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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended
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Dec. 31, 2024
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS | NOTE C – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS ​ Financial Instruments ​ The components of cash and cash equivalents and short-term investments as of December 31 are presented in the following table: ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2024 | ​ | 2023 |
​ | ​ | (in thousands) | ​
Cash and cash equivalents | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash deposits(1) | ​ | $ | 83,048 | ​ | $ | 168,472 | ​
Money market funds(2) | ​ |  | 44,396 | ​ |  | 93,754 | ​
Total cash and cash equivalents | ​ | $ | 127,444 | ​ | $ | 262,226 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Short-term investments | ​ | ​ | ​ | ​ | ​ | ​ | ​
Certificates of deposit(3) | ​ | $ | 29,759 | ​ | $ | 67,842 | ​
(1) | Recorded at cost plus accrued interest, which approximates fair value.
(2) | 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).
(3) | Recorded at cost plus accrued interest, which approximates fair value due to its short-term nature and is categorized in Level 2 of the fair value hierarchy.
​ The Company’s long-term financial instruments are presented in the table of financial assets and liabilities measured at fair value within this Note. ​ Concentrations of Credit Risk of Financial Instruments The Company is subject to concentrations of credit risk related to its cash, cash equivalents, and short-term investments. The Company reduces credit risk by maintaining its cash deposits and short-term investments in accounts and certificates of deposit which are primarily FDIC-insured or in direct obligations of the U.S. government. However, certain cash deposits and certificates of deposit may exceed federally insured limits. At December 31, 2024 and 2023, cash deposits and short-term investments totaling $51.7 million and $76.3 million, respectively, were not FDIC insured. The Company also holds money market funds, which are invested in U.S. government securities and repurchase agreements collateralized solely by U.S. government securities. ​ ​ Fair value and carrying value disclosures of financial instruments as of December 31 are presented in the following table: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2024 |  | 2023 |
​ | ​ | (in thousands) | ​
​ | ​ | ​ | Carrying |  | ​ | Fair |  | ​ | Carrying |  | ​ | Fair | ​
​ | ​ | ​ | Value |  | ​ | Value |  | ​ | Value |  | ​ | Value | ​
Credit Facility(1) | ​ | $ | — | ​ | $ | — | ​ | $ | 50,000 | ​ | $ | 50,000 | ​
Notes payable(2) | ​ |  | 189,134 | ​ |  | 187,675 | ​ |  | 178,938 | ​ |  | 177,149 | ​
New England Pension Fund withdrawal liability(3) | ​ | ​ | 18,671 | ​ | ​ | 16,783 | ​ | ​ | 19,402 | ​ | ​ | 18,220 | ​
​ | ​ | $ | 207,805 | ​ | $ | 204,458 | ​ | $ | 248,340 | ​ | $ | 245,369 | ​
(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). The Company paid down the $50.0 million debt under the Credit Facility during the third quarter of 2024.
(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 6.0% and 5.3% at December 31, 2024 and 2023, respectively, determined using the 20-year U.S. Treasury rate plus a spread (Level 2 of the fair value hierarchy). As of December 31, 2024, the outstanding withdrawal liability totaled $18.7 million, of which $0.8 million was recorded in accrued expenses and the remaining portion was recorded in other long-term liabilities.
​ ​ Assets and Liabilities Measured at Fair Value on a Recurring Basis ​ The assets and liabilities that are measured at fair value on a recurring basis as of December 31 are presented in the following table: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2024 | ​
​ | ​ | ​ | ​ | ​ | 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) | ​ | $ | 44,396 | ​ | $ | 44,396 | ​ | $ | — | ​ | $ | — | ​
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2) | ​ |  | 5,570 | ​ |  | 5,570 | ​ |  | — | ​ |  | — | ​
​ | ​ | $ | 49,966 | ​ | $ | 49,966 | ​ | $ | — | ​ | $ | — | ​
Liabilities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Contingent consideration(3) | ​ | $ | 2,650 | ​ | $ | — | ​ | $ | — | ​ | $ | 2,650 | ​
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 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) | ​ | $ | 93,754 | ​ | $ | 93,754 | ​ | $ | — | ​ | $ | — | ​
Equity, bond, and money market mutual funds held in trust related to the Voluntary Savings Plan(2) | ​ |  | 4,627 | ​ |  | 4,627 | ​ |  | — | ​ |  | — | ​
Interest rate swap(4) | ​ | ​ | 1,710 | ​ | ​ | — | ​ | ​ | 1,710 | ​ | ​ | — | ​
​ | ​ | $ | 100,091 | ​ | $ | 98,381 | ​ | $ | 1,710 | ​ | $ | — | ​
Liabilities: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Contingent consideration(3) | ​ | $ | 92,900 | ​ | $ | — | ​ | $ | — | ​ | $ | 92,900 | ​
​ ​
(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) | The estimated fair value of contingent consideration related to the acquisition of MoLo (see Note B) is determined by assessing Level 3 inputs. The Level 3 assessments utilize a Monte Carlo simulation with inputs including scenarios of estimated revenues and expenses or adjusted EBITDA to be achieved for the applicable performance periods, volatility factors applied to the simulations, and the discount rate applied, which was 12.9% and 13.3% as of December 2024 and 2023, respectively. Changes in the significant unobservable inputs might result in a significantly higher or lower fair value at the reporting date. The decrease in fair value of contingent earnout consideration as of December 31, 2024, compared to December 31, 2023, reflects the reduction in the probability of payout based on 2024 results and projections of 2025 adjusted EBITDA.
(4) | The Company’s interest rate swap terminated on October 1, 2024. The fair value of the interest rate swap at December 31, 2023 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 December 31, 2023 and considered the interest rate swap valuation in Level 2 of the fair value hierarchy.
​ The following table provides the change in fair value of the liabilities measured at fair value using inputs categorized in Level 3 of the fair value hierarchy: ​
​ | ​ | ​ | ​ | ​
​ | ​ | Contingent Consideration | ​
​ | ​ | (in thousands) | ​
Balance at December 31, 2023 | ​ | $ | 92,900 | ​
Change in fair value included in operating expenses | ​ | ​ | (90,250) | ​
Balance at December 31, 2024 | ​ | $ | 2,650 | ​
​ Assets Measured at Fair Value on a Nonrecurring Basis ​ The Company remeasures certain assets on a nonrecurring basis upon events or changes in circumstances that indicate the carrying amount may not be recoverable. The following table provides the changes in long-lived assets measured on a nonrecurring basis during the years ended December 31: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | 2024 |  | 2023 |
​ | ​ | (in thousands) | ​
Equity investment(1) | ​ | $ | (28,739) | ​ | $ | 3,739 | ​
Revenue equipment(2) | ​ | $ | (1,393) | ​ | $ | — | ​
Software(2) | ​ | $ | (307) | ​ | $ | — | ​
Operating right-of-use assets(3) | ​ | $ | — | ​ | $ | (28,124) | ​
Leasehold improvements(3) | ​ | $ | — | ​ | $ | (2,038) | ​
(1) | In November 2021, the Company recorded an equity investment for $25.0 million in Phantom Auto, a startup provider of human-centered remote operation software, and became a lead investor in their Series B Preferred offering. The equity investment was accounted for as a nonmarketable equity security without a readily determinable value using the measurement alternative, which allowed the investment to be recorded at cost, less any impairment and adjusted for observable price changes. During 2023, the fair value of the Company’s investment in Phantom Auto increased based on an observable price change upon the closing of Phantom Auto’s Series B-2 funding round as of April 26, 2023. During the first quarter of 2024, the Company was notified that Phantom Auto was ceasing operations due to liquidity concerns from failing to secure additional funding from investors or lenders. As a result, the Company assessed the likelihood of recovering its investment as remote and recorded a pre-tax, noncash impairment charge, to write off the equity investment in Phantom Auto, which was recognized below the operating income line in “Other, net” within “Other income (costs)” using inputs categorized in Level 3 of the fair value hierarchy.
(2) | During the fourth quarter of 2024, the Company recorded impairment charges for certain revenue equipment and software as part of a strategic decision to adjust capacity within Asset-Light’s operations. The impairment charges were reported in operating expenses in the consolidated statements of operations for the year ended December 31, 2024. Inputs used in the fair value measurements of these assets were categorized in Level 2 of the fair value hierarchy. The software was impaired after it was determined it was no longer going to be utilized and the revenue equipment was written down to fair value, less cost to sell, of $4.6 million when it was reclassified to assets held for sale at fair value, which is reported within other long-term assets as of December 31, 2024.
(3) | During the third quarter of 2023, the Company recorded impairment charges related to operating right-of-use assets and leasehold improvements associated with a freight handling pilot facility, a service center, and office spaces that were made available for sublease. The lease impairment charges were recognized as a component of operating expenses in the consolidated statement of operations for the year ended December 31, 2023. The fair value of these asset groups was estimated at September 1, 2023, using inputs categorized in Level 3 of the fair value hierarchy, such as discounted cash flow method utilizing market-participant discount rates ranging from 7.5% to 9.5% and certain unobservable inputs, including estimated cash flows based on anticipated future sublease terms as determined using third-party real estate broker quotes. See Note G for additional discussion related to these impairment charges.
​

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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