Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 000-19969 | |
Entity Registrant Name | ARCBEST CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 71-0673405 | |
Entity Address, Address Line One | 8401 McClure Drive | |
Entity Address, City or Town | Fort Smith | |
Entity Address, State or Province | AR | |
Entity Address, Postal Zip Code | 72916 | |
City Area Code | 479 | |
Local Phone Number | 785-6000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | ARCB | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,431,641 | |
Entity Central Index Key | 0000894405 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 172,855 | $ 262,226 |
Short-term investments | 68,065 | 67,842 |
Accounts receivable, less allowances (2024 - $9,184; 2023 - $10,346) | 433,717 | 430,122 |
Other accounts receivable, less allowances (2024 - $733; 2023 - $731) | 11,389 | 52,124 |
Prepaid expenses | 39,232 | 37,034 |
Prepaid and refundable income taxes | 22,084 | 24,319 |
Other | 11,136 | 11,116 |
TOTAL CURRENT ASSETS | 758,478 | 884,783 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land and structures | 491,555 | 460,068 |
Revenue equipment | 1,119,446 | 1,126,055 |
Service, office, and other equipment | 318,252 | 319,466 |
Software | 176,988 | 173,354 |
Leasehold improvements | 25,173 | 24,429 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, Gross | 2,131,414 | 2,103,372 |
Less allowances for depreciation and amortization | 1,193,584 | 1,188,548 |
PROPERTY, PLANT AND EQUIPMENT, net | 937,830 | 914,824 |
GOODWILL | 304,753 | 304,753 |
INTANGIBLE ASSETS, net | 97,940 | 101,150 |
OPERATING RIGHT-OF-USE ASSETS | 174,987 | 169,999 |
DEFERRED INCOME TAXES | 10,032 | 8,140 |
OTHER LONG-TERM ASSETS | 73,123 | 101,445 |
TOTAL ASSETS | 2,357,143 | 2,485,094 |
CURRENT LIABILITIES | ||
Accounts payable | 209,908 | 214,004 |
Income taxes payable | 8 | 10,410 |
Accrued expenses | 313,494 | 378,029 |
Current portion of long-term debt | 63,179 | 66,948 |
Current portion of operating lease liabilities | 31,986 | 32,172 |
TOTAL CURRENT LIABILITIES | 618,575 | 701,563 |
LONG-TERM DEBT, less current portion | 148,992 | 161,990 |
OPERATING LEASE LIABILITIES, less current portion | 174,085 | 176,621 |
POSTRETIREMENT LIABILITIES, less current portion | 13,318 | 13,319 |
CONTINGENT CONSIDERATION | 100,220 | 92,900 |
OTHER LONG-TERM LIABILITIES | 34,422 | 40,553 |
DEFERRED INCOME TAXES | 44,798 | 55,785 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value, authorized 70,000,000 shares; issued 2024: 30,038,556 shares; 2023: 30,024,125 shares | 300 | 300 |
Additional paid-in capital | 343,102 | 340,961 |
Retained earnings | 1,267,444 | 1,272,584 |
Treasury stock, at cost, 2024: 6,580,818 shares; 2023: 6,460,137 shares | (391,458) | (375,806) |
Accumulated other comprehensive income | 3,345 | 4,324 |
TOTAL STOCKHOLDERS' EQUITY | 1,222,733 | 1,242,363 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,357,143 | $ 2,485,094 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable, allowances (in dollars) | $ 9,184 | $ 10,346 |
Other accounts receivable, allowances (in dollars) | $ 733 | $ 731 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 70,000,000 | 70,000,000 |
Common stock, issued shares | 30,038,556 | 30,024,125 |
Treasury stock, at cost, shares | 6,580,818 | 6,460,137 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
REVENUES | $ 1,036,419 | $ 1,106,094 |
OPERATING EXPENSES | 1,013,984 | 1,084,935 |
OPERATING INCOME | 22,435 | 21,159 |
OTHER INCOME (COSTS) | ||
Interest and dividend income | 3,315 | 2,933 |
Interest and other related financing costs | (2,228) | (2,327) |
Other, net | (28,199) | 1,780 |
TOTAL OTHER INCOME (COSTS) | (27,112) | 2,386 |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (4,677) | 23,545 |
INCOME TAX PROVISION (BENEFIT) | (1,765) | 4,698 |
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | (2,912) | 18,847 |
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 600 | 52,436 |
NET INCOME (LOSS) | $ (2,312) | $ 71,283 |
BASIC EARNINGS PER COMMON SHARE | ||
Continuing operations (in dollars per share) | $ (0.12) | $ 0.78 |
Discontinued operations (in dollars per share) | 0.03 | 2.16 |
BASIC EARNINGS PER COMMON SHARE (in dollars per share) | (0.10) | 2.93 |
DILUTED EARNINGS PER COMMON SHARE | ||
Continuing operations (in dollars per share) | (0.12) | 0.75 |
Discontinued operations (in dollars per share) | 0.03 | 2.09 |
DILUTED EARNINGS PER COMMON SHARE (in dollars per share) | $ (0.10) | $ 2.84 |
AVERAGE COMMON SHARES OUTSTANDING | ||
Basic (in shares) | 23,561,309 | 24,288,138 |
Diluted (in shares) | 23,561,309 | 25,057,726 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net Income (Loss) | $ (2,312) | $ 71,283 |
Amortization of unrecognized net periodic benefit cost (credit), net of tax: (2024 - $65; 2023 - $86) | ||
Net actuarial gain | (187) | (247) |
Interest rate swap and foreign currency translation: | ||
Change in unrealized loss on interest rate swap, net of tax: (2024 - $130; 2023 - $161) | (366) | (452) |
Change in foreign currency translation, net of tax: (2024 - $150; 2023 - $6) | (426) | (18) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (979) | (717) |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ (3,291) | $ 70,566 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Amortization of unrecognized net periodic benefit cost (credit), tax | $ (65) | $ (86) |
Change in unrealized gain (loss) on interest rate swap, tax | (130) | (161) |
Change in foreign currency translation, tax | $ (150) | $ (6) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income | Total |
Balances at Dec. 31, 2022 | $ 298 | $ 339,582 | $ 1,088,693 | $ (284,275) | $ 7,103 | $ 1,151,401 |
Balances (in shares) at Dec. 31, 2022 | 29,759,000 | |||||
Balances, Treasury stock (in shares) at Dec. 31, 2022 | 5,529,000 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 71,283 | 71,283 | ||||
Other comprehensive income (loss), net of tax | (717) | (717) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 50,000 | |||||
Shares withheld for employee tax remittance on share-based compensation | (1,590) | (1,590) | ||||
Share-based compensation expense | 2,489 | 2,489 | ||||
Purchase of treasury stock | $ (14,092) | (14,092) | ||||
Purchase of treasury stock (in shares) | 154,000 | |||||
Dividends declared on common stock | (2,915) | (2,915) | ||||
Balances at Mar. 31, 2023 | $ 298 | 340,481 | 1,157,061 | $ (298,367) | 6,386 | 1,205,859 |
Balances (in shares) at Mar. 31, 2023 | 29,809,000 | |||||
Balances, Treasury stock (in shares) at Mar. 31, 2023 | 5,683,000 | |||||
Balances at Dec. 31, 2023 | $ 300 | 340,961 | 1,272,584 | $ (375,806) | 4,324 | $ 1,242,363 |
Balances (in shares) at Dec. 31, 2023 | 30,024,000 | |||||
Balances, Treasury stock (in shares) at Dec. 31, 2023 | 6,460,000 | 6,460,137 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (2,312) | $ (2,312) | ||||
Other comprehensive income (loss), net of tax | (979) | (979) | ||||
Issuance of common stock under share-based compensation plans (in shares) | 15,000 | |||||
Shares withheld for employee tax remittance on share-based compensation | (748) | (748) | ||||
Share-based compensation expense | 2,889 | 2,889 | ||||
Purchase of treasury stock | $ (15,652) | (15,652) | ||||
Purchase of treasury stock (in shares) | 121,000 | |||||
Dividends declared on common stock | (2,828) | (2,828) | ||||
Balances at Mar. 31, 2024 | $ 300 | $ 343,102 | $ 1,267,444 | $ (391,458) | $ 3,345 | $ 1,222,733 |
Balances (in shares) at Mar. 31, 2024 | 30,039,000 | |||||
Balances, Treasury stock (in shares) at Mar. 31, 2024 | 6,581,000 | 6,580,818 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ (2,312) | $ 71,283 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 33,616 | 32,187 |
Amortization of intangibles | 3,217 | 3,203 |
Share-based compensation expense | 2,889 | 2,235 |
Provision for losses on accounts receivable | 1,055 | 1,427 |
Change in deferred income taxes | (12,548) | (9,814) |
(Gain) loss on sale of property and equipment | 217 | (9) |
Pre-tax gain on sale of discontinued operations | (806) | (69,083) |
Change in fair value of contingent consideration | 7,320 | 15,040 |
Change in fair value of equity investment | 28,739 | |
Changes in operating assets and liabilities: | ||
Receivables | 35,059 | 43,977 |
Prepaid expenses | (2,198) | (1,464) |
Other assets | (1,218) | 3,874 |
Income taxes | (8,305) | 6,221 |
Operating right-of-use assets and lease liabilities, net | (7,710) | 1,570 |
Accounts payable, accrued expenses, and other liabilities | (70,548) | (79,984) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,467 | 20,663 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment, net of financings | (55,049) | (34,657) |
Proceeds from sale of property and equipment | 1,292 | 1,833 |
Proceeds from sale of discontinued operations | 101,138 | |
Purchases of short-term investments | (5,236) | (35,588) |
Proceeds from sale of short-term investments | 5,635 | 41,865 |
Capitalization of internally developed software | (3,635) | (3,631) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (56,993) | 70,960 |
FINANCING ACTIVITIES | ||
Payments on long-term debt | (16,767) | (17,649) |
Net change in book overdrafts | (2,850) | (10,493) |
Deferred financing costs | 63 | |
Payment of common stock dividends | (2,828) | (2,915) |
Purchases of treasury stock | (15,652) | (14,092) |
Payments for tax withheld on share-based compensation | (748) | (1,590) |
NET CASH USED IN FINANCING ACTIVITIES | (38,845) | (46,676) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (89,371) | 44,947 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 172,855 | 203,319 |
NONCASH INVESTING ACTIVITIES | ||
Equipment financed | 3,478 | |
Accruals for equipment received | 915 | 1,453 |
Lease liabilities arising from obtaining right-of-use assets | $ 5,694 | $ 30,581 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Cash and cash equivalents of continuing operations at beginning of period | $ 262,226 | $ 158,264 |
Cash and cash equivalents of discontinued operations at beginning of period | $ 108 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | NOTE A – ORGANIZATIO N AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION Organization and Description of Business ArcBest Corporation ™ ® The Asset-Based segment represented approximately 63% of the Company’s total revenues before other revenues and intercompany eliminations for the three months ended March 31, 2024. As of March 2024, approximately 82% of the Asset-Based segment’s employees were covered under a collective bargaining agreement, the ABF National Master Freight Agreement (the “2023 ABF NMFA”), with the International Brotherhood of Teamsters (the “IBT”), which will remain in effect through June 30, 2028. Financial Statement Presentation On February 28, 2023, the Company sold FleetNet America, Inc. (“FleetNet”), a wholly owned subsidiary and reportable operating segment of the Company, for an aggregate adjusted cash purchase price of $100.9 million, including post-closing adjustments. The sale of FleetNet ® For the three months ended March 31, 2023, certain reclassifications have been made between operating expenses lines of the Asset-Light segment to conform to the current-year presentation (see Note J). There was no impact on total Asset-Light operating expenses as a result of these reclassifications. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2023 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts may differ from those estimates. Accounting Pronouncements Not Yet Adopted Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting Improvements to Reportable Segment Disclosures ASC Topic 740, Income Taxes Improvements to Income Tax Disclosures In March 2024, the SEC adopted final rules under SEC Release Nos. 33-11275 and 33-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2024 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE B – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial Instruments The following table presents the components of cash and cash equivalents and short-term investments: March 31 December 31 2024 2023 (in thousands) Cash and cash equivalents Cash deposits (1) $ 140,655 $ 168,472 Money market funds (2) 32,200 93,754 Total cash and cash equivalents $ 172,855 $ 262,226 Short-term investments Certificates of deposit (1) $ 68,065 $ 67,842 (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). The Company’s long-term financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note. Concentrations of Credit Risk of Financial Instruments The Company is potentially subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments. The Company reduces credit risk by maintaining its cash deposits and short-term investments in accounts and certificates of deposit which are primarily FDIC-insured or in direct obligations of the U.S. government. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At March 31, 2024 and December 31, 2023, cash deposits and short-term investments totaling $60.0 million and $76.3 million, respectively, were not FDIC insured. The Company also holds money market funds, which are invested in U.S. government securities and repurchase agreements collateralized solely by U.S. government securities. Fair Value Disclosure of Financial Instruments Fair value disclosures are made in accordance with the following hierarchy of valuation techniques based on whether the inputs of market data and market assumptions used to measure fair value are observable or unobservable: ● Level 1 — Quoted prices for identical assets and liabilities in active markets. ● Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 — Unobservable inputs (Company’s market assumptions) that are significant to the valuation model. Fair value and carrying value disclosures of financial instruments are presented in the following table: March 31 December 31 2024 2023 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 50,000 $ 50,000 $ 50,000 $ 50,000 Notes payable (2) 162,171 159,385 178,938 177,149 New England Pension Fund withdrawal liability (3) 19,222 17,734 19,402 18,220 $ 231,393 $ 227,119 $ 248,340 $ 245,369 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on Secured Overnight Financing Rate (“SOFR”), plus a margin, priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). (3) ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 5.6% and 5.3% at March 31, 2024 and December 31, 2023, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of March 31, 2024, the outstanding withdrawal liability totaled $19.2 million, of which $0.7 million was recorded in accrued expenses, and the remaining portion was recorded in other long-term liabilities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis: March 31, 2024 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 32,200 $ 32,200 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 4,821 4,821 — — Interest rate swap (3) 1,214 — 1,214 — $ 38,235 $ 37,021 $ 1,214 $ — Liabilities: Contingent consideration (4) $ 100,220 $ — $ — $ 100,220 December 31, 2023 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 93,754 $ 93,754 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 4,627 4,627 — — Interest rate swap (3) 1,710 — 1,710 — $ 100,091 $ 98,381 $ 1,710 $ — Liabilities: Contingent consideration (4) $ 92,900 $ — $ — $ 92,900 (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities. (3) Included in other long-term assets. The fair value of the interest rate swap was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at March 31, 2024 and December 31, 2023 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy. (4) Included as a long-term liability, based on the March 31, 2024 remeasurement as achievement of the 2024 target is not expected. As part of the Agreement and Plan of Merger (the “Merger Agreement”) of MoLo, executed on November 1, 2021, certain additional cash consideration is required to be paid by the Company based on the achievement of certain incremental targets of adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for each of the years ended December 31, 2023, 2024, and 2025. The adjusted EBITDA metric was below target for 2023, resulting in no earnout payment for 2023. At 100% of the target, the cumulative additional consideration through 2025 would be $215.0 million, consisting of target earnout payments of $70.0 million and $145.0 million, including catch-up provisions, for the years ended December 31, 2024 and 2025, respectively. Possible undiscounted cash consideration could range from a total of $95.0 million at 80% of target to $455.0 million at 300% of target, as outlined in the Merger Agreement. The estimated fair value of contingent consideration is determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and adjusted EBITDA to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 13.4% and 13.3% as of March 31, 2024 and December 31, 2023, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. The increase in fair value of contingent earnout consideration as of March 31, 2024, compared to December 31, 2023, primarily relates to the shorter discount period remaining until the expected payout . The following table provides the changes in fair value of the liabilities measured at fair value using inputs categorized in Level 3 of the fair value hierarchy: Contingent Consideration (in thousands) Balance at December 31, 2023 $ 92,900 Change in fair value included in operating income 7,320 Balance at March 31, 2024 $ 100,220 Assets Measured at Fair Value on a Nonrecurring Basis The Company remeasures certain assets on a nonrecurring basis upon the occurrence of certain events. In November 2021, the Company recorded an equity investment for $25.0 million in Phantom Auto, a startup provider of human-centered remote operation software, and became a lead investor in their Series B Preferred offering. The equity investment was accounted for as a nonmarketable equity security without a readily determinable value using the measurement alternative, which allowed the investment to be recorded at cost, less any impairment and adjusted for observable price changes. During the second quarter of 2023, the fair value of the Company’s investment in Phantom Auto increased by $3.7 million based on an observable price change upon the closing of Phantom Auto’s Series B-2 funding round. During the first quarter of 2024, the Company was notified that Phantom Auto was ceasing operations due to liquidity concerns from failing to secure additional funding from investors or lenders. As a result, the Company assessed the likelihood of recovering its investment as remote and recorded a pre-tax, noncash impairment charge of $28.7 million, to write off the equity investment in Phantom Auto, which was recognized below the operating income line in “Other, net” within “Other income (costs).” The following table provides the change in fair value of equity investments on a nonrecurring basis using inputs categorized in Level 3 of the fair value hierarchy: Equity Investment (in thousands) Balance at December 31, 2023 $ 28,739 Change in fair value included in other income (28,739) Balance at March 31, 2024 $ — |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2024 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE C – DISCONTINUED OPERATIONS On February 28, 2023, the Company sold FleetNet, a wholly owned subsidiary of the Company, for an initial aggregate cash purchase price of $101.1 million, which was subject to certain tax and other customary adjustments, and recorded a pre-tax gain on sale of $69.1 million, or $51.4 million, net of tax. The purchase price was adjusted during the second quarter of 2023, resulting in an aggregate adjusted cash purchase price of $100.9 million. After adjustments the total pre-tax gain recognized in 2023 and the first quarter of 2024 was $70.2 million and $0.8 million, respectively. FleetNet provided roadside repair solutions and vehicle maintenance management services for commercial and private fleets through a network of third-party service providers. The sale of FleetNet allowed the Company to focus on growing its continuing operations, as FleetNet was no longer core to the Company’s growth initiatives. The financial results of FleetNet have been accounted for as discontinued operations for all periods presented. The following table summarizes the financial results from discontinued operations: Three Months Ended March 31 2024 2023 (in thousands) Revenues $ — $ 55,929 Operating expenses Gain on sale of business (1) (806) (69,083) Other — 54,623 (806) (14,460) Operating income 806 70,389 Other income, net (2) — 17 Income from discontinued operations before income taxes 806 70,406 Income tax provision 206 17,970 Income from discontinued operations, net of tax $ 600 $ 52,436 (1) The 2024 period includes the reversal of an employee-related contingent liability that expired one-year after disposition, per the purchase agreement. The 2023 period includes transaction costs of $4.4 million consisting of consulting fees, professional fees, and employee-related expenses prior to resolution of certain post-close contingencies in second quarter 2023. (2) The 2023 period includes interest expense, which is immaterial. Cash flows from discontinued operations of FleetNet were as follows: Three Months Ended March 31 2024 2023 (in thousands) Net cash provided by operating activities (1) $ — $ 762 Net cash used in investing activities (2) — (398) Net cash used in financing activities — (472) Net decrease in cash and cash equivalents $ — $ (108) (1) The 2023 period includes depreciation and amortization expense of $0.4 million and share-based compensation expense of $0.3 million, which is included in the “Pre-tax gain on sale of discontinued operations” line of the consolidated statements of cash flows. (2) The 2023 period includes purchases of property, plant and equipment of $0.1 million. Excludes the proceeds from the sale of discontinued operations, which are included in cash flows from continuing operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE D – GOODWILL AND INTANGIBLE ASSETS Goodwill represents the excess of cost over the fair value of net identifiable tangible and intangible assets acquired. The goodwill balance of $304.8 million at both March 31, 2024 and December 31, 2023, primarily relates to the Asset-Light segment acquisitions of MoLo and Panther. Intangible assets consisted of the following: March 31, 2024 December 31, 2023 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships 12 $ 99,579 $ 53,463 $ 46,116 $ 99,579 $ 51,357 $ 48,222 Other 8 30,158 10,634 19,524 30,151 9,523 20,628 11 129,737 64,097 65,640 129,730 60,880 68,850 Indefinite-lived intangible asset Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 162,037 $ 64,097 $ 97,940 $ 162,030 $ 60,880 $ 101,150 As of March 31, 2024, the future amortization for intangible assets acquired through business acquisitions were as follows: Amortization of Intangible Assets (in thousands) Remainder of 2024 $ 9,598 2025 12,798 2026 8,691 2027 7,266 2028 7,266 Thereafter 20,021 Total amortization $ 65,640 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
INCOME TAXES | |
INCOME TAXES | NOTE E – INCOME TAXES The Company’s total effective tax benefit rate was 40.3% for the three months ended March 31, 2024, due primarily to the pre-tax loss from a noncash impairment charge to write off our equity investment in Phantom Auto included in the loss from continuing operations during the first quarter of 2024. The Company’s total effective tax rate of 24.1% for the three months ended March 31, 2023 includes discontinued operations further discussed in Note C. The effective tax benefit rate from continuing operations was 37.7% for the three months ended March 31, 2024. The effective tax rate from continuing operations was 20.0% for the three months ended March 31, 2023. State tax rates vary among states and average approximately 6.0%, although some state rates are higher, and a small number of states do not impose an income tax. For the three months ended March 31 2024 and 2023, the difference between the Company’s effective tax rate from continuing operations and the federal statutory rate resulted from state income taxes, nondeductible expenses, changes in the cash surrender value of life insurance, the federal alternative fuel tax credit, the federal research and development tax credit, changes in tax valuation allowances, and the tax benefit from the vesting of stock awards. As of March 31, 2024, the Company’s deferred tax liabilities, which will reverse in future years, exceeded the deferred tax assets. The Company evaluated the total deferred tax assets at March 31, 2024, and concluded that, other than for certain deferred tax assets related to foreign and state tax credit carryforwards and state net operating losses, the assets did not exceed the amount for which realization is more likely than not. In making this determination, the Company considered the future reversal of existing taxable temporary differences, future taxable income, and tax planning strategies. Valuation allowances for deferred tax assets totaled $1.8 million at both March 31, 2024 and December 31, 2023. During the three months ended March 31, 2024, the Company paid federal, state, and foreign income taxes of $19.1 million and received refunds of less than $0.1 million of state income taxes that were paid in prior years. For the three months ended March 31, 2023, the Company paid federal, state, and foreign income taxes of $27.7 million and received refunds of $1.6 million of federal and state income taxes that were paid in prior years. Income tax expense reflected in discontinued operations, which primarily consisted of federal and state income taxes on the gain on the sale of FleetNet, was $0.2 million and $18.0 million for the three months ended March 31, 2024 and 2023, respectively, or an effective tax rate of 25.5% in each period. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
LEASES | NOTE F – LEASES The Company has operating lease arrangements for certain facilities and revenue equipment used in the Asset-Based and Asset-Light segment operations and certain other facilities and office equipment. The components of operating lease expense were as follows: Three Months Ended March 31 2024 2023 (in thousands) Operating lease expense $ 10,276 $ 9,166 Variable lease expense 1,681 1,540 Sublease income (646) (114) Total operating lease expense (1) $ 11,311 $ 10,592 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. The operating cash flows from operating lease activity were as follows: Three Months Ended March 31 2024 2023 (in thousands) Noncash change in operating right-of-use assets $ 8,618 $ 7,485 Cash payments to obtain right-of-use assets (7,752) — Change in operating lease liabilities (8,576) (5,915) Operating right-of-use-assets and lease liabilities, net $ (7,710) $ 1,570 Cash paid for amounts included in the measurement of operating lease liabilities $ (10,226) $ (7,596) Maturities of operating lease liabilities at March 31, 2024, were as follows: Equipment Land and and Total Structures (1) Other (in thousands) Remainder of 2024 $ 30,278 $ 30,085 $ 193 2025 37,922 37,899 23 2026 34,746 34,746 — 2027 28,069 28,069 — 2028 24,584 24,584 — Thereafter 87,556 87,556 — Total lease payments 243,155 242,939 216 Less imputed interest (37,084) (37,081) (3) Total $ 206,071 $ 205,858 $ 213 (1) Excludes future minimum lease payments for leases which were executed but had not yet commenced as of March 31, 2024, totaling $28.8 million, which will be paid over approximately 10 years . |
LONG-TERM DEBT AND FINANCING AR
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2024 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | NOTE G – LONG-TERM DEBT AND FINANCING ARRANGEMENTS Long-Term Debt Obligations Long-term debt consisted of borrowings outstanding under the Company’s revolving credit facility, which is further described in Financing Arrangements within this Note, and notes payable related to the financing of revenue equipment (tractors and trailers used primarily in Asset-Based segment operations) and certain other equipment were as follows: March 31 December 31 2024 2023 (in thousands) Credit Facility (interest rate of 6.6% (1) $ 50,000 $ 50,000 Notes payable (weighted-average interest rate of 3.9% at March 31, 2024) 162,171 178,938 212,171 228,938 Less current portion 63,179 66,948 Long-term debt, less current portion $ 148,992 $ 161,990 (1) The interest rate swap mitigates interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% based on the margin of the Credit Facility as of both March 31, 2024 and December 31, 2023. Scheduled maturities of long-term debt obligations as of March 31, 2024, were as follows: Credit Notes Total Facility (1) Payable (in thousands) Due in one year or less $ 71,602 $ 3,142 $ 68,460 Due after one year through two years 50,181 2,690 47,491 Due after two years through three years 38,552 2,502 36,050 Due after three years through four years 69,270 51,273 17,997 Due after four years through five years 3,433 — 3,433 Due after five years — — — Total payments 233,038 59,607 173,431 Less amounts representing interest 20,867 9,607 11,260 Long-term debt $ 212,171 $ 50,000 $ 162,171 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the SOFR swap curve, plus the anticipated applicable margin, exclusive of payments on the interest rate swap. Assets securing notes payable were included in property, plant and equipment as follows: March 31 December 31 2024 2023 (in thousands) Revenue equipment $ 300,161 $ 300,922 Service, office and other equipment 38,138 38,138 Total assets securing notes payable 338,299 339,060 Less accumulated depreciation (1) 145,630 135,305 Net assets securing notes payable $ 192,669 $ 203,755 (1) Depreciation of assets securing notes payable is included in depreciation expense. Financing Arrangements Credit Facility As of March 31, 2024, the Company has a revolving credit facility (the “Credit Facility”) under its Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), with an initial maximum credit amount of $250.0 million, including a swing line facility in an aggregate amount of up to $40.0 million and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million. The Company may request additional revolving commitments or incremental term loans thereunder up to an aggregate amount of up to $125.0 million, subject to the satisfaction of certain additional conditions as provided in the Credit Agreement. As of March 31, 2024, the Company had available borrowing capacity of $200.0 million under the initial maximum credit amount of the Credit Facility. Principal payments under the Credit Facility are due upon maturity of the facility on October 7, 2027; however, borrowings may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice periods and compliance with minimum prepayment amounts. In addition, the Credit Facility requires the Company to pay a fee on unused commitments. The Credit Agreement contains conditions, representations and warranties, events of default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments, liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, and sales of assets. The Company was in compliance with the covenants under the Credit Agreement at March 31, 2024. Interest Rate Swap As noted in the table above, the Company has an interest rate swap agreement with a $50.0 million notional amount, which will end on October 1, 2024. The Company receives floating-rate interest amounts based on one-month SOFR in exchange for fixed-rate interest payments of 0.33% throughout the remaining term of the agreement. The fair value of the interest rate swap of $1.2 million and $1.7 million was recorded in other long-term assets at March 31, 2024 and December 31, 2023, respectively. The unrealized gain or loss on the interest rate swap instrument in effect at the balance sheet date was reported as a component of accumulated other comprehensive income, net of tax, in stockholders’ equity at March 31, 2024 and December 31, 2023, and the change in the unrealized gain or loss on the interest rate swap for the three months ended March 31, 2024 and 2023 was reported in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income. The interest rate swap is subject to certain customary provisions that could allow the counterparty to request immediate settlement of the fair value liability or asset upon violation of any or all of the provisions. The Company was in compliance with all provisions of the interest rate swap agreement at March 31, 2024. Accounts Receivable Securitization Program The Company’s accounts receivable securitization program, which matures on July 1, 2024, provides available cash proceeds of $50.0 million under the program and has an accordion feature allowing the Company to request additional borrowings up to $100.0 million, subject to certain conditions. Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its assets would be available only to satisfy the claims related to the lenders’ interest in the trade accounts receivables. Borrowings under the accounts receivable securitization program bear interest based upon SOFR, plus a margin, and an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage ratio covenant. The Company was in compliance with the covenants under the accounts receivable securitization program at March 31, 2024. The accounts receivable securitization program includes a provision under which the Company may request, and the letter of credit issuer may issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of borrowings under the program. As of March 31, 2024, standby letters of credit of $16.8 million have been issued under the program, which reduced the available borrowing capacity to $33.2 million. Letter of Credit Agreements and Surety Bond Programs As of March 31, 2024, the Company had letters of credit outstanding of $17.4 million (including $16.8 million issued under the accounts receivable securitization program). The Company has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance program. As of March 31, 2024, surety bonds outstanding related to the self-insurance program totaled $67.7 million. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE H – STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Income Components of accumulated other comprehensive income were as follows: March 31 December 31 2024 2023 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 6,564 $ 6,816 Interest rate swap 1,214 1,710 Foreign currency translation (3,285) (2,709) Total $ 4,493 $ 5,817 After-tax amounts: Unrecognized net periodic benefit credit $ 4,874 $ 5,061 Interest rate swap 897 1,263 Foreign currency translation (2,426) (2,000) Total $ 3,345 $ 4,324 The following is a summary of the changes in accumulated other comprehensive income, net of tax, by component for the three months ended March 31, 2024 and 2023: Unrecognized Interest Foreign Total Benefit Credit Swap Translation (in thousands) Balances at December 31, 2023 $ 4,324 $ 5,061 $ 1,263 $ (2,000) Other comprehensive loss before reclassifications (792) — (366) (426) Amounts reclassified from accumulated other comprehensive income (187) (187) — — Net current-period other comprehensive loss (979) (187) (366) (426) Balances at March 31, 2024 $ 3,345 $ 4,874 $ 897 $ (2,426) Balances at December 31, 2022 $ 7,103 $ 6,896 $ 2,604 $ (2,397) Other comprehensive loss before reclassifications (470) — (452) (18) Amounts reclassified from accumulated other comprehensive income (247) (247) — — Net current-period other comprehensive loss (717) (247) (452) (18) Balances at March 31, 2023 $ 6,386 $ 6,649 $ 2,152 $ (2,415) The following is a summary of the significant reclassifications out of accumulated other comprehensive income by component: Unrecognized Net Periodic Benefit Credit Three Months Ended March 31 2024 2023 (in thousands) Amortization of net actuarial gain, pre-tax (1) $ 252 $ 333 Tax expense (65) (86) Total, net of tax $ 187 $ 247 (1) Included in the computation of net periodic benefit credit of the Company’s supplemental benefit plan (“SBP”) and postretirement health benefit plan. Dividends on Common Stock The following table is a summary of dividends declared during the applicable quarter: 2024 2023 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.12 $ 2,828 $ 0.12 $ 2,915 On April 26, 2024, the Company announced its Board of Directors declared a dividend of $0.12 per share to stockholders of record as of May 10, 2024. Treasury Stock The Company has a program to repurchase its common stock in the open market or in privately negotiated transactions (the “share repurchase program”). The share repurchase program has no expiration date but may be terminated at any time at the Board of Directors’ discretion. Repurchases may be made using the Company’s cash reserves or other available sources. As of December 31, 2023, the Company had $33.5 million available for repurchases of its common stock in total under the share repurchase program. In February 2024, the Board of Directors reauthorized the share repurchase program and increased the total amount available for purchases of the Company’s common stock under the program to $125.0 million. During the three months ended March 31, 2024, the Company repurchased 120,681 shares for an aggregate cost of $15.7 million, including 65,366 shares for an aggregate cost of $8.0 million under Rule 10b5-1 plans, which allows for stock repurchases during closed trading windows. The Company had $115.3 million remaining under its share repurchase program as of March 31, 2024. Subsequent to March 31, 2024 through April 30, 2024, the Company settled repurchases of 36,547 shares for an aggregate cost of $5.2 million. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE I – EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per common share: Three Months Ended March 31 2024 2023 (in thousands, except share and per share data) Basic Numerator: Net income (loss) from continuing operations $ (2,912) $ 18,847 Net income from discontinued operations 600 52,436 Net income (loss) $ (2,312) $ 71,283 Denominator: Weighted-average shares 23,561,309 24,288,138 Basic earnings per common share Continuing operations $ (0.12) $ 0.78 Discontinued operations 0.03 2.16 Total basic earnings per common share (1) $ (0.10) $ 2.93 Diluted Numerator: Net income (loss) from continuing operations $ (2,912) $ 18,847 Net income from discontinued operations 600 52,436 Net income (loss) $ (2,312) $ 71,283 Denominator: Weighted-average shares 23,561,309 24,288,138 Effect of dilutive securities — 769,588 Adjusted weighted-average shares and assumed conversions 23,561,309 25,057,726 Diluted earnings per common share Continuing operations $ (0.12) $ 0.75 Discontinued operations 0.03 2.09 Total diluted earnings per common share (1) $ (0.10) $ 2.84 (1) Earnings per common share is calculated in total and may not equal the sum of earnings per common share from continuing operations and discontinued operations due to rounding. |
OPERATING SEGMENT DATA
OPERATING SEGMENT DATA | 3 Months Ended |
Mar. 31, 2024 | |
OPERATING SEGMENT DATA | |
OPERATING SEGMENT DATA | NOTE J – OPERATING SEGMENT DATA The Company uses the “management approach” to determine its reportable operating segments, as well as to determine the basis of reporting the operating segment information. The management approach focuses on financial information that the Company’s management uses to make operating decisions. Management uses revenues, operating expense categories, operating ratios, operating income (loss), and key operating statistics to evaluate performance and allocate resources to the Company’s operations. On February 28, 2023, the Company sold FleetNet, a wholly owned subsidiary and reportable operating segment of the Company. Following the sale, FleetNet is reported as discontinued operations. As such, historical results of FleetNet have been excluded from both continuing operations and segment results for all periods presented. The Company’s reportable operating segments are impacted by seasonal fluctuations which affect tonnage and shipment levels and demand for services, as described below; therefore, operating results for the interim periods presented may not necessarily be indicative of the results for the fiscal year. Inclement weather conditions can adversely affect freight shipments and operating costs of the Asset-Based and Asset-Light segments. Shipments may decline during winter months because of post-holiday slowdowns and during summer months due to plant shutdowns affecting automotive and manufacturing customers of the Asset-Light segment; however, weather and other disruptive events can result in higher short-term demand for expedite services depending on the impact to customers' supply chains. Historically, the second and third calendar quarters of each year usually have the highest tonnage and shipment levels, while the first quarter generally has the lowest, although other factors, including the state of the U.S. and global economies; available capacity in the market; the impact of yield initiatives; and the impact of external events or conditions, may influence quarterly business levels. The Company’s yield initiatives, along with increased technology-driven intelligence and visibility with respect to demand, have allowed for shipment optimization in non-peak times, reducing the Company’s susceptibility to seasonal fluctuations in recent years, including the three months ended March 31, 2024 and 2023. The Company’s reportable operating segments are as follows: ● The Asset-Based segment includes the results of operations of ABF Freight System, Inc. and certain other subsidiaries. The segment operations include national, inter-regional, and regional transportation of general commodities through standard, expedited, and guaranteed LTL services. The Asset-Based segment provides services to the Asset-Light segment, including freight transportation related to managed transportation solutions and other services. ● The Asset-Light segment includes the results of operations of the Company’s service offerings in truckload, ground expedite, dedicated, intermodal, household goods moving, managed transportation, warehousing and distribution, and international freight transportation for air, ocean, and ground. The Asset-Light segment provides services to the Asset-Based segment. The Company’s other business activities and operations that are not reportable segments include ArcBest Corporation (the parent holding company) and certain subsidiaries. Certain costs incurred by the parent holding company and the Company’s shared services subsidiary are allocated to the reporting segments. The Company eliminates intercompany transactions in consolidation. However, the information used by the Company’s management with respect to its reportable operating segments is before intersegment eliminations of revenues and expenses. Shared services represent costs incurred to support all segments, including sales, pricing, customer service, marketing, capacity sourcing functions, human resources, financial services, information technology, and other company-wide services. Certain overhead costs are not attributable to any segment and remain unallocated in “Other and eliminations.” Included in unallocated costs are expenses related to investor relations, legal, the Company’s Board of Directors, and certain technology investments. Shared services costs attributable to the reportable operating segments are predominantly allocated based upon estimated and planned resource utilization-related metrics, such as estimated shipment levels or number of personnel supported. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the reportable operating segments. Management believes the methods used to allocate expenses are reasonable. Further classifications of operations or revenues by geographic location are impracticable and, therefore, are not provided. The Company’s foreign operations are not significant. The following tables reflect the Company’s reportable operating segment information from continuing operations: Three Months Ended March 31 2024 2023 (in thousands) REVENUES Asset-Based $ 671,467 $ 697,817 Asset-Light 396,363 438,092 Other and eliminations (31,411) (29,815) Total consolidated revenues $ 1,036,419 $ 1,106,094 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 344,999 $ 335,605 Fuel, supplies, and expenses 81,044 94,288 Operating taxes and licenses 13,529 13,979 Insurance 14,482 13,273 Communications and utilities 4,799 5,304 Depreciation and amortization 27,007 24,911 Rents and purchased transportation 65,671 90,744 Shared services 64,914 64,613 (Gain) loss on sale of property and equipment 149 (51) Innovative technology costs (1) — 6,068 Other 1,417 1,612 Total Asset-Based 618,011 650,346 Asset-Light Purchased transportation 344,122 370,163 Salaries, wages, and benefits (2) 30,304 34,894 Supplies and expenses (2) 2,809 3,629 Depreciation and amortization (3) 5,078 5,068 Shared services (2) 16,274 16,535 Contingent consideration (4) 7,320 15,040 Other (2) 5,714 6,854 Total Asset-Light 411,621 452,183 Other and eliminations (15,648) (17,594) Total consolidated operating expenses $ 1,013,984 $ 1,084,935 (1) Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023. (2) For the 2023 period, certain expenses have been reclassed to conform to the current year presentation, including amounts previously reported in “Shared services” that were reclassed to present “Salaries, wages, and benefits” expenses in a separate line item, and certain immaterial facility rent expenses which were reclassed between line items. (3) Depreciation and amortization includes amortization of intangibles associated with acquired businesses. (4) Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note B). Three Months Ended March 31 2024 2023 (in thousands) OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS Asset-Based $ 53,456 $ 47,471 Asset-Light (15,258) (14,091) Other and eliminations (15,763) (12,221) Total consolidated operating income $ 22,435 $ 21,159 OTHER INCOME (COSTS) FROM CONTINUING OPERATIONS Interest and dividend income $ 3,315 $ 2,933 Interest and other related financing costs (2,228) (2,327) Other, net (1) (28,199) 1,780 Total other income (costs) (27,112) 2,386 INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $ (4,677) $ 23,545 (1) The 2024 period includes a noncash impairment charge to write off the Company’s equity investment in Phantom Auto, a provider of human-centered remote operation software, which ceased operations during first quarter 2024. The following table reflects information about revenues from customers and intersegment revenues: Three Months Ended March 31 2024 2023 (in thousands) Revenues from customers Asset-Based $ 640,576 $ 669,220 Asset-Light 394,825 436,033 Other 1,018 841 Total consolidated revenues $ 1,036,419 $ 1,106,094 Intersegment revenues Asset-Based $ 30,891 $ 28,597 Asset-Light 1,538 2,059 Other and eliminations (32,429) (30,656) Total intersegment revenues $ — $ — Total segment revenues Asset-Based $ 671,467 $ 697,817 Asset-Light 396,363 438,092 Other and eliminations (31,411) (29,815) Total consolidated revenues $ 1,036,419 $ 1,106,094 The following table presents operating expenses by category on a consolidated basis: Three Months Ended March 31 2024 2023 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 439,523 $ 436,982 Rents, purchased transportation, and other costs of services 375,319 429,605 Fuel, supplies, and expenses (1) 109,522 122,175 Depreciation and amortization (2) 36,833 35,010 Contingent consideration (3) 7,320 15,040 Other (1) 45,467 46,123 $ 1,013,984 $ 1,084,935 (1) For the 2023 period, certain facility rent expenses have been reclassed between line items to conform to the current year presentation. Adjustments made are not material. (2) Includes amortization of intangible assets. (3) Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note B). |
LEGAL PROCEEDINGS, ENVIRONMENTA
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | |
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS | NOTE K – LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS The Company is involved in various legal actions arising in the ordinary course of business. The Company maintains liability insurance against certain risks arising out of the normal course of its business, subject to certain self-insured retention limits. The Company routinely establishes and reviews the adequacy of reserves for estimated legal, environmental, and self-insurance exposures. While management believes that amounts accrued in the consolidated financial statements are adequate, estimates of these liabilities may change as circumstances develop. Considering amounts recorded, routine legal matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. Legal Proceedings In January 2023, the Company and MoLo were named as defendants in lawsuits related to an auto accident which involved a MoLo contract carrier. The accident occurred prior to the Company’s acquisition of MoLo on November 1, 2021. The Company intends to vigorously defend against these lawsuits. The Company believes that a loss related to this matter is reasonably possible. The Company cannot estimate the amount or a range of reasonably possible losses for this matter, if any, at this time; however, it is reasonably possible that such amounts could be material to the Company’s financial condition, results of operations, or cash flows. The Company will pursue recovery for its losses, if any, against all available sources, including, but not limited to, insurance and any potentially responsible third parties. Environmental Matters The Company’s subsidiaries store fuel for use in tractors and trucks in underground tanks at certain facilities. Maintenance of such tanks is regulated at the federal and, in most cases, state levels. The Company believes it is in substantial compliance with all such regulations. The Company’s underground storage tanks are required to have leak detection systems. The Company is not aware of any leaks from such tanks that could reasonably be expected to have a material adverse effect on the Company. The Company has received notices from the Environmental Protection Agency (the “EPA”) and others that it has been identified as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980, exposure related to identified properties based on current environmental regulations, management’s experience with similar environmental matters, and testing performed at certain sites. Other Events During second quarter 2023, the Company received a Notice of Assessment from a state regarding an ongoing sales and use tax audit for the period December 1, 2018 to March 31, 2021. This notice is in addition to the February 2021 Notice of Assessment from that state pertaining to uncollected sales and use tax, including interest and penalties, for the period of September 1, 2016 to November 30, 2018. The Company does not agree with the basis of these assessments and filed an appeal for the 2023 assessment in October 2023 on the same legal basis as the appeal filed in May 2021 for the earlier assessment. The Company has previously accrued an amount related to these assessments consistent with applicable accounting guidance, but if the state prevails in its position, the Company may owe additional tax. Management does not believe the resolution of this matter will have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. During fourth quarter 2023, the Company tentatively settled a claim related to the classification of certain Asset-Light employees under the Fair Labor Standards Act |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION | |
Financial Statement Presentation | Financial Statement Presentation On February 28, 2023, the Company sold FleetNet America, Inc. (“FleetNet”), a wholly owned subsidiary and reportable operating segment of the Company, for an aggregate adjusted cash purchase price of $100.9 million, including post-closing adjustments. The sale of FleetNet ® For the three months ended March 31, 2023, certain reclassifications have been made between operating expenses lines of the Asset-Light segment to conform to the current-year presentation (see Note J). There was no impact on total Asset-Light operating expenses as a result of these reclassifications. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Accordingly, these interim financial statements do not include all information or footnote disclosures required by accounting principles generally accepted in the United States for complete financial statements and, therefore, should be read in conjunction with the audited financial statements and accompanying notes included in the Company’s 2023 Annual Report on Form 10-K and other current filings with the SEC. In the opinion of management, all adjustments (which are of a normal and recurring nature) considered necessary for a fair presentation have been included. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts may differ from those estimates. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting Improvements to Reportable Segment Disclosures ASC Topic 740, Income Taxes Improvements to Income Tax Disclosures In March 2024, the SEC adopted final rules under SEC Release Nos. 33-11275 and 33-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors |
FINANCIAL INSTRUMENTS AND FAI_2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | March 31 December 31 2024 2023 (in thousands) Cash and cash equivalents Cash deposits (1) $ 140,655 $ 168,472 Money market funds (2) 32,200 93,754 Total cash and cash equivalents $ 172,855 $ 262,226 Short-term investments Certificates of deposit (1) $ 68,065 $ 67,842 (1) Recorded at cost plus accrued interest, which approximates fair value. (2) Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note). |
Schedule of fair value and carrying value disclosures of financial instruments | March 31 December 31 2024 2023 (in thousands) Carrying Fair Carrying Fair Value Value Value Value Credit Facility (1) $ 50,000 $ 50,000 $ 50,000 $ 50,000 Notes payable (2) 162,171 159,385 178,938 177,149 New England Pension Fund withdrawal liability (3) 19,222 17,734 19,402 18,220 $ 231,393 $ 227,119 $ 248,340 $ 245,369 (1) The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on Secured Overnight Financing Rate (“SOFR”), plus a margin, priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy). (2) Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy). (3) ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 5.6% and 5.3% at March 31, 2024 and December 31, 2023, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of March 31, 2024, the outstanding withdrawal liability totaled $19.2 million, of which $0.7 million was recorded in accrued expenses, and the remaining portion was recorded in other long-term liabilities. |
Schedule of financial assets and liabilities measured at fair value on a recurring basis | March 31, 2024 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 32,200 $ 32,200 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 4,821 4,821 — — Interest rate swap (3) 1,214 — 1,214 — $ 38,235 $ 37,021 $ 1,214 $ — Liabilities: Contingent consideration (4) $ 100,220 $ — $ — $ 100,220 December 31, 2023 Fair Value Measurements Using Quoted Prices Significant Significant In Active Observable Unobservable Markets Inputs Inputs Total (Level 1) (Level 2) (Level 3) (in thousands) Assets: Money market funds (1) $ 93,754 $ 93,754 $ — $ — Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan (2) 4,627 4,627 — — Interest rate swap (3) 1,710 — 1,710 — $ 100,091 $ 98,381 $ 1,710 $ — Liabilities: Contingent consideration (4) $ 92,900 $ — $ — $ 92,900 (1) Included in cash and cash equivalents. (2) Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities. (3) Included in other long-term assets. The fair value of the interest rate swap was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at March 31, 2024 and December 31, 2023 and considers the interest rate swap valuation in Level 2 of the fair value hierarchy. (4) Included as a long-term liability, based on the March 31, 2024 remeasurement as achievement of the 2024 target is not expected. As part of the Agreement and Plan of Merger (the “Merger Agreement”) of MoLo, executed on November 1, 2021, certain additional cash consideration is required to be paid by the Company based on the achievement of certain incremental targets of adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for each of the years ended December 31, 2023, 2024, and 2025. The adjusted EBITDA metric was below target for 2023, resulting in no earnout payment for 2023. At 100% of the target, the cumulative additional consideration through 2025 would be $215.0 million, consisting of target earnout payments of $70.0 million and $145.0 million, including catch-up provisions, for the years ended December 31, 2024 and 2025, respectively. Possible undiscounted cash consideration could range from a total of $95.0 million at 80% of target to $455.0 million at 300% of target, as outlined in the Merger Agreement. The estimated fair value of contingent consideration is determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and adjusted EBITDA to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 13.4% and 13.3% as of March 31, 2024 and December 31, 2023, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. The increase in fair value of contingent earnout consideration as of March 31, 2024, compared to December 31, 2023, primarily relates to the shorter discount period remaining until the expected payout . |
Schedule of changes in fair value of liabilities measured at fair value using inputs categorized in Level 3 | Contingent Consideration (in thousands) Balance at December 31, 2023 $ 92,900 Change in fair value included in operating income 7,320 Balance at March 31, 2024 $ 100,220 |
Schedule of assets measured at fair value on a nonrecurring basis | Equity Investment (in thousands) Balance at December 31, 2023 $ 28,739 Change in fair value included in other income (28,739) Balance at March 31, 2024 $ — |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
FleetNet | Discontinued Operations, Disposed of by Sale | |
Discontinued Operations | |
Schedules of Discontinued Operations | The following table summarizes the financial results from discontinued operations: Three Months Ended March 31 2024 2023 (in thousands) Revenues $ — $ 55,929 Operating expenses Gain on sale of business (1) (806) (69,083) Other — 54,623 (806) (14,460) Operating income 806 70,389 Other income, net (2) — 17 Income from discontinued operations before income taxes 806 70,406 Income tax provision 206 17,970 Income from discontinued operations, net of tax $ 600 $ 52,436 (1) The 2024 period includes the reversal of an employee-related contingent liability that expired one-year after disposition, per the purchase agreement. The 2023 period includes transaction costs of $4.4 million consisting of consulting fees, professional fees, and employee-related expenses prior to resolution of certain post-close contingencies in second quarter 2023. (2) The 2023 period includes interest expense, which is immaterial. Cash flows from discontinued operations of FleetNet were as follows: Three Months Ended March 31 2024 2023 (in thousands) Net cash provided by operating activities (1) $ — $ 762 Net cash used in investing activities (2) — (398) Net cash used in financing activities — (472) Net decrease in cash and cash equivalents $ — $ (108) (1) The 2023 period includes depreciation and amortization expense of $0.4 million and share-based compensation expense of $0.3 million, which is included in the “Pre-tax gain on sale of discontinued operations” line of the consolidated statements of cash flows. (2) The 2023 period includes purchases of property, plant and equipment of $0.1 million. Excludes the proceeds from the sale of discontinued operations, which are included in cash flows from continuing operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | March 31, 2024 December 31, 2023 Weighted-Average Accumulated Net Accumulated Net Amortization Period Cost Amortization Value Cost Amortization Value (in years) (in thousands) (in thousands) Finite-lived intangible assets Customer relationships 12 $ 99,579 $ 53,463 $ 46,116 $ 99,579 $ 51,357 $ 48,222 Other 8 30,158 10,634 19,524 30,151 9,523 20,628 11 129,737 64,097 65,640 129,730 60,880 68,850 Indefinite-lived intangible asset Trade name N/A 32,300 N/A 32,300 32,300 N/A 32,300 Total intangible assets N/A $ 162,037 $ 64,097 $ 97,940 $ 162,030 $ 60,880 $ 101,150 |
Schedule of future amortization for intangible assets | Amortization of Intangible Assets (in thousands) Remainder of 2024 $ 9,598 2025 12,798 2026 8,691 2027 7,266 2028 7,266 Thereafter 20,021 Total amortization $ 65,640 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Schedule of components of lease expense | Three Months Ended March 31 2024 2023 (in thousands) Operating lease expense $ 10,276 $ 9,166 Variable lease expense 1,681 1,540 Sublease income (646) (114) Total operating lease expense (1) $ 11,311 $ 10,592 (1) Operating lease expense excludes short-term leases with a term of 12 months or less. |
Schedule of operating cash flows from operating lease activity | Three Months Ended March 31 2024 2023 (in thousands) Noncash change in operating right-of-use assets $ 8,618 $ 7,485 Cash payments to obtain right-of-use assets (7,752) — Change in operating lease liabilities (8,576) (5,915) Operating right-of-use-assets and lease liabilities, net $ (7,710) $ 1,570 Cash paid for amounts included in the measurement of operating lease liabilities $ (10,226) $ (7,596) |
Schedule of maturities of operating lease liabilities | Maturities of operating lease liabilities at March 31, 2024, were as follows: Equipment Land and and Total Structures (1) Other (in thousands) Remainder of 2024 $ 30,278 $ 30,085 $ 193 2025 37,922 37,899 23 2026 34,746 34,746 — 2027 28,069 28,069 — 2028 24,584 24,584 — Thereafter 87,556 87,556 — Total lease payments 243,155 242,939 216 Less imputed interest (37,084) (37,081) (3) Total $ 206,071 $ 205,858 $ 213 (1) Excludes future minimum lease payments for leases which were executed but had not yet commenced as of March 31, 2024, totaling $28.8 million, which will be paid over approximately 10 years . |
LONG-TERM DEBT AND FINANCING _2
LONG-TERM DEBT AND FINANCING ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LONG-TERM DEBT AND FINANCING ARRANGEMENTS | |
Schedule of long-term debt | March 31 December 31 2024 2023 (in thousands) Credit Facility (interest rate of 6.6% (1) $ 50,000 $ 50,000 Notes payable (weighted-average interest rate of 3.9% at March 31, 2024) 162,171 178,938 212,171 228,938 Less current portion 63,179 66,948 Long-term debt, less current portion $ 148,992 $ 161,990 (1) The interest rate swap mitigates interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% based on the margin of the Credit Facility as of both March 31, 2024 and December 31, 2023. |
Scheduled maturities of long-term debt obligations | Scheduled maturities of long-term debt obligations as of March 31, 2024, were as follows: Credit Notes Total Facility (1) Payable (in thousands) Due in one year or less $ 71,602 $ 3,142 $ 68,460 Due after one year through two years 50,181 2,690 47,491 Due after two years through three years 38,552 2,502 36,050 Due after three years through four years 69,270 51,273 17,997 Due after four years through five years 3,433 — 3,433 Due after five years — — — Total payments 233,038 59,607 173,431 Less amounts representing interest 20,867 9,607 11,260 Long-term debt $ 212,171 $ 50,000 $ 162,171 (1) The future interest payments included in the scheduled maturities due are calculated using variable interest rates based on the SOFR swap curve, plus the anticipated applicable margin, exclusive of payments on the interest rate swap. |
Schedule of assets securing notes payable | March 31 December 31 2024 2023 (in thousands) Revenue equipment $ 300,161 $ 300,922 Service, office and other equipment 38,138 38,138 Total assets securing notes payable 338,299 339,060 Less accumulated depreciation (1) 145,630 135,305 Net assets securing notes payable $ 192,669 $ 203,755 (1) Depreciation of assets securing notes payable is included in depreciation expense. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS' EQUITY | |
Components of accumulated other comprehensive income | March 31 December 31 2024 2023 (in thousands) Pre-tax amounts: Unrecognized net periodic benefit credit $ 6,564 $ 6,816 Interest rate swap 1,214 1,710 Foreign currency translation (3,285) (2,709) Total $ 4,493 $ 5,817 After-tax amounts: Unrecognized net periodic benefit credit $ 4,874 $ 5,061 Interest rate swap 897 1,263 Foreign currency translation (2,426) (2,000) Total $ 3,345 $ 4,324 |
Summary of changes in accumulated other comprehensive income, net of tax, by component | Unrecognized Interest Foreign Total Benefit Credit Swap Translation (in thousands) Balances at December 31, 2023 $ 4,324 $ 5,061 $ 1,263 $ (2,000) Other comprehensive loss before reclassifications (792) — (366) (426) Amounts reclassified from accumulated other comprehensive income (187) (187) — — Net current-period other comprehensive loss (979) (187) (366) (426) Balances at March 31, 2024 $ 3,345 $ 4,874 $ 897 $ (2,426) Balances at December 31, 2022 $ 7,103 $ 6,896 $ 2,604 $ (2,397) Other comprehensive loss before reclassifications (470) — (452) (18) Amounts reclassified from accumulated other comprehensive income (247) (247) — — Net current-period other comprehensive loss (717) (247) (452) (18) Balances at March 31, 2023 $ 6,386 $ 6,649 $ 2,152 $ (2,415) |
Summary of the significant reclassifications out of accumulated other comprehensive income (loss) by component | Unrecognized Net Periodic Benefit Credit Three Months Ended March 31 2024 2023 (in thousands) Amortization of net actuarial gain, pre-tax (1) $ 252 $ 333 Tax expense (65) (86) Total, net of tax $ 187 $ 247 (1) Included in the computation of net periodic benefit credit of the Company’s supplemental benefit plan (“SBP”) and postretirement health benefit plan. |
Summary of dividends declared | 2024 2023 Per Share Amount Per Share Amount (in thousands, except per share data) First quarter $ 0.12 $ 2,828 $ 0.12 $ 2,915 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
EARNINGS PER SHARE | |
Schedule of computation of basic and diluted earnings (loss) per share | Three Months Ended March 31 2024 2023 (in thousands, except share and per share data) Basic Numerator: Net income (loss) from continuing operations $ (2,912) $ 18,847 Net income from discontinued operations 600 52,436 Net income (loss) $ (2,312) $ 71,283 Denominator: Weighted-average shares 23,561,309 24,288,138 Basic earnings per common share Continuing operations $ (0.12) $ 0.78 Discontinued operations 0.03 2.16 Total basic earnings per common share (1) $ (0.10) $ 2.93 Diluted Numerator: Net income (loss) from continuing operations $ (2,912) $ 18,847 Net income from discontinued operations 600 52,436 Net income (loss) $ (2,312) $ 71,283 Denominator: Weighted-average shares 23,561,309 24,288,138 Effect of dilutive securities — 769,588 Adjusted weighted-average shares and assumed conversions 23,561,309 25,057,726 Diluted earnings per common share Continuing operations $ (0.12) $ 0.75 Discontinued operations 0.03 2.09 Total diluted earnings per common share (1) $ (0.10) $ 2.84 (1) Earnings per common share is calculated in total and may not equal the sum of earnings per common share from continuing operations and discontinued operations due to rounding. |
OPERATING SEGMENT DATA (Tables)
OPERATING SEGMENT DATA (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
OPERATING SEGMENT DATA | |
Schedule of reportable operating segment information from continuing operations | Three Months Ended March 31 2024 2023 (in thousands) REVENUES Asset-Based $ 671,467 $ 697,817 Asset-Light 396,363 438,092 Other and eliminations (31,411) (29,815) Total consolidated revenues $ 1,036,419 $ 1,106,094 OPERATING EXPENSES Asset-Based Salaries, wages, and benefits $ 344,999 $ 335,605 Fuel, supplies, and expenses 81,044 94,288 Operating taxes and licenses 13,529 13,979 Insurance 14,482 13,273 Communications and utilities 4,799 5,304 Depreciation and amortization 27,007 24,911 Rents and purchased transportation 65,671 90,744 Shared services 64,914 64,613 (Gain) loss on sale of property and equipment 149 (51) Innovative technology costs (1) — 6,068 Other 1,417 1,612 Total Asset-Based 618,011 650,346 Asset-Light Purchased transportation 344,122 370,163 Salaries, wages, and benefits (2) 30,304 34,894 Supplies and expenses (2) 2,809 3,629 Depreciation and amortization (3) 5,078 5,068 Shared services (2) 16,274 16,535 Contingent consideration (4) 7,320 15,040 Other (2) 5,714 6,854 Total Asset-Light 411,621 452,183 Other and eliminations (15,648) (17,594) Total consolidated operating expenses $ 1,013,984 $ 1,084,935 (1) Represents costs associated with the freight handling pilot test program at ABF Freight, for which the decision was made to pause the pilot during third quarter 2023. (2) For the 2023 period, certain expenses have been reclassed to conform to the current year presentation, including amounts previously reported in “Shared services” that were reclassed to present “Salaries, wages, and benefits” expenses in a separate line item, and certain immaterial facility rent expenses which were reclassed between line items. (3) Depreciation and amortization includes amortization of intangibles associated with acquired businesses. (4) Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note B). Three Months Ended March 31 2024 2023 (in thousands) OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS Asset-Based $ 53,456 $ 47,471 Asset-Light (15,258) (14,091) Other and eliminations (15,763) (12,221) Total consolidated operating income $ 22,435 $ 21,159 OTHER INCOME (COSTS) FROM CONTINUING OPERATIONS Interest and dividend income $ 3,315 $ 2,933 Interest and other related financing costs (2,228) (2,327) Other, net (1) (28,199) 1,780 Total other income (costs) (27,112) 2,386 INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $ (4,677) $ 23,545 (1) The 2024 period includes a noncash impairment charge to write off the Company’s equity investment in Phantom Auto, a provider of human-centered remote operation software, which ceased operations during first quarter 2024. |
Schedule of revenues from customers and intersegment revenues | Three Months Ended March 31 2024 2023 (in thousands) Revenues from customers Asset-Based $ 640,576 $ 669,220 Asset-Light 394,825 436,033 Other 1,018 841 Total consolidated revenues $ 1,036,419 $ 1,106,094 Intersegment revenues Asset-Based $ 30,891 $ 28,597 Asset-Light 1,538 2,059 Other and eliminations (32,429) (30,656) Total intersegment revenues $ — $ — Total segment revenues Asset-Based $ 671,467 $ 697,817 Asset-Light 396,363 438,092 Other and eliminations (31,411) (29,815) Total consolidated revenues $ 1,036,419 $ 1,106,094 |
Schedule of consolidated operating expenses by component | Three Months Ended March 31 2024 2023 (in thousands) OPERATING EXPENSES Salaries, wages, and benefits $ 439,523 $ 436,982 Rents, purchased transportation, and other costs of services 375,319 429,605 Fuel, supplies, and expenses (1) 109,522 122,175 Depreciation and amortization (2) 36,833 35,010 Contingent consideration (3) 7,320 15,040 Other (1) 45,467 46,123 $ 1,013,984 $ 1,084,935 (1) For the 2023 period, certain facility rent expenses have been reclassed between line items to conform to the current year presentation. Adjustments made are not material. (2) Includes amortization of intangible assets. (3) Represents the change in fair value of the contingent earnout consideration related to the MoLo acquisition (see Note B). |
ORGANIZATION AND DESCRIPTION _3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION - Organization and Description of Business (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Organization and description of business | |
Number of reportable operating segments | 2 |
Asset Based | |
Organization and description of business | |
Percentage of the Company's revenues, before other revenues and intercompany eliminations, represented by the Asset-Based segment | 63% |
Asset Based | Unionized employees concentration risk | Number of employees | |
Organization and description of business | |
Percentage of Asset-Based segment employees covered under collective bargaining agreement with the IBT | 82% |
ORGANIZATION AND DESCRIPTION _4
ORGANIZATION AND DESCRIPTION OF THE BUSINESS AND FINANCIAL STATEMENT PRESENTATION - Financial Statement Presentation (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Feb. 28, 2023 |
FleetNet | Discontinued Operations, Disposed of by Sale | ||
Discontinued Operations | ||
Aggregate adjusted cash purchase price | $ 100.9 | $ 100.9 |
FINANCIAL INSTRUMENTS AND FAI_3
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Cash and Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair value disclosure | ||
Cash and cash equivalents | $ 172,855 | $ 262,226 |
Short-term investments | 68,065 | 67,842 |
Concentrations of Credit Risk of Financial Instruments | ||
Cash deposits and short-term investments which were not FDIC insured | 60,000 | 76,300 |
Cash deposits | ||
Fair value disclosure | ||
Cash and cash equivalents | 140,655 | 168,472 |
Money market funds | ||
Fair value disclosure | ||
Cash and cash equivalents | 32,200 | 93,754 |
Certificates of deposit | ||
Fair value disclosure | ||
Short-term investments | $ 68,065 | $ 67,842 |
FINANCIAL INSTRUMENTS AND FAI_4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Financial instruments (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | |
Fair value disclosure | ||
Outstanding withdrawal liability | $ 19,200 | |
Accrued expenses | ||
Fair value disclosure | ||
Outstanding withdrawal liability | 700 | |
Carrying Value | ||
Fair value disclosure | ||
Financial instruments | 231,393 | $ 248,340 |
Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 227,119 | 245,369 |
Credit Facility | Carrying Value | ||
Fair value disclosure | ||
Financial instruments | 50,000 | 50,000 |
Credit Facility | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 50,000 | 50,000 |
Notes payable | Carrying Value | ||
Fair value disclosure | ||
Financial instruments | 162,171 | 178,938 |
Notes payable | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | 159,385 | 177,149 |
New England Pension Fund withdrawal liability | Carrying Value | ||
Fair value disclosure | ||
Financial instruments | 19,222 | 19,402 |
New England Pension Fund withdrawal liability | Fair Value | Level 2 | ||
Fair value disclosure | ||
Financial instruments | $ 17,734 | $ 18,220 |
Measurement input | 0.056 | 0.053 |
Financial Instrument, Measurement Input | us-gaap:MeasurementInputDiscountRateMember | us-gaap:MeasurementInputDiscountRateMember |
FINANCIAL INSTRUMENTS AND FAI_5
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Liabilities: | ||
Contingent consideration, noncurrent | $ 100,220 | $ 92,900 |
Recurring basis | ||
Assets: | ||
Assets | 38,235 | 100,091 |
Recurring basis | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 32,200 | 93,754 |
Recurring basis | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 4,821 | 4,627 |
Interest rate swap | 1,214 | 1,710 |
Recurring basis | Other long-term liabilities | ||
Liabilities: | ||
Contingent consideration, noncurrent | 100,220 | 92,900 |
Recurring basis | Level 1 | ||
Assets: | ||
Assets | 37,021 | 98,381 |
Recurring basis | Level 1 | Cash and cash equivalents | ||
Assets: | ||
Money market funds | 32,200 | 93,754 |
Recurring basis | Level 1 | Other long-term assets | ||
Assets: | ||
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan | 4,821 | 4,627 |
Recurring basis | Level 2 | ||
Assets: | ||
Assets | 1,214 | 1,710 |
Recurring basis | Level 2 | Other long-term assets | ||
Assets: | ||
Interest rate swap | 1,214 | 1,710 |
Recurring basis | Level 3 | Other long-term liabilities | ||
Liabilities: | ||
Contingent consideration, noncurrent | $ 100,220 | $ 92,900 |
FINANCIAL INSTRUMENTS AND FAI_6
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Merger Agreement (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Mar. 31, 2024 | Nov. 01, 2021 USD ($) | |
Contingent consideration | Level 3 | Recurring basis | |||
Fair value measurement | |||
Measurement input | 0.133 | 0.134 | |
Business Combination, Contingent Consideration, Liability, Measurement Input | us-gaap:MeasurementInputDiscountRateMember | us-gaap:MeasurementInputDiscountRateMember | |
MoLo Solutions, LLC | |||
Fair value measurement | |||
Earnout payment | $ 0 | ||
MoLo Solutions, LLC | 100% of target | |||
Fair value measurement | |||
Adjusted EBITDA target percentage | 100% | ||
Contingent consideration, target | $ 215 | ||
Contingent consideration, target earnout payment for 2024 | 70 | ||
Contingent consideration, target earnout payment for 2025 | $ 145 | ||
MoLo Solutions, LLC | 80% of target | |||
Fair value measurement | |||
Adjusted EBITDA target percentage | 80% | ||
Contingent consideration, low range | $ 95 | ||
MoLo Solutions, LLC | 300% of target | |||
Fair value measurement | |||
Adjusted EBITDA target percentage | 300% | ||
Contingent consideration, high range | $ 455 |
FINANCIAL INSTRUMENTS AND FAI_7
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Changes in Fair Value of Liabilities (Details) - Contingent Consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Changes in fair value | |
Balance at beginning of period | $ 92,900 |
Change in fair value included in operating income | $ 7,320 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income | Operating income |
Balance at end of period | $ 100,220 |
FINANCIAL INSTRUMENTS AND FAI_8
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Assets Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Nov. 30, 2021 | |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | ||||
Equity investments, Balance | $ 28,739 | $ 25,000 | ||
Change in fair value included in other income, increase | $ 3,700 | |||
Change in fair value included in other income, decrease | $ (28,739) |
DISCONTINUED OPERATIONS - Finan
DISCONTINUED OPERATIONS - Financial results (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Feb. 28, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Jun. 30, 2023 | |
Discontinued Operations | |||||
Gain on sale of discontinued operations, pre-tax | $ 806 | $ 69,083 | |||
Operating expenses | |||||
Gain on sale of business | (806) | (69,083) | |||
Income tax provision | 200 | 18,000 | |||
Income from discontinued operations, net of tax | 600 | 52,436 | |||
FleetNet | Discontinued Operations, Disposed of by Sale | |||||
Discontinued Operations | |||||
Aggregate purchase price | $ 101,100 | ||||
Gain on sale of discontinued operations, pre-tax | 69,100 | 806 | 69,083 | $ 70,200 | |
Gain on sale of business, net of tax | (51,400) | ||||
Aggregate adjusted cash purchase price | 100,900 | $ 100,900 | |||
Financial results from discontinued operations | |||||
Revenues | 55,929 | ||||
Operating expenses | |||||
Gain on sale of business | $ (69,100) | (806) | (69,083) | $ (70,200) | |
Other | 54,623 | ||||
Operating expenses | (806) | (14,460) | |||
Operating Income | 806 | 70,389 | |||
Other income, net | 17 | ||||
Income from discontinued operations before income taxes | 806 | 70,406 | |||
Income tax provision | 206 | 17,970 | |||
Income from discontinued operations, net of tax | $ 600 | 52,436 | |||
Transaction costs | $ 4,400 |
DISCONTINUED OPERATIONS - Cash
DISCONTINUED OPERATIONS - Cash flows (Details) - FleetNet - Discontinued Operations, Disposed of by Sale $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Cash flows from discontinued operations | |
Net cash provided by operating activities | $ 762 |
Net cash used in investing activities | (398) |
Net cash used in financing activities | (472) |
Net decrease in cash and cash equivalents | (108) |
Depreciation and amortization expense | 400 |
Share-based compensation expense | 300 |
Purchases of property, plant and equipment | $ 100 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill by reportable operating segment | ||
Goodwill | $ 304,753 | $ 304,753 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 11 years | |
Cost | $ 129,737 | $ 129,730 |
Accumulated Amortization | 64,097 | 60,880 |
Net Value | 65,640 | 68,850 |
Total intangible assets | ||
Cost | 162,037 | 162,030 |
Net Value | 97,940 | 101,150 |
Trade name | ||
Indefinite-lived intangible asset | ||
Net Value | $ 32,300 | 32,300 |
Customer relationships | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 12 years | |
Cost | $ 99,579 | 99,579 |
Accumulated Amortization | 53,463 | 51,357 |
Net Value | $ 46,116 | 48,222 |
Other intangible assets | ||
Finite-lived intangible assets | ||
Weighted Average Amortization Period | 8 years | |
Cost | $ 30,158 | 30,151 |
Accumulated Amortization | 10,634 | 9,523 |
Net Value | $ 19,524 | $ 20,628 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Future amortization for intangible assets | ||
Remainder of 2024 | $ 9,598 | |
2025 | 12,798 | |
2026 | 8,691 | |
2027 | 7,266 | |
2028 | 7,266 | |
Thereafter | 20,021 | |
Net Value | $ 65,640 | $ 68,850 |
INCOME TAXES - Tax Rate (Detail
INCOME TAXES - Tax Rate (Details) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income taxes | ||
Effective tax (benefit) rate, including discontinued operations (as a percent) | (40.30%) | 24.10% |
Effective tax (benefit) rate from continuing operations (as a percent) | (37.70%) | 20% |
Average state tax rate (as a percent) | 6% | 6% |
INCOME TAXES - Allowance (Detai
INCOME TAXES - Allowance (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred tax assets: | ||
Valuation allowance | $ 1.8 | $ 1.8 |
INCOME TAXES - Taxes Paid (Deta
INCOME TAXES - Taxes Paid (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income taxes | ||
Income tax expense (benefit), discontinued operations | $ 0.2 | $ 18 |
Effective tax rate, discontinued operations (as a percent) | 25.50% | 25.50% |
Federal, state and foreign | ||
Income taxes | ||
Income taxes paid (in dollars) | $ 19.1 | $ 27.7 |
State | Maximum | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 0.1 | |
Federal and state | ||
Income taxes | ||
Income tax refunds received (in dollars) | $ 1.6 |
LEASES - Components of Lease Ex
LEASES - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
LEASES | ||
Operating lease expense | $ 10,276 | $ 9,166 |
Variable lease expense | 1,681 | 1,540 |
Sublease income | (646) | (114) |
Total operating lease expense | $ 11,311 | $ 10,592 |
LEASES - Cash Flows (Details)
LEASES - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating leases | ||
Noncash change in operating right-of-use assets | $ 8,618 | $ 7,485 |
Cash payments to obtain right-of-use assets | (7,752) | |
Change in operating lease liabilities | (8,576) | (5,915) |
Operating right-of-use assets and lease liabilities, net | (7,710) | 1,570 |
Cash paid for amounts included in the measurement of operating lease liabilities | $ (10,226) | $ (7,596) |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Maturities of operating lease liabilities | |
Remainder of 2024 | $ 30,278 |
2025 | 37,922 |
2026 | 34,746 |
2027 | 28,069 |
2028 | 24,584 |
Thereafter | 87,556 |
Total lease payments | 243,155 |
Less imputed interest | (37,084) |
Total operating lease liabilities | $ 206,071 |
Operating Lease, Liability, Statement of Financial Position | Operating Lease, Liability, Current, Operating Lease, Liability, Noncurrent |
Land And Structures | |
Maturities of operating lease liabilities | |
Remainder of 2024 | $ 30,085 |
2025 | 37,899 |
2026 | 34,746 |
2027 | 28,069 |
2028 | 24,584 |
Thereafter | 87,556 |
Total lease payments | 242,939 |
Less imputed interest | (37,081) |
Total operating lease liabilities | 205,858 |
Future minimum payments for leases that have not yet commenced | $ 28,800 |
Lease term for lease commitments that have not yet commenced | 10 years |
Equipment and Other | |
Maturities of operating lease liabilities | |
Remainder of 2024 | $ 193 |
2025 | 23 |
Total lease payments | 216 |
Less imputed interest | (3) |
Total operating lease liabilities | $ 213 |
LONG-TERM DEBT AND FINANCING _3
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Long-term debt obligations | ||
Long-term debt | $ 212,171 | $ 228,938 |
Less current portion | 63,179 | 66,948 |
Long-term debt, less current portion | 148,992 | 161,990 |
Credit Facility | ||
Long-term debt obligations | ||
Long-term debt | $ 50,000 | 50,000 |
Interest rate (as a percent) | 6.60% | |
Credit Facility | Interest rate swap agreement, maturing on October 1, 2024 | ||
Long-term debt obligations | ||
Amount of borrowings covered by the interest rate swap | $ 50,000 | $ 50,000 |
Effective fixed interest rate on hedged borrowings (as a percent) | 1.55% | 1.55% |
Notes payable | ||
Long-term debt obligations | ||
Long-term debt | $ 162,171 | $ 178,938 |
Weighted-average interest rate (as a percent) | 3.90% |
LONG-TERM DEBT AND FINANCING _4
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Maturities of long-term debt obligations | ||
Due in one year or less | $ 71,602 | |
Due after one year through two years | 50,181 | |
Due after two years through three years | 38,552 | |
Due after three years through four years | 69,270 | |
Due after four years through five years | 3,433 | |
Total payments | 233,038 | |
Less amounts representing interest | 20,867 | |
Long-term debt | 212,171 | $ 228,938 |
Credit Facility | ||
Maturities of long-term debt obligations | ||
Due in one year or less | 3,142 | |
Due after one year through two years | 2,690 | |
Due after two years through three years | 2,502 | |
Due after three years through four years | 51,273 | |
Total payments | 59,607 | |
Less amounts representing interest | 9,607 | |
Long-term debt | 50,000 | 50,000 |
Notes payable | ||
Maturities of long-term debt obligations | ||
Due in one year or less | 68,460 | |
Due after one year through two years | 47,491 | |
Due after two years through three years | 36,050 | |
Due after three years through four years | 17,997 | |
Due after four years through five years | 3,433 | |
Total payments | 173,431 | |
Less amounts representing interest | 11,260 | |
Long-term debt | $ 162,171 | $ 178,938 |
LONG-TERM DEBT AND FINANCING _5
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Assets Securing Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Financing Arrangements | ||
Total assets securing notes payable | $ 338,299 | $ 339,060 |
Less accumulated depreciation | 145,630 | 135,305 |
Net assets securing notes payable | 192,669 | 203,755 |
Revenue Equipment | ||
Financing Arrangements | ||
Total assets securing notes payable | 300,161 | 300,922 |
Service, office and other equipment | ||
Financing Arrangements | ||
Total assets securing notes payable | $ 38,138 | $ 38,138 |
LONG-TERM DEBT AND FINANCING _6
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Credit Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Financing Arrangements | ||
Repayment of debt | $ 16,767 | $ 17,649 |
Credit Facility | ||
Financing Arrangements | ||
Maximum borrowing capacity | 250,000 | |
Remaining borrowing capacity | 200,000 | |
Credit Facility | Maximum | ||
Financing Arrangements | ||
Additional borrowing capacity that may be requested | 125,000 | |
Swing Line Facility | ||
Financing Arrangements | ||
Maximum borrowing capacity | 40,000 | |
Letters of Credit, Sub-Facility | ||
Financing Arrangements | ||
Maximum borrowing capacity | $ 20,000 |
LONG-TERM DEBT AND FINANCING _7
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Interest Rate Swap (Details) - Interest rate swap agreement, maturing on October 1, 2024 - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Financing Arrangements | ||
Notional amount | $ 50 | |
Fixed interest rate payments (as a percent) | 0.33% | |
Other long-term assets | ||
Financing Arrangements | ||
Fair value of interest rate swap, asset | $ 1.2 | $ 1.7 |
LONG-TERM DEBT AND FINANCING _8
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Securitization Program (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Financing Arrangements | |
Outstanding letters of credit | $ 17.4 |
Accounts receivable securitization program | |
Financing Arrangements | |
Maximum borrowing capacity | 50 |
Additional borrowing capacity that may be requested | 100 |
Outstanding letters of credit | 16.8 |
Remaining borrowing capacity | $ 33.2 |
LONG-TERM DEBT AND FINANCING _9
LONG-TERM DEBT AND FINANCING ARRANGEMENTS - Letters of Credit & Surety Bonds (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Financing Arrangements | |
Outstanding letters of credit | $ 17.4 |
Accounts receivable securitization program | |
Financing Arrangements | |
Outstanding letters of credit | 16.8 |
Surety bonds | |
Financing Arrangements | |
Outstanding surety bonds under uncollateralized bond programs | $ 67.7 |
STOCKHOLDERS' EQUITY - AOCI Com
STOCKHOLDERS' EQUITY - AOCI Components (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Accumulated Other Comprehensive Income | ||||
Total after-tax amount | $ 1,222,733 | $ 1,242,363 | $ 1,205,859 | $ 1,151,401 |
Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | 4,493 | 5,817 | ||
Total after-tax amount | 3,345 | 4,324 | 6,386 | 7,103 |
Unrecognized Net Periodic Benefit Credit | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | 6,564 | 6,816 | ||
Total after-tax amount | 4,874 | 5,061 | 6,649 | 6,896 |
Interest Rate Swap | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | 1,214 | 1,710 | ||
Total after-tax amount | 897 | 1,263 | 2,152 | 2,604 |
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income | ||||
Total pre-tax amount | (3,285) | (2,709) | ||
Total after-tax amount | $ (2,426) | $ (2,000) | $ (2,415) | $ (2,397) |
STOCKHOLDERS' EQUITY - AOCI Cha
STOCKHOLDERS' EQUITY - AOCI Changes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Changes in accumulated other comprehensive income, net of tax, by component | ||
Balances | $ 1,242,363 | $ 1,151,401 |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (979) | (717) |
Balances | 1,222,733 | 1,205,859 |
Accumulated Other Comprehensive Income | ||
Changes in accumulated other comprehensive income, net of tax, by component | ||
Balances | 4,324 | 7,103 |
Other comprehensive loss before reclassifications | (792) | (470) |
Amounts reclassified from accumulated other comprehensive income | (187) | (247) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (979) | (717) |
Balances | 3,345 | 6,386 |
Unrecognized Net Periodic Benefit Credit | ||
Changes in accumulated other comprehensive income, net of tax, by component | ||
Balances | 5,061 | 6,896 |
Amounts reclassified from accumulated other comprehensive income | (187) | (247) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (187) | (247) |
Balances | 4,874 | 6,649 |
Interest Rate Swap | ||
Changes in accumulated other comprehensive income, net of tax, by component | ||
Balances | 1,263 | 2,604 |
Other comprehensive loss before reclassifications | (366) | (452) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (366) | (452) |
Balances | 897 | 2,152 |
Foreign Currency Translation | ||
Changes in accumulated other comprehensive income, net of tax, by component | ||
Balances | (2,000) | (2,397) |
Other comprehensive loss before reclassifications | (426) | (18) |
OTHER COMPREHENSIVE INCOME (LOSS), net of tax | (426) | (18) |
Balances | $ (2,426) | $ (2,415) |
STOCKHOLDERS' EQUITY - Reclass
STOCKHOLDERS' EQUITY - Reclass (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Unrecognized Net Periodic Benefit Credit | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Tax expense | $ (65) | $ (86) |
Total, net of tax | 187 | 247 |
Amortization of net actuarial gain | ||
Significant reclassifications out of accumulated other comprehensive loss by component | ||
Total, pre-tax | $ 252 | $ 333 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Apr. 26, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Dividends on Common Stock | |||
Dividends declared (in dollars per share) | $ 0.12 | $ 0.12 | |
Dividend Amount | $ 2,828 | $ 2,915 | |
Subsequent Event | |||
Dividends on Common Stock | |||
Dividends declared (in dollars per share) | $ 0.12 |
STOCKHOLDERS' EQUITY - Treasury
STOCKHOLDERS' EQUITY - Treasury Stock (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Apr. 30, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Feb. 29, 2024 | Dec. 31, 2023 | |
Treasury Stock | |||||
Cost of repurchased shares | $ 15,652 | $ 14,092 | |||
Stock Repurchase Program | |||||
Treasury Stock | |||||
Amount available for repurchase | $ 115,300 | $ 33,500 | |||
Amount of stock repurchases authorized | $ 125,000 | ||||
Number of shares repurchased during the period | 120,681 | ||||
Cost of repurchased shares | $ 15,700 | ||||
Stock repurchase, 10b5-1 Agreement 1 | |||||
Treasury Stock | |||||
Number of shares repurchased during the period | 65,366 | ||||
Cost of repurchased shares | $ 8,000 | ||||
Stock repurchase, 10b5-1 Agreement 2 | Subsequent Event | |||||
Treasury Stock | |||||
Number of shares repurchased during the period | 36,547 | ||||
Cost of repurchased shares | $ 5,200 |
EARNINGS PER SHARE - Basic And
EARNINGS PER SHARE - Basic And Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Basic, numerator: | ||
Net income (loss) from continuing operations | $ (2,912) | $ 18,847 |
Net income from discontinued operations | 600 | 52,436 |
Net income (loss) | $ (2,312) | $ 71,283 |
Basic, denominator: | ||
Weighted-average shares | 23,561,309 | 24,288,138 |
Basic earnings per common share | ||
Continuing operations (in dollars per share) | $ (0.12) | $ 0.78 |
Discontinued operations (in dollars per share) | 0.03 | 2.16 |
BASIC EARNINGS PER COMMON SHARE (in dollars per share) | $ (0.10) | $ 2.93 |
Diluted, numerator: | ||
Net income (loss) from continuing operations | $ (2,912) | $ 18,847 |
Net income from discontinued operations | 600 | 52,436 |
Net income (loss) | $ (2,312) | $ 71,283 |
Diluted, denominator: | ||
Weighted-average shares | 23,561,309 | 24,288,138 |
Effect of dilutive securities | 769,588 | |
Adjusted weighted-average shares and assumed conversions | 23,561,309 | 25,057,726 |
Diluted earnings per common share | ||
Continuing operations (in dollars per share) | $ (0.12) | $ 0.75 |
Discontinued operations (in dollars per share) | 0.03 | 2.09 |
DILUTED EARNINGS PER COMMON SHARE (in dollars per share) | $ (0.10) | $ 2.84 |
OPERATING SEGMENT DATA - Revenu
OPERATING SEGMENT DATA - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUES | ||
Revenues | $ 1,036,419 | $ 1,106,094 |
Asset Based | ||
REVENUES | ||
Revenues | 640,576 | 669,220 |
Asset-Light | ||
REVENUES | ||
Revenues | 394,825 | 436,033 |
Operating Segments | Asset Based | ||
REVENUES | ||
Revenues | 671,467 | 697,817 |
Operating Segments | Asset-Light | ||
REVENUES | ||
Revenues | 396,363 | 438,092 |
Other and eliminations | ||
REVENUES | ||
Revenues | $ (31,411) | $ (29,815) |
OPERATING SEGMENT DATA - Operat
OPERATING SEGMENT DATA - Operating Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING EXPENSES | ||
Salaries, wages, and benefits | $ 439,523 | $ 436,982 |
Fuel, supplies, and expenses | 109,522 | 122,175 |
Depreciation and amortization | 36,833 | 35,010 |
Contingent consideration | 7,320 | 15,040 |
(Gain) loss on sale of property and equipment | 217 | (9) |
Other | 45,467 | 46,123 |
Total consolidated operating expenses | 1,013,984 | 1,084,935 |
Operating Segments | Asset Based | ||
OPERATING EXPENSES | ||
Salaries, wages, and benefits | 344,999 | 335,605 |
Fuel, supplies, and expenses | 81,044 | 94,288 |
Operating taxes and licenses | 13,529 | 13,979 |
Insurance | 14,482 | 13,273 |
Communications and utilities | 4,799 | 5,304 |
Depreciation and amortization | 27,007 | 24,911 |
Rents and purchased transportation | 65,671 | 90,744 |
Shared services | 64,914 | 64,613 |
(Gain) loss on sale of property and equipment | 149 | (51) |
Innovative technology costs | 6,068 | |
Other | 1,417 | 1,612 |
Total consolidated operating expenses | 618,011 | 650,346 |
Operating Segments | Asset-Light | ||
OPERATING EXPENSES | ||
Purchased transportation | 344,122 | 370,163 |
Salaries, wages, and benefits | 30,304 | 34,894 |
Supplies and expenses | 2,809 | 3,629 |
Depreciation and amortization | 5,078 | 5,068 |
Shared services | 16,274 | 16,535 |
Contingent consideration | 7,320 | 15,040 |
Other | 5,714 | 6,854 |
Total consolidated operating expenses | 411,621 | 452,183 |
Other and eliminations | ||
OPERATING EXPENSES | ||
Total consolidated operating expenses | $ (15,648) | $ (17,594) |
OPERATING SEGMENT DATA - Oper_2
OPERATING SEGMENT DATA - Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | ||
Operating income | $ 22,435 | $ 21,159 |
OTHER INCOME (COSTS) FROM CONTINUING OPERATIONS | ||
Interest and dividend income | 3,315 | 2,933 |
Interest and other related financing costs | (2,228) | (2,327) |
Other, net | (28,199) | 1,780 |
TOTAL OTHER INCOME (COSTS) | (27,112) | 2,386 |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (4,677) | 23,545 |
Operating Segments | Asset Based | ||
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | ||
Operating income | 53,456 | 47,471 |
Operating Segments | Asset-Light | ||
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | ||
Operating income | (15,258) | (14,091) |
Other and eliminations | ||
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS | ||
Operating income | $ (15,763) | $ (12,221) |
OPERATING SEGMENT DATA - Reve_2
OPERATING SEGMENT DATA - Revenue from Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
REVENUES | ||
Revenues | $ 1,036,419 | $ 1,106,094 |
Asset Based | ||
REVENUES | ||
Revenues | 640,576 | 669,220 |
Asset-Light | ||
REVENUES | ||
Revenues | 394,825 | 436,033 |
Corporate and other | ||
REVENUES | ||
Revenues | 1,018 | 841 |
Operating Segments | Asset Based | ||
REVENUES | ||
Revenues | 671,467 | 697,817 |
Operating Segments | Asset-Light | ||
REVENUES | ||
Revenues | 396,363 | 438,092 |
Intersegment revenues | ||
REVENUES | ||
Revenues | (32,429) | (30,656) |
Intersegment revenues | Asset Based | ||
REVENUES | ||
Revenues | 30,891 | 28,597 |
Intersegment revenues | Asset-Light | ||
REVENUES | ||
Revenues | 1,538 | 2,059 |
Other and eliminations | ||
REVENUES | ||
Revenues | $ (31,411) | $ (29,815) |
OPERATING SEGMENT DATA - Oper_3
OPERATING SEGMENT DATA - Operating Expenses by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING EXPENSES | ||
Salaries, wages, and benefits | $ 439,523 | $ 436,982 |
Rents, purchased transportation, and other costs of services | 375,319 | 429,605 |
Fuel, supplies, and expenses | 109,522 | 122,175 |
Depreciation and amortization | 36,833 | 35,010 |
Contingent consideration | 7,320 | 15,040 |
Other | 45,467 | 46,123 |
Total consolidated operating expenses | $ 1,013,984 | $ 1,084,935 |
LEGAL PROCEEDINGS, ENVIRONMEN_2
LEGAL PROCEEDINGS, ENVIRONMENTAL MATTERS, AND OTHER EVENTS (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Claim related to employee classification under Fair Labor Standards Act | Asset-Light | |
Environmental Matters and Other Events | |
Estimated settlement expense | $ 9.5 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (2,312) | $ 71,283 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |