Note 3 - Restructuring and Cost Savings Initiatives

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

3. RESTRUCTURING AND COST SAVINGS INITIATIVES

Since the first quarter of 2020, we made significant changes to our operational business units, overhead structure and branding strategy in an effort to streamline our business in a manner that we believe will allow us to significantly lower our fixed costs, pay down debt and produce consistent acceptable margins. These changes include (i) a reduction in our fleet of tractors and refrigerated trailers, which have historically produced unacceptable or unprofitable operating income, (ii) reallocation of our operating fleet toward our more profitable expedited, dedicated and irregular route operations, (iii) the sale of our Hutchins, Texas terminal and discontinued use of our Texarkana, Arkansas terminal, (iv) changes to key management and reductions to headcount, (v) the closure and early termination of our leased office space in Chattanooga, Tennessee that our brokerage group occupied, (vi) the installation of new operational processes allowing us to abandon or discontinue the use of a number of peripheral information technology infrastructure and applications and (vii) a change in our branding strategy to focus on one company name, phasing out the use of the Landair trade name.

Although the significant majority of restructuring and cost savings initiatives were completed in the second quarter of 2020, we incurred additional costs in the third and fourth quarters of 2020 as we continued to optimize our fleet profile and management team.

In the second quarter of 2020 we discontinued the use of a significant amount of property and equipment, including assets owned and held under operating leases. We adjusted the carrying value of the owned property and equipment down to fair market value less estimated costs of disposal and classified them as available held for sale as of June 30, 2020. We expect to sell all the assets within the next twelve months. We terminated the lease agreement on a leased office facility in Chattanooga, TN during the second quarter of 2020 and recognized the related loss on the termination of the right of use asset and the abandonment of leasehold improvements within the impairment of property and equipment line item of the consolidated statements of operations. The following table provides a summary of the asset groups impaired, amount of the impairment and a description of the valuation technique used to determine fair value. We believe that these impairment activities are substantially complete. Accordingly, we incurred no additional charges during the third and fourth quarters of 2020 and do not expect to incur additional charges in connection with this activity. There were no such charges in 2019 or 2018.

(in thousands)	Twelve months ended December 31,
Description	2020		Segment(s) Impacted	Value Determination
Revenue equipment	$	16,779	Expedited and Dedicated	Third Party Market Appraisal
Terminal facility, leasehold improvements, and equipment, Texarkana, AR		7,319	Expedited and Dedicated	Third Party Market Appraisal
Leased office facility, Chattanooga, TN		2,236	Managed Freight	Loss on ROU Asset and Leasehold Improvements
Training and orientation center, Chattanooga, TN		235	Expedited and Dedicated	Quoted Market Price
Impairment of right-of use asset, long lived properties, and equipment	$	26,569

Other restructuring related gains and charges incurred during the twelve months ended December 31, 2020 are summarized in the table below. Unless noted below, we believe that these other restructuring related gains and charges are substantially complete. Accordingly, we do not expect to incur additional charges in connection with this activity. There were no such activities in 2019 or 2018.

(in thousands)	Twelve months ended December 31,
Description	2020			Segment(s) Impacted
Gain on disposal of terminals, net	$	(4,740	)	Expedited and Dedicated
Restructuring related separation and other		4,334		Expedited, Dedicated, and Managed Freight
Abandonment of information technology infrastructure		1,048		Expedited and Dedicated
Change in useful life/abandonment of intangible assets		1,331		Dedicated, Managed Freight, and Warehousing
Abandonment of revenue equipment held under operating leases		825		Expedited and Dedicated
Contract exit costs and restructuring related costs and professional fees		695		Expedited and Dedicated
Total restructuring	$	3,493