LONG-TERM DEBT AND FINANCING ARRANGEMENTS

12 Months Ended

Dec. 31, 2024

LONG-TERM DEBT AND FINANCING ARRANGEMENTS

LONG-TERM DEBT AND FINANCING ARRANGEMENTS

NOTE H – LONG-TERM DEBT AND FINANCING ARRANGEMENTS

Long-Term Debt Obligations

Long-term debt consisted of notes payable related to the financing of revenue equipment (tractors and trailers used primarily in Asset-Based segment operations) and certain other equipment at December 31, 2024 and 2023 and, at December 31, 2023, borrowings outstanding under the Company’s revolving credit facility, as follows:

	2024		2023
	(in thousands)
Credit Facility(1)	$	—	$	50,000
Notes payable (weighted-average interest rate of 4.6% at December 31, 2024)		189,134		178,938
		189,134		228,938
Less current portion		63,978		66,948
Long-term debt, less current portion	$	125,156	$	161,990

(1) The interest rate swap mitigated interest rate risk by effectively converting the $50.0 million of borrowings under the Credit Facility from variable-rate interest to fixed-rate interest with a per annum rate of 1.55% based on the margin of the Credit Facility at December 31, 2023 and during 2024 through the paydown of the $50.0 million outstanding balance under the Credit Facility on September 30, 2024.

Scheduled payments of long-term debt obligations as of December 31, 2024 were as follows:

	Notes
	Payable
	(in thousands)
2025	$	71,471
2026		59,898
2027		43,637
2028		19,930
2029		10,587
Total payments		205,523
Less amounts representing interest		16,389
Long-term debt	$	189,134

Assets securing notes payable, primarily consisting of revenue equipment, which were included in property, plant and equipment, totaled $333.5 million and $339.1 million at December 31, 2024 and 2023, respectively.

The Company paid interest of $8.5 million, $8.7 million, and $7.1 million in 2024, 2023, and 2022, respectively, net of capitalized interest which totaled $0.4 million for 2024 and $0.3 million for both 2023 and 2022.

Financing Arrangements

Credit Facility

The Company has a revolving credit facility (the “Credit Facility”) under its Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), with an initial maximum credit amount of $250.0 million, including a swing line facility in an aggregate amount of up to $40.0 million and a letter of credit sub-facility providing for the issuance of letters of credit up to an aggregate amount of $20.0 million. The Company may request additional revolving commitments or incremental term loans thereunder up to an aggregate amount of up to $125.0 million, subject to the satisfaction of certain additional conditions as provided in the Credit Agreement. On September 30, 2024, the Company voluntarily paid down the $50.0 million outstanding on the Credit Facility and had no borrowings outstanding as of December 31, 2024. Subsequent to December 31, 2024, the Company elected to borrow $25.0 million on the Credit Facility, at an interest rate of 5.5% (SOFR plus a spread), to support the Company's working capital needs and general corporate purposes.

Principal payments under the Credit Facility are due upon maturity of the facility on October 7, 2027; however, borrowings may be repaid, at the Company’s discretion, in whole or in part at any time, without penalty, subject to required notice periods and compliance with minimum prepayment amounts. Borrowings under the Credit Agreement can either be, at the Company’s election: (i) at an Alternate Base Rate (as defined in the Credit Agreement) plus a spread ranging from 0.125% to 1.00%, and SOFR adjustment of 0.10% per annum; or (ii) the Adjusted Term SOFR Screen Rate (as defined in the

Credit Agreement) plus a spread ranging from 1.125% to 2.00%. The applicable spread is dependent upon the Company’s Adjusted Leverage Ratio (as defined in the Credit Agreement). In addition, the Credit Facility requires the Company to pay a fee on unused commitments. The Credit Agreement contains conditions, representations and warranties, events of default, and indemnification provisions that are customary for financings of this type, including, but not limited to, a minimum interest coverage ratio, a maximum adjusted leverage ratio, and limitations on incurrence of debt, investments, liens on assets, certain sale and leaseback transactions, transactions with affiliates, mergers, consolidations, and sales of assets. The Company was in compliance with the covenants under the Credit Agreement at December 31, 2024.

Interest Rate Swap

The Company had an interest rate swap agreement with a $50.0 million notional amount, which terminated on October 1, 2024. As of December 31, 2023, the fair value of the interest rate swap of $1.7 million was recorded in other long-term assets (as further discussed in Note C). Through its term, the interest rate swap qualified for cash flow hedge accounting (as further discussed in Note B). The unrealized gain or loss on the interest rate swap instrument in effect at the balance sheet date was reported as a component of accumulated other comprehensive income, net of tax, in stockholders’ equity at December 31, 2023, and the change in the unrealized gain or loss on the interest rate swap was reported in other comprehensive income (loss), net of tax, in the consolidated statements of comprehensive income during 2023 and 2024.

Accounts Receivable Securitization Program

During June 2024, the Company amended and restated its accounts receivable securitization program (“A/R Securitization”), extending the maturity date to July 1, 2025. The amendment also, among other things, added a conduit lender party with language to address potential loans funded through the issuance of notes; added provisions relating to erroneous payments; modified the calculation of certain ratios, as defined in the agreement; and modified limitations regarding the concentration of certain obligors of receivables pledged under the program. The program provides available cash proceeds of $50.0 million and has an accordion feature allowing the Company to request additional borrowings up to $100.0 million, subject to certain conditions. As of December 31, 2024 and 2023, the Company had no borrowings outstanding under the A/R Securitization.

Under this program, certain subsidiaries of the Company continuously sell a designated pool of trade accounts receivables to a wholly owned subsidiary which, in turn, may borrow funds on a revolving basis. The A/R Securitization does not qualify for sale treatment. Accordingly, the accounts receivable and related debt obligation remain on the Company’s consolidated balance sheets. This wholly owned consolidated subsidiary is a separate bankruptcy-remote entity, and its assets would be available only to satisfy the claims related to the lenders’ interest in the trade accounts receivables. Borrowings under the A/R Securitization bear interest based upon SOFR, or, to the extent funded by the conduit lender through the issuance of notes, at the commercial paper rate as defined in the agreement, plus a margin in each case, and an annual facility fee. The securitization agreement contains representations and warranties, affirmative and negative covenants, and events of default that are customary for financings of this type, including a maximum adjusted leverage ratio covenant. The Company was in compliance with the covenants under the A/R Securitization at December 31, 2024.

The A/R Securitization includes a provision under which the Company may request and the letter of credit issuer may issue standby letters of credit, primarily in support of workers’ compensation and third-party casualty claims liabilities in various states in which the Company is self-insured. The outstanding standby letters of credit reduce the availability of borrowings under the program. As of December 31, 2024, standby letters of credit of $15.3 million have been issued under the program, which reduced the available borrowing capacity to $34.7 million.

Letter of Credit Agreements and Surety Bond Programs

As of both December 31, 2024 and 2023, the Company had letters of credit outstanding of $15.9 million and $17.4 million, respectively (including $15.3 million and $16.8 million, respectively issued under the A/R Securitization). The Company has programs in place with multiple surety companies for the issuance of surety bonds in support of its self-insurance program. As of December 31, 2024 and 2023, surety bonds outstanding related to the self-insurance program totaled $63.2 million and $65.2 million, respectively.

Notes Payable

The Company has financed the purchase of certain revenue equipment through promissory note arrangements totaling $80.7 million and $33.5 million during the year ended December 31, 2024 and 2023, respectively. Subsequent to December 31, 2024, the Company has financed the purchase of $15.3 million of revenue equipment through promissory note arrangements.