What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 88 added, 54 removed, 395 unchanged (26% of the section changed)

5 unchanged sentences

although in management’s opinion, the disclosures are adequate so that the information presented is not misleading.

Operating results for the three-month period ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the three-month and six-month periods ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

In the opinion of management, the information set forth in the accompanying consolidated condensed balance sheets is fairly stated in all material respects in relation to the consolidated balance sheets from which it has been derived.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands, except per share amounts) 2021 2020 2021 2020

(Unaudited) (Unaudited)

Operating revenues $ 649,814 $ 568,959 $ 1,266,260 $ 1,161,662

14 unchanged sentences

Interest income ( 334 ) ( 377 ) ( 631 ) ( 1,003 )

Gain on equity investment ( 20,191 ) — ( 20,191 ) —

Other 54 23 96 68

Total other expense (income) ( 19,770 ) 807 ( 19,187 ) 1,817

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(In thousands) 2021 2020 2021 2020

(Unaudited) (Unaudited)

Net income $ 72,032 $ 39,132 $ 118,524 $ 62,190

7 unchanged sentences

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except share amounts) March 31,

(In thousands, except share amounts) June 30,

2021 December 31,

20 unchanged sentences

Accrued expenses 25,972 25,032

Income taxes payable 19,226 7,824

Other current liabilities 20,107 28,208

20 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In thousands) 2021 2020

8 unchanged sentences

Other 842 11,036

Gains on investment in equity securities ( 20,191 ) —

Changes in certain working capital items:

12 unchanged sentences

Repayments of short-term debt ( 25,000 ) ( 75,000 )

Proceeds from issuance of short-term debt 5,000 —

Repayments of long-term debt — ( 50,000 )

Proceeds from issuance of long-term debt 120,000 —

Dividends on common stock ( 12,906 ) ( 12,450 )

1 unchanged sentence

Tax withholding related to net share settlements of restricted stock awards ( 3,740 ) ( 3,935 )

Net cash used in financing activities ( 40,361 ) ( 68,960 )

Net cash provided by (used in) financing activities 77,847 ( 150,183 )

Effect of exchange rate fluctuations on cash 88 ( 1,995 )

2 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 192,128 $ 65,389

$ 83,130 $ 79,261

Supplemental disclosures of cash flow information:

7 unchanged sentences

Dividends accrued but not yet paid at end of period 8,151 6,219

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the Consolidated Balance Sheets

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents $ 83,130 $ 72,237

Restricted cash included in other current assets — 7,024

Total cash, cash equivalents and restricted cash $ 83,130 $ 79,261

See Notes to Consolidated Financial Statements (Unaudited).

18 unchanged sentences

BALANCE, March 31, 2021 805 114,588 1,478,616 ( 23,098 ) ( 343,181 ) 1,227,730

Comprehensive income — 72,032 2,225 — 74,257

Dividends on common stock ($ 0.12 per share)

— — ( 8,151 ) — — ( 8,151 )

Equity compensation activity, 13,725 shares

— ( 266 ) — — 266 —

Non-cash equity compensation expense — 2,747 — — — 2,747

BALANCE, June 30, 2021 $ 805 $ 117,069 $ 1,542,497 $ ( 20,873 ) $ ( 342,915 ) $ 1,296,583

BALANCE, December 31, 2019 $ 805 $ 112,649 $ 1,294,608 $ ( 14,728 ) $ ( 282,326 ) $ 1,111,008

8 unchanged sentences

BALANCE, March 31, 2020 805 110,695 1,311,448 ( 30,218 ) ( 290,694 ) 1,102,036

Comprehensive income — — 39,132 306 — 39,438

Dividends on common stock ($ 0.09 per share)

— — ( 6,219 ) — — ( 6,219 )

Equity compensation activity, 10,297 shares

— ( 199 ) — — 194 ( 5 )

Non-cash equity compensation expense — 1,138 — — — 1,138

BALANCE, June 30, 2020 $ 805 $ 111,634 $ 1,344,361 $ ( 29,912 ) $ ( 290,500 ) $ 1,136,388

See Notes to Consolidated Financial Statements (Unaudited).

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Truckload Transportation Services $ 491,200 $ 445,053 $ 954,149 $ 909,916

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

United States $ 602,146 $ 516,425 1,157,385 1,046,496

4 unchanged sentences

A receivable is an unconditional right to consideration and is recognized when shipments have been completed and the related performance obligation has been fully satisfied.

At March 31, 2021 and December 31, 2020, the accounts receivable, trade, net, balance was $ 347.9 million and $ 341.1 million, respectively.

At June 30, 2021 and December 31, 2020, the accounts receivable, trade, net, balance was $ 391.1 million and $ 341.1 million, respectively.

Contract assets represent a conditional right to consideration in exchange for goods or services and are transferred to receivables when the rights become unconditional.

At March 31, 2021 and December 31, 2020, the balance of contract assets was $ 8.9 million and $ 6.9 million, respectively.

At June 30, 2021 and December 31, 2020, the balance of contract assets was $ 8.9 million and $ 6.9 million, respectively.

We have recognized contract assets within the other current assets financial statement caption on the balance sheet.

1 unchanged sentence

Contract liabilities represent advance consideration received from customers and are recognized as revenues over time as the related performance obligation is satisfied.

The balance of contract liabilities was $ 1.7 million as of March 31, 2021 and $ 1.5 million as of December 31, 2020.

The amount of revenues recognized in the three months ended March 31, 2021 that was included in the December 31, 2020 contract liability balance was $ 1.5 million.

The balance of contract liabilities was $ 2.0 million as of June 30, 2021 and $ 1.5 million as of December 31, 2020.

The amount of revenues recognized in the six months ended June 30, 2021 that was included in the December 31, 2020 contract liability balance was $ 1.5 million.

We have recognized contract liabilities within the accounts payable and other current liabilities financial statement captions on the balance sheet.

4 unchanged sentences

transit times generally average approximately 3 days.

During the three months ended March 31, 2021 and March 31, 2020, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material.

During the six months ended June 30, 2021 and June 30, 2020, revenues recognized from performance obligations related to prior periods (for example, due to changes in transaction price) were not material.

We have entered into operating leases primarily for real estate.

7 unchanged sentences

Lease expense is reported in rent and purchased transportation on the consolidated statements of income.

The following table presents information about the amount, timing and uncertainty of cash flows arising from our operating leases as of March 31, 2021.

(In thousands) March 31, 2021

The following table presents information about the amount, timing and uncertainty of cash flows arising from our operating leases as of June 30, 2021.

(In thousands) June 30, 2021

Maturity of Lease Liabilities

12 unchanged sentences

Weighted-average discount rate for operating leases 3.18 %

During the three months ended March 31, 2021 and March 31, 2020, right-of-use assets of $ 0.5 million and $ 0.9 million, respectively, were recognized as non-cash asset additions that resulted from new operating lease liabilities.

Cash paid for amounts included in the present value of operating lease liabilities was $ 0.9 million and $ 1.0 million for the three months ended March 31, 2021 and March 31, 2020, respectively, and is included in operating cash flows.

During the six months ended June 30, 2021 and June 30, 2020, right-of-use assets of $ 2.1 million and $ 1.5 million, respectively, were recognized as non-cash asset additions that resulted from new operating lease liabilities.

Cash paid for amounts included in the present value of operating lease liabilities was $ 1.9 million and $ 2.1 million for the six months ended June 30, 2021 and June 30, 2020, respectively, and is included in operating cash flows.

Operating Lease Expense

Operating lease expense was $ 3.6 million and $ 2.0 million for the three months ended March 31, 2021 and March 31, 2020, respectively.

This expense included $ 1.0 million for the three months ended March 31, 2021 and March 31, 2020 for long-term operating leases, with the remainder for variable and short-term lease expense .

Operating lease expense was $ 3.5 million and $ 7.1 million for the three and six months ended June 30, 2021, respectively, and $ 2.1 million and $ 4.1 million for the three and six months ended June 30, 2020, respectively.

This expense included $ 1.0 million and $ 2.0 million for the three and six months ended June 30, 2021, respectively, and $ 0.9 million and $ 1.9 million for the three and six months ended June 30, 2020, respectively, for long-term operating leases, with the remainder for variable and short-term lease expense .

Lessor Operating Leases

1 unchanged sentence

We recognize revenue for such leases on a straight-line basis over the term of the lease.

Revenues were $ 3.1 million and $ 3.3 million for the three months ended March 31, 2021 and March 31, 2020, respectively.

The following table presents information about the maturities of these operating leases as of March 31, 2021.

(In thousands) March 31, 2021

Revenues were $ 3.0 million and $ 6.1 million for the three and six months ended June 30, 2021, respectively, and $ 3.0 million and $ 6.3 million for the three and six months ended June 30, 2020, respectively.

The following table presents information about the maturities of these operating leases as of June 30, 2021.

(In thousands) June 30, 2021

2021 (remaining) $ 5,788

7 unchanged sentences

This investment is being accounted for under ASC 321, Investments - Equity Securities and is recorded in other noncurrent assets on the consolidated balance sheet.

As of March 31, 2021, no events have occurred that would indicate that the value of our investment in MLSI has changed.

As of June 30, 2021, no events have occurred that would indicate that the value of our investment in MLSI has changed.

Investment in TuSimple

On January 8, 2021, we made a $ 5.0 million equity investment in TuSimple, an autonomous trucking technology company.

Our interest, which represents less than 1%, is being accounted for under ASC 321, Investments - Equity Securities and is recorded in other noncurrent assets on the consolidated balance sheet.

As of March 31, 2021, no events have occurred that would indicate that the value of our investment in TuSimple has changed.

Subsequent Event

TuSimple completed its initial public offering in April 2021.

Upon completion, our equity investment was converted to Class A common shares.

We will record future changes in the value of our investment, based on the share price reported by Nasdaq, in other expense (income) on the consolidated statements of income.

On January 8, 2021, we made a $ 5.0 million equity investment in TuSimple, an autonomous technology company.

Upon completion of TuSimple’s initial public offering in April 2021, our equity investment was converted to Class A common shares.

Our interest, which represents an ownership percentage of less than 1%, is being accounted for under ASC 321, Investments - Equity Securities and is recorded in other noncurrent assets on the consolidated balance sheet.

We record changes in the value of our investment, based on the share price reported by Nasdaq, in other expense (income) on the consolidated statements of income.

In the three and six months ended June 30, 2021, we recognized a $20.2 million unrealized gain on our investment.

As of June 30, 2021, the fair value of our investment was $25.2 million.

(5) Credit Facilities

As of March 31, 2021, we had unsecured committed credit facilities with two banks.

On June 30, 2021, we amended our existing credit agreement, dated May 14, 2019, with BMO Harris Bank N.A.

The amendment added an unsecured fixed-rate term loan commitment not to exceed a principal amount of $100.0 million and increased our borrowing capacity with BMO Harris Bank N.A.

from $200.0 million to $300.0 million.

The outstanding principal balance of the term loan shall bear interest at a fixed rate of 1.28%.

As of June 30, 2021, we had unsecured committed credit facilities with two banks, as well as the new term loan commitment described above with one of these banks.

We had with Wells Fargo Bank, N.A.

a $ 300.0 million credit facility which will expire on May 14, 2024 .

We also had a $ 200.0 million credit facility with BMO Harris Bank N.A., which will expire on May 14, 2024 .

Borrowings under these credit facilities bear variable interest based on the London Interbank Offered Rate (“LIBOR”).

As of March 31, 2021 and December 31, 2020, our outstanding debt totaled $ 175.0 million and $ 200.0 million, respectively.

We had $ 25.0 million outstanding under the credit facilities at a variable interest rate of 0.78 % as of March 31, 2021.

We also had a $ 200.0 million credit facility with BMO Harris Bank N.A., which will expire on May 14, 2024 , and a $100.0 million term loan with quarterly principal payments of $ 1.25 million beginning September 30, 2021 and a final payment of principal and interest due and payable on May 14, 2024 .

Borrowings under these credit facilities bear variable interest based on the London Interbank Offered Rate (“LIBOR”), and the term loan has a fixed interest rate.

As of June 30, 2021 and December 31, 2020, our outstanding debt totaled $ 300.0 million and $ 200.0 million, respectively.

Under the credit facilities as of June 30, 2021, we had $ 50.0 million outstanding at a weighted average variable interest rate of 0.77 % and $ 100.0 million outstanding at a fixed interest rate of 1.28 %.

We had (i) an additional $ 75.0 million outstanding under the Wells Fargo Bank, N.A.

credit facility at a variable rate of 0.78 % as of March 31, 2021, which is effectively fixed at 2.32 % with an interest rate swap agreement through May 14, 2024 and (ii) an additional $ 75.0 million outstanding under the BMO Harris Bank N.A.

credit facility at a variable rate of 0.81 % as of March 31, 2021, which is effectively fixed at 2.36 % with an interest rate swap agreement through May 14, 2024 .

The $ 500.0 million of borrowing capacity under our credit facilities at March 31, 2021, is further reduced b y $ 50.9 million in stand-by letters of credit under which we are obligated.

Each of the debt agreements includes, among other things, financial covenants requiring us (i) to exceed a minimum ratio of earnings before interest, income taxes, depreciation and amortization to interest expense and/or (ii) not to exceed a maximum ratio of total funded debt to earnings before interest, income taxes, depreciation and amortization (as such terms are defined in each credit facility).

At March 31, 2021, we were in compliance with these covenants.

At March 31, 2021, the aggregate future maturities of long-term debt by year are as follows (in thousands):

credit facility at a variable rate of 0.76 % as of June 30, 2021, which is effectively fixed at 2.32 % with an interest rate swap agreement through May 14, 2024 and (ii) an additional $ 75.0 million outstanding under the BMO Harris Bank N.A.

credit facility at a variable rate of 0.79 % as of June 30, 2021, which is effectively fixed at 2.36 % with an interest rate swap agreement through May 14, 2024 .

The $ 600.0 million of borrowing capacity under our credit arrangements at June 30, 2021, is further reduced b y $ 50.9 million in stand-by letters of credit under which we are obligated.

Each of the debt agreements includes, among other things, financial covenants requiring us (i) to exceed a minimum ratio of

earnings before interest, income taxes, depreciation and amortization to interest expense and/or (ii) not to exceed a maximum ratio of total funded debt to earnings before interest, income taxes, depreciation and amortization (as such terms are defined in each credit facility).

At June 30, 2021, we were in compliance with these covenants.

At June 30, 2021, the aggregate future maturities of long-term debt by year are as follows (in thousands):

Total $ 300,000

1 unchanged sentence

(6) Commitments and Contingencies

As of March 31, 2021, we have committed to property and equipment purchases of approximately $ 164.4 million .

As of June 30, 2021, we have committed to property and equipment purchases of approximately $ 269.8 million .

We are involved in certain claims and pending litigation, including those described herein, arising in the ordinary course of business.

8 unchanged sentences

Under the Company’s insurance policies in effect on the date of this accident, the Company’s maximum liability for this accident is $ 10.0 million (plus pre-judgment and post-judgment interest) with premium-based coverage that exceeds the jury verdict amount.

As a result of this jury verdict, the Company had recorded a liability of $ 24.9 million as of March 31, 2021, and $ 23.6 million as of December 31, 2020.

Under the terms of the Company’s insurance policies, the Company is the primary obligor of the verdict, and as such, the Company has also recorded a $ 79.2 million receivable from its third-party insurance providers in other non-current assets and a corresponding liability of the same amount in the long-term portion of insurance and claims accruals in the consolidated balance sheets as of March 31, 2021 and December 31, 2020.

As a result of this jury verdict, the Company had recorded a liability of $ 26.2 million as of June 30, 2021, and $ 23.6 million as of December 31, 2020.

The Company is pursuing an appeal of this verdict.

5 unchanged sentences

As a result of various post-trial motions, the court awarded $ 0.5 million to the plaintiffs for attorney fees and costs.

As of March 31, 2021, we had accrued for the jury’s award, attorney fees and costs in the short break matter and had not accrued for the sleeper berth matter.

Plaintiffs appealed the post-verdict amounts awarded by the trial court for fees, costs and liquidated damages, and the Company filed a cross appeal on the verdict that was in plaintiffs’ favor.

3 unchanged sentences

On July 21, 2020, Plaintiffs’ counsel filed a notice of appeal of that dismissal.

As of June 30, 2021, we

have an accrual for the jury’s award, attorney fees and costs in the short break matter and had not accrued for the sleeper berth matter.

We are also involved in certain class action litigation in which the plaintiffs allege claims for failure to provide meal and rest breaks, unpaid wages, unauthorized deductions and other items.

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Net income $ 72,032 $ 39,132 $ 118,524 $ 62,190

11 unchanged sentences

The maximum aggregate number of shares that may be awarded to any one person in any one calendar year under the Equity Plan is 500,000 .

As of March 31, 2021, there were 6,537,930 shares available for granting additional awards.

As of June 30, 2021, there were 6,534,087 shares available for granting additional awards.

Equity compensation expense is included in salaries, wages and benefits within the Consolidated Statements of Income.

As of March 31, 2021, the total unrecognized compensation cost related to non-vested equity compensation awards was approximately $ 16.1 million and is expected to be recognized over a weighted average period of 2.0 years.

As of June 30, 2021, the total unrecognized compensation cost related to non-vested equity compensation awards was approximately $ 15.7 million and is expected to be recognized over a weighted average period of 1.9 years.

The following table summarizes the equity compensation expense and related income tax benefit recognized in the Consolidated Statements of Income (in thousands):

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Restricted awards:

17 unchanged sentences

The restricted awards do not confer any voting or dividend rights to recipients until such shares vest and do not have any post-vesting sales restrictions.

The following table summarizes restricted award activity for the three months ended March 31, 2021:

The following table summarizes restricted award activity for the six months ended June 30, 2021:

thousands) Weighted

8 unchanged sentences

Cash settled restricted stock units are recorded as a liability within the Consolidated Balance Sheets and are adjusted to fair value each reporting period.

The total fair value of previously granted restricted awards vested during the three-month periods ended March 31, 2021 and March 31, 2020 was $ 4.5 million and $ 2.9 million , respectively.

The total fair value of previously granted restricted awards vested during the six-month periods ended June 30, 2021 and June 30, 2020 was $ 5.1 million and $ 3.4 million , respectively.

We withheld shares based on the closing stock price on the vesting date to settle the employees’ statutory obligation for the applicable income and other employment taxes.

4 unchanged sentences

The performance awards do not confer any voting or dividend rights to recipients until such shares vest and do not have any post-vesting sales restrictions.

The following table summarizes performance award activity for the three months ended March 31, 2021:

The following table summarizes performance award activity for the six months ended June 30, 2021:

thousands) Weighted

12 unchanged sentences

Our estimate of future dividends is based on the most recent quarterly dividend rate at the time of grant, adjusted for any known future changes in the dividend rate.

The vesting date fair value of performance awards that vested during the three-month periods ended March 31, 2021 and March 31, 2020 was $ 4.1 million and $ 5.8 million, respectively.

The vesting date fair value of performance awards that vested during the six-month periods ended June 30, 2021 and June 30, 2020 was $ 4.1 million and $ 5.8 million, respectively.

We withheld shares based on the closing stock price on the vesting date to settle the employees’ statutory obligation for the applicable income and other employment taxes.

26 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Truckload Transportation Services $ 491,200 $ 445,053 $ 954,149 $ 909,916

11 unchanged sentences

Total $ 76,863 $ 52,818 $ 139,334 $ 83,884

(10) Subsequent Event

On July 1, 2021, we acquired an 80 % equity ownership interest in ECM Transport Group (“ECM”) for a cash purchase price of $ 142.4 million, with an exclusive option to purchase the remaining 20% after a period of five years.

ECM consists of ECM Transport and Motor Carrier Service, which are regional truckload carriers that operate in the Mid-Atlantic, Ohio and Northeast regions of the United States.

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