UNIVERSAL LOGISTICS HOLDINGS, INC. 10-Q

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events, future financial performance, anticipated demand for our services, expected operating results, future capital expenditures, liquidity, financing arrangements, market conditions, business strategies and other matters that are not historical facts. In some cases, forward-looking statements can be identified by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions. These forward-looking statements are based on management’s current beliefs, expectations and assumptions regarding future events and are subject to risks, uncertainties and other factors, many of which are beyond our control. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include, among others, changes in freight demand, customer activity levels, automotive and industrial production, labor availability and costs, fuel prices, insurance costs, interest rates, capital expenditures, the availability of qualified owner-operators and drivers, the impact of inflationary pressures, the strength of the U.S. economy, the timing and success of cost reduction initiatives, changes in laws and regulations, cybersecurity risks, supply chain disruptions, and the other risks described in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 and in Part II, Item 1A of this Quarterly Report on Form 10-Q. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Overview Universal Logistics Holdings, Inc. is a holding company whose subsidiaries provide customized transportation and logistics solutions throughout the United States and in Mexico and Canada. On May 1, 2025, we completed a reincorporation from Michigan to Nevada pursuant to a statutory conversion approved by our stockholders. Through our operating subsidiaries, we provide an integrated portfolio of transportation and logistics services designed to support customers throughout their supply chains, including value-added, dedicated, intermodal and trucking services. Our operating subsidiaries provide a comprehensive suite of transportation and logistics solutions that allow our customers to reduce costs and manage their supply chains more efficiently. We market our services through a direct sales and marketing network focused on large customers in specific industry sectors, through company-managed facilities, and through a contract network of agents who solicit freight business directly from shippers. Our business model is designed to provide flexibility in managing purchased transportation, labor and equipment costs and to allow us to respond quickly to changes in customer demand and shipping volumes. We generate substantially all of our revenues from fees charged to customers for transportation services and customized logistics solutions. We also derive revenue from fuel surcharges, where separately identifiable, loading and unloading activities, equipment detention, container management, storage and other related services. Operations in our intermodal and trucking segments are generally associated with individual freight shipments coordinated by our agents and company-managed terminals. In contrast, our contract logistics segment provides value-added services and dedicated transportation solutions to specific customers, generally pursuant to contracts with terms of one year or longer. As a result, our contract logistics segment generally provides greater visibility into volumes and pricing, while our intermodal and trucking segments are more directly affected by spot market conditions, customer shipping patterns and general freight demand. Our segments are also distinguished by the extent to which we dedicate personnel, equipment and other resources to support customer-specific requirements. During the first half of 2026, we continued to operate in a challenging environment in certain parts of our business, particularly in intermodal and certain industrial and automotive end markets. Freight demand remained uneven, customer activity levels remained below historical levels in certain markets, and elevated labor, insurance, equipment, maintenance and borrowing costs continued to pressure margins. The following discussion of our financial condition and results of operations should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 and the unaudited Consolidated Financial Statements and related notes included in this Quarterly Report on Form 10-Q. 20 Current Economic Conditions We continue to operate in an uncertain macroeconomic environment. Freight demand remains uneven across many end markets, particularly in certain industrial, automotive and consumer-related sectors. Production levels and shipping volumes in certain automotive and heavy industrial markets have remained below historical levels, which has negatively affected demand for portions of our contract logistics, intermodal and trucking services. In addition, we continue to experience elevated costs for labor, employee benefits, insurance, equipment, maintenance, fuel and interest expense. While we seek to mitigate these pressures through pricing initiatives, productivity improvements, cost controls and customer contract renewals, there can be no assurance that such actions will fully offset increased costs or reductions in shipping volumes. New or increased tariffs on imported goods, trade restrictions, geopolitical instability, supply chain disruptions or other macroeconomic developments could adversely affect shipping volumes, customer demand and overall freight activity. These factors could negatively affect our revenues, profitability, cash flows and financial condition. Despite these challenges, we believe that cash generated from operations, available cash balances and borrowing capacity under our revolving credit facility and other financing arrangements will be sufficient to fund working capital needs, planned capital expenditures and debt service requirements over the next twelve months. However, our future liquidity, financial condition and results of operations will depend on a number of factors beyond our control, including freight demand, customer shipping patterns, pricing, labor availability, interest rates and broader economic conditions. Operating Revenues For financial reporting purposes, we group our services into five primary categories: truckload, brokerage, intermodal, dedicated, and value-added logistics services. Truckload, brokerage and intermodal services are generally associated with individual freight shipments coordinated by our agents and company-managed terminals, while dedicated and value-added services are typically provided pursuant to customer-specific arrangements, generally under contracts with terms of one year or longer. Truckload includes dry van, flatbed, heavy-haul and refrigerated transportation. Brokerage is provided through third-party transportation providers. Intermodal includes rail-truck, steamship-truck and related drayage support services. Dedicated consists generally of short-run or round-trip transportation services provided to specific customers within defined geographic areas. Value-added services include material handling, sequencing, warehousing, returnable container management, specialty project development and other customer-specific logistics solutions. The following table sets forth operating revenues from each of these service categories for the thirteen weeks and twenty-six weeks ended July 4, 2026 and June 28, 2025, expressed as a percentage of total operating revenues: Thirteen Weeks Ended Twenty-six Weeks Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Operating revenues: Truckload services 11.9 % 11.7 % 10.6 % 10.8 % Brokerage services 5.1 5.0 4.8 5.1 Intermodal services 11.4 17.2 12.1 17.5 Dedicated services 23.2 20.8 23.1 21.5 Value-added services 48.4 45.3 49.4 45.1 Total operating revenues 100.0 % 100.0 % 100.0 % 100.0 % 21 Results of Operations Thirteen Weeks Ended July 4, 2026 Compared to Thirteen Weeks Ended June 28, 2025 The following tables set forth selected items derived from our consolidated statements of income for the thirteen weeks ended July 4, 2026 and June 28, 2025, expressed as a percentage of total operating revenues. The period-to-period discussion that follows should be read together with the table and focuses on the primary drivers of changes in revenues, operating expenses and profitability. During the second quarter of 2026, the gain on the sale of certain real property and improved segment execution favorably impacted our operating margins. The favorable impact was partially offset by a non-cash asset impairment expense and charges related to developments in outstanding legal matters during the period. Thirteen Weeks Ended July 4, 2026 June 28, 2025 Percent Change in Dollar Amount (Dollars in millions) $ % $ % % Operating revenues $ 379,323 100.0 % $ 393,794 100.0 % (3.7 )% Operating expenses: Purchased transportation and equipment rent 67,014 17.7 81,508 20.7 (17.8 ) Direct personnel and related benefits 164,798 43.4 168,032 42.7 (1.9 ) Operating supplies and expenses 56,287 14.8 50,358 12.8 11.8 Commission expense 4,468 1.2 4,395 1.1 1.7 Occupancy expense 16,264 4.3 11,803 3.0 37.8 General and administrative 16,019 4.2 14,026 3.6 14.2 Insurance and claims 17,523 4.6 7,599 1.9 130.6 Depreciation and amortization 33,184 8.7 36,203 9.2 (8.3 ) Gain on disposal of property and equipment (45,257 ) (11.9 ) (23 ) (0.0 ) n/m Impairment expense 3,886 1.0 — — n/m Total operating expenses 334,186 88.1 373,901 94.9 (10.6 ) Income from operations 45,137 11.9 19,893 5.1 126.9 Interest expense, net (10,560 ) (2.8 ) (8,852 ) (2.2 ) 19.3 Other non-operating income (2 ) (0.0 ) 149 0.0 (101.3 ) Income before income taxes 34,575 9.1 11,190 2.9 209.0 Income tax expense 8,389 2.2 2,874 0.8 191.9 Net income $ 26,186 6.9 % $ 8,316 2.1 % 214.9 % Operating Revenues Operating revenues decreased by $14.5 million, or 3.7%, to $379.3 million for the thirteen weeks ended July 4, 2026, from $393.8 million for the thirteen weeks ended June 28, 2025. The decrease was primarily attributable to lower rates and volumes in our intermodal segment. The decrease was partially offset by an increase in our contract logistics segment, primarily driven by an increase in our revenue from value-added programs and strong dedicated transportation volumes. Included in operating revenues for the thirteen weeks ended July 4, 2026, were separately identified fuel surcharges of $24.8 million, compared to $20.2 million in the prior year period. Purchased Transportation and Equipment Rent Purchased transportation and equipment rent generally increases or decreases in proportion to the revenues generated through owner-operators and third-party capacity providers. Purchased transportation and equipment rent was $67.0 million for the thirteen weeks ended July 4, 2026, compared to $81.5 million in the prior year period. The decrease was primarily attributable to lower transactional transportation volumes and a decrease in the mix of owner-operators versus employee drivers in certain intermodal operations. Direct Personnel and Related Benefits Direct personnel and related benefits expense was $164.8 million for the thirteen weeks ended July 4, 2026, compared to $168.0 million in the prior year period. Trends in direct personnel and related benefits are generally correlated with operating facility requirements, headcount levels and labor utilization in our contract logistics segment, including value-added services and dedicated transportation, as well as the use of employee drivers in certain intermodal operations. The decrease in the current year period was primarily attributable to fewer programs in our value-added rail services operations. 22 Operating Supplies and Expenses Operating supplies and expenses include items such as fuel, maintenance, utilities, communications, equipment repairs, cost of materials and other operating costs. Operating supplies and expenses were $56.3 million for the thirteen weeks ended July 4, 2026, compared to $50.4 million in the prior year period. The increase was primarily attributable to an increase in fuel expense on company tractors. Commission Expense Commission expense was $4.5 million for the thirteen weeks ended July 4, 2026, compared to $4.4 million in the prior year period. The change was primarily attributable to increases in revenue generated through our agent-based trucking operations. Occupancy Expense Occupancy expense was $16.3 million for the thirteen weeks ended July 4, 2026, compared to $11.8 million in the prior year period. The change was primarily due to additional properties being leased under our contract logistics segment. General and Administrative Expense General and administrative expense was $16.0 million for the thirteen weeks ended July 4, 2026, compared to $14.0 million in the prior year period. The increase was primarily attributable to a reserve increase related to an outstanding legal matter during the period. Insurance and Claims Expense Insurance and claims expense was $17.5 million for the thirteen weeks ended July 4, 2026, compared to $7.6 million in the prior year period. The increase was primarily attributable to an increase in reserves for auto liability claims related to ongoing matters, including those involving third-party broker carriers. Depreciation and Amortization Depreciation and amortization expense was $33.2 million for the thirteen weeks ended July 4, 2026, compared to $36.2 million in the prior year period. Depreciation expense decreased $0.2 million and amortization expense decreased $2.8 million. The decrease in depreciation expense is primarily attributable to certain fixed assets becoming fully depreciated. The decrease in amortization is due to the previous impairment of certain customer-relationship intangible assets in our intermodal segment in the third quarter of 2025. Gain on Disposal of Property and Equipment Gain on disposal of property and equipment was $45.3 million for the thirteen weeks ended July 4, 2026, compared to $0.0 million in the prior year period. The increase was primarily attributable to the gain recognized on the sale of property located in Kearny, New Jersey to an affiliate. Impairment Expense Impairment expense was $3.9 million for the thirteen weeks ended July 4, 2026, compared to $0.0 million in the prior year period. The increase was attributable to a non-cash impairment charge related to a group of tractors that are no longer expected to be utilized in operations. Interest Expense, Net Net interest expense was $10.6 million for the thirteen weeks ended July 4, 2026, compared to $8.9 million in the prior year period. The change reflects an increase in average interest rates on our outstanding borrowings. As of July 4, 2026, total outstanding borrowings were approximately $695.5 million, compared to $798.6 million as of June 28, 2025. Other Non-Operating Income Other non-operating income was $0.0 million for the thirteen weeks ended July 4, 2026, compared to $0.1 million in the prior year period. The activity in other non-operating income is not material. Income Tax Expense Income tax expense was $8.4 million for the thirteen weeks ended July 4, 2026, compared to income tax expense of $2.9 million in the prior year period. The increase in income tax expense can be attributed to increases in pre-tax income. Our effective income tax rate was 24.3% for the thirteen weeks ended July 4, 2026, compared to 25.7% in the prior year period. The change in effective tax rate was due to a change in the mix of operating profits and losses between foreign and domestic tax jurisdictions. 23 Twenty-six Weeks Ended July 4, 2026 Compared to Twenty-six Weeks Ended June 28, 2025 The following tables set forth selected items derived from our consolidated statements of income for the twenty-six weeks ended July 4, 2026 and June 28, 2025, expressed as a percentage of total operating revenues. The period-to-period discussion that follows should be read together with the table and focuses on the primary drivers of changes in revenues, operating expenses and profitability: Twenty-six Weeks Ended July 4, 2026 June 28, 2025 Percent Change in Dollar Amount (Dollars in millions) $ % $ % % Operating revenues $ 746,898 100.0 % $ 776,183 100.0 % (3.8 )% Operating expenses: Purchased transportation and equipment rent 127,692 17.1 161,251 20.8 (20.8 ) Direct personnel and related benefits 341,002 45.7 332,533 42.8 2.5 Operating supplies and expenses 104,614 14.0 101,669 13.1 2.9 Commission expense 8,653 1.2 8,651 1.1 0.0 Occupancy expense 31,823 4.3 23,056 3.0 38.0 General and administrative 31,088 4.2 27,203 3.5 14.3 Insurance and claims 25,121 3.4 14,563 1.9 72.5 Depreciation and amortization 68,827 9.2 71,691 9.2 (4.0 ) Gain on disposal of property and equipment (45,722 ) (6.1 ) (7 ) (0.0 ) n/m Impairment expense 3,886 0.5 — — n/m Total operating expenses 696,984 93.3 740,610 95.4 (5.9 ) Income from operations 49,914 6.7 35,573 4.6 40.3 Interest expense, net (20,266 ) (2.7 ) (17,075 ) (2.2 ) 18.7 Other non-operating income 293 0.0 727 0.1 (59.7 ) Income before income taxes 29,941 4.0 19,225 2.5 55.7 Income tax expense 7,266 1.0 4,895 0.7 48.4 Net income $ 22,675 3.0 % $ 14,330 1.8 % 58.2 % Operating Revenues Operating revenues decreased by $29.3 million, or 3.8%, to $746.9 million for the twenty-six weeks ended July 4, 2026, from $776.2 million for the twenty-six weeks ended June 28, 2025. The decrease was primarily attributable to lower rates and volumes in our intermodal segment. The decrease was partially offset by an increase in our contract logistics segment, primarily driven by an increase in our revenue from value-added programs and strong dedicated transportation volumes. Included in operating revenues for the twenty-six weeks ended July 4, 2026, were separately identified fuel surcharges of $43.2 million, compared to $41.1 million in the prior year period. Purchased Transportation and Equipment Rent Purchased transportation and equipment rent generally increases or decreases in proportion to the revenues generated through owner-operators and third-party capacity providers. Purchased transportation and equipment rent was $127.7 million for the twenty-six weeks ended July 4, 2026, compared to $161.3 million in the prior year period. The decrease was primarily attributable to lower transactional transportation volumes and a decrease in the mix of owner-operators versus employee drivers in certain intermodal operations. Direct Personnel and Related Benefits Direct personnel and related benefits expense was $341.0 million for the twenty-six weeks ended July 4, 2026, compared to $332.5 million in the prior year period. Trends in direct personnel and related benefits are generally correlated with operating facility requirements, headcount levels and labor utilization in our contract logistics segment, including value-added services and dedicated transportation, as well as the use of employee drivers in certain intermodal operations. The increase in the current year period was primarily attributable to certain new contract logistics programs, partially offset by fewer programs in our value-added rail services operations. Operating Supplies and Expenses Operating supplies and expenses include items such as fuel, maintenance, utilities, communications, equipment repairs, cost of materials and other operating costs. Operating supplies and expenses were $104.6 million for the twenty-six weeks ended July 4, 2026, compared to $101.7 million in the prior year period. The increase was primarily attributable to an increase in fuel expense on company tractors. 24 Commission Expense Commission expense was $8.7 million for both the twenty-six week periods ended July 4, 2026 and June 28, 2025. Occupancy Expense Occupancy expense was $31.8 million for the twenty-six weeks ended July 4, 2026, compared to $23.1 million in the prior year period. The change was primarily attributable to additional properties being leased under our contract logistics segment. General and Administrative Expense General and administrative expense was $31.1 million for the twenty-six weeks ended July 4, 2026, compared to $27.2 million in the prior year period. The increase was primarily attributable to a reserve increase related to an outstanding legal matter during the period. Insurance and Claims Expense Insurance and claims expense was $25.1 million for the twenty-six weeks ended July 4, 2026, compared to $14.6 million in the prior year period. The increase was primarily attributable to an increase in reserves for auto liability claims related to ongoing matters, including those involving third-party broker carriers. Depreciation and Amortization Depreciation and amortization expense was $68.8 million for the twenty-six weeks ended July 4, 2026, compared to $71.7 million in the prior year period. Depreciation expense increased $2.6 million and amortization expense decreased $5.4 million. The increase in depreciation expense is primarily attributable to incremental fixed asset additions. The decrease in amortization is due to the previous impairment of certain customer-relationship intangible assets in our intermodal segment in the third quarter of 2025. Gain on Disposal of Property and Equipment Gain on disposal of property and equipment was $45.7 million for the twenty-six weeks ended July 4, 2026, compared to $0.0 million in the prior year period. The increase was primarily attributable to the gain recognized on the sale of our property located in Kearny, New Jersey to an affiliate. Impairment Expense Impairment expense was $3.9 million for the twenty-six weeks ended July 4, 2026, compared to $0.0 million in the prior year period. The increase was attributable to a non-cash impairment charge related to a group of tractors that are no longer expected to be utilized in operations. Interest Expense, Net Net interest expense was $20.3 million for the twenty-six weeks ended July 4, 2026, compared to $17.1 million in the prior year period. The increase reflects an increase in average interest rates on our outstanding borrowings. As of July 4, 2026, total outstanding borrowings were approximately $695.5 million, compared to $798.6 million as of June 28, 2025. Other Non-Operating Income Other non-operating income was $0.3 million for the twenty-six weeks ended July 4, 2026, compared to $0.7 million in the prior year period. The activity in other non-operating income is not material. Income Tax Expense Income tax expense was $7.3 million for the twenty-six weeks ended July 4, 2026, compared to income tax expense of $4.9 million in the prior year period. The increase in income tax expense can be attributed to increases in pre-tax income. Our effective income tax rate was 24.3% for the twenty-six weeks ended July 4, 2026, compared to 25.5% in the prior year period. The change in effective tax rate was due to a change in the mix of operating profits and losses between foreign and domestic tax jurisdictions. 25 Segment Financial Results We report our financial results in three reportable segments: contract logistics, intermodal and trucking. This presentation reflects the manner in which management evaluates the business, including the economic characteristics and operating performance of each segment. The following tables summarize information about our reportable segments for the thirteen week and twenty-six week periods ended July 4, 2026 and June 28, 2025 (in thousands): Operating Revenues Thirteen Weeks Ended Twenty-six Weeks Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Contract logistics $ 271,424 $ 260,556 $ 540,957 $ 516,448 Intermodal 44,077 68,914 91,931 139,610 Trucking 63,822 64,069 114,010 119,652 Other — 255 — 473 Total operating revenues $ 379,323 $ 393,794 $ 746,898 $ 776,183 Income from Operations Thirteen Weeks Ended Twenty-six Weeks Ended July 4, 2026 June 28, 2025 July 4, 2026 June 28, 2025 Contract logistics $ 24,599 $ 21,770 $ 42,071 $ 45,629 Intermodal (10,450 ) (5,676 ) (23,566 ) (16,385 ) Trucking 2,855 3,340 3,421 5,530 Other 28,133 459 27,988 799 Total income from operations $ 45,137 $ 19,893 $ 49,914 $ 35,573 Thirteen Weeks Ended July 4, 2026 Compared to Thirteen Weeks Ended June 28, 2025 Contract Logistics Operating revenues in our contract logistics segment were $271.4 million for the thirteen weeks ended July 4, 2026, compared to $260.6 million in the prior year period. The change was primarily attributable to certain new value-added programs, increases in certain existing value-added program volumes, and strong dedicated transportation volumes. These increases were partially offset by fewer programs in our value-added rail services operations. Included in contract logistics segment revenues for the thirteen weeks ended July 4, 2026, were separately identified fuel surcharges of $10.5 million, compared to $7.3 million in the prior year period. Income from operations in the contract logistics segment was $24.6 million for the thirteen weeks ended July 4, 2026, compared to $21.8 million in the prior year period. Operating margin in the contract logistics segment was 9.1% for the current year period, compared to 8.4% in the prior year period. The change in operating margin was primarily attributable to a decrease in labor costs. Intermodal Operating revenues in our intermodal segment were $44.1 million for the thirteen weeks ended July 4, 2026, compared to $68.9 million in the prior year period. The change was primarily attributable to decreases in load volumes and average operating revenue per load, excluding fuel surcharges. Included in intermodal segment revenues for the thirteen weeks ended July 4, 2026, were separately identified fuel surcharges of $7.1 million, compared to $8.2 million in the prior year period. Intermodal segment revenues also included detention, demurrage and storage charges of $5.2 million, compared to $9.2 million in the prior year period. The loss from operations in the intermodal segment was $(10.4) million for the thirteen weeks ended July 4, 2026, compared to a loss from operations of $(5.7) million in the prior year period. Operating margin in the intermodal segment was (23.7)% for the current year period, compared to (8.2)% in the prior year period. The change in operating margin is primarily attributable to the impact of lower revenues on the segment’s fixed cost base. Trucking Operating revenues in our trucking segment were $63.8 million for the thirteen weeks ended July 4, 2026, compared to $64.1 million in the prior year period. The decrease was primarily attributable to a decrease in load volumes, which was mostly offset by an increase in the average operating revenue per load, excluding fuel surcharges. Included in trucking segment revenues for the thirteen weeks ended July 4, 2026, were brokerage revenues of $18.8 million, compared to $18.4 million in the prior year period, and separately identified fuel surcharges of $5.6 million, compared to $3.4 million in the prior year period. 26 Income from operations in the trucking segment was $2.9 million for the thirteen weeks ended July 4, 2026, compared to $3.3 million in the prior year period. Operating margin in the trucking segment was 4.5% for the current year period, compared to 5.2% in the prior year period. The decrease in operating margin is due to a decrease in higher margin specialized heavy-haul services. Twenty-six Weeks Ended July 4, 2026 Compared to Twenty-six Weeks Ended June 28, 2025 Contract Logistics Operating revenues in our contract logistics segment were $541.0 million for the twenty-six weeks ended July 4, 2026, compared to $516.4 million in the prior year period. The change was primarily attributable to certain new value-added programs, increases in certain existing value-added program volumes, and strong dedicated transportation volumes. These increases were partially offset by fewer programs in our value-added rail services operations. Included in contract logistics segment revenues for the twenty-six weeks ended July 4, 2026, were separately identified fuel surcharges of $18.4 million, compared to $16.0 million in the prior year period. Income from operations in the contract logistics segment was $42.1 million for the twenty-six weeks ended July 4, 2026, compared to $45.6 million in the prior year period. Operating margin in the contract logistics segment was 7.8% for the current year period, compared to 8.8% in the prior year period. The change in operating margin was primarily attributable to an increase in occupancy expense. Intermodal Operating revenues in our intermodal segment were $91.9 million for the twenty-six weeks ended July 4, 2026, compared to $139.6 million in the prior year period. The change was primarily attributable to decreases in load volumes and average operating revenue per load, excluding fuel surcharges. Included in intermodal segment revenues for the twenty-six weeks ended July 4, 2026, were separately identified fuel surcharges of $12.5 million, compared to $16.3 million in the prior year period. Intermodal segment revenues also included detention, demurrage and storage charges of $12.3 million, compared to $16.6 million in the prior year period. The loss from operations in the intermodal segment was $(23.6) million for the twenty-six weeks ended July 4, 2026, compared to a loss from operations of $(16.4) million in the prior year period. Operating margin in the intermodal segment was (25.6)% for the current year period, compared to (11.7)% in the prior year period. The decrease in operating margin is primarily attributable to the effect of lower revenues on the segment’s fixed cost base. Trucking Operating revenues in our trucking segment were $114.0 million for the twenty-six weeks ended July 4, 2026, compared to $119.7 million in the prior year period. The change was primarily attributable to decreases in load volumes and decreases in brokerage revenue, which was partially offset by an increase in average operating revenue per load, excluding fuel surcharges. Included in trucking segment revenues for the twenty-six weeks ended July 4, 2026, were brokerage revenues of $35.0 million, compared to $36.4 million in the prior year period, and separately identified fuel surcharges of $9.2 million, compared to $6.9 million in the prior year period. Income from operations in the trucking segment was $3.4 million for the twenty-six weeks ended July 4, 2026, compared to $5.5 million in the prior year period. Operating margin in the trucking segment was 3.0% for the current year period, compared to 4.6% in the prior year period. The decrease in operating margin is due to a decrease in higher margin specialized heavy-haul services. Liquidity and Capital Resources Our primary uses of cash are working capital requirements, capital expenditures, debt service, dividend payments, share repurchases and acquisitions. Working capital requirements are generally driven by customer payment terms, payroll, fuel costs, insurance costs, purchased transportation costs and other operating expenses. As of July 4, 2026, we had cash and cash equivalents of approximately $20.3 million and approximately $238.8 million of availability under our revolving credit facility. Total outstanding borrowings were approximately $695.5 million, including borrowings under our revolving credit facility, equipment financing arrangements, and approximately $185.3 million of CTL debt. The CTL debt is generally non-recourse to the Company and its subsidiaries, except for customary limited-recourse obligations under indemnity and guaranty agreements relating to environmental matters, lease-term compliance, and certain representations, warranties, and covenants. Although we were in compliance with all financial covenants as of July 4, 2026, our credit agreements require ongoing monitoring of leverage ratios, fixed charge coverage ratios, minimum liquidity levels and other financial covenants. Given the continued pressure on earnings from uneven freight demand, elevated interest rates and higher labor, insurance and maintenance costs, we continue to actively monitor covenant compliance, liquidity and borrowing capacity. We believe that cash generated from operations, together with available borrowings under our revolving credit facility and other financing arrangements, will be sufficient to fund our working capital needs, planned capital expenditures, debt service obligations and dividend payments for at least the next twelve months. 27 Capital Expenditures In June 2026, we received a real property facility located in Newark, New Jersey with a fair value of $55.6 million as partial consideration in connection with the sale of a real property facility in Kearny, New Jersey. See Note 11 in the Notes to Consolidated Financial Statements (Unaudited) for further information. Excluding the property exchange, capital expenditures for the twenty-six weeks ended July 4, 2026 were $22.9 million and consisted primarily of investments in transportation equipment, terminal facilities and expenditures in support of value-added programs. For the remainder of 2026, we currently expect capital expenditures to be approximately $80.0 million. Actual spending may vary based on customer demand, equipment availability, pricing, timing of value-added opportunities, market conditions and liquidity considerations. Discussion of Cash Flows Net cash provided by operating activities was $73.9 million for the twenty-six weeks ended July 4, 2026, compared with $110.0 million during the same period last year. The decrease primarily reflected lower operating results in each of our reportable segments, particularly intermodal, and higher cash interest payments, partially offset by lower cash income tax payments. The decrease also reflected $3.9 million of cash used for working capital during the current-year period, compared with $10.5 million of cash provided by working capital during the prior-year period. This change was driven largely by trade and other accounts receivable, which used $12.7 million of cash during the current-year period, compared with providing $36.3 million during the prior-year period, primarily due to the timing of customer billings and collections. Net cash provided by investing activities was $28.0 million for the twenty-six weeks ended July 4, 2026, compared with $130.0 million of net cash used in investing activities during the same period last year. The change primarily reflected a decrease in capital expenditures to $22.9 million from $136.8 million, due principally to the timing and level of investments in transportation equipment, terminal facilities and value-added programs. The change also reflected an increase in proceeds from sales of property and equipment to $40.3 million from $4.5 million, primarily attributable to the sale of the Kearny Facility, and an increase in proceeds from sales of marketable securities to $10.6 million from $2.3 million. Net cash used in financing activities was $113.1 million for the twenty-six weeks ended July 4, 2026, compared with $30.3 million of net cash provided by financing activities during the same period last year. The change primarily reflected an increase in term-debt repayments to $160.0 million from $63.5 million, including the repayment in full of our Real Estate Facility, a decrease in term-debt borrowings to $9.4 million from $37.2 million and a decrease in net borrowings under our revolving credit facility to $43.8 million from $62.2 million. Off-Balance Sheet Arrangements As of July 4, 2026, we had no off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on our consolidated financial condition, results of operations, liquidity, capital expenditures or capital resources. Critical Accounting Policies A summary of our critical accounting policies is presented in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies,” included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies during the thirteen weeks ended July 4, 2026. Seasonality Our value-added logistics services experience seasonal demand patterns driven by automotive production schedules, customer shutdown periods and model changeovers. Transportation services are also affected by weather patterns, holiday shipping schedules and changes in customer production levels.