The Company financed approximately $ 75.0 million in equipment purchases during the first nine 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 66.5% and 66.0% of total revenues, excluding fuel surcharges, for the quarters ended June 30, 2024, and 2023, respectively.

Truckload services revenues, excluding fuel surcharges, represented 68.8% and 64.4% of total revenues, excluding fuel surcharges, for the quarters ended September 30, 2024, and 2023, respectively.

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

1 unchanged sentence

Currently, our most challenging costs include fuel, driver recruitment, training, wage and benefits costs, independent broker costs (which we record as purchased transportation), insurance, maintenance and capital equipment costs.

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 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.

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 often-volatile source of revenue allows a more consistent basis for comparing our results of operations from period to period.

During the three months ended September 30, 2024 and 2023, approximately $21.8 million and $27.2 million, respectively, of the Company’s total revenue was generated from fuel surcharges.

During the nine months ended September 30, 2024 and 2023, approximately $66.1 million and $80.8 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

Nine Months Ended

September 30,

(percentages)

5 unchanged sentences

Insurance and claims

(Gain)/loss on sale or disposal of property

Gain on sale or disposal of property

Total operating expenses

Operating (loss)/income

Non-operating income / (expense)

Non-operating income

Interest expense

(Loss)/Income before income taxes

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 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.

Income/(loss) before income taxes

THREE MONTHS ENDED SEPTEMBER 30, 2024 VS.

THREE MONTHS ENDED SEPTEMBER 30, 2023

During the third quarter of 2024, truckload services revenue, before fuel surcharges, decreased 1.5% to $110.6 million as compared to $112.3 million during the third quarter of 2023.

The decrease relates primarily to a 1.5% decrease in total miles travelled from 47.2 million for the third quarter of 2023 to 46.5 million for the third quarter of 2024 and to a 2.0% decrease in our rate per mile, from $2.14 for the third quarter of 2023 to $2.10 for the third quarter of 2024.

The reduction in total miles was primarily driven by a 1.6% reduction in average miles driven by each truck combined with a 1.4% reduction in the average number of trucks operated during the third quarter of 2024 compared to the third quarter of 2023.

Operating supplies and expenses decreased from 13.3% of revenues, before fuel surcharges, during the third quarter of 2023 to 11.7% of revenues, before fuel surcharges, during the third quarter of 2024.

The decrease relates primarily to a reduction in repair and tire expenses, which is a result of introducing new, more reliable revenue equipment to our fleet, while retiring older, less-reliable revenue equipment.

The decrease can also be partially attributed to a decrease in truck count from the third quarter of 2023 to the third quarter of 2024.

Rent and purchased transportation increased from 22.6% of revenues, before fuel surcharges, during the third quarter of 2023 to 26.7% of revenues, before fuel surcharges, during the third 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 326 during the third quarter of 2023 to 481 during the third quarter of 2024, while the average number of company trucks decreased from 2,007 to 1,820 during that same period.

Depreciation increased from 13.6% of revenues, before fuel surcharges, during the third quarter of 2023 to 15.8% of revenues, before fuel surcharges, during the third 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 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.

Non-operating income improved from 1.0% of revenues, before fuel surcharges, during the third quarter of 2023 to 3.3% of revenues, before fuel surcharges, during the third quarter of 2024.

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

Interest expense increased from 1.4% of revenues, before fuel surcharges, during the third quarter of 2023 to 2.5% of revenues, before fuel surcharges, during the third quarter of 2024.

This increase is attributed to an increase in equipment note debt and to an increase in average borrowing rates from 3.66% during the third quarter of 2023 to 4.73% during the third quarter of 2024.

NINE MONTHS ENDED SEPTEMBER 30, 2024 VS.

NINE MONTHS ENDED SEPTEMBER 30, 2023

For the nine months ended September 30, 2024, truckload services revenue, before fuel surcharges, decreased 10.7% to $319.4 million as compared to $357.7 million for the nine months ended September 30, 2023.

The decrease relates primarily to an 8.0% decrease in total miles travelled from 148.3 million during the first nine months of 2023 to 136.4 million for the first nine months of 2024 and to a 3.4% decrease in our rate per mile, from $2.17 for the first nine months of 2023 to $2.10 for the first nine months of 2024.

The reduction in total miles was primarily driven by a 4.2% reduction in the average number of trucks operated combined with a 4.5% reduction in average miles driven by each truck during the first nine month of 2024 compared to the first nine months 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.

Salaries, wages and benefits increased from 37.2% of revenues, before fuel surcharges, in the first nine months of 2023 to 39.0% of revenues, before fuel surcharges, during the first nine months of 2024.

Rent and purchased transportation increased from 23.0% of revenues, before fuel surcharges, during the first nine months of 2023 to 25.3% of revenues, before fuel surcharges, during the first nine months of 2024.

The increase was primarily attributable to an increase in the proportion of miles driven by third-party carriers year over year.

The average number of third-party trucks utilized increased from 360 during the first nine months of 2023 to 455 during the first nine months of 2024, while the average number of company trucks decreased from 2,038 to 1,842 during that same period.

Depreciation increased from 13.1% of revenues, before fuel surcharges, during the first nine months of 2023 to 17.1% of revenues, before fuel surcharges, during the first nine 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.

Insurance and claims expense decreased from 7.0% of revenues, before fuel surcharges, during the first nine months of 2023 to 4.7% of revenues before fuel surcharges, during the first nine 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.

Non-operating income increased from 0.8% of revenues, before fuel surcharges, during the first nine months of 2023 to 2.3% of revenues, before fuel surcharges, during the first nine months of 2024.

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

Interest expense increased from 1.5% of revenues, before fuel surcharges, during the first nine months of 2023 to 2.6% of revenues, before fuel surcharges, during the first nine months of 2024.

This increase is attributed to an increase in equipment note debt and to an increase in average borrowing rates from 3.66% as of September 30, 2023 to 4.73% as of September 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 96.0% for the first nine months of 2023 to 102.8% for the first nine months of 2024.

RESULTS OF OPERATIONS – LOGISTICS AND BROKERAGE SERVICES

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(percentages)

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Operating income

Non-operating income

Non-operating income / (expense)

Interest expense

Income before income taxes

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.

THREE MONTHS ENDED SEPTEMBER 30, 2024 VS.

THREE MONTHS ENDED SEPTEMBER 30, 2023

During the third quarter of 2024, logistics and brokerage services revenue, before fuel surcharges, decreased 19.2% to $50.2 million as compared to $62.1 million during the third quarter of 2023.

The decrease relates to a reduction in the average rates charged to customers year to year, as the truckload market continues to be negatively impacted by downward rate pressure driven by the challenging truckload rate environment.

Rents and purchased transportation increased from 85.7% of revenues, before fuel surcharges, during the third quarter of 2023 to 86.8% of revenues, before fuel surcharges, during the third 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 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 93.3% for the third quarter of 2023 to 94.3% for the third quarter of 2024.

NINE MONTHS ENDED SEPTEMBER 30, 2024 VS.

NINE MONTHS ENDED SEPTEMBER 30, 2023

During the first nine months of 2024, logistics and brokerage services revenue, before fuel surcharges, decreased 15.4% to $162.6 million as compared to $192.2 million during the first nine months of 2023.

Rents and purchased transportation increased from 84.1% of revenues, before fuel surcharges, during the first nine months of 2023 to 86.4% of revenues, before fuel surcharges, during the first nine 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.

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 91.2% for the first nine months of 2023 to 94.0% for the first nine months of 2024.

RESULTS OF OPERATIONS – COMBINED SERVICES

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.

THREE MONTHS ENDED SEPTEMBER 30, 2024 VS.

THREE MONTHS ENDED SEPTEMBER 30, 2023

Net income for all divisions was approximately $2.4 million, or 1.5% of revenues, before fuel surcharges for the third quarter of 2024 as compared to net income of $6.1 million, or 3.5% of revenues, before fuel surcharges for the third quarter of 2023.

The decrease in net income resulted in diluted earnings per share of $0.11 for the third quarter of 2024 as compared to diluted earnings per share of $0.28 for the third quarter of 2023.

NINE MONTHS ENDED SEPTEMBER 30, 2024 VS.

NINE MONTHS ENDED SEPTEMBER 30, 2023

For the first nine months of 2024, all divisions recognized a combined net loss of approximately $0.2 million, or 0.1% in excess of revenues, before fuel surcharges as compared to net income of $20.6 million, or 3.8% of revenues, before fuel surcharges for the first nine months of 2024.

The decrease in net income resulted in a diluted loss per share of $(0.01) for the first nine months of 2024 as compared to diluted earnings per share of $0.93 for the first nine 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 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.

During the first nine months of 2024, we generated $43.8 million in cash from operating activities.

Investing activities used $54.9 million in cash in the first nine months of 2024.

Financing activities used $41.4 million in cash in the first nine 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 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 first nine 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 $124.4 million.

During the remainder of 2024, we expect to purchase approximately 232 trucks and 400 trailers while continuing to sell or trade older equipment, which we expect to result in net capital expenditures of approximately $18.9 million.

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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 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.

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

Amounts outstanding under the line bear interest at Term SOFR plus 1.85% (7.18% at September 30, 2024), are secured by our trade accounts receivable and mature on July 1, 2027.

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

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.

At September 30, 2024 we had no outstanding borrowings against the line of credit and approximately $0.1 million of outstanding letters of credit, with availability to borrow $59.9 million.

Trade accounts receivable increased from $80.6 million at December 31, 2023 to $93.7 million at September 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 September 30, 2024 compared to the final month of the year ending December 31, 2023.

Additionally, the company’s cash suspense decreased during the first nine 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 $9.5 million at September 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 $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.

Revenue equipment increased from $689.2 million at December 31, 2023 to $726.2 million at September 30, 2024.

The increase is primarily due to the purchase of new trucks and trailers during the first nine months of 2024, partially offset by the disposition of aging trucks and trailers during the first nine months of 2024.

Land increased from $23.1 million at December 31, 2023 to $30.4 million at September 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.

Accounts payable decreased from $62.7 million at December 31, 2023 to $37.9 million at September 30, 2024.

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

As of September 30, 2024, our accounts payable includes outstanding invoices for revenue equipment totaling $0.9 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 $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.

Long-term debt and current maturities of long-term debt, on an aggregate basis, increased from $261.7 million at December 31, 2023 to $288.7 million at September 30, 2024.

The increase was primarily related to the financing of additional revenue equipment during the first nine 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