COVENANT LOGISTICS GROUP, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) September 30, 2025 December 31, 2024 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,686 $ 35,619 Accounts receivable, net of allowance of $ 2,001 in 2025 and $ 2,360 in 2024 150,357 141,635 Drivers' advances and other receivables, net of allowance of $ 586 in 2025 and $ 593 in 2024 4,807 3,999 Inventory and supplies 6,145 5,648 Prepaid expenses 20,358 19,975 Assets held for sale 1,169 132 Income taxes receivable 8,752 6,499 Other short-term assets 298 343 Total current assets 194,572 213,850 Property and equipment, at cost 773,638 729,404 Less: accumulated depreciation and amortization ( 231,546 ) ( 204,595 ) Net property and equipment 542,092 524,809 Goodwill 78,941 78,941 Other intangibles, net 93,559 90,126 Other receivables 21,557 3,163 Other assets, net 94,479 86,470 Noncurrent assets of discontinued operations - 209 Total assets $ 1,025,200 $ 997,568 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 32,618 $ 31,939 Accrued expenses 59,620 51,328 Current maturities of long-term debt 63,723 64,210 Current portion of finance lease obligations 817 751 Current portion of operating lease obligations 11,266 10,349 Current portion of insurance and claims accrual 24,396 22,700 Total current liabilities 192,440 181,277 Long-term debt 203,911 187,085 Long-term portion of finance lease obligations 2,571 3,192 Long-term portion of operating lease obligations 26,818 31,302 Insurance and claims accrual 39,867 19,134 Deferred income taxes 122,221 117,650 Other long-term liabilities 13,656 19,588 Total liabilities 601,484 559,228 Stockholders' equity: Class A common stock, $ .01 par value; 40,000,000 shares authorized; 21,855,878 shares issued and 20,347,178 outstanding as of September 30, 2025; and 21,774,350 shares issued and outstanding as of December 31, 2024 219 218 Class B common stock, $ .01 par value; 5,000,000 shares authorized; 4,700,000 shares issued and outstanding 47 47 Additional paid-in-capital 159,672 158,907 Treasury stock at cost; 1,508,700 and no shares as of September 30, 2025 and December 31, 2024, respectively ( 35,047 ) - Accumulated other comprehensive income 604 1,035 Retained earnings 298,221 278,133 Total stockholders' equity 423,716 438,340 Total liabilities and stockholders' equity $ 1,025,200 $ 997,568 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 3 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE three and nine months ended September 30, 2025 and 2024 (In thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, (unaudited) (unaudited) 2025 2024 2025 2024 Revenues Freight revenue $ 268,840 $ 258,599 $ 788,591 $ 762,796 Fuel surcharge revenue 28,049 29,286 80,507 91,349 Total revenue $ 296,889 $ 287,885 $ 869,098 $ 854,145 Operating expenses: Salaries, wages, and related expenses $ 109,745 $ 110,815 $ 323,845 $ 317,523 Fuel expense 29,506 28,545 85,663 88,590 Operations and maintenance 19,352 17,690 52,168 46,838 Revenue equipment rentals and purchased transportation 72,908 64,434 206,504 193,940 Operating taxes and licenses 3,304 3,227 10,326 8,871 Insurance and claims 14,179 12,241 46,769 44,779 Communications and utilities 1,631 1,330 4,580 4,005 General supplies and expenses 15,872 11,937 44,124 47,244 Depreciation and amortization 22,953 21,222 67,869 64,460 Loss on disposition of property and equipment, net ( 487 ) 209 134 1,748 Total operating expenses 288,963 271,650 841,982 817,998 Operating income 7,926 16,235 27,116 36,147 Interest expense, net 3,468 3,204 8,795 10,341 Income from equity method investment ( 3,578 ) ( 3,993 ) ( 11,622 ) ( 11,763 ) Income before income taxes 8,036 17,024 29,943 37,569 Income tax expense 1,772 4,141 7,276 8,817 Income from continuing operations, net of tax 6,264 12,883 22,667 28,752 Income from discontinued operations, net of tax 2,829 150 2,829 450 Net income $ 9,093 $ 13,033 $ 25,496 $ 29,202 Basic income per share: (1) Income from continuing operations $ 0.25 $ 0.49 $ 0.88 $ 1.09 Income from discontinued operations 0.11 0.01 0.11 0.02 Net income per share $ 0.36 $ 0.49 $ 0.99 $ 1.11 Diluted income per share: (1) Income from continuing operations $ 0.24 $ 0.46 $ 0.83 $ 1.04 Income from discontinued operations 0.11 0.01 0.10 0.02 Net income per share $ 0.35 $ 0.47 $ 0.94 $ 1.06 Basic weighted average shares outstanding 25,030 26,354 25,872 26,274 Diluted weighted average shares outstanding 26,301 27,802 27,156 27,654 (1) Total may not sum due to rounding. The accompanying notes are an integral part of these condensed consolidated financial statements. Page 4 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE three and nine months ended September 30, 2025 and 2024 (Unaudited and in thousands ) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 9,093 $ 13,033 $ 25,496 $ 29,202 Other comprehensive income: Unrealized gain (loss) on effective portion of cash flow hedges, net of tax of ($ 1 ) and $ 88 in 2025 and $ 152 and ($ 20 ) in 2024, respectively 4 ( 435 ) ( 253 ) 57 Reclassification of cash flow hedge gains into statement of operations, net of tax of $ 20 and $ 62 in 2025 and $ 34 and $ 103 in 2024, respectively ( 58 ) ( 96 ) ( 178 ) ( 294 ) Total other comprehensive loss(1) ( 54 ) ( 531 ) ( 431 ) ( 237 ) Comprehensive income $ 9,039 $ 12,502 $ 25,065 $ 28,965 (1) It is the Company’s policy to release income tax effects from accumulated other comprehensive income at such time as the earnings or loss of the related activity are recognized in earnings. The accompanying notes are an integral part of these condensed consolidated financial statements. Page 5 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE three and nine months ended September 30, 2025 and 2024 (Unaudited and in thousands) For the Three and Nine Months Ended September 30, 2025 Accumulated Additional Other Total Common Stock Paid-In Treasury Comprehensive Retained Stockholders' Class A Class B Capital Stock Income Earnings Equity Balances at December 31, 2024 $ 218 $ 47 $ 158,907 $ - $ 1,035 $ 278,133 $ 438,340 Net income - - - - - 6,563 6,563 Cash dividend ($ 0.07 per common share) - - - - - ( 1,858 ) ( 1,858 ) Other comprehensive loss - - - - ( 253 ) - ( 253 ) Stock-based employee compensation expense - - 1,011 - - - 1,011 Exercise of stock options 1 - 399 - - - 400 Issuance of restricted shares, net - - ( 559 ) - - - ( 559 ) Balances at March 31, 2025 $ 219 $ 47 $ 159,758 $ - $ 782 $ 282,838 $ 443,644 Net income - - - - - 9,840 9,840 Cash dividend ($ 0.07 per common share) - - - - - ( 1,797 ) ( 1,797 ) Share repurchase - - - ( 35,561 ) - - ( 35,561 ) Other comprehensive loss - - - - ( 124 ) - ( 124 ) Stock-based employee compensation expense - - 920 - - - 920 Issuance of restricted shares, net - - ( 865 ) 817 - - ( 48 ) Balances at June 30, 2025 $ 219 $ 47 $ 159,813 $ ( 34,744 ) $ 658 $ 290,881 $ 416,874 Net income - - - - - 9,093 9,093 Cash dividend ($ 0.07 per common share) - - - - - ( 1,753 ) ( 1,753 ) Other comprehensive income - - - - ( 54 ) - ( 54 ) Share repurchase - - - ( 1,017 ) - - ( 1,017 ) Stock-based employee compensation expense - - 1,065 - - - 1,065 Issuance of restricted shares, net - - ( 1,206 ) 714 - - ( 492 ) Balances at September 30, 2025 $ 219 $ 47 $ 159,672 $ ( 35,047 ) $ 604 $ 298,221 $ 423,716 For the Three and Nine Months Ended September 30, 2024 Accumulated Additional Other Total Common Stock Paid-In Treasury Comprehensive Retained Stockholders' Class A Class B Capital Stock Income Earnings Equity Balances at December 31, 2023 $ 161 $ 24 $ 155,846 $ ( 132,346 ) $ 816 $ 378,919 $ 403,420 Net income - - - - - 3,974 3,974 Cash dividend ($ 0.055 per common share) - - - - - ( 1,443 ) ( 1,443 ) Other comprehensive income - - - - 260 - 260 Exercise of stock options - - 150 278 - - 428 Stock-based employee compensation expense - - 947 - - - 947 Issuance of restricted shares, net - - ( 248 ) ( 91 ) - - ( 339 ) Balances at March 31, 2024 $ 161 $ 24 $ 156,695 $ ( 132,159 ) $ 1,076 $ 381,450 $ 407,247 Net income - - - - - 12,194 12,194 Cash dividend ($ 0.055 per common share) - - - - - ( 1,448 ) ( 1,448 ) Other comprehensive income - - - - 34 - 34 Exercise of stock options - - 195 386 - - 581 Stock-based employee compensation expense - - 765 - - - 765 Issuance of restricted shares, net - - ( 207 ) 207 - - - Balances at June 30, 2024 $ 161 $ 24 $ 157,448 $ ( 131,566 ) $ 1,110 $ 392,196 $ 419,373 Net income - - - - - 13,033 13,033 Cash dividend ($ 0.055 per common share) - - - - - ( 1,450 ) ( 1,450 ) Other comprehensive income - - - - ( 531 ) - ( 531 ) Stock-based employee compensation expense - - 988 - - - 988 Issuance of restricted shares, net - - 45 94 - - 139 Balances at September 30, 2024 $ 161 $ 24 $ 158,481 $ ( 131,472 ) $ 579 $ 403,779 $ 431,552 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 6 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE nine months ended September 30, 2025 and 2024 (Unaudited and in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 25,496 $ 29,202 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses on accounts receivable - ( 46 ) Reversal of gain on sales to equity method investee ( 2 ) ( 28 ) Depreciation and amortization 67,869 64,460 Deferred income tax expense 5,253 5,426 Income tax expense arising from restricted share vesting and stock options exercised ( 322 ) ( 658 ) Stock-based compensation expense 2,996 2,700 Income from equity method investment ( 11,622 ) ( 11,763 ) Return on investment from equity method investee 5,145 3,675 (Gain) loss on disposition of property and equipment ( 3,039 ) 1,748 Changes in operating assets and liabilities: Receivables and advances ( 11,453 ) 7,704 Prepaid expenses and other assets ( 1,659 ) ( 4,080 ) Inventory and supplies ( 497 ) ( 1,261 ) Insurance and claims accrual 3,705 8,242 Accounts payable and accrued expenses 6,231 ( 4,360 ) Net cash flows provided by operating activities 88,101 100,961 Cash flows from investing activities: Acquisition, net of cash acquired - ( 4,556 ) Other investments ( 788 ) ( 488 ) Purchase of property and equipment ( 119,044 ) ( 131,494 ) Proceeds from disposition of property and equipment 30,651 32,332 Net cash flows used in investing activities ( 89,181 ) ( 104,206 ) Cash flows from financing activities: Cash dividend ( 5,408 ) ( 4,341 ) Proceeds from notes payable 86,174 104,785 Repayments of notes payable ( 69,835 ) ( 45,949 ) Repayments of finance lease obligations ( 555 ) ( 553 ) Proceeds under revolving credit facility 75,214 57,247 Repayments under revolving credit facility ( 75,214 ) ( 68,826 ) Payment of contingent consideration liability ( 4,951 ) ( 7,023 ) Proceeds from exercise of stock options 399 1,147 Payment of minimum tax withholdings on stock compensation ( 1,099 ) ( 339 ) Common stock repurchased ( 36,578 ) - Net cash flows (used in) provided by financing activities ( 31,853 ) 36,148 Net change in cash and cash equivalents ( 32,933 ) 32,903 Cash and cash equivalents at beginning of period 35,619 2,294 Cash and cash equivalents at end of period $ 2,686 $ 35,197 The accompanying notes are an integral part of these condensed consolidated financial statements. Page 7 Table of Contents COVENANT LOGISTICS GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1. Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of Covenant Logistics Group, Inc., a Nevada holding company, and its wholly owned subsidiaries. References in this report to "we," "us," "our," the "Company," and similar expressions refer to Covenant Logistics Group, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10 -Q and Article 10 of Regulation S- X promulgated under the Securities Act of 1933. In preparing finan cial statem ents, it is necessary for management to make assumptions and estimates affecting the amounts reported in the condensed consolidated financial statements and related notes. These estimates and assumptions are developed based upon all information available. Actual results could differ from estimated amounts. In the opinion of management, the accompanying financial statements include all adjustments that are necessary for a fair presentation of the results for the interim periods presented, such adjustments being of a normal recurring nature. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 2024 , condensed consolidated balance sheet was derived from our audited balance sheet as of that date. Our operating results are subject to seasonal trends when measured on a quarterly basis; therefore, operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 . These condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10 -K for the year ended December 31, 2024 . Results of operations in interim periods are not necessarily indicative of results to be expected for a full year. Property and Equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation for book purposes is determined using the straight-line method over the estimated useful lives of the assets. Depreciation of revenue equipment is our largest item of depreciation. We generally depreciate new tractors over five years to salvage values ranging from approximately 0 % to 35 % of their cost, depending on the utilization profile of the equipment associated with its reportable segment. We generally depreciate new trailers over seven years for refrigerated trailers and ten years for dry van trailers to salvage values of approximately 20 % and 25 % of their cost, respectively. We annually, or whenever events or changes in circumstances indicate that a review is warranted, review the reasonableness of our estimates regarding useful lives and salvage values of our revenue equipment and other long-lived assets, based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. During the quarter ended June 30, 2024, we performed a review of our estimates and, due to a weak used revenue equipment market, we increased the rate of depreciation on revenue equipment in the period resulting in an additional $ 1.2 million and $ 3.8 million of depreciation expense during the three and nine months ended September 30, 2024, respectively . Recent Accounting Pronouncements Accounting standards not yet adopted In September 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the accounting for costs related to internal-use software. The amendments in the standard remove all previous references to project stages and clarify the threshold entities apply to begin capitalizing costs. The standard becomes effective for us on January 1, 2028, for annual and interim periods and may be adopted on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently evaluating the effects adoption of this guidance will have on our consolidated financial statements. In July 2025, the FASB issued ASU 2025 - 05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. This guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company does not expect adoption of this guidance to have a material effect on our consolidated financial statements. In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses. This guidance requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements. The guidance in this ASU is effective for all public entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The update may be applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the effects adoption of this guidance will have on our consolidated financial statements. In December 2023, the FASB issued ASU 2023 - 09, Improvements to Income Tax Disclosures. This new guidance is designed to enhance the transparency and decision usefulness of income tax disclosures. The amendments of this update are related to the rate reconciliation and income taxes paid, requiring ( 1 ) consistent categories and greater disaggregation of information in the rate reconciliation and ( 2 ) income taxes paid disaggregated by jurisdiction. ASU 2023 - 09 is effective for annual periods beginning after December 15, 2024. The amendments only impact disclosures and are not expected to have an impact on the Company's financial condition and results of operations. Reclassification of Previously Issued Financial Statements Certain amounts in the prior period have been reclassified in the condensed consolidated financial statements to conform to the current year presentation. There has been no impact on previously reported net income or stockholders' equity from such reclassification. Page 8 Table of Contents Note 2. Income Per Share Basic income per share excludes dilution and is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted income per share reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. Income per share is the same for both Class A and Class B shares. The following table sets forth, for the periods indicated, the calculation of net income per share included in the condensed consolidated statements of operations: (in thousands except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Numerators: Income from continuing operations $ 6,264 $ 12,883 $ 22,667 $ 28,752 Income from discontinued operations 2,829 150 2,829 450 Net income $ 9,093 $ 13,033 $ 25,496 $ 29,202 Denominator: Denominator for basic income per share – weighted-average shares 25,030 26,354 25,872 26,274 Effect of dilutive securities: Equivalent shares issuable upon conversion of unvested restricted shares 120 150 137 142 Equivalent shares issuable upon conversion of unvested employee stock options 1,151 1,298 1,147 1,238 Denominator for diluted income per share adjusted weighted-average shares and assumed conversions 26,301 27,802 27,156 27,654 Basic income per share (1) : Income from continuing operations $ 0.25 $ 0.49 $ 0.88 $ 1.09 Income from discontinued operations 0.11 0.01 0.11 0.02 Net income per share $ 0.36 $ 0.49 $ 0.99 $ 1.11 Diluted income per share: (1) Income from continuing operations $ 0.24 $ 0.46 $ 0.83 $ 1.04 Income from discontinued operations 0.11 0.01 0.10 0.02 Net income per share $ 0.35 $ 0.47 $ 0.94 $ 1.06 ( 1 ) Total may not sum due to rounding. There were no unvested shares excluded from the calculation of diluted earnings per share as anti-dilutive for the three and nine months ended September 30, 2025 and 2024 . There were no unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three and nine months ended September 30, 2025 and 2024 . Page 9 Table of Contents Note 3. Fair Value of Financial Instruments Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Accordingly, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. The fair value of our interest rate swap agreements is determined using the market-standard methodology of netting the discounted future fixed-cash payments and the discounted expected variable-cash receipts. The variable-cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These analyses reflect the contractual terms of the swap, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value calculation also includes an amount for risk of non-performance of our counterparties using "significant unobservable inputs" such as estimates of current credit spreads to evaluate the likelihood of default, which we have determined to be insignificant to the overall fair value of our interest rate swap agreements. The fair value of the contingent consideration arrangement is based on inputs that are not observable in the market and is estimated using a probability-weighted method. The significant unobservable inputs used in the fair value of the contingent consideration liability include the financial projections over the earn-out period, the volatility of the underlying financial metrics, and estimated discount rates. The fair value of the life insurance policies was determined by the underwriting insurance company’s valuation models and represents the guaranteed value we would receive upon surrender of these policies as of the reporting date. A three -tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: ● Level 1. Observable inputs such as quoted prices in active markets; ● Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial Instruments Measured at Fair Value on a Recurring Basis (in thousands) September 30, 2025 December 31, 2024 Input Level Interest rate swaps 815 1,397 2 Contingent consideration ( 22,001 ) ( 27,794 ) 3 Cash surrender value life insurance policies 4,777 3,370 2 The carrying amount of cash and cash equivalents, certificates of deposit, accounts receivable, accounts payable, and current debt approximates their fair value because of the short-term maturity of these instruments. Interest rates that are currently available to us for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of our long-term debt, which primarily consists of revenue equipment installment notes. The fair value of our revenue equipment installment notes approximated the carrying value as of September 30, 2025 , as the weighted average interest rate on these notes approximates the market rate for similar debt. Borrowings under our revolving Credit Facility (as defined herein) approximate fair value due to the variable interest rate on that facility. Contingent consideration arrangements require us to pay up to $ 20.0 million of additional consideration to AAT Carriers, Inc.'s ("AAT's") former shareholders based on AAT's results during the first two post-acquisition years, of which the final installment was made during 2024, up to $ 30.0 million of additional consideration to Lew Thompson & Son Trucking, Inc.'s ("LTST's") former shareholders based on LTST's results during the first three calendar years following closing, up to $ 12.0 million of additional consideration to Sims Transport Services, LLC's ("Sims") former shareholders based on Sims' results during the first four calendar years following closing, and up to $ 5.0 million of additional consideration to the seller of the assets of a small, multi-stop distribution carrier we acquired in February 2025 ( the "Asset Acquisition"). The fair value of the contingent consideration is adjusted at each reporting period based on changes to the expected cash flows and related assumptions. During the three months ended September 30, 2025, there were contingent payments made of $ 0.4 million as a result of the Asset Acquisition. During the nine months ended September 30, 2025, there were contingent payments made of $ 12.5 million based on LTST's results for the first calendar year following closing and $ 0.4 million as a result of the Asset Acquisition. During the three months ended September 30, 2024, there were no contingent payments made. During the nine months ended September 30, 2024, there were contingent payments made of $ 10.0 million based on AAT's results for the second post-acquisition year. Of the $ 12.9 million paid for the contingent consideration liability during 2025, $ 5.0 million was classified as financing cash flows and $ 7.9 million was classified as operating cash flows within the condensed consolidated statements of cash flows. Of the $ 10.0 million paid for the contingent consideration liability during 2024, $ 7.0 million was classified as financing cash flows and $ 3.0 million was classified as operating cash flows within the condensed consolidated statements of cash flows. The fair value of the contingent consideration increased $ 0.7 million and $ 0.7 million related to a change in the fair value for the LTST contingent consideration for the three months ended September 30, 2025 and 2024, respectively and $ 2.1 million and $ 9.5 million related to a change in the fair value for the LTST contingent consideration for the nine months ended September 30, 2025 and 2024, respectively. Additionally, contingent consideration increased $ 5.0 million for the nine months ended September 30, 2025 as a result of the Asset Acquisition. The adjustment to the fair value of the contingent consideration liability was recorded as a component of general supplies and expenses within the condensed consolidated statements of operations. The contingent consideration liability is included in accounts payable and other long-term liabilities in our condensed consolidated balance sheets. The following table provides a summary (in thousands) of the activity for the contingent consideration liability for 2025: December 31, 2024 Additions Adjustments to fair market value Payments September 30, 2025 Contingent consideration $ ( 27,794 ) $ ( 5,000 ) $ ( 2,128 ) $ 12,921 $ ( 22,001 ) Page 10 Table of Contents Note 4. Segment Information We have four reportable segments: ● Expedited: The Expedited reportable segment primarily provides truckload services to customers with high service freight and delivery standards, such as 1,000 miles in 22 hours, or 15 -minute delivery windows. Expedited services generally require two -person driver teams on equipment either owned or leased by the Company. ● Dedicated: The Dedicated reportable segment provides customers with committed truckload capacity over contracted periods with the goal of three to five years in length. Equipment is either owned or leased by the Company. The Dedicated reportable segment also provides shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses for Dedicated customers. ● Managed Freight: The Managed Freight reportable segment includes our brokerage and transport management services (“TMS”). Brokerage services provide logistics capacity by outsourcing the carriage of customers’ freight to third parties. TMS provides comprehensive logistics services on a contractual basis to customers who prefer to outsource their logistics needs. ● Warehousing: The Warehousing reportable segment provides day-to-day warehouse management services to customers who have chosen to outsource this function. The Warehousing reportable segment also provides shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses for Warehousing customers. The Company's chief operating decision maker ("CODM"), the Chief Executive Officer, evaluates the operating results through reportable segment operating income, which includes certain corporate overhead allocations directly attributable to each of the segments. We do not report our intersegment revenues by segment to our CODM and do not believe they are a meaningful metric for evaluating the performance of our reportable segments. Each segment uses certain shared infrastructure and each segment is presented with its direct costs and an allocation of certain shared overhead costs. Insurance and claims expense is charged to the segments based on their historic claims experience and an allocation of current insurance premiums. The CODM uses operating income for each segment in the annual budget and strategic planning process. The CODM considers budget-to-actual variances on a quarterly basis as well as month-over-month variances when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment operating income for evaluating pricing strategy, to assess the performance of each segment by comparing the results of each segment with one another, and in determining the compensation of certain employees. The following table summarizes our total revenue by our four reportable segments, as used by our CODM in making decisions regarding allocation of resources etc., for the three and nine months ended September 30, 2025 and 2024 : (in thousands) Three Months Ended September 30, 2025 Expedited Dedicated Managed Freight Warehousing Total Revenues Freight revenue $ 80,184 $ 91,581 $ 72,220 $ 24,802 $ 268,787 Fuel surcharge revenue (1) 14,448 13,439 - 162 28,049 Subtotal operating revenues $ 94,632 $ 105,020 $ 72,220 $ 24,964 $ 296,836 Other revenues 53 Total revenue $ 296,889 Operating expenses: Salaries, wages, and related expenses 30,756 43,760 2,758 12,044 Fuel expense 14,584 14,690 - 167 Operations and maintenance 10,099 12,667 689 1,471 Revenue equipment rentals and purchased transportation 17,742 8,453 62,545 1,052 Operating taxes and licenses 356 667 18 383 Insurance and claims 6,647 5,057 205 220 Communications and utilities - 196 7 249 General supplies and expenses 235 482 769 4,161 Depreciation and amortization 1 4,369 22 461 Loss on disposition of property and equipment, net - ( 63 ) - - Total allocated overhead 9,133 10,643 2,247 2,258 Segment operating expenses 89,553 100,921 69,260 22,466 282,200 Subtotal operating income $ 5,079 $ 4,099 $ 2,960 $ 2,498 $ 14,689 Other (2) ( 6,763 ) Total consolidated operating income 7,926 Interest expense, net ( 3,468 ) Income from equity method investment 3,578 Income before income taxes $ 8,036 (in thousands) Three Months Ended September 30, 2024 Expedited Dedicated Managed Freight Warehousing Total Revenues Freight revenue $ 87,363 $ 82,676 $ 63,385 $ 25,175 $ 258,599 Fuel surcharge revenue (1) 16,951 12,039 - 296 29,286 Subtotal operating revenues $ 104,314 $ 94,715 $ 63,385 $ 25,471 $ 287,885 Other revenues - Total revenue $ 287,885 Operating expenses: Salaries, wages, and related expenses 33,750 36,873 2,756 11,589 Fuel expense 15,469 12,686 - 347 Operations and maintenance 10,182 8,998 968 1,374 Revenue equipment rentals and purchased transportation 16,571 7,361 53,067 1,241 Operating taxes and licenses 358 461 11 506 Insurance and claims 6,638 4,176 428 203 Communications and utilities - 140 5 224 General supplies and expenses 256 486 766 4,329 Depreciation and amortization 4 3,317 21 455 Gain on disposition of property and equipment, net - ( 132 ) - - Total allocated overhead 8,814 9,555 2,417 2,452 Segment operating expenses 92,042 83,921 60,439 22,720 259,122 Segment operating income $ 12,272 $ 10,794 $ 2,946 $ 2,751 $ 28,763 Other (2) ( 12,528 ) Total consolidated operating income 16,235 Interest expense, net ( 3,204 ) Income from equity method investment 3,993 Income before income taxes $ 17,024 (in thousands) Nine Months Ended September 30, 2025 Expedited Dedicated Managed Freight Warehousing Total Revenues Freight revenue $ 243,662 $ 263,827 $ 206,620 $ 74,429 $ 788,538 Fuel surcharge revenue (1) 42,963 37,079 - 465 80,507 Subtotal operating revenues $ 286,625 $ 300,906 $ 206,620 $ 74,894 $ 869,045 Other revenues 53 Total revenue $ 869,098 Operating expenses: Salaries, wages, and related expenses 94,398 125,160 7,880 35,822 Fuel expense 43,854 41,328 - 498 Operations and maintenance 31,263 34,581 1,195 4,154 Revenue equipment rentals and purchased transportation 51,439 26,027 176,734 3,302 Operating taxes and licenses 1,033 1,927 84 1,732 Insurance and claims 19,964 15,221 361 666 Communications and utilities 1 583 25 716 General supplies and expenses 704 1,616 2,444 13,308 Depreciation and amortization 4 12,658 65 1,419 Loss on disposition of property and equipment, net - 225 - - Total allocated overhead 25,830 29,308 6,870 7,019 Segment operating expenses 268,490 288,634 195,658 68,636 821,418 Segment operating income $ 18,135 $ 12,272 $ 10,962 $ 6,258 $ 47,680 Other (2) ( 20,564 ) Total consolidated operating income 27,116 Interest expense, net ( 8,795 ) Income from equity method investment 11,622 Income before income taxes $ 29,943 (in thousands) Nine Months Ended September 30, 2024 Expedited Dedicated Managed Freight Warehousing Total Revenues Freight revenue $ 262,881 $ 237,124 $ 186,668 $ 76,123 $ 762,796 Fuel surcharge revenue (1) 54,914 35,538 - 897 91,349 Subtotal operating revenues $ 317,795 $ 272,662 $ 186,668 $ 77,020 $ 854,145 Other revenues - Total revenue $ 854,145 Operating expenses: Salaries, wages, and related expenses 103,673 104,485 6,819 35,270 Fuel expense 50,028 37,589 - 1,155 Operations and maintenance 30,050 27,110 1,149 4,092 Revenue equipment rentals and purchased transportation 50,892 22,634 158,638 3,671 Operating taxes and licenses 1,310 1,002 34 1,794 Insurance and claims 19,968 11,830 676 601 Communications and utilities 1 315 16 669 General supplies and expenses 704 1,605 2,267 12,679 Depreciation and amortization 19 8,557 63 1,291 Gain on disposition of property and equipment, net - ( 170 ) - - Total allocated overhead 25,177 26,283 7,523 7,262 Segment operating expenses 281,822 241,240 177,185 68,484 768,731 Segment operating income $ 35,973 $ 31,422 $ 9,483 $ 8,536 $ 85,414 Other (2) ( 49,267 ) Total consolidated operating income 36,147 Interest expense, net ( 10,341 ) Income from equity method investment 11,763 Income before income taxes $ 37,569 ( 1 ) The CODM does not receive fuel surcharge revenue and fuel expense individually, but is provided with fuel expense less fuel surcharge revenue (other than the fuel surcharge revenue we reimburse to independent contractors and other third parties which is included in purchased transportation), which we refer to as net fuel expense. The CODM uses net fuel expense to measure the effectiveness of our fuel surcharge program. ( 2 ) Other represents indirect costs not directly attributable to any one reportable segment, amortization of intangible assets, and contingent consideration liability adjustments to match the information our CODM uses to evaluate the operating results of our reportable segments. Balance sheet data by reportable segment is not maintained by the Company. Page 11 Table of Contents Note 5. Income Taxes Income tax expense in both 2025 and 2024 varies from the amount computed by applying the federal corporate income tax rates of 21 % to income before income taxes, primarily due to state income taxes, net of federal income tax effect, adjusted for permanent differences the most significant of which is the effect of the per diem pay structure for drivers, executive compensation disallowance, and excess tax benefits on share-based compensation. Drivers who meet the requirements to receive per diem receive non-taxable per-diem pay in lieu of a portion of their taxable wages. This per diem program increases our drivers' net pay per mile, after taxes, while decreasing gross pay, before taxes. As a result, salaries, wages, and related expenses are slightly lower and our effective income tax rate is higher than the statutory rate. Generally, as pre-tax income increases, the impact of the driver per diem program on our effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pre-tax income, while in periods where earnings are at or near breakeven the impact of the per diem program on our effective tax rate is significant. Due to the partially nondeductible effect of per diem pay, our tax rate will fluctuate in future periods based on fluctuations in earnings. Our liability recorded for uncertain tax positions as of September 30, 2025 is unchanged since December 31, 2024 . The net deferred tax liability of $ 122.2 million primarily relates to differences in cumulative book versus tax depreciation of property and equipment, partially off-set by net operating loss carryovers and insurance claims that have been reserved but not paid. The carrying value of our deferred tax assets assumes that we will be able to generate, based on certain estimates and assumptions, sufficient future taxable income in certain tax jurisdictions to utilize these deferred tax benefits. If these estimates and related assumptions change in the future, we may be required to establish a valuation allowance against the carrying value of the deferred tax assets, which would result in additional income tax expense. On a periodic basis, we assess the need for adjustment of the valuation allowance. The Company has determined that a valuation allowance was not necessary at September 30, 2025 for its deferred tax assets since it is more likely than not they will be realized from the future reversals of temporary differences. If these estimates and related assumptions change in the future, we may be required to modify our valuation allowance against the carrying value of the deferred tax assets. The American Rescue Plan extended the reach of IRC Section 162 (m) to include compensation paid to the eight highest-paid individuals other than the chief executive officer and the chief financial officers (rather than the three highest), however, this change is not effective until 2027. There is no material impact to the financial statements at this time. We do not anticipate the Inflation Reduction Act (the "IRA") will have a significant impact on income tax expense or on other taxes. One of the most impactful provisions of the IRA includes the establishment of a Corporate Alternative Minimum Tax ("CAMT"). However, this tax only applies to corporations with three -year average earnings in excess of $1.0 billion. We will continue to monitor the CAMT each year to determine if we will become an applicable corporation. Additionally, the IRA enacted an excise tax on stock buybacks, which imposes a 1% tax on stock buybacks, subject to netting provisions regarding stock awarded to employees as part of their compensation. We do not believe this will have a material impact on our active repurchase program. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act ("OBBBA") into law. The OBBBA, among other things, includes provisions for accelerated tax depreciation, modifications to the net interest deduction limitations, and the rollback of certain alternative energy provisions. Based on preliminary analysis, we anticipate our deferred tax liability for fixed assets to increase by approximately $ 31.0 million related to bonus depreciation. We are continuing to model the effects of the OBBBA, such as Section 163 (j) and Section 174, with no other adjustments expected as of September 30, 2025. Page 12 Table of Contents Note 6. Debt Current and long-term debt and lease obligations consisted of the following as of September 30, 2025 and December 31, 2024 : (in thousands) September 30, 2025 December 31, 2024 Current Long-Term Current Long-Term Borrowings under Credit Facility $ - $ - $ - $ - Borrowings under the Draw Note - - - - Revenue equipment installment notes; weighted average interest rate of 5.2 % at September 30, 2025, and 5.4 % at December 31, 2024, due in monthly installments with final maturities at various dates ranging from February 2028 to September 2031, secured by related revenue equipment 62,330 188,505 62,860 170,629 Real estate notes; interest rate of 6.1 % at September 30, 2025 and 6.3 % at December 31, 2024 due in monthly installments with a fixed maturity at August 2035, secured by related real estate 1,393 15,406 1,350 16,456 Total debt 63,723 203,911 64,210 187,085 Principal portion of finance lease obligations, secured by related revenue equipment 817 2,571 751 3,192 Principal portion of operating lease obligations, secured by related real estate and revenue equipment 11,266 26,818 10,349 31,302 Total debt and lease obligations $ 75,806 $ 233,300 $ 75,310 $ 221,579 We and substantially all of our subsidiaries are parties to the Third Amended and Restated Credit Agreement (the "Credit Facility") with Bank of America, N.A., as agent (the "Agent") and JPMorgan Chase Bank, N.A. (together with the Agent, the "Lenders"). The Credit Facility is a $ 110.0 million revolving credit facility, with an uncommitted accordion feature that, so long as no event of default exists, allows us to request an increase in the revolving credit facility of up to $ 75.0 million subject to Lender acceptance of the additional funding commitment. The Credit Facility includes a letter of credit sub facility in an aggregate amount of $ 105.0 million and a swing line sub facility in an aggregate amount equal to the greater of $ 10.0 million or 10 % of the Lenders' aggregate commitments under the Credit Facility from time-to-time. The Credit Facility matures in May 2027. Borrowings under the Credit Facility are classified as either "base rate loans" or "SOFR loans." Base rate loans accrue interest at a base rate equal to the greater of the Agent’s prime rate, the federal funds rate plus 0.5 %, or SOFR for a one month period as of such day, plus an applicable margin ranging from 0.25 % to 0.75%; while SOFR loans accrued interest at SOFR, plus an applicable margin ranging from 1.25 % to 1.75 %. The applicable rates are adjusted quarterly based on average pricing availability. The unused line fee is the product of 0.25 % times the average daily amount by which the Lenders' aggregate revolving commitments under the Credit Facility exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility. The obligations under the Credit Facility are guaranteed by us and secured by a pledge of substantially all of our assets, with the notable exclusion of any real estate, revenue equipment pledged under other financing agreements, including revenue equipment installment notes and finance leases, and revenue equipment that we do not designate as being included in the borrowing base. Borrowings under the Credit Facility are subject to a borrowing base limited to the lesser of (A) $110.0 million, minus the sum of the stated amount of all outstanding letters of credit; or (B) the sum of (i) 87.5 % of eligible accounts receivable, plus (ii) the least of (a) 85 % of the appraised net orderly liquidation value of eligible revenue equipment, (b) 100 % of the net book value of eligible revenue equipment, (c) 60.0 % of the Lenders' aggregate revolving commitments under the Credit Facility, or (d) $ 65.0 million. We had no borrowings outstanding under the Credit Facility as of September 30, 2025 , undrawn letters of credit outstanding of approximately $ 19.9 million, and available borrowing capacity of $ 90.1 million. As of September 30, 2025 , there were no base rate or SOFR loans. Based on availability as of September 30, 2025 and 2024 , there was no fixed charge coverage requirement. Page 13 Table of Contents The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the Lenders' commitments may be terminated. If an event of default occurs under the Credit Facility and the Lenders cause, or have the ability to cause, all of the outstanding debt obligations under the Credit Facility to become due and payable, this could result in a default under other debt instruments that contain acceleration or cross-default provisions. The Credit Facility contains certain restrictions and covenants relating to, among other things, debt, dividends, liens, acquisitions and dispositions outside of the ordinary course of business, and affiliate transactions. Failure to comply with the covenants and restrictions set forth in the Credit Facility could result in an event of default. Pricing for the revenue equipment installment notes is quoted by the respective financial affiliates of our primary revenue equipment suppliers and other lenders at the funding of each group of equipment acquired and include fixed annual rates for new equipment under retail installment contracts. The notes included in the funding are due in monthly installments with final maturities at various dates ranging from February 2028 to September 2031 . The notes contain certain requirements regarding payment, insuring of collateral, and other matters, but do not have any financial or other material covenants or events of default except certain notes totaling $ 21.4 million are cross-defaulted with the Credit Facility. Additional borrowings from the financial affiliates of our primary revenue equipment suppliers and other lenders are expected to be available to fund new tractors expected to be delivered in 2025 , while any other property and equipment purchases, including trailers, are expected to be funded with a combination of available cash, notes, operating leases, finance leases, and/or from the Credit Facility. In August 2015, we financed a portion of the purchase of our corporate headquarters, a maintenance facility, and certain surrounding property in Chattanooga, Tennessee by entering into a $ 28.0 million variable rate note with a third -party lender. The note contains certain restrictions and covenants that are usual and customary for a note of this nature. Failure to comply with the covenants and restrictions set forth in the note could result in an event of default. Concurrently with entering into the note, we entered into an interest rate swap to effectively fix the related interest rate to 4.2 %. We expect to be in compliance with our debt covenants for the next 12 months. In connection with the settlement of a dispute related to the sale of Transport Financial Services (the "TFS Settlement"), in September 2020, TBK Bank, SSB, as lender and agent for Triumph (“TBK Bank”), provided the Company with a $ 45 million line of credit (the “Draw Note”), the proceeds of which were to be used solely to satisfy our indemnification obligations under the TFS Settlement. The Draw Note expired September 23, 2025. Page 14 Table of Contents Note 7. Lease Obligations The finance leases in effect at September 30, 2025 terminate from June 2028 through November 2033 and contain guarantees of the residual value of the related equipment by us. A summary of our lease obligations at September 30, 2025 and 2024 are as follows: (dollars in thousands) Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Finance lease cost: Amortization of right-of-use assets $ 218 $ 122 $ 655 $ 368 Interest on lease liabilities 112 215 355 636 Operating lease cost 3,390 3,648 11,219 10,607 Variable lease cost ( 3 ) 50 ( 71 ) 199 Short-term lease cost 1,652 802 4,336 2,776 Total lease cost $ 5,369 $ 4,837 $ 16,494 $ 14,586 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases 112 215 355 636 Operating cash flows from operating leases 2,534 2,851 8,578 8,286 Financing cash flows from finance leases 190 188 555 553 Right-of-use assets obtained in exchange for new finance lease liabilities - - - 815 Right-of-use assets obtained in exchange for new operating lease liabilities 702 4,783 4,991 13,753 Weighted-average remaining lease term—finance leases (in years) 4.9 3.5 Weighted-average remaining lease term—operating leases (in years) 3.8 4.6 Weighted-average discount rate—finance leases 6.1 % 13.5 % Weighted-average discount rate—operating leases 8.8 % 8.6 % As of September 30, 2025 and December 31, 2024 , right-of-use assets of $ 36.0 million and $ 40.0 million for operating leases and $ 3.0 million and $ 4.6 million for finance leases, respectively, are included in net property and equipment in our condensed consolidated balance sheets. Operating lease right-of-use asset amortization is included in revenue equipment rentals and purchased transportation and general supplies and expenses, depending on the underlying asset, in the condensed consolidated statement of operations. Amortization of finance leased assets is included in depreciation and amortization expense in the condensed consolidated statement of operations. Our future minimum lease payments as of September 30, 2025 , are summarized as follows by lease category: (in thousands) Operating Finance 2025 (1) 3,473 $ 303 2026 13,695 1,212 2027 12,148 1,212 2028 6,450 930 2029 3,703 340 Thereafter 4,563 529 Total minimum lease payments $ 44,032 $ 4,526 Less: amount representing interest ( 5,948 ) ( 1,138 ) Present value of minimum lease payments $ 38,084 $ 3,388 Less: current portion ( 11,266 ) ( 817 ) Lease obligations, long-term $ 26,818 $ 2,571 ( 1 ) Excludes the nine months ended September 30, 2025 . Page 15 Table of Contents Note 8. Stock -Based Compensation Our Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (the "Incentive Plan") governs the issuance of equity awards and other incentive compensation to management and members of the Board of Directors (the "Board"). The Incentive Plan includes (i) a fungible share reserve feature, under which shares subject to stock options and stock appreciation rights will be counted as one share for every share granted and shares subject to all other awards will be counted as 1.80 shares for every share granted, (ii) a double-trigger vesting requirement upon a change in control, and (iii) a maximum award granted or payable to any one participant under the Incentive Plan for a calendar year of 1,000,000 shares of Class A common stock or $ 4,000,000 , in the event the award is paid in cash. The Incentive Plan permits annual awards of shares of our Class A common stock to executives, other key employees, consultants, non-employee directors, and eligible participants under various types of options, restricted stock, or other equity instruments. As of September 30, 2025 , there were 1,814,712 shares available for award under the Incentive Plan. No awards may be made under the Incentive Plan after May 1, 2033. To the extent available, we have issued treasury stock to satisfy all share-based incentive plans. Included in salaries, wages, and related expenses within the condensed consolidated statements of operations is stock-based compensation expense of $ 0.9 million and $ 0.8 million for the three months ended September 30, 2025 and 2024 , respectively, and expense of $ 2.4 million and $ 2.1 million for the nine months ended September 30, 2025 and 2024 , respectively. Included in general supplies and expenses within the condensed consolidated statements of operations is stock-based compensation expense for non-employee directors of $ 0.2 million for each of the three months ended September 30, 2025 and 2024 and $ 0.6 million for each of the nine months ended September 30, 2025 and 2024 . Of the stock compensation expense recorded for the three months ended September 30, 2025 and 2024 , $ 0.9 million and $ 0.8 million relates to restricted shares, respectively, and, for the nine months ended September 30, 2025 and 2024 , $ 2.4 million and $ 1.5 million relates to restricted shares, respectively. There were no unvested employee stock options or related stock compensation expense for the nine months ended September 30, 2025 . For the nine months ended September 30, 2024 , $ 0.6 million of the stock compensation expense recorded related to unvested employee stock options. The Incentive Plan allows participants to pay the federal and state minimum statutory tax withholding requirements related to awards that vest or allows participants to deliver to us shares of Class A common stock having a fair market value equal to the minimum amount of such required withholding taxes. To satisfy withholding requirements for shares that vested through September 30, 2025 , certain participants elected to forfeit receipt of an aggregate of 42,593 shares of Class A common stock at a weighted average per share price of $ 25.81 based on the closing price of our Class A common stock on the dates the shares vested in 2025 , in lieu of the federal and state minimum statutory tax withholding requirements. We remitted $ 1.1 million to the proper taxing authorities in satisfaction of the employees' minimum statutory withholding requirements. Note 9. Commitments and Contingencies Legal Proceedings From time-to-time, we are a party to litigation arising in the ordinary course of business, most of which involves claims for personal injury, workers’ compensation, and/or property damage incurred in connection with the transportation of freight. We record a liability for the estimated cost of the uninsured portion of pending claims and the estimated allocated loss adjustment expenses, including legal and other direct costs associated with a claim, when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. There are inherent uncertainties in these legal matters, some of which are beyond management’s control, making the ultimate outcomes difficult to predict. Moreover, management's views and estimates related to these matters may change in the future, as new events and circumstances arise and the matters continue to develop. The Company’s business, results of operations, financial condition, or liquidity could be materially and adversely affected by the resolution of one or more of these contingencies. In 2025, a third -party trucking company hauling a load brokered by the Company and using a trailer owned by the Company was involved in an accident that resulted in five fatalities and injuries to at least one other person. There are several possible defendants in the case, facts are still being developed, alleged damages have not been specified, and there are significant factual and legal issues to be resolved. The Company has concluded that a loss is probable in the case, but given the preliminary nature of the proceedings, the Company cannot reasonably estimate a range of possible losses at this time in excess of the amount accrued for legal costs. As of September 30, 2025, the Company accrued $ 0.5 million for legal costs associated with the accident, but it has not recorded any other liability related to the accident. To the extent the Company is found to have liability related to the accident, and the damages awarded against the Company exceed the Company’s coverage limits, involve significant aggregate use of the Company’s self-insured retention amounts, or cause increases in the Company’s insurance premiums, the Company’s insurance and claims expense would be volatile and increase. Any resulting increases in such expenses could have a materially adverse effect on the Company’s business, results of operations, financial condition, or liquidity. Other Commitments and Contingencies We had $ 19.9 million and $ 19.8 million of outstanding and undrawn letters of credit as of September 30, 2025 and December 31, 2024 . The letters of credit are maintained primarily to support our insurance programs. Additionally, we had $ 45.0 million of availability on a line of credit from Triumph solely to fund any indemnification owed to Triumph in relation to the TFS Settlement which expired September 23. 2025. As of September 30, 2025 the remaining contingent liability was $ 0.2 million. Note 10. Equity Method Investment We own a 49.0 % interest in Transport Enterprise Leasing, LLC ("TEL"), a tractor and trailer equipment leasing company and used equipment reseller. There is no loss limitation on our 49.0% interest in TEL. We have not guaranteed any of TEL's debt and have no obligation to provide funding, services, or assets. There are no current put rights to purchase or sell with any owners. TEL’s majority owners are generally restricted from transferring their interests in TEL, other than to certain permitted transferees, without our consent. There are no third -party liquidity arrangements, guarantees, and/or other commitments that may affect the fair value or risk of our interest in TEL. As of September 30, 2025 , we had a revenue equipment operating lease liability to TEL of $ 8.4 million. During the quarter ended March 31, 2024, we sold revenue equipment to TEL in exchange for the assumption of the related notes payable of $ 26.2 million and $ 0.5 million of cash. No other transactions with TEL were material for the three or nine months ended September 30, 2025 and 2024 . Page 16 Table of Contents We have accounted for our investment in TEL using the equity method of accounting, and thus our financial results include our proportionate share of TEL's 2025 net income through September 30, 2025 , or $ 11.6 million. Our accounts receivable from TEL, accounts payable to TEL, and investment in TEL as of September 30, 2025 and December 31, 2024 are as follows (in thousands): Description: Balance Sheet Line Item: September 30, 2025 December 31, 2024 Accounts receivable from TEL Driver advances and other receivables $ 4 $ - Accounts payable to TEL Accrued expenses $ 373 $ 275 Investment in TEL Other assets $ 83,885 $ 77,405 Operating lease obligations Current and long-term portion of operating lease obligations $ 8,393 $ 10,092 Our accounts receivable from TEL related to cash disbursements made pursuant to our performance of certain back-office and maintenance functions on TEL’s behalf and our accounts payable to TEL primarily related to leased revenue equipment payment accruals. Page 17 Table of Contents Note 11. Goodwill, Intangibles, and Other Assets During the nine months ended September 30, 2025 we acquired an $ 11.2 million customer relationship for the Dedicated reportable segment through the Asset Acquisition. The Landair Holdings, Inc. ("Landair") trade name has a residual value of $ 0.5 million. Amortization expense of $ 7.8 million and $ 7.1 million for the nine months ended September 30, 2025 and 2024 , respectively, was included in depreciation and amortization in the condensed consolidated statements of operations. Page 18 Table of Contents A summary of other intangible assets as of September 30, 2025 and December 31, 2024 is as follows: (in thousands) September 30, 2025 Gross intangible assets Accumulated amortization Net intangible assets Remaining life (months) Trade name: Dedicated $ 4,502 $ ( 2,637 ) $ 1,865 Managed Freight 1,089 ( 923 ) 166 Warehousing 999 ( 885 ) 114 Total trade name 6,590 ( 4,445 ) 2,145 89 Non-compete agreement: Dedicated 4,670 ( 2,821 ) 1,849 Managed Freight 380 ( 198 ) 182 Total non-compete agreement 5,050 ( 3,019 ) 2,031 19 Customer relationships: Dedicated 71,374 ( 15,708 ) 55,666 Managed Freight 7,312 ( 2,695 ) 4,617 Warehousing 12,436 ( 7,514 ) 4,922 Total customer relationships: 91,122 ( 25,917 ) 65,205 138 Credentialing: Expedited 32,000 ( 7,822 ) 24,178 Total credentialing 32,000 ( 7,822 ) 24,178 136 Total other intangible assets $ 134,762 $ ( 41,203 ) $ 93,559 133 (in thousands) December 31, 2024 Gross intangible assets Accumulated amortization Net intangible assets Remaining life (months) Trade name: Dedicated $ 4,502 $ ( 2,479 ) $ 2,023 Managed Freight 1,089 ( 910 ) 179 Warehousing 999 ( 885 ) 114 Total trade name 6,590 ( 4,274 ) 2,316 98 Non-compete agreement: Dedicated 4,670 ( 1,946 ) 2,724 Managed Freight 380 ( 127 ) 253 Total non-compete agreement 5,050 ( 2,073 ) 2,977 28 Customer relationships: Dedicated 60,172 ( 12,142 ) 48,030 Managed Freight 7,312 ( 1,987 ) 5,325 Warehousing 12,436 ( 6,736 ) 5,700 Total customer relationships: 79,920 ( 20,865 ) 59,055 149 Credentialing: Expedited 32,000 ( 6,222 ) 25,778 Total credentialing 32,000 ( 6,222 ) 25,778 145 Total other intangible assets $ 123,560 $ ( 33,434 ) $ 90,126 142 The expected amortization of these assets for the next five successive years is as follows: (in thousands) 2025 (1) 2,652 2026 10,609 2027 9,799 2028 9,340 2029 9,328 Thereafter 51,331 ( 1 ) Excludes the nine months ended September 30, 2025 . Page 19 Table of Contents There were no changes to the carrying amount of goodwill from $ 78.9 million at December 31, 2024 . A summary of the carrying amount of goodwill is as follows: (in thousands) Expedited Dedicated Managed Freight Warehousing Balance at September 30, 2025 $ 15,699 $ 32,575 $ 8,917 $ 21,750 At September 30, 2025, our insurance program involves self-insurance to certain risk retention levels. We accrue claims above our self-insured retention and record a corresponding receivable for the amounts we expect to collect from insurers upon settlement of such claims. We have $ 19.4 million and $ 0.6 million as other long-term receivables and as a corresponding accrual in the long-term portion of insurance and claims accruals on our condensed consolidated balance sheet for claims above our self-insured retention for which we believe it is reasonably assured that the insurers will pay their portion of such claims at September 30, 2025 and December 31, 2024, respectively. Note 12. Equity On December 31, 2024, after market close, the Company effected a 2 for 1 forward split on its Class A common stock and Class B common stock outstanding in the form of a stock dividend, under which each stockholder of the Company’s Class A common stock on that date received one additional share of the Company’s $ 0.01 par value Class A common stock for every one share owned and each stockholder of the Company’s Class B common stock on that date received one additional share of the Company’s $ 0.01 par value Class B common stock for every one share owned. All share and per share amounts presented in this Quarterly Report on Form 10 -Q, including with respect to dividends and in the financial statement and notes hereto have been adjusted for the stock split. On February 13, 2024, our Board declared a cash dividend of $ 0.055 per share which was paid on March 29, 2024, to stockholders of record on March 1, 2024. On May 15, 2024, our Board declared a cash dividend of $ 0.055 per share which was paid on June 28, 2024, to stockholders of record on June 7, 2024. On August 14, 2024, our Board declared a cash dividend of $ 0.055 per share which was paid on September 27, 2024, to stockholders of record on September 6, 2024. On November 21, 2024, our Board declared a cash dividend of $ 0.055 per share which was paid on December 27, 2024, to stockholders of record on December 6, 2024. On February 10, 2025, our Board declared a cash dividend of $ 0.07 per share which was paid on March 28, 2025, to stockholders of record on March 7, 2025. On May 14, 2025, our Board declared a cash dividend of $ 0.07 per share which was paid on June 27, 2025, to stockholders of record on June 6, 2025. On August 12, 2025, our Board declared a cash dividend of $ 0.07 per share which was paid on September 26, 2025, to stockholders of record on September 5, 2025. On April 23, 2025, our Board approved a stock repurchase authorization of up to $ 50.0 million of our Class A common stock. Under such authorization, we repurchased approximately 1.6 million shares of our Class A common stock for $ 36.2 million during the nine months ended September 30, 2025 . Note 13. Subsequent Events In October 2025, we acquired certain assets of a small logistics and brokerage company. The Asset Purchase Agreement includes an earnout component based on the average adjusted earnings before interest, taxes, depreciation, and amortization reported for operations associated with the purchased assets for the three years ending December 31, 2028 with advance payments being made for incremental targets at each of the years ending December 31, 2026 and 2027. The total purchase price, excluding any earnout achieved, was approximately $ 30.0 million. The purchase accounting, including the valuation of the earnout, has not yet been completed. Based on adverse claims development after September 30, 2025, through the date of this report, management anticipates the insurance and claims accrual rate experienced for each of the first three quarters of 2025 will be increased an additional $ 4.0 million and $ 9.0 million in the fourth quarter of 2025. Page 20 Table of Contents