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Operations and Summary of Significant Accounting Policies | 12 Months Ended
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Dec. 31, 2023
Accounting Policies [Abstract] |
Operations and Summary of Significant Accounting Policies | Operations and Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation Forward Air Corporation and its subsidiaries (the “Company”) is a leading asset-light freight and logistics company. The Company has two reportable segments: Expedited Freight and Intermodal. The Company conducts business in the United States, Canada, and Mexico. The Expedited Freight segment provides expedited regional, inter-regional and national less-than-truckload (“LTL”) and truckload services. Expedited Freight also offers customers local pick-up and delivery and other services including shipment consolidation and deconsolidation, warehousing, customs brokerage and other handling services. The Intermodal segment provides first- and last-mile high value intermodal container drayage services both to and from seaports and railheads. Intermodal also offers dedicated contract and container freight station (“CFS”) warehouse and handling services. The Company’s consolidated financial statements includes the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The Company holds interests in certain wholly-owned subsidiaries of Omni Newco, LLC (“Omni”) that are considered Variable Interest Entities (“VIEs”). VIEs are legal entities in which equity investors do not have sufficient equity at risk for the entity to independently finance its activities, or as a group, the holders of the equity investment at risk lack the power through voting or similar rights to direct the activities of the entity that most significantly impact its economic performance, or do not have the obligation to absorb the expected losses of the entity or the right to receive expected residual returns of the entity. Consolidation of a VIE is required if a reporting entity is the primary beneficiary of the VIE. Investments in these VIEs are evaluated to determine if the Company is the primary beneficiary. This evaluation gives appropriate consideration to the design of the entity and the variability that the entity was designed to create and pass along, the relative power of each party, and to the Company’s obligation to absorb losses or receive residual returns of the entity. The Company concluded that the VIEs should be consolidated because the Company has (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) the obligation to absorb losses and the right to receive benefits, which could potentially be significant. For changes in facts and circumstances, the Company re-assesses whether or not it is a primary beneficiary of a VIE. Refer to Note 3, Acquisitions, for additional disclosures regarding the Company’s VIEs. In December 2023, the Board of Directors (the “Board”) of the Company approved a strategy to divest of the Final Mile business (“Final Mile”), and the sale of Final Mile was completed on December 20, 2023. Final Mile provided delivery and installation of heavy bulky appliances such as washing machines, dryers, dishwashers and refrigerators throughout the United States. As a result of the divestiture of the Final Mile business, the results of operations for Final Mile are presented as a discontinued operation in the Consolidated Statements of Comprehensive Income for all periods presented. In addition, assets and liabilities were reflected as “assets and liabilities held for sale” in the Consolidated Balance Sheets for the prior period. Unless otherwise noted, amounts, percentages and discussion for all periods reflect the results of operations, financial condition and cash flows from the Company’s continuing operations. Refer to Note 2, Discontinued Operation and Held for Sale, for further discussion. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and expenses during the reporting period. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform to the current period presentation. Cash and Cash Equivalents Cash as of December 31, 2023 and 2022 of $111,969 and $30,743, respectively, consisted of cash on hand and bank deposits. Cash equivalents as of December 31, 2023 and 2022 of $10,000 and $15,079, respectively, consisted of money market deposits. The Company considers all investments with an original maturity of three months or less to be cash and cash equivalents. Restricted Cash and Cash Equivalents Restricted cash equivalents and noncurrent restricted cash equivalents are related to the amounts held in escrow in connection with the financing of the acquisition of Omni. Amounts are restricted until the acquisition of Omni is closed. Refer to Note 3, Acquisitions, for additional disclosures regarding the amounts held in escrow. Allowance for Doubtful Accounts and Revenue Adjustments The Company has a broad range of customers, including freight forwarders, third-party logistics companies, passenger and cargo airlines, steamship lines, and retailers, located across a diverse geography. In circumstances in which the Company is aware of a specific customer’s inability to meet its financial obligations to the Company, the Company records a specific reserve in order to reduce the net recognized accounts receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes a general reserve based on a percentage of revenue to ensure accounts receivables are properly recorded at the net amount expected to be collected. The Company sets the general reserve based on historical collection experience combined with forecasts about any expected changes to the collection experience. If circumstances change, expected recoverability of amounts due to the Company may change by a material amount. Accounts are written off after all means of collection, including legal action, have been exhausted. The Company records an allowance for revenue adjustments as result of future billing rate changes. Adjustments arise: (a) when small rate changes (“spot quotes”) are granted to customers that differ from the standard rates in the billing system; (b) when freight requires dimensionalization or is reweighed which results in a different rate; (3) when billing errors occur; and (4) when data entry errors occur. In 2023, average revenue adjustments per month were approximately $424 on average revenue per month of approximately $114,228 (0.4% of monthly revenue). The Company estimates an allowance for revenue adjustments based on historical experience, trends and current information. The average amount of revenue adjustments per month can vary in relation to the level of revenue or as a result of other factors. Both the average monthly revenue adjustments and the average lag assumptions are continually evaluated for appropriateness. Inventories Inventories are valued at the lower of cost or net realizable value, using first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business. Replacement parts are expensed when placed in service, while tires are capitalized and amortized over their estimated useful life. Expenses related to the utilization of inventories are recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of 30 to 40 years for building and improvements, three to ten years for equipment, the lesser of the estimated useful life or the initial lease term for leasehold improvements and five years for computer software. Land is not depreciated and construction in progress is not depreciated until ready for service. Expenditures for maintenance and repairs are charged to expense as incurred. For internally developed software, all costs incurred during planning and evaluation are expensed. Costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized software also includes software acquired for internal use. Property and equipment as of December 31, 2023 and 2022 consisted of the following:
| December 31, 2023 |  | December 31, 2022
Land | $ | 26,479 |  |  | $ | 26,479 |
Buildings and improvements | 94,277 |  |  | 94,277 |
Equipment | 320,557 |  |  | 283,526 |
Leasehold improvements | 24,386 |  |  | 16,779 |
Computer software | 31,063 |  |  | 29,511 |
Construction in progress | 11,518 |  |  | 13,902 |
Total property and equipment | 508,280 |  |  | 464,474 |
Less accumulated depreciation and amortization | 250,185 |  |  | 218,145 |
Total property and equipment, net | $ | 258,095 |  |  | $ | 246,329 |
As of December 31, 2023 and 2022, the net book value of computer software included in property and equipment, net was $7,361 and $8,737, respectively. For the years ended December 31, 2023, 2022 and 2021, amortization expense of computer software was $2,909, $2,558 and $2,394, respectively. Cloud Computing Costs The Company capitalizes the costs incurred during the implementation stage for cloud computing or hosting arrangements. Costs incurred in the preliminary project stage and post-implementation stage, which includes maintenance and training costs, are expensed as incurred. Capitalized software costs are amortized using the straight-line method over three to five years and are recorded in “Prepaid expenses” and “Other assets” in the Consolidated Balance Sheets. Goodwill, Intangible Assets and Other Long-Lived Assets The Company tests goodwill for impairment, at the reporting unit level, annually and when events or circumstances indicate that fair value of a reporting unit may be below its carrying value. A reporting unit is an operating segment or one level below an operating segment, for example, a component. The Company’s reporting units are not its reportable segments. Goodwill is evaluated annually as of June 30 for impairment using a qualitative assessment or a quantitative one-step assessment. If the Company elects to perform a qualitative assessment and determines the fair value of its reporting units more likely than not exceed the carrying value of their net assets, no further evaluation is necessary. For reporting units where the Company performs a one-step quantitative assessment, the Company compares the estimated fair value of each reporting unit, which is determined based on a combination of an income approach using a discounted cash flow model, and a market approach, which considers comparable companies, to its respective carrying value of net assets, including goodwill. If the estimated fair value of the reporting unit exceeds its carrying value of net assets, the goodwill is not considered impaired. If the carrying value of net assets is higher than the estimated fair value of the reporting unit, the impairment charge is the amount by which the carrying value exceeds the reporting unit’s estimated fair value. The Company reviews its long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The evaluation for recoverability is performed at a level where independent cash flows may be attributed to either an asset or asset group. If the Company determines that the carrying amount of an asset or asset group is not recoverable based on the expected undiscounted future cash flows of the asset or asset group, an impairment loss is recorded equal to the excess of the carrying amounts over the estimated fair value of the long-lived assets. Estimates of future cash flows are based on various factors, including current operating results, expected market trends and competitive influences. The Company also evaluates the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or estimated fair value, less estimated costs to sell. The results of the Company’s goodwill impairment analyses conducted as of June 30, 2023, 2022 and 2021 indicated that no reduction in the carrying amount of the Company’s goodwill was required. Changes in the carrying amount of goodwill during the years ended December 31, 2023, 2022 and 2021 are summarized as follows:
| Expedited Freight |  | Intermodal |  | Consolidated
Balance as of December 31, 2021 | $ | 121,091 |  |  | $ | 97,464 |  |  | $ | 218,555 |
Acquisitions | — |  |  | 34,754 |  |  | 34,754 |
Acquisition adjustment | — |  |  | 4,678 |  |  | 4,678 |
Balance as of December 31, 2022 | $ | 121,091 |  |  | $ | 136,896 |  |  | $ | 257,987 |
Acquisition | 20,629 |  |  | — |  |  | 20,629 |
Acquisition adjustment | — |  |  | 90 |  |  | 90 |
Balance as of December 31, 2023 | $ | 141,720 |  |  | $ | 136,986 |  |  | $ | 278,706 |
The Company’s accumulated goodwill impairment is $25,686 related to impairment charges the Company recorded during 2016 pertaining to its Truckload Services ("TLS") reporting unit. The TLS reporting unit operates within the Expedited Freight reportable segment. As of December 31, 2023, approximate ly $247,760 of goodwill is deductible for tax purposes. The Company amortizes certain acquired identifiable intangible assets on a straight-line basis over their estimated useful lives, which range from one year to 20 years. The acquired intangible assets have a weighted-average useful life as follows:
Intangible Assets |  | Weighted-Average Useful Life
Customer relationships |  | 14 years
Non-compete agreements |  | 5 years
Trade names |  | 4 years
For the years ended December 31, 2023, 2022 and 2021, acquired intangible asset amortization was $16,039, $12,213 and $10,539, respectively. The Company estimates amortization of existing intangible assets will be $16,053 in 2024, $16,052 in 2025, $16,030 in 2026, $15,958 in 2027, and $15,701 in 2028. Changes in the carrying amount of acquired intangible assets during 2023 and 2022 are summarized as follows:
|  | Gross Carrying Amount
|  | Customer Relationships 1 |  | Non-Compete Agreements |  | Trade Names |  | Total
Balance as of December 31, 2021 |  | $ | 202,176 |  |  | $ | 6,826 |  |  | $ | 1,500 |  |  | $ | 210,502 |
Acquisitions |  | 21,655 |  |  | 272 |  |  | — |  |  | 21,927 |
Acquisition adjustment |  | (5,162) |  |  | (692) |  |  | — |  |  | (5,854) |
Balance as of December 31, 2022 |  | $ | 218,669 |  |  | $ | 6,406 |  |  | $ | 1,500 |  |  | $ | 226,575 |
Acquisition |  | 35,200 |  |  | — |  |  | — |  |  | 35,200 |
Acquisition adjustment |  | 45 |  |  | 1 |  |  | — |  |  | 46 |
Balance as of December 31, 2023 |  | $ | 253,914 |  |  | $ | 6,407 |  |  | $ | 1,500 |  |  | $ | 261,821 |
|  | Accumulated Amortization
|  | Customer Relationships |  | Non-Compete Agreements |  | Trade Names |  | Total
Balance as of December 31, 2021 |  | $ | 91,713 |  |  | $ | 5,567 |  |  | $ | 1,500 |  |  | $ | 98,780 |
Amortization expense |  | 11,891 |  |  | 322 |  |  | — |  |  | 12,213 |
Balance as of December 31, 2022 |  | $ | 103,604 |  |  | $ | 5,889 |  |  | $ | 1,500 |  |  | $ | 110,993 |
Amortization expense |  | 15,389 |  |  | 650 |  |  | — |  |  | 16,039 |
Balance as of December 31, 2023 |  | $ | 118,993 |  |  | $ | 6,539 |  |  | $ | 1,500 |  |  | $ | 127,032 |
1 Carrying value as of December 31, 2023, 2022 and 2021 is inclusive of $16,501 of accumulated impairment. Accrued Expenses Accrued expenses as of December 31, 2023 and 2022 consisted of the following:
| December 31, 2023 |  | December 31, 2022
Accrued payroll and related items | $ | 15,267 |  |  | $ | 21,919 |
Insurance and claims accruals | 19,566 |  |  | 19,167 |
Payables to Leased Capacity Providers | 10,663 |  |  | 8,832 |
Accrued interest payable 1 | 17,452 |  |  | — |
Accrued expenses | $ | 62,948 |  |  | $ | 49,918 |
¹ Amounts held in escrow by the VIEs.
Other Current Liabilities Other current liabilities as of December 31, 2023 and 2022 consisted of the following:
| December 31, 2023 |  | December 31, 2022
Income taxes payable | $ | 31,190 |  |  | $ | — |
Accrued legal and professional fees | 34,721 |  |  | 1,294 |
Other | 5,816 |  |  | 2,650 |
Other current liabilities | $ | 71,727 |  |  | $ | 3,944 |
Self-Insurance Loss Reserves The Company’s licensed motor carrier contracts with independent contractor fleets, owner-operators and other third-party transportation capacity providers for most of the transportation services. The Company’s independent contractor fleet owners and owner-operators lease their equipment to the Company (“Leased Capacity Providers”) and own, operate and maintain their own tractors and employ their own drivers. Under U.S. Department of Transportation regulations, the Company is liable for bodily injury and property damage caused by the Leased Capacity Providers and employee drivers while they are operating equipment under the Company’s various motor carrier authorities. The potential liability associated with any accident can be severe and occurrences are unpredictable. For vehicle liability, the Company retains a portion of the risk. Below is a summary of the Company’s risk retention on vehicle liability insurance coverage maintained by the Company through $10,000 (in thousands):
|  | Company Risk Retention |  | Frequency |  | Layer |  | Policy Term
Expedited Freight |  |  |  |  |  |  |  |
LTL business |  | $ | 5,000 |  |  | Occurrence/Accident¹ |  | $0 to $5,000 |  | 10/1/2023 to 10/1/2024
Truckload business |  | $ | 5,000 |  |  | Occurrence/Accident¹ |  | $0 to $5,000 |  | 10/1/2023 to 10/1/2024
LTL, Truckload and Intermodal businesses |  | $ | 5,000 |  |  | Policy Term Aggregate² |  | $5,000 to $10,000 |  | 10/1/2023 to 10/1/2024
Intermodal |  | $ | 1,000 |  |  | Occurrence/Accident¹ |  | $0 to $1,000 |  | 10/1/2023 to 10/1/2024
¹ For each and every accident/incident, the Company is responsible for damages and defense up to these amounts, regardless of the number of claims associated with any accident/incident.
² During the Policy Term, the Company is responsible for damages and defense within the stated Layer up to the stated, aggregate amount of Company Risk Retention before insurance will contribute.
Also, from time to time, when brokering freight, the Company may face claims for the “negligent selection” of outside, contracted carriers that are involved in accidents, and the Company maintains third-party liability insurance coverage with a $100 deductible per occurrence for its brokered services. Additionally, the Company maintains workers’ compensation insurance with a self-insured retention of $500 per occurrence. The Company provides for the estimated costs of vehicle liability and workers’ compensation claims both reported and for claims incurred but not reported. The amount of self-insurance loss reserves and loss adjustment expenses is determined based on an estimation process that uses information obtained from both Company-specific and industry data, as well as general economic information. The most significant assumptions used in the estimation process include determining the trend in loss costs, the expected consistency in the frequency and severity of claims incurred but not yet reported, changes in the timing of the reporting of losses from the loss date to the notification date, and the expected costs to settle unpaid claims. The Company estimates its self-insurance loss exposure by evaluating the merits and circumstances surrounding individual known claims and through actuarial analysis to determine an estimate of probable losses on claims incurred but not reported. T he Company accrues for the costs of the uninsured portion of pending claims, based on the nature and severity of individual claims and historical claims development trends. Estimating the number and severity of claims, as well as related judgment or settlement amounts is inherently difficult. Failure to establish sufficient insurance reserves and adequately estimate for future insurance claims may cause unfavorable differences between actual self-insurance costs and the reserve estimates. As of December 31, 2023 and 2022, the Company recorded self-insurance loss reserves of $66,374 and $67,860, respectively, inclusive of reserves in excess of the self-insured retention limit that are expected to be reimbursed from insurance carriers. As of December 31, 2023, $19,566 was recorded in “Accrued expenses” and $46,808 was recorded in “Other long-term liabilities” in the Consolidated Balance Sheets. As of December 31, 2022, $19,167 was recorded in “Accrued expenses” and $48,693 was recorded in “Other long-term liabilities” in the Consolidated Balance Sheets. As of December 31, 2023 and 2022, the Company recognized a receivable for insurance proceeds and a corresponding claims payable for vehicle liability and workers’ compensation claims in excess of the self-insured retention limit. As of December 31, 2023 and 2022, the Company recorded $26,712 and $29,087, respectively, in “Other assets” and “Other long-term liabilities” in the Consolidated Balance Sheets. Revenue Recognition Revenue is recognized when the Company satisfies the performance obligation by the delivery of a shipment in accordance with contractual agreements, bills of lading and general tariff provisions. The amount of revenue recognized is measured as the consideration the Company expects to receive in exchange for those services pursuant to a contract with a customer. A contract exists once the Company enters into a contractual agreement with a customer. The Company does not recognize revenue in cases where collectibility is not probable, and defers recognition until collection is probable or payment is received. The Company generates revenue from the delivery of a shipment and the completion of related services. Revenue for the delivery of a shipment is recorded over time to coincide with when customers simultaneously receive and consume the benefits of the delivery services. Accordingly, revenue billed to a customer for the transportation of freight are recognized over the transit period as the performance obligation to the customer is satisfied. The Company determines the transit period for a shipment based on the pick-up date and the delivery date, which may be estimated if delivery has not occurred as of a reporting period. The determination of the transit period and how much of it has been completed as of a given reporting date may require the Company to make judgments that impact the timing of revenue recognized. For delivery of shipments with a pick-up date in one reporting period and a delivery date in another reporting period, the Company recognizes revenue based on relative transit time in each reporting period. A portion of the total revenue to be billed to the customer after completion of a delivery is recognized in each reporting period based on the percentage of total transit time that has been completed at the end of the applicable reporting period. Upon delivery of a shipment or related service, customers are billed according to the applicable payment terms. Related services are a separate performance obligation and include accessorial charges such as terminal handling, storage, equipment rentals and customs brokerage. Revenue is classified based on the line of business as the Company believes that best depicts the nature, timing and amount of revenue and cash flows. For all lines of business, the Company records revenue on a gross basis as it is the principal in the transaction as the Company has discretion to determine the amount of consideration. Additionally, the Company has the discretion to select drivers and other vendors for the services provided to customers. These factors, discretion in the amount of consideration and the selection of drivers and other vendors, support revenue recognized on a gross basis. Leases The Company accounts for leases under Accounting Standards Codification 842, Leases, (“ASC 842”), where lessees are required to record an asset (right-of-use asset or finance lease asset) and a lease liability. ASC 842 allows for two types of leases for recognition purposes: operating leases and finance leases. Operating leases result in the recognition of a single lease expense on a straight-line basis over the lease term, while finance leases result in an accelerated expense. The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period. All leases greater than 12 months result in the recognition of a right-of-use asset and liability at the lease commencement date based on the present value of the lease payments over the lease term. The present value of the lease payments is calculated using the applicable weighted-average discount rate. The weighted-average discount rate is based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company estimates an applicable incremental borrowing rate. The incremental borrowing rate is estimated based on the contractual lease term and the Company’s applicable borrowing rate. Business Combinations Upon the acquisition of a business, the fair value of the assets acquired and liabilities assumed are estimated, which may require judgment regarding the identification of acquired assets and liabilities assumed. Once the acquired assets and assumed liabilities are identified, the fair value of the assets and liabilities are estimated using a variety of approaches that require significant judgments. For intangible assets, significant judgments include, but are not limited to, future cash flows, selection of discount rates, determination of terminal growth rates, and estimated useful life and pattern of use of the underlying intangible assets. For tangible assets, significant judgements include, but are not limited to, current market values, physical and functional obsolescence of the assets, and remaining useful lives. Consideration is typically paid in the form of cash paid upon closing while contingent consideration is paid upon the satisfaction of a future obligation. If contingent consideration is included as a component of the consideration, the Company values the consideration as of the acquisition date. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Refer to Note 7, Income Taxes, for further discussion. Net Income (Loss) Per Common Share Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during each period. Restricted shares have non-forfeitable rights to dividends and as a result, are considered participating securities for purposes of computing net income (loss) per common share pursuant to the two-class method. Diluted net income (loss) per common share assumes the exercise of outstanding stock options and the vesting of performance share awards using the treasury stock method when the effects of such assumptions are dilutive. A reconciliation of net income attributable to Forward Air and weighted-average common shares outstanding for purposes of calculating basic and diluted net income (loss) per share during the years ended December 31, 2023, 2022 and 2021 is as follows:
| 2023 |  | 2022 |  | 2021 |  |  |  |  |  |
Numerator: |  |  |  |  |  |  |  |  |  |  |
Net income and comprehensive income from continuing operations | $ | 42,803 |  |  | $ | 179,414 |  |  | $ | 106,879 |  |  |  |  |  |  |
Net income and comprehensive income from discontinued operations | 124,548 |  |  | 13,777 |  |  | (1,020) |  |  |  |  |  |  |
Net income attributable to Forward Air | $ | 167,351 |  |  | $ | 193,191 |  |  | $ | 105,859 |  |  |  |  |  |  |
Income allocated to participating securities from continuing operations | (220) |  |  | (993) |  |  | (737) |  |  |  |  |  |  |
Income allocated to participating securities from discontinued operations | (639) |  |  | (77) |  |  | — |  |  |  |  |  |  |
Income allocated to participating securities | (859) |  |  | (1,070) |  |  | (737) |  |  |  |  |  |  |
Numerator for basic and diluted net income per share for continuing operations | $ | 42,583 |  |  | $ | 178,421 |  |  | $ | 106,142 |  |  |  |  |  |  |
Numerator for basic and diluted net (loss) income per share for discontinued operations | $ | 123,909 |  |  | $ | 13,700 |  |  | $ | (1,020) |  |  |  |  |  |  |
Denominator: |  |  |  |  |  |  |  |  |  |  |
Denominator for basic net income per share - weighted-average number of common shares outstanding | 25,913 |  |  | 26,783 |  |  | 27,155 |  |  |  |  |  |  |
Dilutive stock options and performance share awards | 90 |  |  | 143 |  |  | 137 |  |  |  |  |  |  |
Denominator for diluted net income per share - weighted-average number of common shares and common share equivalents outstanding | 26,003 |  |  | 26,926 |  |  | 27,292 |  |  |  |  |  |  |
Basic net income (loss) per share: |  |  |  |  |  |  |  |  |  |  |
Continuing operations | $ | 1.64 |  |  | $ | 6.66 |  |  | $ | 3.91 |  |  |  |  |  |  |
Discontinued operations | 4.78 |  |  | 0.51 |  |  | (0.04) |  |  |  |  |  |  |
Net income per basic share | $ | 6.42 |  |  | $ | 7.17 |  |  | $ | 3.87 |  |  |  |  |  |  |
Diluted net income (loss) per share: |  |  |  |  |  |  |  |  |  |  |
Continuing operations | $ | 1.64 |  |  | $ | 6.63 |  |  | $ | 3.89 |  |  |  |  |  |  |
Discontinued operations | 4.77 |  |  | 0.51 |  |  | (0.04) |  |  |  |  |  |  |
Net income per diluted share 1 | $ | 6.40 |  |  | $ | 7.14 |  |  | $ | 3.85 |  |  |  |  |  |  |
1 Rounding may impact summation of amounts. The number of shares that were not included in the calculation of net income (loss) per diluted share because to do so would have been anti-dilutive for the years ended December 31, 2023, 2022 and 2021 are as follows:
| 2023 |  | 2022 |  | 2021 |  |  |  |  |  |
Anti-dilutive stock options | 112 |  |  | 57 |  |  | — |  |  |  |  |  |  |
Anti-dilutive performance shares | 18 |  |  | 13 |  |  | — |  |  |  |  |  |  |
Anti-dilutive restricted shares and deferred stock units | 67 |  |  | 2 |  |  | — |  |  |  |  |  |  |
Total anti-dilutive shares | 197 |  |  | 72 |  |  | — |  |  |  |  |  |  |
Share-Based Compensation The Company grants awards under the stock incentive plans to certain employees of the Company. The awards include stock options, restricted shares and performance shares. The fair value of the stock options is estimated on the grant date using the Black-Scholes option pricing model, and share-based compensation expense is recognized on a straight-line basis over the three-year vesting period. The fair value of the restricted shares is the quoted market value of the Company’s common stock on the grant date, and the share-based compensation expense is recognized on a straight-line basis over the vesting period. For certain performance shares, the fair value is the quoted market value of the Company’s common stock on the grant date less the present value of the expected dividends not received during the relevant period. For these performance shares, the share-based compensation expense is recognized on a straight-line basis over the vesting period based on the projected assessment of the level of performance that will be achieved. The fair value of other performance shares that have a financial target of the Company’s total shareholder return as compared to the total shareholder return of a selected peer group, is estimated on the grant date using a Monte Carlo simulation model. The share-based compensation expense is recognized on a straight-line basis over the vesting period. All share-based compensation expense is recognized in salaries, wages and employee benefits in the Consolidated Statements of Comprehensive Income. Refer to Note 6, Stock Incentive Plan, for further discussion. Ransomware Incident In December 2020, the Company detected a ransomware incident impacting its operational and information technology systems, which caused service delays for many of its customers (“Ransomware Incident”). Promptly upon its detection of the incident, the Company initiated response protocols, launched an investigation and engaged the services of cybersecurity and forensics professionals. The Company also engaged with the appropriate law enforcement authorities. The Company continued to cooperate with law enforcement in connection with the criminal investigation into those responsible for the Ransomware Incident. For the year ended 2021 expenses related to the Ransomware Incident were $434, which were recorded in “Other operating expenses” in the Consolidated Statements of Comprehensive Income. No expenses were incurred for the years ended December 31, 2023 and 2022. Expenses include costs to investigate and remediate the Ransomware Incident and legal and other professional services related to the incident. Recent Accounting Pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the financial condition or the results of operations of the Company.

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