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Acquisitions | 12 Months Ended
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Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Expedited Freight In April 2019, the Company acquired certain assets and liabilities of FSA Network, Inc., doing business as FSA Logistix (“FSA”), for $26,798, net of cash acquired of $202, and an earn-out of up to $15,000. FSA, with management offices in Fort Lauderdale, Florida and Southlake, Texas, specializes in last mile logistics for a wide range of American companies, including national retailers, manufacturers, eTailers and third-party logistics companies. FSA has operations in the East, Midwest, Southwest and West regions. The acquisition of FSA provides the Company with the opportunity to expand its final mile service offering into additional geographic markets, form relationships with new customers, add volumes to existing locations and generate synergies within the Company. The acquisition was financed by cash flow from operations. The results of operations of FSA has been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Expedited Freight reportable segment. The purchase agreement for FSA included an earn-out up to $15,000 based on the achievement of certain revenue milestones over two one-year periods, beginning May 1, 2019. The estimated fair value of the earn-out liability on the date of acquisition was $11,803. The fair value was based on the estimated two-year performance of the acquired customer revenue and was calculated using a Monte Carlo simulation model. The assumptions under the Monte Carlo simulation model were as follows for the year ended December 31, 2020 and 2019:
| December 31, 2020 |  | December 31, 2019
Risk-free rate | 1.4% |  | 2.2%
Revenue discount rate | 3.2% |  | 4.4%
Revenue volatility | 8.0% |  | 5.0%
The fair value of the earn-out liability was adjusted at each reporting period based on changes in the expected cash flows and related assumptions used in the Monte Carlo simulation model. During the year ended December 31, 2021, 2020 and 2019, the fair value of the earn-out changed by ($52), $379 and ($33), respectively, and the change in fair value was recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income. The first one-year period ended in the second quarter of 2020 and the Company paid $5,284 based on the terms of the purchase agreement. The second one-year period ended in the second quarter of 2021 and the Company paid $6,813 in the third quarter of 2021 based on the terms of the purchase agreement. As of December 31, 2020, the fair value of the earn-out liability was $6,865, which was reflected in “Other current liabilities” in the Consolidated Balance Sheets. In January 2020, the Company acquired certain assets and liabilities of Linn Star Holdings, Inc., Linn Star Transfer, Inc. and Linn Star Logistics, LLC (collectively, “Linn Star”) for $55,931, net of cash acquired of $1,308. Linn Star, headquartered in Cedar Rapids, Iowa, specializes in last mile logistics and in-home installation services for a range of national retailers and manufacturers. Linn Star has operations primarily in the Midwest and Southwest regions. The acquisition of Linn Star supports the Company’s strategic growth plan by expanding the footprint of the Final Mile business into additional markets. The acquisition was financed by cash flows from operations. The results of operations of Linn Star have been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Expedited Freight reportable segment. On October 11, 2020, the Company acquired certain assets of CLW Delivery, Inc. (“CLW”) for $5,500. CLW, headquartered in Johnson City, Tennessee, specializes in last mile logistics and in-home installation services for national retailers and manufacturers. The acquisition of CLW supports the Company’s strategic growth plan by expanding the footprint of the Final Mile business into additional markets. The acquisition was financed by cash flows from operations. The results of operations of CLW have been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Expedited Freight reportable segment. In May 2021, the Company acquired certain assets and liabilities of J&P Hall Express Delivery (“J&P”) for $7,670. J&P is headquartered in Atlanta, Georgia with a second terminal in Albany, Georgia. The acquisition of J&P supports the Company’s strategic growth plan by expanding pickup and delivery, less-than-truckload, truckload, less than container load, container freight station warehousing, and airport transfer services across the Southeastern United States. The acquisition was financed by cash flow from operations. The results of J&P have been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Expedited Freight reportable segment. Intermodal In July 2019, the Company acquired certain assets and liabilities of O.S.T. Logistics, Inc. and O.S.T. Trucking Co., Inc. (collectively, “O.S.T.”) for $12,000. O.S.T., headquartered in Baltimore, Maryland, provides intermodal drayage services. O.S.T. has locations in Florida, Georgia, South Carolina and Virginia. The acquisition of O.S.T. supports the Company’s strategic growth plan by expanding the footprint of the Intermodal business into additional markets. The acquisition was financed by cash flows from operations. The results of operations of O.S.T. have been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Intermodal reportable segment. In February 2021, the Company acquired certain assets and liabilities of Proficient Transport Incorporated and Proficient Trucking, Inc. (together “Proficient Transport”) for $16,339 and a potential earn-out up to $2,000. Proficient Transport is an intermodal drayage company headquartered in Chicago, Illinois. The acquisition of Proficient Transport supports the Company’s strategic growth plan by expanding the intermodal footprint in Georgia, Illinois, North Carolina, and Texas, and introduces a new location in Ohio. The acquisition was financed by cash flows from operations. The results of Proficient Transport have been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Intermodal reportable segment. The purchase agreement for Proficient Transport included an earn-out up to $2,000 based on the achievement of certain revenue milestones over a one-year period, beginning March 1, 2021. The estimated fair value of the earn-out liability on the date of acquisition was $829. The fair value was based on the estimated one-year performance of the acquired customer revenue and was calculated using the option pricing method. The assumptions used to calculate the estimated fair value of the earn-out under the option pricing method were as follows:
| December 31, 2021 |  | February 28, 2021
Risk-free rate | 0.1% |  | 0.1%
Revenue discount rate | 9.8% |  | 8.3%
Revenue volatility | 24.2% |  | 27.3%
The fair value of the earn-out liability was adjusted at each reporting period based on changes in the expected cash flows and related assumptions used in the option pricing method. During the year ended December 31, 2021, the fair value of the earn-out changed by ($444), and the change in the fair value was recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income. As of December 31, 2021, the fair value of the earn-out liabili ty was $385, which was reflected in “Other current liabilities” in the Consolidated Balance Sheets. In November 2021, the Company acquired certain assets and liabilities of BarOle Trucking, Inc. (“BarOle”) for $35,436. BarOle is an intermodal drayage company headquartered in Roseville, Minnesota. The acquisition of BarOle provides additional capacity and resources to meet customer demands in the intermodal market, and extends the service footprint to the Minneapolis-Saint Paul, Minnesota area. In addition, BarOle has a larger terminal location, which allows for further expansion in the future. The acquisition was financed by cash flows from operations. The results of BarOle have been included in the Company’s consolidated financial statements as of and from the date of acquisition. The associated goodwill has been included in the Company’s Intermodal reportable segment. Fair Value of Assets Acquired and Liabilities Assumed Assets acquired and liabilities assumed as of the acquisition date are presented in the following table:
|  | FSA |  | O.S.T. |  | Linn Star |  | CLW |  | Proficient Transport |  | J&P |  | BarOle
|  | April 21, 2019 |  | July 14, 2019 |  | January 12, 2020 |  | October 11, 2020 |  | February 28, 2021 |  | May 30, 2021 |  | November 30, 2021
Tangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 202 |  |  | $ | — |  |  | $ | 1,308 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Accounts receivable |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,171 |  |  | 1,940 |  |  | 2,481 |
Other receivables |  | 1,491 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Prepaid expenses and other current assets |  | — |  |  | — |  |  | 1,182 |  |  | — |  |  | — |  |  | 32 |  |  | — |
Property and equipment |  | 40 |  |  | 10,371 |  |  | 605 |  |  | — |  |  | 140 |  |  | 1,567 |  |  | 5,351 |
Other assets |  | — |  |  | — |  |  | — |  |  | — |  |  | 24 |  |  | 3 |  |  | — |
Operating lease right-of-use assets |  | 3,209 |  |  | 1,672 |  |  | 10,011 |  |  | 811 |  |  | — |  |  | 1,355 |  |  | — |
Total tangible assets |  | 4,942 |  |  | 12,043 |  |  | 13,106 |  |  | 811 |  |  | 4,335 |  |  | 4,897 |  |  | 7,832 |
Intangible assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | 17,900 |  |  | 5,700 |  |  | 29,800 |  |  | 1,500 |  |  | 6,060 |  |  | 620 |  |  | 16,282 |
Non-compete agreements |  | 900 |  |  | 850 |  |  | 450 |  |  | 1,000 |  |  | 18 |  |  | 120 |  |  | 913 |
Goodwill |  | 19,963 |  |  | 2,050 |  |  | 25,234 |  |  | 3,000 |  |  | 6,249 |  |  | 4,020 |  |  | 10,677 |
Total intangible assets |  | 38,763 |  |  | 8,600 |  |  | 55,484 |  |  | 5,500 |  |  | 12,327 |  |  | 4,760 |  |  | 27,872 |
Total assets acquired |  | 43,705 |  |  | 20,643 |  |  | 68,590 |  |  | 6,311 |  |  | 16,662 |  |  | 9,657 |  |  | 35,704 |
Liabilities assumed: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  | 8,466 |  |  | — |  |  | 1,340 |  |  | — |  |  | 323 |  |  | 632 |  |  | 268 |
Other liabilities |  | 5,030 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Finance lease obligations |  | — |  |  | 6,971 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Operating lease liabilities |  | 3,209 |  |  | 1,672 |  |  | 10,011 |  |  | 811 |  |  | — |  |  | 1,355 |  |  | — |
Total liabilities assumed |  | 16,705 |  |  | 8,643 |  |  | 11,351 |  |  | 811 |  |  | 323 |  |  | 1,987 |  |  | 268 |
Net assets acquired |  | $ | 27,000 |  |  | $ | 12,000 |  |  | $ | 57,239 |  |  | $ | 5,500 |  |  | $ | 16,339 |  |  | $ | 7,670 |  |  | $ | 35,436 |
The preliminary purchase price for BarOle has been allocated to assets acquired and liabilities assumed based on the the Company’s best estimates and assumptions using the information available as of the acquisition date through the date of this filing. The provisional measurements of identifiable assets and liabilities, and the resulting goodwill related to these acquisitions are subject to adjustments in subsequent periods as the Company finalizes its purchase price allocation, including the third-party valuations. The Company expects to finalize the valuation as soon as practicable, but no later than one year from the acquisition date. The estimated useful life of acquired intangible assets as of the acquisition date are summarized in the following table:
|  | Estimated Useful Lives
|  | FSA |  | O.S.T. |  | Linn Star |  | CLW |  | Proficient Transport |  | J&P |  | BarOle
Customer relationships |  | 15 years |  | 10 years |  | 15 years |  | 7 years |  | 8 years |  | 12 years |  | 8 years
Non-compete agreements |  | 5 years |  | 3 years |  | 1 year |  | 5 years |  | 1 year |  | 5 years |  | 5 years

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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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