PAMT CORP 10-K

Item 8. Financial Statements and Supplementary Data. The following statements are filed with this report: Report of Independent Registered Public Accounting Firm – Grant Thornton LLP (PCAOB ID Number 248 ) Consolidated Balance Sheets - December 31, 2025 and 2024 Consolidated Statements of Operations - Years ended December 31, 2025, 2024 and 2023 Consolidated Statements of Comprehensive Income - Years ended December 31, 2025, 2024 and 2023 Consolidated Statements of Stockholders’ Equity - Years ended December 31, 2025, 2024 and 2023 Consolidated Statements of Cash Flows - Years ended December 31, 2025, 2024 and 2023 Notes to Consolidated Financial Statements - 31 - Table of Contents Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders PAMT CORP Opinion on the financial statements We have audited the accompanying consolidated balance sheets of PAMT CORP (a Nevada corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 12, 2026 expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /S/ GRANT THORNTON LLP We have served as the Company’s auditor since 2005. Tulsa, Oklahoma March 12, 2026 - 32 - Table of Contents PAMT CORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 AND 2024 (in thousands, except share and per share data) 2025 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 35,234 $ 68,060 Accounts receivable—net: Trade, less current estimated credit loss of $ 8,415 and $ 6,636 , respectively 66,882 79,967 Other 6,757 4,854 Inventories 2,332 2,433 Prepaid expenses and deposits 9,807 11,555 Marketable equity securities 48,488 42,620 Income taxes refundable 1,732 2,281 Total current assets 171,232 211,770 PROPERTY AND EQUIPMENT: Land 30,064 30,426 Structures and improvements 58,458 53,620 Revenue equipment 687,291 733,181 Office furniture and equipment 16,578 19,263 Total property and equipment 792,391 836,490 Accumulated depreciation ( 275,554 ) ( 309,272 ) Net property and equipment 516,837 527,218 OTHER ASSETS 9,843 2,666 TOTAL ASSETS $ 697,912 $ 741,654 (Continued) See notes to consolidated financial statements. - 33 - Table of Contents CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 AND 2024 (in thousands, except share and per share data) LIABILITIES AND STOCKHOLDERS' EQUITY 2025 2024 CURRENT LIABILITIES: Accounts payable $ 32,752 $ 31,198 Accrued expenses and other liabilities 41,078 14,569 Current maturities of long-term debt 65,542 73,017 Total current liabilities 139,372 118,784 Long-term debt—less current portion 268,327 252,565 Deferred income taxes 73,689 92,547 Other long-term liabilities 6,040 250 Total liabilities 487,428 464,146 COMMITMENTS AND CONTINGENCIES (Note 16) STOCKHOLDERS’ EQUITY Preferred stock, $ .01 par value, 10,000,000 shares authorized; none issued - - Common stock, $ .01 par value, 100,000,000 shares authorized; 22,377,606 and 22,364,120 shares issued; 20,926,020 and 21,782,534 shares outstanding at December 31, 2025 and 2024, respectively 224 224 Additional paid-in capital 41,682 41,171 Treasury stock, at cost; 1,451,586 and 581,586 shares at December 31, 2025 and 2024, respectively ( 28,924 ) ( 13,996 ) Retained earnings 197,502 250,109 Total stockholders’ equity 210,484 277,508 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 697,912 $ 741,654 (Concluded) See notes to consolidated financial statements. - 34 - Table of Contents PAMT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 (in thousands, except per share data) 2025 2024 2023 OPERATING REVENUES: Revenue, before fuel surcharge $ 526,545 $ 629,015 $ 706,114 Fuel surcharge 71,511 85,631 104,693 Total operating revenues 598,056 714,646 810,807 OPERATING EXPENSES AND COSTS: Salaries, wages and benefits 160,306 174,491 186,223 Operating supplies and expenses 119,168 136,975 160,527 Rents and purchased transportation 247,578 289,393 315,647 Depreciation 83,298 99,264 64,605 Impairment Loss - 6,406 - Insurance and claims 46,780 19,778 30,769 Other 20,462 24,338 23,769 (Gain) loss on disposition of equipment ( 15,474 ) 766 ( 1,043 ) Total operating expenses and costs 662,118 751,411 780,497 OPERATING (LOSS) INCOME ( 64,062 ) ( 36,765 ) 30,310 NON-OPERATING INCOME 11,232 8,459 7,446 INTEREST EXPENSE ( 17,458 ) ( 13,240 ) ( 9,177 ) (LOSS) INCOME BEFORE INCOME TAXES ( 70,288 ) ( 41,546 ) 28,579 FEDERAL & STATE INCOME TAX (BENEFIT) EXPENSE: Current 1,177 2,034 7,277 Deferred ( 18,858 ) ( 11,785 ) 2,886 Total federal & state income tax (benefit) expense ( 17,681 ) ( 9,751 ) 10,163 NET (LOSS) INCOME $ ( 52,607 ) $ ( 31,795 ) $ 18,416 (LOSS) EARNINGS PER COMMON SHARE: Basic $ ( 2.48 ) $ ( 1.45 ) $ 0.83 Diluted $ ( 2.48 ) $ ( 1.45 ) $ 0.83 AVERAGE COMMON SHARES OUTSTANDING: Basic 21,209 21,878 22,056 Diluted 21,209 21,878 22,197 See notes to consolidated financial statements. - 35 - Table of Contents PAMT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS ’ EQUITY YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 (in thousands) Common Stock Shares / Amount Additional Paid-In Capital Treasury Stock Retained Earnings Total BALANCE— January 1, 2023 22,166 $ 223 $ 40,472 $ ( 4,000 ) $ 263,488 $ 300,183 Net income 18,416 18,416 Restricted stock issued 24 Treasury stock repurchases ( 169 ) ( 4,736 ) ( 4,736 ) Restricted stock net settlement ( 199 ) ( 199 ) Share-based compensation 552 552 BALANCE— December 31, 2023 22,021 $ 223 $ 40,825 $ ( 8,736 ) $ 281,904 $ 314,216 Net loss ( 31,795 ) ( 31,795 ) Restricted stock issued 47 1 ( 1 ) Treasury stock repurchases ( 285 ) ( 5,260 ) ( 5,260 ) Restricted stock net settlement ( 376 ) ( 376 ) Share-based compensation 723 723 BALANCE— December 31, 2024 21,783 $ 224 $ 41,171 $ ( 13,996 ) $ 250,109 $ 277,508 Net loss ( 52,607 ) ( 52,607 ) Restricted stock issued 13 Treasury stock repurchases ( 870 ) ( 14,928 ) ( 14,928 ) Restricted stock net settlement ( 37 ) ( 37 ) Share-based compensation 548 548 BALANCE— December 31, 2025 20,926 $ 224 $ 41,682 $ ( 28,924 ) $ 197,502 $ 210,484 See notes to consolidated financial statements. - 36 - Table of Contents PAMT CORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 (in thousands) 2025 2024 2023 OPERATING ACTIVITIES: Net (loss) income $ ( 52,607 ) $ ( 31,795 ) $ 18,416 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 83,298 99,264 64,605 Impairment Loss - 6,406 - Bad debt expense 1,779 3,074 2,396 Stock compensation—net of excess tax benefits 548 723 553 Provision for deferred income tax (benefit) expense ( 18,858 ) ( 11,785 ) 2,886 Recognized (gain) on marketable equity securities ( 6,671 ) ( 3,079 ) ( 1,618 ) (Gain) loss on sale or disposal of equipment ( 15,474 ) 766 ( 1,043 ) Changes in operating assets and liabilities: Accounts receivable 9,402 ( 86 ) 50,798 Prepaid expenses, deposits, inventories, and other assets 1,831 3,463 2,538 Income taxes refundable 549 1,602 1,768 Income taxes payable - - - Trade accounts payable ( 11,565 ) ( 6,520 ) ( 10,980 ) Accrued expenses and other liabilities 25,103 ( 2,992 ) ( 15,742 ) Net cash provided by operating activities 17,335 59,041 114,577 INVESTING ACTIVITIES: Purchases of property and equipment ( 40,740 ) ( 140,759 ) ( 34,060 ) Proceeds from disposition of equipment 58,334 36,910 22,622 Sales of marketable equity securities 5,040 3,662 143 Purchases of marketable equity securities, net of return of capital ( 4,237 ) - Net cash provided by (used in) investing activities 18,397 ( 100,187 ) ( 11,295 ) FINANCING ACTIVITIES: Borrowings under line of credit 651,649 750,912 879,191 Repayments under line of credit ( 651,649 ) ( 750,912 ) ( 879,191 ) Borrowings of long-term debt 30,000 80,679 - Repayments of long-term debt ( 83,630 ) ( 66,827 ) ( 71,105 ) Borrowings under margin account 1,807 - 46 Repayments under margin account ( 1,807 ) - ( 960 ) Repurchases of treasury stock ( 14,928 ) ( 5,259 ) ( 4,736 ) Proceeds from exercise of stock options - ( 1 ) - Net cash (used) provided by financing activities ( 68,558 ) 8,592 ( 76,755 ) NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 32,826 ) ( 32,554 ) 26,527 CASH AND CASH EQUIVALENTS—Beginning of year 68,060 100,614 74,087 CASH AND CASH EQUIVALENTS—End of year $ 35,234 $ 68,060 $ 100,614 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION— Cash paid during the period for: Interest $ 17,441 $ 13,494 $ 9,762 Income taxes $ 886 $ 674 $ 5,510 NON-CASH INVESTING AND FINANCING ACTIVITIES— Purchases of revenue equipment included in accounts payable $ 13,332 $ 214 $ 25,147 See notes to consolidated financial statements. - 37 - Table of Contents PAMT CORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 1. ACCOUNTING POLICIES Description of Business and Principles of Consolidation – PAMT CORP (the “Company”), through its subsidiaries, operates as a truckload transportation and logistics company. The consolidated financial statements include the accounts of the Company and its wholly-owned operating subsidiaries: P.A.M. Transport, Inc., P.A.M. Cartage Carriers, LLC, Met Express, Inc., Choctaw Brokerage, Inc., Costar Equipment, Inc., Costar Real Estate Holdings, Inc., Costar Management, Inc., Select CDL Driving School, Inc., Overdrive Leasing, LLC, Choctaw Express, LLC, Decker Transport Co., LLC, T.T.X., LLC, Transcend Logistics, Inc., Unmoored Realty, LLC and East Coast Transport and Logistics, LLC. The following subsidiaries were inactive during all periods presented: P.A.M. International, Inc., S & L Logistics, Inc., P.A.M. Mexico Holdings, LLC and PAMEX, LLC. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent assets and liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. The Company periodically reviews these estimates and assumptions. The most significant estimates that affect our financial statements are accrued liabilities for insurance claims, legal reserves, and useful lives and salvage values for property and equipment. The Company's estimates were based on its historical experience and various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Cash and Cash Equivalents – The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At times, cash held at banks may exceed FDIC insured limits. Accounts Receivable and Current Expected Credit Losses – Accounts receivable are presented in the Company’s consolidated financial statements net of current expected credit losses. Management estimates current expected credit losses based upon an evaluation of the aging of our customer receivables and historical write-offs, as well as other trends and factors surrounding the credit risk of specific customers. The Company continually updates the history it uses to make these estimates so as to reflect the most recent trends, factors and other information available. In order to gather information regarding these trends and factors, the Company also performs ongoing credit evaluations of its customers. Customer receivables are considered to be past due when payment has not been received by the invoice due date. Write-offs occur when management determines an account to be uncollectible and could differ from the current expected credit losses estimate as a result of a number of factors, including unanticipated changes in the overall economic environment or factors and risks surrounding a particular customer. Management believes its methodology for estimating current expected credit losses to be reliable and consistent with prior periods. However, additional credit losses may be incurred if the financial condition of our customers were to deteriorate and could have a material effect on the Company’s consolidated financial statements in future periods. Bank Overdrafts – The Company classifies bank overdrafts in current liabilities as accounts payable. Bank overdrafts generally represent checks written in excess of available cash that have not yet cleared the Company’s bank accounts. The majority of the Company’s bank accounts are zero balance accounts that are funded at the time items clear against the account by drawings against a line of credit; therefore, the outstanding checks represent bank overdrafts. Because the recipients of these checks have generally not yet received payment, the Company continues to classify bank overdrafts as accounts payable. Bank overdrafts are classified as changes in accounts payable in the cash flows from operating activities section of the Company’s Consolidated Statement of Cash Flows. There were no bank overdrafts as of December 31, 2025 or 2024. - 38 - Table of Contents Accounts Receivable Other – The components of accounts receivable other consist primarily of amounts representing maintenance chargebacks, company driver advances, independent contractor advances, and equipment manufacturer warranties. Maintenance chargebacks from our equipment partners were approximately $ 85,000 and $ 1,300,000 as of December 31, 2025 and December 31, 2024, respectively. Accounts receivable from independent contractors as of December 31, 2025 and 2024, were approximately $ 297,000 and $ 881,000 , respectively. Independent contractors are allowed to purchase items such as fuel, repairs and tolls on Company accounts in order to share in favorable pricing negotiated by the Company. Advances receivable from company drivers as of December 31, 2025 and 2024, were approximately $ 92,000 and $ 20,000 , respectively. Independent contractors and trip lease carriers are allowed to receive advances for a portion of the revenue that they expect to receive for loads that they transport for the Company. Marketable Equity Securities – The Company’s investment in marketable equity securities is accounted for in accordance with ASC Topic 321, (“ASC Topic 321” ), Investments - Equity Securities. ASC Topic 321 requires companies to measure equity investments at fair value, with changes in fair value recognized in net income. The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method. Realized and unrealized gains and losses, interest and dividends on marketable equity securities are included in non-operating income (expense) in our consolidated statements of operations. For additional information with respect to marketable equity securities, see Note 4 – Marketable Equity Securities. Impairment of Long-Lived Assets – The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An impairment loss would be recognized if the carrying amount of the long-lived asset is not recoverable, and it exceeds its fair value. For long-lived assets classified as held and used, if the carrying value of the long-lived asset exceeds the sum of the future net undiscounted cash flows, it is not recoverable. Management continues to believe that the market conditions for used revenue equipment has deteriorated since its peak in 2022. This decline in market conditions prompted the requirement for a recoverability test. Asset groups were formed based on year and model of the revenue equipment and whether those groups were acquired used or new. Management tested all applicable asset groups and concluded that no groups of trucks or trailers are impaired beyond their carrying value as of December 31, 2025. Therefore, no impairment loss was incurred during 2025. At December 31, 2024, management determined specific asset groups of trucks and trailers to be impaired beyond their carrying value. The impairment of these asset groups resulted in an impairment loss of approximately $ 6.4 million, or $ 0.22 loss per share, net of tax, during the year ended December 31, 2024. No impairment loss was incurred during the year ended December 31, 2023. Property and Equipment – Property and equipment is recorded at historical cost, less accumulated depreciation. For financial reporting purposes, the cost of such property is depreciated principally by the straight-line method. For tax reporting purposes, accelerated depreciation or applicable cost recovery methods are used. Depreciation is recognized over the estimated asset life, considering the estimated salvage value of the asset. Such salvage values are based on estimates using expected market values for used equipment and the estimated time of disposal which in many cases include guaranteed residual values by the manufacturers. Gains and losses are reflected in the year of disposal. The following is a table reflecting estimated ranges of asset useful lives by major class of depreciable assets: Asset Class Estimated Asset Life (in years) Service vehicles 3 - 5 Office furniture and equipment 3 - 10 Revenue equipment 3 - 9 Structures and improvements 5 - 40 - 39 - Table of Contents The Company’s management periodically evaluates whether changes to estimated useful lives and/or salvage values are necessary to ensure its estimates accurately reflect the economic use of the assets. During 2025, management determined that no material adjustments to the estimated useful lives or salvage values of trucks or trailers were necessary based on such an evaluation. Inventory – Inventories consist primarily of revenue equipment parts, tires, supplies, and fuel. Inventories are carried at the lower of cost or market with cost determined using the first in, first out method. Prepaid Tires – Tires purchased with revenue equipment are capitalized as a cost of the related equipment. Replacement tires are included in prepaid expenses and deposits and are amortized over a 24 -month period. Amounts paid for the recapping of tires are expensed when incurred. Advertising Expense – Advertising costs are expensed as incurred and totaled approximately $ 1,525,000 , $ 1,359,000 and $ 2,014,000 for the years ended December 31, 2025, 2024 and 2023, respectively. Repairs and Maintenance – Repairs and maintenance costs are expensed as incurred. Self-Insurance Liability – A liability is recognized for known health, workers’ compensation, cargo damage, property damage, and auto liability damage claims. An estimate of the incurred but not reported claims for each type of liability is made based on historical claims made, estimated frequency of occurrence, and considering changing factors that contribute to the overall cost of insurance. See Note 6 – Claims Liabilities for more information regarding insurance and claims liability. Income Taxes – The Company applies the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized. See Note 12 – Federal and State Income Taxes for more information regarding income taxes. The application of income tax law to multi-jurisdictional operations such as those performed by the Company is inherently complex. Laws and regulations in this area are voluminous and often ambiguous. As such, we may be required to make subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax laws and regulations may change over time which could cause changes in our assumptions and judgments that could materially affect amounts recognized in the consolidated financial statements. We recognize the impact of tax positions in our financial statements. These tax positions must meet a more-likely-than- not recognition threshold to be recognized and tax positions that previously failed to meet the more-likely-than- not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than- not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. We recognize potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statements of income as income tax expense. In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC 740 - 10 - 30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of December 31, 2025 and 2024, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary. - 40 - Table of Contents Revenue Recognition – Revenue is recognized over time as the freight progresses towards its destination and the transportation service obligation is fulfilled. For loads picked up during the reporting period, but delivered in a subsequent reporting period, revenue is allocated to each period based on the transit time in each period as a percentage of total transit time. The contract asset, or the amount of remaining performance obligation relating to loads in process at the end of each reporting period, was $ 2.4 million and $ 2.3 million for the years ended December 31, 2025 and 2024, respectively. Recorded contract assets are included in the accounts receivable line item of the balance sheet. Corresponding liabilities are recorded in the accrued expenses and other liabilities line items for the estimated expenses on these same in-process loads. The Company had no contract liabilities associated with our operations as of December 31, 2025 and 2024. Earnings Per Share – The Company computes basic earnings per share (“EPS”) by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the potential dilution that could occur from stock-based awards and other stock-based commitments using the treasury stock or the as if converted methods, as applicable. The difference between the Company's weighted-average shares outstanding and diluted shares outstanding is due to the dilutive effect of common stock equivalents for all periods presented. See Note 14 – Earnings per Share for more information regarding the computation of diluted EPS. Fair Value Measurements – Certain financial assets and liabilities are measured at fair value within the financial statements on a recurring basis. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For additional information with respect to fair value measurements, see Note 18 – Fair Value of Financial Instruments. Reportable Segments – The operations of the Company and its subsidiaries are all in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under Generally Accepted Accounting Principles (“GAAP”). The operations of these subsidiaries can generally be classified into either truckload services or brokerage and logistics services. The Company has carefully considered the segment reporting requirements under Accounting Standards Codification (“ASC”) 280, Segment Reporting , for the years presented. ASC 280 requires companies to identify operating segments based on internal management reporting reviewed by the chief operating decision maker and permits aggregation of operating segments when they have similar economic characteristics and meet certain qualitative and quantitative criteria. Both our truckload operations and our brokerage/logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. Based on the Company’s segment identification, interpretation of the aggregation criteria outlined in ASC 280 - 10 - 50 - 11, and the similar qualitative and quantitative economic characteristics of the Company’s operating segments, the operations of the Company are aggregated into a single motor carrier segment. The Company’s chief operating decision maker, the Chief Executive Officer, utilizes the metrics of net income and operating ratio to evaluate company performance and in competitive analysis when comparing to competing companies. The accounting policies of the motor carrier segment are the same as those described in the summary of accounting policies found in this report. For purposes of this report, net income reflects the profitability of our operations by calculating the total earnings after deducting operating expenses, interest expense, income taxes and any other applicable costs from total revenue. The measure of net income is reported on the consolidated statement of operations as consolidated net (loss) income. Operating ratio is the measure of our efficiency in managing operating expenses relative to revenue generation. It is calculated as total operating expenses as a percentage of total operating revenue. The Company provides truckload transportation services as well as brokerage and logistics services to customers throughout the United States and portions of Canada and Mexico. Truckload transportation services revenues, excluding fuel surcharges, represented 68.3 %, 67.1 % and 65.3 % of total revenues, excluding fuel surcharges, for the twelve months ended December 31, 2025, 2024 and 2023, respectively. Remaining revenues, excluding fuel surcharges, for each respective year were generated by brokerage and logistics services. - 41 - Table of Contents Concentrations of Credit Risk – The Company performs ongoing credit evaluations and generally does not require collateral from its customers. The Company maintains reserves for potential credit losses. In view of the concentration of the Company’s revenues and accounts receivable among a limited number of customers within the automobile industry, the financial health of this industry is a factor in the Company’s overall evaluation of accounts receivable. Subsequent Events – We have evaluated subsequent events for recognition and disclosure through the date these financial statements were filed with the United States Securities and Exchange Commission and concluded that no subsequent events or transactions have occurred that require recognition or disclosure in our financial statements. Foreign Currency Transactions – The functional currency of the Company’s foreign branch office in Mexico is the U.S. dollar. The Company remeasures the monetary assets and liabilities of this branch office, which are maintained in the local currency ledgers, at the rates of exchange in effect at the end of the reporting period. Revenues and expenses recorded in the local currency during the period are remeasured using average exchange rates for each period. Non-monetary assets and liabilities are remeasured using historical rates. Any resulting exchange gain or loss from the remeasurement process is included in non-operating income in the Company’s consolidated statements of operations. Recent Accounting Pronouncements – In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update, (“ASU”) No. 2023 - 09, (“ASU 2023 - 09” ), Improvements to Income Tax Disclosures. ASU 2023 - 09 was issued to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The guidance is effective for annual reporting periods beginning after December 15, 2024. The Company adopted ASU 2023 - 09 effective January 1, 2025 on a prospective basis. The adoption resulted in expanded income tax disclosures, including additional information presented in the effective tax rate reconciliation within these consolidated financial statements. In November 2024, the FASB issued Accounting Standards Update, (“ASU”) No. 2024 - 03, (“ASU 2024 - 03” ), Disaggregation of Income Statement Expenses. ASU 2024 - 03 was issued to enhance the transparency of financial reporting by requiring public business entities to provide more detailed disclosures about certain operating expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company has evaluated the new guidance and does not expect it to have a material impact on its financial condition, results of operations, or cash flows. The Company considered the applicability and impact of the above-referenced ASU’s and all other accounting standard updates issued by the Financial Accounting Standards Board to the Accounting Standards Codification ("ASC") and determined there are not any ASUs that have not already been adopted which require significant consideration for disclosure as of December 31, 2025. - 42 - Table of Contents 2. REVENUE RECOGNITION The Company has a single performance obligation, to transport our customer’s freight from a specified origin to a specified destination. The Company has the discretion to choose to self-transport or to arrange for alternate transportation to fulfill the performance obligation. Where the Company decides to self-transport the freight, the Company classifies the service as truckload services, and where the Company arranges for alternate transportation of the freight, the Company classifies the service as brokerage and logistics services. In either case, the Company is paid a rate to transport freight from its origin location to a specified destination. Because the primary factors influencing revenue recognition, including performance obligation, customer base, and timing of revenue recognition are the same for both of its service categories, the Company utilizes the same revenue recognition method throughout its operations. Company revenue is generated from freight transportation services performed utilizing heavy truck trailer combinations. While various ownership arrangements may exist for the equipment utilized to perform these services, including Company-owned or leased, owner-operator owned, and third -party carriers, revenue is generated from the same base of customers. Contracts with these customers establish rates for services performed, which are predominantly rates that will be paid to pick up, transport and drop off freight at various locations. In addition to transportation, revenue is also awarded for various accessorial services performed in conjunction with the base transportation service. The Company also has other revenue categories that are not discussed in this note or broken out in our consolidated statements of operations due to their immaterial amounts. In fulfilling the Company’s obligation to transport freight from a specified origin to a specified destination, control of freight is transferred to the Company at the point it has been loaded into the driver’s trailer, the doors are sealed and the driver has signed a bill of lading, which is the basic transportation agreement that establishes the nature, quantity and condition of the freight loaded, responsibility for invoice payment, and pickup and delivery locations. The Company’s revenue is generated, and our customer receives benefit, as the freight progresses towards delivery locations. In the event the Company’s customer cancels the shipment at some point prior to the final delivery location and re-consigns the shipment to an alternate delivery location, the Company is entitled to receive payment for services performed for the partial shipment. Shipments are generally conducted over a relatively short time span, generally one to three days; however, freight is sometimes stored temporarily in our trailer at one of our drop yard locations or at a location designated by a customer. The Company’s revenue is categorized as either Freight Revenue or Fuel Surcharge Revenue, and both are earned by performing the same freight transportation services, as discussed further below. Freight Revenue – revenue generated by the performance of the freight transportation service, including any accessorial service, provided to customers. Fuel Surcharge Revenue – revenue designed to adjust freight revenue rates to an agreed-upon base cost for diesel fuel. Diesel fuel prices can fluctuate widely during the term of a contract with a customer. At the point that freight revenue rates are negotiated with customers, a sliding scale is agreed upon that approximately adjusts diesel fuel costs to an agreed-upon base amount. In general, as fuel prices increase, revenue from fuel surcharge increases, so that diesel fuel cost is adjusted to the approximate base amount agreed upon. Revenue is recognized over time as the freight progresses towards its destination and the transportation service obligation is fulfilled. For loads picked up during the reporting period, but delivered in a subsequent reporting period, revenue is allocated to each period based on the transit time in each period as a percentage of total transit time. The contract asset, or the amount of remaining performance obligation relating to loads in process at the end of each reporting period, is recorded and included in the accounts receivable line item of the balance sheet. Corresponding liabilities are recorded in the accrued expenses and other liabilities line items for the estimated expenses on these same in-process loads. The Company recognizes operating lease revenue from leasing tractors and related equipment to third parties, including independent contractors. Operating lease revenue from rental operations is recognized in revenue as it is earned. Upon lease termination, losses may be incurred in the recovery of leased equipment which are recognized as an expense in the period in which they are incurred. - 43 - Table of Contents 3. TRADE ACCOUNTS RECEIVABLE The Company's receivables result primarily from the sale of transportation and logistics services. The Company performs ongoing credit evaluations of its customers and generally does not require collateral for accounts receivable. Accounts receivable, which consist of both billed and unbilled receivables, are presented net of current estimated credit losses. Accounts outstanding longer than contractual payment terms are considered past due and are reviewed individually for collectability. Accounts receivable balances consist of the following components as of December 31, 2025 and 2024: 2025 2024 (in thousands) Billed $ 67,952 $ 78,521 Unbilled 7,345 8,082 Current estimated credit losses ( 8,415 ) ( 6,636 ) Total accounts receivable—net $ 66,882 $ 79,967 An analysis of changes in current estimated credit losses for the years ended December 31, 2025, 2024, and 2023 follows: 2025 2024 2023 (in thousands) Balance—beginning of year $ 6,636 $ 7,717 $ 5,381 Provision for bad debts 1,779 3,074 2,396 Charge-offs - ( 4,155 ) ( 60 ) Balance—end of year $ 8,415 $ 6,636 $ 7,717 4. MARKETABLE EQUITY SECURITIES The Company accounts for its marketable securities in accordance with Accounting Standards Codification (“ASC”) Topic 321, Investments—Equity Securities, which provides guidance on the recognition, measurement, and presentation of investments in equity securities. ASC Topic 321 generally requires equity investments with readily determinable fair values to be measured at fair value, with changes in fair value recognized in net income. The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income (expense). Marketable equity securities are carried at fair value, with changes in fair market value included in the determination of net income. The fair market value of marketable equity securities is determined based on quoted market prices in active markets. See Note 18 – Fair Value of Financial Instruments for additional information regarding the valuation of marketable equity securities. The following table sets forth cost, market value and unrealized gain on equity securities classified as available-for-sale as of December 31, 2025 and 2024. 2025 2024 (in thousands) Available-for-sale securities: Fair market value $ 48,488 $ 42,620 Cost 28,211 27,094 Unrealized gain $ 20,277 $ 15,526 - 44 - Table of Contents The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of December 31, 2025 and 2024. 2025 2024 (in thousands) Available-for-sale securities: Gross unrealized gains $ 21,362 $ 17,215 Gross unrealized losses 1,085 1,689 Net unrealized gains $ 20,277 $ 15,526 For the years ended December 31, 2025, 2024 and 2023, the Company recognized dividends of approximately $ 1,574,000 , $ 1,443,000 and $ 1,557,000 in non-operating income in its consolidated statements of operations, respectively. The following table shows the Company’s net realized (losses) gains during 2025, 2024 and 2023 on certain marketable equity securities. 2025 2024 2023 (in thousands) Realized (losses) gains: Sale proceeds $ 5,040 $ 3,662 $ 343 Cost of securities sold 3,121 3,213 255 Realized (losses) / gains $ 1,919 $ 449 $ 88 At December 31, 2025, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $ 4,250,000 and $ 1,085,000 , respectively. At December 31, 2024, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $ 6,584,000 and $ 1,689,000 , respectively. At December 31, 2023, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $ 8,099,000 and $ 2,630,000 , respectively. The market value of the Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. At December 31, 2025 and December 31, 2024, the Company had no outstanding borrowings under its margin account. - 45 - Table of Contents 5. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities at December 31 are summarized as follows: 2025 2024 (in thousands) Payroll $ 3,370 $ 3,779 Taxes—other than income 3,291 3,223 Interest 540 557 Driver escrows 1,079 1,392 Self-insurance claims and legal reserves 31,430 5,095 Current portion of Right-of-Use liability 1,118 - Other liabilities 250 523 Total accrued expenses and other liabilities $ 41,078 $ 14,569 The Company’s accounts payable as of December 31, 2025 is $ 32,752,000 , which includes $ 13,332,000 in payables for purchases of revenue equipment. The Company’s accounts payable as of December 31, 2024 was $ 31,198,000 , which included $ 214,000 in payables for purchases of revenue equipment. 6. CLAIMS LIABILITIES The Company maintains cargo insurance coverage to protect it from certain business risks. This policy has a per occurrence deductible of $ 25,000 . Since September 1, 2020, the Company has been self-insured for certain layers of auto liability claims in excess of $ 2.0 million. The Company specifically reserves for claims that are expected to exceed $2.0 million when fully developed, based on the facts and circumstances of those claims. During the fourth quarter of 2025, the Company recorded a $ 26.5 million increase in its claims reserve related to the settlement of a significant auto liability claim. See Note 16 – Commitments and Contingencies for additional information. The Company has self-insurance status for workers’ compensation coverage in Arkansas, Florida, Ohio, Oklahoma, and Mississippi with a $ 0.5 million self-insured retention and a $ 0.5 million per occurrence excess policy. The Company has chosen to opt out of workers’ compensation coverage in Texas and is providing coverage through the P.A.M. Texas Injury Plan which covers claims in excess of $ 1.0 million up to $ 10 million. The Company has accrued for estimated losses to pay such claims as well as claims incurred but not yet reported. The Company has not experienced any adverse trends involving differences in claims experienced versus claims estimates for workers’ compensation claims. The Company self-insures for employee health claims with a stop loss of $ 0.4 million per covered employee per year and estimates its liability for claims outstanding and claims incurred but not reported. See Note 5 – Accrued Expenses and Other Liabilities for additional information regarding self-insurance claims liabilities. - 46 - Table of Contents 7. LONG-TERM DEBT Long-term debt at December 31, consists of the following: 2025 2024 (in thousands) Line of credit with a bank—due July 1, 2027, and collateralized by accounts receivable (1) - - Equipment financing (2) 300,892 287,799 Real estate financing (3) 32,977 37,783 Total long-term debt 333,869 325,582 Less current maturities ( 65,542 ) ( 73,017 ) Long-term debt—net of current maturities $ 268,327 $ 252,565 ( 1 ) Line of credit agreement with a bank provides for maximum borrowings of $ 60.0 million and contains certain restrictive covenants that must be maintained by the Company on a consolidated basis. Borrowings on the line of credit are at an interest rate of Term SOFR as of the first day of the month plus 3.35 %, ( 7.22 % at December 31, 2025 ) and are secured by our trade accounts receivable. An “unused fee” of 0.25 % is charged if average daily borrowings are less than $ 18.0 million in a given month. Monthly payments of interest are required under this agreement. Also, under the terms of the agreement the Company is required to maintain a minimum level of financial stability by meeting various metrics as defined in the debt covenants. The Company was in compliance with all provisions under this agreement as of December 31, 2025. At December 31, 2025, we had no outstanding borrowings against the line of credit and approximately $ 0.3 million of outstanding letters of credit, with availability to borrow $ 59.7 million. At December 31, 2024, outstanding advances on the line were approximately $ 0.2 million, including letters of credit totaling $ 0.2 million. ( 2 ) Equipment financings consist of installment obligations for revenue equipment purchases, payable in various monthly installments with various maturity dates through June 2032, at a weighted average interest rate of 5.31 % as of December 31, 2025 and collateralized by revenue equipment. ( 3 ) Real estate financing consisting of an installment obligation for the purchase of real estate in Laredo, TX, payable in 120 installments at an interest rate of 3.02 % and maturing in September 2030, and an installment obligation for the financing of various company-owned terminals and office buildings payable in 120 installments at an interest rate of 3.65 % and maturing in March 2032. These obligations are collateralized by the underlying real estate and any rental income generated by the underlying real estate. The Company has provided letters of credit to third parties totaling approximately $ 300,000 and $ 200,000 at December 31, 2025 and December 31, 2024, respectively. The letter is held by the third party to assist such party in collection of any amounts due by the Company should the Company default in its commitments to the party. Scheduled annual maturities on long-term debt outstanding at December 31, 2025, are: 2026 $ 65,542 2027 71,818 2028 57,878 2029 60,329 2030 53,483 Thereafter 24,819 Total $ 333,869 - 47 - Table of Contents 8. NONCASH INVESTING AND FINANCING ACTIVITIES The Company financed approximately $ 61.9 million, $ 50.0 million, and $ 68.5 million in equipment purchases during 2025, 2024 and 2023, respectively, utilizing noncash financing. 9. CAPITAL STOCK The Company's authorized capital stock consists of 100,000,000 shares of common stock, par value $.01 per share, and 10,000,000 shares of preferred stock, par value $.01 per share. On October 31, 2024, the Company’s shareholders approved an increase in the authorized shares of common stock from 50,000,000 to 100,000,000 shares. At December 31, 2025, there were 22,377,606 shares of our common stock issued and 20,926,020 shares outstanding. At December 31, 2024, there were 22,364,120 shares of our common stock issued and 21,782,534 shares outstanding. No shares of our preferred stock were issued or outstanding at December 31, 2025 or 2024. Common Stock The holders of our common stock, subject to such rights as may be granted to any preferred stockholders, elect all directors and are entitled to one vote per share. All shares of common stock participate equally in dividends when and as declared by the Board of Directors and in net assets on liquidation. The shares of common stock have no preference, conversion, exchange, preemptive, or cumulative voting rights. Preferred Stock Preferred stock may be issued from time to time by our Board of Directors, without stockholder approval, in such series and with such preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or other provisions, as may be fixed by the Board of Directors in the resolution authorizing their issuance. The issuance of preferred stock by the Board of Directors could adversely affect the rights of holders of shares of common stock; for example, the issuance of preferred stock could result in a class of securities outstanding that would have certain preferences with respect to dividends and in liquidation over the common stock, and that could result in a dilution of the voting rights, net income per share and net book value of the common stock. As of December 31, 2025, we have no agreements or understandings for the issuance of any shares of preferred stock. Treasury Stock The Company’s stock repurchase program has been extended and expanded several times, most recently in July 2023, when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011 authorization. Under this program, the Company did not repurchase any shares of its common stock during 2025 and repurchased 1,050 shares of its common stock during 2024, respectively. As of December 31, 2025, there remain 474,016 shares of common stock authorized under this plan. On April 3, 2025, the Company commenced a tender offer to repurchase up to 435,000 shares of the Company’s outstanding common stock at a price of not greater than $ 17.00 nor less than $ 14.00 per share. On April 11, 2025, the Company amended the terms of the tender offer to increase the minimum purchase price for shares purchased in the tender offer to $ 14.50 per share. Following the expiration of the tender offer on May 1, 2025, the Company accepted 870,000 shares of its common stock for purchase at $ 17.00 per share, at an aggregate purchase price of approximately $ 14.8 million, excluding fees and expenses related to the offer. The number of shares purchased by the Company reflects the Company’s right to purchase additional shares in the tender offer up to an additional 2 % of its outstanding shares. The Company funded the purchase of the accepted shares tendered with available cash and accounted for the repurchase of these shares as treasury stock on the Company’s condensed consolidated balance sheet as of December 31, 2025. - 48 - Table of Contents On April 24, 2024, the Company commenced a tender offer to repurchase up to 550,000 shares of the Company’s outstanding common stock at a price of not greater than $ 18.00 nor less than $ 15.50 per share. Following the expiration of the tender offer on May 22, 2024, the Company accepted 284,206 shares of its common stock for purchase at $ 18.00 per share, at an aggregate purchase price of approximately $ 5.1 million, excluding fees and expenses related to the offer. The Company funded the purchase of the accepted shares tendered with available cash and accounted for the repurchase of these shares as treasury stock on the Company’s condensed consolidated balance sheet as of December 31, 2024. The Company accounts for Treasury stock using the cost method, and as of December 31, 2025, 1,451,586 shares were held in the treasury at an aggregate cost of approximately $ 28,924,000 . 10. SEGMENT INFORMATION, SIGNIFICANT CUSTOMERS, INDUSTRY CONCENTRATION AND GEOGRAPHIC AREAS The Company's revenues for 2025, 2024 and 2023 were all generated from operations in the motor carrier segment and are aggregated into a single reporting segment in accordance with the aggregation criteria under GAAP. Both our truckload operations and our brokerage/logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. Based on the Company’s segment identification, interpretation of the aggregation criteria outlined in ASC 280 - 10 - 50 - 11, and the similar qualitative and quantitative economic characteristics of the Company’s operating segments, the operations of the Company is aggregated into a single motor carrier segment. The Company’s chief operating decision maker, the Chief Executive Officer, utilizes the metrics of net income and operating ratio to evaluate company performance and in competitive analysis when comparing to competing companies. The accounting policies of the motor carrier segment are the same as those described in the summary of accounting policies found in this report. The table below presents revenue dollars and percentages by geographic area: Year Ended December 31, 2025 2024 2023 (in thousands) Amount Percent Amount Percent Amount Percent United States - domestic shipments $ 332,431 55.6 $ 448,137 62.1 $ 512,552 63.2 Shipments to or from Mexico 264,440 44.2 265,386 37.7 296,696 36.6 Shipments to or from Canada 1,185 0.2 1,123 0.2 1,559 0.2 Total $ 598,056 100 % $ 714,646 100 % $ 810,807 100 % Our five largest customers, for which we provide carrier services covering a number of geographic locations, accounted for approximately 43 %, 39 % and 34 % of our total revenues in 2025, 2024 and 2023, respectively. General Motors Company accounted for approximately 14 %, 12 % and 12 % of our revenues in 2025, 2024 and 2023, respectively. We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers. Approximately 35 %, 32 % and 30 % of our revenues were derived from transportation services provided to the automobile industry during 2025, 2024 and 2023, respectively. Accounts receivable from the three largest customers totaled approximately $ 25,296,000 and $ 25,384,000 at December 31, 2025 and 2024, respectively. 11. DIVIDENDS The Company has paid cash dividends in the past; however, the Company currently intends to retain future earnings and does not anticipate paying cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of the Board and will depend on the Company’s financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends, and other factors the Board deems relevant. - 49 - Table of Contents 12. FEDERAL AND STATE INCOME TAXES The Company prospectively applied Accounting Standards Update (“ASU”) No. 2023 - 09, Improvements to Income Tax Disclosures (“ASU 2023 - 09” ). As such, information presented below for 2024 and 2023 has not been recast to conform to current-year presentation. Net loss before income taxes for the year ended December 31 are as follows: 2025 (in thousands) Domestic ( 70,288 ) Foreign - Total (loss) before income taxes $ ( 70,288 ) The provision (benefit) for income taxes consisted of the following components for the following years ended December 31: 2025 2024 2023 (in thousands) Current: Federal $ 436 $ 945 $ 4,697 State 741 1,089 2,580 Total current income tax provision 1,177 2,034 7,277 Deferred: Federal ( 15,277 ) ( 9,248 ) 944 State ( 3,581 ) ( 2,537 ) 1,942 Total deferred income tax provision ( 18,858 ) ( 11,785 ) 2,886 Total income tax provision expense $ ( 17,681 ) $ ( 9,751 ) $ 10,163 After the adoption of ASU 2023 - 09, the reconciliation between the provision for income taxes for the year December 31, 2025 and the amounts computed using the federal statutory rate in effect is presented in the following table: 2025 Amount Percent Federal income tax at statutory rate $ ( 14,760 ) 21.0 State income taxes, net of federal income tax effect (1) ( 2,840 ) 4.0 Tax Credits Federal fuel tax credit ( 64 ) 0.1 Nontaxable and nondeductible items Nondeductible per-diem paid to drivers 152 ( 0.2 ) Dividend received deduction ( 162 ) 0.2 Other 98 ( 0.1 ) Other Adjustments ( 105 ) 0.2 Total income tax (benefit) expense $ ( 17,681 ) 25.2 % ( 1 ) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include Arkansas, Pennsylvania and Tennessee. Deferred state income taxes are calculated using a blended state tax rate and are not attributed to specific states. Accordingly, the states disclosed are based on current state income tax expense. - 50 - Table of Contents The reconciliation between the computed provision for income taxes and the amounts computed using the federal statutory rate for the years ended December 31 prior to the adoption of ASU 2023 - 09 is presented in the following table: 2024 2023 Amount Percent Amount Percent Federal income tax at statutory rate $ ( 8,725 ) 21.0 $ 6,002 21.0 Federal income tax effects of: State income taxes ( 860 ) 2.1 ( 2,038 ) ( 7.1 ) Nondeductible per diem and meals 247 ( 0.6 ) 371 1.3 Other 1,035 ( 2.5 ) 1,306 4.6 Federal income tax provision ( 8,302 ) 20.0 5,641 19.8 State income tax provision ( 1,449 ) 3.5 4,522 15.8 Total income tax (benefit) expense $ ( 9,751 ) 23.5 $ 10,163 35.6 Under GAAP, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax reporting purposes. Significant components of the Company’s deferred tax liabilities and assets at December 31 are as follows: 2025 2024 (in thousands) Deferred tax liabilities: Depreciation & basis differences for property, plant and equipment $ 98,072 $ 89,960 Unrealized gains on securities 5,215 3,987 Prepaid expenses 2,466 2,880 Total deferred tax liabilities 105,753 96,827 Deferred tax assets: Net operating loss carryover 22,007 - Accrued Expenses 7,866 1,063 Current expected credit losses 2,166 1,708 Disallowed interest expense under Sec. 163(j) - 1,509 Other 25 - Total deferred tax assets 32,064 4,280 Net deferred tax liability $ 73,689 $ 92,547 Income taxes paid, net of refunds received, during the year ended December 31, 2025 were as follows: 2025 (in thousands) Federal - State Arkansas 400 Tennessee 110 Louisiana 85 Alabama 65 Pennsylvania 53 Georgia 45 Other (net refund) ( 122 ) Total income taxes paid, net of refunds $ 636 Income taxes paid, net of refunds received totaled $ 0.5 million in 2024, while income taxes paid, net of refunds received totaled $ 5.5 million in 2023. - 51 - Table of Contents On July 4, 2025, the United States Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill (the “OBBB”). Among other provisions, the legislation reinstated 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025, and modified the limitation on business interest expense under Internal Revenue Code Section 163 (j) to be based on 30% of adjusted taxable income determined using an EBITDA measure, rather than EBIT. The OBBB has multiple effective dates with certain provisions effective in 2025 and others implemented through 2027. The relevant items contained in the bill increased our deferred tax liability and reduced federal income tax liability in 2025, with no material impact on the 2025 effective tax rate. As a result of these provisions, the Company recorded accelerated depreciation deductions and recognized previously disallowed interest expense, which collectively increased current-year deductible expenses and are expected to result in a federal net operating loss of $ 85.5 million for the year ended December 31, 2025. The enactment of the OBBBA resulted in a material impact to the Company’s current and deferred income tax balances reflected on the condensed consolidated balance sheet and income statement for the year ended December 31, 2025. In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of Accounting Standards Codification (“ASC”) 740 - 10 - 30, weighs all available evidence, both positive and negative to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of December 31, 2025, management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance was not necessary. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of December 31, 2025, an adjustment to the Company’s consolidated financial statements for uncertain tax positions has not been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During 2025 and 2024, the Company has not recognized or accrued any interest or penalties related to uncertain income tax positions. The Company and its subsidiaries are subject to U.S. and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions. The major tax jurisdictions in which we operate generally provide for a deficiency assessment statute of limitation period of three years and as a result, the Company’s tax years 2022 and forward remain open to examination in those jurisdictions. 13. STOCK-BASED COMPENSATION The Company maintains a stock incentive plan under which incentive and nonqualified stock options and other stock awards may be granted. On February 15, 2024, the Company’s Board of Directors adopted, and on October 31, 2024, our shareholders approved, the 2024 Equity Incentive Plan (the “2024 Plan”). Under the 2024 Plan, 1,600,000 shares are reserved for the issuance of stock awards to employees, officers, directors, consultants and advisors of the Company. The stock option exercise price and the restricted stock purchase price under the 2024 Plan shall not be less than 100 % of the fair market value of the Company’s common stock on the date the award is granted. The fair market value is determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award is granted. In January 2025, the Company granted awards of restricted stock units representing 100,000 shares of common stock to certain key employees under the 2024 Plan. These stock awards had a grant date fair value of $ 16.10 per share, based on the closing price of the Company’s stock on the date of grant. 52,500 of the awarded share units vest on the four -year anniversary date of the award. The remaining 47,500 of the awarded share units vest on the five -year anniversary date of the award. - 52 - Table of Contents In May 2025, the Company granted 2,862 shares of common stock to non-employee directors. This stock award had a grant date fair value of $ 15.71 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately. In August 2025, the Company granted awards of restricted stock units representing 100,000 shares of common stock to its Chief Executive Officer under the 2024 Plan. The stock award had a grant date fair value of $ 12.15 per share, based on the closing price of the Company’s stock on the date of grant. The awarded share units will vest in four equal installments beginning on February 9, 2026. Prior to the 2024 Plan, the Company maintained the 2014 Amended and Restated Stock Option and Incentive Plan (the “2014 Plan”), which was adopted by the Company’s Board of Directors in March 2014 and approved by the Company’s shareholders in May 2014. Under the 2014 Plan, 3,000,000 shares (as adjusted for the Company’s 2 -for- 1 forward splits of its common stock paid in August 2021 and March 2022, respectively) were reserved for the issuance of stock awards to directors, officers, key employees, and others. The stock option exercise price and the restricted stock purchase price under the 2014 Plan were not to be less than 85 % of the fair market value of the Company’s common stock on the date the award is granted. The fair market value was determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award was granted. The 2014 Plan expired on March 13, 2024, and no further grants may be made under this plan. All outstanding unvested awards granted under the 2014 Plan, however, remain subject to the terms and conditions of the 2014 Plan. During May 2024, the Company issued 2,130 shares of common stock to non-employee directors. These shares had a grant date fair value of $ 17.60 per share, based on the closing price of the Company’s stock on the date of issuance. These shares are not registered under the Securities Act of 1933 and are subject restrictions on transfer under the requirements of such act and the rules and regulations thereunder. During February 2023, the Company granted 28,313 shares of common stock to certain key employees. These stock awards had grant date fair values of $ 28.30 per share, based on the closing price of the Company’s stock on the date of grant, and vest in 25 % increments over four years, beginning one year from the anniversary date of the grant. During May 2023, the Company granted 2,295 shares of common stock to non-employee directors. These stock awards had a grant date fair value of $ 23.95 per share, based on the closing price of the Company’s stock on the date of grant, and vested immediately. During 2025, 2024 and 2023, there were no grants of stock options and there were no outstanding stock options at December 31, 2025 or December 31, 2024. At December 31, 2025, approximately 1,432,500 shares were available for granting future equity awards under the 2024 Equity Incentive Plan. The grant date fair value of stock and stock options vested during 2025, 2024 and 2023 was approximately $ 437,000 , $ 928,000 and $ 576,000 , respectively. Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $ 548,000 during 2025 and includes approximately $ 45,000 recognized as a result of the grant of a total of 2,862 shares of stock to four non-employee directors during the second quarter of 2025. The Company recognized a total income tax benefit of approximately $ 138,000 related to stock-based compensation expense during 2025. The recognition of stock-based compensation expense decreased diluted earnings per common share by $ 0.02 and basic earnings per common share by approximately $ 0.02 during 2025. As of December 31, 2025, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $ 1,949,000 which is being amortized over the remaining vesting period. As a result, the Company expects to recognize the following approximate amounts of additional compensation expense related to unvested restricted stock awards during each of the years indicated: 2026 $ 643,000 2027 $ 546,000 2028 $ 537,000 2029 $ 210,000 2030 $ 13,000 Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $ 723,000 during 2024 and includes approximately $ 37,000 recognized as a result of the grant of a total of 2,130 shares of stock to four non-employee directors during the second quarter of 2024. The Company recognized a total income tax benefit of approximately $ 170,000 related to stock-based compensation expense during 2024. The recognition of stock-based compensation expense decreased diluted earnings per common share by $ 0.02 and basic earnings per common share by approximately $ 0.02 during 2024. - 53 - Table of Contents Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $ 553,000 during 2023 and includes approximately $ 55,000 recognized as a result of the grant of a total of 2,295 shares of stock to four non-employee directors during the second quarter of 2023. The Company recognized a total income tax benefit of approximately $ 197,000 related to stock-based compensation expense during 2023. The recognition of stock-based compensation expense decreased diluted earnings per common share by $ 0.02 and basic earnings per common share by approximately $ 0.02 during 2023. There were no options granted during 2025, 2024, or 2023. A summary of the status of the Company’s non-vested restricted stock as of December 31, 2025 and changes during the year ended December 31, 2025, is presented below: Restricted Stock Number of Shares Weighted- Average Grant Date Fair Value Nonvested—January 1, 2025 128,591 $ 13.79 Granted 202,862 14.15 Canceled/forfeited/expired ( 141,486 ) 11.93 Vested ( 15,862 ) 27.52 Nonvested—December 31, 2025: 174,105 $ 14.47 14. EARNINGS PER SHARE Basic (loss) earnings per common share was computed by dividing net (loss) income by the weighted average number of shares outstanding (on a stock split adjusted basis) during the period. Diluted (loss) earnings per common share was calculated as follows: For the Year Ended December 31, 2025 2024 2023 (in thousands, except per share data) Net (loss) income $ ( 52,607 ) $ ( 31,795 ) $ 18,416 Basic weighted average common shares outstanding 21,209 21,878 22,056 Dilutive effect of common stock equivalents - 141 Diluted weighted average common shares outstanding 21,209 21,878 22,197 Basic (loss) earnings per share $ ( 2.48 ) $ ( 1.45 ) $ 0.83 Diluted (loss) earnings per share $ ( 2.48 ) $ ( 1.45 ) $ 0.83 - 54 - Table of Contents 15. BENEFIT PLAN The Company sponsors a benefit plan for the benefit of all eligible employees. The plan qualifies under Section 401 (k) of the Internal Revenue Code thereby allowing eligible employees to make tax-deductible contributions to the plan. The plan provides for employer matching contributions of 50 % of each participant’s voluntary contribution up to 3 % of the participant’s compensation and vests at the rate of 20 % each year until fully vested after five years. Total employer matching contributions to the plan were approximately $ 280,000 , $ 288,000 and $ 245,000 in 2025, 2024 and 2023, respectively. 16. COMMITMENTS AND CONTINGENCIES We are involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. Since September 1, 2020, we have been self-insured for certain layers of auto liability claims in excess of $ 2.0 million. We currently specifically reserve for claims that are expected to exceed $ 2.0 million when fully developed, based on the facts and circumstances of those claims. Except as described below, based on our knowledge of the facts, and in certain cases, opinions of outside counsel, we believe the resolution of such claims and pending litigation will not have a material effect on our financial position, results of operations or cash flows. However, if we experience claims that are not covered by our insurance or that exceed our estimated claim reserve, it could increase the volatility of our earnings and have a materially adverse effect on our financial condition, results of operations or cash flows. We are a defendant in a motor vehicle accident lawsuit filed on January 10, 2025 in the State Court of Gwinnett County, Georgia, arising from a December 29, 2024 accident between a Company tractor-trailer and a passenger vehicle. As of December 31, 2025, we reached a preliminary settlement agreement with the plaintiff for a total settlement amount of $ 30.0 million, of which $ 26.5 million represents the Company’s net exposure after consideration of applicable insurance coverage. The settlement agreement is subject to final approval, which is currently expected during the first quarter of 2026. As of December 31, 2025, the Company has recorded a liability of $ 26.5 million related to this matter, which is included in accrued expenses and other liabilities in the Consolidated Balance Sheets (see Note 5, Accrued Expenses and Other Liabilities). - 55 - Table of Contents 17. LEASES Right-of-Use Leases In May 2025, the Company entered into an operating lease for shop and office space for an initial term of three years and in October 2025, the Company entered into an operating lease for terminal space for an initial term of ten years. Neither lease provides an option for early cancellation. During 2024 and 2023, the Company did not enter into any new leases with similar provisions. In accordance with the provisions of ASC Topic 842, Leases , which requires lessees to recognize right-of-use assets and corresponding lease liabilities for operating leases on the balance sheet, these leases resulted in the recognition of right-of-use assets and corresponding operating lease liabilities, respectively, valued at approximately $ 7.2 million as of December 31, 2025. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using the Company’s incremental borrowing rate as of the respective dates of lease inception, as the rate implicit in each lease is not readily determinable. The right-of-use assets are recorded in other assets, and the lease liability is recorded in accrued expenses and other liabilities and in other long-term liabilities on our condensed consolidated balance sheet at December 31, 2025. Lease expense is recorded on a straight-line basis over the lease term and is recorded in rent and purchased transportation in our condensed consolidated statements of operations. While these lease agreements may contain provisions to extend for a period of time after the initial term, the Company is not reasonably certain these extension options will be exercised. Therefore, potential lease payments that might occur under this extension period are not included in amounts recorded in our condensed consolidated balance sheets as of December 31, 2025. Scheduled amounts and timing of cash flows arising from operating lease payments at December 31, 2025, are: (in thousands) Maturity of Lease Liabilities 2026 $ 1,122 2027 1,159 - 2028 952 2029 863 2030 and Thereafter 5,048 Total undiscounted operating lease payments $ 9,144 Less: Imputed interest ( 1,986 ) Present value of operating lease liabilities $ 7,158 Balance Sheet Classification Right-of-use assets (recorded in other non-current assets ) $ 7,158 Current lease liabilities (recorded in other current liabilities) $ 1,118 Long-term lease liabilities (recorded in other long-term liabilities ) 6,040 Total operating lease liabilities $ 7,158 Other Information Weighted-average remaining lease term for operating leases (in years) 8.51 Weighted-average discount rate for operating leases 5.62 % Cash Flows A right-of-use asset was recognized as a non-cash asset addition that resulted from new operating lease liabilities during the year ended December 31, 2025. No new right-of-use asset was recognized as non-cash asset additions that resulted from new operating lease liabilities during the year ended December 31, 2024. Cash paid for amounts included in the present value of right-of-use lease liabilities was $ 0.3 and $ 0.1 million during the years ended December 31, 2025 and December 31, 2024, respectively, and is included in operating cash flows. - 56 - Table of Contents Cash Paid for Operating Leases Twelve Months Ended December 31, 2025 2024 (in thousands) Right-of-Use leases $ 292 $ 114 Short-term leases (1) 2,173 3,424 Total $ 2,465 $ 3,538 ( 1 ) Short-term lease cost includes leases with a term of twelve months or less and leases with options for early cancellation. Lease Revenue The Company has a lease-purchase program whereby we offer independent contractors the opportunity to lease a Company-owned truck. The terms associated with these leases require weekly lease payments over the term of the leases which range from 5 to 60 months. The cost and carrying amount of Company-owned trucks in this program at December 31, 2025 were approximately $ 72,910,000 and $ 35,866,000 , respectively. The cost and carrying amount of the Company-owned trucks in this program at December 31, 2024 were approximately $ 67,440,000 and $ 37,932,000 , respectively. Payments under this program are classified in the Company’s financial statements under the consolidated statement of operations category Revenue. Leases in our lease-purchase program expire at various dates through 2029. Future minimum lease receipts related to these operating leases at December 31, 2025 and 2024 were approximately $ 12,601,000 and $ 21,111,000 , respectively. Depreciation is calculated on a straight-line basis over the estimated useful life of the equipment, down to an estimated salvage value. In most cases, the Company has agreements in place with certain manufacturers whereby salvage values are guaranteed by the manufacturer. In other cases, where salvage values are not guaranteed, estimates of salvage value are based on the expected market values of equipment at the time of disposal. During the year ended December 31, 2025, the Company incurred $ 9.6 million of depreciation expense for these assets. The Company leases dock space to a related party at our Laredo, Texas terminal and warehouse and office space to an unrelated lessee at a second Laredo, Texas terminal. At December 31, 2025, the cost and carrying amount of the facilities leased were approximately $ 13,738,000 and $ 10,568,000 , respectively. Future minimum lease receipts related to this operating lease at December 31, 2025 are approximately $ 49,000 . See Note 19 – Related Party Transactions for additional information regarding the Company’s transactions with related persons. The Company's operating lease revenue during 2025, 2024 and 2023 is as follows: 2025 2024 2023 (in thousands) Leased truck revenue (recorded in revenue, before fuel surcharge) $ 10,578 $ 9,961 $ 7,850 Leased building space revenue (recorded in non-operating income) 800 604 395 Total lease revenue $ 11,378 $ 10,565 $ 8,245 Lease Receivable Future minimum operating lease payments receivable at December 31, 2025: (in thousands) 2026 $ 9,361 2027 1,996 2028 1,175 2029 & Thereafter 69 Total future minimum lease payments receivable $ 12,601 - 57 - Table of Contents Lease Payments to Related Parties Payments to related parties of $ 794,509 were made for real estate leases during 2025 which include maintenance facilities in one state and trailer drop yards in nine states. The leases are generally month to month leases with automatic monthly renewal provisions. During 2025 the Company leased office, shop and parking spaces from various lessors, including a related party. The initial term for the majority of these leases is one year, with an option for early cancellation and an option to renew for subsequent one -month periods. These leases can be terminated by either party by providing notice to the other party of the intent to cancel or to not extend. Relatively short lease durations for these properties are intended to provide flexibility to the Company as changing operational needs and shifting opportunities often result in cancellation or non-renewal of these leases by the Company or the lessor. The minimum operating lease payable under these arrangements was approximately $ 27,000 as of December 31, 2025. The Company leases office and shop facilities to a related party. At December 31, 2025, the cost and carrying amount of the facilities leased were approximately $ 13,738,000 and $ 10,568,000 , respectively. Future minimum lease receipts related to this lease at December 31, 2025 were approximately $ 49,000 . 18. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments consist of cash and cash equivalents, marketable equity securities, accounts receivable, trade accounts payable, and borrowings. The Company follows the guidance for financial assets and liabilities measured on a recurring basis. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 inputs that are either directly or indirectly observable such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable; or other inputs not directly observable, but derived principally from, or corroborated by, observable market data. Level 3: Unobservable inputs that are supported by little or no market activity. The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. At December 31, 2025 and 2024, the following items are measured at fair value on a recurring basis: 2025 2024 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Marketable equity securities $ 48,488 $ 48,488 - - $ 42,620 $ 42,620 - - During 2025 and 2024, there were no transfers of marketable securities between levels of fair value measurement. - 58 - Table of Contents The Company’s investments in marketable equity securities are recorded at fair value based on quoted market prices. The carrying value of cash and cash equivalents, accounts receivable, trade accounts payable, and accrued liabilities approximate fair value due to their short maturities. The carrying amount for the line of credit approximates fair value because the line of credit interest rate is adjusted frequently. For long-term debt other than the lines of credit, the fair values are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The carrying values and estimated fair values of this other long-term debt at December 31, 2025 and 2024 are summarized as follows: 2025 2024 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (in thousands) Long-term debt $ 333,869 $ 332,066 $ 325,582 $ 319,210 The Company has not elected the fair value option for any of our financial instruments. 19. RELATED PARTY TRANSACTIONS In the normal course of business, transactions for transportation and repair services, equipment, property leases and other services are conducted between the Company and companies affiliated with our Chairman and controlling shareholders. The Company recognized approximately $ 18,130,000 , $ 13,319,000 and $ 321,000 in operating revenue and approximately $ 12,768,000 , $ 30,140,000 and $ 27,286,000 in operating expenses in 2025, 2024, and 2023, respectively from related party transactions. The Company purchased auto liability and workers’ compensation insurance through an insurance company affiliated with our Chairman and controlling shareholders. Premiums for auto liability coverage during 2025, 2024, and 2023 were approximately $ 15,655,000 , $ 14,404,000 , and $ 13,307,000 , respectively. Premiums for workers’ compensation coverage during 2025, 2024, and 2023 were approximately $ 375,000 , $ 267,000 and $ 298,000 , respectively. Amounts owed to the Company by these affiliates were approximately $ 2,554,000 and $ 3,724,000 at December 31, 2025 and 2024, respectively. Of the accounts receivable at December 31, 2025 and 2024, approximately $ 2,461,000 and $ 3,275,000 represent freight transportation and approximately $ 93,000 and $ 449,000 represent revenue resulting from other services performed for related parties. Amounts payable to affiliates at December 31, 2025 and 2024 were approximately $ 1,213,000 and $ 1,196,000 respectively. - 59 - Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.