# Hub Group, Inc.: Form 10-Q for the period ended Jun 30, 2023

- Company: [Hub Group, Inc.](/companies/hubg.md) (CIK 940942)
- Form: 10-Q
- Filed: 2023-08-04
- Accepted by EDGAR: Aug 4, 2023, 16:15 ET
- Period: 2023-06-30
- Accession: 0000950170-23-038573
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/940942/000095017023038573/hubg-20230630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/940942/000095017023038573/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-04-01 to 2023-06-30 | $1.04bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2023-01-01 to 2023-06-30 | $2.19bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2023-04-01 to 2023-06-30 | $62.1m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-01-01 to 2023-06-30 | $140.3m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-04-01 to 2023-06-30 | $3.1m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2023-01-01 to 2023-06-30 | $6.1m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-04-01 to 2023-06-30 | $14.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-01-01 to 2023-06-30 | $29.5m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-04-01 to 2023-06-30 | $46.5m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-01-01 to 2023-06-30 | $108.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-04-01 to 2023-06-30 | $1.44 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-01-01 to 2023-06-30 | $3.33 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-04-01 to 2023-06-30 | $1.45 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-01-01 to 2023-06-30 | $3.35 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-04-01 to 2023-06-30 | 32,293 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-01-01 to 2023-06-30 | 32,566 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-01-01 to 2023-06-30 | $221.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-01-01 to 2023-06-30 | $65.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 6 months, 2023-01-01 to 2023-06-30 | $100.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-06-30 | $342.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-06-30 | $989.9m | us-gaap:AssetsCurrent |
| Total assets | at 2023-06-30 | $2.80bn | us-gaap:Assets |
| Current liabilities | at 2023-06-30 | $593.7m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2023-06-30 | $238.2m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-06-30 | $98.3m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2023-06-30 | $1.61bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 25,870 characters.

### Forward-Looking Statements

Statements in this section and other parts of this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements, provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that might cause the actual performance of the Company to differ materially from those expressed or implied by this discussion and, therefore, should be viewed with caution. Further information on the risks that may affect the Company’s business is included in filings it makes with the SEC from time to time, including those discussed under the “Risk Factors” section in the 2022 10-K and subsequent filings. The Company assumes no obligation to update any such forward-looking statements.

### EXECUTIVE SUMMARY

We are a leading supply chain solutions provider in North America that offers comprehensive transportation and logistics management services focused on reliability, visibility and value for our customers. Our service offerings include a full range of freight transportation and logistics services, some of which are provided by assets we own and operate, and some of which are provided by third parties with whom we contract. Our services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, dedicated and regional trucking. Other services include full outsource logistics solutions, transportation management services, freight consolidation, warehousing and fulfillment, final mile delivery, parcel and international services.

We service a large and diversified customer base in a broad range of industries, including retail, consumer products and durable goods. We believe our strategy to offer multi-modal supply chain management solutions serves to strengthen and deepen our relationships with our customers and allows us to provide a more cost effective and higher service solution.

Beginning in first quarter 2023, we have two reportable segments - Intermodal and Transportation Solutions, and Logistics, which are based primarily on the services each segment provides. Results for the for the three and six months ended June 30, 2022, have been recast to conform with the current period presentation.

*Intermodal and Transportation Solutions.* Our Intermodal and Transportation Solutions segment offers high service, nationwide door-to-door intermodal transportation, providing value, visibility and reliability in both transcontinental and local lanes by combining rail transportation with local trucking. This segment also includes our trucking operations which provides drayage for our intermodal service offering and serves our customers who require high service local and regional trucking transportation using equipment dedicated to their needs. Our dedicated service operation offers fleets of equipment and drivers to each customer on a contract basis, as well as the management and infrastructure to operate according to the customer’s high service expectations. We arrange for the movement of our customers’ freight in one of our approximately 49,000 containers. We contract with railroads to provide transportation for the long-haul portion of the shipment between rail terminals. Local pickup and delivery services (referred to as “drayage”) between origin or destination and rail terminals are provided by our own trucking operations and third-parties with whom we contract. As of June 30, 2023, our trucking transportation operation consisted of approximately 2,400 tractors, 3,200 employee drivers and 4,400 trailers. We also contract for services with approximately 560 independent owner-operators.

*Logistics*. Our Logistics segment offers a full range of trucking transportation services, including dry van, expedited, less-than-truckload, refrigerated and flatbed, all of which is provided by third party carriers with whom we contract. This segment also offers a wide range of logistics services including transportation management, shipment optimization, load consolidation, mode selection, carrier management, load planning and execution, warehousing, fulfillment, cross-docking, consolidation services and final mile delivery. Many of the customers for these solutions are consumer goods companies who sell into the retail channel. Our business operates or has access to approximately 9.5 million square feet of warehousing and cross-dock space across North America, to which our customers ship their goods to be stored and distributed to destinations including residences, retail stores and other commercial locations. These services offer our customers shipment visibility, transportation cost savings, high service and compliance with retailers’ increasingly stringent supply chain requirements.

In August 2022, we acquired TAGG Logistics, LLC which enhanced our presence in the consolidation and fulfillment space and added a complementary e-commerce offering to serve our customers' multimodal transportation and logistics needs. The acquisition added scale to our logistics segment.

We are working on several yield enhancement projects including network optimization, matching of inbound and outbound loads, reducing empty miles, improving our recovery of accessorial costs, increasing our driver and asset utilization, reducing repositioning costs, providing holistic solutions and improving low profit freight. Hub’s top 50 customers represent approximately 63% of revenue for the six months ended June 30, 2023, while one customer accounted for more than 10% of our revenue for the six months ended June 30, 2023. We use various performance indicators to manage our business. We closely monitor profit levels for our top customers. We also evaluate on-time performance, customer service, cost per load and daily sales outstanding by customer account. Vendor cost changes and vendor service levels are also monitored closely.

Uncertainties and risks to our outlook include the following: inflation, a slowdown in consumer spending (driven by, among other factors, rising inflation, an economic recession, increases in interest rates, and geopolitical concerns), a shift by consumers to spending on services at the expense of goods, an increase of retailers’ inventory levels, a significant increase in transportation supply in the marketplace, aggressive pricing actions by our competitors and any inability to pass cost increases, such as transportation and warehouse costs, through to our customers, all of which could have a materially negative impact on our revenue, profitability and cash flow in 2023.

### RESULTS OF OPERATIONS

### Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022

The following table summarizes our operating revenue by segment (in thousands):

| Operating Revenue | Three Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Intermodal and Transportation Solutions | $614,632 | $875,150 |
| Logistics | 453,549 | 548,613 |
| Inter-segment eliminations | (27,719) | (22,307) |
| Total operating revenue | $1,040,462 | $1,401,456 |

The following table summarizes our operating income by segment (in thousands):

| Operating Income | Three Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Intermodal and Transportation Solutions | $31,777 | $100,601 |
| Logistics | 30,293 | 37,035 |
| Total operating income | $62,070 | $137,636 |

Total consolidated operating revenue decreased 26% to $1,040 million in 2023 from $1,401 million in 2022.

Intermodal and Transportation Solutions (“ITS”) revenue decreased 30% to $615 million primarily due to a 17% decrease in intermodal volume driven by elevated retailer inventory levels and soft import activity that impacted demand for our services, an 18% decrease in intermodal revenue per load (primarily due to lower price, fuel prices and mix) and a 7% decline in dedicated revenues due to lost customers partially offset by growth with existing and new customers.

ITS operating income decreased to $32 million, 5% of revenue, as compared to $101 million, 11% of revenue in the prior year due to lower volume, lower customer rates, higher equipment costs and lower surcharges and accessorial income. These headwinds were partially offset by lower drayage costs as we increased the portion of drayage handled on our own fleet to 79% in the second quarter of 2023 as compared to 62% in the prior year, as well as an improvement in profitability at our Dedicated service line.

Logistics revenue decreased 17% to $454 million primarily driven by lower revenue per load in our brokerage service line and lower managed transportation service line revenue, partially offset by revenue from TAGG. Brokerage volumes declined 1% compared to the prior year. Operating income was 7% of revenue in both 2023 and 2022. Operating income was $30 million as compared to $37 million last year, as lower revenue was partially offset by lower purchased transportation costs and our yield management initiatives.

The following is a summary of operating results and certain items in the consolidated statements of income as a percentage of revenue (in thousands):

|  | Three Months Ended June 30, 2023 |  | 2022 |  |
| --- | ---: | ---: | ---: | ---: |
| Operating revenue | $1,040,462 | 100.0% | $1,401,456 | 100.0% |
| Operating expenses: |  |  |  |  |
| Purchased transportation and warehousing | 763,609 | 73.4% | 1,062,983 | 75.9% |
| Salaries and benefits | 141,823 | 13.6% | 129,499 | 9.2% |
| Depreciation and amortization | 35,386 | 3.4% | 32,244 | 2.3% |
| Insurance and claims | 11,676 | 1.1% | 10,645 | 0.8% |
| General and administrative | 26,757 | 2.6% | 36,213 | 2.6% |
| Gain on sale of assets, net | (859) | -0.1% | (7,764) | -0.6% |
| Total operating expenses | 978,392 | 94.0% | 1,263,820 | 90.2% |
| Operating income | $62,070 | 6.0% | $137,636 | 9.8% |

12

### CONSOLIDATED OPERATING EXPENSES

### Purchased Transportation and Warehousing

Purchased transportation and warehousing costs decreased 28% to $764 million in 2023 from $1,063 million in 2022.

Purchased transportation and warehousing costs declined as compared to prior year due to lower volumes, reductions in third party carrier costs, decreased use of third-party carriers for drayage in ITS and a change in method of estimating accruals for certain costs, partially offset by higher equipment costs.

### Salaries and Benefits

Salaries and benefits increased to $142 million in 2023 from $129 million in 2022. As a percentage of revenue, salaries and benefits increased to 13.6% in 2023 from 9.2% in 2022.

This increase was primarily due to $30 million of incremental expense related to growth of our driver and warehouse employee headcount, partially offset by an $18 million reduction in office employee compensation due to lower headcount and lower incentive compensation expense.

Headcount, which includes drivers, warehouse personnel and office employees, was 5,864 and 4,783 as of June 30, 2023 and 2022, respectively. The increase in headcount related primarily to drivers as we have expanded the portion of drayage coverage handled by our own fleet, as well as the acquisition of TAGG, which added 671 warehouse employees.

### Depreciation and Amortization

Depreciation and amortization expense increased to $35 million in 2023 from $32 million in 2022. This increase was primarily due to increased container and tractor depreciation expense as well as the amortization of intangibles related to the acquisition of TAGG. This expense, as a percentage of revenue, increased to 3.4% in 2023 from 2.3% in 2022. Depreciation expense includes transportation equipment, technology investments, leasehold improvements, office equipment and building improvements.

### Insurance and Claims

Insurance and claims expense increased to $12 million in 2023 from $11 million in 2022. This increase was primarily due to increased auto liability expenses not covered by insurance which increased due to an increase in mileage run on our own trucking fleet. These expenses, as a percentage of revenue, increased to 1.1% in 2023 from 0.8% in 2022.

### General and Administrative

General and administrative expenses decreased to $27 million in 2023 from $36 million in 2022. These expenses, as a percentage of revenue, remained consistent at 2.6% in both 2023 and in 2022.

This decrease was primarily due to a decrease in legal and acquisition-related expenses, bad debt expense and professional services expense including IT software expense, partially offset by increased expense due to the acquisition of TAGG and higher rent expense.

### Gain on Sale of Assets, Net

Net gains on the sale of equipment decreased to $1 million in 2023 from $8 million in 2022. This decrease resulted from both less units sold and a lower average gain per unit sold in 2023 as compared to 2022. These gains, as a percentage of revenue, decreased to 0.1% in 2023 from 0.6% in 2022.

### Other Income (Expense)

Other expense decreased to $1 million in 2023 from $2 million in 2022. Interest expense increased due primarily to higher interest rates on our debt to $3 million in 2023 from $1 million in 2022. This increase was offset by increased interest income to $2 million in 2023 due to higher interest rates on our cash balance.

### Provision for Income Taxes

The provision for income taxes decreased to $15 million in 2023 from $33 million in 2022. We provided for income taxes using an effective rate of 23.9% in 2023 and an effective rate of 24.4% in 2022. The second quarter 2023 effective tax rate of 23.9% benefitted primarily from a change in state apportionment methodology.

### Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

The following table summarizes our operating revenue by segment (in thousands):

| Operating Revenue | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Intermodal and Transportation Solutions | $1,323,881 | $1,651,720 |
| Logistics | 922,690 | 1,089,597 |
| Inter-segment eliminations | (53,844) | (41,738) |
| Total operating revenue | $2,192,727 | $2,699,579 |

The following table summarizes our operating income by segment (in thousands):

| Operating Income | Six Months Ended June 30, 2023 | 2022 |
| --- | ---: | ---: |
| Intermodal and Transportation Solutions | $80,981 | $186,297 |
| Logistics | 59,294 | 66,399 |
| Total operating income | $140,275 | $252,696 |

Total consolidated operating revenue decreased 19% to $2,193 million in 2023 from $2,700 million in 2022.

Intermodal and Transportation Solutions (“ITS”) revenue decreased 20% to $1,324 million primarily due to a 15% decrease in intermodal volume driven by elevated retailer inventory levels and soft import activity that impacted demand for our services, an 8% decrease in intermodal revenue per load (primarily due to lower price, fuel prices and mix) and a 1% decline in dedicated revenues due to lost customers, partially offset by growth with existing and new customers.

ITS operating income decreased to $81 million, 6% of revenue, as compared to $186 million, 11% of revenue, in the prior year due to lower volume, lower customer rates, higher equipment costs and lower surcharges and accessorial income. These headwinds were partially offset by lower drayage costs as we increased the portion of drayage handled on our own fleet to 76% in the first six months of 2023 as compared to 60% in the prior year, as well as an improvement in profitability at our Dedicated service line.

Logistics revenue decreased 15% to $923 million primarily driven by lower revenue per load in our brokerage service line and lower managed transportation service line revenue, partially offset by revenue from TAGG. Operating income was 6% of revenue in both 2023 and 2022. Operating income was $59 million as compared to $66 million last year, as lower revenue was partially offset by lower purchased transportation costs and our yield management initiatives.

The following is a summary of operating results and certain items in the consolidated statements of income as a percentage of revenue (in thousands):

|  | Six Months Ended June 30, 2023 |  | 2022 |  |
| --- | ---: | ---: | ---: | ---: |
| Operating revenue | $2,192,727 | 100.0% | $2,699,579 | 100.0% |
| Operating expenses: |  |  |  |  |
| Purchased transportation and warehousing | 1,630,540 | 74.4% | 2,058,248 | 76.2% |
| Salaries and benefits | 279,254 | 12.7% | 258,238 | 9.6% |
| Depreciation and amortization | 70,835 | 3.2% | 63,533 | 2.4% |
| Insurance and claims | 24,359 | 1.1% | 19,938 | 0.7% |
| General and administrative | 52,298 | 2.4% | 59,435 | 2.2% |
| Gain on sale of assets, net | (4,834) | -0.2% | (12,509) | -0.5% |
| Total operating expenses | 2,052,452 | 93.6% | 2,446,883 | 90.6% |
| Operating income | $140,275 | 6.4% | $252,696 | 9.4% |

14

### CONSOLIDATED OPERATING EXPENSES

### Purchased Transportation and Warehousing

Purchased transportation and warehousing costs decreased 21% to $1,631 million in 2023 from $2,058 million in 2022.

Purchased transportation and warehousing costs declined as compared to prior year due to lower volumes, reductions in third party carrier costs and decreased use of third-party carriers for drayage in ITS, partially offset by higher equipment costs.

### Salaries and Benefits

Salaries and benefits increased to $279 million in 2023 from $258 million in 2022. As a percentage of revenue, salaries and benefits increased to 12.7% in 2023 from 9.6% in 2022.

This increase was primarily due to $58 million of incremental expense related to growth of our driver and warehouse employee headcount, partially offset by a $37 million reduction in office employee compensation due to lower headcount and lower incentive compensation expense.

### Depreciation and Amortization

Depreciation and amortization expense increased to $71 million in 2023 from $64 million in 2022. This increase was primarily due to increased container and tractor depreciation expense as well as the amortization of intangibles related to the acquisition of TAGG. This expense, as a percentage of revenue, increased to 3.2% in 2023 from 2.4% in 2022. Depreciation expense includes transportation equipment, technology investments, leasehold improvements, office equipment and building improvements.

### Insurance and Claims

Insurance and claims expense increased to $24 million in 2023 from $20 million in 2022. This increase was primarily due to increased workers compensation costs and auto liability expenses not covered by insurance which increased due to an increase in mileage run on our own trucking fleet. These expenses, as a percentage of revenue, increased to 1.1% in 2023 from 0.7% in 2022.

### General and Administrative

General and administrative expenses decreased to $52 million in 2023 from $59 million in 2022. These expenses, as a percentage of revenue, increased to 2.4% in 2023 from 2.2% in 2022.

This decrease was primarily due to a decrease in legal and acquisition-related expenses, bad debt expense and professional services expense including IT software expense, partially offset by increased expense due to the acquisition of TAGG and higher rent expense.

### Gain on Sale of Assets, Net

Net gains on the sale of equipment decreased to $5 million in 2023 from $13 million in 2022. The decrease resulted from both less units sold and a lower average gain per unit sold in 2023 as compared to 2022. These gains, as a percentage of revenue, decreased to 0.2% in 2023 from 0.5% in 2022.

### Other Income (Expense)

Other expense remained consistent at $3 million in both 2023 and in 2022. Interest expense increased to $6 million in 2023 from $3 million in 2022. This increase was due primarily to higher interest rates on our debt. Interest income increased to $3 million in 2023 due to higher interest rates on our cash balance.

### Provision for Income Taxes

The provision for income taxes decreased to $29 million in 2023 from $59 million in 2022. We provided for income taxes using an effective rate of 21.4% in 2023 and an effective rate of 23.7% in 2022. The effective tax rate for the six months ended June 30, 2023 of 21.4% benefitted primarily from a change in state apportionment methodology.

### LIQUIDITY AND CAPITAL RESOURCES

Our financing and liquidity strategy is to fund operating cash payments through cash received from the provision of services, cash on hand, and to a lesser extent, from cash received from the sale of equipment. As of June 30, 2023, we had $342 million of cash and $20.3 million of restricted investments. We generally fund our purchases of transportation equipment through the issuance of secured, fixed rate Equipment Notes. Payments for our other investing activities, investments in warehousing improvements and our capitalized technology investments, have been funded by cash on hand or cash flows from operations. Cash used in financing activities including the purchase of treasury stock has been funded by cash from operations or cash on hand. We have not historically used our Credit Facility to fund our operating, investing or financing cash needs, though it is available to fund future cash requirements as needed. In the last three years, we have funded our business acquisitions from cash on hand, though in the future we may elect to fund these activities through a combination of cash on hand, borrowings on our Credit Facility, or from issuance of secured or unsecured debt. Based on past performance and current expectations, we believe cash on hand and cash received from the provision of services, along with other financing sources, will provide us the necessary capital to fund transactions and achieve our planned growth for the next twelve months and the foreseeable future.

Cash provided by operating activities for the six months ended June 30, 2023 was approximately $221 million, which resulted primarily from net income of $108 million plus non-cash charges of $110 million and changes in operating assets and liabilities of $3 million.

Cash provided by operating activities totaled $221 million in 2023 compared to $201 million in 2022. The $20 million increase in cash flow was primarily due to increases in a positive change in operating assets and liabilities of $65 million, primarily due to a decrease in the accounts receivable balance, an increase in non-cash charges of $37 million partially offset by a decrease in net income of $82 million.

Net cash used in investing activities for the six months ended June 30, 2023 was $50 million which resulted from capital expenditures of $66 million, partially offset by proceeds from the sale of equipment of $15 million. Capital expenditures of $66 million related primarily to tractors of $35 million, containers of $14 million, technology investments of $8 million, warehouse equipment of $7 million and leasehold improvements of $2 million.

Capital expenditures decreased by approximately $20 million in 2023 as compared to 2022. The 2023 decrease was due to lower spend on our corporate headquarters of $15 million, decreases in container purchases of $14 million and technology investments of $7 million. These decreases were partially offset by increases in the purchase of tractors and warehouse equipment of $7 million each and leasehold improvements of $2 million.

In 2023, we estimate capital expenditures will range from $140 million to $150 million. This range is lower than the estimate we disclosed in our 2022 10-K of $170 million to $190 million, as we have reduced our planned purchase of containers in 2023. We expect transportation equipment purchases to range from $116 million to $124 million and technology and other investments will range from $24 million to $26 million. We plan to fund these expenditures with a combination of cash and debt.

Net cash used in financing activities for the six months ended June 30, 2023 was $115 million which includes purchases of treasury stock of $100 million, repayments of long-term debt of $56 million, cash for stock tendered for payments of withholding taxes of $8 million and finance lease payments of $1 million, partially offset by proceeds from the issuance of debt of $50 million. Debt incurred in 2023 was used to fund the purchase of transportation equipment.

The $121 million increase in cash used in financing activities for 2023 versus 2022 was primarily due to the increase in the purchase of treasury stock of $100 million, less proceeds from the issuance of debt of $16 million and increases in both cash paid for stock related to employee withholding taxes and repayments of long-term debt of $2 million each.

As a result of anticipated favorable timing differences, primarily related to depreciation and compensation, we expect our cash paid for income taxes in 2023 to be less than our income tax expense.

See Note 5 of the consolidated financial statements for details related to interest rates and commitment fees.

We have standby letters of credit that expire in 2023 and 2024. As of June 30, 2023 and December 31, 2022, our letters of credit were $1 million and $43 million, respectively.

As of June 30, 2023, and December 31, 2022, we had no borrowings under the Credit Agreement and our unused and available borrowings were $349 million and $307 million, respectively. We were in compliance with our debt covenants as of June 30, 2023 and December 31, 2022.

We are continually evaluating the possible effects of current economic conditions and reasonable and supportable economic forecasts in operational cash flows, including the risks of declines in the overall freight market and our customers’ liquidity and ability to pay. We are monitoring working capital on a daily basis and are in frequent communications with our customers.

## Controls and procedures

As filed, 1,142 characters.

*(a) Disclosure Controls and Procedures.* As of June 30, 2023, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2023.

*(b) Changes in Internal Control over Financial Reporting.* There have been no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) during the fiscal quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On August 22, 2022, we completed the acquisition of TAGG. We are currently integrating processes, employees, technologies and operations. Management will continue to evaluate our internal controls over financial reporting as we complete our integration.

## Risk factors

As filed, 407 characters.

Investing in shares of our stock involves certain risks, including those identified and described in Part I, Item 1A of our 2022 10-K under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business and stock price can be materially and adversely affected. There have been no material changes to the Company’s risk factors since the 2022 Form 10-K.

Filed Aug 4, 2023.
Source: SEC EDGAR, the filing index for accession 0000950170-23-038573. Last ingested by Listed: Oct 27, 2026, 16:30 ET. No prices; not investment advice.