x | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended June 30, 2018 | |
o | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from _________ to _________ | |
Commission File Number 001-34470 |
Delaware | 20-5001120 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
600 West Chicago Avenue Suite 725 Chicago, Illinois 60654 Phone: (800) 354-7993 (Address (including zip code) and telephone number (including area code) of registrant's principal executive offices) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o | ||||
(Do not check if a smaller reporting company) |
Page | |||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(In thousands, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenue | $ | 634,811 | $ | 470,086 | $ | 1,211,902 | $ | 885,838 | |||||||
Costs and expenses: | |||||||||||||||
Transportation costs | 528,022 | 388,473 | 1,005,190 | 729,727 | |||||||||||
Selling, general and administrative expenses | 84,644 | 70,199 | 165,162 | 137,436 | |||||||||||
Depreciation and amortization | 9,033 | 7,976 | 17,939 | 16,014 | |||||||||||
Income from operations | 13,112 | 3,439 | 23,612 | 2,661 | |||||||||||
Interest expense | (3,754 | ) | (3,677 | ) | (7,504 | ) | (7,302 | ) | |||||||
Income (Loss) before provision for income taxes | 9,358 | (239 | ) | 16,107 | (4,640 | ) | |||||||||
Income tax (expense) benefit | (1,680 | ) | (6 | ) | (3,702 | ) | 1,523 | ||||||||
Net income (loss) | $ | 7,678 | $ | (245 | ) | $ | 12,405 | $ | (3,117 | ) | |||||
Earnings (Loss) per common share: | |||||||||||||||
Basic | $ | 0.28 | $ | (0.01 | ) | $ | 0.45 | $ | (0.11 | ) | |||||
Diluted | $ | 0.28 | $ | (0.01 | ) | $ | 0.45 | $ | (0.11 | ) | |||||
Note: Amounts may not foot due to rounding. |
June 30, 2018 | December 31, 2017 | ||||||
(In thousands, except share data) | (Unaudited) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 44,656 | $ | 23,515 | |||
Accounts receivable, net of allowance for doubtful accounts of $5,344 and $3,745 at June 30, 2018 and December 31, 2017, respectively | 393,300 | 309,733 | |||||
Income taxes receivable | 4,360 | 5,101 | |||||
Prepaid expenses | 8,090 | 6,191 | |||||
Other current assets | 4,793 | 3,760 | |||||
Total current assets | 455,200 | 348,301 | |||||
Noncurrent assets: | |||||||
Property and equipment, net of accumulated depreciation of $97,857 and $86,549 at June 30, 2018 and December 31, 2017, respectively | 63,219 | 63,062 | |||||
Goodwill | 307,314 | 307,314 | |||||
Intangible assets, net of accumulated amortization of $63,309 and $56,834 at June 30, 2018 and December 31, 2017, respectively | 111,009 | 117,484 | |||||
Other noncurrent assets | 3,039 | 1,918 | |||||
Total noncurrent assets | 484,580 | 489,778 | |||||
Total assets | $ | 939,780 | $ | 838,079 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 267,278 | $ | 193,749 | |||
Due to seller, current | 1,250 | 919 | |||||
Accrued expenses | 43,206 | 39,660 | |||||
Total current liabilities | 311,734 | 234,328 | |||||
Noncurrent liabilities: | |||||||
Convertible notes, net | 214,774 | 210,919 | |||||
Due to seller, noncurrent | — | 1,156 | |||||
Other noncurrent liabilities | 19,239 | 20,301 | |||||
Deferred income taxes | 15,816 | 12,503 | |||||
Total noncurrent liabilities | 249,829 | 244,879 | |||||
Total liabilities | 561,563 | 479,207 | |||||
Stockholders' equity: | |||||||
Common stock, par value $0.0001 per share, 100,000,000 shares authorized, 31,243,465 shares issued and 27,716,595 shares outstanding at June 30, 2018; 30,768,050 shares issued and 27,241,180 shares outstanding at December 31, 2017 | 3 | 3 | |||||
Treasury stock, 3,526,870 shares at June 30, 2018 and December 31, 2017, respectively | (69,818 | ) | (69,818 | ) | |||
Additional paid-in capital | 343,249 | 337,445 | |||||
Retained earnings | 104,783 | 91,242 | |||||
Total stockholders' equity | 378,218 | 358,872 | |||||
Total liabilities and stockholders' equity | $ | 939,780 | $ | 838,079 | |||
Note: Amounts may not foot due to rounding. |
Six Months Ended June 30, | |||||||
(In thousands) | 2018 | 2017 | |||||
Operating activities | |||||||
Net income (loss) | $ | 12,405 | $ | (3,117 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Deferred income taxes | 2,943 | 1,254 | |||||
Noncash stock compensation expense | 4,737 | 5,081 | |||||
Noncash interest expense | 4,211 | 3,974 | |||||
Change in contingent consideration due to seller | 100 | 365 | |||||
Change in contingent consideration due from seller | — | (79 | ) | ||||
Gain on disposal of assets | — | 13 | |||||
Depreciation and amortization | 17,939 | 16,014 | |||||
Change in assets: | |||||||
Accounts receivable | (71,543 | ) | (36,254 | ) | |||
Income taxes receivable | 745 | (3,036 | ) | ||||
Prepaid expenses and other assets | (3,407 | ) | 593 | ||||
Change in liabilities: | |||||||
Accounts payable | 63,517 | 41,187 | |||||
Accrued expenses and other liabilities | 3,409 | (625 | ) | ||||
Payments of contingent consideration in excess of costs over estimated earnings | (375 | ) | (245 | ) | |||
Net cash provided by operating activities | 34,680 | 25,125 | |||||
Investing activities | |||||||
Purchases of property and equipment | (13,231 | ) | (9,549 | ) | |||
Investments in business entities | (1,000 | ) | — | ||||
Net cash used in investing activities | (14,231 | ) | (9,549 | ) | |||
Financing activities | |||||||
Receipt of contingent consideration due from seller | — | 500 | |||||
Payments of contingent consideration due to seller | (550 | ) | (450 | ) | |||
Proceeds from exercise of stock options | 3,561 | 138 | |||||
Employee tax withholdings related to net share settlements of equity-based awards | (2,318 | ) | (1,530 | ) | |||
Purchases of treasury stock | — | (10,851 | ) | ||||
Proceeds from borrowing on ABL facility | 12,000 | 32,000 | |||||
Repayments of amounts borrowed on ABL facility | (12,000 | ) | (32,000 | ) | |||
Net cash provided by (used in) financing activities | 693 | (12,192 | ) | ||||
Increase in cash and cash equivalents | 21,141 | 3,385 | |||||
Cash and cash equivalents, beginning of period | 23,515 | 16,646 | |||||
Cash and cash equivalents, end of period | $ | 44,656 | $ | 20,031 | |||
Note: Amounts may not foot due to rounding. |
Supplemental disclosure of cash flow information | |||||||
Cash paid during the period for interest | $ | 3,282 | $ | 3,314 | |||
Cash paid during the period for income taxes | 144 | 259 | |||||
Cash received during the period for income taxes refunded | 129 | — |
Common Stock | Treasury Stock | Additional Paid-In Capital | |||||||||||||||||||||||
(In thousands, except share data) | Shares | Amount | Shares | Amount | Retained Earnings | Total | |||||||||||||||||||
Balance at December 31, 2017 | 30,768,050 | $ | 3 | (3,526,870 | ) | $ | (69,818 | ) | $ | 337,445 | $ | 91,242 | $ | 358,872 | |||||||||||
Share compensation expense | — | — | — | — | 4,562 | — | 4,562 | ||||||||||||||||||
Exercise of stock options | 325,342 | 0 | — | — | 3,561 | — | 3,561 | ||||||||||||||||||
Common stock issued for vested restricted stock | 205,723 | 0 | — | — | (0 | ) | — | — | |||||||||||||||||
Common stock issued for vested performance shares | 26,567 | 0 | — | — | (0 | ) | — | — | |||||||||||||||||
Common shares withheld and retired to satisfy employee tax withholding obligations upon vesting of share-based awards | (82,217 | ) | (0 | ) | — | — | (2,318 | ) | — | (2,318 | ) | ||||||||||||||
Cumulative effect of accounting change | — | — | — | — | — | 1,136 | 1,136 | ||||||||||||||||||
Net income | — | — | — | — | — | 12,405 | 12,405 | ||||||||||||||||||
Balance at June 30, 2018 | 31,243,465 | $ | 3 | (3,526,870 | ) | $ | (69,818 | ) | $ | 343,249 | $ | 104,783 | $ | 378,218 | |||||||||||
Note: Amounts may not foot due to rounding. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
Client Type | 2018 | 2017(1) | 2018 | 2017(1) | |||||||||||
Transactional | $ | 502,788 | $ | 371,394 | $ | 955,897 | $ | 704,355 | |||||||
Managed Transportation | 132,023 | 98,692 | 256,005 | 181,483 | |||||||||||
Revenue | $ | 634,811 | $ | 470,086 | $ | 1,211,902 | $ | 885,838 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
Mode | 2018 | 2017(1) | 2018 | 2017(1) | |||||||||||
Truckload | $ | 443,711 | $ | 314,668 | $ | 844,186 | $ | 595,011 | |||||||
Less than truckload | 160,584 | 129,927 | 307,818 | 243,788 | |||||||||||
Other revenue | 30,516 | 25,490 | 59,898 | 47,039 | |||||||||||
Revenue | $ | 634,811 | $ | 470,086 | $ | 1,211,902 | $ | 885,838 |
• | Level 1: Inputs are quoted prices in active markets for identical assets or liabilities. |
• | Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data. |
• | Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. |
Fair Value Measurements as of June 30, 2018 | |||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||
Liabilities: | |||||||||||||
Contingent consideration due to seller | $ | (1,250 | ) | — | — | $ | (1,250 | ) |
Fair Value Measurements as of December 31, 2017 | |||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||
Liabilities: | |||||||||||||
Contingent consideration due to seller | $ | (2,075 | ) | — | — | $ | (2,075 | ) |
Due to Seller Liability | |||
Balance at December 31, 2017 | $ | (2,075 | ) |
Change in fair value of contingent consideration due to seller | (100 | ) | |
Payment of contingent consideration due to seller | 925 | ||
Balance at June 30, 2018 | $ | (1,250 | ) |
June 30, 2018 | December 31, 2017 | ||||||||||||||||||||||
Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | ||||||||||||||||||
Customer relationships | $ | 145,139 | $ | (52,931 | ) | $ | 92,208 | $ | 145,139 | $ | (48,058 | ) | $ | 97,081 | |||||||||
Carrier relationships | 18,300 | (3,319 | ) | 14,981 | 18,300 | (2,781 | ) | 15,519 | |||||||||||||||
Non-compete agreements | 5,239 | (2,609 | ) | 2,630 | 5,239 | (2,216 | ) | 3,023 | |||||||||||||||
Trade names | 5,640 | (4,449 | ) | 1,191 | 5,640 | (3,779 | ) | 1,861 | |||||||||||||||
$ | 174,318 | $ | (63,309 | ) | $ | 111,009 | $ | 174,318 | $ | (56,834 | ) | $ | 117,484 |
Remainder of 2018 | $ | 6,386 | |
2019 | 11,471 | ||
2020 | 10,639 | ||
2021 | 10,025 | ||
2022 | 9,668 | ||
Thereafter | 62,820 | ||
Total | $ | 111,009 |
June 30, 2018 | December 31, 2017 | ||||||
Accrued compensation | $ | 28,730 | $ | 24,206 | |||
Accrued rebates | 2,068 | 2,038 | |||||
Accrued employee benefits | 2,573 | 2,480 | |||||
Accrued professional service fees | 1,437 | 698 | |||||
Accrued interest | 1,152 | 1,139 | |||||
Deferred rent | 2,519 | 2,641 | |||||
Other | 4,726 | 6,459 | |||||
Total accrued expenses | $ | 43,206 | $ | 39,660 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Income (Loss) before provision for income taxes | $ | 9,358 | $ | (239 | ) | $ | 16,107 | $ | (4,640 | ) | |||||
Income tax (expense) benefit | $ | (1,680 | ) | $ | (6 | ) | $ | (3,702 | ) | $ | 1,523 | ||||
Effective tax rate | 17.9 | % | 2.7 | % | 23.0 | % | (32.8 | )% |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Numerator: | |||||||||||||||
Net income (loss) | $ | 7,678 | $ | (245 | ) | $ | 12,405 | $ | (3,117 | ) | |||||
Denominator: | |||||||||||||||
Denominator for basic earnings (loss) per common share - weighted-average shares | 27,603,096 | 28,016,122 | 27,466,689 | 28,085,710 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee stock awards | 268,850 | — | 332,249 | — | |||||||||||
Denominator for dilutive earnings (loss) per common share | 27,871,946 | 28,016,122 | 27,798,938 | 28,085,710 | |||||||||||
Basic earnings (loss) per common share | $ | 0.28 | $ | (0.01 | ) | $ | 0.45 | $ | (0.11 | ) | |||||
Diluted earnings (loss) per common share | $ | 0.28 | $ | (0.01 | ) | $ | 0.45 | $ | (0.11 | ) |
June 30, 2018 | December 31, 2017 | ||||||
Convertible senior notes, principal amount | $ | 230,000 | $ | 230,000 | |||
Unamortized debt discount | (12,712 | ) | (15,930 | ) | |||
Unamortized debt issuance costs | (2,514 | ) | (3,151 | ) | |||
Convertible senior notes, net | $ | 214,774 | $ | 210,919 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Contractual coupon interest | $ | 1,438 | $ | 1,438 | $ | 2,875 | $ | 2,875 | |||||||
Debt discount amortization | 1,622 | 1,523 | 3,219 | 3,022 | |||||||||||
Debt issuance cost amortization | 321 | 301 | 637 | 598 | |||||||||||
Interest expense, Notes | $ | 3,380 | $ | 3,261 | $ | 6,730 | $ | 6,494 |
Total | 2018 | 2019 | 2020 | |||||||
Senior convertible notes, including interest | $ | 241,500 | 2,875 | 5,750 | $ | 232,875 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Unaudited, in thousands except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Consolidated statements of operations data: | |||||||||||||||
Revenue | $ | 634,811 | $ | 470,086 | $ | 1,211,902 | $ | 885,838 | |||||||
Transportation costs | 528,022 | 388,473 | 1,005,190 | 729,727 | |||||||||||
Net revenue (1) | 106,789 | 81,613 | 206,712 | 156,111 | |||||||||||
Operating expenses: | |||||||||||||||
Commissions | 32,369 | 24,748 | 62,569 | 47,119 | |||||||||||
Selling, general and administrative expenses | 52,225 | 45,256 | 102,493 | 90,031 | |||||||||||
Contingent consideration expense | 50 | 194 | 100 | 286 | |||||||||||
Depreciation and amortization | 9,033 | 7,976 | 17,939 | 16,014 | |||||||||||
Total operating expenses | 93,677 | 78,174 | 183,100 | 153,450 | |||||||||||
Income from operations | 13,112 | 3,439 | 23,612 | 2,661 | |||||||||||
Interest expense | (3,754 | ) | (3,677 | ) | (7,504 | ) | (7,302 | ) | |||||||
Income (Loss) before provision for income taxes | 9,358 | (239 | ) | 16,107 | (4,640 | ) | |||||||||
Income tax (expense) benefit | (1,680 | ) | (6 | ) | (3,702 | ) | 1,523 | ||||||||
Net income (loss) | $ | 7,678 | $ | (245 | ) | $ | 12,405 | $ | (3,117 | ) | |||||
Earnings (Loss) per common share: | |||||||||||||||
Basic | $ | 0.28 | $ | (0.01 | ) | $ | 0.45 | $ | (0.11 | ) | |||||
Diluted | $ | 0.28 | $ | (0.01 | ) | $ | 0.45 | $ | (0.11 | ) | |||||
Shares used in per share calculations (in thousands): | |||||||||||||||
Basic | 27,603 | 28,016 | 27,467 | 28,086 | |||||||||||
Diluted | 27,872 | 28,016 | 27,799 | 28,086 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
(Unaudited, in thousands) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenue | $ | 634,811 | $ | 470,086 | $ | 1,211,902 | $ | 885,838 | |||||||
Transportation costs | 528,022 | 388,473 | 1,005,190 | 729,727 | |||||||||||
Net revenue | $ | 106,789 | $ | 81,613 | $ | 206,712 | $ | 156,111 |
Date | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program (1) | ||||||||||
4/1/18-4/30/18 | 1,383 | $ | 28.00 | — | $ | 30,181,701 | ||||||||
5/1/18-5/31/18 | 1,027 | $ | 28.05 | — | $ | 30,181,701 | ||||||||
6/1/18-6/30/18 | 995 | $ | 28.54 | — | $ | 30,181,701 | ||||||||
Total | 3,405 | $ | 28.17 | — |
Number | Description | ||
31.1 | |||
31.2 | |||
32.1 | |||
32.2 | |||
101.INS** | XBRL Instance Document | ||
101.SCH** | XBRL Taxonomy Extension Schema Document | ||
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document | ||
** Submitted electronically with this Quarterly Report on Form 10-Q |
ECHO GLOBAL LOGISTICS, INC. | |||||
Date: | July 26, 2018 | /s/ DOUGLAS R. WAGGONER | |||
By: | Douglas R. Waggoner Chairman and Chief Executive Officer | ||||
Date: | July 26, 2018 | /s/ KYLE L. SAUERS | |||
By: | Kyle L. Sauers Chief Financial Officer |
Date: | July 26, 2018 | /s/ DOUGLAS R. WAGGONER | |
Douglas R. Waggoner Chairman and Chief Executive Officer |
Date: | July 26, 2018 | /s/ KYLE L. SAUERS | |
Kyle L. Sauers Chief Financial Officer |
Date: | July 26, 2018 | /s/ DOUGLAS R. WAGGONER | |
Douglas R. Waggoner Chairman and Chief Executive Officer |
Date: | July 26, 2018 | /s/ KYLE L. SAUERS | |
Kyle L. Sauers Chief Financial Officer |
Document and Entity Information Document - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jul. 25, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Echo Global Logistics, Inc. | |
Entity Central Index Key | 0001426945 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 28,548,087 |
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||||
Revenue | $ 634,811 | $ 470,086 | $ 1,211,902 | $ 885,838 |
Costs and expenses: | ||||
Transportation costs | 528,022 | 388,473 | 1,005,190 | 729,727 |
Selling, general and administrative expenses | 84,644 | 70,199 | 165,162 | 137,436 |
Depreciation and amortization | 9,033 | 7,976 | 17,939 | 16,014 |
Income from operations | 13,112 | 3,439 | 23,612 | 2,661 |
Interest expense | (3,754) | (3,677) | (7,504) | (7,302) |
Income (Loss) before provision for income taxes | 9,358 | (239) | 16,107 | (4,640) |
Income tax (expense) benefit | (1,680) | (6) | (3,702) | 1,523 |
Net income (loss) | $ 7,678 | $ (245) | $ 12,405 | $ (3,117) |
Earnings (Loss) per common share: | ||||
Basic (in usd per share) | $ 0.28 | $ (0.01) | $ 0.45 | $ (0.11) |
Diluted (in usd per share) | $ 0.28 | $ (0.01) | $ 0.45 | $ (0.11) |
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 5,344 | $ 3,745 |
Noncurrent assets: | ||
Property and equipment, accumulated depreciation | 97,857 | 86,549 |
Customer relationships and other intangible assets, accumulated amortization | $ 63,309 | $ 56,834 |
Stockholders' equity: | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 31,243,465 | 30,768,050 |
Common stock, shares outstanding (in shares) | 27,716,595 | 27,241,180 |
Treasury stock, shares (in shares) | 3,526,870 | 3,526,870 |
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Echo Global Logistics, Inc. and its subsidiaries (the "Company" or "Echo"). All significant intercompany accounts and transactions have been eliminated in the consolidation. The consolidated statements of operations include the results of entities or assets acquired from the effective date of the acquisition for accounting purposes. The preparation of the consolidated financial statements is in conformity with the rules and regulations of the Securities and Exchange Commission ("SEC") and accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules or regulations. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments considered necessary for a fair presentation of the results for the period and those adjustments are of a normal recurring nature. The operating results for the six months ended June 30, 2018 are not necessarily indicative of the results expected for the full year 2018. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's audited financial statements for the year ended December 31, 2017. Preparation of Financial Statements and Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results can differ from those estimates. Fair Value of Financial Instruments The carrying values of the Company's financial instruments, which consist of cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short-term nature. The fair value of the due to seller liabilities are determined based on the likelihood of the Company making contingent earn-out payments (see Note 4). The fair value of the liability component of the Notes (as defined in Note 11) was determined using the discounted cash flow analysis discussed in Note 11. |
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. This new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. In addition, the new standard requires enhanced qualitative and quantitative disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard on January 1, 2018 using the modified retrospective approach. As a result of using this approach, the Company recognized the cumulative effect adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of this new standard adjusted the revenue recognition timing of the Company's brokerage and transportation management services performance obligation from point in time to over time on a relative transit time basis, which resulted in a cumulative transition adjustment to the opening balance of retained earnings, on January 1, 2018, of $1.1 million, net of tax, and an increase of $3.3 million to revenue for the six months ended June 30, 2018. While adoption of this standard also effects the corresponding direct costs of revenue, including commission, this change did not have a material impact on the Company's consolidated financial statements due to the short term nature of its performance obligations. The Company fully describes the adoption and impact of this standard in Note 3 to the consolidated financial statements. As part of the adoption of this standard, the Company implemented changes to its accounting policies, practices and internal controls over financial reporting. In March 2018, the FASB issued ASU 2018-05, Income Taxes, to clarify the accounting implications of Staff Accounting Bulletin No. 118 ("SAB 118"). SAB 118 provides a measurement period that should not extend beyond one year from December 22, 2017, the date of the enactment of the Tax Cuts and Jobs Act (the "Act"), to complete the accounting under Accounting Standards Codification ("ASC") 740, Income Taxes. As of June 30, 2018, the Company has not adjusted the provisional estimate of $8.9 million recorded as a decrease to the net deferred tax liability at December 31, 2017. The Company expects to complete its analysis within the measurement period in accordance with SAB 118. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation, to provide guidance regarding which changes to a share-based payment award require modification accounting in Topic 718. The Company adopted this standard prospectively on January 1, 2018. The impact of this new standard is dependent on future modifications, if any, to the Company's share-based payment awards. For the six months ended June 30, 2018, the adoption of this standard had no impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business, to clarify the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted this standard prospectively on January 1, 2018. The impact of this new standard is dependent on future acquisitions. For the six months ended June 30, 2018, the adoption of this standard did not have an impact on the consolidated financial statements as no acquisitions took place during the quarter. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows, to clarify the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs and settlement of contingent consideration arising from an acquisition. The Company adopted this standard on January 1, 2018, using the full retrospective method (prior periods have been restated). For the six months ended June 30, 2018 and 2017, cash payments in excess of the contingent consideration liability recognized at the acquisition date were recorded as an operating activity in the consolidated statements of cash flows. Recently issued accounting pronouncements not yet adopted In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this update will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This new accounting standard will be effective for annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, requiring a lessee to record, on the balance sheet, the assets and liabilities for the right-of-use assets and lease obligations created by leases with lease terms of more than 12 months. This new accounting standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The original guidance required application on a modified retrospective basis with respect to the earliest period presented. During March 2018, the FASB approved amendments to create an optional transition method that will provide an option to use the effective date of ASC 842, Leases, as of the date of initial application of the transition. The Company plans to adopt this optional transition standard on January 1, 2019. Upon adoption, the Company plans to use the package of practical expedients that allows it to (i) not reassess whether an arrangement contains a lease, (ii) carry forward its lease classification as operating or capital leases and (iii) not reassess its previously recorded initial direct costs. Adoption will also require enhanced qualitative and quantitative disclosures. The Company anticipates that the adoption of this standard will materially affect its consolidated balance sheets. |
Revenue |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers ("ASC Topic 606"), using the modified retrospective method. Results for reporting periods beginning on or after January 1, 2018 are presented under ASC Topic 606; however, prior period amounts are not adjusted and continue to be reported in accordance with the accounting standards in effect for those periods. The Company recorded an increase to the opening balance of retained earnings of $1.1 million, net of tax, as of January 1, 2018 due to the cumulative impact of adoption of ASC Topic 606. The impact to revenue for the six months ended June 30, 2018 was an increase of $3.3 million, as a result of applying ASC Topic 606. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to receive in exchange for its services. The Company generates revenue from two different client types: Transactional and Managed Transportation. Most clients are categorized as Transactional clients. For the Transactional business, the Company provides brokerage and transportation management services on a shipment-by-shipment basis. Carrier selection, dispatch, load management and tracking are integrated services that occur within the brokerage and transportation management performance obligation. For the brokerage and transportation management performance obligation, revenue is recognized as the client's shipment travels from origin to destination by a third-party carrier. The Company is the principal in these transactions and recognizes revenue on a gross basis on a relative transit time basis. The Company categorizes a client as a Managed Transportation client if there is an agreement with the client for the provision of services, typically for a multi-year term. Brokerage and transportation management services can also be performance obligations for the Company's Managed Transportation clients. Other performance obligations for Managed Transportation clients may include transportation management services, which includes the integrated services of dispatch, tracking and carrier payment. For these types of transactions, revenue is recorded on a net basis as we do not have latitude in carrier selection or establish rates with the carrier. The Company also performs project-based services, such as compliance management, customized re-billing services and freight studies for certain Managed Transportation clients. The following table presents the Company's revenue disaggregated by client type (in thousands, unaudited):
(1) Prior period amounts have not been adjusted under the modified retrospective method. Revenue recognized per shipment varies depending on the transportation mode. The primary modes of shipment in which the Company transacts are truckload and less than truckload. Other transportation modes include intermodal, small parcel, domestic air, expedited and international. The following table presents the Company's revenue disaggregated by mode (in thousands, unaudited):
Note: Amounts may not foot due to rounding. (1) Prior period amounts have not been adjusted under the modified retrospective method. Variable Consideration Certain customers may receive rebates based on the terms of their agreement with the Company, which are accounted for as variable consideration. Rebates are estimated based on the expected amount to be provided to customers and reduce revenue recognized. The Company also estimates for possible additional fees based on a portfolio approach. Practical Expedients The Company adopted the practical expedient to recognize commission expense when incurred because the amortization period is less than one year. Commission expense recognition aligns with the Company's revenue recognition policy under ASC Topic 606, as commission expense is recognized on a relative transit time basis. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. |
Fair Value Measurement |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | Fair Value Measurement The Company applies ASC Topic 820, Fair Value Measurements and Disclosures ("ASC Topic 820"), for its financial assets and financial liabilities. The guidance requires disclosures about assets and liabilities measured at fair value. The Company's financial liabilities primarily relate to contingent earn-out payments due to sellers in connection with various acquisitions. The fair value of the due to seller liabilities at June 30, 2018 was $1.3 million. The potential earn-out payments and performance periods are defined in the individual purchase agreements for each acquisition. Earnings before interest, taxes, depreciation and amortization ("EBITDA") is the performance target defined and measured to determine the earn-out payment due, if any, after each defined measurement period. The Company's financial assets related to contingent payments that were due from the seller of Command Transportation, LLC ("Command") based upon certain employee retention criteria. As of June 30, 2018, there was no remaining balance of the due from seller asset as the criteria were met. ASC Topic 820 includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon its own market assumptions. The fair value hierarchy consists of the following three levels:
The significant inputs used to derive the fair value of the amounts due to seller include financial forecasts of future operating results, the probability of reaching the forecast and an appropriate discount rate for each contingent liability. Probabilities are estimated by reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. If an acquisition reaches the required performance measure, the estimated probability would be increased to 100% and would still be classified as a contingent liability on the balance sheet. If the measure is not reached, the probability would be reduced to reflect the amount earned, if any, depending on the terms of the agreement. Discount rates used in determining the fair value of the contingent consideration due to seller ranged from 5% to 6%. Historical results of the respective acquisitions serve as the basis for the financial forecasts used in the valuation. Quantitative factors are also considered in these forecasts, including acquisition synergies, growth and sales potential and potential operational efficiencies gained. Changes to the significant inputs used in determining the fair value of the contingent consideration due to seller could result in a change in the fair value of the contingent consideration. However, the correlation and inverse relationship between higher projected financial results to the discount rate applied and probability of meeting the financial targets mitigates the effect of any changes to the unobservable inputs. The following tables set forth the Company's financial liabilities measured at fair value on a recurring basis and the basis of measurement at June 30, 2018 and December 31, 2017 (in thousands):
The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):
For the three months ended June 30, 2018 and 2017, the Company recognized net expense of $50 thousand and $194 thousand, respectively, in selling, general and administrative expenses due to the change in fair value determined by a Level 3 valuation technique. For the six months ended June 30, 2018 and 2017, the Company recognized net expense of $100 thousand and $286 thousand, respectively. These changes in fair value resulted from using revised forecasts that took into account the most recent performance at each acquired business, the effect of the time value of money and the satisfaction of the employee retention criteria. During the six months ended June 30, 2018 and 2017, the Company made contingent earn-out payments of $925 thousand and $695 thousand, respectively, to the sellers of businesses acquired by the Company. The Company did not receive any contingent payments from the seller of Command during the six months ended June 30, 2018. The Company received $500 thousand of contingent payments from the seller of Command during the six months ended June 30, 2017. |
Intangibles and Goodwill |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangibles and Goodwill | Intangibles and Goodwill The balance of goodwill was $307.3 million as of June 30, 2018 and December 31, 2017, as no changes occurred during the period. The following is a summary of amortizable intangible assets as of June 30, 2018 and December 31, 2017 (in thousands):
Note: Amounts may not foot due to rounding. The customer relationships are being amortized using an accelerated method over their estimated weighted-average useful life of 14.8 years, as an accelerated method best approximates the distribution of cash flows generated by the acquired customer relationships. The carrier relationships, non-compete agreements and trade names are being amortized using the straight-line method over their estimated weighted-average useful lives of 17.0 years, 6.7 years and 4.0 years, respectively. Amortization expense related to intangible assets was $3.2 million and $3.6 million for the three months ended June 30, 2018 and 2017, respectively, and $6.5 million and $7.1 million for the six months ended June 30, 2018 and 2017, respectively. The estimated amortization expense for the next five years and thereafter is as follows (in thousands):
|
Accrued Expenses and Other Noncurrent Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses and Other Noncurrent Liabilities | Accrued Expenses and Other Noncurrent Liabilities The components of accrued expenses at June 30, 2018 and December 31, 2017 were as follows (in thousands):
Note: Amounts may not foot due to rounding. The other noncurrent liabilities of $19.2 million and $20.3 million at June 30, 2018 and December 31, 2017, respectively, consist primarily of the portion of deferred rent in excess of twelve months. |
Income Taxes |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes On December 22, 2017, the Act was signed into legislation. The Act became effective January 1, 2018 and reduced the federal corporate tax rate from 35% to 21%. In March 2018, the FASB issued ASU 2018-05, Income Taxes, which provides guidance on accounting for the tax effects of SAB 118, as discussed in Note 2. SAB 118 provides a measurement period that should not extend beyond one year from December 22, 2017 to complete the accounting under the Act. As of June 30, 2018, the Company has not adjusted the provisional estimate of $8.9 million recorded as a decrease to the net deferred tax liability at December 31, 2017. The Company considers the deferred tax re-measurements, and other items to be reasonable estimates, but provisional, due to the forthcoming guidance and its ongoing analysis of final year-end data and tax provisions. The Company expects to complete its analysis within the measurement period in accordance with SAB 118. The following table shows the Company's effective income tax rate for the three and six months ended June 30, 2018 and 2017 (in thousands):
The difference in the Company's effective tax rate for the three months ended June 30, 2018 from the Company's statutory federal tax rate of 21% was primarily due to tax benefits associated with stock-based compensation exercises, while the difference in the Company's effective tax rate for the six months ended June 30, 2018 from the Company's statutory federal tax rate was primarily due to state taxes; an increase in non-deductible expenses, primarily executive stock-based compensation; offset in part by the impact of certain tax credits. The difference in the Company's effective tax rate for the three months ended June 30, 2017 from the company's federal tax rate of 35% was primarily due to net tax deficiencies related to share-based payment awards recognized as income tax expense in accordance with ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting and lower income before taxes during the quarter, while the difference in the Company's effective tax rate for the six months ended June 30, 2017 was primarily due to the net tax deficiencies related to share-based payment awards, completion of a state tax audit and the effect of the 2017 year to date pre-tax loss. |
Earnings (Loss) Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average shares outstanding plus share equivalents that would arise from the exercise of share options and the vesting of restricted stock and performance shares. The computation of basic and diluted earnings (loss) per common share for the three and six months ended June 30, 2018 and 2017 is as follows (in thousands, except share and per share data):
For the three and six months ended June 30, 2018, the Company excluded 2,538 unvested performance and market-based shares from the calculation of diluted earnings per common share because the effect was anti-dilutive. There were no employee stock options and no unvested restricted stock excluded from the calculation of diluted earnings per common share. For the three and six months ended June 30, 2017, 239,440 and 331,618 incremental shares related to stock-based awards were not included in the computation of diluted loss per common share because of the net loss during the respective periods. As of June 30, 2018, none of the conditions allowing holders of the Notes to convert have been met and no conversion spread exists. As such, the Notes did not have a dilutive impact on diluted earnings (loss) per common share for the three and six months ended June 30, 2018 and 2017, respectively. |
Stock-Based Compensation Plans |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Plans | Stock-Based Compensation Plans The Company recorded $2.2 million and $4.7 million in total stock-based compensation expense with corresponding income tax benefits of $0.5 million and $1.2 million for the three and six months ended June 30, 2018, respectively. For the three and six months ended June 30, 2017, the Company recorded $2.4 million and $5.1 million in total stock-based compensation expense with corresponding income tax benefits of $0.9 million and $1.9 million, respectively. During each of the six months ended June 30, 2018 and 2017, the Company did not grant any stock options. The Company granted 244,448 and 280,853 shares of restricted stock to various employees during the six months ended June 30, 2018 and 2017, respectively. In 2014, the Company initiated a performance and market-based stock incentive plan for certain executives that provides vesting based on specific financial and market-based performance measurements. The Company granted 97,966 and 99,933 shares of performance and market-based stock during the six months ended June 30, 2018 and 2017, respectively. |
Contingencies |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies In the normal course of business, the Company is subject to potential claims and disputes related to its business, including claims for freight lost or damaged in transit. Some of these matters may be covered by the Company's insurance and risk management programs or may result in claims or adjustments with the Company's carriers. No such matters are currently expected to have a material adverse effect on the Company's financial position, results of operations or cash flows. In July 2016, the Company received an unfavorable appeals assessment regarding a state activity-based tax matter of $1.3 million, including penalties and interest, for the state tax audit period from January 1, 2010 to June 30, 2014. The Company believes the assessment is without merit and is currently defending the Company's position through a formal appeals process. The Company has not recorded any potential loss related to this matter as of June 30, 2018. |
Long-Term Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt ABL Facility On June 1, 2015, the Company and Command, as co-borrowers, entered into a Revolving Credit and Security Agreement (the “Credit Agreement”) with PNC Bank. The Credit Agreement provides for a senior secured revolving credit facility in an initial aggregate principal amount of up to $200 million (the “ABL Facility”). The Company's obligations under the ABL facility are secured, on a first lien priority basis, by certain working capital assets. The initial aggregate principal amount under the ABL Facility may be increased from time to time by an additional $100 million to a maximum aggregate principal amount of $300 million. Interest is payable at a rate per annum equal to, at the option of the Company, any of the following, plus, in each case, an applicable margin: (a) a base rate determined by reference to the highest of (1) the federal funds effective rate, plus 0.50%, (2) the base commercial lending rate of PNC Bank, National Association and (3) a daily LIBOR rate, plus 1.00%; or (b) a LIBOR rate determined by reference to the costs of funds for deposits in the relevant currency for the interest period relevant to such borrowing adjusted for certain additional costs. The applicable margin is 0.25% to 0.75% for borrowings at the base rate and 1.25% to 1.75% for borrowings at the LIBOR rate, in each case, based on the excess availability under the ABL Facility. The Company is required to pay a commitment fee in respect to the unutilized commitments under the revolving credit facility. At June 30, 2018, the Company's commitment fee was calculated at a rate of 0.375%. The Company recognized interest expense related to the commitment fee and borrowings on the ABL Facility of $0.2 million for each of the three months ended June 30, 2018 and 2017, and $0.4 million and $0.5 million for each of the six months ended June 30, 2018 and 2017, respectively. The Company drew $12.0 million and $32.0 million on the ABL Facility during the six months ended June 30, 2018 and 2017, respectively, all of which was repaid as of June 30, 2018 and 2017. No amounts were outstanding on the ABL Facility as of June 30, 2018. The Company is in compliance with all covenants related to the ABL Facility. The issuance of letters of credit under the ABL Facility reduces available borrowings. At June 30, 2018, there were $0.7 million of letters of credit outstanding. The total draw allowed on the ABL Facility at June 30, 2018, as determined by the working capital assets pledged as collateral, was $200.0 million. After adjusting for the letters of credit, the Company's remaining availability under the ABL Facility at June 30, 2018 was $199.3 million. The Company incurred issuance costs of $3.1 million in 2015 related to the ABL Facility. These issuance costs are being amortized to interest expense using straight-line amortization over the 5 year life of the ABL Facility. For each of the three and six months ended June 30, 2018 and 2017, the Company recorded $0.2 million and $0.4 million of interest expense related to ABL Facility issuance costs, respectively. As there is no outstanding draw on the ABL Facility at June 30, 2018, the unamortized issuance costs are presented as a deferred asset on the consolidated balance sheets. Convertible Senior Notes On May 5, 2015, the Company issued $230 million aggregate principal amount of 2.50% convertible senior notes due 2020 (the “Notes”). The Company used all of the net proceeds from the note offering (together with the proceeds from the sale of common stock and borrowings under the ABL Facility) to finance the acquisition of Command in June 2015. The Notes bear interest at a rate of 2.50% per year payable semiannually in arrears in cash on May 1 and November 1 of each year, beginning on November 1, 2015. The Notes will mature on May 1, 2020, unless earlier converted or repurchased in accordance with the terms discussed below. The Notes are the Company's senior unsecured obligations and rank senior in right of payment to any of the Company's indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company's unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company's secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company's subsidiaries. The Notes will be convertible, under certain circumstances and during certain periods, into cash, shares of the Company's common stock, or a combination of cash and shares of common stock at the Company's election, at an initial conversion rate of 25.5428 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $39.15 per share of common stock. The Company's intent and policy will be to settle the $230 million principal amount of Notes in cash, and any excess conversion premium in shares of common stock. As such, the principal amount of the Notes will not be included in the calculation of diluted earnings (loss) per common share, but any conversion premium that exists will be included in the calculation of diluted earnings (loss) per common share using the treasury stock method. As of June 30, 2018, none of the conditions allowing holders of the Notes to convert have been met and no conversion spread exists. As such, the Notes did not have a dilutive impact on diluted earnings (loss) per common share for each of the six months ended June 30, 2018 and 2017. At issuance, the Company estimated the straight debt borrowing rates at issuance to be 5.75% for similar debt to the Notes without the conversion feature, which resulted in a fair value of the liability component of $198.5 million and a fair value of the equity component of $31.5 million. The fair value of the equity component was recorded as a debt discount, with the offset recorded as a credit to additional paid-in capital within stockholders' equity. The $31.5 million debt discount and Note issuance costs discussed below are being amortized to interest expense under the effective interest method over the 5 year life of the Notes, using an effective interest rate of 6.33%. The Company allocated the total issuance costs related to the Notes to the liability and equity components based on their relative fair values. Issuance costs attributable to the liability component were recorded on the consolidated balance sheets as a contra-liability that reduces the carrying amount of the convertible note liability. This amount is being amortized to interest expense over the term of the Notes using the effective interest method and an effective interest rate of 6.33%. Issuance costs attributable to the equity component were recorded as a charge to additional paid-in capital within stockholders' equity. As of June 30, 2018 and December 31, 2017, the carrying amounts of the Notes on the consolidated balance sheets were calculated as follows (in thousands):
The Notes are carried on the consolidated balance sheets at their principal amount, net of the unamortized debt discount and unamortized debt issuance costs, and are not marked to market each period. The approximate fair value of the Notes as of June 30, 2018 was $238.1 million. The fair value of the Notes was estimated based on the trading price of the Notes at June 30, 2018. As trading volume is low, these are quoted prices for identical instruments in markets that are not active, and thus are Level 2 in the fair value hierarchy. For the three and six months ended June 30, 2018 and 2017, interest expense related to the Notes consisted of the following (in thousands):
Note: Amounts may not foot due to rounding. The undiscounted interest and principal payments due in relation to the Notes from June 30, 2018 to the maturity of the Notes on May 1, 2020 are as follows (in thousands):
|
Subsequent Events (Notes) |
Jul. 06, 2018 |
---|---|
Subsequent Event [Line Items] | |
Subsequent Events | Subsequent Events On July 6, 2018, the Company purchased substantially all of the assets of Freight Management Plus, Inc., a Pennsylvania corporation ("Freight Management") for an aggregate purchase price of up to $10.2 million, of which (i) $6.6 million was paid at closing, subject to post-closing adjustments for working capital, (ii) $0.7 million was paid in the form of common stock, par value $0.0001 per share, of the Company at closing and (iii) up to $2.9 million will be paid in the three years following the closing, subject to the achievement of certain financial objectives set forth in the Asset Purchase Agreement by and between Echo/FMP Holdings, LLC, a wholly-owned subsidiary of the Company, and Freight Management. |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Preparation of Financial Statements and Use of Estimates | Preparation of Financial Statements and Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results can differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying values of the Company's financial instruments, which consist of cash and cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short-term nature. The fair value of the due to seller liabilities are determined based on the likelihood of the Company making contingent earn-out payments (see Note 4). The fair value of the liability component of the Notes (as defined in Note 11) was determined using the discounted cash flow analysis discussed in Note 11. |
New Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. This new standard requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. In addition, the new standard requires enhanced qualitative and quantitative disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this standard on January 1, 2018 using the modified retrospective approach. As a result of using this approach, the Company recognized the cumulative effect adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The adoption of this new standard adjusted the revenue recognition timing of the Company's brokerage and transportation management services performance obligation from point in time to over time on a relative transit time basis, which resulted in a cumulative transition adjustment to the opening balance of retained earnings, on January 1, 2018, of $1.1 million, net of tax, and an increase of $3.3 million to revenue for the six months ended June 30, 2018. While adoption of this standard also effects the corresponding direct costs of revenue, including commission, this change did not have a material impact on the Company's consolidated financial statements due to the short term nature of its performance obligations. The Company fully describes the adoption and impact of this standard in Note 3 to the consolidated financial statements. As part of the adoption of this standard, the Company implemented changes to its accounting policies, practices and internal controls over financial reporting. In March 2018, the FASB issued ASU 2018-05, Income Taxes, to clarify the accounting implications of Staff Accounting Bulletin No. 118 ("SAB 118"). SAB 118 provides a measurement period that should not extend beyond one year from December 22, 2017, the date of the enactment of the Tax Cuts and Jobs Act (the "Act"), to complete the accounting under Accounting Standards Codification ("ASC") 740, Income Taxes. As of June 30, 2018, the Company has not adjusted the provisional estimate of $8.9 million recorded as a decrease to the net deferred tax liability at December 31, 2017. The Company expects to complete its analysis within the measurement period in accordance with SAB 118. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation, to provide guidance regarding which changes to a share-based payment award require modification accounting in Topic 718. The Company adopted this standard prospectively on January 1, 2018. The impact of this new standard is dependent on future modifications, if any, to the Company's share-based payment awards. For the six months ended June 30, 2018, the adoption of this standard had no impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business, to clarify the definition of a business to assist entities when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted this standard prospectively on January 1, 2018. The impact of this new standard is dependent on future acquisitions. For the six months ended June 30, 2018, the adoption of this standard did not have an impact on the consolidated financial statements as no acquisitions took place during the quarter. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows, to clarify the classification of certain cash receipts and cash payments in the statement of cash flows, including debt prepayment or extinguishment costs and settlement of contingent consideration arising from an acquisition. The Company adopted this standard on January 1, 2018, using the full retrospective method (prior periods have been restated). For the six months ended June 30, 2018 and 2017, cash payments in excess of the contingent consideration liability recognized at the acquisition date were recorded as an operating activity in the consolidated statements of cash flows. Recently issued accounting pronouncements not yet adopted In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this update will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment, to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This new accounting standard will be effective for annual periods beginning after December 15, 2019. Early adoption is permitted. The Company is evaluating the effects that the adoption of this guidance will have on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, requiring a lessee to record, on the balance sheet, the assets and liabilities for the right-of-use assets and lease obligations created by leases with lease terms of more than 12 months. This new accounting standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The original guidance required application on a modified retrospective basis with respect to the earliest period presented. During March 2018, the FASB approved amendments to create an optional transition method that will provide an option to use the effective date of ASC 842, Leases, as of the date of initial application of the transition. The Company plans to adopt this optional transition standard on January 1, 2019. Upon adoption, the Company plans to use the package of practical expedients that allows it to (i) not reassess whether an arrangement contains a lease, (ii) carry forward its lease classification as operating or capital leases and (iii) not reassess its previously recorded initial direct costs. Adoption will also require enhanced qualitative and quantitative disclosures. The Company anticipates that the adoption of this standard will materially affect its consolidated balance sheets. |
Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following table presents the Company's revenue disaggregated by mode (in thousands, unaudited):
Note: Amounts may not foot due to rounding. (1) Prior period amounts have not been adjusted under the modified retrospective method. The following table presents the Company's revenue disaggregated by client type (in thousands, unaudited):
(1) Prior period amounts have not been adjusted under the modified retrospective method. |
Fair Value Measurement (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis | The following tables set forth the Company's financial liabilities measured at fair value on a recurring basis and the basis of measurement at June 30, 2018 and December 31, 2017 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs | The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):
|
Intangibles and Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of amortizable intangible assets | The following is a summary of amortizable intangible assets as of June 30, 2018 and December 31, 2017 (in thousands):
Note: Amounts may not foot due to rounding. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated amortization expense for the next five years and thereafter | The estimated amortization expense for the next five years and thereafter is as follows (in thousands):
|
Accrued Expenses and Other Noncurrent Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accrued expenses | The components of accrued expenses at June 30, 2018 and December 31, 2017 were as follows (in thousands):
Note: Amounts may not foot due to rounding. |
Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of effective income tax rate | The following table shows the Company's effective income tax rate for the three and six months ended June 30, 2018 and 2017 (in thousands):
|
Earnings (Loss) Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of basic and diluted earnings (loss) per common share | The computation of basic and diluted earnings (loss) per common share for the three and six months ended June 30, 2018 and 2017 is as follows (in thousands, except share and per share data):
|
Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of convertible senior notes | As of June 30, 2018 and December 31, 2017, the carrying amounts of the Notes on the consolidated balance sheets were calculated as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest expense related to convertible senior notes | For the three and six months ended June 30, 2018 and 2017, interest expense related to the Notes consisted of the following (in thousands):
Note: Amounts may not foot due to rounding. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of maturities of convertible senior notes | The undiscounted interest and principal payments due in relation to the Notes from June 30, 2018 to the maturity of the Notes on May 1, 2020 are as follows (in thousands):
|
Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 104,783 | $ 91,242 | |
Effective income tax rate reconciliation, change in enacted tax rate, amount | 8,900 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 1,100 | ||
Revenues | $ 3,300 |
Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Disaggregation of Revenue [Line Items] | ||||||
Retained earnings | $ 104,783 | $ 104,783 | $ 91,242 | |||
Revenue | 634,811 | $ 470,086 | 1,211,902 | $ 885,838 | ||
Truckload | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 443,711 | 314,668 | 844,186 | 595,011 | ||
Less than truckload | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 160,584 | 129,927 | 307,818 | 243,788 | ||
Other revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 30,516 | 25,490 | 59,898 | 47,039 | ||
Transactional | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | 502,788 | 371,394 | 955,897 | 704,355 | ||
Managed Transportation | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Revenue | $ 132,023 | $ 98,692 | 256,005 | $ 181,483 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Retained earnings | $ 1,100 | |||||
Revenues | $ 3,300 |
Fair Value Measurement - Assets and Liabilities at Fair Value (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Contingent consideration | ||
Liabilities: | ||
Contingent consideration due to seller | $ (1,300,000) | |
Contingent consideration | ||
Assets: | ||
Contingent consideration due from seller | 0 | |
Fair Value, Measurements, Recurring | Contingent consideration | ||
Liabilities: | ||
Contingent consideration due to seller | (1,250,000) | $ (2,075,000) |
Fair Value, Measurements, Recurring | Contingent consideration | Level 1 | ||
Liabilities: | ||
Contingent consideration due to seller | 0 | 0 |
Fair Value, Measurements, Recurring | Contingent consideration | Level 2 | ||
Liabilities: | ||
Contingent consideration due to seller | 0 | 0 |
Fair Value, Measurements, Recurring | Contingent consideration | Level 3 | ||
Liabilities: | ||
Contingent consideration due to seller | $ (1,250,000) | $ (2,075,000) |
Fair Value Measurement - Reconciliation of Liabilities Using Level 3 (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Payment of contingent consideration due to seller | $ 925 | $ 695 |
Level 3 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance at beginning of period | (2,075) | |
Change in fair value of contingent consideration due to seller | (100) | |
Payment of contingent consideration due to seller | 925 | |
Balance at end of period | $ (1,250) |
Accrued Expenses and Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 28,730 | $ 24,206 |
Accrued rebates | 2,068 | 2,038 |
Accrued employee benefits | 2,573 | 2,480 |
Accrued professional service fees | 1,437 | 698 |
Accrued interest | 1,152 | 1,139 |
Deferred rent | 2,519 | 2,641 |
Other | 4,726 | 6,459 |
Total accrued expenses | 43,206 | 39,660 |
Other noncurrent liabilities | $ 19,239 | $ 20,301 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation, change in enacted tax rate, amount | $ 8,900 | |||
Income (Loss) before provision for income taxes | $ 9,358 | $ (239) | 16,107 | $ (4,640) |
Income tax (expense) benefit | $ (1,680) | $ (6) | $ (3,702) | $ 1,523 |
Effective tax rate | 17.90% | 2.70% | 23.00% | (32.80%) |
Federal tax rate | 21.00% | 35.00% | 21.00% | 35.00% |
Stock-Based Compensation Plans (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Stock based compensation plans: | ||||
Stock-based compensation expense | $ 2.2 | $ 2.4 | $ 4.7 | $ 5.1 |
Tax benefits from stock-based compensation expense | $ 0.5 | $ 0.9 | $ 1.2 | $ 1.9 |
Grants in period, options (in shares) | 0 | 0 | ||
Restricted stock | ||||
Stock based compensation plans: | ||||
Grants in period, other than options (in shares) | 244,448 | 280,853 | ||
Performance and market-based stock | ||||
Stock based compensation plans: | ||||
Grants in period, other than options (in shares) | 97,966 | 99,933 |
Contingencies (Details) $ in Millions |
Jul. 31, 2016
USD ($)
|
---|---|
State Tax Audit | |
Loss Contingencies [Line Items] | |
Amount of assessment including penalties and interest | $ 1.3 |
Long-Term Debt - Convertible Senior Notes (Details) - Senior convertible notes, including interest - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
May 05, 2015 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Debt Instrument [Line Items] | ||||||
Stated interest rate | 2.50% | |||||
Conversion ratio | 25.5428 | |||||
Debt conversion, converted instrument, amount | $ 1,000 | |||||
Conversion price (in usd per share) | $ 39.15 | |||||
Carrying amount of Notes on the balance sheet: | ||||||
Convertible senior notes, principal amount | $ 230,000,000 | $ 230,000,000 | $ 230,000,000 | $ 230,000,000 | ||
Unamortized debt discount | (12,712,000) | (12,712,000) | (15,930,000) | |||
Unamortized debt issuance costs | (2,514,000) | (2,514,000) | (3,151,000) | |||
Convertible senior notes, net | 214,774,000 | 214,774,000 | $ 210,919,000 | |||
Convertible senior notes, fair value | 238,100,000 | 238,100,000 | ||||
Contractual coupon interest | 1,438,000 | $ 1,438,000 | 2,875,000 | $ 2,875,000 | ||
Debt discount amortization | 1,622,000 | 1,523,000 | 3,219,000 | 3,022,000 | ||
Amortization of debt issuance costs | 321,000 | 301,000 | 637,000 | 598,000 | ||
Interest expense | $ 3,380,000 | $ 3,261,000 | $ 6,730,000 | $ 6,494,000 | ||
Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Straight debt borrowing rate | 5.75% | |||||
Fair value of liability component | $ 198,500,000 | |||||
Fair value of equity component | $ 31,500,000 | |||||
Discount amortization period | 5 years | |||||
Effective interest rate | 6.33% |
Long-Term Debt - Maturity Schedule (Details) - Senior convertible notes, including interest $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2018 | $ 2,875 |
2019 | 5,750 |
2020 | 232,875 |
Total | $ 241,500 |
Subsequent Events (Details) - Freight Management Plus, Inc. - Subsequent Event $ in Millions |
Jul. 06, 2018
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Purchase price | $ 10.2 |
Cash paid upon acquisition | 6.6 |
Common stock issued upon acquisition | 0.7 |
Potential earn-out payments | $ 2.9 |
Earn-out period | 3 years |
JK M'&:+*EPT'&25]YE8._3^"9_X=.T?^.F
M%=J2"SK_LK'_#:(#GTIRXT>H\Q]L,20T+AP_^+.9QFPR'/;S#V++-R[_ %!+
M P04 " #Z@?I,"G.9^K,! #2 P &0 'AL+W=O ..>I]D4DS1ZL"HKAJA0#,,@M2[%/@Y=7=:I-O@R7A#PXN^A!F40>
M$/'*)/)*!RH3[.X4(-.W.G;W*EI4=!RX[*='/=%^-3-@X4'Z9G.IK_*ZS_ 5!+ P04 " #Z@?I,:!I"
M 8(" !M" &0 'AL+W=O 4X!(&06T= !''%".8!
MN*)R19*!,*8AM,@*L+I"4;W"72\ NR13FK)JD$J1#3?+.XGGHK31W(.#0(@H
MMEDN]Q/$4'HKV+FG3A.1.&*U42ID&'+05-?(@&"=46HY?Y3=!\_E HUUY A$
M9'9&6TM0^\W'I%U3C,TH[I>-T!-3HO2%GG3R664;UN2E*LX;@!^IERC7'?
MGKS*OGKZL.UB+BDHH8'/:!M7P ;H&+4@1LV)% LU^TT#^'C$5 >:C8 AY8RI
M:__IJ4 !!^FZP'>D*WF2_MSDQ&',4=H_$6*/HBLX'@1UX5 CSB$YW^_0#;IC
MI]72:%6,,L\'#PN] ^<*O[V3,%0TH[FY,"QIO*F,5]VC:
MFKG6 B\C24F6K%:W3'&A:9Y&W]GFJ>F\%!K.EKA.*6Y?3R!-G]$U?7<\BKKQ
MP<'RM.4U_ +_NSU;M-BD4@H%V@FCB84JH_?KXVD;\!'P1T#O9F<2*KD8\Q2,
M[V5&5R$AD%#XH,!QN\(#2!F$,(WG49-.(0-Q?GY7_QIKQUHNW,D7]%Z9N,
M[BDIH>*=](^F_P9C/3M*QN)_P!4DPD,F&*,PTL65%)WS1HTJF(KB+\,N=-S[
MX69W&&G+A&0D)!-A'^.P(5#,_ OW/$^MZ8D=>M_R\,3K8X*]*8(SMB+>8?(.
MO==\?=BG[!J$1LQIP"1SS(1@J#Z%2)9"G))/]&29OEG,/A0XF<,SO6'(&S64P6VCM/D2&$Z'2=YYIT&]CZ);_(//DS[3VYK
MH1VY&(\O&_M?&>,!4UG=X @U^,$F0T+EP_$.SW88L\'PIAU_$)N^&PO=V]R:W-H965T?] 7R>S>"-
MPQE!>!72+8GN= Z.UC!-FLU>!=E)DOFK4)T=)&>_YPH.#JE(35E;L]:Q+59"
M53)D5)N"WU1<
,:: 6FE:XW3_
M=JC::+79^27OZ@Z$[7Z0K:(#@?>[B-9X*_/::GJ-@S#/:6,7,WK%33K;BXVE
M&[$B&W=9E%L*-5&/'0YZH%(^9-_P(/GA5S5HXNB2]K?H#!2W-8V6"P""JDG&
MGDW<