MARTEN TRANSPORT LTD 10-Q

Item 1. Financial Statements. MARTEN TRANSPORT, LTD. CONSOLIDATED CONDENSED BALANCE SHEETS September 30, December 31, (In thousands, except share information) 2025 2024 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 49,485 $ 17,267 Receivables: Trade, net 92,011 89,992 Other 9,201 5,364 Prepaid expenses and other 25,296 25,888 Total current assets 175,993 138,511 Property and equipment: Revenue equipment, buildings and land, office equipment and other 1,148,269 1,198,737 Accumulated depreciation ( 355,266 ) ( 370,124 ) Net property and equipment 793,003 828,613 Escrow deposit 5,000 - Other noncurrent assets 1,655 1,633 Total assets $ 975,651 $ 968,757 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 39,744 $ 25,781 Insurance and claims accruals 41,313 44,246 Accrued and other current liabilities 34,527 23,492 Total current liabilities 115,584 93,519 Deferred income taxes 91,617 107,034 Noncurrent operating lease liabilities 250 282 Total liabilities 207,451 200,835 Stockholders’ equity: Preferred stock, $ .01 par value per share; 2,000,000 shares authorized; no shares issued and outstanding - - Common stock, $ .01 par value per share; 192,000,000 shares authorized; 81,520,424 shares at September 30, 2025, and 81,463,938 shares at December 31, 2024, issued and outstanding 815 815 Additional paid-in capital 54,143 52,941 Retained earnings 713,242 714,166 Total stockholders’ equity 768,200 767,922 Total liabilities and stockholders’ equity $ 975,651 $ 968,757 The accompanying notes are an integral part of these consolidated condensed financial statements. 1 MARTEN TRANSPORT, LTD. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, (In thousands, except per share information) 2025 2024 2025 2024 Operating revenue $ 220,470 $ 237,366 $ 673,544 $ 733,276 Operating expenses (income): Salaries, wages and benefits 78,972 83,442 236,342 258,723 Purchased transportation 42,284 44,862 123,063 129,911 Fuel and fuel taxes 33,526 35,781 99,234 114,151 Supplies and maintenance 15,585 16,464 46,704 49,006 Depreciation 25,447 27,392 80,224 84,125 Operating taxes and licenses 2,423 2,505 7,291 7,619 Insurance and claims 11,382 13,759 40,611 37,975 Communications and utilities 2,093 2,166 6,536 6,834 Gain on disposition of revenue equipment ( 1,903 ) ( 881 ) ( 8,750 ) ( 4,584 ) Other 7,923 7,607 23,958 23,023 Total operating expenses 217,732 233,097 655,213 706,783 Operating income 2,738 4,269 18,331 26,493 Other ( 213 ) ( 922 ) ( 998 ) ( 2,732 ) Income before income taxes 2,951 5,191 19,329 29,225 Income taxes expense 725 1,437 5,582 7,936 Net income $ 2,226 $ 3,754 $ 13,747 $ 21,289 Basic earnings per common share $ 0.03 $ 0.05 $ 0.17 $ 0.26 Diluted earnings per common share $ 0.03 $ 0.05 $ 0.17 $ 0.26 Dividends declared per common share $ 0.06 $ 0.06 $ 0.18 $ 0.18 The accompanying notes are an integral part of these consolidated condensed financial statements. 2 MARTEN TRANSPORT, LTD. CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS ’ EQUITY (Unaudited) Common Stock Additional Paid-In Retained Total Stock- holders’ (In thousands) Shares Amount Capital Earnings Equity Balance at December 31, 2024 81,464 $ 815 $ 52,941 $ 714,166 $ 767,922 Net income - - - 4,335 4,335 Issuance of common stock from share-based payment arrangement exercises and vesting of performance unit awards 29 - 9 - 9 Employee taxes paid in exchange for shares withheld - - ( 284 ) - ( 284 ) Share-based payment arrangement compensation expense - - 407 - 407 Dividends on common stock, $ 0.06 per share - - - ( 4,889 ) ( 4,889 ) Balance at March 31, 2025 81,493 815 53,073 713,612 767,500 Net income - - - 7,186 7,186 Issuance of common stock from share-based payment arrangement exercises 27 - - - - Share-based payment arrangement compensation expense - - 921 - 921 Dividends on common stock, $ 0.06 per share - - - ( 4,891 ) ( 4,891 ) Balance at June 30, 2025 81,520 815 53,994 715,907 770,716 Net income - - - 2,226 2,226 Share-based payment arrangement compensation expense - - 149 - 149 Dividends on common stock, $ 0.06 per share - - - ( 4,891 ) ( 4,891 ) Balance at September 30, 2025 81,520 $ 815 $ 54,143 $ 713,242 $ 768,200 The accompanying notes are an integral part of these consolidated condensed financial statements. 3 MARTEN TRANSPORT, LTD. CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS ’ EQUITY (Unaudited) Common Stock Additional Paid-In Retained Total Stock- holders’ (In thousands) Shares Amount Capital Earnings Equity Balance at December 31, 2023 81,312 $ 813 $ 49,789 $ 706,784 $ 757,386 Net income - - - 9,646 9,646 Issuance of common stock from share-based payment arrangement exercises and vesting of performance unit awards 51 1 306 - 307 Employee taxes paid in exchange for shares withheld - - ( 382 ) - ( 382 ) Share-based payment arrangement compensation expense - - 353 - 353 Dividends on common stock, $ 0.06 per share - - - ( 4,881 ) ( 4,881 ) Balance at March 31, 2024 81,363 814 50,066 711,549 762,429 Net income - - - 7,889 7,889 Issuance of common stock from share-based payment arrangement exercises 52 - 308 - 308 Share-based payment arrangement compensation expense - - 1,011 - 1,011 Dividends on common stock, $ 0.06 per share - - - ( 4,884 ) ( 4,884 ) Balance at June 30, 2024 81,415 814 51,385 714,554 766,753 Net income - - - 3,754 3,754 Issuance of common stock from share-based payment arrangement exercises 33 - 421 - 421 Share-based payment arrangement compensation expense - - 419 - 419 Dividends on common stock, $ 0.06 per share - - - ( 4,886 ) ( 4,886 ) Balance at September 30, 2024 81,448 $ 814 $ 52,225 $ 713,422 $ 766,461 The accompanying notes are an integral part of these consolidated condensed financial statements. 4 MARTEN TRANSPORT, LTD. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, (In thousands) 2025 2024 Cash flows provided by operating activities: Operations: Net income $ 13,747 $ 21,289 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 80,224 84,125 Tires in service amortization 4,805 5,247 Gain on disposition of revenue equipment ( 8,750 ) ( 4,584 ) Deferred income taxes ( 15,417 ) ( 6,019 ) Share-based payment arrangement compensation expense 1,477 1,783 Changes in other current operating items: Receivables ( 3,030 ) 16,623 Prepaid expenses and other ( 2,087 ) ( 3,116 ) Accounts payable 8,520 ( 158 ) Insurance and claims accruals ( 2,933 ) ( 4,071 ) Accrued and other current liabilities 11,350 ( 98 ) Net cash provided by operating activities 87,906 111,021 Cash flows used for investing activities: Revenue equipment additions ( 121,725 ) ( 170,026 ) Proceeds from revenue equipment dispositions 89,372 67,684 Buildings and land, office equipment and other additions ( 3,337 ) ( 4,864 ) Proceeds from buildings and land, office equipment and other dispositions - 8 Other ( 52 ) ( 49 ) Net cash used for investing activities ( 35,742 ) ( 107,247 ) Cash flows used for financing activities: Dividends on common stock ( 14,671 ) ( 14,651 ) Issuance of common stock from share-based payment arrangement exercises and vesting of performance unit awards 9 1,036 Employee taxes paid in exchange for shares withheld ( 284 ) ( 382 ) Net cash used for financing activities ( 14,946 ) ( 13,997 ) Net change in cash and cash equivalents and escrow deposit 37,218 ( 10,223 ) Cash and cash equivalents and escrow deposit: Beginning of period 17,267 53,213 End of period $ 54,485 $ 42,990 Supplemental non-cash disclosure: Change in property and equipment not yet paid $ 2,617 $ 9,726 Operating lease assets and liabilities acquired $ 287 $ 253 Supplemental disclosure of cash flow information: Cash paid for income taxes $ 14,502 $ 8,673 Reconciliation of cash and cash equivalents and escrow deposit in the consolidated condensed balance sheets Cash and cash equivalents $ 49,485 $ 42,990 Escrow deposit 5,000 - Total cash and cash equivalents and escrow deposit shown above $ 54,485 $ 42,990 The accompanying notes are an integral part of these consolidated condensed financial statements. 5 MARTEN TRANSPORT, LTD. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2025 (Unaudited) (1) Consolidated Condensed Financial Statements The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements, and therefore do not include all information and disclosures required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, such statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present our consolidated financial condition, results of operations and cash flows for the interim periods presented. The results of operations for any interim period do not necessarily indicate the results for the full year. The unaudited interim consolidated condensed financial statements should be read with reference to the consolidated financial statements and notes to consolidated financial statements in our 2024 Annual Report on Form 10-K. (2) Earnings per Common Share Basic and diluted earnings per common share were computed as follows: Three Months Nine Months Ended September 30, Ended September 30, (In thousands, except per share amounts) 2025 2024 2025 2024 Numerator: Net income $ 2,226 $ 3,754 $ 13,747 $ 21,289 Denominator: Basic earnings per common share - weighted-average shares 81,520 81,437 81,508 81,389 Effect of dilutive stock options 7 55 8 71 Diluted earnings per common share - weighted-average shares and assumed conversions 81,527 81,492 81,516 81,460 Basic earnings per common share $ 0.03 $ 0.05 $ 0.17 $ 0.26 Diluted earnings per common share $ 0.03 $ 0.05 $ 0.17 $ 0.26 Options totaling 672,071 and 632,398 equivalent shares for the three-month and nine-month periods ended September 30, 2025, respectively, and 522,300 and 518,200 equivalent shares for the three-month and nine-month periods ended September 30, 2024, respectively, were outstanding but were not included in the calculation of diluted earnings per share because including the options in the denominator would be antidilutive, or decrease the number of weighted-average shares, due to their exercise prices exceeding the average market price of the common shares, or because inclusion of average unrecognized compensation expense in the calculation would cause the options to be antidilutive. Unvested performance unit awards totaling 154,059 equivalent shares for each of the three-month and nine-month periods ended September 30, 2025, and 141,320 equivalent shares for each of the three-month and nine-month periods ended September 30, 2024, were considered outstanding but were not included in the calculation of diluted earnings per share because inclusion of average unrecognized compensation expense in the calculation would cause the performance units to be antidilutive. (3) Long-Term Debt In August 2022, we entered into a credit agreement that provides for an unsecured committed credit facility with an aggregate principal amount of $ 30.0 million which matures in August 2027. The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended. At September 30, 2025, there was no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $ 24.1 million and remaining borrowing availability of $ 5.9 million. At December 31, 2024, there was also no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $ 23.1 million on the facility. This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins. The interest rate for the facility that would apply to outstanding principal balances was 7.25 % at September 30, 2025. 6 Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $ 150 million. The current credit agreement also contains restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at September 30, 2025 and December 31, 2024. (4) Related Party Transactions We purchase tires and obtain related services from Bauer Built, Inc., or BBI. Jerry M. Bauer, the chairman of the board and chief executive officer of BBI, is one of our directors. We paid BBI $ 22,000 in each of the first nine months of 2025 and 2024 for tires and related services. In addition, we paid $ 1.2 million in the first nine months of 2025 and $ 1.7 million in the first nine months of 2024 to tire manufacturers for tires that were provided by BBI. BBI received commissions from the tire manufacturers related to these purchases. We paid Durand Builders Service, Inc. $ 8,000 in the first nine months of 2024 for building repairs and had no transactions with that company in the first nine months of 2025. Larry B. Hagness, one of our directors, is the chief executive officer and principal stockholder of Durand Builders Service, Inc. (5) Share Repurchase Program In August 2019, our Board of Directors approved and we announced an increase from current availability in our existing share repurchase program providing for the repurchase of up to $ 34.0 million, or approximately 1.8 million shares, of our common stock, which was increased by our Board of Directors to 2.7 million shares in August 2020 to reflect the three -for- two stock split effected in the form of a stock dividend in August 2020. In May 2022, our Board of Directors approved and we announced an additional increase from current availability in our existing share repurchase program providing for the repurchase of up to $ 50.0 million, or approximately 3.1 million shares of our common stock. The share repurchase program allows purchases on the open market or through private transactions in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and extent to which we repurchase shares depends on market conditions and other corporate considerations. The repurchase program does not have an expiration date. We repurchased and retired 1.3 million shares of common stock for $ 25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $ 16.8 million in the second quarter of 2022. We have not repurchased any shares since the second quarter of 2022. As of September 30, 2025, future repurchases of up to $ 33.2 million, or approximately 2.2 million shares, were available in the share repurchase program. (6) Dividends In 2010, we announced a regular cash dividend program to our stockholders, subject to approval each quarter. Quarterly cash dividends of $ 0.06 per share of common stock were paid in each of the first three quarters of 2025 and 2024 which totaled $ 14.7 million in each period. (7) Accounting for Share-based Payment Arrangement Compensation We account for share-based payment arrangements in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 718, Compensation – Stock Compensation . During the first nine months of 2025, there were no significant changes to the structure of our stock-based award plans. Pre-tax compensation expense related to stock options and performance awards recorded in the first nine months of 2025 and 2024 was $ 1.5 million and $ 1.8 million, respectively. (8) Fair Value of Financial Instruments The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these instruments. (9) Commitments and Contingencies We are committed to new revenue equipment purchases of $ 32.9 million for the remainder of 2025. Operating lease obligation expenditures through 2028 total $ 613,000 . 7 We self-insure, in part, for losses relating to workers’ compensation, auto liability, general liability, cargo and property damage claims, along with employees’ health insurance, with varying risk retention levels. We renewed our liability insurance policies effective June 1, 2025, and are responsible for the first $ 3.0 million on each auto liability claim. For the policy year effective June 1, 2024, we are responsible for the first $ 2.0 million on each auto liability claim. For both policy years, we are also responsible for an annual $ 5.0 million aggregate for claims between $ 10.0 million and $ 20.0 million. For the policy year effective June 1, 2023, we are responsible for the first $ 1.0 million on each auto liability claim with no aggregates. We continue to be responsible for the first $ 750,000 on each workers’ compensation claim. We maintain insurance coverage for per-incident and total losses in excess of these risk retention levels in amounts we consider adequate based upon historical experience and our ongoing review, and reserve currently for the estimated cost of the uninsured portion of pending claims. We are also involved in other legal actions that arise in the ordinary course of business. A number of trucking companies, including us, have been subject to lawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants. We self-insure for such claims and record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. The outcome of litigation, particularly class action lawsuits, is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. Not all claims are covered by our insurance, and there can be no assurance that our coverage limits will be adequate to cover all amounts in dispute. To the extent we experience claims that are uninsured, exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts or cause increases in future premiums, the resulting expense could have a materially adverse effect on our business and operating results. Based on our present knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of open claims and pending litigation, taking into account existing reserves, is not likely or probable to have a materially adverse effect on our consolidated condensed financial statements; however, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time. As such, future liability claims or adverse developments in existing claims could have a materially adverse effect on our consolidated condensed financial statements. (10) Sale of Intermodal Business Assets On September 30, 2025, we closed on the previously announced agreement to sell the assets related to our Intermodal business to Hub Group, Inc. The transaction was structured as an asset sale of certain Intermodal equipment, including over 1,200 refrigerated containers, and associated customer contracts to Hub Group, Inc. for $ 51.8 million in cash. No gain or loss on disposition of assets resulted from the transaction. In connection with this transaction, $5.0 million was placed in an escrow account to secure potential indemnity claims by Hub Group, Inc. These funds are restricted from use for general corporate purposes. The escrow agreement is set to expire in December 2026. Accordingly, the escrow deposit is classified as a non-current asset. (11) Revenue and Business Segments We account for our revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers . We combine our six current operating segments into four reporting segments (Truckload, Dedicated, Intermodal and Brokerage) for financial reporting purposes. These four reporting segments are also the appropriate categories for the disaggregation of our revenue under FASB ASC 606. As discussed in Note 10, our Intermodal operations were sold effective September 30, 2025. We have strategically transitioned from a refrigerated long-haul carrier to a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our six distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. Our Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. Our agreements with customers are typically for one year. 8 Our Dedicated segment provides customized transportation solutions tailored to meet individual customers’ requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from three to five years and are subject to annual rate reviews. Generally, we are paid by the mile for our Truckload and Dedicated services. We also derive Truckload and Dedicated revenue from fuel surcharges, loading and unloading activities, equipment detention and other accessorial services. The main factors that affect our Truckload and Dedicated revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated, the number of miles we generate with our equipment and changes in fuel prices. We monitor our revenue production primarily through average Truckload and Dedicated revenue, net of fuel surcharges, per tractor per week. We also analyze our average Truckload and Dedicated revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our fuel surcharge revenue, our accessorial revenue and our other sources of operating revenue. Our Intermodal segment transported our customers’ freight within the United States utilizing our refrigerated containers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. The main factors that affected our Intermodal revenue were the rate per mile and other charges we received from our customers. As discussed in Note 10, our Intermodal operations were sold effective September 30, 2025. Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the United States Department of Transportation, or DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers. Operating results of our MRTN de Mexico business which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carriers is reported within our Truckload and Brokerage segments. Our customer agreements are typically for one-year terms except for our Dedicated agreements which range from three to five years with annual rate reviews. Under FASB ASC 606, the contract date for each individual load within each of our four reporting segments is generally the date that each load is tendered to and accepted by us. For each load transported within each of our four reporting segments, the entire amount of revenue to be recognized is a single performance obligation and our agreements with our customers detail the per-mile charges for line haul and fuel surcharges, along with the rates for loading and unloading, stop offs and drops, equipment detention and other accessorial services, which is the transaction price. There are no discounts that would be a material right or consideration payable to a customer. We are required to recognize revenue and related expenses over time, from load pickup to delivery, for each load within each of our four reporting segments. We base our calculation of the amount of revenue to record in each period for individual loads picking up in one period and delivering in the following period using the number of hours estimated to be incurred within each period applied to each estimated transaction price. Contract assets for this estimated revenue which are classified within prepaid expenses and other within our consolidated condensed balance sheets were $ 1.9 million and $ 1.6 million as of September 30, 2025 and December 31, 2024, respectively. We had no impairment losses on contract assets in the first nine months of 2025 or 2024. We bill our customers for loads after delivery is complete with standard payment terms of 30 days. We account for revenue of our Intermodal and Brokerage segments and revenue on freight transported by independent contractors within our Truckload and Dedicated segments on a gross basis because we are the principal service provider controlling the promised service before it is transferred to each customer. We are primarily responsible for fulfilling the promise to provide each specified service to each customer. We bear the primary risk of loss in the event of cargo claims by our customers. We also have complete control and discretion in establishing the price for each specified service. Accordingly, all such revenue billed to customers is classified as operating revenue and all corresponding payments to carriers for transportation services we arrange in connection with brokerage and intermodal activities and to independent contractor providers of revenue equipment are classified as purchased transportation expense within our consolidated condensed statements of operations. 9 The following table sets forth for the periods indicated our operating revenue and operating income by segment. We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment. Three Months Nine Months Ended September 30, Ended September 30, (In thousands) 2025 2024 2025 2024 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 90,138 $ 93,278 $ 272,728 $ 284,346 Truckload fuel surcharge revenue 14,691 15,146 42,978 48,152 Total Truckload revenue 104,829 108,424 315,706 332,498 Dedicated revenue, net of fuel surcharge revenue 56,675 62,898 180,418 202,080 Dedicated fuel surcharge revenue 10,335 12,123 32,091 40,667 Total Dedicated revenue 67,010 75,021 212,509 242,747 Intermodal revenue, net of fuel surcharge revenue 8,369 12,289 28,730 38,230 Intermodal fuel surcharge revenue 1,482 2,220 4,941 7,315 Total Intermodal revenue 9,851 14,509 33,671 45,545 Brokerage revenue 38,780 39,412 111,658 112,486 Total operating revenue $ 220,470 $ 237,366 $ 673,544 $ 733,276 Operating income/(loss): Truckload $ ( 2,002 ) $ ( 142 ) $ 42 $ 1,462 Dedicated 3,426 3,056 13,709 18,964 Intermodal ( 293 ) ( 1,542 ) ( 1,883 ) ( 2,420 ) Brokerage 1,607 2,897 6,463 8,487 Total operating income $ 2,738 $ 4,269 $ 18,331 $ 26,493 10 The following segment operating results for the periods indicated are provided monthly to our chief operating decision maker, our Chairman of the Board and Chief Executive Officer, and used in assessing segment performance and allocating resources, primarily based upon each segment’s variances in operating revenue, operating income and operating ratio. We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment. Three Months Ended September 30, 2025 Segment Operating Results (In thousands) Truckload Dedicated Intermodal Brokerage Total Operating revenue $ 104,829 $ 67,010 $ 9,851 $ 38,780 $ 220,470 Operating expense (income): Salaries, wages and benefits 45,122 30,107 1,593 2,150 78,972 Purchased transportation 734 2,408 5,891 33,251 42,284 Fuel and fuel taxes 21,878 10,484 1,164 - 33,526 Supplies and maintenance 10,679 4,429 477 - 15,585 Depreciation 16,073 8,609 305 460 25,447 Operating taxes and licenses 1,445 927 34 17 2,423 Insurance and claims 6,521 4,185 34 642 11,382 Communications and utilities 1,185 643 32 233 2,093 Gain on disposition of revenue equipment ( 1,103 ) ( 791 ) ( 9 ) - ( 1,903 ) Other 4,297 2,583 623 420 7,923 Total operating expenses 106,831 63,584 10,144 37,173 217,732 Operating income/(loss) $ ( 2,002 ) $ 3,426 $ ( 293 ) $ 1,607 $ 2,738 Operating ratio 101.9 % 94.9 % 103.0 % 95.9 % 98.8 % Operating ratio, net of fuel surcharges 102.2 % 94.0 % 103.5 % 95.9 % 98.6 % Nine Months Ended September 30, 2025 Segment Operating Results (In thousands) Truckload Dedicated Intermodal Brokerage Total Operating revenue $ 315,706 $ 212,509 $ 33,671 $ 111,658 $ 673,544 Operating expense (income): Salaries, wages and benefits 132,278 92,326 5,819 5,919 236,342 Purchased transportation 2,653 7,123 18,802 94,485 123,063 Fuel and fuel taxes 63,124 32,986 3,124 - 99,234 Supplies and maintenance 31,338 13,527 1,832 7 46,704 Depreciation 48,346 27,538 2,881 1,459 80,224 Operating taxes and licenses 4,230 2,841 156 64 7,291 Insurance and claims 23,004 15,630 738 1,239 40,611 Communications and utilities 3,645 2,078 142 671 6,536 Gain on disposition of revenue equipment ( 5,412 ) ( 3,160 ) ( 178 ) - ( 8,750 ) Other 12,458 7,911 2,238 1,351 23,958 Total operating expenses 315,664 198,800 35,554 105,195 655,213 Operating income/(loss) $ 42 $ 13,709 $ ( 1,883 ) $ 6,463 $ 18,331 Operating ratio 100.0 % 93.5 % 105.6 % 94.2 % 97.3 % Operating ratio, net of fuel surcharges 100.0 % 92.4 % 106.6 % 94.2 % 96.9 % 11 Three Months Ended September 30, 2024 Segment Operating Results (In thousands) Truckload Dedicated Intermodal Brokerage Total Operating revenue $ 108,424 $ 75,021 $ 14,509 $ 39,412 $ 237,366 Operating expense (income): Salaries, wages and benefits 45,513 33,440 2,647 1,842 83,442 Purchased transportation 1,162 2,463 7,975 33,262 44,862 Fuel and fuel taxes 21,909 12,323 1,549 - 35,781 Supplies and maintenance 10,347 5,172 949 ( 4 ) 16,464 Depreciation 15,803 9,549 1,513 527 27,392 Operating taxes and licenses 1,377 984 80 64 2,505 Insurance and claims 7,810 5,335 411 203 13,759 Communications and utilities 1,233 663 52 218 2,166 Gain on disposition of revenue equipment ( 483 ) ( 369 ) ( 29 ) - ( 881 ) Other 3,895 2,405 904 403 7,607 Total operating expenses 108,566 71,965 16,051 36,515 233,097 Operating income/(loss) $ ( 142 ) $ 3,056 $ ( 1,542 ) $ 2,897 $ 4,269 Operating ratio 100.1 % 95.9 % 110.6 % 92.6 % 98.2 % Operating ratio, net of fuel surcharges 100.2 % 95.1 % 112.5 % 92.6 % 97.9 % Nine Months Ended September 30, 2024 Segment Operating Results (In thousands) Truckload Dedicated Intermodal Brokerage Total Operating revenue $ 332,498 $ 242,747 $ 45,545 $ 112,486 $ 733,276 Operating expense (income): Salaries, wages and benefits 140,966 103,413 8,563 5,781 258,723 Purchased transportation 3,557 7,998 23,990 94,366 129,911 Fuel and fuel taxes 68,649 41,237 4,265 - 114,151 Supplies and maintenance 30,949 15,542 2,517 ( 2 ) 49,006 Depreciation 48,119 29,804 4,645 1,557 84,125 Operating taxes and licenses 4,087 3,006 255 271 7,619 Insurance and claims 21,249 15,059 1,168 499 37,975 Communications and utilities 3,831 2,195 181 627 6,834 Gain on disposition of revenue equipment ( 2,470 ) ( 1,948 ) ( 166 ) - ( 4,584 ) Other 12,099 7,477 2,547 900 23,023 Total operating expenses 331,036 223,783 47,965 103,999 706,783 Operating income/(loss) $ 1,462 $ 18,964 $ ( 2,420 ) $ 8,487 $ 26,493 Operating ratio 99.6 % 92.2 % 105.3 % 92.5 % 96.4 % Operating ratio, net of fuel surcharges 99.5 % 90.6 % 106.3 % 92.5 % 95.8 % (12) Use of Estimates We must make estimates and assumptions to prepare the consolidated condensed financial statements in conformity with U.S. generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities in the consolidated condensed financial statements and the reported amount of revenue and expenses during the reporting period. These estimates are primarily related to insurance and claims accruals and depreciation. Ultimate results could differ from these estimates. 12 Item 2. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read together with the selected consolidated financial data and our consolidated condensed financial statements and the related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those included in our Form 10-K, Part I, Item 1A for the year ended December 31, 2024. We do not assume, and specifically disclaim, any obligation to update any forward-looking statement contained in this report. Overview We have strategically transitioned from a refrigerated long-haul carrier to a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our six distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. As discussed in Note 10, our Intermodal operations were sold effective September 30, 2025. Our Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. Our agreements with customers are typically for one year. Our Dedicated segment provides customized transportation solutions tailored to meet each individual customer’s requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from three to five years and are subject to annual rate reviews. Generally, we are paid by the mile for our Truckload and Dedicated services. We also derive Truckload and Dedicated revenue from fuel surcharges, loading and unloading activities, equipment detention and other accessorial services. The main factors that affect our Truckload and Dedicated revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated, the number of miles we generate with our equipment and changes in fuel prices. We monitor our revenue production primarily through average Truckload and Dedicated revenue, net of fuel surcharges, per tractor per week. We also analyze our average Truckload and Dedicated revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our fuel surcharge revenue, our accessorial revenue and our other sources of operating revenue. Our Intermodal segment transported our customers’ freight within the United States utilizing our refrigerated containers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. The main factors that affected our Intermodal revenue were the rate per mile and other charges we received from our customers. As discussed in Note 10, our Intermodal operations were sold effective September 30, 2025. Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers. Operating results of our MRTN de Mexico business which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carriers is reported within our Truckload and Brokerage segments. In addition to the factors discussed above, our operating revenue is also affected by, among other things, the United States economy, inventory levels, the level of truck and rail capacity in the transportation market, a contracting driver market, severe weather conditions and specific customer demand. 13 Our operating revenue decreased $59.7 million, or 8.1%, in the first nine months of 2025 from the first nine months of 2024. Our operating revenue, net of fuel surcharges, decreased $43.6 million, or 6.8%, compared with the first nine months of 2024. Truckload segment revenue, net of fuel surcharges, decreased 4.1% from the first nine months of 2024, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. Dedicated segment revenue, net of fuel surcharges, decreased 10.7% from the first nine months of 2024, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. Intermodal segment revenue, net of fuel surcharges, decreased 24.8% from the first nine months of 2024, primarily due to decreases in both our number of loads and our revenue per load. Brokerage segment revenue decreased 0.7% from the first nine months of 2024, primarily due to a decrease in our revenue per load, partially offset by an increase in our number of loads. Fuel surcharge revenue decreased to $80.0 million in the first nine months of 2025 from $96.1 million in the first nine months of 2024. Our profitability is impacted by the variable costs of transporting freight for our customers, fixed costs, and expenses containing both fixed and variable components. The variable costs include fuel expense, driver-related expenses, such as wages, benefits, training and recruitment, and independent contractor costs, which are recorded under purchased transportation. Expenses that have both fixed and variable components include maintenance and tire expense and our cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs relate to the acquisition and subsequent depreciation of long-term assets, such as revenue equipment and operating terminals. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of higher prices of new equipment, along with any increases in fleet size. Although certain factors affecting our expenses are beyond our control, we monitor them closely and attempt to anticipate changes in these factors in managing our business. For example, fuel prices have significantly fluctuated over the past several years. We manage our exposure to changes in fuel prices primarily through fuel surcharge programs with our customers, as well as through volume fuel purchasing arrangements with national fuel centers and bulk purchases of fuel at our terminals. To help further reduce fuel expense, we have installed and tightly manage the use of auxiliary power units in our tractors to provide climate control and electrical power for our drivers without idling the tractor engine, and also have improved the fuel usage in the temperature-control units on our trailers. For our Intermodal and Brokerage segments, our profitability is impacted by the percentage of revenue which is payable to the providers of the transportation services we arrange. This expense is included within purchased transportation in our consolidated condensed statements of operations. Our operating income declined 30.8% to $18.3 million in the first nine months of 2025 from $26.5 million in the first nine months of 2024. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 97.3% in the first nine months of 2025 and 96.4% in the first nine months of 2024. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 96.9% in the first nine months of 2025 from 95.8% in the first nine months of 2024. Our net income declined 35.4% to $13.7 million, or $0.17 per diluted share, in the first nine months of 2025 from $21.3 million, or $0.26 per diluted share, in the first nine months of 2024. Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. At September 30, 2025, we had $54.5 million of cash and cash equivalents and an escrow deposit, $768.2 million in stockholders’ equity and no long-term debt outstanding. In the first nine months of 2025, net cash flows provided by operating activities of $87.9 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $32.4 million, to pay cash dividends of $14.7 million and to purchase other assets in the amount of $3.3 million, resulting in a $37.2 million increase in cash and cash equivalents and an escrow deposit. We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $28 million for the remainder of 2025. Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first three quarters of 2025 which totaled $14.7 million. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future. 14 We continue to invest considerable time and capital resources to actively implement and promote long-term environmentally sustainable solutions that drive reductions in our fuel and electricity consumption and decrease our carbon footprint. These initiatives include (i) reducing idle time for our tractors by installing and tightly managing the use of auxiliary power units, which are powered by solar panels and provide climate control and electrical power for our drivers without idling the tractor engine, (ii) improving the energy efficiency of our newer, more aerodynamic and well-maintained tractor and trailer fleets by optimizing the equipment’s specifications, weight and tractor speed, equipping our tractors with automatic transmissions, converting the refrigeration units in our refrigerated trailers to the new, more-efficient CARB refrigeration units along with increasing the insulation in the trailer walls and installing trailer skirts, and using ultra-fuel efficient and wide-based tires, and (iii) upgrading all of our facilities to indoor and outdoor LED lighting along with converting all of our facilities to solar power. Additionally, we are an active participant in the United States Environmental Protection Agency, or EPA, SmartWay Transport Partnership, in which freight shippers, carriers, logistics companies and other voluntary stakeholders partner with the EPA to measure, benchmark and improve logistics operations to reduce their environmental footprint. This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes discussions of operating revenue, net of fuel surcharge revenue; Truckload, Dedicated and Intermodal revenue, net of fuel surcharge revenue; operating expenses as a percentage of operating revenue, each net of fuel surcharge revenue; and net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads). We provide these additional disclosures because management believes these measures provide a more consistent basis for comparing results of operations from period to period. These financial measures in this report have not been determined in accordance with U.S. generally accepted accounting principles (GAAP). Pursuant to Item 10(e) of Regulation S-K, we have included the amounts necessary to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures of operating revenue, operating expenses divided by operating revenue, and fuel and fuel taxes. Results of Operations The following table sets forth for the periods indicated certain operating statistics regarding our revenue and operations: Three Months Nine Months Ended September 30, Ended September 30, 2025 2024 2025 2024 Truckload Segment: Revenue (in thousands) $ 104,829 $ 108,424 $ 315,706 $ 332,498 Average revenue, net of fuel surcharges, per tractor per week (1) $ 4,129 $ 4,187 $ 4,178 $ 4,090 Average tractors (1) 1,661 1,695 1,674 1,776 Average miles per trip 508 533 523 533 Total miles (in thousands) 38,081 39,288 115,575 119,838 Dedicated Segment: Revenue (in thousands) $ 67,010 $ 75,021 $ 212,509 $ 242,747 Average revenue, net of fuel surcharges, per tractor per week (1) $ 3,776 $ 3,693 $ 3,811 $ 3,744 Average tractors (1) 1,142 1,296 1,214 1,379 Average miles per trip 292 311 300 321 Total miles (in thousands) 23,206 26,571 73,574 83,882 Intermodal Segment: Revenue (in thousands) $ 9,851 $ 14,509 $ 33,671 $ 45,545 Loads 2,956 4,119 10,168 13,172 Average tractors 61 104 72 117 Brokerage Segment: Revenue (in thousands) $ 38,780 $ 39,412 $ 111,658 $ 112,486 Loads 25,940 24,628 70,450 67,389 (1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 83 and 94 tractors as of September 30, 2025 and 2024, respectively. 15 Comparison of Three Months Ended September 30, 2025 to Three Months Ended September 30, 2024 The following table sets forth for the periods indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component: Dollar Percentage Change Change Three Months Three Months Three Months Ended Ended Ended September 30, September 30, September 30, (Dollars in thousands) 2025 2024 2025 vs. 2024 2025 vs. 2024 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 90,138 $ 93,278 $ (3,140 ) (3.4 )% Truckload fuel surcharge revenue 14,691 15,146 (455 ) (3.0 ) Total Truckload revenue 104,829 108,424 (3,595 ) (3.3 ) Dedicated revenue, net of fuel surcharge revenue 56,675 62,898 (6,223 ) (9.9 ) Dedicated fuel surcharge revenue 10,335 12,123 (1,788 ) (14.7 ) Total Dedicated revenue 67,010 75,021 (8,011 ) (10.7 ) Intermodal revenue, net of fuel surcharge revenue 8,369 12,289 (3,920 ) (31.9 ) Intermodal fuel surcharge revenue 1,482 2,220 (738 ) (33.2 ) Total Intermodal revenue 9,851 14,509 (4,658 ) (32.1 ) Brokerage revenue 38,780 39,412 (632 ) (1.6 ) Total operating revenue $ 220,470 $ 237,366 $ (16,896 ) (7.1 )% Operating income/(loss): Truckload $ (2,002 ) $ (142 ) $ (1,860 ) (1,309.9 )% Dedicated 3,426 3,056 370 12.1 Intermodal (293 ) (1,542 ) 1,249 81.0 Brokerage 1,607 2,897 (1,290 ) (44.5 ) Total operating income $ 2,738 $ 4,269 $ (1,531 ) (35.9 )% Operating ratio: Truckload 101.9 % 100.1 % Dedicated 94.9 95.9 Intermodal 103.0 110.6 Brokerage 95.9 92.6 Consolidated operating ratio 98.8 % 98.2 % Operating ratio, net of fuel surcharges: Truckload 102.2 % 100.2 % Dedicated 94.0 95.1 Intermodal 103.5 112.5 Brokerage 95.9 92.6 Consolidated operating ratio, net of fuel surcharges 98.6 % 97.9 % Our operating revenue decreased $16.9 million, or 7.1%, to $220.5 million in the 2025 period from $237.4 million in the 2024 period. Our operating revenue, net of fuel surcharges, decreased $13.9 million, or 6.7%, to $194.0 million in the 2025 period from $207.9 million in the 2024 period. This decrease in the 2025 period was due to a $6.2 million decrease in Dedicated revenue, net of fuel surcharges, a $3.9 million decrease in Intermodal revenue, net of fuel surcharges, a $3.1 million decrease in Truckload revenue, net of fuel surcharges, and a $632,000 decrease in Brokerage revenue. Fuel surcharge revenue decreased to $26.5 million in the 2025 period from $29.5 million in the 2024 period. 16 Truckload segment revenue decreased $3.6 million, or 3.3%, to $104.8 million in the 2025 period from $108.4 million in the 2024 period. Truckload segment revenue, net of fuel surcharges, decreased $3.1 million, or 3.4%, to $90.1 million in the 2025 period from $93.3 million in the 2024 period, primarily due to a decrease in both our average fleet size and average revenue per tractor. The operating ratio was 101.9% in the 2025 period and 100.1% in the 2024 period. Impacting the 2025 period operating ratio was lower average revenue per tractor, along with higher depreciation and fuel costs, both as a percentage of revenue. Dedicated segment revenue decreased $8.0 million, or 10.7%, to $67.0 million in the 2025 period from $75.0 million in the 2024 period. Dedicated segment revenue, net of fuel surcharges, decreased 9.9%, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. The operating ratio improved to 94.9% in the 2025 period from 95.9% in the 2024 period. Impacting the 2025 period operating ratio was improved average revenue per tractor, along with lower company driver compensation, as a percentage of revenue. Intermodal segment revenue decreased $4.7 million, or 32.1%, to $9.9 million in the 2025 period from $14.5 million in the 2024 period. Intermodal segment revenue, net of fuel surcharges, decreased 31.9% from the 2024 period, primarily due to decreases in both our number of loads and our revenue per load. The operating ratio in the 2025 period improved to 103.0% from 110.6% in the 2024 period. Impacting the 2025 period operating ratio was a decrease in our depreciation expense, partially offset by higher purchased transportation costs, both as a percentage of revenue, and by the decrease in our revenue per load. Brokerage segment revenue decreased $632,000, or 1.6%, to $38.8 million in the 2025 period from $39.4 million in the 2024 period, primarily due to a decrease in our revenue per load, partially offset by an increase in our number of loads. The operating ratio in the 2025 period of 95.9% was up from 92.6% in the 2024 period. This increase was primarily due to higher insurance and claims costs and an increase in the amounts payable to carriers for transportation services which we arranged, both as a percentage of revenue. 17 The following table sets forth for the periods indicated the dollar and percentage increase or decrease of the items in our unaudited consolidated condensed statements of operations, and those items as a percentage of operating revenue: Dollar Change Percentage Change Percentage of Operating Revenue Three Months Ended September 30, Three Months Ended September 30, Three Months Ended September 30, (Dollars in thousands) 2025 vs. 2024 2025 vs. 2024 2025 2024 Operating revenue $ (16,896 ) (7.1 )% 100.0 % 100.0 % Operating expenses (income): Salaries, wages and benefits (4,470 ) (5.4 ) 35.8 35.2 Purchased transportation (2,578 ) (5.7 ) 19.2 18.9 Fuel and fuel taxes (2,255 ) (6.3 ) 15.2 15.1 Supplies and maintenance (879 ) (5.3 ) 7.1 6.9 Depreciation (1,945 ) (7.1 ) 11.5 11.5 Operating taxes and licenses (82 ) (3.3 ) 1.1 1.1 Insurance and claims (2,377 ) (17.3 ) 5.2 5.8 Communications and utilities (73 ) (3.4 ) 0.9 0.9 Gain on disposition of revenue equipment (1,022 ) (116.0 ) (0.9 ) (0.4 ) Other 316 4.2 3.6 3.2 Total operating expenses (15,365 ) (6.6 ) 98.8 98.2 Operating income (1,531 ) (35.9 ) 1.2 1.8 Other 709 76.9 (0.1 ) (0.4 ) Income before income taxes (2,240 ) (43.2 ) 1.3 2.2 Income taxes expense (712 ) (49.5 ) 0.3 0.6 Net income $ (1,528 ) (40.7 )% 1.0 % 1.6 % Salaries, wages and benefits consist of compensation for our employees, including both driver and non-driver employees, employees’ health insurance, 401(k) plan contributions and other fringe benefits. These expenses vary depending upon the size of our Truckload, Dedicated and Intermodal tractor fleets, the ratio of company drivers to independent contractors, our efficiency, our experience with employees’ health insurance claims, changes in health care premiums and other factors. Salaries, wages and benefits expense decreased $4.5 million, or 5.4%, in the 2025 period from the 2024 period. This decrease resulted primarily from a reduction in company driver compensation expense of $4.7 million. Purchased transportation consists of amounts payable to railroads and carriers for transportation services we arrange in connection with Brokerage and Intermodal operations and to independent contractor providers of revenue equipment. This category will vary depending upon the amount and rates, including fuel surcharges, we pay to third-party railroad and motor carriers, the ratio of company drivers versus independent contractors and the amount of fuel surcharges passed through to independent contractors. Purchased transportation expense decreased $2.6 million in total, or 5.7%, in the 2025 period from the 2024 period. Amounts payable to carriers for transportation services we arranged in our Brokerage segment were $33.3 million in each of the 2025 and 2024 periods. Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $5.9 million in the 2025 period from $8.0 million in the 2024 period, primarily due to a decrease in our number of loads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased by $481,000 in the 2025 period. 18 Fuel and fuel taxes decreased by $2.3 million, or 6.3%, in the 2025 period from the 2024 period. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) increased $36,000, or 0.4%, to $8.8 million in the 2025 period from $8.7 million in the 2024 period. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $1.7 million from $2.4 million in the 2024 period. The United States Department of Energy, or DOE, national average cost of fuel increased to $3.76 per gallon from $3.69 per gallon in the 2024 period. Our net fuel expense was 5.6% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2025 period, up from 5.2% in the 2024 period. We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers. Auxiliary power units, which we have installed in our company-owned tractors, provide climate control and electrical power for our drivers without idling the tractor engine. Supplies and maintenance consist of repairs, maintenance, tires, parts, oil and engine fluids, along with load-specific expenses including loading/unloading, tolls, pallets and trailer hostling. Our supplies and maintenance expense decreased $879,000, or 5.3%, from the 2024 period, primarily due to lower tire and outside repair costs. Depreciation relates to owned tractors, trailers, containers, auxiliary power units, communication units, terminal facilities and other assets. The $1.9 million, or 7.1%, decrease in depreciation in the 2025 period was primarily due to a decrease in our average tractor, trailer and refrigerated container fleet size, partially offset by higher prices of new equipment. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of continued higher prices of new equipment, which will result in greater depreciation over the useful life. Insurance and claims consist of the costs of insurance premiums and accruals we make for claims within our self-insured retention amounts, primarily for personal injury, property damage, physical damage to our equipment, cargo claims and workers’ compensation claims. These expenses will vary primarily based upon the frequency and severity of our accident experience, our self-insured retention levels and the market for insurance. The $2.4 million, or 17.3%, decrease in insurance and claims in the 2025 period was primarily due to decreases in our self-insured costs of physical damage claims related to our revenue equipment, workers’ compensation claims and insurance premiums, partially offset by higher self-insured auto liability claim costs. Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods which could materially impact our financial results depending on the frequency, severity and timing of claims. Gain on disposition of revenue equipment increased to $1.9 million in the 2025 period from $881,000 in the 2024 period due to increases in the average gain for our tractor and trailer sales and in the number of units sold. Future gains or losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control. Our operating income declined 35.9% to $2.7 million in the 2025 period from $4.3 million in the 2024 period as a result of the foregoing factors. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 98.8% in the 2025 period and 98.2% in the 2024 period. The operating ratio for our Truckload segment was 101.9% in the 2025 period and 100.1% in the 2024 period, for our Dedicated segment was 94.9% in the 2025 period and 95.9% in the 2024 period, for our Intermodal segment was 103.0% in the 2025 period and 110.6% in the 2024 period, and for our Brokerage segment was 95.9% in the 2025 period and 92.6% in the 2024 period. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 98.6% in the 2025 period and 97.9% in the 2024 period. Other non-operating income decreased to $213,000 from $922,000 in the 2024 period due to decreased interest income earned on our cash and cash equivalents. Our effective income tax rate was 24.6% in the 2025 period and 27.7% in the 2024 period. The 2025 period includes a discrete tax benefit related to a return-to-provision true-up, resulting from the finalization of the prior year tax returns. The benefit was partially offset by increases in per diem and other non-deductible expenses as a percentage of projected earnings. As a result of the factors described above, net income declined 40.7% to $2.2 million, or $0.03 per diluted share, in the 2025 period from $3.8 million, or $0.05 per diluted share, in the 2024 period. 19 Comparison of Nine Months Ended September 30, 2025 to Nine Months Ended September 30, 2024 The following table sets forth for the periods indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component: Dollar Percentage Change Change Nine Months Nine Months Nine Months Ended Ended Ended September 30, September 30, September 30, (Dollars in thousands) 2025 2024 2025 vs. 2024 2025 vs. 2024 Operating revenue: Truckload revenue, net of fuel surcharge revenue $ 272,728 $ 284,346 $ (11,618 ) (4.1 )% Truckload fuel surcharge revenue 42,978 48,152 (5,174 ) (10.7 ) Total Truckload revenue 315,706 332,498 (16,792 ) (5.1 ) Dedicated revenue, net of fuel surcharge revenue 180,418 202,080 (21,662 ) (10.7 ) Dedicated fuel surcharge revenue 32,091 40,667 (8,576 ) (21.1 ) Total Dedicated revenue 212,509 242,747 (30,238 ) (12.5 ) Intermodal revenue, net of fuel surcharge revenue 28,730 38,230 (9,500 ) (24.8 ) Intermodal fuel surcharge revenue 4,941 7,315 (2,374 ) (32.5 ) Total Intermodal revenue 33,671 45,545 (11,874 ) (26.1 ) Brokerage revenue 111,658 112,486 (828 ) (0.7 ) Total operating revenue $ 673,544 $ 733,276 $ (59,732 ) (8.1 )% Operating income/(loss): Truckload $ 42 $ 1,462 $ (1,420 ) (97.1 )% Dedicated 13,709 18,964 (5,255 ) (27.7 ) Intermodal (1,883 ) (2,420 ) 537 22.2 Brokerage 6,463 8,487 (2,024 ) (23.8 ) Total operating income $ 18,331 $ 26,493 $ (8,162 ) (30.8 )% Operating ratio: Truckload 100.0 % 99.6 % Dedicated 93.5 92.2 Intermodal 105.6 105.3 Brokerage 94.2 92.5 Consolidated operating ratio 97.3 % 96.4 % Operating ratio, net of fuel surcharges: Truckload 100.0 % 99.5 % Dedicated 92.4 90.6 Intermodal 106.6 106.3 Brokerage 94.2 92.5 Consolidated operating ratio, net of fuel surcharges 96.9 % 95.8 % Our operating revenue decreased $59.7 million, or 8.1%, to $673.5 million in the 2025 period from $733.3 million in the 2024 period. Our operating revenue, net of fuel surcharges, decreased $43.6 million, or 6.8%, to $593.5 million in the 2025 period from $637.1 million in the 2024 period. This decrease in the 2025 period was primarily due to a $21.7 million decrease in Dedicated revenue, net of fuel surcharges, an $11.6 million decrease in Truckload revenue, net of fuel surcharges, and a $9.5 million decrease in Intermodal revenue, net of fuel surcharges. Fuel surcharge revenue decreased to $80.0 million in the 2025 period from $96.1 million in the 2024 period. 20 Truckload segment revenue decreased $16.8 million, or 5.1%, to $315.7 million in the 2025 period from $332.5 million in the 2024 period. Truckload segment revenue, net of fuel surcharges, decreased $11.6 million, or 4.1%, to $272.7 million in the 2025 period from $284.3 million in the 2024 period, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. The operating ratio was 100.0% in the 2025 period and 99.6% in the 2024 period. Impacting the 2025 period operating ratio was higher insurance and claims and depreciation costs, partially offset by lower company driver compensation, all as a percentage of revenue, along with improved average revenue per tractor. Dedicated segment revenue decreased $30.2 million, or 12.5%, to $212.5 million in the 2025 period from $242.7 million in the 2024 period. Dedicated segment revenue, net of fuel surcharges, decreased 10.7%, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. The operating ratio increased to 93.5% in the 2025 period from 92.2% in the 2024 period. Impacting the 2025 period operating ratio was higher insurance and claims costs, as a percentage of revenue, partially offset by increased average revenue per tractor. Intermodal segment revenue decreased $11.9 million, or 26.1%, to $33.7 million in the 2025 period from $45.5 million in the 2024 period. Intermodal segment revenue, net of fuel surcharges, decreased 24.8% from the 2024 period, primarily due to decreases in both our number of loads and our revenue per load. The operating ratio in the 2025 period increased to 105.6% from 105.3% in the 2024 period. Impacting the 2025 period operating ratio was the decrease in our revenue per load along with higher purchased transportation costs, partially offset by lower company driver compensation and depreciation expense, all as a percentage of revenue. Brokerage segment revenue decreased $828,000, or 0.7%, to $111.7 million in the 2025 period from $112.5 million in the 2024 period, primarily due to a decrease in our revenue per load, partially offset by an increase in our number of loads. The operating ratio in the 2025 period of 94.2% was up from 92.5% in the 2024 period. This increase was primarily due to higher insurance and claims costs and an increase in the amounts payable to carriers for transportation services which we arranged, both as a percentage of revenue. 21 The following table sets forth for the periods indicated the dollar and percentage increase or decrease of the items in our unaudited consolidated condensed statements of operations, and those items as a percentage of operating revenue: Dollar Change Percentage Change Percentage of Operating Revenue Nine Months Ended September 30, Nine Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 vs. 2024 2025 vs. 2024 2025 2024 Operating revenue $ (59,732 ) (8.1 )% 100.0 % 100.0 % Operating expenses (income): Salaries, wages and benefits (22,381 ) (8.7 ) 35.1 35.3 Purchased transportation (6,848 ) (5.3 ) 18.3 17.7 Fuel and fuel taxes (14,917 ) (13.1 ) 14.7 15.6 Supplies and maintenance (2,302 ) (4.7 ) 6.9 6.7 Depreciation (3,901 ) (4.6 ) 11.9 11.5 Operating taxes and licenses (328 ) (4.3 ) 1.1 1.0 Insurance and claims 2,636 6.9 6.0 5.2 Communications and utilities (298 ) (4.4 ) 1.0 0.9 Gain on disposition of revenue equipment (4,166 ) (90.9 ) (1.3 ) (0.6 ) Other 935 4.1 3.6 3.1 Total operating expenses (51,570 ) (7.3 ) 97.3 96.4 Operating income (8,162 ) (30.8 ) 2.7 3.6 Other 1,734 63.5 (0.1 ) (0.4 ) Income before income taxes (9,896 ) (33.9 ) 2.9 4.0 Income taxes expense (2,354 ) (29.7 ) 0.8 1.1 Net income $ (7,542 ) (35.4 )% 2.0 % 2.9 % Salaries, wages and benefits expense decreased $22.4 million, or 8.7%, in the 2025 period from the 2024 period. This decrease resulted primarily from reductions in company driver compensation expense of $17.7 million and employees’ health insurance expense due to lower self-insured medical claims of $1.9 million. Purchased transportation expense decreased $6.8 million in total, or 5.3%, in the 2025 period from the 2024 period. Amounts payable to carriers for transportation services we arranged in our Brokerage segment increased $118,000 to $94.5 million in the 2025 period from $94.4 million in the 2024 period. Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $18.8 million in the 2025 period from $24.0 million in the 2024 period, primarily due to a decrease in the number of loads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased by $1.8 million in the 2025 period. Fuel and fuel taxes decreased by $14.9 million, or 13.1%, in the 2025 period from the 2024 period. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) decreased $1.1 million, or 4.4%, to $24.7 million in the 2025 period from $25.9 million in the 2024 period. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $5.5 million from $7.8 million in the 2024 period. The DOE national average cost of fuel decreased to $3.65 per gallon from $3.83 per gallon in the 2024 period. Despite this price decrease, our net fuel expense was up slightly to 5.1% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2025 period from 4.9% in the 2024 period. Our supplies and maintenance expense decreased $2.3 million, or 4.7%, from the 2024 period primarily due to lower tire, tolls and loading/unloading costs. The $3.9 million, or 4.6%, decrease in depreciation in the 2025 period was primarily due to a decrease in our average tractor, trailer and refrigerated container fleet size, partially offset by higher prices of new equipment. The $2.6 million, or 6.9%, increase in insurance and claims in the 2025 period was primarily due to increases in our self-insured auto liability claim costs and insurance premiums, partially offset by lower self-insured costs of physical damage claims related to our revenue equipment and workers’ compensation claims. 22 Gain on disposition of revenue equipment increased to $8.8 million in the 2025 period from $4.6 million in the 2024 period due to increases in the average gain for our tractor and trailer sales and in the number of units sold. Our operating income declined 30.8% to $18.3 million in the 2025 period from $26.5 million in the 2024 period as a result of the foregoing factors. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 97.3% in the 2025 period and 96.4% in the 2024 period. The operating ratio for our Truckload segment was 100.0% in the 2025 period and 99.6% in the 2024 period, for our Dedicated segment was 93.5% in the 2025 period and 92.2% in the 2024 period, for our Intermodal segment was 105.6% in the 2025 period and 105.3% in the 2024 period, and for our Brokerage segment was 94.2% in the 2025 period and 92.5% in the 2024 period. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 96.9% in the 2025 period and 95.8% in the 2024 period. Other non-operating income decreased to $998,000 from $2.7 million in the 2024 period due to decreased interest income earned on our cash and cash equivalents. Our effective income tax rate increased to 28.9% in the 2025 period from 27.2% in the 2024 period primarily due to increases in per diem and other non-deductible expenses as a percentage of projected earnings. As a result of the factors described above, net income declined 35.4% to $13.7 million, or $0.17 per diluted share, in the 2025 period from $21.3 million, or $0.26 per diluted share, in the 2024 period. Liquidity and Capital Resources Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. Our primary sources of liquidity are funds provided by operations and our revolving credit facility. A portion of our tractor fleet is provided by independent contractors who own and operate their own equipment. We have no capital expenditure requirements relating to those drivers who own their tractors or obtain financing through third parties. The table below reflects our net cash flows provided by operating activities, net cash flows used for investing activities and net cash flows used for financing activities for the periods indicated. Nine Months Ended September 30, (In thousands) 2025 2024 Net cash flows provided by operating activities $ 87,906 $ 111,021 Net cash flows used for investing activities (35,742 ) (107,247 ) Net cash flows used for financing activities (14,946 ) (13,997 ) In August 2019, our Board of Directors approved and we announced an increase from current availability in our existing share repurchase program providing for the repurchase of up to $34.0 million, or approximately 1.8 million shares, of our common stock, which was increased by our Board of Directors to 2.7 million shares in August 2020 to reflect the three-for-two stock split effected in the form of a stock dividend in August 2020. In May 2022, our Board of Directors approved and we announced an additional increase from current availability in our existing share repurchase program providing for the repurchase of up to $50.0 million, or approximately 3.1 million shares, of our common stock. The share repurchase program allows purchases on the open market or through private transactions in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and extent to which we repurchase shares depends on market conditions and other corporate considerations. The repurchase program does not have an expiration date. We repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million in the second quarter of 2022. We have not repurchased any shares since the second quarter of 2022. As of September 30, 2025, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program. In the first nine months of 2025, net cash flows provided by operating activities of $87.9 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $32.4 million, to pay cash dividends of $14.7 million and to purchase other assets in the amount of $3.3 million, resulting in a $37.2 million increase in cash and cash equivalents and an escrow deposit. In the first nine months of 2024, net cash flows provided by operating activities of $111.0 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $102.3 million, to pay cash dividends of $14.7 million and to construct and upgrade regional operating facilities in the amount of $3.9 million, resulting in a $10.2 million decrease in cash and cash equivalents. 23 We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $28 million for the remainder of 2025. This amount includes commitments to purchase $32.9 million of new revenue equipment, prior to considering proceeds from dispositions. Additionally, operating lease obligations total $613,000 through 2028. Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first three quarters of 2025 and 2024 which totaled $14.7 million in each period. We currently expect to continue to pay quarterly cash dividends in the future. The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future. In August 2022, we entered into a credit agreement that provides for an unsecured committed credit facility with an aggregate principal amount of $30.0 million which matures in August 2027. The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended. At September 30, 2025, there was no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $24.1 million and remaining borrowing availability of $5.9 million. At December 31, 2024, there was also no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $23.1 million on the facility. This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins. The interest rate for the facility that would apply to outstanding principal balances was 7.25% at September 30, 2025. Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million. The current credit agreement also contains restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at September 30, 2025 and December 31, 2024. Other than our obligations for revenue equipment and operating lease expenditures, along with our outstanding standby letters of credit to guarantee settlement of self-insurance claims, which are each mentioned above, we did not have any material off-balance sheet arrangements at September 30, 2025. Seasonality Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments. At the same time, operating expenses generally increase, with harsh weather creating higher accident frequency, increased claims, lower fuel efficiency and more equipment repairs. Critical Accounting Estimates There have been no material changes in the critical accounting estimates disclosed by us under Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates contained in the Annual Report on Form 10-K for the year ended December 31, 2024. 24