FLATBED SOLUTIONS
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Three Months Ended March 31, |
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2023 |
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2022 |
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Change |
(Dollars in millions, except Rate per mile and Revenue per tractor) |
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Amount |
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% |
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Amount |
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% |
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Absolute |
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Relative |
REVENUE: |
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Company freight |
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$ |
44.9 |
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26.6 |
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% |
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$ |
41.3 |
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21.2 |
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% |
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$ |
3.6 |
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8.7 |
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% |
Owner operator freight |
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73.9 |
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43.7 |
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87.7 |
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45.1 |
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(13.8 |
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(15.7 |
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Brokerage |
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23.4 |
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13.8 |
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41.1 |
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21.1 |
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(17.7 |
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(43.1 |
) |
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Logistics |
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1.0 |
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0.6 |
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1.0 |
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0.5 |
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— |
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— |
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Fuel surcharge |
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25.9 |
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15.3 |
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23.3 |
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12.1 |
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2.6 |
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11.2 |
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Total revenue |
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$ |
169.1 |
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100.0 |
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% |
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$ |
194.4 |
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100.0 |
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% |
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$ |
(25.3 |
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(13.0 |
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% |
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OPERATING EXPENSES: |
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Salaries, wages and employee benefits |
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$ |
34.6 |
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20.5 |
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% |
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$ |
31.4 |
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16.2 |
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% |
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$ |
3.2 |
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10.2 |
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% |
Fuel |
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10.5 |
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6.2 |
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9.9 |
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5.1 |
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0.6 |
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6.1 |
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Operations and maintenance |
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12.0 |
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7.1 |
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10.5 |
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5.4 |
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1.5 |
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14.3 |
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Purchased freight |
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83.1 |
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49.1 |
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107.0 |
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55.0 |
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(23.9 |
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(22.3 |
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Depreciation and amortization |
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12.0 |
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7.1 |
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9.1 |
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4.7 |
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2.9 |
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31.9 |
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Restructuring charges |
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0.4 |
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0.2 |
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0.3 |
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0.2 |
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0.1 |
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33.3 |
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Other operating expenses |
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13.3 |
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7.9 |
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16.8 |
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8.6 |
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(3.5 |
) |
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(20.8 |
) |
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Total operating expenses |
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$ |
165.9 |
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98.1 |
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% |
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$ |
185.0 |
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95.2 |
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% |
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$ |
(19.1 |
) |
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(10.3 |
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% |
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INCOME FROM OPERATIONS |
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$ |
3.2 |
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1.9 |
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% |
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$ |
9.4 |
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4.8 |
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% |
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$ |
(6.2 |
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(66.0 |
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% |
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OPERATING STATISTICS: |
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Company miles |
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19.1 |
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15.8 |
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3.3 |
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20.9 |
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% |
Owner operator miles |
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31.6 |
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34.2 |
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(2.6 |
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(7.6 |
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Total miles (in millions) |
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50.7 |
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50.0 |
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0.7 |
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1.4 |
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% |
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Rate per mile |
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$ |
2.34 |
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$ |
2.58 |
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$ |
(0.24 |
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(9.3 |
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% |
Revenue per tractor |
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$ |
49,000 |
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$ |
55,400 |
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$ |
(6,400 |
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(11.6 |
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% |
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Company owned tractors, at quarter-end |
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905 |
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723 |
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182 |
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25.2 |
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% |
Owner operator tractors, at quarter-end |
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1,487 |
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1,568 |
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(81 |
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(5.2 |
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Number of trailers, at quarter-end |
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3,942 |
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4,046 |
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(104 |
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(2.6 |
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% |
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Company owned tractors, average for the quarter |
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901 |
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755 |
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146 |
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19.3 |
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% |
Owner operator tractors, average for the quarter |
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1,522 |
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1,575 |
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(53 |
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(3.4 |
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Total tractors, average for the quarter |
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2,423 |
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2,330 |
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93 |
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4.0 |
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% |
16
Table of Contents
Revenue. Total revenue decreased 5.0% for the three months ended March 31, 2023 as compared to the same period in 2022. The decrease in total revenue was primarily attributed to decreased owner operator freight and brokerage revenue due to the macro trend of lower available freight volumes and the intentional shift toward loading company-owned tractors. We invested in additional company-owned tractors, expanded the company-driver team, and strategically prioritized loads on the company-owned tractors, which led to a 2.8% increase in company freight revenue. Total miles driven increased 0.6%, whereas rate per mile decreased 5.4%. The decrease in rate per mile was primarily due to a decrease in market rates. In addition, we experienced decreases in productivity, as drivers had to undertake longer routes between loads, due to the deceleration in available freight loads across the transportation industry.
The Company’s Specialized Solutions segment’s revenue increased 1.8% for the three months ended March 31, 2023 as compared to the same period in 2022. The increase in revenue was primarily due to our acquisition of SJ Transportation Co., Inc. (SJ Transportation) on March 3, 2022, which contributed an incremental $5.5 million in revenue compared to the same period in 2022, post-acquisition. We saw revenue increases in the agriculture and energy end markets that were offset by revenue declines in the construction and manufacturing end markets. Productivity declined as there were fewer loads available which required longer routes and empty miles between loads. Logistics revenue increased 36.5% for the three months ended March 31, 2023 as compared to the same period in 2022, primarily due to strong commercial efforts that led to an increase in storage revenue at various warehousing locations. Company freight increased 0.6% for the three months ended March 31, 2023 as compared to the same period in 2022 due to a 5.0% increase in miles driven, partially offset by a 4.2% decrease in company rate per mile. Owner operator freight decreased 9.0% due to a 17.9% decrease in miles driven, partially offset by an increase in owner operator rate per mile associated with an increase in high security cargo loads. Brokerage revenue was generally consistent for the three months ended March 31, 2023 as compared to the same period in 2022. Total brokerage loads were down 17% and brokerage revenue per load was up 20%, which resulted in the slight increase in brokerage revenue. We utilized our brokerage service offering for some incremental wind-related projects during the quarter which resulted in the increase in brokerage revenue per load. Fuel surcharge revenue increased 14.8% for the three months ended March 31, 2023 as compared to the same period in 2022 due to increased fuel costs that resulted in higher fuel surcharges to our customers.
The Company’s Flatbed Solutions segment’s revenue decreased 13.0% for the three months ended March 31, 2023 as compared to the same period in 2022, primarily due to a 9.3% decrease in rate per mile and a 1.4% increase in total miles, driven by an increase in tractors which was partially offset by a decline in productivity. Strength primarily in our manufacturing end market was more than offset by declines in the steel and construction end markets. Company freight revenue increased 8.7% due to a 20.9% increase in miles driven, partially offset by a 10.1% decrease in company rate per mile. Owner operator freight decreased 15.7% due to a 7.6% decrease in miles driven and a decrease in owner operator rate per mile. There was an increase of 19.3% in the average company owned tractors, and a decrease of 3.4% in the average owner operator tractors for the three months ended March 31, 2023 as compared to the same period in 2022. Brokerage revenue decreased 43.1% for the three months ended March 31, 2023 as compared to the same period in 2022. Our brokerage service offering is typically utilized in strong rate environments in order to capture excess volumes. Accordingly, total brokerage loads were down 38% and brokerage revenue per load was down 9%, which resulted in the decrease in brokerage revenue. Fuel surcharge revenue increased 11.2% for the three months ended March 31, 2023 as compared to the same period in 2022 due to increased fuel costs that resulted in higher fuel surcharges to our customers.
Salaries, Wages and Employee Benefits. Salaries, wages and employee benefits expense, which consists of compensation for all employees, is primarily affected by the number of miles driven by company drivers, the rate per mile paid to company drivers, employee benefits including, but not limited to, health care and workers’ compensation, and to a lesser extent, the number of, and compensation and benefits paid to, non-driver employees. In general, the Specialized Solutions segment drivers receive a higher driver pay per total mile than Flatbed Solutions segment drivers due to the former requiring a higher level of training and expertise.
Salaries, wages and employee benefits expense increased 7.9% for the three months ended March 31, 2023 as compared to the same period in 2022. The increase in salaries, wages and employee benefits expense was primarily due to incremental driver compensation, increased corporate headcount and stock compensation, partially offset by decreased health insurance claims. Salaries, wages and employee benefits expense, as a percentage of consolidated revenue (excluding brokerage and owner operator revenue), was generally consistent for the three months ended March 31, 2023 as compared to the same period in 2022.
The Company’s Specialized Solutions segment’s salaries, wages and employee benefits expense increased 6.8% for the three months ended March 31, 2023 compared to the same period in 2022, primarily as a result of incremental driver compensation, increased allocated corporate headcount and stock compensation, partially offset by decreased health insurance claims. The incremental driver compensation was due to a 2% increase in driver rate and a 5.0% increase in Company miles. Salaries, wages and employee benefits expense, as a percentage of Specialized Solutions revenue (excluding brokerage and owner operator revenue), was generally consistent for the three months ended March 31, 2023 as compared to the same period in 2022.
17
Table of Contents
The Company’s Flatbed Solutions segment’s salaries, wages and employee benefits expense increased 10.2% for the three months ended March 31, 2023 compared to the same period in 2022, primarily as a result of incremental driver compensation, increased allocated corporate headcount and stock compensation, partially offset by decreased health insurance claims. The incremental driver compensation was due to a 20.9% increase in Company miles and an 8% increase in driver rate due to driver pay lagging in response to the overall market rate environment. Salaries, wages and employee benefits expense, as a percentage of Flatbed Solutions revenue (excluding brokerage and owner operator revenue), was generally consistent for the three months ended March 31, 2023 as compared to the same period in 2022.
Fuel. Fuel expense consists primarily of diesel fuel expense for company-owned tractors and fuel taxes. The primary factors affecting fuel expense are the cost of diesel fuel, the miles per gallon realized with company equipment and the number of miles driven by company drivers.
Total fuel expense increased 1.4% for the three months ended March 31, 2023 as compared to the same period in 2022. The Company’s Specialized Solutions segment’s fuel expense was generally consistent for the three months ended March 31, 2023 as compared to the same period in 2022. The Company’s Flatbed Solutions segment’s fuel expense increased 6.1% for the three months ended March 31, 2023 as compared to the same period in 2022. These increases are primarily due to an increase in Company miles driven for the three months ended March 31, 2023 as compared to the same period in 2022, partially offset by a reduction in fuel cost per mile that was primarily attributed to negotiated fuel discounts and rebates utilizing our fuel network. Company miles increased by 5.0% in our Specialized Solutions segment and increased by 20.9% in our Flatbed Solutions segment, when compared to the same period in 2022.
Operations and Maintenance. Operations and maintenance expense consists primarily of ordinary vehicle repairs and maintenance, costs associated with preparing tractors and trailers for sale or trade-in, driver recruiting, training and safety costs, permitting and pilot car fees and other general operations expenses. Operations and maintenance expense is primarily affected by the age of company-owned tractors and trailers, the number of miles driven in a period and driver turnover.
Operations and maintenance expense increased 19.3% for the three months ended March 31, 2023 as compared to the same period in 2022 primarily due to a $3.8 million increase in maintenance costs such as repairs and tires, largely driven by a 9.8% increase in company miles driven, inflation and supply chain shortages of parts, and a $2.8 million increase in pilot cars cost. The Company’s Specialized Solutions segment’s operations and maintenance expense increased 21.4% for the three months ended March 31, 2023 as compared to the same period in 2022 primarily as a result of a $2.8 million increase in pilot cars cost, which was associated with an increase in wind-related projects, as well as a $1.9 million increase in maintenance costs, largely due to a 5.0% increase in company miles driven, inflation and supply chain shortages of parts. The Company’s Flatbed Solutions segment’s operations and maintenance expense increased 14.3% for the three months ended March 31, 2023 as compared to the same period in 2022 primarily due to a $1.8 million increase in maintenance costs due to a 20.9% increase in company miles driven, inflation and supply chain shortages of parts. Operations and maintenance expense, as a percentage of consolidated revenue (excluding brokerage revenue), was generally consistent for the three months ended March 31, 2023 as compared to the same period in 2022.
Purchased Freight. Purchased freight expense consists of the payments to owner operators, including fuel surcharge reimbursements, and payments to third-party capacity providers that haul loads brokered to them. Purchased freight expense generally takes into account changes in diesel fuel prices, resulting in higher payments during periods of increasing fuel prices.
Total purchased freight expense decreased 15.9% during the three months ended March 31, 2023 as compared to the same period in 2022. Purchased freight expense from owner operators decreased $29.5 million during the three months ended March 31, 2023 as compared to the same period in 2022 as a result of 10.0% decrease in owner operator miles driven. Purchased freight expense from third-party capacity providers increased $2.3 million during the three months ended March 31, 2023 as compared to the same period in 2022, as a result of an increase in utilization of third-party capacity providers associated with some wind-related projects. Purchased freight expense, as a percentage of consolidated revenue, for the three months ended March 31, 2023, decreased 4.7% as compared to the same period in 2022.
The Company’s Specialized Solutions segment’s purchased freight expense decreased 5.1% during the three months ended March 31, 2023 as compared to the same period in 2022. Purchased freight expense from owner operators decreased $5.8 million during the three months ended March 31, 2023 as compared to the same period in 2022, as a result of a 17.9% decrease in owner operator miles driven, partially offset by a 10.8% increase in owner operators’ rate. Purchased freight expense from third-party capacity providers increased $2.5 million during the three months ended March 31, 2023 as compared to the same period in 2022, as a result of an increase in utilization of third-party capacity providers associated with some wind-related projects. Purchased freight expense, as a percentage of Specialized Solutions revenue, for the three months ended March 31, 2023, was generally consistent as compared to the same period in 2022.
The Company’s Flatbed Solutions segment’s purchased freight expense decreased 22.3% for the three months ended March 31, 2023 as compared to the same period in 2022. Purchased freight expense from owner operators decreased $23.7 million for the three months ended March 31, 2023 as compared to the same period in 2022, as a result of a 7.6% decrease in owner operator miles driven and an 8.8% decrease in owner operators’ rate. Purchased freight expense from third-party capacity providers was generally consistent during the three months ended March 31, 2023 as compared to the same period in 2022. Purchased freight expense, as a percentage of Flatbed Solutions revenue, for the three months ended March 31, 2023, decreased 5.9% as compared to the same period in 2022.
18
Table of Contents
Depreciation and Amortization. Depreciation and amortization expense consists primarily of depreciation for company-owned tractors and trailers and amortization of finance lease right-of-use assets. The primary factors affecting these expense items include the size of the fleet and age of company-owned tractors and trailers and the cost of new equipment. Amortization of intangible assets is also included in this expense.
Depreciation and amortization expense increased 16.2% for the three months ended March 31, 2023 as compared to the same period in 2022. The Company’s Specialized Solutions segment’s depreciation and amortization expense increased approximately 4.8% for the three months ended March 31, 2023 as compared to the same period in 2022. The Company’s Flatbed Solutions segment’s depreciation and amortization expense increased 31.9% for the three months ended March 31, 2023 as compared to the same period in 2022. These increases were primarily related to the increase of company-owned tractors, primarily related to capital expenditures that were originally planned for 2022, but were previously delayed due to supply chain disruptions.
Insurance and Claims. Insurance and claims expense consists of insurance premiums and the accruals the Company makes for estimated payments and expenses for claims for bodily injury, property damage, cargo damage and other casualty events. Factors affecting the Company’s insurance and claims expense are the frequency and severity of accidents, trends in the development factors used in its accruals and developments in large, prior-year claims. The frequency of accidents tends to correlate with the miles the Company travels; however, insurance and claims expense could increase in periods where there are claims in excess of the Company’s self-insured retention. Insurance and claims expense decreased 28.6% during the three months ended March 31, 2023 as compared to the same period in 2022, primarily due to a $13.1 million decrease in insurance claims, partially offset by a $6.5 million increase in the estimate of incurred but not recorded claims.
Other Expense (Income). Interest expense consists of cash interest, amortization and write-off of related issuance costs and fees. Interest expense increased 77.5% for the three months ended March 31, 2023 as compared to the same period in 2022 primarily due to a rising interest rate environment. The Company’s common stock purchase warrants expired in February 2022 and are no longer exercisable. Change in fair value of warrant liability was a gain of $4.7 million for the three months ended March 31, 2022.
Income Tax. Income tax expense was $0.4 million for the three months ended March 31, 2023 compared to income tax expense of $3.4 million for the same period in 2022. The effective tax rate was 44.4% for the three months ended March 31, 2023, compared to 20.7% for the same period in 2022. The difference between the Company’s effective tax rate and the federal statutory rate is primarily a result of state and foreign income taxes, global intangible low-taxed income inclusion, and the impact of certain nondeductible expenses related to executive compensation and driver per diem as compared to forecasted earnings.
Liquidity, Capital Resources and Capital Requirements
The Company had the following sources of liquidity available at March 31, 2023 and December 31, 2022 (in millions).
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March 31, |
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December 31, |
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2023 |
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2022 |
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Cash and cash equivalents |
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$ |
161.3 |
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$ |
153.4 |
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Availability under line of credit |
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104.6 |
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|
110.9 |
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Total |
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$ |
265.9 |
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$ |
264.3 |
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The Company’s primary sources of liquidity have been cash provided by operating activities and borrowings under its credit facilities. The Company also receives cash from sales of equipment and historically received cash from issuances of capital stock.
The Company’s business requires substantial amounts of cash for operating expenses, including salaries and wages paid to employees, contract payments to independent contractors, insurance and claims payments, tax payments, and others. The Company also uses large amounts of cash and credit for capital expenditures as well as repurchases of equity securities from time to time.
The Company believes it can finance its expected cash needs, including debt repayment, in the short-term with cash flows from operations, and borrowings available under the ABL Facility. The Company expects that the ABL Facility will provide sufficient credit availability to support its ongoing operations, fund debt service requirements, capital expenditures, and working capital needs. Over the long-term, the Company will continue to have significant capital requirements, and expects to devote substantial financial resources to grow its operations and fund its acquisition activities. As a result of these funding requirements, the Company may in the future need to sell additional equity or debt securities or seek additional financing through additional borrowings, lease financing or equity capital. The availability of financing or equity capital will depend upon the Company’s financial condition and results of operations as well as prevailing market conditions. If such additional borrowings, lease financing or equity capital is not available at the time it needs to incur such expenditures, the Company may be required to extend the maturity of then outstanding indebtedness, rely on alternative financing arrangements or engage in asset sales.
Since its inception, the Company has acquired over twenty transportation companies. The primary reason for each acquisition was to add resources and services in geographic areas, customers and markets that the Company wants to serve. The Company will continue to evaluate potential acquisitions and any other sources of growth it considers in its best interest. Additionally, depending on the Company’s actual and anticipated sources and uses of liquidity, prevailing market conditions and other factors, the Company may from time to time seek to repay
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Table of Contents
or repurchase outstanding debt or equity securities through cash purchases in the open market or privately negotiated transactions. The amounts involved in any such transactions may be material.
Capital Expenditures
The Company follows a dual strategy of both owning assets and employing asset-light activities, the latter of which reduces the capital expenditures required to operate the business. Asset-light activities are conducted utilizing tractors and trailers provided by owner operators and third-party carriers for significant portions of our flatbed and specialized services. Company-owned asset expenditures require substantial cash and financing (including finance and operating leases) to maintain a modern tractor fleet, refresh the trailer fleet, fund replacement and growth in the revenue equipment fleet, and for the acquisition of real property and improvements to existing terminals and facilities.
Total property and equipment additions for the three months ended March 31, 2023 and 2022 are shown below (in millions):
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Three Months Ended March 31, |
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2023 |
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2022 |
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Net cash capital receipts |
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$ |
(2.7 |
) |
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$ |
(2.7 |
) |
Property and equipment acquired with debt or finance lease obligations |
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|
23.8 |
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|
7.3 |
|
Total net property and equipment additions |
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$ |
21.1 |
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$ |
4.6 |
|
Total net property and equipment additions increased due to an increase in financed equipment purchases during the three months ended March 31, 2023 primarily related to capital expenditures that were originally planned for 2022, but were previously delayed due to supply chain disruptions.
The Company currently estimates its 2023 net capital expenditures to be $135 million to $145 million.
Operating leases
The Company entered into operating leases for revenue equipment and other equipment with terms of one year to five years and real property with terms of two years to five years having right-of-use asset values at lease inception of $3.3 million and $3.9 million, respectively, for the three months ended March 31, 2023.
Material Debt
Overview
As of March 31, 2023, the Company had the following material debt:
•the Term Loan Facility and the ABL Facility;
•equipment and real estate term loans; and
•finance lease liabilities.
The amounts outstanding under such agreements were as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Term Loan Facility |
|
$ |
392.0 |
|
|
$ |
393.0 |
|
ABL Facility |
|
|
— |
|
|
|
— |
|
Equipment and real estate term loans |
|
|
253.8 |
|
|
|
249.1 |
|
Finance lease liabilities |
|
|
22.9 |
|
|
|
25.0 |
|
Total debt and finance lease liabilities |
|
|
668.7 |
|
|
|
667.1 |
|
Less current portion |
|
|
(80.8 |
) |
|
|
(78.4 |
) |
Less unamortized deferred financing fees |
|
|
(6.1 |
) |
|
|
(6.4 |
) |
Long-term debt and finance lease liabilities, less current portion and unamortized deferred financing fees |
|
$ |
581.8 |
|
|
$ |
582.3 |
|
The Company regularly evaluates its capital structure and liquidity position. From time to time and as opportunities arise, the Company may access the debt capital markets and modify its debt arrangements to optimize its capital structure and liquidity position.
See Note 6 of the Notes to Consolidated Financial Statements included herein for information regarding the Company’s material debt.
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Table of Contents
ABL and Term Loan Facilities and Equipment Financing Agreements
As of March 31, 2023, the Company has (i) a senior secured term loan credit facility with an outstanding balance of $392.0 million, and (ii) an asset-based senior secured revolving credit facility with an aggregate maximum credit amount equal to $150.0 million (that may be increased to $200.0 million, subject to availability under a borrowing base). As of March 31, 2023, the Company had no borrowings outstanding on the ABL Facility, $22.3 million in outstanding letters of credit, and $104.6 million available under the ABL Facility, based on current qualified collateral. Under the terms of the ABL Facility, lenders may issue up to $40 million of standby letters of credit on our behalf. Outstanding letters of credit reduce the availability on the $150 million ABL Facility. Standby letters of credit are generally issued for the benefit of regulatory authorities, insurance companies and state departments of insurance for the purpose of satisfying certain collateral requirements, primarily related to automobile, workers’ compensation, and general insurance liabilities.
As of March 31, 2023, the Company had $253.8 million of equipment and real estate term loans and $22.9 million of finance leases collateralized primarily by revenue equipment, with the majority of the equipment loans and finance leases having terms of 48 to 60 months.
Cash Flows
The Company’s summary statements of cash flows information for the three months ended March 31, 2023 and 2022 is set forth in the table below (in millions):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities |
|
$ |
31.0 |
|
|
$ |
29.2 |
|
Net cash (used in) provided by investing activities |
|
$ |
2.7 |
|
|
$ |
(16.6 |
) |
Net cash used in financing activities |
|
$ |
(25.8 |
) |
|
$ |
(6.3 |
) |
Operating Activities. Cash provided by operating activities was $31.0 million during the three months ended March 31, 2023 and consisted of $0.5 million of net income plus $25.6 million of non-cash items, consisting primarily of depreciation, amortization, deferred taxes, gain on disposition of property and equipment, and stock-based compensation, and $4.9 million of net cash provided by working capital and other activities. Cash provided by working capital and other activities during the three months ended March 31, 2023 reflect a decrease of $4.1 million in accounts receivable, a decrease of $0.3 million in drivers’ advances and other receivables, a decrease of $2.7 million in other current assets, and an increase of $4.4 million in accounts payable, partially offset by a decrease of $6.6 million in accrued expenses and other liabilities.
The $1.8 million increase in cash provided by operating activities during the three months ended March 31, 2023, as compared with the three months ended March 31, 2022, was the result of increases in net cash provided by working capital of $5.9 million, increases in non-cash items of $8.4 million, offset by a $12.5 million reduction to net income.
Investing Activities. Cash provided by investing activities was $2.7 million for the three months ended March 31, 2023 as compared to cash used in investing activities of $16.6 million for the three months ended March 31, 2022. This change is primarily due to a $19.3 million cash payment during the three months ended March 31, 2022 for the SJ Transportation acquisition, an increase of $0.5 million in cash receipts from sales of revenue equipment, partially offset by an increase of $0.5 million in cash equipment purchases for the three months ended March 31, 2023.
Total net cash capital receipts for the three months ended March 31, 2023 and 2022 are shown below (in millions):
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
Revenue equipment |
|
$ |
3.1 |
|
|
$ |
7.8 |
|
Revenue equipment leased and available for lease to owner operators |
|
|
2.8 |
|
|
|
— |
|
Buildings and improvements |
|
|
0.3 |
|
|
|
0.2 |
|
Furniture and fixtures, office and computer equipment, vehicles and capitalized software development |
|
|
3.1 |
|
|
|
0.8 |
|
Total cash capital expenditures |
|
|
9.3 |
|
|
|
8.8 |
|
Less: Proceeds from sales of property and equipment |
|
|
12.0 |
|
|
|
11.5 |
|
Net cash capital receipts |
|
$ |
(2.7 |
) |
|
$ |
(2.7 |
) |
Financing Activities. Cash used in financing activities increased from $6.3 million for the three months ended March 31, 2022 to $25.8 million for the three months ended March 31, 2023. During the three months ended March 31, 2023, we had approximately $7.0 million more net debt-related payments and $2.3 million in dividend payments related to the Series B preferred stock (which were issued in November 2022) compared to same period in 2022. During the three months ended March 31, 2022, we received $9.4 million in proceeds from warrant exercises and $0.8 million in stock options exercises compared to none in the same period in 2023.
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Table of Contents
Critical Accounting Estimates
The preparation of the Company’s consolidated financial statements in accordance with US GAAP requires it to make estimates and assumptions that impact the amounts reported in its consolidated financial statements and accompanying notes. Therefore, the reported amounts of assets, liabilities, revenue, expenses, and associated disclosures of contingent assets and liabilities are affected by these estimates and assumptions. The Company evaluates these estimates and assumptions on an ongoing basis, utilizing historical experience, consultation with experts and other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from these estimates and assumptions, and it is possible that materially different amounts will be reported using differing estimates or assumptions.
The Company considers critical accounting estimates to be those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the Company's financial condition or results of operations. See “Critical Accounting Estimates” included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, for a discussion of our critical accounting estimates; there have been no material changes to the Company’s critical accounting estimates as disclosed therein.