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Acquisition | 6 Months Ended
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Jun. 30, 2022
Business Combinations [Abstract] |
Acquisition | NOTE 2. Acquisition Choptank Transport, LLC Acquisition On October 19, 2021, we acquired 100% of the equity interests of Choptank Transport, LLC (“Choptank”). Total consideration for the transaction was $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 proprietary technology platform that we will leverage to enhance our truck brokerage service line. The following table summarizes the total purchase consideration to the net 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 |  | 70,989 |
Prepaid expenses and other current assets |  | 419 |
Property and equipment |  | 169 |
Right of use assets - operating leases |  | 922 |
Other intangibles |  | 60,500 |
Goodwill, net |  | 54,980 |
Total assets acquired | $ | 193,575 |
Accounts payable trade | $ | 60,970 |
Accrued payroll |  | 3,458 |
Accrued other |  | 359 |
Lease liability - operating leases short-term |  | 309 |
Lease liability - operating leases long-term |  | 613 |
Total liabilities assumed | $ | 65,709 |
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. The following table presents the carrying amount of goodwill (in thousands):
| Total |
Balance at December 31, 2021 | $ | 576,913 |
Acquisition |  | 427 |
Balance at June 30, 2022 | $ | 577,340 |
The changes noted as "acquisition" in the above table refer to purchase accounting adjustments related to the Choptank acquisition. 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. The components of “Other intangibles” listed in the above table as of the acquisition date are summarized as follows (in thousands):
|  |  |  | Accumulated |  |  | Balance at |  |  | Estimated Useful
| Amount |  |  | Amortization |  |  | June 30, 2022 |  |  | Life
Customer relationships | $ | 36,300 |  |  | $ | 1,815 |  |  | $ | 34,485 |  |  | 15 years
Carrier network | $ | 14,400 |  |  | $ | 2,700 |  |  | $ | 11,700 |  |  | 4 years
Developed technology | $ | 6,500 |  |  | $ | 696 |  |  | $ | 5,804 |  |  | 7 years
Trade name | $ | 3,300 |  |  | $ | 1,650 |  |  | $ | 1,650 |  |  | 18 months
The above intangible assets are amortized using the straight-line method. Amortization expense related to this acquisition for the three and six months ended June 30, 2022 was $2.3 million and $4.6 million, respectively. The intangible assets have a weighted average useful life of approximately 10.57 years. Amortization expense related to Choptank for the next five years is as follows (in thousands):
|  | Total |
Remainder of 2022 |  | $ | 4,574 |
2023 |  |  | 7,499 |
2024 |  |  | 6,949 |
2025 |  |  | 6,049 |
2026 |  |  | 3,349 |
The following unaudited pro forma consolidated results of operations present the effects of Choptank as though it had been acquired as of January 1, 2021 (in thousands, except for per share amounts):
| Three Months Ended |  |  | Six Months Ended |
| June 30, 2021 |  |  | June 30, 2021 |
Revenue | $ | 1,101,750 |  |  | $ | 2,115,680 |
Net income | $ | 27,186 |  |  | $ | 43,724 |
Earnings per share |  |  |  |  |
Basic | $ | 0.81 |  |  | $ | 1.31 |
Diluted | $ | 0.80 |  |  | $ | 1.29 |
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 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, 2021.

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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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