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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended
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Mar. 31, 2023
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
Schedule components of cash and cash equivalents, short term investments, and restricted funds | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31 |  | December 31 |
​ | ​ | 2023 | ​ | 2022 |
​ | ​ | (in thousands) | ​
Cash and cash equivalents | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash deposits(1)(2) | ​ | $ | 129,640 | ​ | $ | 137,247 | ​
Variable rate demand notes(1)(3) | ​ |  | 121 | ​ |  | 9,285 | ​
Money market funds(4) | ​ |  | 73,558 | ​ |  | 11,732 | ​
Total cash and cash equivalents | ​ | $ | 203,319 | ​ | $ | 158,264 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Short-term investments | ​ | ​ | ​ | ​ | ​ | ​ | ​
Certificates of deposit(1) | ​ | $ | 113,307 | ​ | $ | 88,851 | ​
U.S. Treasury securities(5) | ​ | ​ | 49,180 | ​ | ​ | 78,811 | ​
Total short-term investments | ​ | $ | 162,487 | ​ | $ | 167,662 | ​
​
(1) | Recorded at cost plus accrued interest, which approximates fair value.
(2) | The December 31, 2022 balance reflects the reclassification of FleetNet cash deposits to discontinued operations.
(3) | Amounts may be redeemed on a daily basis with the original issuer.
(4) | Recorded at fair value as determined by quoted market prices (see amounts presented in the table of financial assets and liabilities measured at fair value within this Note).
(5) | Recorded at amortized cost plus accrued interest, which approximates fair value. U.S. Treasury securities included in short-term investments are held-to-maturity investments with maturity dates of less than one year.
​
Schedule of fair value and carrying value disclosures of financial instruments | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31 | ​ | December 31 | ​
​ |  | 2023 |  | 2022 |
​ | ​ | (in thousands) | ​
​ | ​ | ​ | Carrying |  | ​ | Fair |  | ​ | Carrying |  | ​ | Fair | ​
​ | ​ | ​ | Value |  | ​ | Value |  | ​ | Value |  | ​ | Value | ​
Credit Facility(1) | ​ | $ | 50,000 | ​ | $ | 50,000 | ​ | $ | 50,000 | ​ | $ | 50,000 | ​
Notes payable(2) | ​ |  | 200,452 | ​ |  | 194,705 | ​ |  | 214,623 | ​ |  | 207,778 | ​
New England Pension Fund withdrawal liability(3) | ​ | ​ | 19,929 | ​ | ​ | 19,253 | ​ | ​ | 20,100 | ​ | ​ | 18,911 | ​
​ | ​ | $ | 270,381 | ​ | $ | 263,958 | ​ | $ | 284,723 | ​ | $ | 276,689 | ​
​
(1) | The revolving credit facility (the “Credit Facility”) carries a variable interest rate based on Secured Overnight Financing Rate (“SOFR”), plus a margin, priced at market for debt instruments having similar terms and collateral requirements (Level 2 of the fair value hierarchy).
(2) | Fair value of the notes payable was determined using a present value income approach based on quoted interest rates from lending institutions with which the Company would enter into similar transactions (Level 2 of the fair value hierarchy).
(3) | ABF Freight’s multiemployer pension plan obligation with the New England Teamsters and Trucking Industry Pension Fund (the “New England Pension Fund”) was restructured under a transition agreement effective on August 1, 2018, which resulted in a related withdrawal liability. The fair value of the outstanding withdrawal liability is equal to the present value of the future withdrawal liability payments, discounted at an interest rate of 4.9% and 5.3% at March 31, 2023 and December 31, 2022, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of March 31, 2023, the outstanding withdrawal liability totaled $19.9 million, of which $0.7 million and $19.2 million were recorded in accrued expenses and other long-term liabilities, respectively.
​
Schedule of financial assets and liabilities measured at fair value on a recurring basis | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2023 | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements Using | ​
​ | ​ | ​ | ​ | ​ | Quoted Prices |  | Significant |  | Significant | ​
​ |  | ​ | ​ | ​ | In Active | ​ | Observable | ​ | Unobservable | ​
​ | ​ | ​ | ​ | ​ | Markets | ​ | Inputs | ​ | Inputs | ​
​ | ​ | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
​ | ​ | (in thousands) | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Money market funds(1) | ​ | $ | 73,558 | ​ | $ | 73,558 | ​ | $ | — | ​ | $ | — | ​
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2) | ​ |  | 3,898 | ​ |  | 3,898 | ​ |  | — | ​ |  | — | ​
Interest rate swap(3) | ​ | ​ | 2,913 | ​ | ​ | — | ​ | ​ | 2,913 | ​ | ​ | — | ​
​ | ​ | $ | 80,369 | ​ | $ | 77,456 | ​ | $ | 2,913 | ​ | $ | — | ​
Liabilities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Contingent consideration(4) | ​ | ​ | 127,040 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 127,040 | ​
​ | ​ | $ | 127,040 | ​ | $ | — | ​ | $ | — | ​ | $ | 127,040 | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022 | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements Using | ​
​ | ​ | ​ | ​ | ​ | Quoted Prices |  | Significant |  | Significant | ​
​ |  | ​ | ​ | ​ | In Active | ​ | Observable | ​ | Unobservable | ​
​ | ​ | ​ | ​ | ​ | Markets | ​ | Inputs | ​ | Inputs | ​
​ | ​ | Total |  | (Level 1) |  | (Level 2) |  | (Level 3) |
​ | ​ | (in thousands) | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Money market funds(1) | ​ | $ | 11,732 | ​ | $ | 11,732 | ​ | $ | — | ​ | $ | — | ​
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2) | ​ |  | 3,982 | ​ |  | 3,982 | ​ |  | — | ​ |  | — | ​
Interest rate swap(3) | ​ | ​ | 3,526 | ​ | ​ | — | ​ | ​ | 3,526 | ​ | ​ | — | ​
​ | ​ | $ | 19,240 | ​ | $ | 15,714 | ​ | $ | 3,526 | ​ | $ | — | ​
Liabilities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Contingent consideration(4) | ​ | ​ | 112,000 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 112,000 | ​
​ | ​ | $ | 112,000 | ​ | $ | — | ​ | $ | — | ​ | $ | 112,000 | ​
​
(1) | Included in cash and cash equivalents.
(2) | Nonqualified deferred compensation plan investments consist of U.S. and international equity mutual funds, government and corporate bond mutual funds, and money market funds which are held in a trust with a third-party brokerage firm. Included in other long-term assets, with a corresponding liability reported within other long-term liabilities.
(3) | Included in other long-term assets. The fair value of the interest rate swap was determined by discounting future cash flows and receipts based on expected interest rates observed in market interest rate curves adjusted for estimated credit valuation considerations reflecting nonperformance risk of the Company and the counterparty, which are generally considered to be in Level 3 of the fair value hierarchy. However, the Company assessed Level 3 inputs as insignificant to the valuation at March 31, 2023 and December 31, 2022, and considers the interest rate swap valuation in Level 2 of the fair value hierarchy.
(4) | As part of the Agreement and Plan of Merger (the “Merger Agreement”) of MoLo, executed in November 2021, certain additional cash consideration is required to be paid by the Company based on the achievement of certain incremental targets of adjusted earnings before interest, taxes, depreciation and amortization for each of the years ended December 31, 2023, 2024, and 2025. At 100% of the target, the cumulative additional consideration for years 2023 through 2025 would be $215.0 million, with the possible undiscounted cash consideration due ranging from a total of $95.0 million at 80% of target to $455.0 million at 300% of target, as outlined in the Merger Agreement. The estimated fair value of contingent earnout consideration is determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and earnings before interest, taxes, depreciation and amortization to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 13.7% and 14.0% as of March 31, 2023 and December 31, 2022, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. As of March 31, 2023, the contingent earnout consideration totaled $127.0 million, of which $43.4 million was recorded in current liabilities based on when expected payouts become due, and the remaining portion was recorded in long-term liabilities. The increase in fair value upon the remeasurement at March 31, 2023 reflects increases in
| assumptions for business growth, combined with a lower discount rate versus the previous measurement period. Adjustments to the contingent earnout consideration liability are included in operating income.
​
Schedule of changes in fair value of liabilities measured at fair value using inputs categorized in Level 3 | ​
​ | ​ | ​ | ​ | ​
​ | ​ | Contingent Consideration | ​
​ | ​ | (in thousands) | ​
Balances at December 31, 2022 | ​ | $ | 112,000 | ​
Change in fair value included in operating income | ​ | ​ | 15,040 | ​
Balances at March 31, 2023 | ​ | $ | 127,040 | ​

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