☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2019
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Nevada
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88-0320154
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(State / other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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400 Birmingham Hwy.
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Chattanooga, TN
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37419
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
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423 - 821-1212
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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$0.01 Par Value Class A common stock
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CVTI
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The NASDAQ Global Select Market
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Emerging growth company
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☐
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Part I
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Item 1.
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4
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Item 1A.
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16
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Item 1B.
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32
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Item 2.
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32
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Item 3.
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32
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Item 4.
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33
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Part II
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Item 5.
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34
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Item 6.
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35
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Item 7.
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37
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Item 7A.
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51
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Item 8.
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52
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Item 9.
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52
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Item 9A.
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53
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Item 9B.
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53
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Part III
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Item 10.
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54
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Item 11.
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54
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Item 12.
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54
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Item 13.
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54
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Item 14.
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54
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Part IV
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Item 15.
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55
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Item 16.
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57
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58
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59
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|||
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60
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Financial Data
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61
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62
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63
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64
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65
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66
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ITEM 1.
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● |
Highway Services
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● |
Managed Freight
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2018
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2019
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||||||
Average freight revenue per total mile
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$
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2.03
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$
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1.93
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||||
Average miles per tractor
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126,116
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124,228
|
||||||
Average freight revenue per tractor per week
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$
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4,908
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$
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4,595
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2018
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2019
|
||||||
Average freight revenue per total mile
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$
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1.79
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$
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1.81
|
||||
Average miles per tractor
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95,652
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91,318
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||||||
Average freight revenue per tractor per week
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$
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3,275
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$
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3,168
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●
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the worker is free from control and direction in the performance of services; and
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●
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the worker is performing work outside the usual course of business of the hiring company; and
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●
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the worker is customarily engaged in an independently established trade, occupation, or business.
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ITEM 1A.
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●
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we may experience a reduction in overall freight levels, which may impair our asset utilization;
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●
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certain of our customers may face credit issues and could experience cash flow problems that may lead to payment delays, increased credit risk, bankruptcies, and other
financial hardships that could result in even lower freight demand and may require us to increase our allowance for doubtful accounts;
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●
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freight patterns may change as supply chains are redesigned, resulting in an imbalance between our capacity and our customers' freight demand;
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●
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customers may solicit bids for freight from multiple trucking companies or select competitors that offer lower rates from among existing choices in an attempt to lower
their costs, and we might be forced to lower our rates or lose freight;
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●
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we may be forced to accept more freight from freight brokers, where freight rates are typically lower, or may be forced to incur more non-revenue miles to obtain
loads; and
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●
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lack of access to current sources of credit or lack of lender access to capital, leading to an inability to secure credit financing on satisfactory terms, or at all.
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●
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we compete with many other truckload carriers of varying sizes and, to a lesser extent, with (i) less-than-truckload carriers, (ii) railroads, intermodal companies,
and (iii) other transportation and logistics companies, many of which have access to more equipment and greater capital resources than we do;
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●
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many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy, which may limit our ability
to maintain or increase freight rates or to maintain or expand our business or may require us to reduce our freight rates in order to maintain business and keep our equipment productive;
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●
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many of our customers, including several in our top ten, are other transportation companies or also operate their own private trucking fleets, and they may decide to
transport more of their own freight;
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●
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we may increase the size of our fleet during periods of high freight demand during which our competitors also increase their capacity, and we may experience losses in
greater amounts than such competitors during subsequent cycles of softened freight demand if we are required to dispose of assets at a loss to match reduced customer demand;
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●
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a significant portion of our business is in the retail industry, which continues to undergo a shift away from the traditional brick and mortar model towards
e-commerce, and this shift could impact the manner in which our customers source or utilize our services;
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●
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many customers reduce the number of carriers they use by selecting so-called "core carriers" as approved service providers or by engaging dedicated providers, and we
may not be selected;
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●
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many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of
our business to competitors;
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●
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the trend toward consolidation in the trucking industry may create large carriers with greater financial resources and other competitive advantages relating to their
size, and we may have difficulty competing with these larger carriers;
|
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●
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the market for qualified drivers is increasingly competitive, and our inability to attract and retain drivers could reduce our equipment utilization or cause us to
increase compensation to our drivers and independent contractors we engage, both of which would adversely affect our profitability;
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●
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competition from freight logistics and freight brokerage companies may adversely affect our customer relationships and freight rates;
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●
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economies of scale that procurement aggregation providers may pass on to smaller carriers may improve such carriers’ ability to compete with us;
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●
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advances in technology may require us to increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to
cover the cost of these investments;
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●
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the Covenant brand name is a valuable asset that is subject to the risk of adverse publicity (whether or not justified),which could result in the loss of value
attributable to our brand and reduced demand for our services; and
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●
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higher fuel prices and, in turn, higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including
rail transportation.
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●
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finance working capital requirements, capital investments, or refinance existing indebtedness;
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●
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develop or enhance our technological infrastructure and our existing products and services;
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●
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fund strategic relationships;
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respond to competitive pressures; and
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●
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acquire complementary businesses, technologies, products, or services.
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●
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approval of premium rates for insurance;
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●
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standards of solvency;
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●
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minimum amounts of statutory capital surplus that must be maintained;
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●
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limitations on types and amounts of investments;
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●
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regulation of dividend payments and other transactions between affiliates;
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●
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regulation of reinsurance;
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●
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regulation of underwriting and marketing practices;
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●
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approval of policy forms;
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●
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methods of accounting; and
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●
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filing of annual and other reports with respect to financial condition and other matters.
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●
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our vulnerability to adverse economic and industry conditions and competitive pressures is heightened;
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●
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we will continue to be required to dedicate a substantial portion of our cash flows from operations to lease payments and repayment of debt, limiting the availability
of cash for our operations, capital expenditures, and future business opportunities;
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●
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our flexibility in planning for, or reacting to, changes in our business and industry will be limited;
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●
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our profitability is sensitive to fluctuations in interest rates because some of our debt obligations are subject to variable interest rates, and future borrowings and
lease financing arrangements will be affected by any such fluctuations;
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●
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our ability to obtain additional financing in the future for working capital, capital expenditures, debt service requirements, acquisitions, or other purposes may be
limited;
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●
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it may be difficult for us to comply with the multitude of financial covenants, borrowing conditions, or other obligations contained in our debt agreements, thereby
increasing the risk that we trigger certain cross-default provisions; and
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●
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we may be required to issue additional equity securities to raise funds, which would dilute the ownership position of our stockholders.
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●
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some of the acquired businesses may not achieve anticipated revenue, earnings or cash flows;
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●
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we may assume liabilities that were not disclosed to us or otherwise exceed our estimates;
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●
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we may be unable to integrate acquired businesses successfully, or at all, and realize anticipated economic, operational and other benefits in a timely manner, which
could result in substantial costs and delays or other operational, technical, or financial problems;
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●
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transaction costs and acquisition-related integration costs could adversely affect our results of operations in the period in which such charges are recorded;
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●
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we may incur future impairment charges, write-offs, write-downs, or restructuring charges that could adversely impact our results of operations;
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●
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acquisitions could disrupt our ongoing business, distract our management and divert our resources;
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●
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we may experience difficulties operating in markets in which we have had no or only limited direct experience;
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●
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we could lose customers, employees and drivers of any acquired company; and
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●
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we may incur additional indebtedness.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 6.
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|
Years Ended December 31,
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|||||||||||||||||||
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2019
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2018
|
2017
|
2016
|
2015
|
|||||||||||||||
Statement of Operations Data:
|
||||||||||||||||||||
Freight revenue
|
$
|
800,401
|
$
|
779,729
|
$
|
626,809
|
$
|
610,845
|
$
|
640,120
|
||||||||||
Fuel surcharge revenue
|
94,127
|
105,726
|
78,198
|
59,806
|
84,120
|
|||||||||||||||
Total revenue
|
$
|
894,528
|
$
|
885,455
|
$
|
705,007
|
$
|
670,651
|
$
|
724,240
|
||||||||||
|
||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Salaries, wages, and related expenses
|
321,997
|
304,447
|
241,784
|
234,526
|
244,779
|
|||||||||||||||
Fuel expense
|
115,307
|
121,264
|
103,139
|
103,108
|
122,160
|
|||||||||||||||
Operations and maintenance
|
59,505
|
55,505
|
48,774
|
45,864
|
46,458
|
|||||||||||||||
Revenue equipment rentals and purchased transportation
|
204,655
|
183,645
|
141,954
|
117,472
|
118,583
|
|||||||||||||||
Operating taxes and licenses
|
13,024
|
11,831
|
9,878
|
11,712
|
11,016
|
|||||||||||||||
Insurance and claims (1)
|
47,724
|
43,333
|
33,155
|
32,596
|
31,909
|
|||||||||||||||
Communications and utilities
|
6,969
|
7,061
|
6,938
|
6,057
|
6,162
|
|||||||||||||||
General supplies and expenses
|
30,434
|
23,227
|
14,783
|
14,413
|
14,007
|
|||||||||||||||
Depreciation and amortization, including gains and losses on disposition of equipment
|
78,879
|
76,156
|
76,447
|
72,456
|
61,384
|
|||||||||||||||
Total operating expenses
|
878,494
|
826,469
|
676,852
|
638,204
|
656,458
|
|||||||||||||||
Operating income
|
16,034
|
58,986
|
28,155
|
32,447
|
67,782
|
|||||||||||||||
Interest expense, net
|
11,110
|
8,708
|
8,258
|
8,226
|
8,445
|
|||||||||||||||
Income from equity method investment
|
(7,017
|
)
|
(7,732
|
)
|
(3,400
|
)
|
(3,000
|
)
|
(4,570
|
)
|
||||||||||
Income before income taxes
|
11,941
|
58,010
|
23,297
|
27,221
|
63,907
|
|||||||||||||||
Income tax expense (benefit)
|
3,464
|
15,507
|
(32,142
|
)
|
10,386
|
21,822
|
||||||||||||||
Net income
|
$
|
8,477
|
$
|
42,503
|
$
|
55,439
|
$
|
16,835
|
$
|
42,085
|
||||||||||
|
||||||||||||||||||||
Basic income per share
|
$
|
0.46
|
$
|
2.32
|
$
|
3.03
|
$
|
0.93
|
$
|
2.32
|
||||||||||
|
||||||||||||||||||||
Diluted income per share
|
$
|
0.45
|
$
|
2.30
|
$
|
3.02
|
$
|
0.92
|
$
|
2.30
|
||||||||||
|
||||||||||||||||||||
Basic weighted average common shares outstanding
|
18,435
|
18,340
|
18,279
|
18,182
|
18,145
|
|||||||||||||||
|
||||||||||||||||||||
Diluted weighted average common shares outstanding
|
18,635
|
18,469
|
18,372
|
18,266
|
18,311
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||||||
Selected Balance Sheet Data:
|
||||||||||||||||||||
Net property and equipment
|
$
|
517,203
|
$
|
450,595
|
$
|
464,072
|
$
|
465,471
|
$
|
454,049
|
||||||||||
Total assets (2)
|
$
|
881,640
|
$
|
773,524
|
$
|
649,668
|
$
|
620,538
|
$
|
646,717
|
||||||||||
Long-term debt and finance lease obligations, less current maturities
|
$
|
267,069
|
$
|
201,754
|
$
|
186,242
|
$
|
188,437
|
$
|
206,604
|
||||||||||
Total stockholders' equity
|
$
|
350,111
|
$
|
343,142
|
$
|
295,201
|
$
|
236,414
|
$
|
202,160
|
||||||||||
|
||||||||||||||||||||
Selected Operating Data:
|
||||||||||||||||||||
Capital expenditures, net (3)
|
$
|
91,664
|
$
|
33,093
|
$
|
72,006
|
$
|
59,052
|
$
|
148,994
|
||||||||||
Average freight revenue per loaded mile (4)
|
$
|
2.07
|
$
|
2.13
|
$
|
1.89
|
$
|
1.86
|
$
|
1.89
|
||||||||||
Average freight revenue per total mile (4)
|
$
|
1.87
|
$
|
1.94
|
$
|
1.70
|
$
|
1.67
|
$
|
1.69
|
||||||||||
Average freight revenue per tractor per week (4)
|
$
|
3,778
|
$
|
4,191
|
$
|
3,917
|
$
|
3,881
|
$
|
3,967
|
||||||||||
Average miles per tractor per year
|
105,379
|
112,736
|
120,043
|
121,782
|
122,508
|
|||||||||||||||
Weighted average tractors for year (5)
|
3,073
|
2,843
|
2,557
|
2,593
|
2,700
|
|||||||||||||||
Total tractors at end of period (5)
|
3,021
|
3,154
|
2,559
|
2,535
|
2,656
|
|||||||||||||||
Total trailers at end of period (6)
|
6,739
|
6,950
|
6,846
|
7,389
|
6,978
|
|||||||||||||||
Team-driven tractors as percentage of fleet
|
27.4
|
%
|
30.8
|
%
|
38.1
|
%
|
38.7
|
%
|
35.3
|
%
|
(1)
|
2017 insurance and claims expense includes $0.9 million of additional reserves for 2008 cargo claim.
|
(2)
|
Adjusted for retrospective adoption of ASU 2015-17.
|
(3)
|
Includes equipment purchased under finance leases.
|
(4)
|
Excludes fuel surcharge revenue.
|
(5)
|
Includes monthly rental tractors and tractors provided by independent contractors.
|
(6)
|
Excludes monthly rental trailers.
|
ITEM 7.
|
Segment
|
2019
|
2018
|
||||||
Highway Services
|
$
|
356,521
|
$
|
469,308
|
||||
Dedicated
|
342,473
|
257,739
|
||||||
Managed Freight
|
186,394
|
153,346
|
||||||
Factoring
|
9,140
|
5,062
|
||||||
Total
|
$
|
894,528
|
$
|
885,455
|
|
●
|
Total revenue was $894.5 million, compared with $885.5 million for 2018, and freight revenue (which excludes revenue from fuel surcharges) was $800.4 million, compared
with $779.7 million for 2018;
|
|
|
|
|
●
|
Operating income was $16.0 million, compared with operating income of $59.0 million for 2018;
|
|
|
|
|
●
|
Net income was $8.5 million, or $0.45 per diluted share, compared with net income of $42.5 million, or $2.30 per diluted share, for 2018;
|
|
|
|
|
●
|
With available borrowing capacity of $59.8 million under our Credit Facility as of December 31, 2019, we do not expect to be required to test our fixed charge covenant
in the foreseeable future;
|
|
|
|
|
●
|
Our equity investment in TEL provided $7.0 million of pre-tax earnings in 2019, compared to $7.7 million for 2018;
|
|
|
|
|
●
|
Since December 31, 2018, total indebtedness, net of cash, increased by $112.3 million to $304.6 million however, $60.3 million of this increase related to recording
right of use operating lease liabilities under ASU 842 in 2019, which was not required in 2018; and
|
|
|
|
|
●
|
Stockholders' equity and tangible book value at December 31, 2019 were $350.1 million and $278.0 million, respectively.
|
|
Year ended December 31,
|
|||||||
(in thousands)
|
2019
|
2018
|
||||||
Revenue:
|
||||||||
Freight revenue
|
$
|
800,401
|
$
|
779,729
|
||||
Fuel surcharge revenue
|
94,127
|
105,726
|
||||||
Total revenue
|
$
|
894,528
|
$
|
885,455
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Salaries, wages, and related expenses
|
$
|
321,997
|
$
|
304,447
|
||||
% of total revenue
|
36.0
|
%
|
34.4
|
%
|
||||
% of freight revenue
|
40.2
|
%
|
39.0
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Fuel expense
|
$
|
115,307
|
$
|
121,264
|
||||
% of total revenue
|
12.9
|
%
|
13.7
|
%
|
||||
% of freight revenue
|
14.4
|
%
|
15.6
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Total fuel surcharge
|
$
|
94,127
|
$
|
105,726
|
||||
Less: Fuel surcharge revenue reimbursed to independent contractors and other third parties
|
11,673
|
12,635
|
||||||
Company fuel surcharge revenue
|
$
|
82,454
|
$
|
93,091
|
||||
Total fuel expense
|
$
|
115,307
|
$
|
121,264
|
||||
Less: Company fuel surcharge revenue
|
82,454
|
93,091
|
||||||
Net fuel expense
|
$
|
32,853
|
$
|
28,173
|
||||
% of freight revenue
|
4.1
|
%
|
3.6
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Operations and maintenance
|
$
|
59,505
|
$
|
55,505
|
||||
% of total revenue
|
6.7
|
%
|
6.3
|
%
|
||||
% of freight revenue
|
7.4
|
%
|
7.1
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Revenue equipment rentals and purchased transportation
|
$
|
204,655
|
$
|
183,645
|
||||
% of total revenue
|
22.9
|
%
|
20.7
|
%
|
||||
% of freight revenue
|
25.6
|
%
|
23.6
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Operating taxes and licenses
|
$
|
13,024
|
$
|
11,831
|
||||
% of total revenue
|
1.5
|
%
|
1.3
|
%
|
||||
% of freight revenue
|
1.6
|
%
|
1.5
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Insurance and claims
|
$
|
47,724
|
$
|
43,333
|
||||
% of total revenue
|
5.3
|
%
|
4.9
|
%
|
||||
% of freight revenue
|
6.0
|
%
|
5.6
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Communications and utilities
|
$
|
6,969
|
$
|
7,061
|
||||
% of total revenue
|
0.8
|
%
|
0.8
|
%
|
||||
% of freight revenue
|
0.9
|
%
|
0.9
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
General supplies and expenses
|
$
|
30,434
|
$
|
23,227
|
||||
% of total revenue
|
3.4
|
%
|
2.6
|
%
|
||||
% of freight revenue
|
3.8
|
%
|
3.0
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Depreciation and amortization
|
$
|
78,879
|
$
|
76,156
|
||||
% of total revenue
|
8.8
|
%
|
8.6
|
%
|
||||
% of freight revenue
|
9.9
|
%
|
9.8
|
%
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Interest expense, net
|
$
|
11,110
|
$
|
8,708
|
||||
% of total revenue
|
1.2
|
%
|
1.0
|
%
|
||||
% of freight revenue
|
1.4
|
%
|
1.1
|
%
|
|
Year ended December 31,
|
|||||||
(in thousands)
|
2019
|
2018
|
||||||
Income from equity method investment
|
$
|
7,017
|
$
|
7,732
|
|
Year ended December 31,
|
|||||||
(dollars in thousands)
|
2019
|
2018
|
||||||
Income tax expense (benefit)
|
$
|
3,464
|
$
|
15,507
|
||||
% of total revenue
|
0.4
|
%
|
1.8
|
%
|
||||
% of freight revenue
|
0.4
|
%
|
2.0
|
%
|
|
||||||||
|
Year ended December 31,
|
|||||||
(in thousands)
|
2019
|
2018
|
||||||
Revenues:
|
||||||||
Highway Services:
|
||||||||
Expedited
|
$
|
262,764
|
$
|
317,244
|
||||
OTR
|
93,757
|
152,064
|
||||||
Total Highway Services
|
356,521
|
469,308
|
||||||
|
||||||||
Dedicated
|
342,473
|
257,739
|
||||||
|
||||||||
Managed Freight:
|
||||||||
Brokerage
|
102,479
|
102,730
|
||||||
TMS
|
36,136
|
27,036
|
||||||
Warehousing
|
47,779
|
23,580
|
||||||
Total Managed Freight
|
186,394
|
153,346
|
||||||
|
||||||||
Factoring
|
9,140
|
5,062
|
||||||
|
||||||||
Total revenues
|
$
|
894,528
|
$
|
885,455
|
||||
|
||||||||
Operating Income:
|
||||||||
Highway Services:
|
||||||||
Expedited
|
$
|
10,629
|
$
|
25,877
|
||||
OTR
|
(11,727
|
)
|
6,816
|
|||||
Total Highway Services
|
(1,098
|
)
|
32,693
|
|||||
|
||||||||
Dedicated
|
1,026
|
12,699
|
||||||
|
||||||||
Managed Freight:
|
||||||||
Brokerage
|
314
|
3,805
|
||||||
TMS
|
3,014
|
3,457
|
||||||
Warehousing
|
5,520
|
2,873
|
||||||
Total Managed Freight
|
8,848
|
10,135
|
||||||
|
||||||||
Factoring
|
7,258
|
3,459
|
||||||
|
||||||||
Total operating income
|
$
|
16,034
|
$
|
58,986
|
Payments due by period:
|
2020
|
2021
|
2022
|
2023
|
2024
|
More than
|
||||||||||||||||||||||
(in thousands)
|
Total
|
(less than 1 year)
|
(1-3 years)
|
(1-3 years)
|
(3-5 years)
|
(3-5 years)
|
5 years
|
|||||||||||||||||||||
Credit Facility (1)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Revenue equipment and property installment notes, including interest (2)
|
$
|
279,645
|
$
|
63,317
|
$
|
77,543
|
$
|
85,843
|
$
|
28,710
|
$
|
2,077
|
$
|
22,155
|
||||||||||||||
Operating leases (3)
|
$
|
65,952
|
$
|
21,991
|
$
|
18,223
|
$
|
16,014
|
$
|
7,293
|
$
|
439
|
$
|
1,992
|
||||||||||||||
Finance leases (4)
|
$
|
35,642
|
$
|
8,184
|
$
|
7,719
|
$
|
9,269
|
$
|
9,080
|
$
|
1,390
|
$
|
-
|
||||||||||||||
Purchase obligations (5)
|
$
|
68,422
|
$
|
68,422
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Total contractual cash obligations (6)
|
$
|
446,846
|
$
|
159,099
|
$
|
103,485
|
$
|
111,126
|
$
|
45,083
|
$
|
3,906
|
$
|
24,147
|
(1)
|
Represents principal owed at December 31, 2019 and interest on such principal amount through maturity. The borrowings consist of draws under our Credit Facility, with fluctuating borrowing
amounts and variable interest rates. In determining future contractual interest and principal obligations, for variable interest rate debt, the interest rate and principal amount in place at December 31, 2019, was utilized. The table assumes
long-term debt is held to maturity. Refer to Note 6, "Debt" of the accompanying consolidated financial statements for further information.
|
(2)
|
Represents principal and interest payments owed at December 31, 2019. The borrowings consist of installment notes with finance companies, with fixed borrowing amounts and fixed interest rates,
except for a variable rate real estate note, for which the interest rate is effectively fixed through an interest rate swap. The table assumes these installment notes are held to maturity. Refer to Note 6, "Debt" of the accompanying
consolidated financial statements for further information.
|
(3)
|
Represents future monthly rental payment obligations under operating leases for tractors, trailers, and terminal properties, and computer and office equipment. Substantially all lease agreements
for revenue equipment have fixed payment terms based on the passage of time. The tractor lease agreements generally stipulate maximum miles and provide for mileage penalties for excess miles. These leases generally run for a period of three
to five years for tractors and five to seven years for trailers. Refer to Note 7, "Leases" of the accompanying consolidated financial statements for further information.
|
(4)
|
Represents principal and interest payments owed at December 31, 2019. The borrowings consist of finance leases with one finance company, with fixed borrowing amounts and fixed interest rates or
rates that are floating but effectively fixed through related interest rate swaps. Borrowings in 2019 and thereafter include the residual value guarantees on the related equipment as balloon payments. Refer to Note 6, "Debt" of the
accompanying consolidated financial statements for further information.
|
(5)
|
Represents purchase obligations for revenue equipment totaling approximately $68.4 million in 2019. These commitments are cancelable, subject to certain adjustments in the underlying obligations
and benefits. These purchase commitments are expected to be financed by operating leases, finance leases, long-term debt, proceeds from sales of existing equipment, and/or cash flows from operations. Refer to Notes 6 and 7, "Debt" and
"Leases," respectively, of the accompanying consolidated financial statements for further information.
|
(6)
|
Excludes any amounts accrued for unrecognized tax benefits as we are unable to reasonably predict the ultimate amount or timing of settlement of such unrecognized tax benefits.
|
GAAP Operating Ratio:
|
2019
|
OR %
|
2018
|
OR %
|
||||||||||||
Total revenue
|
$
|
894,528
|
$
|
885,455
|
||||||||||||
Total operating expenses
|
878,494
|
98.2
|
%
|
826,469
|
93.3
|
%
|
||||||||||
Operating income
|
$
|
16,034
|
$
|
58,986
|
Adjusted Operating Ratio:
|
2019
|
Adj. OR %
|
2018
|
Adj. OR %
|
||||||
Total revenue
|
$
|
894,528
|
|
$
|
885,455
|
|
||||
Fuel surcharge revenue
|
(94,127
|
)
|
|
(105,726
|
)
|
|
||||
Freight revenue (total revenue, excluding fuel surcharge)
|
800,401
|
|
779,729
|
|
||||||
|
|
|
||||||||
Total operating expenses
|
878,494
|
|
826,469
|
|
||||||
Adjusted for:
|
|
|
||||||||
Fuel surcharge revenue
|
(94,127
|
)
|
|
(105,726
|
)
|
|
||||
Amortization of intangibles
|
(2,923
|
)
|
|
(1,462
|
)
|
|
||||
Adjusted operating expenses
|
781,444
|
97.6%
|
719,281
|
92.2%
|
||||||
Adjusted operating income
|
$
|
18,957
|
|
$
|
60,448
|
|
|
●
|
auto liability - $1.0 million
|
|
●
|
workers' compensation - $1.3 million
|
|
●
|
cargo - $0.3 million
|
|
●
|
employee medical - $0.4 million
|
|
●
|
physical damage - 100%
|
ITEM 7A.
|
ITEM 8.
|
ITEM 9.
|
ITEM 9A.
|
|
●
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
|
●
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
|
|
●
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
|
ITEM 9B.
|
ITEM 10.
|
ITEM 11.
|
ITEM 12.
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted average exercise price of outstanding options, warrants and rights
|
Number of securities remaining eligible for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|||||||||||
|
(a)
|
(b)
|
(c)
|
|||||||||||
Equity compensation plans approved by security holders
|
787,460
|
(1) |
|
|
-
|
477,245
|
||||||||
Equity compensation plans not approved by security holders
|
-
|
-
|
-
|
|||||||||||
Total
|
787,460
|
-
|
477,245
|
(1)
|
Represents unvested restricted shares granted under the 2006 Omnibus Incentive Plan, as amended. The weighted average stock price on the date of grant for outstanding restricted stock awards was
$18.25, which is not reflected in column (b), because restricted stock awards do not have an exercise price.
|
ITEM 13.
|
ITEM 14.
|
Exhibit Number
|
Reference
|
Description
|
|
Stock Purchase Agreement, dated July 3, 2018, by and among Landair Holdings, Inc., the Stockholders of Landair Holdings, Inc. and Covenant Transportation Group, Inc. (Incorporated by reference
to Exhibit 2.1 to the Company's Form 10-Q, filed November 9, 2018)
|
|
3.1 |
|
Second Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q, filed May 10, 2019)
|
3.2
|
|
Third Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Company's Report on Form 8-K, filed March 14, 2019)
|
4.1
|
|
Second Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company's Form 10-Q, filed May 10, 2019)
|
4.2
|
|
Third Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Company's Report on Form 8-K, filed March 14, 2019)
|
#
|
Description of the Registrant’s Securities
|
|
*
|
Form of Indemnification Agreement between Covenant Transport, Inc. and each officer and director, effective May 1, 2004 (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q,
filed August 5, 2004)
|
|
*
|
Form of Restricted Stock Award Notice under the 2006 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.22 to the Company's Form 10-Q, filed August 9, 2006)
|
|
*
|
Form of Restricted Stock Special Award Notice under the 2006 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.23 to the Company's Form 10-Q, filed August 9, 2006)
|
|
|
Third Amended and Restated Credit Agreement, dated September 23, 2008, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc.,
Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A., and Textron Financial Corporation (Incorporated by reference to Exhibit 10.14 to the
Company's Form 10-K, filed March 30, 2010)
|
|
*
|
Covenant Transportation Group, Inc. Third Amended and Restated 2006 Omnibus Incentive Plan (Incorporated by reference to Appendix A to the Company's Schedule 14A, filed April 19, 2013)
|
|
Amendment No. 1 to Third Amended and Restated Credit Agreement, dated March 27, 2009, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset
Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A., and Textron Financial Corporation (Incorporated by reference to Exhibit
10.1 to the Company's Form 10-Q, filed May 15, 2009)
|
|
|
Second Amendment to Third Amended and Restated Credit Agreement, dated February 25, 2010, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset
Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A., and Textron Financial Corporation (Incorporated by reference to Exhibit
10.1 to the Company's Form 10-Q, filed May 17, 2010)
|
|
|
Third Amendment to Third Amended and Restated Credit Agreement, dated July 30, 2010, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset
Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form
10-Q, filed November 9, 2010)
|
|
|
Fourth Amendment to Third Amended and Restated Credit Agreement, dated August 31, 2010, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset
Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the Company's Form
10-Q, filed November 9, 2010)
|
|
|
Fifth Amendment to Third Amended and Restated Credit Agreement, dated September 1, 2011, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset
Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Report
on Form 8-K, filed October 28, 2011)
|
|
|
Sixth Amendment to Third Amended and Restated Credit Agreement, dated effective as of October 24, 2011, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company,
Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the
Company's Report on Form 8-K, filed October 28, 2011)
|
|
|
Seventh Amendment to Third Amended and Restated Credit Agreement, dated effective as of March 29, 2012, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company,
Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the
Company's Report on Form 8-K, filed April 2, 2012)
|
|
|
Eighth Amendment to Third Amended and Restated Credit Agreement, dated effective as of December 31, 2012, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing
Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1
to the Company's Report on Form 8-K, filed January 31, 2013)
|
|
|
Ninth Amendment to Third Amended and Restated Credit Agreement and Related Security Documents, dated effective as of August 6, 2014, among Covenant Transportation Group, Inc., Covenant
Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by
reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 13, 2014)
|
|
|
Tenth Amendment to Third Amended and Restated Credit Agreement and Related Security Documents, dated effective as of September 8, 2014, among Covenant Transportation Group, Inc., Covenant
Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by
reference to Exhibit 10.2 to the Company's Form 10-Q, filed November 13, 2014)
|
|
*
|
Consulting Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 9, 2016)
|
|
|
Joinder, Supplement and Eleventh Amendment to Third Amended and Restated Credit Agreement, dated effective as of August 6, 2015, among Covenant Transportation Group, Inc., Covenant Transport,
Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Covenant Properties, LLC, Bank of America, N.A.,
and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 9, 2015)
|
|
|
Twelfth Amendment to Third Amended and Restated Credit Agreement, dated effective as of February 25, 2016, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing
Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Covenant Properties, LLC, Bank of America, N.A., and JPMorgan Chase
Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed May 10, 2016)
|
|
Thirteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of December 16, 2016, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing
Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated
by reference to Exhibit 10.26 to the Company's Form 10-K, filed March 14, 2017)
|
|
*
|
First Amendment to Consulting Agreement (Incorporated by reference to Exhibit 10.27 to the Company's Form 10-K, filed March 14, 2017)
|
|
|
Fourteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of November 28, 2017, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing
Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Transport Management Services, LLC, Bank of America, N.A., and
JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.27 to the Company's Form 10-K, filed February 28, 2018)
|
|
|
Fifteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of June 19, 2018, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company,
Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, LLC, Star Transportation, Inc., Covenant Logistics, Inc., Driven Analytic Solutions, LLC, Transport Management Services, LLC, Bank of
America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed August 8, 2018)
|
|
|
Sixteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of July 3, 2018, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company,
Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, LLC, Star Transportation, Inc., Covenant Logistics, Inc., Driven Analytic Solutions, LLC, Transport Management Services, LLC, Landair
Holdings, Inc., Landair Transport, Inc., Landair Logistics, Inc., Landair Leasing, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 9, 2018)
|
|
First Amendment to the Covenant Transportation Group, Inc. Third Amended and Restated 2006 Omnibus Incentive Plan (Incorporated by reference to Appendix A to the Company's Definitive Proxy
Statement filed with the SEC on April 8, 2019 in connection with the 2019 Annual Meeting of Stockholders)
|
||
*
|
Form of Restricted Stock Award Notice under the Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed
August 9, 2019)
|
|
#
|
List of Subsidiaries
|
|
#
|
Consent of Independent Registered Public Accounting Firm – KPMG LLP
|
|
#
|
Consent of Independent Auditor – Coulter & Justus, P.C.
|
|
#
|
Consent of Independent Registered Public Accounting Firm – Coulter & Justus, P.C.
|
|
#
|
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by David R. Parker, the Company's Principal Executive Officer
|
|
#
|
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Richard B. Cribbs, the Company's Principal Financial Officer
|
|
##
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by David R. Parker, the Company's Chief Executive Officer
|
|
##
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Richard B. Cribbs, the Company's Chief Financial Officer
|
|
#
|
Financial Statements of Transport Enterprise Leasing, LLC
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
#
|
Filed herewith.
|
##
|
Furnished herewith.
|
*
|
Management contract or compensatory plan or arrangement.
|
ITEM 16.
|
|
COVENANT TRANSPORTATION GROUP, INC.
|
|
|
|
|
|
|
|
|
|
|
Date: March 9, 2020
|
By:
|
/s/ Richard B. Cribbs
|
|
|
|
Richard B. Cribbs
|
|
|
|
Executive Vice President and Chief Financial Officer in his capacity as such and on behalf of the issuer.
|
|
Signature and Title
|
|
Date
|
|
|
|
/s/ David R. Parker
|
|
March 9, 2020
|
David R. Parker
|
|
|
Chairman of the Board and Chief Executive Officer
(principal executive officer)
|
|
|
|
|
|
/s/ Richard B. Cribbs
|
|
March 9, 2020
|
Richard B. Cribbs
|
|
|
Executive Vice President and Chief Financial Officer
(principal financial officer)
|
|
|
|
|
|
/s/ James S. Grant
|
|
March 9, 2020
|
James S. Grant
|
|
|
Corporate Controller
(principal accounting officer)
|
|
|
|
|
|
/s/ Bradley A. Moline
|
|
March 9, 2020
|
Bradley A. Moline
|
|
|
Director
|
|
|
|
|
|
/s/ William T. Alt
|
|
March 9, 2020
|
William T. Alt
|
|
|
Director
|
|
|
|
|
|
/s/ Robert E. Bosworth
|
|
March 9, 2020
|
Robert E. Bosworth
|
|
|
Director
|
|
|
|
|
|
/s/ Herbert J. Schmidt
|
|
March 9, 2020
|
Herbert J. Schmidt
|
|
|
Director
|
|
|
|
|
|
/s/ W. Miller Welborn
|
|
March 9, 2020
|
W. Miller Welborn
|
|
|
Director
|
|
|
CONSOLIDATED BALANCE SHEETS
|
DECEMBER 31, 2019 AND 2018
|
(In thousands, except share data)
|
|
2019
|
2018
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
43,591
|
$
|
23,127
|
||||
Accounts receivable, net of allowance of $1,944 in 2019 and $1,985 in 2018
|
167,825
|
151,093
|
||||||
Drivers' advances and other receivables, net of allowance of $692 in 2019 and $626 in 2018
|
8,507
|
16,675
|
||||||
Inventory and supplies
|
4,210
|
4,067
|
||||||
Prepaid expenses
|
11,707
|
11,579
|
||||||
Assets held for sale
|
12,010
|
2,559
|
||||||
Income taxes receivable
|
5,403
|
1,109
|
||||||
Other short-term assets
|
1,132
|
1,435
|
||||||
Total current assets
|
254,385
|
211,644
|
||||||
|
||||||||
Property and equipment, at cost
|
725,383
|
638,770
|
||||||
Less: accumulated depreciation and amortization
|
(208,180
|
)
|
(188,175
|
)
|
||||
Net property and equipment
|
517,203
|
450,595
|
||||||
|
||||||||
Goodwill
|
42,518
|
41,598
|
||||||
Other intangibles, net
|
29,615
|
32,538
|
||||||
Other assets, net
|
37,919
|
37,149
|
||||||
|
||||||||
Total assets
|
$
|
881,640
|
$
|
773,524
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Checks outstanding in excess of bank balances
|
$
|
592
|
$
|
1,857
|
||||
Accounts payable
|
25,745
|
22,101
|
||||||
Accrued expenses
|
31,840
|
49,503
|
||||||
Current maturities of long-term debt
|
54,377
|
28,710
|
||||||
Current portion of finance lease obligations
|
7,258
|
5,374
|
||||||
Current portion of operating lease obligations
|
19,460
|
-
|
||||||
Current portion of insurance and claims accrual
|
21,800
|
19,787
|
||||||
Other short-term liabilities
|
185
|
-
|
||||||
Total current liabilities
|
161,257
|
127,332
|
||||||
|
||||||||
Long-term debt
|
200,177
|
166,635
|
||||||
Long-term portion of finance lease obligations
|
26,010
|
35,119
|
||||||
Long-term portion of operating lease obligations
|
40,882
|
-
|
||||||
Insurance and claims accrual
|
20,295
|
22,193
|
||||||
Deferred income taxes
|
80,330
|
77,467
|
||||||
Other long-term liabilities
|
2,578
|
1,636
|
||||||
Total liabilities
|
531,529
|
430,382
|
||||||
Commitments and contingent liabilities
|
-
|
-
|
||||||
Stockholders' equity:
|
||||||||
Class A common stock, $.01 par value; 40,000,000 shares authorized; 16,165,145 shares issued and outstanding as of December 31, 2019; and 20,000,000 authorized; 16,015,708
shares issued and outstanding as of December 31, 2018
|
173
|
171
|
||||||
Class B common stock, $.01 par value; 5,000,000 shares authorized; 2,350,000 shares issued and outstanding
|
24
|
24
|
||||||
Additional paid-in-capital
|
141,885
|
142,177
|
||||||
Accumulated other comprehensive income
|
(1,014
|
)
|
204
|
|||||
Retained earnings
|
209,043
|
200,566
|
||||||
Total stockholders' equity
|
350,111
|
343,142
|
||||||
Total liabilities and stockholders' equity
|
$
|
881,640
|
$
|
773,524
|
|
2019
|
2018
|
2017
|
|||||||||
Revenues
|
||||||||||||
Freight revenue
|
$
|
800,401
|
$
|
779,729
|
$
|
626,809
|
||||||
Fuel surcharge revenue
|
94,127
|
105,726
|
78,198
|
|||||||||
Total revenue
|
$
|
894,528
|
$
|
885,455
|
$
|
705,007
|
||||||
|
||||||||||||
Operating expenses:
|
||||||||||||
Salaries, wages, and related expenses
|
321,997
|
304,447
|
241,784
|
|||||||||
Fuel expense
|
115,307
|
121,264
|
103,139
|
|||||||||
Operations and maintenance
|
59,505
|
55,505
|
48,774
|
|||||||||
Revenue equipment rentals and purchased transportation
|
204,655
|
183,645
|
141,954
|
|||||||||
Operating taxes and licenses
|
13,024
|
11,831
|
9,878
|
|||||||||
Insurance and claims
|
47,724
|
43,333
|
33,155
|
|||||||||
Communications and utilities
|
6,969
|
7,061
|
6,938
|
|||||||||
General supplies and expenses
|
30,434
|
23,227
|
14,783
|
|||||||||
Depreciation and amortization, including gains and losses on disposition of property and equipment
|
78,879
|
76,156
|
76,447
|
|||||||||
Total operating expenses
|
878,494
|
826,469
|
676,852
|
|||||||||
Operating income
|
16,034
|
58,986
|
28,155
|
|||||||||
Interest expense, net
|
11,110
|
8,708
|
8,258
|
|||||||||
Income from equity method investment
|
(7,017
|
)
|
(7,732
|
)
|
(3,400
|
)
|
||||||
Income before income taxes
|
11,941
|
58,010
|
23,297
|
|||||||||
Income tax expense (benefit)
|
3,464
|
15,507
|
(32,142
|
)
|
||||||||
Net income
|
$
|
8,477
|
$
|
42,503
|
$
|
55,439
|
||||||
|
||||||||||||
Income per share:
|
||||||||||||
Basic income per share
|
$
|
0.46
|
$
|
2.32
|
$
|
3.03
|
||||||
|
||||||||||||
Diluted income per share
|
$
|
0.45
|
$
|
2.30
|
$
|
3.02
|
||||||
|
||||||||||||
Basic weighted average shares outstanding
|
18,435
|
18,340
|
18,279
|
|||||||||
|
||||||||||||
Diluted weighted average shares outstanding
|
18,635
|
18,469
|
18,372
|
|
2019
|
2018
|
2017
|
|||||||||
|
||||||||||||
Net income
|
$
|
8,477
|
$
|
42,503
|
$
|
55,439
|
||||||
|
||||||||||||
Other comprehensive income:
|
||||||||||||
|
||||||||||||
Unrealized (loss) gain on effective portion of cash flow hedges, net of tax of $437, $377, and $51 in 2019, 2018 and 2017, respectively
|
(1,278
|
)
|
993
|
149
|
||||||||
|
||||||||||||
Reclassification of cash flow hedge gains (losses) into statement of operations, net of tax of ($5), $408, and $1,719 in 2019, 2018 and 2017, respectively
|
15
|
(1,076
|
)
|
2,784
|
||||||||
|
||||||||||||
Unrealized holding gain (loss) on investments classified as available-for-sale
|
45
|
(6
|
)
|
-
|
||||||||
Total other comprehensive (loss) income
|
(1,218
|
)
|
(89
|
)
|
2,933
|
|||||||
|
||||||||||||
Comprehensive income
|
$
|
7,259
|
$
|
42,414
|
$
|
58,372
|
|
Accumulated
|
|||||||||||||||||||||||||||
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Treasury
|
Comprehensive
|
Retained
|
Stockholders
|
||||||||||||||||||||||
|
Class A
|
Class B
|
Capital
|
Stock
|
Income (Loss)
|
Earnings
|
Equity
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balances at December 31, 2016
|
$
|
170
|
$
|
24
|
$
|
137,912
|
$
|
(1,084
|
)
|
$
|
(2,640
|
)
|
$
|
102,032
|
$
|
236,414
|
||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
55,439
|
55,439
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
2,933
|
-
|
2,933
|
|||||||||||||||||||||
Stock-based employee compensation expense
|
-
|
-
|
951
|
-
|
-
|
-
|
951
|
|||||||||||||||||||||
Issuance of restricted shares, net
|
1
|
-
|
(1,621
|
)
|
1,084
|
-
|
-
|
(536
|
)
|
|||||||||||||||||||
Balances at December 31, 2017
|
$
|
171
|
$
|
24
|
$
|
137,242
|
$
|
-
|
$
|
293
|
$
|
157,471
|
$
|
295,201
|
||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
42,503
|
42,503
|
|||||||||||||||||||||
Effect of adoption of ASU 2014-09
|
-
|
-
|
-
|
-
|
-
|
592
|
592
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(89
|
)
|
-
|
(89
|
)
|
|||||||||||||||||||
Stock-based employee compensation expense
|
-
|
-
|
4,802
|
-
|
-
|
-
|
4,802
|
|||||||||||||||||||||
Issuance of restricted shares, net
|
-
|
-
|
133
|
-
|
-
|
-
|
133
|
|||||||||||||||||||||
Balances at December 31, 2018
|
$
|
171
|
$
|
24
|
$
|
142,177
|
$
|
-
|
$
|
204
|
$
|
200,566
|
$
|
343,142
|
||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
8,477
|
8,477
|
|||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(1,218
|
)
|
-
|
(1,218
|
)
|
|||||||||||||||||||
Stock-based employee compensation expense
|
-
|
-
|
819
|
-
|
-
|
-
|
819
|
|||||||||||||||||||||
Issuance of restricted shares, net
|
2
|
-
|
(1,111
|
)
|
-
|
-
|
-
|
(1,109
|
)
|
|||||||||||||||||||
Balances at December 31, 2019
|
$
|
173
|
$
|
24
|
$
|
141,885
|
$
|
-
|
$
|
(1,014
|
)
|
$
|
209,043
|
$
|
350,111
|
|
2019
|
2018
|
2017
|
|||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
8,477
|
$
|
42,503
|
$
|
55,439
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Provision for losses on accounts receivable
|
255
|
507
|
454
|
|||||||||
Reversal of gain on sales to equity method investee
|
(7
|
)
|
(189
|
)
|
(179
|
)
|
||||||
Depreciation and amortization
|
80,529
|
75,859
|
72,422
|
|||||||||
Amortization of deferred financing fees
|
147
|
148
|
242
|
|||||||||
Deferred income tax expense (benefit)
|
3,454
|
13,840
|
(23,023
|
)
|
||||||||
Income tax (expense) benefit arising from restricted share vesting and stock options exercised
|
(105
|
)
|
(44
|
)
|
457
|
|||||||
Stock-based compensation expense
|
819
|
5,177
|
1,201
|
|||||||||
Equity in income of affiliate
|
(7,017
|
)
|
(7,732
|
)
|
(3,400
|
)
|
||||||
Return on investment in affiliated company
|
1,225
|
1,960
|
1,960
|
|||||||||
(Gain) loss on disposition of property and equipment
|
(2,829
|
)
|
298
|
4,024
|
||||||||
Return on investment in available-for-sale securities
|
13
|
(13
|
)
|
-
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Receivables and advances
|
(6,706
|
)
|
(27,199
|
)
|
(23,670
|
)
|
||||||
Prepaid expenses and other assets
|
487
|
(2,127
|
)
|
1,768
|
||||||||
Inventory and supplies
|
(143
|
)
|
168
|
(252
|
)
|
|||||||
Insurance and claims accrual
|
945
|
2,412
|
(1,165
|
)
|
||||||||
Operating lease right-of-use asset amortization
|
553
|
-
|
-
|
|||||||||
Accounts payable and accrued expenses
|
(16,066
|
)
|
19,232
|
(3,425
|
)
|
|||||||
Net cash flows provided by operating activities
|
64,031
|
124,800
|
82,853
|
|||||||||
|
||||||||||||
Cash flows from investing activities:
|
||||||||||||
Acquisition of Landair Holdings, Inc., net of cash acquired
|
-
|
(105,946
|
)
|
-
|
||||||||
Purchase of available-for-sale securities
|
(1,365
|
)
|
(1,496
|
)
|
-
|
|||||||
Acquisition of property and equipment
|
(138,273
|
)
|
(75,142
|
)
|
(110,802
|
)
|
||||||
Proceeds from disposition of property and equipment
|
46,609
|
61,687
|
48,749
|
|||||||||
Net cash flows used by investing activities
|
(93,029
|
)
|
(120,897
|
)
|
(62,053
|
)
|
||||||
|
||||||||||||
Cash flows from financing activities:
|
||||||||||||
Change in checks outstanding in excess of bank balances
|
(1,265
|
)
|
1,857
|
(189
|
)
|
|||||||
Proceeds from issuance of notes payable
|
107,251
|
100,811
|
121,210
|
|||||||||
Repayments of notes payable
|
(44,278
|
)
|
(89,569
|
)
|
(122,676
|
)
|
||||||
Repayments of finance lease obligations
|
(7,225
|
)
|
(3,883
|
)
|
(7,416
|
)
|
||||||
Proceeds under revolving credit facility
|
1,734,338
|
1,598,213
|
1,271,669
|
|||||||||
Repayments under revolving credit facility
|
(1,738,249
|
)
|
(1,603,309
|
)
|
(1,274,847
|
)
|
||||||
Payment of minimum tax withholdings on stock compensation
|
(1,110
|
)
|
(242
|
)
|
(785
|
)
|
||||||
Debt refinancing costs
|
-
|
(10
|
)
|
(160
|
)
|
|||||||
Net cash flows provided by (used in) financing activities
|
49,462
|
3,868
|
(13,194
|
)
|
||||||||
|
||||||||||||
Net change in cash and cash equivalents
|
20,464
|
7,771
|
7,606
|
|||||||||
|
||||||||||||
Cash and cash equivalents at beginning of year
|
23,127
|
15,356
|
7,750
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
43,591
|
$
|
23,127
|
$
|
15,356
|
||||||
|
||||||||||||
Supplemental disclosure of cash flow information:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest, net of capitalized interest
|
$
|
11,026
|
$
|
8,568
|
$
|
8,268
|
||||||
Income taxes
|
$
|
752
|
$
|
(5,388
|
)
|
$
|
(2,222
|
)
|
||||
Equipment purchased under finance leases
|
$
|
-
|
$
|
19,638
|
$
|
9,953
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
●
|
Non-dedicated truckload services ("Highway Services"), which consists of two truckload service offerings that are aggregated because they have similar economic characteristics and meet the
aggregation criteria. The two truckload service offerings include: (i) expedited and (ii) over-the-road (“OTR”).
|
|
●
|
Dedicated contract truckload services (“Dedicated”), which consists of our truckload business that involves longer-term contracts that allocate a specified number of tractors and trailers to a
specific customer, with fixed and variable compensation.
|
|
●
|
Freight brokerage, transportation management services (“TMS”), and warehousing services (“Managed Freight”), which consists of three service offerings that are aggregated because they have
similar economic characteristics and meet the aggregation criteria. The three service offerings that comprise our Managed Freight segment are as follows: (i) Freight brokerage (“Brokerage”); (ii) TMS, (iii) and Warehousing (“Warehousing”).
|
|
●
|
Accounts receivable factoring services (“Factoring”), which assists current and potential capacity providers with improving their cash flows through secured invoice factoring services.
|
|
Years ended
|
|||||||||||
|
December 31,
|
|||||||||||
(in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Revenues:
|
||||||||||||
Highway Services:
|
||||||||||||
Expedited
|
$
|
262,764
|
$
|
317,244
|
$
|
314,579
|
||||||
OTR
|
93,757
|
152,064
|
153,413
|
|||||||||
Total Highway Services
|
356,521
|
469,308
|
467,992
|
|||||||||
|
||||||||||||
Dedicated
|
342,473
|
257,739
|
144,845
|
|||||||||
|
||||||||||||
Managed Freight:
|
||||||||||||
Brokerage
|
102,479
|
102,730
|
79,630
|
|||||||||
TMS
|
36,136
|
27,036
|
9,412
|
|||||||||
Warehousing
|
47,779
|
23,580
|
-
|
|||||||||
Total Managed Freight
|
186,394
|
153,346
|
89,042
|
|||||||||
|
||||||||||||
Factoring
|
9,140
|
5,062
|
3,128
|
|||||||||
|
||||||||||||
Total revenues
|
$
|
894,528
|
$
|
885,455
|
$
|
705,007
|
Years ended December 31:
|
Beginning balance January 1,
|
Additional provisions to (reversal of) allowance
|
Write-offs and other adjustments
|
Ending balance December 31,
|
||||||||||||
|
||||||||||||||||
2019
|
$
|
1,985
|
$
|
255
|
$
|
(296
|
)
|
$
|
1,944
|
|||||||
|
||||||||||||||||
2018
|
$
|
1,456
|
$
|
507
|
$
|
22
|
$
|
1,985
|
||||||||
|
||||||||||||||||
2017
|
$
|
1,345
|
$
|
454
|
$
|
(343
|
)
|
$
|
1,456
|
|
●
|
auto liability - $1.0 million
|
|
●
|
workers' compensation - $1.3 million
|
|
●
|
cargo - $0.3 million
|
|
●
|
employee medical - $0.4 million
|
|
●
|
physical damage - 100%
|
(in thousands except per share data)
|
||||||||||||
|
2019
|
2018
|
2017
|
|||||||||
Numerator:
|
||||||||||||
|
||||||||||||
Net income
|
$
|
8,477
|
$
|
42,503
|
$
|
55,439
|
||||||
|
||||||||||||
Denominator:
|
||||||||||||
|
||||||||||||
Denominator for basic income per share – weighted-average shares
|
18,435
|
18,340
|
18,279
|
|||||||||
Effect of dilutive securities:
|
||||||||||||
Equivalent shares issuable upon conversion of unvested restricted shares
|
200
|
129
|
93
|
|||||||||
Denominator for diluted income per share adjusted weighted-average shares and assumed conversions
|
18,635
|
18,469
|
18,372
|
|||||||||
|
||||||||||||
Net income per share:
|
||||||||||||
Basic income per share
|
$
|
0.46
|
$
|
2.32
|
$
|
3.03
|
||||||
Diluted income per share
|
$
|
0.45
|
$
|
2.30
|
$
|
3.02
|
2.
|
LIQUIDITY
|
3.
|
STOCK-BASED COMPENSATION
|
|
Number of
|
Weighted
|
||||||
|
stock
|
average grant
|
||||||
|
awards
|
date fair
|
||||||
|
(in thousands)
|
value
|
||||||
|
||||||||
Unvested at December 31, 2016
|
265
|
$
|
18.63
|
|||||
|
||||||||
Granted
|
434
|
$
|
16.69
|
|||||
Vested
|
(96
|
)
|
$
|
12.78
|
||||
Forfeited
|
(16
|
)
|
$
|
19.25
|
||||
Unvested at December 31, 2017
|
587
|
$
|
18.14
|
|||||
|
||||||||
Granted
|
153
|
$
|
30.32
|
|||||
Vested
|
(35
|
)
|
$
|
25.97
|
||||
Forfeited
|
(30
|
)
|
$
|
27.58
|
||||
Unvested at December 31, 2018
|
675
|
$
|
20.08
|
|||||
|
||||||||
Granted
|
351
|
$
|
15.42
|
|||||
Vested
|
(191
|
)
|
$
|
19.22
|
||||
Forfeited
|
(48
|
)
|
$
|
19.33
|
||||
Unvested at December 31, 2019
|
787
|
$
|
18.25
|
4.
|
PROPERTY AND EQUIPMENT
|
(in thousands)
|
Estimated Useful Lives (Years)
|
2019
|
2018
|
|||||||||
Revenue equipment
|
3-10
|
$
|
588,828
|
$
|
504,192
|
|||||||
Communications equipment
|
5-10
|
6,189
|
3,850
|
|||||||||
Land and improvements
|
0-15
|
23,398
|
25,240
|
|||||||||
Buildings and leasehold improvements
|
7-40
|
75,471
|
75,134
|
|||||||||
Construction in-progress
|
-
|
400
|
3,121
|
|||||||||
Other
|
2-10
|
31,097
|
27,233
|
|||||||||
|
$
|
725,383
|
$
|
638,770
|
5.
|
GOODWILL, OTHER INTANGIBLE, AND OTHER ASSETS
|
(in thousands)
|
December 31, 2019
|
|||
|
Gross/net goodwill
|
|||
Dedicated
|
$
|
15,320
|
||
Managed Freight
|
27,198
|
|||
Total goodwill
|
$
|
42,518
|
(in thousands)
|
December 31, 2019
|
|||||||||||||||
|
Gross intangible assets
|
Accumulated amortization
|
Net intangible assets
|
Remaining Life (months)
|
||||||||||||
Trade name:
|
||||||||||||||||
Dedicated
|
$
|
2,402
|
$
|
(240
|
)
|
$
|
2,162
|
|||||||||
Managed Freight
|
1,998
|
(200
|
)
|
1,798
|
||||||||||||
Total trade name
|
4,400
|
(440
|
)
|
3,960
|
162
|
|||||||||||
Non-Compete agreement:
|
||||||||||||||||
Dedicated
|
914
|
(274
|
)
|
640
|
||||||||||||
Managed Freight
|
486
|
(146
|
)
|
340
|
||||||||||||
Total non-compete agreement
|
1,400
|
(420
|
)
|
980
|
42
|
|||||||||||
Customer relationships:
|
||||||||||||||||
Dedicated
|
14,072
|
(1,759
|
)
|
12,313
|
||||||||||||
Managed Freight
|
14,128
|
(1,766
|
)
|
12,362
|
||||||||||||
Total customer relationships:
|
28,200
|
(3,525
|
)
|
24,675
|
126
|
|||||||||||
Total other intangible assets
|
$
|
34,000
|
$
|
(4,385
|
)
|
$
|
29,615
|
(in thousands)
|
December 31, 2018
|
|||
|
Gross/net goodwill
|
|||
Goodwill
|
$
|
41,598
|
(in thousands)
|
December 31, 2018
|
|||||||||||||||
|
Gross intangible assets
|
Accumulated amortization
|
Net intangible assets
|
Remaining Life (months)
|
||||||||||||
Trade name
|
$
|
4,400
|
$
|
(147
|
)
|
$
|
4,253
|
174
|
||||||||
Non-Compete agreement
|
1,400
|
(140
|
)
|
1,260
|
54
|
|||||||||||
Customer relationships
|
28,200
|
(1,175
|
)
|
27,025
|
138
|
|||||||||||
Total other intangible assets
|
$
|
34,000
|
$
|
(1,462
|
)
|
$
|
32,538
|
|
(In thousands)
|
|||
2020
|
$
|
2,923
|
||
2021
|
2,923
|
|||
2022
|
2,923
|
|||
2023
|
2,783
|
|||
2024
|
2,643
|
|||
Thereafter
|
15,420
|
(in thousands)
|
2019
|
2018
|
||||||
Investment in TEL
|
$
|
31,906
|
$
|
26,106
|
||||
Other assets, net
|
6,013
|
11,043
|
||||||
Total other assets, net
|
$
|
37,919
|
$
|
37,149
|
6.
|
DEBT
|
(in thousands)
|
December 31, 2019
|
December 31, 2018
|
||||||||||||||
|
Current
|
Long-Term
|
Current
|
Long-Term
|
||||||||||||
Borrowings under Credit Facility
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
3,911
|
||||||||
Revenue equipment installment notes; weighted average interest rate of 3.7% at December 31, 2019, and 3.7% December 31, 2018, due in monthly installments
with final maturities at various dates ranging from January 2020 to July 2023, secured by related revenue equipment
|
53,431
|
177,514
|
27,809
|
139,115
|
||||||||||||
|
||||||||||||||||
Real estate notes; interest rate of 3.3% at December 31, 2019 and 4.1% at December 31, 2018 due in monthly installments with a fixed maturity at August 2035,
secured by related real estate
|
1,093
|
22,670
|
1,048
|
23,763
|
||||||||||||
Deferred loan costs
|
(147
|
)
|
(7
|
)
|
(147
|
)
|
(154
|
)
|
||||||||
Total debt
|
54,377
|
200,177
|
28,710
|
166,635
|
||||||||||||
Principal portion of finance lease obligations, secured by related revenue equipment
|
7,258
|
26,010
|
5,374
|
35,119
|
||||||||||||
Principal portion of operating lease obligations, secured by related equipment
|
19,460
|
40,882
|
-
|
-
|
||||||||||||
Total debt and lease obligations
|
$
|
81,095
|
$
|
267,069
|
$
|
34,084
|
$
|
201,754
|
|
(in thousands)
|
|||
2020
|
$
|
54,524
|
||
2021
|
71,231
|
|||
2022
|
82,150
|
|||
2023
|
27,703
|
|||
2024
|
1,294
|
|||
Thereafter
|
17,806
|
7.
|
LEASES
|
(dollars in thousands)
|
Twelve Months Ended
|
|||
|
December 31, 2019
|
|||
Finance lease cost:
|
||||
Amortization of right-of-use assets
|
$
|
5,469
|
||
Interest on lease liabilities
|
1,107
|
|||
Operating lease cost
|
24,393
|
|||
Variable lease cost
|
326
|
|||
|
||||
Total lease cost
|
$
|
31,295
|
||
|
||||
Other information
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||
Operating cash flows for finance leases
|
$
|
7,226
|
||
Operating cash flows for operating leases
|
$
|
24,393
|
||
Financing cash flows for finance leases
|
$
|
1,107
|
||
Right-of-use assets obtained in exchange for new finance lease liabilities
|
$
|
-
|
||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
37,080
|
||
Weighted-average remaining lease term—finance leases
|
2.9 years
|
|||
Weighted-average remaining lease term—operating leases
|
3.4 years
|
|||
Weighted-average discount rate—finance leases
|
3.0
|
%
|
||
Weighted-average discount rate—operating leases
|
5.2
|
%
|
(in thousands)
|
Operating
|
Finance
|
||||||
2020
|
$
|
21,991
|
$
|
8,185
|
||||
2021
|
18,223
|
7,719
|
||||||
2022
|
16,014
|
9,269
|
||||||
2023
|
7,293
|
9,080
|
||||||
2024
|
439
|
1,390
|
||||||
Thereafter
|
1,992
|
-
|
||||||
Total minimum lease payments
|
$
|
65,952
|
$
|
35,643
|
||||
Less: amount representing interest
|
(5,610
|
)
|
(2,375
|
)
|
||||
Present value of minimum lease payments
|
60,342
|
33,268
|
||||||
Less: current portion
|
(19,460
|
)
|
(7,258
|
)
|
||||
Lease obligations, long-term
|
$
|
40,882
|
$
|
26,010
|
(in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Revenue equipment rentals
|
$
|
20,989
|
$
|
14,682
|
$
|
12,055
|
||||||
Building and lot rentals
|
2,898
|
1,339
|
448
|
|||||||||
Other equipment rentals
|
506
|
881
|
261
|
|||||||||
Total rental expense
|
$
|
24,393
|
$
|
16,902
|
$
|
12,764
|
8.
|
INCOME TAXES
|
(in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Federal, current
|
$
|
(1,174
|
)
|
$
|
-
|
$
|
(7,780
|
)
|
||||
Federal, deferred
|
3,976
|
14,117
|
(28,055
|
)
|
||||||||
State, current
|
1,077
|
1,410
|
(1,737
|
)
|
||||||||
State, deferred
|
(415
|
)
|
(20
|
)
|
5,430
|
|||||||
Income tax expense (benefit)
|
$
|
3,464
|
$
|
15,507
|
$
|
(32,142
|
)
|
(in thousands)
|
2019
|
2018
|
2017
|
|||||||||
Computed "expected" income tax expense
|
$
|
2,508
|
$
|
12,182
|
$
|
8,154
|
||||||
State income taxes, net of federal income tax effect
|
(351
|
)
|
2,610
|
862
|
||||||||
831(b) election
|
(393
|
)
|
(200
|
)
|
(290
|
)
|
||||||
Per diem allowances
|
1,450
|
1,446
|
2,145
|
|||||||||
Tax contingency accruals
|
601
|
(57
|
)
|
(43
|
)
|
|||||||
Valuation allowance, net
|
321
|
-
|
(1,167
|
)
|
||||||||
Tax credits
|
(377
|
)
|
(968
|
)
|
(1,352
|
)
|
||||||
Impact of Tax Act remeasurement
|
-
|
-
|
(40,123
|
)
|
||||||||
Excess tax benefits on share-based compensation
|
105
|
50
|
(457
|
)
|
||||||||
Change in prior year estimates
|
(420
|
)
|
-
|
-
|
||||||||
Other, net
|
20
|
444
|
129
|
|||||||||
Income tax expense (benefit)
|
$
|
3,464
|
$
|
15,507
|
$
|
(32,142
|
)
|
(in thousands)
|
2019
|
2018
|
||||||
Deferred tax assets:
|
||||||||
Insurance and claims
|
$
|
10,269
|
$
|
9,593
|
||||
Net operating loss carryovers
|
25,849
|
10,260
|
||||||
Tax credits
|
10,942
|
11,985
|
||||||
Leased liability
|
15,668
|
-
|
||||||
Capital lease obligation
|
8,483 | - | ||||||
State bonus
|
6,576
|
5,938
|
||||||
Other
|
2,160
|
2,412
|
||||||
Valuation allowance
|
(385
|
)
|
(63
|
)
|
||||
Total deferred tax assets
|
79,562
|
40,125
|
||||||
|
||||||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
(97,066
|
)
|
(87,939
|
)
|
||||
Investment in partnership
|
(36,669
|
)
|
(26,066
|
)
|
||||
Deferred fuel hedge
|
-
|
(73
|
)
|
|||||
ROU Asset- leases
|
(15,280
|
)
|
-
|
|||||
481(a) – Capital leases
|
(7,462
|
)
|
-
|
|||||
Other
|
(449
|
)
|
(569
|
)
|
||||
Prepaid expenses
|
(2,966
|
)
|
(2,945
|
)
|
||||
Total deferred tax liabilities
|
(159,892
|
)
|
(117,592
|
)
|
||||
|
||||||||
Net deferred tax liability
|
$
|
(80,330
|
)
|
$
|
(77,467
|
)
|
|
2019
|
2018
|
2017
|
|||||||||
Balance as of January 1,
|
$
|
1,796
|
$
|
1,924
|
$
|
2,051
|
||||||
Increases related to prior year tax positions
|
2,969
|
4
|
19
|
|||||||||
Decreases related to prior year positions
|
-
|
(9
|
)
|
(10
|
)
|
|||||||
Increases related to current year tax positions
|
287
|
-
|
-
|
|||||||||
Decreases related to settlements with taxing authorities
|
(4,200
|
)
|
-
|
-
|
||||||||
Decreases related to lapsing of statute of limitations
|
(29
|
)
|
(123
|
)
|
(136
|
)
|
||||||
Balance as of December 31,
|
$
|
823
|
$
|
1,796
|
$
|
1,924
|
(in thousands)
|
As of the years ended December 31,
|
|||||||
|
2019
|
2018
|
||||||
Current Assets
|
$
|
28,577
|
$
|
25,877
|
||||
Non-current Assets
|
346,014
|
273,987
|
||||||
Current Liabilities
|
85,751
|
78,530
|
||||||
Non-current Liabilities
|
232,992
|
176,389
|
||||||
Total Equity
|
$
|
55,848
|
$
|
44,945
|
(in thousands)
|
As of the years ended December 31,
|
|||||||||||
|
2019
|
2018
|
2017
|
|||||||||
Revenue
|
$
|
110,298
|
$
|
108,801
|
$
|
84,865
|
||||||
Cost of Sales
|
20,404
|
37,307
|
37,343
|
|||||||||
Operating Expenses
|
65,058
|
47,281
|
35,525
|
|||||||||
Operating Income
|
24,836
|
24,213
|
11,997
|
|||||||||
Net Income
|
$
|
13,403
|
$
|
16,496
|
$
|
6,954
|
10.
|
DEFERRED PROFIT SHARING EMPLOYEE BENEFIT PLAN
|
11.
|
RELATED PARTY TRANSACTIONS
|
12.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
13.
|
SEGMENT INFORMATION
|
●
|
Highway Services: Includes the Company’s Expedited and OTR services, which are typically ad-hoc and do not include long-term contracts.
|
||
|
●
|
Expedited services primarily involves high service freight with delivery standards, such as 1,000 miles in 22 hours, or 15-minute delivery windows. Expedited services
generally require two-person driver teams on equipment either owned or leased by the Company.
|
|
|
●
|
OTR services provide customers with one-way load capacity over irregular routes for loads that are typically shorter in nature.
|
|
●
|
Dedicated: Specializes in providing customers with committed capacity over extended contract periods using equipment either owned or leased by the Company.
|
||
●
|
Managed Freight: Includes the Company’s Brokerage, TMS and Warehousing services.
|
||
|
●
|
Brokerage services provide logistics capacity by outsourcing the carriage of customers’ freight to contractual third parties.
|
|
|
●
|
TMS provides comprehensive logistics services on a contractual basis to customers who prefer to outsource their logistics needs.
|
|
|
●
|
Warehousing services provides day-to-day warehouse management services to customers who have chosen to outsource this function.
|
|
●
|
Factoring services assist freight capacity providers with improving cash flows by purchasing accounts receivables at a discount and collecting them directly from the
end consumer.
|
(in thousands)
|
||||||||||||||||||||
Year Ended December 31, 2019
|
Highway Services
|
Dedicated
|
Managed Freight
|
Factoring
|
Consolidated
|
|||||||||||||||
Total revenue from external customers
|
$
|
356,521
|
$
|
342,473
|
$
|
186,394
|
$
|
9,140
|
$
|
894,528
|
||||||||||
Intersegment revenue
|
10,302
|
-
|
-
|
-
|
10,302
|
|||||||||||||||
Operating (loss) income
|
(1,098
|
)
|
1,026
|
8,848
|
7,258
|
16,034
|
||||||||||||||
Depreciation and amortization (1)
|
38,325
|
37,944
|
2,583
|
27
|
78,879
|
|||||||||||||||
|
||||||||||||||||||||
Year Ended December 31, 2018
|
Highway Services
|
Dedicated
|
Managed Freight
|
Factoring
|
Consolidated
|
|||||||||||||||
Total revenue from external customers
|
$
|
469,308
|
$
|
257,739
|
$
|
153,346
|
$
|
5,062
|
$
|
885,455
|
||||||||||
Intersegment revenue
|
7,298
|
-
|
-
|
-
|
7,298
|
|||||||||||||||
Operating income
|
32,693
|
12,699
|
10,135
|
3,459
|
58,986
|
|||||||||||||||
Depreciation and amortization (1)
|
46,931
|
28,515
|
695
|
15
|
76,156
|
|||||||||||||||
|
||||||||||||||||||||
Year Ended December 31, 2017
|
Highway Services
|
Dedicated
|
Managed Freight
|
Factoring
|
Consolidated
|
|||||||||||||||
Total revenue from external customers
|
$
|
467,992
|
$
|
144,845
|
$
|
89,042
|
$
|
3,128
|
$
|
705,007
|
||||||||||
Intersegment revenue
|
6,009
|
-
|
-
|
-
|
6,009
|
|||||||||||||||
Operating income
|
14,323
|
5,244
|
6,388
|
2,200
|
28,155
|
|||||||||||||||
Depreciation and amortization (1)
|
56,925
|
19,498
|
11
|
13
|
76,447
|
|
(1)
|
Includes gains and losses on disposition of equipment.
|
(in thousands)
|
For the years ended December 31,
|
|||||||||||
|
2019
|
2018
|
2017
|
|||||||||
Total external revenues for reportable segments
|
$
|
894,528
|
$
|
885,455
|
$
|
705,007
|
||||||
Intersegment revenues for reportable segments
|
10,302
|
7,298
|
6,009
|
|||||||||
Elimination of intersegment revenues
|
(10,302
|
)
|
(7,298
|
)
|
(6,009
|
)
|
||||||
Total consolidated revenues
|
$
|
894,528
|
$
|
885,455
|
$
|
705,007
|
14.
|
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
|
|
||||||||||||||||
(in thousands except per share amounts)
|
||||||||||||||||
|
Mar. 31,
|
June 30,
|
Sep. 30,
|
Dec. 31,
|
||||||||||||
Quarters ended
|
2019
|
2019
|
2019
|
2019
|
||||||||||||
|
||||||||||||||||
Total revenue
|
$
|
219,181
|
$
|
219,298
|
$
|
222,914
|
$
|
233,135
|
||||||||
Operating income (loss)
|
5,426
|
8,844
|
(1,931
|
)
|
3,695
|
|||||||||||
Net income (loss)
|
4,433
|
6,071
|
(3,189
|
)
|
1,162
|
|||||||||||
Basic income (loss) per share
|
0.24
|
0.33
|
(0.17
|
)
|
0.06
|
|||||||||||
Diluted income (loss) per share
|
0.24
|
0.33
|
(0.17
|
)
|
0.05
|
|
||||||||||||||||
(in thousands except per share amounts)
|
||||||||||||||||
|
Mar. 31,
|
June 30,
|
Sep. 30,
|
Dec. 31,
|
||||||||||||
Quarters ended
|
2018
|
2018
|
2018
|
2018
|
||||||||||||
|
||||||||||||||||
Total revenue
|
$
|
173,566
|
$
|
196,318
|
$
|
243,303
|
$
|
272,268
|
||||||||
Operating income
|
6,425
|
14,065
|
16,181
|
22,315
|
||||||||||||
Net income
|
4,417
|
9,971
|
11,614
|
16,501
|
||||||||||||
Basic income per share
|
0.24
|
0.54
|
0.63
|
0.91
|
||||||||||||
Diluted income per share
|
0.24
|
0.54
|
0.63
|
0.89
|
•
|
the designation and number of shares;
|
•
|
the dividend rate and preferences, if any, which dividends on that series of preferred stock will have compared to any other class or series of our capital stock;
|
•
|
the voting rights, if any;
|
•
|
the conversion or exchange privileges, if any, applicable to that series;
|
•
|
the redemption price or prices and the other terms of redemption, if any, applicable to that series; and
|
•
|
any purchase, retirement, or sinking fund provisions applicable to that series.
|
(1) |
On May 31, 2011, we acquired a 49% interest in TEL. We account for our investment in TEL using the equity method of accounting.
|
Date: March 9, 2020
|
/s/ David R. Parker
|
|
David R. Parker
|
|
Principal Executive Officer
|
Date: March 9, 2020
|
/s/ Richard B. Cribbs
|
|
Richard B. Cribbs
|
|
Principal Financial Officer
|
Date: March 9, 2020
|
/s/ David R. Parker
|
|
David R. Parker
|
|
Chief Executive Officer
|
Date: March 9, 2020
|
/s/ Richard B. Cribbs
|
|
Richard B. Cribbs
|
|
Chief Financial Officer
|
Page
|
||
Report of Independent Registered Public Accounting Firm
|
1
|
|
Independent Auditor’s Report
|
2
|
|
Financial Statements:
|
||
Balance Sheets
|
3
|
|
Statements of Income and Changes in Members’ Equity
|
4
|
|
Statements of Cash Flows
|
5
|
|
Notes to the Financial Statements
|
6-17
|
Assets
|
||||||||
2019
|
2018
|
|||||||
Current assets:
|
||||||||
Cash
|
$
|
6,566,090
|
$
|
8,302,072
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
6,763,448
|
5,190,669
|
||||||
Net investment in direct financing leases
|
995,675
|
558,462
|
||||||
Inventory
|
7,463,324
|
6,254,212
|
||||||
Prepaid expenses
|
488,939
|
408,080
|
||||||
Restricted cash
|
3,422,255
|
4,873,414
|
||||||
Restricted investments (at fair value)
|
2,001,660
|
-
|
||||||
Other current assets
|
875,661
|
289,651
|
||||||
Total current assets
|
28,577,052
|
25,876,560
|
||||||
Property and equipment, net
|
345,037,378
|
273,581,365
|
||||||
Other assets
|
976,760
|
406,145
|
||||||
Total assets
|
$
|
374,591,190
|
$
|
299,864,070
|
||||
Liabilities and Members' Equity
|
||||||||
Current liabilities:
|
||||||||
Trade accounts payable
|
$
|
674,824
|
$
|
213,497
|
||||
Accounts payable to related party
|
1,250,794
|
7,189,952
|
||||||
Line of credit
|
6,700,000
|
-
|
||||||
Current portion of long‑term debt
|
66,481,231
|
61,689,436
|
||||||
Accrued liabilities
|
10,644,593
|
9,436,796
|
||||||
Total current liabilities
|
85,751,442
|
78,529,681
|
||||||
Long‑term debt, excluding current maturities
|
231,575,490
|
174,662,347
|
||||||
Deferred income taxes
|
1,416,367
|
1,726,722
|
||||||
Total liabilities
|
318,743,299
|
254,918,750
|
||||||
Members' equity
|
55,847,891
|
44,945,320
|
||||||
Total liabilities and members' equity
|
$
|
374,591,190
|
$
|
299,864,070
|
2019
|
2018
|
2017 (Unaudited)*
|
||||||||||
Revenues
|
$
|
110,298,080
|
$
|
108,801,015
|
$
|
84,865,141
|
||||||
Operating costs and expenses:
|
||||||||||||
Cost of sales
|
20,403,760
|
37,307,456
|
37,342,707
|
|||||||||
Depreciation
|
53,746,434
|
41,198,544
|
29,165,485
|
|||||||||
Administrative and selling expenses
|
16,398,845
|
8,494,116
|
6,589,523
|
|||||||||
Net gain on disposals of property and equipment
|
(5,086,848
|
)
|
(2,412,233
|
)
|
(229,397
|
)
|
||||||
Total operating costs and expenses
|
85,462,191
|
84,587,883
|
72,868,318
|
|||||||||
Operating income
|
24,835,889
|
24,213,132
|
11,996,823
|
|||||||||
Interest income
|
(202,752
|
)
|
(171,761
|
)
|
(30,023
|
)
|
||||||
Interest expense
|
11,946,225
|
7,888,694
|
5,073,208
|
|||||||||
Interest expense, net
|
11,743,473
|
7,716,933
|
5,043,185
|
|||||||||
Income before income taxes
|
13,092,416
|
16,496,199
|
6,953,638
|
|||||||||
Deferred state income tax benefit
|
310,355
|
–
|
–
|
|||||||||
Net income
|
13,402,771
|
16,496,199
|
6,953,638
|
|||||||||
Distributions to members
|
(2,500,200
|
)
|
(3,999,800
|
)
|
(4,000,000
|
)
|
||||||
Members' equity at beginning of year
|
44,945,320
|
32,448,921
|
29,495,283
|
|||||||||
Members' equity at end of year
|
$
|
55,847,891
|
$
|
44,945,320
|
$
|
32,448,921
|
2019
|
2018
|
2017 (Unaudited)*
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
13,402,771
|
$
|
16,496,199
|
$
|
6,953,638
|
||||||
Adjustments to reconcile net income to cash flows provided by operating activities:
|
||||||||||||
Depreciation
|
53,746,434
|
41,198,544
|
29,165,485
|
|||||||||
Bad debt expense
|
5,922,882
|
614,010
|
292,620
|
|||||||||
Deferred state income tax benefit
|
(310,355
|
)
|
-
|
-
|
||||||||
Net gain on disposals of property and equipment
|
(5,086,848
|
)
|
(2,412,233
|
)
|
(229,397
|
)
|
||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
(7,495,661
|
)
|
(1,132,369
|
)
|
(2,166,146
|
)
|
||||||
Inventory
|
(1,209,112
|
)
|
(3,043,536
|
)
|
(390,751
|
)
|
||||||
Prepaid expenses
|
(80,859
|
)
|
(44,353
|
)
|
(68,311
|
)
|
||||||
Other current and non-current assets
|
(79,591
|
)
|
-
|
-
|
||||||||
Accounts payable related party
|
(5,939,158
|
)
|
(1,457,404
|
)
|
4,978,945
|
|||||||
Accounts payable other
|
461,327
|
(2,213,992
|
)
|
2,045,464
|
||||||||
Accrued liabilities
|
1,207,797
|
3,635,339
|
1,068,881
|
|||||||||
Net cash provided by operating activities
|
54,539,627
|
51,640,205
|
41,650,428
|
|||||||||
Cash flows used in investing activities:
|
||||||||||||
Purchases of property and equipment
|
(170,333,585
|
)
|
(149,154,690
|
)
|
(79,719,226
|
)
|
||||||
Collections on direct financing leases
|
1,706,606
|
2,348,888
|
1,149,917
|
|||||||||
Proceeds from disposals of property and equipment, related party
|
10,509,600
|
1,760,400
|
-
|
|||||||||
Proceeds from disposals of property and equipment, other
|
37,564,567
|
16,308,216
|
11,743,147
|
|||||||||
Purchases of restricted investments
|
(2,001,660
|
)
|
-
|
-
|
||||||||
Other
|
(1,077,034
|
)
|
(49,302
|
)
|
(140,462
|
)
|
||||||
Net cash used in investing activities
|
(123,631,506
|
)
|
(128,786,488
|
)
|
(66,966,624
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from line of credit
|
8,500,000
|
1,625,000
|
4,000,000
|
|||||||||
Payments of line of credit
|
(1,800,000
|
)
|
(1,625,000
|
)
|
(4,000,000
|
)
|
||||||
Proceeds from long‑term debt
|
167,567,450
|
143,641,199
|
69,063,355
|
|||||||||
Payments of long‑term debt
|
(105,862,512
|
)
|
(59,802,307
|
)
|
(36,946,550
|
)
|
||||||
Distributions to members
|
(2,500,200
|
)
|
(3,999,800
|
)
|
(4,000,000
|
)
|
||||||
Net cash provided by financing activities
|
65,904,738
|
79,839,092
|
28,116,805
|
|||||||||
Change in cash and restricted cash
|
(3,187,141
|
)
|
2,692,809
|
2,800,609
|
||||||||
Cash and restricted cash at beginning of year
|
13,175,486
|
10,482,677
|
7,682,068
|
|||||||||
Cash and restricted cash at end of year
|
$
|
9,988,345
|
$
|
13,175,486
|
$
|
10,482,677
|
(2) |
Summary of significant accounting policies
|
|
(a) |
Accounts receivable and credit policies
|
|
(b) |
Inventory
|
|
(c) |
Restricted Cash
|
|
(d) |
Restricted Investments
|
|
(e) |
Property and equipment
|
|
(f) |
Income taxes
|
|
(g) |
Revenue recognition
|
|
(h) |
Use of estimates
|
|
(i) |
Reclassifications
|
|
(j) |
Events occurring after reporting date
|
(3) |
Credit risk and other concentrations
|
2019
|
2018
|
2017
|
||||||||||
Operating lease revenues
|
$
|
87,342,886
|
$
|
68,422,222
|
$
|
44,925,960
|
||||||
Equipment sales
|
22,225,912
|
40,327,004
|
39,773,633
|
|||||||||
Consulting revenue
|
660,333
|
-
|
-
|
|||||||||
Direct finance leases
|
68,949
|
51,789
|
165,548
|
|||||||||
Total revenues
|
$
|
110,298,080
|
$
|
108,801,015
|
$
|
84,865,141
|
(5) |
Accounts receivable
|
2019
|
2018
|
|||||||
Accounts receivable
|
$
|
11,120,913
|
$
|
5,385,712
|
||||
Less allowance for doubtful accounts
|
(4,357,465
|
)
|
(195,043
|
)
|
||||
Total accounts receivable
|
$
|
6,763,448
|
$
|
5,190,669
|
(6) |
Net investment in direct financing leases
|
Year
|
Amount
|
|||
2020
|
$
|
68,399,947
|
||
2021
|
56,113,855
|
|||
2022
|
32,725,565
|
|||
2023
|
7,855,828
|
|||
2024
|
794,140
|
|||
2025 and beyond
|
1,056,255
|
|||
Total
|
$
|
166,945,590
|
2019
|
2018
|
|||||||
Assets Subject to operating leases:
|
||||||||
Tractors
|
$
|
310,184,998
|
$
|
240,415,537
|
||||
Trailers
|
128,841,380
|
102,137,832
|
||||||
439,026,378
|
342,553,369
|
|||||||
Accumulated depreciation
|
(103,108,764
|
)
|
(76,846,362
|
)
|
||||
335,917,614
|
265,707,007
|
|||||||
Other equipment
|
586,974
|
473,338
|
||||||
Accumulated depreciation
|
(265,402
|
)
|
(162,178
|
)
|
||||
321,572
|
311,160
|
|||||||
Assets held for lease
|
8,798,192
|
7,563,198
|
||||||
Total property and equipment
|
$
|
345,037,378
|
$
|
273,581,365
|
2019
|
2018
|
|||||||
Maintenance escrow
|
$
|
5,174,527
|
$
|
4,742,211
|
||||
Security deposits
|
3,461,090
|
2,950,855
|
||||||
Accrued payroll
|
961,968
|
1,109,644
|
||||||
Other
|
539,865
|
326,763
|
||||||
Accrued interest
|
507,143
|
307,323
|
||||||
Total accrued liabilities
|
$
|
10,644,593
|
$
|
9,436,796
|
2019
|
2018
|
|||||||
Revenue equipment installment notes; weighted average interest rate of 4.22% and 4.24% at December 31, 2019 and 2018, respectively; due in monthly installments with final
maturities at various dates ranging from January 2020 to January 2024; collateralized by substantially all property and equipment.
|
||||||||
$
|
298,056,721
|
$
|
236,351,783
|
|||||
Less current installments
|
(66,481,231
|
)
|
(61,689,436
|
)
|
||||
Long-term debt, excluding current installments
|
$
|
231,575,490
|
$
|
174,662,347
|
Year
|
Installment Payment
|
Balloon Payments
|
Total
|
|||||||||
2020
|
$
|
51,445,596
|
$
|
15,035,635
|
$
|
66,481,231
|
||||||
2021
|
45,506,014
|
24,926,232
|
70,432,246
|
|||||||||
2022
|
31,970,667
|
46,512,939
|
78,483,606
|
|||||||||
2023
|
11,002,980
|
70,838,057
|
81,841,037
|
|||||||||
2024
|
-
|
818,601
|
818,601
|
|||||||||
Total
|
$
|
139,925,257
|
$
|
158,131,464
|
$
|
298,056,721
|
|
2019
|
2018
|
||||||
State deferred tax assets:
|
||||||||
State net operating loss carryforwards
|
$
|
3,420,789
|
$
|
2,797,179
|
||||
Allowance for doubtful accounts
|
118,297
|
12,678
|
||||||
Total state deferred tax assets
|
3,539,086
|
2,809,857
|
||||||
|
||||||||
State deferred tax liability:
|
||||||||
Property and equipment, principally due to differences in depreciation
|
4,955,453
|
4,536,579
|
||||||
Net state deferred tax liabilities
|
$
|
1,416,367
|
$
|
1,726,722
|
•
|
Purchases of previously owned equipment amounting to $0, $39,500 and $228,000, respectively.
|
•
|
Payment of fees for miscellaneous equipment items, equipment maintenance, and management services amounting to $9,447,865, $8,187,683 and $5,853,195, respectively.
|
•
|
Receipt of lease payments for use of equipment amounting to $607,200, $928,012 and $504,542, respectively.
|
|
Level 1 |
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets the Company has the ability to access.
|
|
Level 2
|
Inputs to the methodology include:
|
-
|
Quoted prices for similar assets or liabilities in active markets;
|
-
|
Quoted prices for identical or similar assets or liabilities in inactive markets;
|
-
|
Inputs other than quoted prices that are observable for the asset or liability;
|
-
|
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
|
Level 3 |
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
Amortized Cost Basis
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Aggregate Fair Value
|
|||||||||||||
Level 1
|
||||||||||||||||
US government securities
|
$
|
320,469
|
$
|
-
|
$
|
-
|
$
|
320,469
|
||||||||
Mutual funds
|
210,723
|
-
|
-
|
210,723
|
||||||||||||
531,192
|
-
|
-
|
531,192
|
|||||||||||||
Level 2
|
||||||||||||||||
Corporate debt securities
|
1,470,468
|
-
|
-
|
1,470,468
|
||||||||||||
Total restricted investments
|
$
|
2,001,660
|
$
|
-
|
$
|
-
|
$
|
2,001,660
|
Year
|
U.S. Government Securities
|
Corporate Bonds
|
Total
|
|||||||||
2020
|
$
|
200,617
|
$
|
239,941
|
$
|
440,558
|
||||||
2021
|
119,852
|
364,286
|
484,138
|
|||||||||
2022
|
—
|
746,755
|
746,755
|
|||||||||
2023
|
—
|
119,486
|
119,486
|
|||||||||
Total
|
$
|
320,469
|
$
|
1,470,468
|
$
|
1,790,937
|