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Discontinued Operation and Held for Sale | 12 Months Ended
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Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operation and Held for Sale | Discontinued Operation and Held for Sale As previously disclosed, on April 23, 2020, the Company made a decision to divest of Pool. The Pool business met the criteria for held for sale classification. As a result, the assets and liabilities of Pool were presented separately under the captions “Current assets held for sale”, “Noncurrent assets held for sale”, “Current liabilities held for sale” and “Noncurrent liabilities held for sale” in the Consolidated Balance Sheets as of December 31, 2020. The results of Pool were reclassified to “Loss from discontinued operation, net of tax” in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019. Certain corporate overhead and other costs previously allocated to Pool for segment reporting purposes did not qualify for classification within discontinued operation and have been reallocated to continuing operations. These costs were reclassified to the eliminations column in the segment reconciliation in Note 12, Segment Reporting. Held for Sale Upon meeting the criteria for held for sale classification and in each subsequent reporting period, the Company evaluated whether Pool’s estimated fair value, less costs to sell, exceeded the net carrying value. The annual goodwill impairment analysis conducted as of June 30, 2020 indicated that the fair value in excess of the carrying value related to the Pool reporting unit was approximately 5% and in the third quarter of 2020, the Company concluded the estimated fair value, less costs to sell, exceeded the net carrying value and there were no indicators of impairment for the Pool reporting unit. However, in response to the longer than expected macroeconomic conditions caused by the COVID-19 pandemic and status of negotiations to sell the Pool business, a strategic review of the business was completed in the fourth quarter of 2020 along with revised forecasts to include updated market conditions and strategic operating decisions. The revised forecasts indicated an impairment of the entire goodwill balance of the Pool reporting unit was necessary as of December 31, 2020. A non-cash charge of approximately $5,406 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2020. In addition, the Company recorded a valuation allowance against the net assets held for sale to write down the carrying value to the estimated fair value less costs to sell. A non-cash valuation allowance of approximately $22,978 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2020. The fair value was estimated based on a combination of an income approach using a discounted cash flow model, and a market approach, which considers comparable companies. Estimates of future cash flows are based on various factors, including current operating results, expected market trends and competitive influences. Refer to Note 1, Operations and Summary of Significant Accounting Policies, for further discussion about the estimation of fair value. Sale of Pool On February 12, 2021, the Company completed the sale of the Pool business for $8,000 in cash and up to a $12,000 earn-out based on earnings before interest, taxes, depreciation and amortization. The sale agreement for Pool included an earn-out based on the achievement of certain earnings before interest, taxes, depreciation and amortization attainment over an eleven-month period, beginning February 1, 2021. The estimated fair value of the earn-out asset on the date of sale was $6,967. The fair value was based on the estimated eleven-month period of the earnings before interest, taxes, depreciation and amortization and was calculated using a Monte Carlo simulation model. The weighted average assumptions under the Monte Carlo simulation model were as follows:
| February 12, 2021
Counterparty credit spread | 1.2%
Earnings before interest, taxes, depreciation and amortization discount rate | 15.0%
Asset volatility | 55.0%
Subsequent to the date of sale, the Company recognized any increases in the carrying value of the earn-out asset when the change was realized and evaluated the earn-out asset for impairment at each reporting period. The financial performance of the Pool business significantly deteriorated during the third quarter of 2021. As a result, an evaluation of the earn-out asset for impairment was completed, which included a review of revised forecasts, updated strategic operating decisions and current market conditions. The revised forecasts indicated an impairment of the entire earn-out asset was necessary. A non-cash charge of $6,967 was recorded as an “Impairment charge” in the summarized discontinued operation financial information for the year ended December 31, 2021. Transition Services Agreement On February 12, 2021, the Company entered into a Transition Services Agreement (“TSA”) with TOG FAS Holdings LLC, the buyer of the Pool business. Under the TSA, the Company performed certain services on an interim basis in order to facilitate the orderly transition of the Pool business. The effective date of the TSA was February 12, 2021 and remained in effect until the date all services were completed, but no more than six months following the effective date. The TSA provided the right to extend the term of the TSA with no limit on the number of the mutually agreed upon extensions. In exchange for the services performed by the Company under the TSA, the Company received a monthly service charge. For the year ended December 31, 2021, the Company recognized $747, in “Other operating expenses” in the Consolidated Statements of Comprehensive Income, for the services performed under the TSA. The TSA ended in October 2021 when all services were completed. Additionally, under the TSA, the Company remitted payments to outside vendors on behalf of TOG FAS Holdings LLC for expenses incurred by the Pool business up to a limit of $18,000. The Company is reimbursed by TOG FAS Holdings LLC within 60 days from the end of the month in which the payment is remitted. As of December 31, 2021, the Company recorded a receivable in the amount o f $8,097 in “Other receivables” in Consolidated Balance Sheets for the reimbursement due to the Company. The Company evaluates the collectability of the receivable at least quarterly and if the Company is aware of the inability of TOG FAS Holdings LLC to meet its financial obligations to the Company, the Company will record a specific reserve in order to reduce the receivable to the amount the Company reasonably believes will be collected. The Company believes collectibility of the receivable is probable as of December 31, 2021. Summarized Held for Sale and Discontinued Operation Financial Information A summary of the carrying amounts of major classes of assets and liabilities, which are included in assets and liabilities held for sale in the Consolidated Balance Sheets, is as follows:
|  | December 31, 2020
Assets |  |
Current assets: |  |
Accounts receivable, less allowance of $86 in 2020 |  | $ | 19,740 |
Other current assets |  | 1,262 |
Total current assets held for sale |  | $ | 21,002 |
Property and equipment |  | $ | 48,905 |
Less accumulated depreciation and amortization |  | 28,890 |
Net property and equipment |  | 20,015 |
Operating lease right-of-use assets |  | 46,865 |
Other acquired intangibles, net of accumulated amortization of $12,679 in 2020 |  | 2,621 |
Deferred income taxes |  | 3,253 |
Other assets |  | 3,321 |
Valuation allowance on assets held for sale |  | (22,978) |
Total noncurrent assets held for sale |  | $ | 53,097 |
Liabilities |  |
Current liabilities: |  |
Accounts payable |  | $ | 4,002 |
Accrued expenses |  | 5,070 |
Other current liabilities |  | 27 |
Current portion of operating lease liabilities |  | 16,825 |
Total current liabilities held for sale |  | $ | 25,924 |
Operating lease liabilities, less current portion |  | $ | 30,024 |
Other long-term liabilities |  | 4,551 |
Total noncurrent liabilities held for sale |  | $ | 34,575 |
A summary of the results of operations classified as a discontinued operation, net of tax, in the Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 is as follows:
| Year Ended |  |
| December 31, 2021 |  |  |  | December 31, 2020 |  | December 31, 2019 |  |
Operating revenue | $ | 17,776 |  |  |  |  | $ | 141,433 |  |  | $ | 195,208 |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |
Purchased transportation | 3,381 |  |  |  |  | 33,979 |  |  | 52,867 |  |  |
Salaries, wages and employee benefits | 9,458 |  |  |  |  | 65,695 |  |  | 77,162 |  |  |
Operating leases | 2,289 |  |  |  |  | 21,982 |  |  | 18,918 |  |  |
Depreciation and amortization | — |  |  |  |  | 1,657 |  |  | 5,715 |  |  |
Insurance and claims | 929 |  |  |  |  | 6,205 |  |  | 6,707 |  |  |
Fuel expense | 508 |  |  |  |  | 4,279 |  |  | 6,462 |  |  |
Other operating expenses | 1,627 |  |  |  |  | 17,587 |  |  | 20,969 |  |  |
Impairment charge | 6,967 |  |  |  |  | 28,384 |  |  | — |  |  |
Total operating expenses | 25,159 |  |  |  |  | 179,768 |  |  | 188,800 |  |  |
(Loss) income from discontinued operation | (7,383) |  |  |  |  | (38,335) |  |  | 6,408 |  |  |
Loss on sale of business | (2,860) |  |  |  |  | — |  |  | — |  |  |
(Loss) income from discontinued operation before income taxes | (10,243) |  |  |  |  | (38,335) |  |  | 6,408 |  |  |
Income tax (benefit) expense | (11) |  |  |  |  | (9,301) |  |  | 1,631 |  |  |
(Loss) income from discontinued operation, net of tax | $ | (10,232) |  |  |  |  | $ | (29,034) |  |  | $ | 4,777 |  |  |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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