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) March 31, 2026 December 31, 2025 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 11,245 $ 4,946 Accounts receivable, net of allowance of $ 2,518 in 2026 and $ 2,780 in 2025 155,720 151,803 Drivers' advances and other receivables, net of allowance of $ 582 in 2026 and $ 584 in 2025 6,734 10,214 Inventory and supplies 7,170 6,342 Prepaid expenses 17,683 21,658 Assets held for sale 1,548 26,070 Income taxes receivable 10,840 11,548 Other short-term assets 193 240 Total current assets 211,133 232,821 Property and equipment, at cost 705,832 718,204 Less: accumulated depreciation and amortization ( 249,166 ) ( 241,033 ) Net property and equipment 456,666 477,171 Goodwill 80,440 80,477 Other intangibles, net 102,608 105,609 Operating lease right-of-use assets 33,332 35,513 Other receivables 30,703 16,531 Other assets, net 101,946 97,426 Total assets $ 1,016,828 $ 1,045,548 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 50,352 $ 45,479 Accrued expenses 52,034 56,001 Accrued purchased transportation 8,502 6,009 Current maturities of long-term debt 52,153 64,005 Current portion of finance lease obligations 865 840 Current portion of operating lease obligations 12,554 12,182 Current portion of insurance and claims accrual 25,714 25,462 Total current liabilities 202,174 209,978 Long-term debt 201,389 234,046 Long-term portion of finance lease obligations 2,095 2,353 Long-term portion of operating lease obligations 22,693 25,272 Insurance and claims accrual 50,579 36,361 Deferred income taxes 120,803 119,725 Other long-term liabilities 9,490 13,817 Total liabilities 609,223 641,552 Stockholders' equity: Class A common stock, $ .01 par value; 40,000,000 shares authorized; 21,855,878 shares issued and 20,392,177 outstanding as of March 31, 2026; and 21,855,878 shares issued and 20,370,361 outstanding as of December 31, 2025 219 219 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 159,975 159,492 Treasury stock at cost; 1,463,701 and 1,485,517 shares as of March 31, 2026 and December 31, 2025, respectively ( 34,159 ) ( 34,584 ) Accumulated other comprehensive income 649 612 Retained earnings 280,874 278,210 Total stockholders' equity 407,605 403,996 Total liabilities and stockholders' equity $ 1,016,828 $ 1,045,548 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 months ended March 31, 2026 and 2025 (In thousands, except per share data) Three Months Ended March 31, (unaudited) 2026 2025 Revenues Freight revenue $ 281,925 $ 243,219 Fuel surcharge revenue 25,236 26,136 Total revenue $ 307,161 $ 269,355 Operating expenses: Salaries, wages, and related expenses $ 109,268 $ 104,952 Fuel expense 28,297 28,168 Operations and maintenance 17,914 15,750 Revenue equipment rentals and purchased transportation 89,218 56,805 Operating taxes and licenses 2,989 3,586 Insurance and claims 12,646 15,283 Communications and utilities 2,034 1,468 General supplies and expenses 14,199 13,595 Depreciation and amortization 23,976 21,795 Loss on disposition of property and equipment, net 338 326 Total operating expenses 300,879 261,728 Operating income 6,282 7,627 Interest expense, net 3,886 2,857 Income from equity method investment ( 3,687 ) ( 3,776 ) Income before income taxes 6,083 8,546 Income tax expense 1,663 1,983 Net income $ 4,420 $ 6,563 Basic income per share: Net income per share $ 0.18 $ 0.25 Diluted income per share: Net income per share $ 0.17 $ 0.24 Basic weighted average shares outstanding 25,082 26,538 Diluted weighted average shares outstanding 26,434 27,877 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 months ended March 31, 2026 and 2025 (Unaudited and in thousands ) Three Months Ended March 31, 2026 2025 Net income $ 4,420 $ 6,563 Other comprehensive income: Unrealized gain (loss) on effective portion of cash flow hedges, net of tax of ($ 25 ) in 2026 and $ 67 in 2025, respectively 73 ( 193 ) Reclassification of cash flow hedge gains into statement of operations, net of tax of $ 13 in 2026 and $ 21 in 2025, respectively ( 36 ) ( 60 ) Total other comprehensive gain (loss)(1) 37 ( 253 ) Comprehensive income $ 4,457 $ 6,310 (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 months ended March 31, 2026 and 2025 (Unaudited and in thousands) For the Three Months Ended March 31, 2026 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, 2025 $ 219 $ 47 $ 159,492 $ ( 34,584 ) $ 612 $ 278,210 $ 403,996 Net income - - - - - 4,420 4,420 Cash dividend ($ 0.07 per common share) - - - - - ( 1,756 ) ( 1,756 ) Other comprehensive loss - - - - 37 - 37 Stock-based employee compensation expense - - 934 - - - 934 Exercise of stock options - - ( 169 ) 269 - - 100 Issuance of restricted shares, net - - ( 282 ) 156 - - ( 126 ) Balances at March 31, 2026 $ 219 $ 47 $ 159,975 $ ( 34,159 ) $ 649 $ 280,874 $ 407,605 For the Three Months Ended March 31, 2025 Accumulated Additional Other Total Common Stock Paid-In Comprehensive Retained Stockholders' Class A Class B Capital 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 income - - - ( 253 ) - ( 253 ) Exercise of stock options 1 - 399 - - 400 Stock-based employee compensation expense - - 1,011 - - 1,011 Issuance of restricted shares, net - - ( 559 ) - - ( 559 ) Balances at March 31, 2025 $ 219 $ 47 $ 159,758 $ 782 $ 282,838 $ 443,644 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 three months ended March 31, 2026 and 2025 (Unaudited and in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 4,420 $ 6,563 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses on accounts receivable ( 130 ) - Reversal of gain on sales to equity method investee ( 28 ) - Depreciation and amortization 23,976 21,795 Deferred income tax benefit (expense) 1,181 ( 2,652 ) Income tax expense arising from restricted share vesting and stock options exercised ( 116 ) ( 288 ) Stock-based compensation expense 934 1,011 Income from equity method investment ( 3,687 ) ( 3,776 ) Loss on disposition of property and equipment 338 526 Changes in operating assets and liabilities: Receivables and advances ( 1,292 ) ( 470 ) Prepaid expenses and other assets 3,286 4,832 Inventory and supplies ( 828 ) 152 Insurance and claims accrual 1,991 9,243 Accounts payable and accrued expenses ( 1,082 ) ( 12,106 ) Net cash flows provided by operating activities 28,963 24,830 Cash flows from investing activities: Other investments ( 18 ) ( 137 ) Purchase of property and equipment ( 11,370 ) ( 33,425 ) Proceeds from disposition of property and equipment 35,613 9,482 Net cash flows provided by (used by) investing activities 24,225 ( 24,080 ) Cash flows from financing activities: Cash dividend ( 1,756 ) ( 1,858 ) Proceeds from notes payable 7,641 23,588 Repayments of notes payable ( 51,186 ) ( 41,991 ) Repayments of finance lease obligations ( 233 ) ( 180 ) Proceeds under revolving credit facility 52,227 124 Repayments under revolving credit facility ( 53,227 ) ( 124 ) Payment of contingent consideration liability ( 329 ) ( 4,530 ) Proceeds from exercise of stock options 100 400 Payment of minimum tax withholdings on stock compensation ( 126 ) ( 559 ) Net cash flows used by financing activities ( 46,889 ) ( 25,130 ) Net change in cash and cash equivalents 6,299 ( 24,380 ) Cash and cash equivalents at beginning of period 4,946 35,619 Cash and cash equivalents at end of period $ 11,245 $ 11,239 Supplemental disclosure of cash flow information: Cash paid (received) during the year for: Interest, net of capitalized interest 3,154 2,635 Income taxes ( 112 ) ( 1,988 ) Non-cash transactions during the year for: Equipment acquired under operating leases 818 2,876 Non-cash capital asset acquisitions 530 1,728 Non-cash debt reduction ( 36 ) - Insurance and claims accruals 12,479 7,805 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, 2025 , 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 three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 . 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, 2025 . 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 reportable segment profile of the equipment. 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. 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 November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses which was later clarified by ASU 2025 - 01. 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. Accounting standards adopted 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 became effective for us for our annual reporting period beginning January 1, 2026, and related interim reporting periods. We made the election to adopt the practical expedient as of January 1, 2026. The adoption of this standard had an immaterial effect on our consolidated financial statements. 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 March 31, 2026 2025 Numerator: Net income $ 4,420 $ 6,563 Denominator: Denominator for basic income per share – weighted-average shares 25,082 26,538 Effect of dilutive securities: Equivalent shares issuable upon conversion of unvested restricted shares 128 129 Equivalent shares issuable upon conversion of unvested employee stock options 1,224 1,210 Denominator for diluted income per share adjusted weighted-average shares and assumed conversions 26,434 27,877 Basic income per share $ 0.18 $ 0.25 Diluted income per share $ 0.17 $ 0.24 There were no unvested shares excluded from the calculation of diluted earnings per share as anti-dilutive for the three months ended March 31, 2026 and 2025 . There were no unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three months ended March 31, 2026 and 2025 . 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) March 31, 2026 December 31, 2025 Input Level Interest rate swaps 875 826 2 Contingent consideration ( 22,488 ) ( 22,489 ) 3 Cash surrender value life insurance policies 5,059 5,041 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 March 31, 2026 , 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 $ 30.0 million of additional consideration to Lew Thompson & Son Trucking, LLC's ("LTST's") former owners 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 owners 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"). Additionally, the acquisition of assets that are now operating as Star (the "Star Acquisition") requires us to pay additional consideration to the sellers as described in Note 13 "Acquisition of Assets of a Brokerage Business Operating as Star Logistics Solutions". 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 March 31, 2026 and 2025, there were contingent payments made of $ 0.3 million as a result of the Asset Acquisition and $ 12.5 million based on LTST's results for the first calendar year following closing, respectively. The $ 0.3 million paid for the contingent consideration liability during 2026 was classified as financing cash flows within the condensed consolidated statements of cash flows. Of the $ 12.5 million paid for the contingent consideration liability during 2025, $ 4.5 million was classified as financing cash flows and $ 8.0 million was classified as operating cash flows within the condensed consolidated statements of cash flows. The fair value of the contingent consideration increased $ 0.3 million and $ 0.7 million due to a change in the fair value for the LTST contingent consideration for the three months ended March 31, 2026 and 2025, respectively. Additionally, contingent consideration increased $ 5.0 million for the three months ended March 31, 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 2026: December 31, 2025 Additions Adjustments to fair market value Payments March 31, 2026 Contingent consideration $ ( 22,489 ) $ - $ ( 328 ) $ 329 $ ( 22,488 ) 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 months ended March 31, 2026 and 2025 : (in thousands) Three Months Ended March 31, 2026 Expedited Dedicated Managed Freight Warehousing Total Revenues Freight revenue $ 71,949 $ 91,064 $ 90,731 $ 27,552 $ 281,296 Fuel surcharge revenue (1) 12,722 12,359 - 155 25,236 Subtotal operating revenues $ 84,671 $ 103,423 $ 90,731 $ 27,707 $ 306,532 Other revenues 629 Total revenue $ 307,161 Operating expenses: Salaries, wages, and related expenses 28,027 44,243 3,173 14,740 Fuel expense 14,509 14,162 - 217 Operations and maintenance 9,301 11,110 501 1,854 Revenue equipment rentals and purchased transportation 15,082 7,198 79,369 1,197 Operating taxes and licenses 288 720 31 439 Insurance and claims 6,651 5,610 468 243 Communications and utilities - 222 34 378 General supplies and expenses 355 393 1,229 3,948 Depreciation and amortization 1 4,875 99 424 Loss on disposition of property and equipment, net - - - - Total allocated overhead 7,636 9,303 2,124 2,489 Segment operating expenses 81,850 97,836 87,028 25,929 292,643 Subtotal operating income $ 2,821 $ 5,587 $ 3,703 $ 1,778 $ 14,518 Other (2) ( 8,236 ) Total consolidated operating income 6,282 Interest expense, net ( 3,886 ) Income from equity method investment 3,687 Income before income taxes $ 6,083 (in thousands) Three Months Ended March 31, 2025 Expedited Dedicated Managed Freight Warehousing Total Revenues Freight revenue $ 80,249 $ 82,080 $ 56,850 $ 24,040 $ 243,219 Fuel surcharge revenue (1) 14,444 11,529 - 163 26,136 Subtotal operating revenues $ 94,693 $ 93,609 $ 56,850 $ 24,203 $ 269,355 Other revenues - Total revenue $ 269,355 Operating expenses: Salaries, wages, and related expenses 31,489 39,359 2,277 11,428 Fuel expense 14,934 13,086 - 175 Operations and maintenance 10,843 10,614 ( 57 ) 1,150 Revenue equipment rentals and purchased transportation 16,561 8,343 47,631 1,077 Operating taxes and licenses 336 608 57 790 Insurance and claims 6,574 4,993 132 207 Communications and utilities - 163 10 241 General supplies and expenses 244 503 790 4,404 Depreciation and amortization 3 4,067 22 481 Gain on disposition of property and equipment, net - 82 - - Total allocated overhead 8,118 9,706 2,447 2,408 Segment operating expenses 89,102 91,524 53,309 22,361 256,296 Segment operating income $ 5,591 $ 2,085 $ 3,541 $ 1,842 $ 13,059 Other (2) ( 5,432 ) Total consolidated operating income 7,627 Interest expense, net ( 2,857 ) Income from equity method investment 3,776 Income before income taxes $ 8,546 ( 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 2026 and 2025 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 March 31, 2026 is unchanged since December 31, 2025 . The net deferred tax liability of $ 120.8 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. There was no material change to the valuation allowance as March 31, 2026 . The Company continues to have a significant amount of reversing temporary differences that can be considered as future sources of taxable income. 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. We considered the effects of the OBBBA in our provision for income taxes with no other adjustments expected as of March 31, 2026. Page 12 Table of Contents Note 6. Debt Current and long-term debt and lease obligations consisted of the following as of March 31, 2026 and December 31, 2025 : (in thousands) March 31, 2026 December 31, 2025 Current Long-Term Current Long-Term Borrowings under Credit Facility $ - $ 29,000 $ - $ 30,000 Revenue equipment installment notes; weighted average interest rate of 5.1 % at March 31, 2026, and 5.1% at December 31, 2025, due in monthly installments with final maturities at various dates ranging from April 2026 to February 2032, secured by related revenue equipment 50,735 157,702 62,602 189,115 Real estate notes; interest rate of 5.4 % at March 31, 2026 and 5.6 % at December 31, 2025 due in monthly installments with a fixed maturity at August 2035, secured by related real estate 1,418 14,687 1,403 14,931 Total debt 52,153 201,389 64,005 234,046 Principal portion of finance lease obligations, secured by related revenue equipment 865 2,095 840 2,353 Principal portion of operating lease obligations, secured by related real estate and revenue equipment 12,554 22,693 12,182 25,272 Total debt and lease obligations $ 65,572 $ 226,177 $ 77,027 $ 261,671 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 $ 29.0 million borrowings outstanding under the Credit Facility as of March 31, 2026 , undrawn letters of credit outstanding of approximately $ 19.9 million, and available borrowing capacity of $ 57.5 million. As of March 31, 2026 , there were no base rate and $ 29.0 million of SOFR loans. Based on availability as of March 31, 2026 and 2025 , 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 April 2026 to February 2032 . 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. 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 2026 , 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 required debt covenants for the next 12 months. Page 14 Table of Contents Note 7. Lease Obligations The finance leases in effect at March 31, 2026 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 March 31, 2026 and 2025 are as follows: (dollars in thousands) Three Months Ended Three Months Ended March 31, 2026 March 31, 2025 Finance lease cost: Amortization of right-of-use assets $ 218 $ 219 Interest on lease liabilities 105 124 Operating lease cost 3,689 3,841 Variable lease cost 16 ( 84 ) Short-term lease cost 2,279 1,205 Total lease cost 6,307 5,305 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases 105 124 Operating cash flows from operating leases 3,075 3,019 Financing cash flows from finance leases 233 180 Right-of-use assets obtained in exchange for new finance lease liabilities - - Right-of-use assets obtained in exchange for new operating lease liabilities 818 2,876 Weighted-average remaining lease term—finance leases (in years) 4.2 4.5 Weighted-average remaining lease term—operating leases (in years) 3.4 4.2 Weighted-average discount rate—finance leases 12.5 % 12.8 % Weighted-average discount rate—operating leases 8.7 % 8.4 % As of March 31, 2026 and December 31, 2025 , right-of-use assets of $ 33.3 million and $ 35.5 million for operating leases and $ 2.6 million and $ 2.8 million for finance leases, respectively. Finance leases 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, communications and utilities, 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 March 31, 2026 , are summarized as follows by lease category: (in thousands) Operating Finance 2026 (1) 11,110 $ 909 2027 13,216 1,212 2028 7,046 930 2029 4,074 340 2030 2,602 214 Thereafter 2,101 285 Total minimum lease payments $ 40,149 $ 3,890 Less: amount representing interest ( 4,902 ) ( 930 ) Present value of minimum lease payments $ 35,247 $ 2,960 Less: current portion ( 12,554 ) ( 865 ) Lease obligations, long-term $ 22,693 $ 2,095 ( 1 ) Excludes the three months ended March 31, 2026 . 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 March 31, 2026 , there were 1,852,982 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 $ 0.7 million and $ 0.8 million for the three months ended March 31, 2026 and 2025 , 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 March 31, 2026 and 2025 . The stock compensation expense recorded for the three months ended March 31, 2026 and 2025 , of $ 0.7 million and $ 0.8 million relates to restricted shares, respectively. There were no unvested employee stock options or related stock compensation expense for the three months ended March 31, 2026 or 2025 . 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 March 31, 2026 , certain participants elected to forfeit receipt of an aggregate of 4,200 shares of Class A common stock at a weighted average per share price of $ 29.44 based on the closing price of our Class A common stock on the dates the shares vested in 2026 , in lieu of the federal and state minimum statutory tax withholding requirements. We remitted $ 0.1 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 Covenant Transport Solutions, LLC, and using a trailer owned by CTG Leasing 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 March 31, 2026, the Company accrued $ 0.7 million for legal costs associated with the accident, but it has not recorded any other liability related to the accident. To the extent Covenant Transport Solutions, LLC, 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 of outstanding and undrawn letters of credit as of March 31, 2026 and December 31, 2025 . The letters of credit are maintained primarily to support our insurance programs. 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. Similarly, we are generally restricted from transferring our interest in TEL, other than to certain permitted transferees, without their 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 March 31, 2026 , we had a revenue equipment operating lease liability to TEL of $ 7.3 million with final maturities at various dates ranging from April 2029 to August 2029. No other transactions with TEL were material for the three months ended March 31, 2026 and 2025 . 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 2026 net income through March 31, 2026 , or $ 3.7 million. Our accounts receivable from TEL, accounts payable to TEL, and investment in TEL as of March 31, 2026 and December 31, 2025 are as follows (in thousands): Description: Balance Sheet Line Item: March 31, 2026 December 31, 2025 Accounts receivable from TEL Driver advances and other receivables $ 6 $ 13 Accounts payable to TEL Accrued expenses $ 443 $ 460 Investment in TEL Other assets $ 89,227 $ 85,512 Operating lease obligations Current and long-term portion of operating lease obligations $ 7,269 $ 7,800 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 The Landair Holdings, Inc. ("Landair") trade name has a residual value of $ 0.5 million. Amortization expense of $ 3.0 million and $ 2.4 million for the three months ended March 31, 2026 and 2025 , 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 March 31, 2026 and December 31, 2025 is as follows: (in thousands) March 31, 2026 Gross intangible assets Accumulated amortization Net intangible assets Remaining life (months) Trade name: Dedicated $ 4,502 $ ( 2,742 ) $ 1,760 Managed Freight 1,089 ( 932 ) 157 Warehousing 999 ( 885 ) 114 Total trade name 6,590 ( 4,559 ) 2,031 83 Non-compete agreement: Dedicated 4,670 ( 3,405 ) 1,265 Managed Freight 630 ( 278 ) 352 Total non-compete agreement 5,300 ( 3,683 ) 1,617 17 Customer relationships: Dedicated 71,374 ( 18,210 ) 53,164 Managed Freight 22,112 ( 3,832 ) 18,280 Warehousing 12,436 ( 8,031 ) 4,405 Total customer relationships: 105,922 ( 30,073 ) 75,849 133 Credentialing: Expedited 32,000 ( 8,889 ) 23,111 Total credentialing 32,000 ( 8,889 ) 23,111 130 Total other intangible assets $ 149,812 $ ( 47,204 ) $ 102,608 129 (in thousands) December 31, 2025 Gross intangible assets Accumulated amortization Net intangible assets Remaining life (months) Trade name: Dedicated $ 4,502 $ ( 2,689 ) $ 1,813 Managed Freight 1,089 ( 927 ) 162 Warehousing 999 ( 885 ) 114 Total trade name 6,590 ( 4,501 ) 2,089 86 Non-compete agreement: Dedicated 4,670 ( 3,113 ) 1,557 Managed Freight 630 ( 238 ) 392 Total non-compete agreement 5,300 ( 3,351 ) 1,949 15 Customer relationships: Dedicated 71,374 ( 16,959 ) 54,415 Managed Freight 22,112 ( 3,264 ) 18,848 Warehousing 12,436 ( 7,772 ) 4,664 Total customer relationships: 105,922 ( 27,995 ) 77,927 131 Credentialing: Expedited 32,000 ( 8,356 ) 23,644 Total credentialing 32,000 ( 8,356 ) 23,644 133 Total other intangible assets $ 149,812 $ ( 44,203 ) $ 105,609 128 The expected amortization of these assets for the next five successive years is as follows: (in thousands) 2026 (1) 9,000 2027 11,191 2028 10,732 2029 10,705 2030 9,215 Thereafter 51,265 ( 1 ) Excludes the three months ended March 31, 2026 . Page 19 Table of Contents The assignment of goodwill and intangible assets to our reportable segments was not complete as of March 31, 2026 due to the October 2025 Star Acquisition. The carrying amount of goodwill was $ 80.4 million at March 31, 2026 and $ 80.5 million at December 31, 2025 . A summary of the changes in the carrying amount of goodwill by reportable segment is as follows: (in thousands) Expedited Dedicated Managed Freight Warehousing Total Balance at December 31, 2025 $ 15,699 $ 21,877 $ 21,151 $ 21,750 $ 80,477 Post-acquisition goodwill adjustments - - ( 37 ) - ( 37 ) Balance at March 31, 2026 $ 15,699 $ 21,877 $ 21,114 $ 21,750 $ 80,440 At March 31, 2026, 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 $ 29.1 million and $ 14.6 million at March 31, 2026 and December 31, 2025, respectively, included in 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. Note 12. Equity Other Equity 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 twelve months ended December 31, 2025 with no such repurchases during the three months ended March 31, 2026 . Dividends On February 5, 2026, our Board declared a cash dividend of $ 0.07 per share which was paid on March 27, 2026, to stockholders of record on March 6, 2026. 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 November 20, 2025, our board declared a cash dividend of $ 0.07 per share which was paid on December 26, 2025, to stockholders of record on December 5, 2025. Note 13. Acquisition of Assets of Brokerage Business Operating as Star Logistics Solutions On October 10, 2025, we acquired the assets of a truckload brokerage business, which we are operating as Star. Star operates in the consumer retail and disaster relief sectors where we historically have lacked exposure. Additionally, the disaster recovery market is highly specialized and synergistic with our Expedited business and offers occasional, high volume and high margin opportunities. The acquisition date fair value of the consideration transferred was $ 27.1 million. The Asset Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. The Asset Purchase Agreement includes an earnout component based on Star's average adjusted earnings before interest, taxes, depreciation, and amortization reported for the three years ended December 31, 2028 with potential advance payments based on Star's adjusted earnings before interest, taxes, depreciation, and amortization reported for each of the years ended December 31, 2026 and 2027. The total purchase price, including any earnout achieved, is expected to be approximately $ 27.2 million depending on the results achieved by Star. The acquisition date fair value of the consideration transferred consisted of the following: October 10, 2025 (in thousands) Cash paid pursuant to Asset Purchase Agreement $ 27,053 Contingent consideration 159 Net purchase price $ 27,212 We estimated the fair value of the contingent consideration using a probability-weighted model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. Refer to Note 3, "Fair Value of Financial Instruments" for information regarding changes in the contingent consideration arrangement. All goodwill related to the acquisition is deductible for tax purposes, and there are no deferred income taxes arising from the acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date. October 10, 2025 Accounts receivable $ 10,466 Driver advances and other receivables 707 Inventory and supplies 16 Prepaid expenses 438 Other short-term assets 250 Net property and equipment 2,169 Other intangibles, net 15,050 Total identifiable assets acquired 29,096 Accounts payable ( 10,149 ) Accrued expenses ( 2,235 ) Current maturities of long-term debt ( 168 ) Current portion of operating lease obligations ( 584 ) Current portion of insurance and claims accrual ( 258 ) Long-term portion of operating lease obligations ( 560 ) Total liabilities assumed ( 13,954 ) Net identifiable assets acquired 15,142 Goodwill 12,070 Net assets acquired $ 27,212 Goodwill and other intangible assets may change upon the finalization of the valuation of the contingent consideration liability and intangible assets as part of the purchase accounting for the acquisition. The goodwill recognized is attributable primarily to expected cost synergies as a result of overhead support. Refer to Note 11, "Goodwill, Intangibles, and Other Assets" for a summary of changes to goodwill during the period as well as information related to the identifiable intangible asset acquired. Star’s results have been included in the consolidated financial statements since the date of acquisition and are reported within our Managed Freight reportable segment. The following unaudited pro forma consolidated results of operations assume that the acquisition of Star occurred as of January 1, 2025: (in thousands) Three months ended Three months ended March 31, 2026 March 31, 2025 Total revenue $ 307,161 $ 301,793 Net income $ 4,420 $ 6,964 Basic net income per share $ 0.18 $ 0.26 Diluted net income per share $ 0.17 $ 0.25 The pro forma financial information for all periods presented above has been calculated after adjusting the results of Star to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets as though the acquisition occurred as of the beginning of the Company’s fiscal year 2025. As noted above, the allocation is preliminary and changes to the value of the contingent consideration and finalization of our valuation could result in changes to the amount of amortization expense from acquired intangible assets included in the pro forma financial information presented above. The Company's historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2025. Page 20 Table of Contents