Chairman and Chief Executive Officer,
“For 2022, we generated over
“Despite these unprecedented achievements, our fourth quarter results undoubtedly reflect sequential softening in the freight market, continued inflationary pressure and the cost of significant excess equipment. While we anticipate improved equipment related costs in 2023, we believe the freight market, as a combination of freight rates and volumes, will remain unfavorable compared to the prior year for the next several quarters.
“Our asset-based segments, Expedited and Dedicated, contributed approximately 67% of total revenue, 19% of operating income, 62% of total freight revenue, and 59% of adjusted operating income in the quarter. Our Expedited segment grew revenue and improved adjusted margins compared to the fourth quarter last year. Our Dedicated segment produced comparable revenue and improved adjusted margins year over year. We continue to work to improve the durability of contracts in these segments to lower volatility across economic and freight cycles.
“Our asset-light segments, Managed Freight and Warehousing, contributed approximately 33% of total revenue, 81% of operating income, 38% of total freight revenue, and 41% of adjusted operating income in the quarter and combined to generate comparable margins and returns. Managed Freight continued to exceed our expectations through strong execution and effective coordination with our Expedited and Dedicated segments. Warehousing was able to grow revenue through new customer startups but had diminished margins primarily due to incremental cost headwinds associated with new customer startups and investments in capacity for future growth in this segment.
“Our 49% equity method investment with
A summary of our fourth quarter financial performance:
Three Months Ended | Year Ended | |||||||||||||||
($000s, except per share information) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Total Revenue | $ | 296,057 | $ | 294,228 | $ | 1,216,858 | $ | 1,046,003 | ||||||||
Freight Revenue, Excludes Fuel Surcharge | $ | 255,327 | $ | 267,022 | $ | 1,046,396 | $ | 949,913 | ||||||||
Operating Income | $ | 10,904 | $ | 18,237 | $ | 120,682 | $ | 67,162 | ||||||||
Adjusted Operating Income (1) | $ | 22,010 | $ | 18,824 | $ | 97,244 | $ | 71,205 | ||||||||
Operating Ratio | 96.3 | % | 93.8 | % | 90.1 | % | 93.6 | % | ||||||||
Adjusted Operating Ratio (1) | 91.4 | % | 93.0 | % | 90.7 | % | 92.5 | % | ||||||||
Net Income | $ | 11,504 | $ | 17,732 | $ | 108,682 | $ | 60,731 | ||||||||
Adjusted Net Income (1) | $ | 19,522 | $ | 18,169 | $ | 90,543 | $ | 61,287 | ||||||||
Earnings per Diluted Share | $ | 0.81 | $ | 1.05 | $ | 7.00 | $ | 3.57 | ||||||||
Adjusted Earnings per Diluted Share (1) | $ | 1.37 | $ | 1.07 | $ | 5.84 | $ | 3.61 | ||||||||
(1) Represents non-GAAP measures. | ||||||||||||||||
Equipment Adjustment
In an effort to improve our driver experience, service and operating cost, we made the decision earlier in the year to aggressively reduce the average age of our equipment. We did this through the combination of acquiring additional unbudgeted trucks in the fourth quarter and increasing our original tractor order for 2023. During the fourth quarter we made significant progress on the plan but incurred unusual expense from two items: (i) an early lease abandonment and disposal charge and (ii) excess equipment due to delivery of a large number of new tractors combined with delays in removing existing leased tractors from operations. Overall, we are pleased to be taking delivery of new units and exiting older, less efficient units, which will reduce our average fleet age and improve operating efficiency. Nevertheless, the fourth quarter cost was significant. The excess equipment is excluded from our operating statistics. The early lease abandonment and disposal charge relates to tractors pulled from operations during the fourth quarter, which have been the source of significant operational headwinds throughout the year due to poor fuel economy, unusually high maintenance costs and elevated down time. Because we have no intended future use for these units, we have abandoned the right of use asset associated with the leases, which extend through the fourth quarter of 2023. The charge reflects the current period costs, the write down of the remaining right of use asset, plus the estimated cost of refurbishment and turn-in. The combination of these two factors resulted in the following incremental expense in the period:
Lease abandonment and disposal expense | ||
Excess equipment expense | ||
The pre-tax financial impact of the items outlined above negatively impacted our fourth quarter results. However, we believe the future benefits of improved fuel economy, utilization and maintenance costs will outweigh this cost.
Truckload Operating Data and Statistics
Three Months Ended | Year Ended | |||||||||||||||
($000s, except statistical information) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Combined Truckload | ||||||||||||||||
Total Revenue | $ | 198,339 | $ | 169,674 | $ | 815,710 | $ | 661,604 | ||||||||
Freight Revenue, excludes Fuel Surcharge | $ | 157,911 | $ | 142,670 | $ | 646,559 | $ | 566,213 | ||||||||
Operating Income | $ | 2,094 | $ | 6,855 | $ | 81,639 | $ | 31,707 | ||||||||
Adj. Operating Income (1) | $ | 12,906 | $ | 7,149 | $ | 57,024 | $ | 33,804 | ||||||||
Operating Ratio | 98.9 | % | 96.0 | % | 90.0 | % | 95.2 | % | ||||||||
Adj. Operating Ratio (1) | 91.8 | % | 95.0 | % | 91.2 | % | 94.0 | % | ||||||||
Average Freight Revenue per Tractor per Week | $ | 5,417 | $ | 4,732 | $ | 5,388 | $ | 4,509 | ||||||||
Average Freight Revenue per Total Mile | $ | 2.53 | $ | 2.24 | $ | 2.45 | $ | 2.07 | ||||||||
Average Miles per Tractor per Period | 28,116 | 27,805 | 114,636 | 113,485 | ||||||||||||
Weighted Average Tractors for Period | 2,218 | 2,294 | 2,301 | 2,408 | ||||||||||||
Expedited | ||||||||||||||||
Total Revenue | $ | 114,479 | $ | 85,924 | $ | 452,713 | $ | 337,063 | ||||||||
Freight Revenue, excludes Fuel Surcharge | $ | 90,364 | $ | 71,782 | $ | 355,360 | $ | 289,350 | ||||||||
Operating Income | $ | 5,972 | $ | 5,585 | $ | 60,552 | $ | 33,064 | ||||||||
Adj. Operating Income (1) | $ | 10,334 | $ | 5,585 | $ | 45,927 | $ | 33,064 | ||||||||
Operating Ratio | 94.8 | % | 93.5 | % | 86.6 | % | 90.2 | % | ||||||||
Adj. Operating Ratio (1) | 88.6 | % | 92.2 | % | 87.1 | % | 88.6 | % | ||||||||
Average Freight Revenue per Tractor per Week | $ | 7,639 | $ | 6,557 | $ | 7,604 | $ | 6,498 | ||||||||
Average Freight Revenue per Total Mile | $ | 2.39 | $ | 2.06 | $ | 2.32 | $ | 1.97 | ||||||||
Average Miles per Tractor per Period | 42,073 | 41,925 | 170,925 | 172,080 | ||||||||||||
Weighted Average Tractors for Period | 900 | 833 | 896 | 854 | ||||||||||||
Dedicated | ||||||||||||||||
Total Revenue | $ | 83,860 | $ | 83,750 | $ | 362,997 | $ | 324,541 | ||||||||
Freight Revenue, excludes Fuel Surcharge | $ | 67,547 | $ | 70,888 | $ | 291,199 | $ | 276,863 | ||||||||
Operating Income (Loss) | $ | (3,878 | ) | $ | 1,270 | $ | 21,087 | $ | (1,357 | ) | ||||||
Adj. Operating Income(1) | $ | 2,572 | $ | 1,564 | $ | 11,097 | $ | 740 | ||||||||
Operating Ratio | 104.6 | % | 98.5 | % | 94.2 | % | 100.4 | % | ||||||||
Adj. Operating Ratio (1) | 96.2 | % | 97.8 | % | 96.2 | % | 99.7 | % | ||||||||
Average Freight Revenue per Tractor per Week | $ | 3,899 | $ | 3,692 | $ | 3,975 | $ | 3,417 | ||||||||
Average Freight Revenue per Total Mile | $ | 2.76 | $ | 2.46 | $ | 2.63 | $ | 2.19 | ||||||||
Average Miles per Tractor per Period | 18,586 | 19,755 | 78,728 | 81,284 | ||||||||||||
Weighted Average Tractors for Period | 1,318 | 1,461 | 1,405 | 1,554 | ||||||||||||
(1) Represents non-GAAP measures. | ||||||||||||||||
Combined Truckload Revenue
Expedited Truckload Revenue
Dedicated Truckload Revenue
“For the quarter, freight revenue in our Dedicated segment decreased
Combined Truckload Operating Expenses
“Salaries, wages and related expense increased year-over-year
“Operations and maintenance related expense increased year-over-year by
“Insurance related expense increased year-over-year by
“Gain on sale of equipment increased to
Managed Freight Segment
Three Months Ended | Year Ended | |||||||||||||||
($000s) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Freight Revenue | $ | 76,171 | $ | 108,132 | $ | 320,985 | $ | 321,236 | ||||||||
Operating Income | $ | 8,795 | $ | 10,952 | $ | 36,858 | $ | 32,461 | ||||||||
Adj. Operating Income (1) | $ | 8,830 | $ | 10,988 | $ | 36,999 | $ | 32,986 | ||||||||
Operating Ratio | 88.5 | % | 89.9 | % | 88.5 | % | 89.9 | % | ||||||||
Adj. Operating Ratio (1) | 88.4 | % | 89.8 | % | 88.5 | % | 89.7 | % | ||||||||
(1) Represents non-GAAP measures. | ||||||||||||||||
“For the quarter, Managed Freight’s freight revenue decreased 29.6%, from the prior year quarter. Operating income and adjusted operating income declined 20.0% compared to the fourth quarter of 2021. Managed Freight’s reduced freight revenue is attributable to reduced volumes of overflow freight from both Expedited and Dedicated truckload operations which was at an all-time high during the fourth quarter 2021. Revenue and operating income in this segment are expected to fluctuate with changes in the freight market and our percentage of contracted versus non-contracted freight.”
Warehousing Segment
Three Months Ended | Year Ended | |||||||||||||||
($000s) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Freight Revenue | $ | 21,245 | $ | 16,220 | $ | 78,852 | $ | 62,464 | ||||||||
Operating Income | $ | 15 | $ | 430 | $ | 2,185 | $ | 2,994 | ||||||||
Adj. Operating Income (1) | $ | 274 | $ | 687 | $ | 3,221 | $ | 4,415 | ||||||||
Operating Ratio | 99.9 | % | 97.4 | % | 97.3 | % | 95.3 | % | ||||||||
Adj. Operating Ratio (1) | 98.7 | % | 95.8 | % | 95.9 | % | 92.9 | % | ||||||||
(1) Represents non-GAAP measures. | ||||||||||||||||
“For the quarter, Warehousing’s freight revenue increased 31.0% versus the prior year quarter. The increase in revenue was primarily driven by the year-over-year impact of new customer business added during the current year. Operating income and adjusted operating income for the Warehousing segment decreased
Capitalization, Liquidity and Capital Expenditures
The increase in net indebtedness is primarily attributable to the base purchase price paid for the acquisition of AAT in the amount of
“At
“Our net capital investment through
“Our baseline expectation for net capital expenditures in 2023 is
“Based on our current capital structure and expected 2023 net capital expenditures, we believe we have substantial flexibility to continue to repurchase stock, declare quarterly dividends and evaluate other capital allocation alternatives.”
Subsequent Event: Real Estate Sale
On
Outlook
“As we look toward 2023, we anticipate a very difficult freight environment for at least the first half of the year which could compress rates and margins when compared to 2022. However, we believe our more resilient operating model, together with the steps we are taking to reduce costs and inefficiencies, will mitigate a portion of our historical volatility throughout economic and freight market cycles. Overall, I am pleased with our current position, which features a de-leveraged balance sheet, strong liquidity and a reduction of approximately 20% of the shares outstanding compared to a year ago. We will remain focused on growing our market share, continuing to improve our operations, and becoming a stronger, more profitable, and more predictable business with the opportunity for significant and sustained value creation.”
Conference Call Information
The Company will host a live conference call tomorrow,
(1) See GAAP to Non-GAAP Reconciliation in the schedules included with this release. In addition to operating income (loss), operating ratio, net income, and earnings per diluted share, we use adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted earnings per diluted share, non-GAAP measures, as key measures of profitability. Adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted diluted earnings per share are not substitutes for operating income (loss), operating ratio, net income, and earnings per diluted share measured in accordance with GAAP. There are limitations to using non-GAAP financial measures. We believe our presentation of these non-GAAP financial measures are useful because it provides investors and securities analysts with supplemental information that we use internally for purposes of assessing profitability. Further, our Board and management use non-GAAP operating income (loss), operating ratio, net income, and earnings per diluted share measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. Although we believe that adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted diluted earnings per share improves comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry, if those companies define such measures differently. Because of these limitations, adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted earnings per diluted share should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.
This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as “expects,” “estimates,” “projects,” “believes,” “anticipates,” “plans,” “could,” “would,” “may,” “will,” "intends," “outlook,” “focus,” “seek,” “potential,” “mission,” “continue,” “goal,” “target,” “objective,” derivations thereof, and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this press release, statements relating to expected cost inflation, expected freight demand, volume, and rates, future Dedicated and Expedited contracts, growth in the Warehousing segment, as well as margins in the Warehousing segment, future results of TEL, future revenue, operating income, and operating expenses, future availability and covenant testing under our ABL credit facility, expected fleet age, operating efficiency, and cost, net capital expenditures, capital allocation alternatives, progress toward our strategic goals, and the statements under “Outlook” are forward-looking statements. The following factors, among others could cause actual results to differ materially from those in the forward-looking statements: Our business is subject to economic, credit, business, and regulatory factors affecting the truckload industry that are largely beyond our control including cost inflation and global supply chain disruption that could affect (i) the volume, pricing, and predictability of customer demand, (ii) the availability, pricing, and delivery schedule of equipment and parts, (iii) the availability and compensation of employees and third-party capacity providers, and (iv) other aspects of our business; We may not be successful in achieving our strategic plan; We operate in a highly competitive and fragmented industry; We may not grow substantially in the future and we may not be successful in improving our profitability; We may not make acquisitions in the future, or if we do, we may not be successful in our acquisition strategy; Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability to maintain or grow our fleet; Our engagement of independent contractors to provide a portion of our capacity exposes us to different risks than we face with our tractors driven by company drivers; We derive a significant portion of our revenues from our major customers; Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, surcharge collection, and hedging activities may increase our costs of operation; We depend on third-party providers, particularly in our Managed Freight segment; We depend on the proper functioning and availability of our management information and communication systems and other information technology assets (including the data contained therein) and a system failure or unavailability, including those caused by cybersecurity breaches, or an inability to effectively upgrade such systems and assets could cause a significant disruption to our business; If we are unable to retain our key employees, our business, financial condition, and results of operations could be harmed; Seasonality and the impact of weather and other catastrophic events affect our operations and profitability; We self-insure for a significant portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings; Our self-insurance for auto liability claims and our use of captive insurance companies could adversely impact our operations; We have experienced, and may experience additional, erosion of available limits in our aggregate insurance policies; We may experience additional expense to reinstate insurance policies due to liability claims; We operate in a highly regulated industry; If our independent contractor drivers are deemed by regulators or judicial process to be employees, our business, financial condition, and results of operations could be adversely affected; Developments in labor and employment law and any unionizing efforts by employees could have a materially adverse effect on our results of operations; The Compliance Safety Accountability program adopted by the
For further information contact:
PBunn@covenantlogistics.com
TGrant@covenantlogistics.com
For copies of Company information contact:
BMcKenzie@covenantlogistics.com
Key Financial and Operating Statistics | ||||||||||||||||||||||||
Income Statement Data | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
($s in 000s, except per share data) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||||||
Freight revenue | $ | 255,327 | $ | 267,022 | (4.4 | %) | $ | 1,046,396 | $ | 949,913 | 10.2 | % | ||||||||||||
Fuel surcharge revenue | 40,730 | 27,206 | 49.7 | % | 170,462 | 96,090 | 77.4 | % | ||||||||||||||||
Total revenue | $ | 296,057 | $ | 294,228 | 0.6 | % | $ | 1,216,858 | $ | 1,046,003 | 16.3 | % | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries, wages, and related expenses | 101,295 | 91,637 | 402,276 | 350,246 | ||||||||||||||||||||
Fuel expense | 39,954 | 28,273 | 166,410 | 103,641 | ||||||||||||||||||||
Operations and maintenance | 18,803 | 15,323 | 79,051 | 59,269 | ||||||||||||||||||||
Revenue equipment rentals and purchased transportation | 81,343 | 106,358 | 325,624 | 331,685 | ||||||||||||||||||||
Operating taxes and licenses | 3,213 | 2,667 | 11,931 | 10,899 | ||||||||||||||||||||
Insurance and claims | 14,794 | 10,350 | 50,547 | 38,788 | ||||||||||||||||||||
Communications and utilities | 1,662 | 1,233 | 5,385 | 4,558 | ||||||||||||||||||||
General supplies and expenses | 9,346 | 7,701 | 37,762 | 29,673 | ||||||||||||||||||||
Depreciation and amortization | 15,778 | 12,565 | 57,512 | 53,881 | ||||||||||||||||||||
Gain on disposition of property and equipment, net | (1,035 | ) | (116 | ) | (40,322 | ) | (3,799 | ) | ||||||||||||||||
Total operating expenses | 285,153 | 275,991 | 1,096,176 | 978,841 | ||||||||||||||||||||
Operating income | 10,904 | 18,237 | 120,682 | 67,162 | ||||||||||||||||||||
Interest expense, net | 827 | 616 | 3.083 | 2,791 | ||||||||||||||||||||
Income from equity method investment | (3,931 | ) | (5,210 | ) | (25,193 | ) | (14,782 | ) | ||||||||||||||||
Income from continuing operations before income taxes | 14,008 | 22,831 | 142,792 | 79,153 | ||||||||||||||||||||
Income tax expense | 2,729 | 5,099 | 34,860 | 20,962 | ||||||||||||||||||||
Income from continuing operations | 11,279 | 17,732 | 107,932 | 58,191 | ||||||||||||||||||||
Income from discontinued operations, net of tax | 225 | - | 750 | 2,540 | ||||||||||||||||||||
Net income | $ | 11,504 | $ | 17,732 | $ | 108,682 | $ | 60,731 | ||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||
Income from continuing operations | $ | 0.83 | $ | 1.06 | $ | 7.19 | $ | 3.46 | ||||||||||||||||
Income from discontinued operations | $ | 0.02 | $ | - | $ | 0.05 | $ | 0.15 | ||||||||||||||||
Net income | $ | 0.85 | $ | 1.06 | $ | 7.24 | $ | 3.61 | ||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||
Income from continuing operations | $ | 0.79 | $ | 1.05 | $ | 6.95 | $ | 3.42 | ||||||||||||||||
Income from discontinued operations | $ | 0.02 | $ | - | $ | 0.05 | $ | 0.15 | ||||||||||||||||
Net income | $ | 0.81 | $ | 1.05 | $ | 7.00 | $ | 3.57 | ||||||||||||||||
Basic weighted average shares outstanding (000s) | 13,544 | 16,718 | 15,006 | 16,803 | ||||||||||||||||||||
Diluted weighted average shares outstanding (000s) | 14,205 | 16,974 | 15,524 | 17,020 | ||||||||||||||||||||
Segment Freight Revenues | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
($s in 000's) | 2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||||||||||||||
Expedited - Truckload | $ | 90,364 | $ | 71,782 | 25.9 | % | $ | 355,360 | $ | 289,350 | 22.8 | % | ||||||||||||
Dedicated - Truckload | 67,547 | 70,888 | (4.7 | %) | 291,199 | 276,863 | 5.2 | % | ||||||||||||||||
Combined Truckload | 157,911 | 142,670 | 10.7 | % | 646,559 | 566,213 | 14.2 | % | ||||||||||||||||
Managed Freight | 76,171 | 108,132 | (29.6 | %) | 320,985 | 321,236 | (0.1 | %) | ||||||||||||||||
Warehousing | 21,245 | 16,220 | 31.0 | % | 78,852 | 62,464 | 26.2 | % | ||||||||||||||||
Consolidated Freight Revenue | $ | 255,327 | $ | 267,022 | (4.4 | %) | $ | 1,046,396 | $ | 949,913 | 10.2 | % | ||||||||||||
Truckload Operating Statistics | ||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||
Average freight revenue per loaded mile | $ | 2.86 | $ | 2.53 | 13.0 | % | $ | 2.77 | $ | 2.33 | 18.9 | % | ||||||||||||
Average freight revenue per total mile | $ | 2.53 | $ | 2.24 | 12.9 | % | $ | 2.45 | $ | 2.07 | 18.4 | % | ||||||||||||
Average freight revenue per tractor per week | $ | 5,417 | $ | 4,732 | 14.5 | % | $ | 5,388 | $ | 4,509 | 219.5 | % | ||||||||||||
Average miles per tractor per period | 28,116 | 27,805 | 1.1 | % | 114,636 | 113,485 | 1.0 | % | ||||||||||||||||
Weighted avg. tractors for period | 2,218 | 2,294 | (3.3 | %) | 2,301 | 2,408 | (4.4 | )% | ||||||||||||||||
Tractors at end of period | 2,138 | 2,294 | (6.7 | %) | 2,138 | 2,291 | (6.7 | )% | ||||||||||||||||
Trailers at end of period | 5,367 | 5,331 | 0.7 | % | 5,367 | 5,331 | 0.7 | % | ||||||||||||||||
Selected Balance Sheet Data | ||||||||||||||||||||||||
($s in '000's, except per share data) | ||||||||||||||||||||||||
Total assets | $ | 796,645 | $ | 651,662 | ||||||||||||||||||||
Total stockholders' equity | $ | 377,128 | $ | 349,699 | ||||||||||||||||||||
Total indebtedness, comprised of total debt and finance leases, net of cash | $ | 46,356 | $ | 28,473 | ||||||||||||||||||||
Net Indebtedness to Capitalization Ratio | 10.9 | % | 7.5 | % | ||||||||||||||||||||
Leverage Ratio(1) | 0.34 | 0.24 | ||||||||||||||||||||||
Tangible book value per end-of-quarter basic share | $ | 19.97 | $ | 17.10 | ||||||||||||||||||||
(1) Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. |
Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||||||||||
Adjusted Operating Income and Adjusted Operating Ratio (1) | ||||||||||||||||||||||||
(Dollars in thousands) | Three Months Ended | Year Ended | ||||||||||||||||||||||
GAAP Presentation | 2022 | 2021 | bps Change | 2022 | 2021 | bps Change | ||||||||||||||||||
Total revenue | $ | 296,057 | $ | 294,228 | $ | 1,216,858 | $ | 1,046,003 | ||||||||||||||||
Total operating expenses | 285,153 | 275,991 | 1,096,176 | 978,841 | ||||||||||||||||||||
Operating income | $ | 10,904 | $ | 18,237 | $ | 120,682 | $ | 67,162 | ||||||||||||||||
Operating ratio | 96.3 | % | 93.8 | % | 250 | 90.1 | % | 93.6 | % | (350 | ) | |||||||||||||
Non-GAAP Presentation | 2022 | 2021 | bps Change | 2022 | 2021 | bps Change | ||||||||||||||||||
Total revenue | $ | 296,057 | $ | 294,228 | $ | 1,216,858 | $ | 1,046,003 | ||||||||||||||||
Fuel surcharge revenue | (40,730 | ) | (27,206 | ) | (170,462 | ) | (96,090 | ) | ||||||||||||||||
Freight revenue (total revenue, excluding fuel surcharge) | 255,327 | 267,022 | 1,046,396 | 949,913 | ||||||||||||||||||||
Total operating expenses | 285,153 | 275,991 | 1,096,176 | 978,841 | ||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||
Fuel surcharge revenue | (40,730 | ) | (27,206 | ) | (170,462 | ) | (96,090 | ) | ||||||||||||||||
Amortization of intangibles (2) | (1,121 | ) | (587 | ) | (4,306 | ) | (4,043 | ) | ||||||||||||||||
Gain on disposal of terminals, net | - | - | 38,542 | - | ||||||||||||||||||||
Contingent consideration liability adjustment | - | - | (813 | ) | - | |||||||||||||||||||
Abandonment and excess revenue equipment | (9,985 | ) | - | (9,985 | ) | - | ||||||||||||||||||
Adjusted operating expenses | 233,317 | 229,020 | 949,152 | 878,708 | ||||||||||||||||||||
Adjusted operating income | 22,010 | 21,235 | 97,244 | 71,205 | ||||||||||||||||||||
Adjusted operating ratio | 91.4 | % | 91.5 | % | (160 | ) | 90.7 | % | 92.5 | % | (180 | ) | ||||||||||||
(1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | ||||||||||||||||||||||||
(2) "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. |
Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||
Adjusted Net Income and Adjusted EPS (1) | ||||||||||||||||
(Dollars in thousands) | Three Months Ended | Year Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
GAAP Presentation - Net income | $ | 11,504 | $ | 17,732 | $ | 108,682 | $ | 60,731 | ||||||||
Adjusted for: | ||||||||||||||||
Amortization of intangibles (2) | 1,121 | 587 | 4,306 | 4,043 | ||||||||||||
Strategic restructuring adjusting items: | ||||||||||||||||
Discontinued operations reversal of loss contingency (3) | (300 | ) | - | (1,000 | ) | (3,411 | ) | |||||||||
Gain on disposal of terminal, net | - | - | (38,542 | ) | - | |||||||||||
Contingent consideration liability adjustment | - | - | 813 | - | ||||||||||||
Abandonment and excess revenue equipment | 9,985 | - | 9,985 | - | ||||||||||||
Total adjustments before taxes | 10,806 | 587 | (24,438 | ) | 632 | |||||||||||
Provision for income tax expense at effective rate | (2,788 | ) | (150 | ) | 6,299 | 76 | ||||||||||
Tax effected adjustments | $ | 8,018 | $ | 437 | $ | (18,139 | ) | $ | 556 | |||||||
Non-GAAP Presentation - Adjusted net income | $ | 19,522 | $ | 18,169 | $ | 90,543 | $ | 61,287 | ||||||||
GAAP Presentation - Diluted earnings per share ("EPS") | $ | 0.81 | $ | 1.05 | $ | 7.00 | $ | 3.57 | ||||||||
Adjusted for: | ||||||||||||||||
Amortization of intangibles (2) | 0.08 | 0.03 | 0.28 | 0.24 | ||||||||||||
Discontinued operations reversal of loss contingency(3) | (0.02 | ) | - | (0.06 | ) | (0.20 | ) | |||||||||
Gain on sale of terminal, net | - | - | (2.48 | ) | - | |||||||||||
Contingent consideration liability adjustment | - | - | 0.05 | - | ||||||||||||
Abandonment and excess revenue equipment | 0.70 | 0.64 | - | |||||||||||||
Total adjustments before taxes | 0.76 | 0.03 | (1.57 | ) | 0.04 | |||||||||||
Provision for income tax expense at effective rate | (0.20 | ) | (0.01 | ) | 0.41 | - | ||||||||||
Tax effected adjustments | $ | 0.56 | $ | 0.02 | $ | (1.16 | ) | $ | 0.04 | |||||||
Non-GAAP Presentation - Adjusted EPS | $ | 1.37 | $ | 1.07 | $ | 5.84 | $ | 3.61 | ||||||||
(1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. | ||||||||||||||||
(2) "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | ||||||||||||||||
(3) "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. |
Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income and Adjusted Operating Ratio (1) | ||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Three Months Ended | |||||||||||||||||||||||||||||||||||||||
GAAP Presentation | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||
Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | |||||||||||||||||||||||||||||||
Total revenue | $ | 114,479 | $ | 83,860 | $ | 198,339 | $ | 76,171 | $ | 21,547 | $ | 85,924 | $ | 83,750 | $ | 169,674 | $ | 108,132 | $ | 16,422 | ||||||||||||||||||||
Total operating expenses | 108,507 | 87,738 | $ | 196,245 | $ | 67,376 | 21,532 | 80,339 | 82,480 | 162,819 | 97,180 | 15,992 | ||||||||||||||||||||||||||||
Operating income (loss) | $ | 5,972 | $ | (3,878 | ) | $ | 2,094 | $ | 8,795 | $ | 15 | $ | 5,585 | $ | 1,270 | $ | 6,855 | $ | 10,952 | $ | 430 | |||||||||||||||||||
Operating ratio | 94.8 | % | 104.6 | % | 98.9 | % | 88.5 | % | 99.9 | % | 93.5 | % | 98.5 | % | 96.0 | % | 89.9 | % | 97.4 | % | ||||||||||||||||||||
Non-GAAP Presentation | ||||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 114,479 | $ | 83,860 | $ | 198,338 | $ | 76,171 | $ | 21,547 | $ | 85,924 | $ | 83,750 | $ | 169,674 | $ | 108,132 | $ | 16,422 | ||||||||||||||||||||
Fuel surcharge revenue | (24,115 | ) | (16,313 | ) | (40,428 | ) | - | (302 | ) | (14,142 | ) | (12,862 | ) | (27,004 | ) | - | (202 | ) | ||||||||||||||||||||||
Freight revenue (total revenue, excluding fuel surcharge) | 90,364 | 67,547 | 157,911 | 76,171 | 21,245 | 71,782 | 70,888 | 142,670 | 108,132 | 16,220 | ||||||||||||||||||||||||||||||
Total operating expenses | 108,507 | 87,738 | 196,245 | 67,376 | 21,532 | 80,339 | 82,480 | 162,819 | 97,180 | 15,992 | ||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||
Fuel surcharge revenue | (24,115 | ) | (16,313 | ) | (40,428 | ) | - | (302 | ) | (14,142 | ) | (12,862 | ) | (27,004 | ) | - | (202 | ) | ||||||||||||||||||||||
Amortization of intangibles (2) | (533 | ) | (294 | ) | (827 | ) | (35 | ) | (259 | ) | - | (294 | ) | (294 | ) | (36 | ) | (257 | ) | |||||||||||||||||||||
Abandonment of revenue equipment | (3,829 | ) | (6,156 | ) | (9,985 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Adjusted operating expenses | 80,030 | 64,975 | 145,005 | 67,341 | 20,971 | 66,197 | 69,324 | 135,521 | 97,144 | 15,533 | ||||||||||||||||||||||||||||||
Adjusted operating income (loss) | 10,334 | 2,572 | 12,906 | 8,830 | 274 | 5,585 | 1,564 | 7,149 | 10,988 | 687 | ||||||||||||||||||||||||||||||
Adjusted operating ratio | 88.6 | % | 96.2 | % | 91.8 | % | 88.4 | % | 98.7 | % | 92.2 | % | 97.8 | % | 95.0 | % | 89.8 | % | 95.8 | % | ||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||||||||||||||||||
GAAP Presentation | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||
Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | |||||||||||||||||||||||||||||||
Total revenue | $ | 452,713 | $ | 362,997 | $ | 815,710 | $ | 320,985 | $ | 80,163 | $ | 337,063 | $ | 324,541 | $ | 661,604 | $ | 321,236 | $ | 63,163 | ||||||||||||||||||||
Total operating expenses | 392,161 | $ | 341,910 | $ | 734,071 | $ | 284,127 | $ | 77,978 | $ | 303,999 | $ | 325,898 | $ | 629,897 | $ | 288,775 | $ | 60,169 | |||||||||||||||||||||
Operating income (loss) | $ | 60,552 | $ | 21,087 | $ | 81,639 | $ | 36,858 | $ | 2,185 | $ | 33,064 | $ | (1,357 | ) | $ | 31,707 | $ | 32,461 | $ | 2,994 | |||||||||||||||||||
Operating ratio | 86.6 | % | 94.2 | % | 90.0 | % | 88.5 | % | 97.3 | % | 90.2 | % | 100.4 | % | 95.2 | % | 89.9 | % | 95.3 | % | ||||||||||||||||||||
Non-GAAP Presentation | ||||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 452,713 | $ | 362,997 | $ | 815,710 | $ | 320,985 | $ | 80,163 | $ | 337,063 | $ | 324,541 | $ | 661,604 | $ | 321,236 | $ | 63,163 | ||||||||||||||||||||
Fuel surcharge revenue | (97,353 | ) | (71,798 | ) | $ | (169,151 | ) | - | (1,311 | ) | (47,713 | ) | (47,678 | ) | (95,391 | ) | - | (699 | ) | |||||||||||||||||||||
Freight revenue (total revenue, excluding fuel surcharge) | 335,360 | 291,199 | 646,559 | 320,985 | 78,852 | 289,350 | 276,863 | 566,213 | 321,236 | 62,464 | ||||||||||||||||||||||||||||||
Total operating expenses | 392,161 | 341,910 | 734,071 | 284,127 | 77,978 | 303,999 | 325,898 | 629,897 | 288,775 | 60,169 | ||||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||
Fuel surcharge revenue | (97,353 | ) | (71,798 | ) | (169,151 | ) | - | (1,311 | ) | (47,713 | ) | (47,678 | ) | (95,391 | ) | - | (699 | ) | ||||||||||||||||||||||
Amortization of intangibles (2) | (1,956 | ) | (1,173 | ) | (3,129 | ) | (141 | ) | (1,036 | ) | - | (2,097 | ) | (2,097 | ) | (525 | ) | (1,421 | ) | |||||||||||||||||||||
Gain on disposal of terminals, net | 21,223 | 17,319 | 38,542 | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Contingent consideration liability adjustment | (813 | ) | - | (813 | ) | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Abandonment and excess revenue equipment | (3,829 | ) | (6,156 | ) | (9,985 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
Adjusted operating expenses | 309,433 | 280,102 | 589,535 | 283,986 | 75,631 | 256,286 | 276,123 | 532,409 | 288,250 | 58,049 | ||||||||||||||||||||||||||||||
Adjusted operating income (loss) | 45,927 | 11,097 | 57,024 | 36,999 | 3,221 | 33,064 | 740 | 33,804 | 32,986 | 4,415 | ||||||||||||||||||||||||||||||
Adjusted operating ratio | 87.1 | % | 96.2 | % | 91.2 | % | 88.5 | % | 95.9 | % | 88.6 | % | 99.7 | % | 94.0 | % | 89.7 | % | 92.9 | % | ||||||||||||||||||||
(1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | ||||||||||||||||||||||||||||||||||||||||
(2) "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. |
Source:
2023 GlobeNewswire, Inc., source