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Acquisitions | 12 Months Ended
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Dec. 31, 2021
Business Combinations [Abstract] |
Acquisitions | NOTE 4. Acquisitions Choptank Transport, LLC Acquisition On October 19, 2021, we acquired 100% of the equity interests of Choptank. Total consideration for the transaction w as $127.6 million in cash and the settlement of accounts receivable due from Choptank of $0.3 million. In connection with the acquisition, we granted approximately $22 million of restricted stock to Choptank's owners and senior management team, which is subject to certain vesting conditions. The grants of restricted stock were made pursuant to award agreements and issued under our 2017 Long Term Incentive Plan. The acquisition of Choptank enhanced our refrigerated trucking transportation solutions offering and complemented our growing fleet of refrigerated intermodal containers. Choptank has developed a best-in-class proprietary technology platform that we will leverage to enhance our truck brokerage service line. The initial accounting for the acquisition of Choptank is incomplete as we, with the support of our valuation specialist, are in the process of finalizing the fair market value calculations of the acquired net assets. In addition, we are preparing a review of the applicable future cash flows used in determining the purchase accounting. Finally, certain post-closing activities outlined in the acquisition agreement remain incomplete. As a result, the amounts recorded in the consolidated financial statements related to the Choptank acquisition are preliminary and subject to change. The following table summarizes the preliminary allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):
| October 19, 2021 |
Cash and cash equivalents | $ | 5,596 |
Accounts receivable trade |  | 71,576 |
Prepaid expenses and other current assets |  | 419 |
Property and equipment |  | 169 |
Right of use assets - operating leases |  | 872 |
Goodwill, net |  | 54,553 |
Other intangibles |  | 60,500 |
Total assets acquired | $ | 193,685 |
Accounts payable trade | $ | 60,970 |
Accrued payroll |  | 3,458 |
Accrued other |  | 519 |
Lease liability - operating leases short-term |  | 311 |
Lease liability - operating leases long-term |  | 561 |
Total liabilities assumed | $ | 65,819 |
Total consideration | $ | 127,866 |
Cash paid, net | $ | 122,270 |
The Choptank acquisition was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of October 19, 2021 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the Choptank acquisition was primarily attributable to potential expansion and future development of the acquired business. Tax history and attributes are not inherited in an equity purchase of this kind, however, the goodwill and other intangibles recognized in this purchase will be fully tax deductible over a period of 15 years. We incurred approximately $1.1 million of transaction costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the year ended December 31, 2021. The components of “Other intangibles” listed in the above table as of the acquisition date are preliminarily estimated as follows (in thousands):
|  |  |  | Accumulated |  |  | Balance at |  |  | Estimated Useful
| Amount |  |  | Amortization |  |  | December 31, 2021 |  |  | Life
Customer relationships | $ | 36,300 |  |  | $ | 605 |  |  | $ | 35,695 |  |  | 15 years
Carrier network | $ | 14,400 |  |  | $ | 900 |  |  | $ | 13,500 |  |  | 4 years
Developed technology | $ | 6,500 |  |  | $ | 232 |  |  | $ | 6,268 |  |  | 7 years
Trade name | $ | 3,300 |  |  | $ | 550 |  |  | $ | 2,750 |  |  | 18 months
The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the year ended December 31, 2021 was $2.3 million. The intangible assets have a weighted average useful life of approximately 10.7 years. Amortization expense related to Choptank for the next five years is as follows (in thousands):
|  | Total |
Year 1 |  | $ | 9,149 |
Year 2 |  |  | 7,499 |
Year 3 |  |  | 6,949 |
Year 4 |  |  | 6,049 |
Year 5 |  |  | 3,349 |
From the date of the acquisition through December 31, 2021, Choptank’s revenue was $112.2 million and operating income was $0.3 million. NonstopDelivery, LLC Acquisition On December 9, 2020, we acquired 100% of the equity interests of NSD. Total consideration for the transaction was $105.9 million which consisted of cash paid of $89.8 million, of which $0.1 million was paid in the second quarter of 2021 as part of the post-closing true-up, and the settlement of Hub’s accounts receivable due from NSD of $16.1 million. The acquisition of NSD expanded our logistics service offering to include final mile logistics. NSD provides residential final mile delivery services through a non-asset business model, working with a network of nearly 200 carriers throughout the country. The financial results, since the acquisition date, of NSD are included in our logistics line of business. The following table summarizes the allocation of the total consideration to the assets acquired and liabilities assumed as of the date of the acquisition (in thousands):
| December 9, 2020 |  |
Cash and cash equivalents | $ | 4,775 |  |
Accounts receivable trade |  | 25,927 |  |
Prepaid expenses and other current assets |  | 207 |  |
Property and equipment |  | 1,018 |  |
Right of use assets - operating leases |  | 1,295 |  |
Goodwill, net |  | 38,156 |  |
Other intangibles |  | 47,700 |  |
Other assets |  | 14 |  |
Total assets acquired | $ | 119,092 |  |
Accounts payable trade | $ | 9,972 |  |
Accrued payroll |  | 1,324 |  |
Accrued other |  | 578 |  |
Lease liability - operating leases short-term |  | 373 |  |
Lease liability - operating leases long-term |  | 922 |  |
Total liabilities assumed | $ | 13,169 |  |
Total consideration | $ | 105,923 |  |
Cash paid, net | $ | 84,989 |  |
The NSD acquisition was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of December 9, 2020 with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the NSD acquisition was primarily attributable to potential expansion and future development of the acquired business. Tax history and attributes are not inherited in an equity purchase of this kind, however, the goodwill and other intangibles recognized in this purchase will be fully tax deductible over a period of 15 years. We incurred approximately $1.0 million of transaction costs associated with this transaction prior to the closing date that are reflected in general and administrative expense in the accompanying Consolidated Statements of Income for the year ended December 31, 2020. The components of “Other intangibles” listed in the above table as of the acquisition date are estimated as follows (in thousands):
|  |  |  | Accumulated |  |  | Balance at |  |  | Estimated Useful
| Amount |  |  | Amortization |  |  | December 31, 2021 |  |  | Life
Customer relationships | $ | 46,200 |  |  | $ | 3,337 |  |  | $ | 42,863 |  |  | 15 years
Trade name | $ | 900 |  |  | $ | 650 |  |  | $ | 250 |  |  | 18 months
Agent relationships | $ | 600 |  |  | $ | 163 |  |  | $ | 437 |  |  | 4 years
The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the year ended December 31, 2021 was $3.7 million. The intangible assets have a weighted average useful life of approximately 13.73 years. From the date of the acquisition through December 31, 2020, NSD’s revenue was $10.2 million and operating income was $0.9 million. The following unaudited pro forma consolidated results of operations presents the effects of Choptank as though it had been acquired as of January 1, 2020 and NSD as though it had been acquired as of January 1, 2019 (in thousands, except for per share amounts):
|  |  |  | Years Ended |  |  |  |
| December 31, 2021 |  |  | December 31, 2020 |  |  | December 31, 2019 |
Revenue | $ | 4,624,385 |  |  | $ | 3,887,189 |  |  | $ | 3,733,507 |
Net income | $ | 173,254 |  |  | $ | 79,578 |  |  | $ | 107,998 |
Earnings per share |  |  |  |  |  |  |  |
Basic | $ | 5.18 |  |  | $ | 2.40 |  |  | $ | 3.24 |
Diluted | $ | 5.11 |  |  | $ | 2.37 |  |  | $ | 3.23 |
The unaudited pro forma consolidated results for the annual periods were prepared using the acquisition method of accounting and are based on the historical financial information of Hub, NSD and Choptank. The historical financial information has been adjusted to give effect to the pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the Choptank acquisition as of January 1, 2020 and the NSD acquisition on January 1, 2019.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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