C. H. Robinson Worldwide 10-Q 2025-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number: 000-23189

C.H. ROBINSON WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

14701 Charlson Road

Eden Prairie, MN 55347

(Address of principal executive offices, including zip code)

952-937-8500

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2025, the number of shares outstanding of the registrant’s Common Stock, par value $0.10 per share, was 118,730,622.

C.H. ROBINSON WORLDWIDE, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except per share data)

See accompanying notes to the condensed consolidated financial statements.

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(unaudited, in thousands except per share data)

See accompanying notes to the condensed consolidated financial statements.

C.H. ROBINSON WORLDWIDE, INC.

Condensed Consolidated Statements of Stockholders’ Investment

(unaudited, in thousands, except per share data)

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The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes.

FORWARD-LOOKING INFORMATION

Our Quarterly Report on Form 10-Q, including this discussion and analysis of our financial condition and results of operations and our disclosures about market risk, contains certain “forward-looking statements.” These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to, factors such as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry that could adversely impact our profitability and ability to achieve our long-term growth targets; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with seasonal changes or significant disruptions in the transportation industry; risks associated with identifying and completing suitable acquisitions; our dependence upon and changes in relationships with existing contracted truck, rail, ocean, and air carriers; risks associated with the loss of significant customers; risks associated with reliance on technology to operate our business; cybersecurity related risks; our ability to staff and retain employees; risks associated with operations outside of the United States; our ability to successfully integrate the operations of acquired companies with our historic operations or efficiently manage divestitures; climate change related risks; risks associated with our indebtedness; risks associated with interest rates; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulations including environmental-related regulations; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of changes in political and governmental conditions; changes to our capital structure; changes due to catastrophic events; risks associated with the usage of artificial intelligence technologies; risks associated with cybersecurity events; and other risks and uncertainties, including those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 14, 2025, as well as the updates to these risk factors included in Part II—“Item 1A, Risk Factors,” herein.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.

OVERVIEW

C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the largest global logistics providers in the world. We deliver logistics like no one else. Companies around the world look to us to reimagine supply chains, advance freight technology, and solve logistics challenges—from the simple to the most complex. We are grounded in our promise to deliver exceptional customer success, using our expertise, scale, and tailored solutions to help customers navigate increasingly complex global supply chains.

Our adjusted gross profits and adjusted gross profit margin are non-GAAP financial measures. Adjusted gross profits are calculated as gross profits excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. Adjusted gross profit margin is calculated as adjusted gross profits divided by total revenues. We believe adjusted gross profits and adjusted gross profit margin are useful measures of our ability to source, add value, and sell services and products that are provided by third parties, and we consider adjusted gross profits to be a primary performance measurement. Accordingly, the discussion of our results of operations often focuses on the changes in our adjusted gross profits and adjusted gross profit margin.

The reconciliation of gross profits to adjusted gross profits and gross profit margin to adjusted gross profit margin is presented below (dollars in thousands):

Our adjusted operating margin is a non-GAAP financial measure calculated as operating income divided by adjusted gross profits. We believe adjusted operating margin is a useful measure of our profitability in comparison to our adjusted gross profits, which we consider a primary performance metric as discussed above. The reconciliation of operating margin to adjusted operating margin is presented below (dollars in thousands):

MARKET TRENDS

The North America surface transportation market continued to experience an imbalance of excess carrier capacity and industry freight volumes in the first quarter of 2025. These conditions are typically referred to as a soft market. While capacity has continued to exit the market it has been largely offset by declining industry freight volumes, as measured by the Cass Freight Index, which decreased in the first quarter of 2025 compared to both the prior quarter and the first quarter of 2024. Despite these soft market conditions, freight costs per mile temporarily increased in January due to severe weather impacts before declining back to the suppressed levels experienced in recent quarters for the remainder of the first quarter of 2025. One of the key metrics we use to measure market conditions is the truckload routing guide depth from our Managed Solutions business. This metric measures the average number of carriers contacted before securing a transportation provider. Routing guide depth of 1 would be perfect performance and 2 would be extremely poor. The average routing guide depth in the first quarter of 2025 remained consistent with the end of 2024 at 1.3. Seasonal factors, along with macroeconomic and geopolitical uncertainty, may impact future periods. However, we expect that the current soft market conditions will persist until carrier capacity better aligns with shipper demand.

The global forwarding market remains volatile, driven by tariff and macroeconomic uncertainty. Additionally, ongoing diversions from the Suez Canal continue to result in long transit times straining available capacity. Ocean freight volumes in the first quarter of 2025 benefited from increased shipping activity ahead of tariff implementations. However, industry volumes will likely face significant challenges in the second quarter of 2025 as shippers navigate the complexities of the evolving tariff and geopolitical landscape. Ocean freight rates declined in the first quarter of 2025 compared to the prior year and declined each month within the first quarter of 2025. The combination of tariff and geopolitical uncertainty, capacity continuing to enter the market, and the impact of disruptions including the Red Sea conflict will likely continue to affect ocean freight pricing in the near term, although the duration and extent remain uncertain. The air freight market faces many of the same uncertainties but operated in a more balanced fashion than the ocean market in the first quarter of 2025 as capacity and demand have largely stabilized.

BUSINESS TRENDS

Our first quarter of 2025 surface transportation results continued to be impacted by the prevailing soft market conditions discussed in the market trends section. These conditions led to most shipments moving under committed pricing agreements and suppressed freight rates for the limited number of shipments reaching the competitive spot market. Despite these challenging market conditions, we were able to improve our adjusted gross profits per transaction in the first quarter of 2025 compared to the same period in 2024 as a result of disciplined pricing and capacity procurement efforts leading to better adjusted gross profits per transaction within our transactional portfolio. Industry freight volumes, as measured by the Cass Freight Index, decreased approximately six percent in the first quarter of 2025 compared to the same period of 2024. Despite these challenging market conditions, our combined North American Surface Transportation (“NAST”) truckload and less than truckload (“LTL”) volume outperformed the market, decreasing only one percent in the first quarter of 2025 compared to the first quarter of 2024. Our average truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 3.0 percent during the first quarter of 2025 compared to the first quarter of 2024, largely driven by the impacts of severe weather in January. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, increased approximately 4.0 percent during the first quarter of 2025.

Our first quarter of 2025 global forwarding results continue to be impacted by the volatile market conditions discussed in the market trends section. Assuming no significant changes to the current tariff and geopolitical landscape, our ocean freight volumes may be adversely impacted in the near term although the duration and extent remain uncertain. Our ocean total revenues declined in the first quarter of 2025 driven by declining market rates compared to the first quarter of 2024. Our ocean freight volumes increased 1.5 percent in the first quarter of 2025, driven by the strong execution of our global forwarding team and the impact of increased shipping activity ahead of tariff implementations discussed above. Our air freight tonnage decreased 3.0 percent compared to the first quarter of 2024.

As part of our enterprise strategy to drive focus on profitable growth in our four core modes—North American truckload and LTL and global ocean and air—as engines to ignite growth and create the most value for our stakeholders we divested our Europe Surface Transportation business. The sale closed effective February 1, 2025. Europe Surface Transportation provided transportation and logistics services, including truckload and LTL transportation services across Europe and represented the majority of our Other Surface Transportation operations included in All Other and Corporate.

SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select first quarter 2025 year-over-year operating comparisons to the first quarter 2024:

• Total revenues decreased 8.3 percent to $4.0 billion, primarily driven by the divestiture of our Europe Surface Transportation business, lower volume in our truckload services and lower pricing in our ocean services.

• Gross profits increased 1.5 percent to $657.4 million. Adjusted gross profits increased 2.3 percent to $673.1 million, primarily driven by higher adjusted gross profit per transaction in our truckload and LTL services.

• Personnel expenses decreased 8.1 percent to $348.6 million, primarily due to cost optimization efforts and productivity improvements and prior year restructuring charges related to workforce reductions. Average employee headcount decreased 11.0 percent.

• Other selling, general, and administrative (“SG&A”) expenses decreased 2.5 percent to $147.7 million primarily due to restructuring charges in the prior year related to the impairment of internally developed software.

• Income from operations increased 39.1 percent to $176.9 million, due to the increase in adjusted gross profit and decreased operating expenses.

• Adjusted operating margin of 26.3 percent increased 700 basis points.

• Interest and other income/expense, net totaled $20.1 million of expense, consisting primarily of $16.8 million of interest expense, which decreased $5.3 million compared to last year, and a $3.4 million net loss from foreign currency revaluation and realized foreign currency gains and losses.

• The effective tax rate in the quarter was 13.7 percent compared to 15.8 percent in the first quarter last year.

• Net income totaled $135.3 million, an increase of 45.6 percent from a year ago.

• Diluted earnings per share increased 42.3 percent to $1.11.

• Cash flow from operations increased $139.9 million in the three months ended March 31, 2025, primarily driven by a favorable change in net operating working capital used for operations and the increase in net income.

CONSOLIDATED RESULTS OF OPERATIONS

The following table summarizes our results of operations (dollars in thousands, except per share data):

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

A reconciliation of our reportable segments to our consolidated results can be found in Note 8, Segment Reporting, in Part I, Financial Information of this Quarterly Report on Form 10-Q.

Consolidated Results of Operations—Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Total revenues and direct costs. Total transportation revenues and direct costs decreased primarily due to the divestiture of our Europe Surface Transportation business, along with lower North America truckload volume, and lower pricing in ocean services. Carrier capacity has continued to exit the North America truckload market although it has been largely offset by declining industry freight volumes, as measured by the Cass Freight Index, which decreased in the first quarter of 2025. As a

result of the continued soft market conditions, most shipments continued to move under committed pricing agreements, limiting the number of shipments reaching the competitive spot market. Ocean freight rates in the first quarter of 2025 declined despite the continued market volatility discussed in the market trends section above. Our sourcing total revenue and direct costs decreased, driven by lower average pricing with foodservice customers.

Gross profits and adjusted gross profits. Our transportation adjusted gross profits increased, driven by higher adjusted gross profits per transaction in truckload and to a lesser extent in LTL services. The improvement in truckload services was driven by improved execution and disciplined pricing and capacity procurement within our transactional portfolio. Sourcing adjusted gross profits increased, driven by an increase in integrated supply chain solutions for retail and foodservice customers.

Operating expenses. Personnel expenses decreased primarily due to cost optimization efforts and productivity improvements, the divestiture of our Europe Surface Transportation business, and prior year restructuring charges related to workforce reductions discussed below. Other SG&A expenses decreased primarily due to restructuring charges in the prior year related to the impairment of internally developed software discussed below.

In addition to the above, our personnel expenses in the first quarter of 2025 included $1.2 million of severance and related personnel expenses, and $1.2 million of other SG&A expenses resulting from the divestiture of our Europe Surface Transportation business. Refer to Note 14, Divestitures, for further discussion related to the divestiture of our Europe Surface Transportation business. We also incurred $6.3 million of other SG&A expenses in the first quarter of 2025 resulting from an impairment charge on our Kansas City regional center lease resulting from the execution of a sublease agreement on a portion of the building.

Our personnel expenses for the first quarter of 2024 included $7.9 million of severance and related personnel expenses. We also incurred a $5.0 million impairment in other SG&A expenses primarily related to capitalized internally developed software. These expenses were both associated with our 2024 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 Restructuring Program.

Interest and other income/expense, net. Interest and other income/expense, net primarily consisted of interest expense of $16.8 million. Interest expense decreased $5.3 million during the first quarter of 2025, due to a lower average debt balance and lower variable interest rates. The current year included a $3.4 million net loss from foreign currency revaluation and realized foreign currency gains and losses, compared to a $3.9 million net gain in the prior year.

Provision for income taxes. Our effective income tax rate was 13.7 percent for the first quarter of 2025 compared to 15.8 percent for the first quarter of 2024. The effective income tax rate for the first quarter of 2025 was lower than the statutory federal income tax rate primarily due to the tax benefit of share-based payment awards, which reduced the effective tax rate by 6.1 percentage points. Additionally, a lower tax rate on foreign earnings and U.S. tax credits and incentives decreased the effective income tax rate by 2.7 percentage points and 1.6 percentage points, respectively, during the first quarter of 2025. The effective income tax rate for the first quarter of 2024 was lower than the statutory federal income tax rate primarily due to the tax impact of U.S. tax credits and incentives, which reduced the effective tax rate by 7.8 percentage points. These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by 2.8 percentage points during the first quarter of 2024.

NAST Segment Results of Operations

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Total revenues and direct costs. NAST total revenues and direct costs decreased primarily due to a volume decline and lower pricing and purchased transportation costs in truckload services. The lower pricing and purchased transportation costs in truckload services continue to be driven by the ongoing soft market conditions as the market remains in a prolonged stage of oversupplied carrier capacity with decreased industry freight volumes as discussed in the market and business trends section above.

Gross profits and adjusted gross profits. NAST adjusted gross profits increased due to higher adjusted gross profits per transaction in truckload and to a lesser extent in LTL services. The improvement in truckload services was driven by improved execution and disciplined pricing and capacity procurement within our transactional portfolio. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, increased approximately 4.0 percent in the first quarter of 2025 compared to the first quarter of 2024. Our truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 3.0 percent in the first quarter of 2025 compared to the first quarter of 2024.

Operating expenses. NAST personnel expenses decreased driven by cost optimization efforts and productivity improvements, including lower average employee headcount. NAST other SG&A expenses decreased slightly as declines across several categories were mostly offset by higher claims and higher allocated corporate expenses.

In addition to the above, NAST personnel expenses in the first quarter of 2024 included $3.0 million of severance and related personnel expenses. We also incurred $1.9 million of impairment losses in the first quarter of 2024 included in other SG&A expenses related to capitalized internally developed software. These expenses were both associated with our 2024 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 Restructuring Program.

The operating expenses of NAST and all other segments include allocated corporate expenses. Allocated personnel expenses consist primarily of stock-based compensation allocated based upon segment participation levels in our equity plans. Remaining corporate allocations, including corporate functions and technology related expenses, are included within each segment’s other SG&A expenses, and are allocated based upon relevant segment operating metrics.

Global Forwarding Segment Results of Operations

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Total revenues and direct costs. Global Forwarding total revenues and direct costs decreased driven by lower pricing and purchased transportation costs in ocean services partially offset by an increase in ocean services volume, compared to the first quarter of 2024. Ocean pricing and purchased transportation declined throughout the first quarter of 2025. Assuming no significant changes to the current tariff and geopolitical landscape, our ocean freight volumes may be adversely impacted in the near term although the extent and duration remain uncertain.

Gross profits and adjusted gross profits. Global Forwarding adjusted gross profits increased driven by higher adjusted gross profits per ton in air freight and an increase in ocean volumes. The increase in ocean volume was driven by increased activity by shippers discussed in the market trends section above. Customs adjusted gross profits increased driven by both an increase in adjusted gross profits per transaction and an increase in transaction volumes.

Operating expenses. Personnel expenses decreased driven by cost optimization efforts and productivity improvements, including lower average employee headcount. Global Forwarding other SG&A expenses increased primarily related to higher allocated corporate expenses.

In addition to the above, Global Forwarding personnel expenses for the first quarter of 2024 included $3.2 million of severance and related personnel expenses. We also incurred $0.2 million in other SG&A expenses in the first quarter of 2024. These expenses were both associated with our 2024 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 Restructuring Program.

All Other and Corporate Segment Results of Operations

All Other and Corporate includes our Robinson Fresh and Managed Solutions segments, as well as Other Surface Transportation outside of North America and other miscellaneous revenues and unallocated corporate expenses.

(1) Adjusted gross profit margin is a non-GAAP financial measure explained above.

Three Months Ended March 31, 2025, Compared to the Three Months Ended March 31, 2024

Total revenues and direct costs. Total revenues and direct costs decreased driven by a decline in Europe truckload services in Other Surface Transportation resulting from the divestiture of our Europe Surface Transportation business on February 1, 2025. Refer to Note 14, Divestitures, for further discussion related to the divestiture of our Europe Surface Transportation business.

Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased due to an increase in integrated supply chain solutions for retail and foodservice customers. Managed Solutions adjusted gross profits decreased driven by lower transaction volume. Other Surface Transportation adjusted gross profits decreased driven by a decline in Europe truckload services in Other Surface Transportation resulting from the divestiture of our Europe Surface Transportation business on February 1, 2025. Refer to Note 14, Divestitures, for further discussion related to the divestiture of our Europe Surface Transportation business.

Restructuring, lease impairment charge, and divestiture expenses. All Other and Corporate personnel expenses in the first quarter of 2025 included $1.2 million of severance and related personnel expenses and $1.2 million of other SG&A expenses resulting from the divestiture of our Europe Surface Transportation business. Refer to Note 14, Divestitures, for further discussion related to the divestiture of our Europe Surface Transportation business. We also incurred $6.3 million of other SG&A expenses in the first quarter of 2025 from an impairment charge on our Kansas City regional center lease resulting from the execution of a sublease agreement on a portion of the building.

Personnel expenses in the first quarter of 2024 included $1.7 million of severance and related personnel expenses. We also incurred a $2.9 million impairment loss in the first quarter of 2024 included in other SG&A expenses related to capitalized internally developed software. These expenses were both associated with our 2024 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 Restructuring Program.

LIQUIDITY AND CAPITAL RESOURCES

We have historically generated substantial cash from operations, which has enabled us to fund our organic growth while paying cash dividends and repurchasing stock. In addition, we maintain the following debt facilities as described in Note 4, Financing Arrangements (in thousands):

(1) Net of unamortized discounts and issuance costs.

We expect to use our current debt facilities and potentially other indebtedness incurred in the future to assist us in continuing to fund working capital, capital expenditures, possible acquisitions, dividends, share repurchases or other investments.

Cash and cash equivalents totaled $129.9 million as of March 31, 2025, and $145.8 million as of December 31, 2024. Cash and cash equivalents held outside the United States totaled $121.3 million as of March 31, 2025, and $134.0 million as of December 31, 2024.

We prioritize our investments to grow our market share and expand globally in key industries, trade lanes, and geographies, and to digitize our customer, carrier, and internal tools to support our organic growth. We are continually looking for acquisitions, but those acquisitions must fit our culture and enhance our growth opportunities.

The following table summarizes our major sources and uses of cash and cash equivalents (dollars in thousands):

Cash flows from operating activities. In the prior year, cash flows from operating activities were negatively impacted by increasing ocean freight rates resulting in an increase in net operating working capital and a use of cash for operations. In the current year, our improved net income and a lesser increase in net operating working capital drove a significant improvement in cash flows from operating activities in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. We continue to closely monitor credit and collections activities and the quality of our accounts receivable balance to minimize risk as well as work with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.

Cash flows from investing activities. Capital expenditures consisted primarily of investments in software, which are intended to develop and deliver scalable solutions by transforming our processes, accelerate the pace of development and prioritizing data integrity, improve our customer and carrier experience, and increase efficiency to help expand our adjusted operating margins and grow the business.

The sale of our Europe Surface Transportation business closed during the three months ended March 31, 2025. We received $27.7 million of consideration at closing with the remaining consideration due in fixed equal installments on the 12-month and 18-month anniversary of the closing date subject to post-closing working capital adjustments. The remaining consideration due is collateralized by all current and future accounts receivable of the Europe Surface Transportation business.

Cash flows from financing activities. Net borrowing on debt in the three months ended March 31, 2024, were primarily to fund operations. Cash used for financing activities in the three months ended March 31, 2025 increased as we resumed share repurchases under our board authorization in addition to an increase of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans compared to the prior year. The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.

We believe that, assuming no change in our current business plan, our available cash, together with expected future cash generated from operations, the amount available under our credit facilities, and credit available in the market, will be sufficient to satisfy our anticipated needs for working capital, capital expenditures, and cash dividends for at least the next 12 months and the foreseeable future. We also believe we could obtain funds under lines of credit or other forms of indebtedness on short notice, if needed.

As of March 31, 2025, we were in compliance with all of the covenants under our debt agreements.

Recently Issued Accounting Pronouncements

Refer to Note 1, Basis of Presentation, contained in this Quarterly Report and in the company's 2024 Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Refer to the company's 2024 Annual Report on Form 10-K for a complete discussion regarding our critical accounting policies and estimates. As of March 31, 2025, there were no material changes to our critical accounting policies and estimates.

Refer to the company’s 2024 Annual Report on Form 10-K for a discussion on the company’s market risk. As of March 31, 2025, there were no material changes in market risk from those disclosed in the company’s 2024 Annual Report on Form 10-K.

(a) Evaluation of disclosure controls and procedures.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025.

(b) Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not subject to any pending or threatened litigation other than routine litigation arising in the ordinary course of our business operations, including certain contingent auto liability cases. For some legal proceedings, we have accrued an amount that reflects the aggregate liability deemed probable and estimable, but this amount is not material to our consolidated financial position, results of operations, or cash flows. Because of the preliminary nature of many of these proceedings, the difficulty in ascertaining the applicable facts relating to many of these proceedings, the inconsistent treatment of claims made in many of these proceedings, and the difficulty of predicting the settlement value of many of these proceedings, we are often unable to estimate an amount or range of any reasonably possible additional losses. However, based upon our historical experience, the resolution of these proceedings is not expected to have a material effect on our consolidated financial position, results of operations, or cash flows.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition, or future results. There have not been material changes in our risk factors set forth in the company’s 2024 Annual Report on Form 10-K. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about company purchases of common stock during the quarter ended March 31, 2025:

(1) The total number of shares purchased based on trade date includes: (i) 484,815 shares of common stock purchased under the authorization described below; and (ii) 481,604 shares of common stock surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2) In December 2021, the Board of Directors increased the number of shares authorized for repurchase by 20,000,000 shares. As of March 31, 2025, there were 6,278,630 shares remaining for future repurchases. Repurchases can be made in the open market or in privately negotiated transactions, including Rule 10b5-1 plans and accelerated repurchase programs.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

During the three months ended March 31, 2025, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Exhibits filed with, or incorporated by reference into, this Quarterly Report:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on May 2, 2025.