Significant Accounting Policies [Text Block] | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Covenant Logistics Group, Inc., a Nevada holding company, together with its wholly owned subsidiaries offers transportation and logistics services to customers throughout the continental United States. Principles of Consolidation The consolidated financial statements include the accounts of Covenant Logistics Group, Inc., a holding company incorporated in the state of Nevada in 1994, References in this report to "it," "we," "us," "our," the "Company," and similar expressions refer to Covenant Logistics Group, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Our four ● Expedited: The Expedited reportable segment primarily provides truckload services to customers with high service freight and delivery standards, such as 1,000 22 15 two ● Dedicated: The Dedicated reportable segment provides customers with committed truckload capacity over contracted periods with the goal of three five ● Managed Freight: The Managed Freight reportable segment includes our brokerage and transport management services ("TMS"). Brokerage services provide logistics capacity by outsourcing the carriage of customers' freight to third ● Warehousing: The Warehousing reportable segment provides day-to-day warehouse management services to customers who have chosen to outsource this function. We also provide shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses. The following table summarizes our revenue by our four December 31, 2023 2022 2021 Year ended December 31, (in thousands) 2023 2022 2021 Revenues: Expedited $ 423,820 $ 452,713 $ 337,063 Dedicated 320,287 362,997 324,541 Managed Freight 258,903 320,985 321,236 Warehousing 100,563 80,163 63,163 Total revenues $ 1,103,573 $ 1,216,858 $ 1,046,003 Investment in Transport Enterprise Leasing, LLC Transport Enterprise Leasing, LLC ("TEL") is a tractor and trailer equipment leasing company and used equipment reseller. We evaluated our investment in TEL to determine whether it should be recorded on a consolidated basis. Our percentage of ownership interest (49%), an evaluation of control, and whether a variable interest entity ("VIE") existed were all considered in our consolidation assessment. Based on the analysis, the Company is not not 49% On a periodic basis, we assess whether there are any indicators that the fair value of our investment in TEL may no December 31, 2023 2022 2021. Risks and Uncertainties Our insurance program includes multi-year policies with specific insurance limits that may April 1, 2018 March 31, 2021, $9.0 $1.0 January 28, 2021 April 1, 2024. $9.0 $1.0 April 1, 2018 March 31, 2021, may Revenue Recognition Revenue, drivers' wages, and other direct operating expenses generated by our Expedited and Dedicated reportable segments are recognized proportionally as the transportation service is performed based on the percentage of miles completed as of the period end. Revenue is recognized on a gross basis at amounts charged to our customers because we control and are primarily responsible for the fulfillment of the promised service. Revenue includes transportation revenue, fuel surcharges, loading and unloading activities, equipment detention, and other accessorial services. Revenue generated by our Managed Freight reportable segment is recognized proportionally as the services are provided based on the percentage of completion method using the estimated time elapsed as of the period end. Revenue is recorded on a gross basis, without deducting third There are no December 31, 2023 2022 2021 December 31, 2023 2022 Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make decisions based upon estimates, assumptions, and factors we consider as relevant to the circumstances. Such decisions include the selection of applicable accounting principles and the use of judgment in their application, the results of which impact reported amounts and disclosures. Changes in future economic conditions or other business circumstances may Cash and Cash Equivalents We consider all highly liquid investments with a maturity of three December 31, 2023, Accounts Receivable and Concentration of Credit Risk We extend credit to our customers in the normal course of business, which are generally due within 30 45 120 not Accounts receivable are comprised of a diversified customer base that mitigates the level of concentration of credit risk. During 2023 2022 2021 ten 2023 none 2022 2021 10% 49 40 2023 2022 The following table provides a summary (in thousands) of the activity in the allowance for credit losses for 2023 2022 2021 Years ended December 31: Beginning balance January 1, (Reversal of) additional provisions to allowance Write-offs and other adjustments Ending balance December 31, 2023 $ 2,934 $ (258 ) $ (227 ) $ 2,449 2022 $ 4,112 $ 367 $ (1,545 ) $ 2,934 2021 $ 2,992 $ 1,338 $ (218 ) $ 4,112 Inventories and Supplies Inventories and supplies consist of parts, tires, fuel, and supplies. Tires on new revenue equipment are capitalized as a component of the related equipment cost when the tractor or trailer is placed in service and recognized through depreciation over the life of the vehicle. Replacement tires and parts on hand at year end are recorded at the lower of cost or net realizable value with cost determined using the first first Assets Held for Sale Assets held for sale include property and revenue equipment no no twelve Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation for book purposes is determined using the straight-line method over the estimated useful lives of the assets. Depreciation of revenue equipment is our largest item of depreciation. We generally depreciate new tractors over five seven ten not We lease certain revenue equipment under finance and operating leases with terms of approximately 48 to 84 months. Amortization of assets under finance and operating leases are included in depreciation and amortization expense and revenue and equipment rentals and purchased transportation, respectively. A portion of our tractors are protected by binding trade-back agreements with the manufacturers. The remainder of our tractors and substantially all of our owned trailers are subject to fluctuations in market prices for used revenue equipment. Moreover, our trade-back agreements are contingent upon reaching acceptable terms for the purchase of new equipment. Declines in the price of used revenue equipment or failure to reach agreement for the purchase of new tractors with the manufacturers issuing trade-back agreements could result in impairment of, or losses on the sale of, revenue equipment. Goodwill and Other Intangible Assets We classify intangible assets into two may may not may not We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any agreement, the history of the asset, our long-term strategy for the use of the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have finite lives are amortized, generally on a straight-line basis, over their remaining useful lives, ranging from 3 to 17 years. Impairment of Long-Lived Assets Pursuant to applicable accounting standards, revenue equipment and other long-lived assets are tested for impairment whenever an event occurs that indicates an impairment may Pursuant to applicable accounting standards, revenue equipment and other long-lived assets are tested for impairment whenever an event occurs that indicates impairment may no twelve December 31, 2023 2022 2021 Accrued Expenses Accrued expenses as of December 31, 2023, December 31, 2022, Insurance and Other Claims The primary claims arising against us consist of auto liability (personal injury and property damage), workers' compensation, cargo, commercial liability, and employee medical expenses. At December 31, 2023 ● auto liability - $7.0 million in excess of $3.0 million policy that runs from January 28, 2021 April 1, 2024 ● workers' compensation - $1.5 million ● cargo - $0.3 million ● employee medical - $0.4 million ● physical damage - 100% Due to our significant self-insured retention amounts, we have exposure to fluctuations in the number and severity of claims and to variations between our estimated and actual ultimate payouts. We record a liability for the estimated cost of the uninsured portion of pending claims and the estimated allocated loss adjustment expenses including legal and other direct costs associated with a claim. Estimates require judgments concerning the nature and severity of the claim, historical trends, advice from third In addition to estimates within our self-insured retention layers, we also must make judgments concerning claims where we have third third December 31, 2023 2022 December 31, 2023 2022 may We also make judgments regarding the ultimate benefit versus risk of commuting certain periods within our auto liability policy. If we commute a policy, we assume 100% risk for covered claims in exchange for a policy refund. Our prior auto liability policies have sometimes included a release premium refund or commutation option that we have sometimes exercised, although we do not not no December 31, 2023 2022. Interest We capitalize interest on major projects during construction. Interest is capitalized based on the average interest rate on related debt. Capitalized interest was $0.3 million, $0.3 million, and less than $0.1 million in 2023 2022 2021 Fair Value of Financial Instruments Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, available-for-sale securities, accounts payable, debt, and interest rate swaps. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and current debt approximates their fair value because of the short-term maturity of these instruments. Interest rates that are currently available to us for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of our long-term debt, which primarily consists of revenue equipment installment notes. The fair value of our revenue equipment installment notes approximated the carrying value at December 31, 2023 Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We have reflected the net liability after offsetting our deferred tax assets and liabilities in the deferred income taxes line in the accompanying consolidated balance sheets. We believe the future tax deductions will be realized principally through future reversals of existing taxable temporary differences and future taxable income, except for when a valuation allowance has been provided as discussed in Note 12. In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances, and information available at the reporting dates. For those tax positions where it is more likely than not 50% not not no Our policy is to recognize income tax benefit arising from the exercise of stock options and restricted share vesting based on the ordering provisions of the tax law as prescribed by the Internal Revenue Code, including indirect tax effects, if any. Lease Accounting At the commencement date of a new lease agreement with contractual terms longer than twelve Right-of-use assets and lease liabilities are initially recorded based on the present value of lease payments over the term of the lease. When the rate implicit in the lease is readily determinable, this rate is used for calculating the present value of remaining lease payments; otherwise, our incremental borrowing rate is used. The incremental borrowing rate represents an estimate of the interest rate we would incur at the lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Right-of-use assets also include prepaid lease expenses and initial direct costs of executing the leases, which are reduced by landlord incentives. Options to extend or terminate a lease agreement are included in or excluded from the lease term, respectively, when those options are reasonably certain to be exercised. Right-of-use assets are tested for impairment in the same manner as long-lived assets. Finance lease obligations are utilized to finance a portion of our revenue equipment and are entered into with certain finance companies who are not may not Right-of-use assets are included in net property and equipment. For finance leases, right-of-use assets are amortized on a straight-line basis over the shorter of the expected useful life or the lease term, and the carrying amount of the lease liability is adjusted to reflect interest expense, which is recorded in interest expense, net. Operating lease right-of-use assets are amortized over the lease term on a straight-line basis, and the lease liability is measured at the present value of the remaining lease payments. Variable lease payments not Capital Structure The shares of Class A and B common stock are substantially identical except that the Class B shares are entitled to two one Income Per Share Basic income per share excludes dilution and is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted income per share reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. There were approximately 245,000 shares, 358,000 shares, and 217,000 shares issuable upon conversion of unvested restricted shares for the years ended December 31, 2023 2022 2021 no not December 31, 2023 2022 2021 no December 31, 2023 2022 2021 December 31, 2023 2022 2021 The following table sets forth the calculation of net income per share included in the consolidated statements of operations for each of the three December 31: (in thousands except per share data) 2023 2022 2021 Numerators: Income from continuing operations $ 54,629 $ 107,932 $ 58,191 Income from discontinued operations, net of tax 600 750 2,540 Net income $ 55,229 $ 108,682 $ 60,731 Denominator: Denominator for basic income per share – weighted-average shares 13,048 15,006 16,803 Effect of dilutive securities: Equivalent shares issuable upon conversion of unvested restricted shares 245 358 217 Equivalent shares issuable upon conversion of unvested employee stock options 541 160 - Denominator for diluted income per share adjusted weighted-average shares and assumed conversions 13,834 15,524 17,020 Basic income per share: Income from continuing operations $ 4.19 $ 7.19 $ 3.46 Income from discontinued operations $ 0.05 $ 0.05 $ 0.15 Net income per basic share(1) $ 4.23 $ 7.24 $ 3.61 Diluted income per share: Income from continuing operations $ 3.95 $ 6.95 $ 3.42 Income from discontinued operations $ 0.04 $ 0.05 $ 0.15 Net income per diluted share $ 3.99 $ 7.00 $ 3.57 ( 1 Total may not Stock-Based Employee Compensation We issue several types of stock-based compensation, including awards that vest based on service, market, and performance conditions or a combination of the conditions. Performance-based and market-based awards vest contingent upon meeting certain performance or market criteria, respectively, established by the Compensation Committee of the Board. All awards require future service. For performance-based awards, determining the appropriate amount to expense in each period is based on likelihood and timing of achieving the stated targets for performance-based awards and requires judgment, including forecasting future financial results. The estimates are revised periodically based on the probability and timing of achieving the required performance and adjustments are made as appropriate. Awards that are only subject to time vesting provisions are amortized using the straight-line method. Recent Accounting Pronouncements Accounting Standards not In November 2023, No. 2023 07, 280 December 15, 2023, December 15, 2024. December 31, 2024. In December 2023, 2023 09, 1 2 2023 09 December 15, 2024. Accounting Standards adopted In June 2016, 2016 13, Financial Instruments - Measurement of Credit Losses on Financial Instruments January 1, 2023, There are no |