PAMT 10-K
Pamt Corp (PAMT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Fiscal Year Ended
or
For the transition period from ________to________
PAMT CORP
(Exact name of registrant as specified in its charter)
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(Address of principal executive offices) (Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
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Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | |
| Non-accelerated filer ☐ | Smaller reporting company Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
The aggregate market value of the common stock of the registrant held by non-affiliates of the registrant computed by reference to the closing price of the common stock as of the last business day of the registrant's most recently completed second quarter was $
The number of shares outstanding of the registrant’s common stock, as of February 23, 2026:
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for its 2026 Annual Meeting of Stockholders are incorporated by reference in Part III of this report.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this “Report”) contains forward-looking statements, including statements about our operating and growth strategies, our expected financial position and operating results, industry trends, our capital expenditure and financing plans and similar matters. Such forward-looking statements are found throughout this Report, including under Item 1, Business, Item 1A, Risk Factors, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 7A, Quantitative and Qualitative Disclosures About Market Risk. In those and other portions of this Report, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “project”, “could”, “should”, “would” and similar expressions, as they relate to us, our management, and our industry are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business. Actual results may differ materially. Some of the risks, uncertainties and assumptions that may cause actual results to differ from these forward-looking statements include, but are not limited to excess capacity in the trucking industry; surplus inventories; general inflation, recessionary economic cycles and downturns in customers’ business cycles; a significant or sustained reduction in or termination of the Company's trucking service by a key customer, including as a result of recent or future labor or international trade disruptions; increases or rapid fluctuations in fuel prices, interest rates, fuel taxes, tolls, and license and registration fees; the resale value of the Company’s used equipment; the price and availability of new equipment consistent with anticipated acquisition and replacement plans; increases in compensation for and difficulty in attracting and retaining qualified drivers and owner-operators; increases in insurance premiums and deductible amounts relating to accident, cargo, workers’ compensation, health, and other claims; unanticipated increases in the number or amount of claims for which the Company is self-insured; inability of the Company to continue to secure acceptable financing arrangements; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors including reductions in rates resulting from competitive bidding; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; the impact of future or pending litigation; general risks associated with doing business in Mexico, including, without limitation, exchange rate fluctuations, inflation, import duties, tariffs, quotas, political and economic instability and terrorism; the potential impact of new laws, regulations or policy, including, without limitation, laws and regulations governing the classification of independent contractors as employees, tariffs, import/export, trade and immigration regulations or policies; the ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; potential future economic, business and operational disruptions and uncertainties due to public health crises; and other factors described under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures About Market Risk” of this Report.
All forward-looking statements attributable to us, or to persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this Report might not transpire.
PAMT CORP
FORM 10-K
For the fiscal year ended December 31, 2025
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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PART I
Unless the context otherwise requires, all references in this Annual Report on Form 10-K to the “Company,” “we,” “our,” or “us” mean PAMT CORP and its subsidiaries.
We are a holding company that owns subsidiaries engaged in providing truckload dry van carrier services transporting general commodities throughout the continental United States and Mexico, as well as in certain Canadian provinces. Our consolidated operating subsidiaries also provide transportation services in Mexico under agreements with Mexican carriers. Our freight consists primarily of automotive parts, expedited goods, consumer goods, such as general retail store merchandise, and manufactured goods, such as heating and air conditioning units.
PAMT CORP (formerly P.A.M. Transportation Services, Inc.) is a holding company incorporated under the laws of the State of Nevada in November 2024 and previously incorporated under the laws of the State of Delaware in June 1986. We conduct operations and hold assets principally through the following wholly-owned subsidiaries: P.A.M. Transport, Inc., Met Express, Inc., Costar Real Estate Holdings, Inc., Costar Equipment, Inc., Costar Management, Inc., Select CDL Driving School, Inc., Unmoored Realty, LLC, T.T.X., LLC, P.A.M. Cartage Carriers, LLC, Overdrive Leasing, LLC, Choctaw Express, LLC, Choctaw Brokerage, Inc., Transcend Logistics, Inc., Decker Transport Co., LLC, East Coast Transport and Logistics, LLC, S & L Logistics, Inc., P.A.M. International, Inc., P.A.M. Mexico Holdings LLC and PAMEX, LLC. Our operating authorities are held by P.A.M. Transport, Inc., Met Express, Inc., P.A.M. Cartage Carriers, LLC, Choctaw Express, LLC, Choctaw Brokerage, Inc., T.T.X., LLC, Decker Transport Co., LLC, and East Coast Transport and Logistics, LLC.
We are headquartered and maintain our primary terminal, maintenance facilities, and our corporate and administrative offices in Tontitown, Arkansas, which is located in northwest Arkansas, a major center for the trucking industry and where the support services for most major truck and trailer equipment manufacturers are readily available.
Segment Financial Information
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 Company has carefully considered the segment reporting requirements under Accounting Standards Codification (“ASC”) 280 for the year-ended December 31, 2025. 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 measure of operating ratio is reported in the Company’s Results of Operations found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Report, for each of the Company’s two operating segments of Truckload Services and Brokerage and Logistics Services.
Operations
Our subsidiaries’ operations can generally be classified into truckload services or brokerage and logistics services. This designation is based primarily on the ownership of the asset that performed the freight transportation service. Truckload services are performed by Company divisions that generally utilize Company-owned trucks, long-term contractors, or single-trip contractors to transport loads of freight for customers, while brokerage and logistics services coordinate or facilitate the transport of loads of freight for customers and generally involve the utilization of single-trip contractors. Both our truckload operations and our brokerage and logistics operations have similar economic characteristics and are impacted by virtually the same economic factors as discussed elsewhere in this Report. Truckload services operating revenues, before fuel surcharges, represented 68.3%, 67.1% and 65.3% of total operating revenues for the years ended December 31, 2025, 2024 and 2023, respectively. The remaining operating revenues, before fuel surcharge, for the same periods were generated by brokerage and logistics services, representing 31.7%, 32.9% and 34.7%, respectively.
Approximately 56% of the Company's revenues are derived from domestic shipments while approximately 44% of the Company’s revenues are derived from freight originating from or destined to locations in Mexico or Canada.
Business and Growth Strategy
Our strategy focuses on the following elements:
Providing a Full Suite of Complementary Truckload Transportation Solutions. Our objective is to provide our customers with a comprehensive solution to their truckload transportation needs. Our array of asset-based service offerings consists of dedicated, expedited, automotive, local, regional, and long-haul truckload services. Our brokerage and logistics solutions offer similar services but utilize third-party equipment to expand available capacity. Our area of service includes the continental United States, Mexico and, to a lesser degree, Canada.
Developing Customer Relationships within High Density Traffic Lanes. We strive to maximize utilization and increase revenue per truck while minimizing our time and empty miles between loads. In this regard, we seek to provide equipment to our customers in defined regions and disciplined traffic lanes. This strategy enables us to:
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maintain more consistent equipment capacity; |
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provide a high level of service to our customers, including time-sensitive delivery schedules; |
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attract and retain drivers; and |
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maintain a sound safety record as drivers travel familiar routes. |
Providing Superior and Flexible Customer Service. We strive to provide a very high level of service to our customers, thus creating a level of satisfaction, value, and loyalty within our customer base. We closely monitor each shipment for compliance regarding scheduled pickup, delivery and transit times, service levels and customer specific expectations. We provide verbal and electronic updates through various forums to customers to allow visibility of their products as they progress through the transport process.
Many of our customers depend on us to deliver shipments on a time-definite basis, meaning that parts or raw materials are scheduled for delivery as they are needed on a manufacturer’s production line. The need for this service is a product of modern manufacturing and assembly methods that are designed to decrease inventory levels and handling costs. Such requirements place a premium on our delivery performance and reliability.
Employing Stringent Cost Controls. Throughout our organization, emphasis is placed on gaining efficiency in our processes with the primary goals of decreasing costs and improving customer satisfaction. Maintaining a high level of efficiency and prioritizing our focus on improvements allows us to minimize the number of non-driving personnel we employ and positively influence other overhead costs. Expenses are intensely scrutinized for opportunities for elimination, reduction or to further leverage our purchasing power to achieve more favorable pricing.
Industry
According to the American Trucking Association’s “American Trucking Trends 2025” report, the trucking industry generated over $906 billion in revenue during 2024 while moving over 11.27 billion tons of freight. The truckload industry is highly fragmented and is impacted by several economic and business factors, many of which are beyond the control of individual carriers. The state of the economy, coupled with equipment capacity levels, can impact freight rates. Volatility of various operating expenses, such as fuel and insurance, make the predictability of profit levels uncertain. Availability, attraction, retention, and compensation of drivers also affect operating costs, as well as equipment utilization. In addition, the capital requirements for equipment, availability of equipment and potential uncertainty of used equipment values, impact the ability of many carriers to expand their operations.
The current operating environment is characterized by the following:
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competition for freight; |
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competition for drivers; |
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price increases by truck and trailer equipment manufacturers; |
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oversupplied used revenue equipment market; |
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increasing insurance premium costs; and |
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pressure on less profitable or undercapitalized carriers to consolidate or exit the industry. |
Competition
The trucking industry is highly competitive and includes thousands of carriers, none of which dominates the market in which the Company operates. The Company's market share is less than 1%, and we compete primarily with other medium and long-haul truckload carriers, with private carriage conducted by our existing and potential customers, and, to a lesser extent, with the railroads. We compete on the basis of quality of service and delivery performance, as well as price. Many of the carriers we compete with have substantially greater financial resources, own more equipment or carry a larger total volume of freight as compared to the Company.
Marketing and Significant Customers
Our marketing emphasis is directed to that portion of the truckload market which is generally service-sensitive, as opposed to being solely price driven. We seek to become a “core carrier” for our customers in order to maintain high utilization and capitalize on recurring revenue opportunities. Our marketing efforts are diversified and designed to gain access to dedicated, expedited, regional, automotive, and long-haul opportunities (including those in Mexico and Canada) and to expand brokerage and logistics offerings.
Our sales efforts are conducted by a staff of thirteen employees who are located in our major markets and supervised from our headquarters. These individuals work to improve profitability by maintaining an even flow of freight traffic (taking into account the balance between originations and destinations in a given geographical area), high utilization, and minimizing movement of empty equipment.
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. Ford Motor Company accounted for approximately 9%, 9% and 5% of our revenues in 2025, 2024 and 2023, respectively. Walmart Inc. accounted for approximately 8%, 8% and 6% 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.
Revenue Equipment
At December 31, 2025, we operated a fleet of 2,094 trucks, which included 493 independent contractor trucks. At December 31, 2025, our trailer fleet consisted of 8,020 trailers. Our company-owned trucks and leased trucks are late model, well-maintained, premium trucks, which we believe help to attract and retain drivers, maximize fuel efficiency, promote safe operations, minimize maintenance, and repair costs, and improve customer service by minimizing service interruptions caused by breakdowns. The average age of our trucks and trailers as of December 31, 2025 was 2.0 years and 5.7 years, respectively. We evaluate our equipment purchasing decisions based on factors such as initial cost, useful life, warranty terms, expected maintenance costs, fuel economy, driver comfort, customer needs, manufacturer support, and resale value.
We contract with independent contractors to provide greater flexibility in responding to fluctuations in consumer demand. Independent contractors provide their own trucks and are contractually responsible for all associated expenses, including financing costs, fuel, maintenance, insurance, and taxes, among other things. They are also responsible for maintaining compliance with the Federal Motor Carrier Safety Administration regulations.
Technology
Our trucks and trailers are equipped with cellular-based global positioning and communications systems that allow fleet managers to communicate directly with drivers. Drivers provide location, status, and informational updates directly to our computer system which increases productivity, convenience, and customer visibility. This system provides information that allows us to calculate accurate estimated time of arrival information, which helps to optimize planning and customer service levels.
Our information systems manage the data provided by our on-board devices to update system information regarding the location and load status of our trucks, which permits us to better manage customer delivery schedules, respond to customer inquiries, and perform optimized equipment to load matching, among various other planning and support functions. In many instances, our systems also directly provide real-time information electronically to our customers regarding the status of freight shipments and anticipated arrival times, adding flexibility and convenience by extending supply chain visibility.
Maintenance
We have a strictly enforced, comprehensive preventive maintenance program for our trucks and trailers. Inspections and various levels of preventive maintenance are performed at set intervals on both trucks and trailers. A maintenance and safety inspection is performed on all vehicles each time they return to a terminal.
We purchase our trucks with standard manufacturer’s warranty coverage for equipment and components. These warranties range from one year or 100,000 miles for the chassis up to five years or 750,000 miles for other key components. Occasionally, extended truck warranties are negotiated with truck manufacturers and manufacturers of major components, such as engine, transmission, and differential manufacturers. Our trailers carry full warranties by the manufacturer for up to seven years with certain components covered for up to ten years. The Company evaluates the cost-benefit of purchasing such extended warranties on new or replacement equipment.
Human Capital Resources
Overview. At December 31, 2025, we employed 2,365 persons, of whom 1,598 were drivers. None of our employees are represented by a collective bargaining unit, and we believe that our employee relations are good.
We contract with independent contractors to supply one or more trucks and drivers for our use. At December 31, 2025, we had 424 independent contractor drivers under contract who were compensated on a per mile basis. Independent contractors must pay their own truck expenses, fuel, maintenance, insurance, and driver costs. They must meet and operate within our guidelines with respect to safety. We have a lease-purchase program whereby we offer independent contractors the opportunity to lease a truck, with the option to purchase the truck at the end of the lease term. We believe our lease-purchase program has contributed to our ability to attract and retain independent contractors. At December 31, 2025, our lease-purchase program had 446 trucks available for use, with approximately 362 drivers participating in the program.
Employee Health and Safety. We are committed to being an industry leader in health and safety standards. The physical health, wellbeing, and mental health of our employees is crucial to our success. In addition to strict application screening and drug testing, before being permitted to operate a vehicle, our drivers must undergo classroom instruction on our policies and procedures, safety techniques as taught by the Smith System of Defensive Driving, and the proper operation of equipment, and must pass both written and road tests. Instruction in defensive driving and safety techniques continues after hiring, with seminars at several of our terminals. At December 31, 2025, we employed 139 persons on a full-time basis in our driver recruiting, training and safety instruction programs.
Talent Acquisition, Retention and Development. We continually strive to hire, develop and retain the top talent in our industry. Critical to attracting and retaining top talent is employee satisfaction, and we regularly implement programs to increase employee satisfaction. We reward our employees by providing competitive compensation, benefits and incentives throughout all levels in our organization, including for our drivers. Drivers can earn bonuses by recruiting other qualified drivers who become employed by us, and both cash and non-cash prizes are awarded for achieving certain safety, productivity and fuel efficiency goals. With many dedicated and over-the-road assignments, we allow our drivers to select routes that fit their lifestyles.
Intense competition in the trucking industry for qualified drivers has resulted in additional expense to recruit and retain an adequate supply of drivers and has had a negative impact on the industry. Our operations have also been impacted and we have occasionally experienced under-utilization and increased expenses due to a shortage of qualified drivers. Therefore, we place a high priority on the recruitment and retention of an adequate supply of qualified drivers.
Available Information
The Company maintains a website where additional information concerning its business can be found. The website address is www.pamtransport.com. On our website, under the caption “Investors,” the Company makes available, free of charge, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as soon as reasonably practicable after it electronically files or furnishes such materials to the Securities and Exchange Commission.
Seasonality
Generally, our revenues do not exhibit a significant seasonal pattern; however, revenue is affected by adverse weather conditions, holidays and the number of business days that occur during a given period because revenue is directly related to the available workdays of shippers. Operating expenses are typically higher in the winter months primarily due to decreased fuel efficiency and increased maintenance costs associated with inclement weather. In addition, automobile plants for which we transport a large amount of freight typically undergo scheduled shutdowns in July and December, and the volume of automotive freight we ship is reduced during such scheduled plant shutdowns.
Regulation
We are a common and contract motor carrier regulated by various United States federal and state, Canadian provincial, and Mexican federal agencies. These regulatory agencies have broad powers, generally governing matters such as authority to engage in motor carrier operations, motor carrier registration, driver hours-of-service (“HOS”), drug and alcohol testing of drivers, and safety, size, and weight of transportation equipment. The primary regulatory agencies affecting the Company’s operations include the Federal Motor Carrier Safety Administration (“FMCSA”), the Pipeline and Hazardous Materials Safety Agency, and the Surface Transportation Board, which are all agencies within the U.S. Department of Transportation (“DOT”). We believe that we are in compliance in all material respects with applicable regulatory requirements relating to our business and operate with a “satisfactory” rating (the highest of three rating categories) from the DOT. In addition, we are subject to compliance with cargo-security and transportation regulations issued by the Transportation Security Administration, a component department within the U.S. Department of Homeland Security. To the extent that we conduct operations outside the United States, we are subject to the Foreign Corrupt Practices Act, which generally prohibits U.S. companies and their intermediaries from offering bribes to foreign officials for the purpose of obtaining or retaining favorable treatment.
Under current FMCSA rules regulating HOS adopted in December 2011, drivers are required to take a mandatory thirty-minute break during each consecutive eight hour driving period. In addition, pursuant to federal legislation, the FMCSA has established minimum performance and design standards for HOS electronic logging devices (“ELDs”), requirements for the mandatory use of these devices by drivers currently required to prepare HOS records of duty status, requirements concerning HOS supporting documents, and measures to address concerns about harassment resulting from the mandatory use of ELDs. These rulings affect the majority of carriers, including us, and the Company’s ELD devices were in compliance with FMCSA requirements prior to the December 2019 implementation deadline, as the company was an early adopter of ELD capable devices, requiring the devices to be installed on its entire fleet and requiring its drivers to use such devices since 2010.
The FMCSA administers carrier safety compliance and enforcement through its Compliance, Safety, Accountability (“CSA”) program that became effective in December 2010. CSA is designed to measure and evaluate the safety performance of carriers and drivers through categorization of inspection and crash results into Behavior Analysis and Safety Improvement Categories (“BASICs”) including unsafe/fatigued driving, driver fitness, controlled substances and alcohol, maintenance, cargo, and crashes. BASIC scores are evaluated relative to carrier peer groups to determine carriers that exceed certain thresholds, identifying them for intervention. Intervention status might include targeted roadside inspections, onsite investigations and the development of cooperative safety plans, among other things. Ongoing compliance with CSA may result in additional expenses to the Company or a reduction in the pool of drivers eligible for us to hire. In addition to FMCSA action, a BASIC score that exceeds an intervention threshold might have a negative impact on our ability to attract customers and drivers.
The Environmental Protection Agency (“EPA”) and the National Highway Traffic Safety Administration (“NHTSA”) jointly developed new standards for various vehicles, including heavy duty trucks, that were adopted in August 2011 and covered model years 2014 through 2018. The standard adopted for heavy duty trucks was intended to achieve a reduction in CO2 and fuel consumption ranging from 7% to 20% by model year 2017. In August 2016, the EPA and NHTSA finalized the second phase of these standards which further reduces greenhouse gas emissions and fuel consumption for heavy duty trucks through model year 2027. In December 2022, the EPA finalized an additional phase of standards which is intended to reduce nitrous oxide (NOx) emissions to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10.0 grams at idle for vehicles with model years 2027 and above. Although the Trump Administration recently revoked the legal basis for the EPA and NHTSA standards, compliance with these federal and state requirements has increased the cost of our equipment, and any enforcement of the EPA and NHTSA standards or implementation of similar standards by future federal administrations may further increase the cost of replacement equipment in the future.
The FMCSA Commercial Driver’s License (“CDL”) Drug and Alcohol Clearinghouse (“Clearinghouse”) became effective in January 2020. This database contains information pertaining to violations of the U.S. Department of Transportation controlled substances and alcohol testing program for holders of CDL’s. The Clearinghouse rules require FMCSA regulated employers, among others, to report to the Clearinghouse information related to violations of the drug and alcohol regulations. Further, the rules require that FMCSA regulated employers query current and prospective employees’ drug and alcohol violations before permitting those employees to operate a commercial motor vehicle on public roads, and to recheck each employee annually. The system is intended to remove the ability of prospective employees to fail to disclose past drug and alcohol violations at previous employers to potential employers. Since its adoption in 2020, the enforcement of the Clearinghouse has removed certain drivers from the pool of drivers available to the industry and has contributed to increased competition and related costs to attract and retain qualified drivers.
Our motor carrier operations are subject to additional environmental laws and regulations, including laws and regulations dealing with the transportation of hazardous materials and other environmental matters, and our operations involve certain inherent environmental risks. These laws and regulations have the effect of increasing the costs, risks and liabilities associated with our applicable operations. If current regulatory requirements become more stringent or new environmental laws and regulations are introduced, we could be required to make significant expenditures or abandon certain activities. Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others. We have instituted programs to monitor and control environmental risks and assure compliance with applicable environmental laws. As part of our safety and risk management program, we periodically perform internal environmental reviews so that we can achieve environmental compliance and avoid environmental risk. We transport a minimal amount of environmentally hazardous substances and, to date, have experienced no significant claims for hazardous materials shipments. If we should fail to comply with applicable regulations, we could be subject to substantial fines or penalties and to civil and criminal liability.
As issues related to climate change become more prevalent, federal, state and local governments, as well as some of our customers, have made efforts to respond to these issues. This increased focus on sustainability has prompted new legislation and regulation in California and in Europe, new regulations by the Securities and Exchange Commission (the “SEC”) that are currently under an indefinite stay pending legal challenges (although the SEC in 2025 voted to withdraw its defense of the rules and indicated they do not intend to review or reconsider the rules), and similar proposed legislation or regulations in other states, as well as various customer-imposed requirements. Any of these efforts could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements. Legislation or regulations that potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s trucks, could adversely affect our operations and financial results. More specifically, legislative or regulatory actions relating to climate change could adversely impact the Company by increasing our fuel costs and reducing fuel efficiency and could result in the creation of substantial additional capital expenditures and operating costs in the form of taxes, emissions allowances, or required equipment upgrades.
Company operations are often conducted in industrial areas, where truck terminals and other industrial activities are conducted, and where groundwater or other forms of environmental contamination have occurred, which could potentially expose us to claims that we contributed to the environmental contamination.
We believe we are currently in material compliance with applicable laws and regulations and that the cost of compliance has not materially affected results of operations to date.
Set forth below, and elsewhere in this Report and in other documents we file with the SEC, are risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this Report.
Risks Related to Our Industry
Our business is subject to general economic and business factors that are largely beyond our control, any of which could have a material adverse effect on our operating results.
Our business is dependent upon a number of general economic and business factors that may adversely affect our results of operations. These factors include significant increases or rapid fluctuations in fuel prices, excess capacity in the trucking industry, surpluses in the market for used equipment, interest rates, fuel taxes, license and registration fees, insurance premiums, self-insurance levels, and difficulty in attracting and retaining qualified drivers, independent contractors, and third-party carriers.
We operate in a highly competitive and fragmented industry, and our business may suffer if we are unable to adequately address any downward pricing pressures or other factors that may adversely affect our ability to compete with other carriers.
Further, we are affected by recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries, such as the automotive industry, where we have a significant concentration of customers. Economic conditions may also adversely affect our customers and their ability to pay for our services.
Deterioration in the United States and/or world economies could exacerbate any difficulties experienced by our customers and suppliers in obtaining financing, which, in turn, could materially and adversely impact our business, financial condition, results of operations and cash flows.
The imposition of new tariffs on Mexico and Canada, and any retaliatory actions by such countries, may have a negative impact on our operations and profitability.
In 2025, the United States implemented significant new tariffs on imports from Canada, Mexico and China, including 25% tariffs on goods imported from Mexico and Canada. While the tariffs on Mexico and Canada have been suspended on more than one occasion and the U.S. Supreme Court in February 2026 struck down the legal basis for the tariffs under the International Emergency Economic Powers Act, President Trump has announced he intends to implement new across-the-board tariffs under a different legal authority, subject to certain exemptions under the United States-Canada-Mexico Agreement. The outlook remains uncertain as to whether such tariffs, and any resulting retaliatory tariffs on U.S. exports by those countries, will ultimately be implemented and how long they may be in effect. The imposition and enforcement of new tariffs on goods imported from Mexico or Canada, or vice versa, could adversely affect our business operations and financial results. A significant portion of our business is dependent on the automotive manufacturing industry and its suppliers, which have substantial operations in Mexico. Any increase in tariffs could lead to higher costs and reduced consumer demand for automotive products sold by our customers that are imported or exported to or from the United States. This, in turn, may result in reduced demand for our transportation services, particularly our cross-border and Mexico freight business, as customers seek to mitigate increased expenses by reducing production, sourcing components from alternative locations, or modifying their supply chain strategies. This could reduce the volume of goods transported by us, thereby affecting our operational efficiency and financial performance. In addition to the direct impact on our customers, the broader economic implications of tariffs could lead to further fluctuations in cross-border or general freight volumes and affect our operations and our ability to maintain consistent service levels. Any such disruptions could necessitate adjustments in our operational strategies, increase our costs and negatively impact our revenue and profitability.
We may be adversely impacted by fluctuations in the price and availability of diesel fuel.
Diesel fuel represents a significant operating expense for the Company, and we do not currently hedge against the risk of diesel fuel price increases. An increase in diesel fuel prices or diesel fuel taxes, or any change in federal or state regulations that results in such an increase, could have a material adverse effect on our operating results to the extent we are unable to recoup such increases from customers in the form of increased freight rates or through fuel surcharges. Historically, we have been able to offset, to a certain extent, diesel fuel price increases through fuel surcharges to our customers, but we cannot be certain that we will be able to do so in the future. We continuously monitor the components of our pricing, including base freight rates and fuel surcharges, and address individual account profitability issues with our customers when necessary.
Difficulty in attracting drivers and independent contractors could affect our profitability and ability to grow.
The transportation industry often experiences significant difficulty in attracting and retaining qualified drivers and independent contractors. This shortage is exacerbated by several factors, including demand from competing industries, such as manufacturing, construction and farming, demand from other transportation companies, and the impact of regulations, including CSA and hours of service rules and other difficulties attracting and training new drivers. Economic conditions affecting operating costs such as fuel, insurance, equipment and maintenance costs can negatively impact the number of qualified independent contractors available to us. We have occasionally experienced under-utilization and increased expenses due to a shortage of qualified drivers. If we are unable to attract drivers or contract with independent contractors when needed, we could be required to further adjust our driver compensation packages, increase driver recruiting efforts, or let trucks sit idle, any of which could adversely affect our growth and profitability.
Purchase price increases for new revenue equipment, decreases in the value of used revenue equipment and/or disruptions in the availability of new revenue equipment could have an adverse effect on our results of operations, cash flows and financial condition.
Over the past decade, the purchase price of new revenue equipment has increased significantly as equipment manufacturers recover increased materials and engine design costs resulting from compliance with increasingly stringent EPA engine emission standards, government tariffs on raw materials and other factors beyond the Company’s control. Additional EPA emission mandates, tariff increases on raw materials, or other factors that increase material or manufacturing costs of new equipment in the future could increase the purchase price paid by the Company for new revenue equipment and could result in higher than anticipated depreciation expenses. If we are unable to offset any such increase in expenses with freight rate increases, our cash flows and results of operations could be adversely affected. If the market price for used revenue equipment declines, we could incur substantial losses upon disposition of our revenue equipment which could adversely affect our results of operations and financial condition.
We have significant ongoing capital requirements that could affect our liquidity and profitability if we are unable to generate sufficient cash from operations or obtain sufficient financing on favorable terms.
The trucking industry is capital intensive. If we are unable to generate sufficient cash from operations in the future, we may have to limit our growth, enter into unfavorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a material adverse effect on our profitability.
We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a material adverse effect on our business.
Our operations are authorized and regulated by various federal and state agencies in the United States, Mexico and Canada that generally govern such activities as authorization to engage in motor carrier operations, safety, and financial reporting. Specific standards and regulations such as equipment dimensions, engine emissions, maintenance, drivers’ hours of service, drug and alcohol testing, and hazardous materials are regulated by the Department of Transportation, Federal Motor Carrier Safety Administration, the Environmental Protection Agency and various other state and federal agencies. We may become subject to new or more restrictive regulations imposed by these authorities, which could significantly impair equipment and driver productivity and increase operating expenses.
The FMCSA administers carrier safety compliance and enforcement through its CSA program, which places carriers in peer groups and assigns each carrier a relative ranking compared to their peers in various categories. Carriers that exceed allowable thresholds in a particular category are placed in “intervention” status by the FMCSA until the score improves to a level below the threshold. While the Company has not exceeded allowable thresholds to date, if future roadside inspections or crashes were to result in the Company being placed in intervention status, we may incur additional operating costs to improve our safety program in deficient categories, experience increased roadside inspections, or have onsite visits by the FMCSA. If the intervention category is not remedied, it could affect our ability to attract and retain drivers and customers as they seek competitive carriers with scores below intervention thresholds. In addition, the CSA program could increase competition and related compensation and recruitment costs for drivers and independent contractors by reducing the pool of qualified drivers if existing drivers exit the profession, become disqualified due to low scores or as carriers focus recruiting efforts on drivers with the best relative safety scores.
The EPA and the NHTSA jointly developed new standards for various vehicles, including heavy duty trucks, that were adopted in August 2011 and cover model years 2014 through 2018. The standard adopted for heavy duty trucks was intended to achieve a reduction in CO2 and fuel consumption ranging from 7% to 20% by model year 2017. In August 2016, the EPA and NHTSA finalized the second phase of these standards which will further reduce greenhouse gas emissions and fuel consumption for heavy duty trucks through model year 2027. In December 2022, the EPA finalized an additional phase of standards which is intended to reduce nitrous oxide (NOx) emissions to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10.0 grams at idle for vehicles with model years 2027 and above. In March 2024, the EPA finalized the third phase of standards, which aim to reduce greenhouse gas emissions from heavy duty vehicles with model years 2028 to 2032, including tractor-trailers. Although the Trump Administration recently revoked the legal basis for the EPA and NHTSA standards, compliance with these federal and state requirements has increased the cost of our equipment, and any enforcement of the EPA and NHTSA standards or implementation of similar standards by future federal administrations may further increase the cost of replacement equipment in the future.
The Regulation section in Item 1 of Part I of this Annual Report on Form 10-K discusses several proposed and final regulations that could materially impact our business and operations.
A determination that independent contractors are employees could expose us to various liabilities and additional costs.
Federal and state legislation as well as tax and other regulatory authorities often seek to assert that independent contractors in the transportation service industry are employees rather than independent contractors. Recently issued rulemaking by the U.S. Department of Labor, effective March 11, 2024, and the laws of several states, including California, apply stricter tests for determining whether an independent contractor should be classified as an employee. We believe we are in compliance with all applicable independent contractor classification requirements. However, it is possible that other federal or state legislation or regulations could be enacted or that various authorities could assert a position that re-classifies independent contractors as employees. If our independent contractors are determined to be properly classified as employees, that determination could materially increase our exposure under a variety of federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as our potential liability for employee benefits. In addition, such changes may be applied retroactively, and if so, we may be required to pay additional amounts to compensate individuals for prior time periods. Any of the above increased costs would adversely affect our business and operating results.
We may incur additional operating expenses or liabilities as a result of potential future requirements to address climate change issues.
As issues related to climate change become more prevalent, federal, state and local governments, as well as some of our customers, have made efforts to respond to these issues. This increased focus on sustainability has prompted newly enacted and proposed legislation and regulations and customer requirements that could negatively affect us as we may incur additional costs or be required to make changes to our operations in order to comply with any new regulations or customer requirements. Current or future legislation or regulations that potentially impose restrictions, caps, taxes, new disclosure requirements or other controls on emissions of greenhouse gases such as carbon dioxide, a by-product of burning fossil fuels such as those used in the Company’s trucks, could adversely affect our operations and financial results. More specifically, legislative or regulatory actions relating to climate change could adversely impact the Company by increasing our fuel costs and reducing fuel efficiency and could result in the creation of substantial additional capital expenditures and operating costs in the form of taxes, emissions allowances, or required equipment upgrades. Any of these factors could impair our operating efficiency and productivity and result in higher operating costs. In addition, revenues could decrease if we are unable to meet regulatory or customer sustainability requirements. These additional costs, changes in operations, or loss of revenues could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Our Business
Numerous competitive factors could impair our ability to operate at an acceptable profit. These factors include, but are not limited to, the following:
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we compete with many other truckload carriers of varying sizes and, to a lesser extent, with less-than-truckload carriers and railroads, some of which have more equipment and greater capital resources than we do; |
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some of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase freight rates, maintain our margins or maintain significant growth in our business; |
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many customers reduce the number of carriers they use by selecting so-called “core carriers” as approved service providers, and in some instances we may not be selected; |
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many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of our business to competitors; |
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the trend toward consolidation in the trucking industry may create other large carriers with greater financial resources and other competitive advantages relating to their size and with whom we may have difficulty competing; |
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advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments; |
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competition from Internet-based and other logistics and freight brokerage companies may adversely affect our customer relationships and freight rates; and |
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economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve their ability to compete with us. |
We are highly dependent on our major customers, the loss of one or more of which could have a material adverse effect on our business.
A significant portion of our revenue is generated from our major customers. For 2025, our top five customers, based on revenue, accounted for approximately 43% of our revenue. Our largest customer, General Motors Company, accounted for approximately 14% of our revenue. We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers. As a result, the concentration of our business within the automobile industry is greater than the concentration in a single customer. Approximately 35% of our revenues for 2025 were derived from transportation services provided to the automobile industry.
Generally, we do not have long-term contractual relationships with our major customers, and we cannot assure that our customer relationships will continue as presently in effect. Any sustained or future reduction in or termination of our services by our major customers could have a further material adverse effect on our business and operating results.
The impact of any future significant labor dispute involving one or more of our customers, or that could otherwise affect our operations, could reduce our revenues and harm our profitability.
A substantial number of the employees of our largest customers are members of industrial trade unions and are employed under the terms of collective bargaining agreements. In September 2023, the United Auto Workers initiated a trilateral strike against Ford, General Motors, and Stellantis that lasted several weeks until each of these automotive customers was able to negotiate a new contract with the union. The strike targeted select plants at each of these automotive companies, causing prolonged plant shutdowns for these customers and ripple effects on plants and workers for other customers and automotive suppliers. The effects of the shutdowns adversely impacted our business and financial performance during the third and fourth quarters of 2023 and the first quarter of 2024. Any future labor dispute involving our customers or their suppliers that results in a slowdown or closure of our customers’ plants to which we provide services could have a material adverse effect on our business.
Ongoing insurance and claims expenses could significantly reduce our earnings.
Our future insurance and claims expenses have recently and might in the future exceed historical levels, which could reduce our earnings. The Company is self-insured for a material portion of auto liability claims in excess of two million dollars and for health and workers’ compensation insurance up to certain limits. The actual cost to settle self-insured claims can differ from amounts reserved due to various uncertainties, including the ultimate severity of the claims and potential amounts required to defend and settle claims. During the fourth quarter of 2025, we incurred a $26.5 million increase in our auto-liability reserve as a result of our reaching a preliminary agreement to settle a significant auto-liability claim that exceeds our applicable insurance coverage. If claims costs continue to increase, if we experience significant additional claims for which we are self-insured or if the severity or number of claims increases, and if we are unable to offset the resulting increases in expenses with higher freight rates, our earnings could be materially and adversely affected. Healthcare legislation and inflationary cost increases could also have a negative effect on our results.
We may be subject to litigation claims that could result in significant expenditures.
By the nature of our operations we are exposed to the potential for a variety of litigation, including personal injury claims, vehicular collisions and accidents, alleged violations of federal and state labor and employment laws, such as class-action lawsuits alleging wage and hour violations and improper pay, commercial and contract disputes, cargo loss and property damage claims. While we purchase insurance coverage at levels we deem adequate, we recently reached a preliminary agreement to settle litigation over an auto-liability claim for an amount that substantially exceeds our insurance coverage, which materially and adversely affected our financial results for the fourth quarter of 2025. It is possible that future litigation may similarly exceed our insurance coverage or may not be covered by insurance. We accrue a provision for a litigation matter according to applicable accounting standards based on the ongoing assessment of the strengths and weaknesses of the litigation, its likelihood of success, and an evaluation of the possible range of loss. Our inability to defend ourselves against a significant litigation claim could have a material adverse effect on our financial results.
We have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health. Our substantial debt levels could have important consequences such as the following:
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impair our ability to obtain additional future financing for working capital, capital expenditures, acquisitions or general corporate expenses; |
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limit our ability to use operating cash flow in other areas of our business due to the necessity of dedicating a substantial portion of these funds for payments on our indebtedness; |
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limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
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make it more difficult for us to satisfy our obligations; |
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increase our vulnerability to general adverse economic and industry conditions; and |
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place us at a competitive disadvantage compared to our competitors. |
Our ability to make scheduled payments on, or to refinance, our debt and other obligations will depend on our financial and operating performance, which, in turn, is subject to our ability to implement our strategic initiatives, prevailing economic conditions and certain financial, business and other factors beyond our control. If our cash flow and capital resources are insufficient to fund our debt service and other obligations, we may be forced to reduce or delay expansion plans and capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. We cannot provide any assurance that our operating performance, cash flow and capital resources will be sufficient to pay our debt obligations when they become due. We also cannot provide assurance that we would be able to dispose of material assets or operations or restructure our debt or other obligations if necessary or, even if we were able to take such actions, that we could do so on terms that are acceptable to us.
Disruptions in the credit markets may adversely affect our business, including the availability and cost of short-term funds for liquidity requirements and our ability to meet long-term commitments, which could adversely affect our results of operations, cash flows and financial condition.
If cash from operations is not sufficient, we may be required to rely on the capital and credit markets to meet our financial commitments and short-term liquidity needs. Disruptions in the capital and credit markets could adversely affect our ability to draw on our bank revolving credit facility. Our access to funds under the credit facility is dependent on the ability of banks to meet their funding commitments. A bank may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience excessive volumes of borrowing requests from other borrowers within a short period of time.
Longer term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives, or failures of significant financial institutions could adversely affect our access to liquidity needed for our business. Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for our business needs can be arranged, which could adversely affect our growth and profitability.
We are subject to certain risks arising from doing business in Mexico.
As we continue to grow our business in Mexico, we are subject to greater risks of doing business internationally, including changes in U.S. and Mexican trade policies and relations, immigration policies, fluctuations in foreign currencies, changes in the economic strength of Mexico, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and U.S. export and import laws, and social, political, and economic instability. If we are unable to address business concerns related to our international operations in a timely and cost efficient manner, our financial position, results of operations or cash flows could be adversely affected. Additionally, approximately 44% of the freight we haul crosses the border between the United States and Mexico. In past years, we have experienced delays in Mexico border-crossings due to weather events, immigration-related issues and the reallocation of border agents to other border areas. Any future shutdowns or disruptions of Mexico border-crossings, particularly at the Laredo, Texas border, could materially and adversely impact our operations, cash flows and profitability. The agreement permitting cross-border movements for both United States and Mexican-based carriers in the United States and Mexico presents additional risks in the form of potential increased competition and the potential for increased congestion in our lanes that cross the border between countries.
Our results of operations may be affected by seasonal factors.
Our productivity may decrease during the winter season when severe winter weather impedes operations. Also, some shippers may reduce their shipments after the winter holiday season. At the same time, operating expenses may increase and fuel efficiency may decline due to engine idling during periods of inclement weather. Harsh weather conditions generally also result in higher accident frequency, increased freight claims, and higher equipment repair expenditures. In addition, automobile plants for which we transport a large amount of freight typically undergo scheduled shutdowns in July and December, which reduces the volume of automotive freight we ship during these plant shutdowns.
Our business may be disrupted by natural disasters and severe weather conditions causing supply chain disruptions.
Natural disasters such as earthquakes, tsunamis, hurricanes, tornadoes, floods or other adverse weather and climate conditions, whether occurring in the United States or abroad, could disrupt our operations or the operations of our customers or could damage or destroy infrastructure necessary to transport products as part of the supply chain. Specifically, these events may damage or destroy our assets, disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, and affect regional economies. As a result, these events could make it difficult or impossible for us to provide logistics and transportation services; disrupt or prevent our ability to perform functions at the corporate level; and/or otherwise impede our ability to continue business operations in a continuous manner consistent with the level and extent of business activities prior to the occurrence of the unexpected event, which could adversely affect our business and results of operations or make our results more volatile.
Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties.
We are subject to various environmental laws and regulations dealing with the handling of hazardous materials, underground fuel storage tanks, and discharge and retention of stormwater. We operate in industrial areas, where truck terminals and other industrial activities are located, and where groundwater or other forms of environmental contamination could occur. Our operations may involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others. If we are involved in a spill or other accident involving hazardous substances, or if we are found to be in violation of applicable laws or regulations, it could have a materially adverse effect on our business and operating results. If we should fail to comply with applicable environmental regulations, we could be subject to substantial fines or penalties and to civil and criminal liability.
Our information technology systems are subject to certain cyber security and disaster risks that are beyond our control.
We depend heavily on the proper functioning and availability of our information, communications, and data processing systems, including operating and financial reporting systems, in operating our business. Our operating system is critical in meeting customer expectations, effectively tracking, maintaining and operating our equipment, directing and compensating our employees, and interfacing with our financial reporting system. Our financial reporting system receives, processes, controls and reports information for operating our business and for tabulation into our financial statements.
While we are not aware of a breach that has resulted in significant lost productivity or exposure of sensitive information to date, we are aware that our systems are targeted by various viruses and cyber-attacks and expect these efforts to continue. Our systems and those of our technology and communications providers are vulnerable to interruptions caused by natural disasters, power loss, telecommunication and internet failures, cyber-attack, and other events beyond our control. Accordingly, information security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority for us and we maintain information security processes and policies to protect our systems and data from cyber security events and threats.
Although we have processes, policies and procedures in place and our information systems are protected through physical and software security as well as redundant backup systems, they remain susceptible to cyber-security risks. Some of our software systems are utilized by third parties who provide outsourced processing services which may increase the risk of a cyber-security incident.
A successful cyber-attack or catastrophic natural disaster could significantly affect our operating and financial systems and could temporarily disrupt our ability to provide required services to our customers and impact our ability to manage our operations and perform vital financial processes, any of which could have a materially adverse effect on our business. In addition, regulatory and enforcement focus on data protection in the U.S. and failure to comply with applicable U.S. data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition.
With the rapid advancement in artificial intelligence (“AI”) technology, cyber-attacks have become increasingly sophisticated. While we have modified our security policy both to educate and to place appropriate guardrails around our users’ ability to use such technology in order to safeguard our system, we cannot guarantee that these efforts will be successful in preventing a successful cyber-attack or the exposure of our proprietary information. In addition, we rely on our third-party business partners who provide security services to continually enhance their detection and mitigation capabilities to better support our operation, and we conduct analysis regarding third party systems and their use of AI technology to limit potential exposures to security risks. However, we cannot guarantee that our third-party business partners will not experience security issues due to AI that could have an impact on our operations. A breach in our security systems, whether due to the use of AI technology or not, could harm our reputation and adversely impact our business, results of operations and financial condition.
We have substantial fixed costs and, as a result, our operating income fluctuates disproportionately with changes in our net sales.
A significant portion of our expenses are fixed costs that neither increase nor decrease proportionately with sales. There can be no assurance that we would be able to reduce our fixed costs proportionately in response to a decline in our sales, and therefore our competitiveness could be significantly impacted. As a result, a decline in our sales would result in a higher percentage decline in our income from operations and net income.
If our employees were to unionize, our operating costs would increase and our ability to compete would be impaired.
None of our employees are currently represented by a collective bargaining agreement. However, we can offer no assurance that our employees will not unionize in the future, particularly if legislation is passed that facilitates unionization. If our employees were to unionize, our operating costs would increase and our profitability could be adversely affected.
Our business may be harmed by terrorist attacks, anti-terrorism measures, military conflicts or political instability.
In order to prevent terrorist attacks, federal, state and municipal authorities have implemented and continue to follow various security measures, including checkpoints and travel restrictions on large trucks. Our international operations in Canada and Mexico may be affected significantly if there are any disruptions or closures of border traffic due to security measures. Such measures may have costs associated with them, which, in connection with the transportation services we provide, we or our independent contractors could be forced to bear. Further, a terrorist attack, military conflict (including the ongoing conflicts in the Ukraine and the Middle East, the recent U.S. military action against Iran and retaliatory actions taken by the Iranian government, or any future conflict), or risk of future such events, also may have an adverse effect on the economy. A decline in economic activity could adversely affect our revenue or restrict our future growth. Instability in the financial markets as a result of domestic or international conflicts, terrorism or political instability also could affect our ability to raise capital. In addition, the insurance premiums charged for some or all of the coverage currently maintained by us could increase dramatically or such coverage could be unavailable in the future.
Future public health crises could negatively impact our financial condition, liquidity, results of operations, and cash flows.
Measures and the public health concerns resulting from the outbreak of a future public health crisis may severely disrupt economic and commercial activity. The resulting impact on domestic and global supply chains caused slowdowns and reduced freight demand for transportation companies such as ours. Because we have a significant concentration of customers within the automotive industry, our freight volumes and revenues were significantly affected by the temporary closure of North American automotive manufacturing facilities during the spring of 2020 as a result of the COVID-19 pandemic. Any future delays or interruptions of automotive production and other consumer activity affecting our customers that could result from any future public health crises could further adversely affect our business. In addition, the implementation of measures to protect the health and safety of our employees, customers, vendors and the general public, or any state of federal vaccination mandates, may disrupt our ability to efficiently manage personnel and operations and to recruit and retain driver and non-driver personnel, which could have a material adverse effect on our operating results. Further, negative financial results, an economic downturn or uncertainty, or a tightening of credit markets caused by a public health crisis could have a material adverse effect on our liquidity and our ability to effectively meet our short- and long-term financial obligations.
Risks Related to Our Common Stock
Our public shareholders may have limited influence over our significant corporate actions.
Matthew T. Moroun, the Chairman of our Board of Directors, is the trustee of family trusts that collectively own greater than 50% of our outstanding common stock. In this capacity, Mr. Moroun holds investment power over the shares of our common stock held by the family trusts. Frederick P. Calderone, a member of our Board of Directors, is the special trustee of certain of these family trusts, and in that capacity, he exercises voting power over the shares held by such trusts, while Mr. Moroun exercises voting power over the shares held by the other family trust of which he is trustee. The special trustee serves at the discretion of the trustee of the trusts, and members of the Moroun family are the beneficiaries of the family trusts. Messrs. Moroun and Calderone have entered into a voting agreement under which Mr. Moroun agreed to vote the shares of our common stock over which he exercises voting power in accordance with and in the same manner as Mr. Calderone votes the shares of our common stock held by the family trusts over which the special trustee exercises voting power. Therefore, votes cast on behalf of the family trusts control any action requiring the general approval of our shareholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger or sale of substantially all of our assets. This concentration of ownership could also limit the price that some investors might be willing to pay for shares of our common stock.
The interests of our controlling shareholders may conflict with those of the Company and our other shareholders.
The interests of the Moroun family trusts could conflict with the interests of the Company or our other shareholders. For example, the concentration of ownership in the trusts could delay, defer, or prevent a change of control of the Company that may otherwise be favorable to the Company and our other shareholders. The votes cast on behalf of the family trusts could also result in our entry into transactions or agreements that our other shareholders do not approve. Our controlling shareholders might also refrain from voting in favor of a transaction that would result in our other shareholders receiving consideration for our common stock that is much higher than its then-current market price. Any such decisions that may be made in the future by our controlling shareholders will be in their absolute discretion, subject to applicable laws and fiduciary duties.
Because we are a “controlled company” under NASDAQ rules, we are not subject to certain corporate governance standards that apply to other publicly traded companies.
The NASDAQ rules state that a controlled company is one in which more than 50% of the voting power is held by another person or group of persons acting together. A controlled company may elect not to comply with certain corporate governance requirements, including:
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a majority of the board of directors consist of independent directors; |
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a nominating and corporate governance committee composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
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the compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. |
We are a controlled company under these rules, and these requirements will not apply to us as long as we retain that status. Accordingly, you may not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of NASDAQ.
Our stock trading volume may not provide adequate liquidity for investors.
Although shares of our common stock are traded on the NASDAQ Global Market, the average daily trading volume in our common stock is less than that of other larger transportation and logistics companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of a sufficient number of willing buyers and sellers of the common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Given the daily average trading volume of our common stock, significant sales of the common stock in a brief period of time, or the expectation of these sales, could cause a decline in the price of our common stock. Additionally, low trading volumes may limit a shareholder’s ability to sell shares of our common stock.
We currently do not intend to pay future dividends on our common stock.
We currently do not anticipate paying future cash dividends on our common stock. Any determination to pay future dividends and other distributions in cash, stock, or property by the Company in the future will be at the discretion of our Board of Directors and will be dependent on then-existing conditions, including our financial condition and results of operations and contractual restrictions. Therefore, shareholders should not rely on future dividend income from shares of our common stock.
Item 1B. Unresolved Staff Comments.
None.
Our cybersecurity program utilizes various risk mitigation techniques to manage cybersecurity risk by deploying enhanced detection tools. We conduct cybersecurity penetration tests, purple team exercises, and risk assessments through both internal subject matter experts and with the support of parties to identify threats and vulnerabilities that could adversely impact our business operations. We also attempt to assess the cybersecurity risk profile of, and threats related to, our business partners, vendors and service providers through various assertions of their security practices. In the normal course, we engage assessors, consultants and other parties to assist in various cyber-related matters. The underlying controls of our cybersecurity program utilize recognized practices and standards for cybersecurity and information technology security. Our risk-based approach enables us to design and implement cybersecurity programs that are specific to our corporate resources, customer profiles and business network.
Our executive offices and primary terminal facilities, which we own, are located in Tontitown, Arkansas. These facilities are located on approximately 61.9 acres and consist of 115,371 square feet of office space and maintenance and storage facilities.
Our subsidiaries lease facilities in Conley, Georgia; Fort Wayne, Hammond and Indianapolis, Indiana; Romulus, Michigan; Saddle Brook, New Jersey; Charlotte, North Carolina; and Monterrey, Mexico. Our terminal facilities in North Little Rock, Arkansas; North Jackson, Ohio; Willard, Ohio; Bloomsburg, Pennsylvania; El Paso, Irving and Laredo, Texas; and Nuevo Laredo, Mexico are owned. The leased facilities have contractual terms typically ranging from one to five years and have provisions for early cancellation if we so choose.
We also have access to trailer drop and relay stations in various other locations across the country. We lease certain of these facilities on a month-to-month basis from affiliates of our largest stockholder.
We believe that all of the properties that we own or lease are suitable for their purposes and adequate to meet our needs.
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. We currently self-insure for certain layers of auto liability claims in excess of $2.0 million. Specifically, we 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.
Item 4. Mine Safety Disclosures
Not applicable
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock is traded on the NASDAQ Global Market under the symbol PAMT. As of February 23, 2026, there were approximately 56 holders of record of our common stock.
Dividends
The Company historically has not declared or paid any cash dividends on our common stock, except for certain special cash dividends paid during 2012. No dividends have been paid during any year since 2012. Future dividend policy and the payment of dividends, if any, will be determined by the Board of Directors in light of circumstances then existing, including our earnings, financial condition and other factors deemed relevant by the Board of Directors. Currently, the Company does not intend to pay dividends in the foreseeable future.
Repurchases of Equity Securities by the Issuer
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.
No shares were repurchased under the Company’s stock repurchase program during the fourth quarter of 2025. As of December 31, 2025, 474,016 shares remained available for repurchase under the stock repurchase program.
Securities Authorized for Issuance Under Equity Compensation Plans
See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report for a presentation of compensation plans under which equity securities of the Company are authorized for issuance.
Performance Graph
Set forth below is a line graph comparing the yearly percentage change in the cumulative total stockholder return on our common stock against the cumulative total return of the NASDAQ OMX Index for the NASDAQ Stock Market (U.S. companies) and the NASDAQ OMX Index for the NASDAQ Trucking and Transportation Stocks for the period of five years commencing December 31, 2020 and ending December 31, 2025. The graph assumes that the value of the investment in our common stock and in each index was $100 on December 31, 2020 and that all dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG OUR COMMON STOCK,
THE NASDAQ OMX INDEX FOR THE NASDAQ STOCK MARKET (U.S. COMPANIES)
AND THE NASDAQ TRUCKING AND TRANSPORTATION STOCKS INDEX THROUGH DECEMBER 31, 2025
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Business Overview
The Company's administrative headquarters are in Tontitown, Arkansas. From this location we manage operations in the continental United States, Mexico, and Canada conducted through our wholly-owned subsidiaries. The operations of these subsidiaries can generally be classified into either truckload services or brokerage and logistics services. This designation is based primarily on the ownership of the asset that performed the freight transportation service. Truckload services are performed by Company divisions that generally utilize Company-owned trucks, long-term contractors, or single-trip contractors to transport loads of freight for customers, while brokerage and logistics services coordinate or facilitate the transport of loads of freight for customers and generally involve the utilization of single-trip contractors. Both our truckload operations and our brokerage and 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.
For both operations, substantially all of our revenue is generated by transporting freight for customers and is predominantly affected by the rates per mile received from our customers, equipment utilization, and our percentage of non-compensated miles. These aspects of our business are carefully managed and efforts are continuously underway to achieve favorable results. Truckload 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.
The main factors that impact our profitability on the expense side are costs incurred in transporting freight for our customers. Currently, our most challenging costs include fuel, driver recruitment, training, wage and benefit costs, independent broker costs (which we record as purchased transportation), insurance and claims, maintenance, and capital equipment costs.
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 and is calculated as total operating expenses as a percentage of total operating revenue.
In discussing our results of operations we use revenue, before fuel surcharge (and operating supplies and expense, net of fuel surcharge), because management believes that eliminating the impact of this sometimes volatile source of revenue allows a more consistent basis for comparing our results of operations from period to period. During 2025, 2024 and 2023, approximately $71.5 million, $85.6 million, and $104.7 million, respectively, of the Company's total revenue was generated from fuel surcharges. We also discuss certain changes in our expenses as a percentage of revenue, before fuel surcharge, rather than absolute dollar changes. We do this because we believe the high variable cost nature of certain expenses makes a comparison of changes in expenses as a percentage of revenue more meaningful than absolute dollar changes.
Results of Operations - Truckload Services
The following table sets forth, for truckload services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated. Operating supplies and expenses are shown net of fuel surcharges.
| Years Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Operating revenues, before fuel surcharge |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Operating expenses: |
||||||||||||
| Salaries, wages and benefits |
42.0 | 38.9 | 37.8 | |||||||||
| Operating supplies and expenses, net of fuel surcharge |
12.9 | 11.8 | 11.8 | |||||||||
| Rent and purchased transportation |
27.4 | 26.1 | 23.5 | |||||||||
| Depreciation |
22.6 | 23.3 | 13.8 | |||||||||
| Impairment Loss |
- | 1.5 | - | |||||||||
| Insurance and claims |
12.9 | 4.6 | 6.7 | |||||||||
| Other |
4.9 | 4.8 | 4.4 | |||||||||
| Gain(loss) on sale or disposal of property |
(4.3 | ) | 0.2 | (0.3 | ) | |||||||
| Total operating expenses |
118.4 | 111.2 | 97.7 | |||||||||
| Operating (loss)income |
(18.4 | ) | (11.2 | ) | 2.3 | |||||||
| Non-operating income |
2.8 | 1.9 | 1.2 | |||||||||
| Interest expense |
(4.7 | ) | (2.9 | ) | (1.6 | ) | ||||||
| Income before income taxes |
(20.3% | ) | (12.2% | ) | 1.9 | % | ||||||
2025 Compared to 2024
For the year ended December 31, 2025, truckload services revenue, before fuel surcharges, decreased 14.8% to $359.6 million as compared to $422.0 million for the year ended December 31, 2024. The decrease relates primarily to an 8.3% decrease in total miles travelled from 178.6 million during the year ended December 31, 2024 to 163.8 million for the year ended December 31, 2025 and to a 3.8% decrease in our rate per mile, from $2.10 for the year ended December 31, 2024 to $2.02 for the year ended December 31, 2025. The reduction in total miles was primarily driven by a 10.4% reduction in the average number of trucks operated offset by a 2.7% improvement in average miles driven by each truck during the year ended December 31, 2025 compared to the year ended December 31, 2024. The reduction in truck count and miles resulted from a less favorable freight market year over year, characterized by an oversupply of available trucks in the market compared to available freight.
Salaries, wages and benefits increased from 38.9% of revenues, before fuel surcharges, during 2024 to 42.0% of revenues, before fuel surcharges, during 2025. The percentage-based increase relates primarily to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital.
Rent and purchased transportation increased from 26.1% of revenues, before fuel surcharges, during 2024 to 27.4% of revenues, before fuel surcharges, during 2025. The increase was primarily due to an increase in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Depreciation expense decreased from 23.3% of revenues, before fuel surcharges, for the year ended December 31, 2024 to 22.6% of revenues, before fuel surcharges, for the year ended December 31, 2025. The decrease is primarily attributable to the absence of the incremental depreciation recognized in 2024 resulting from the Company’s change in accounting estimates related to the useful lives and salvage values of revenue equipment. As previously disclosed, during the year ended December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment, which increased depreciation expense in that period. Depreciation expense in 2025 reflects the continued application of those revised estimates but does not include a comparable incremental impact from an additional change in estimate. Although depreciation decreased as a percentage of revenue year over year, it remains elevated relative to 2023 due to the ongoing effect of the shorter estimated useful lives and lower salvage values established in 2024, as well as the continued replacement of revenue equipment at costs that remain above historical levels. In addition, the fixed-cost nature of depreciation expense, combined with lower operating revenues in 2025, affects period-over-period comparability of depreciation as a percentage of revenue.
Impairment loss accounted for 0% of revenues, before fuel surcharges, during 2025, compared to 1.5% of revenues, before fuel surcharges, during 2024. Although management continues to believe that market conditions for used revenue equipment have deteriorated since their peak in 2022, the Company performed a recoverability analysis of its long-lived asset groups during the year ended December 31, 2025 and concluded that the carrying amounts of all applicable asset groups were recoverable, as the estimated future undiscounted cash flows for each asset group exceeded its respective carrying value. Accordingly, no impairment loss was recognized during 2025. In contrast, during the year ended December 31, 2024, management determined that certain asset groups of trucks and trailers were impaired, resulting in an impairment loss of approximately $6.4 million, or $0.22 loss per share, net of tax.
Insurance and claims increased from 4.6% of revenues, before fuel surcharges, during 2024 to 12.9% of revenues, before fuel surcharges, during 2025. The increase is attributable to an increase in the Company’s auto-liability reserve during the fourth quarter of 2025. This increase in auto-liability reserve is due to an agreement in principle to settle a significant auto-liability claim in which the Company was a named defendant. The total settlement amount is $30.0 million, of which $26.5 million represents the Company’s net exposure after consideration of applicable insurance coverage.
Gains (losses) on disposition of equipment increased from a loss of 0.2% of revenues, before fuel surcharges, for the year ended December 31, 2024 to a gain of 4.3% of revenues, before fuel surcharges, for the year ended December 31, 2025. The Company recognized a net loss on disposition of equipment of approximately $0.8 million during 2024, compared to net gains of approximately $15.5 million during 2025. The increase was primarily attributable to higher disposition volumes in 2025, including the sale of approximately 650 additional trailers and 250 additional trucks compared to 2024, as well as the sale of certain equipment whose carrying values had been reduced in 2024 as a result of impairment charges. The increased volume of disposals was driven in part by the reduction in estimated useful lives of trailers implemented in 2024, which accelerated the planned retirement and disposal of certain assets that were not previously expected to be sold in 2025.
Non-operating income increased from 1.9% of revenues, before fuel surcharges, during 2024 to 2.8% of revenues, before fuel surcharges, during 2025. This increase resulted primarily from an increase in the market value of our marketable equity securities portfolio and an increase in the Company’s net realized gains from the sale of certain marketable equity securities during the year-ended December 31, 2025 as compared to the year ended December 31, 2024.
Interest expense increased from 2.9% of revenues, before fuel surcharges, for the year ended December 31, 2024 to 4.7% of revenues, before fuel surcharges, for the year ended December 31, 2025. The increase was primarily attributable to a net increase in long-term debt of approximately $8.3 million, consisting of $91.9 million of equipment financing obtained during 2025, partially offset by $83.6 million of long-term debt repayments. The weighted-average interest rate on debt incurred during 2025 was 5.71%, compared to 5.17% for debt incurred prior to 2025 that remained outstanding as of December 31, 2025, meaning the Company experienced a higher overall cost of new borrowings. The repayment of lower-rate debt and issuance of new debt at higher prevailing interest rates further contributed to the increase in interest expense. The fixed-cost nature of interest expense, combined with lower operating revenues in 2025, also increased interest expense as a percentage of revenue.
The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 118.4% for 2025 from 111.2% for 2024.
2024 Compared to 2023
For the year ended December 31, 2024, truckload services revenue, before fuel surcharges, decreased 8.4% to $422.0 million as compared to $460.9 million for the year ended December 31, 2023. The decrease relates primarily to a 5.7% decrease in total miles travelled from 189.5 million during the year ended December 31, 2023 to 178.6 million for the year ended December 31, 2024 and to a 3.2% decrease in our rate per mile, from $2.17 for the year ended December 31, 2023 to $2.10 for the year ended December 31, 2024. The reduction in total miles was primarily driven by a 3.1% reduction in the average number of trucks operated combined with a 3.5% reduction in average miles driven by each truck during the year ended December 31, 2024 compared to the year ended December 31, 2023. The reduction in truck count and miles resulted from a less favorable freight market year over year, characterized by an oversupply of available trucks in the market compared to available freight.
Salaries, wages and benefits increased from 37.8% of revenues, before fuel surcharges, during 2023 to 38.9% of revenues, before fuel surcharges, during 2024. The percentage-based increase relates primarily to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital.
Rent and purchased transportation increased from 23.5% of revenues, before fuel surcharges, during 2023 to 26.1% of revenues, before fuel surcharges, during 2024. The increase was primarily due to a year-over-year increase in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers and to a lesser extent increased rates paid to third-party carriers for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Depreciation increased from 13.8% of revenues, before fuel surcharges, during 2023 to 23.3% of revenues, before fuel surcharges, during 2024. The increase is primarily attributed to management’s change in accounting estimates related to the salvage values and useful lives of revenue equipment during the year ended December 31, 2024. During 2024, the Company conducted a review of its revenue equipment and determined that changes in market conditions and expected asset usage warranted a revision to the estimated useful lives and salvage values of certain equipment. As a result, during the year ended December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment to better reflect their expected residual values at the end of their service periods. This change in accounting estimates increased depreciation expense by approximately $24.7 million and increased basic and diluted loss per share by $0.86, net of tax, for the year ended December 31, 2024. In addition to the Company’s change in accounting estimate, the year-over-year increase can also be attributed to an increase in the cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense.
Impairment loss accounted for 1.5% of revenues, before fuel surcharges, during 2024. The Company has not previously recognized an impairment loss on long-lived assets. Management determined that market conditions for used revenue equipment had deteriorated since its peak in 2022. This decline in market conditions prompted the requirement for a recoverability test and subsequent impairment charge against certain asset groups of used trucks and trailers. Management tested all applicable asset groups and 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.
Insurance and claims decreased from 6.7% of revenues, before fuel surcharges, during 2023 to 4.6% of revenues, before fuel surcharges, during 2024. The decrease is primarily attributable to a decrease in auto liability claims incurred during the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease was slightly offset by an increase in the rate per mile paid for auto liability insurance during 2024 compared to 2023.
Non-operating income increased from 1.2% of revenues, before fuel surcharges, during 2023 to 1.9% of revenues, before fuel surcharges, during 2024. This increase resulted primarily from an increase in the market value of our marketable equity securities portfolio and an increase in the Company’s net realized gains from the sale of certain marketable equity securities during the year-ended December 31, 2024 as compared to the year ended December 31, 2023.
Interest expense increased from 1.6% of revenues, before fuel surcharges, during 2023 to 2.9% of revenues, before fuel surcharges, during 2024. The increase is attributed to the Company’s increased long-term debt from $261.7 million at December 31, 2023 to $325.6 million at December 31, 2024, coupled with an increase in interest rates as the Company’s weighted average interest rate increased from 4.20% in 2023 to 5.00% in 2024.
The truckload services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 111.2% for 2024 from 97.7% for 2023.
Results of Operations - Logistics and Brokerage Services
The following table sets forth, for logistics and brokerage services, the percentage relationship of expense items to operating revenues, before fuel surcharges, for the periods indicated. Brokerage service operations occur specifically in certain divisions; however, brokerage operations occur throughout the Company in similar operations having substantially similar economic characteristics. Rent and purchased transportation, which includes costs paid to third-party carriers, are shown net of fuel surcharges.
| Years Ended December 31, |
||||||||||||
| 2025 |
2024 |
2023 |
||||||||||
| Operating revenues, before fuel surcharge |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Operating expenses: |
||||||||||||
| Salaries, wages and benefits |
5.6 | 5.1 | 4.9 | |||||||||
| Rent and purchased transportation |
89.3 | 86.6 | 84.6 | |||||||||
| Other |
3.8 | 3.2 | 2.4 | |||||||||
| Total operating expenses |
98.7 | 94.9 | 91.9 | |||||||||
| Operating income |
1.3 | 5.1 | 8.1 | |||||||||
| Non-operating income |
0.7 | 0.2 | 0.8 | |||||||||
| Interest expense |
(0.4 | ) | (0.4 | ) | (0.7 | ) | ||||||
| Income before income taxes |
1.6 | % | 4.8 | % | 8.2 | % | ||||||
2025 Compared to 2024
For the year ended December 31, 2025, logistics and brokerage services revenues, before fuel surcharges, decreased 19.3% to $167.0 million as compared to $207.0 million for the year ended December 31, 2024. The decrease relates to a reduction in the average rates charged to customers year to year, coupled with a 25.4% decrease in brokered loads year over year. The brokerage market continued to be negatively impacted by downward rate pressure driven by the challenging truckload rate environment.
Rent and purchased transportation increased from 86.6% of revenues, before fuel surcharges, in 2024 to 89.3% of revenues, before fuel surcharges, in 2025. The increase results from paying third-party carriers a larger percentage of customer revenue, coupled with the interaction of a decrease in operating revenues with the need for purchased transportation.
The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 98.7% for 2025 from 94.9% for 2024.
2024 Compared to 2023
For the year ended December 31, 2024, logistics and brokerage services revenues, before fuel surcharges, decreased 15.6% to $207.0 million as compared to $245.2 million for the year ended December 31, 2023. The decrease relates to a reduction in the average rates charged to customers year to year, while total brokered loads remained flat, as the brokerage market was negatively impacted by downward rate pressure driven by the challenging truckload rate environment.
Rent and purchased transportation increased from 84.6% of revenues, before fuel surcharges, in 2023 to 86.6% of revenues, before fuel surcharges, in 2024. The increase results from paying third-party carriers a larger percentage of customer revenue, coupled with the interaction of a decrease in operating revenues with the need for purchased transportation.
The logistics and brokerage services division operating ratio, which measures the ratio of operating expenses, net of fuel surcharges, to operating revenues, before fuel surcharges, increased to 94.9% for 2024 from 91.9% for 2023.
Results of Operations - Combined Services
2025 Compared to 2024
Income tax benefit was approximately $17.7 million in 2025, resulting in an effective rate of 25.2%, as compared to income tax benefit of approximately $9.8 million, or an effective tax rate of 23.5% in 2024. The effective tax rate is impacted by the effect of state taxes and other factors.
As of December 31, 2025, management conducted a tax asset valuation allowance as described above and 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.
Additionally, s 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.
The combined net loss for all divisions was $52.6 million, or 10.0% of revenues, before fuel surcharge, for 2025 as compared to the combined net loss for all divisions of $31.8 million, or 5.1% of revenues, before fuel surcharge, for 2024. Diluted loss per share decreased to ($2.48) for the year ended December 31, 2025 from ($1.45) for the year ended December 31, 2024.
2024 Compared to 2023
Income tax benefit was approximately $9.8 million in 2024, resulting in an effective rate of 23.5%, as compared to income tax expense of approximately $10.2 million, or an effective tax rate of 35.6% in 2023. The effective tax rate is impacted by the effect of state taxes and other factors.
As of December 31, 2024, management conducted a tax asset valuation allowance as described above and 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.
Additionally, as of December 31, 2024, management determined that an adjustment to the Company’s consolidated financial statements for uncertain tax positions was not 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 2023, the Company did not recognize or accrue any interest or penalties related to uncertain income tax positions.
The combined net loss for all divisions was $31.8 million, or 5.1% of revenues, before fuel surcharge, for 2024 as compared to the combined net income for all divisions of $18.4 million or 2.6% of revenues, before fuel surcharge, for 2023. Diluted (loss) earnings per share decreased to ($1.45) for the year ended December 31, 2024 from $0.83 for the year ended December 31, 2023.
Liquidity and Capital Resources
Our business has required, and will continue to require, a significant investment in new revenue equipment. Our primary sources of liquidity have been funds provided by operations, proceeds from the sales of revenue equipment, borrowings under our lines of credit, installment notes, investment margin account, and issuances of equity securities.
During 2025, we generated $17.3 million in cash from operating activities compared to $59.0 million and $114.6 million in 2024 and 2023, respectively. Investing activities generated $18.4 million in cash during 2025 compared to using $100.2 million and $11.3 million in 2024 and 2023, respectively. Financing activities used $68.6 million in cash during 2025 compared to generating $8.6 million during 2024 and using $76.8 million during 2023. See the Consolidated Statements of Cash Flows in Item 8 of this Report.
Our primary use of funds is for the purchase of revenue equipment. We typically use installment notes, our existing lines of credit on an interim basis, proceeds from the sale or trade of equipment, and cash flows from operations to finance capital expenditures and repay long-term debt. During 2025 and 2024, we utilized cash on hand, long-term debt, and our lines of credit to finance purchases of revenue equipment and other assets of approximately $40.7 million and $195.7 million, respectively. In addition, we acquired approximately $61.9 million and $50.0 million of revenue equipment through vendor-direct financing arrangements during 2025 and 2024, respectively. These non-cash financing arrangements provide an additional source of liquidity for acquiring new equipment but do not result in cash inflows or outflows and, accordingly, are not reflected in the consolidated statement of cash flows.
We often finance the acquisition of revenue equipment through installment notes with fixed interest rates. At December 31, 2025, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $333.9 million. These installment notes are payable in monthly installments, ranging from 60 monthly installments to 84 monthly installments, at a weighted average interest rate of 5.31%. At December 31, 2024, the Company’s subsidiaries had combined outstanding indebtedness under such installment notes of $325.6 million. These installment notes were payable in monthly installments, ranging from 36 to 84 months at a weighted average interest rate of 5.00%.
In order to maintain an adequate pool of available equipment, it is often necessary to purchase replacement equipment and place them in service before trucks and trailers scheduled for replacement are removed from service. The timing of this process often requires the Company to pay for new equipment before receiving any proceeds from retired equipment, or without any reduction in price for trade units. In this situation, the Company later receives payment for the equipment scheduled for replacement once they are delivered to the buyer and have passed inspection. During the twelve months ended December 31, 2025 and 2024, the Company received approximately $58.3 million and $36.9 million, respectively, for disposed revenue equipment.
During 2025, we maintained a revolving line of credit with a borrowing limit of $60.0 million. Under this credit facility, amounts outstanding under the line bear interest at Term SOFR plus 3.35% (7.22% at December 31, 2025), are secured by our trade accounts receivable and mature on July 1, 2027. The credit facility also establishes an “unused fee” of 0.25% if average borrowings are less than $18.0 million. 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.
Trade accounts receivable decreased by approximately $13.1 million from $80.0 million as of December 31, 2024 to $66.9 million as of December 31, 2025. The decrease is attributed to a general decrease in freight revenue and fuel surcharge revenue, which flows through the accounts receivable account, during the fourth quarter of 2025 as compared to the freight revenue and fuel surcharge revenue generated during the fourth quarter of 2024.
Marketable equity securities at December 31, 2025 increased approximately $5.9 million as compared to December 31, 2024. The increase resulted from the unrealized appreciation in the fair value of the portfolio by $4.8 million coupled with the purchase of $4.2 million in marketable equity securities, partially offset by the sales of marketable equity securities approximating $3.1 million. At December 31, 2025, the remaining marketable equity securities have a combined cost basis of approximately $28.2 million and a combined fair market value of approximately $48.5 million. The Company has developed a strategy to invest in securities from which it expects to receive dividends that qualify for favorable tax treatment, as well as appreciate in value. During 2025, the Company received dividends of approximately $1.6 million. The holding term of these securities depends largely on the general economic environment, the equity markets, borrowing rates, and the Company's cash requirements.
Property and equipment decreased by approximately $44.1 million from $836.5 as of December 31, 2024 to $792.4 million as of December 31,2025. This decrease is primarily attributable to the disposal of aging trucks and trailers totaling $160.2 million during 2025. This was partially offset by the purchase of new trucks and trailers approximating $108.2 million and the remodel of our corporate headquarters and a driver training facility at our corporate headquarters in Tontitown, Arkansas during 2025.
Accounts payable remained relatively flat year over year with a balance of $32.8 million at December 31, 2025 compared to a balance of $31.2 million at December 31, 2024.
Accrued expenses and other liabilities increased from $14.6 million at December 31, 2024 to $41.1 million at December 31, 2025. The increase is primarily attributable to an increase in the Company’s auto-liability reserve during the fourth quarter of 2025. This increase in auto-liability reserve is due to an agreement in principle to settle a significant auto-liability claim in which the Company was a named defendant totaling $26.5 million after consideration of applicable insurance coverage.
For 2026, we expect to purchase 570 new trucks and 700 trailers while continuing to sell or trade equipment that has reached the end of its life cycle. Management believes we will be able to finance our existing needs for working capital over the next twelve months, as well as acquisitions of revenue equipment and any other asset acquisitions or capital transactions during such period, with cash balances, cash flows from operations, and borrowings believed to be available from financing sources. We will continue to have significant capital requirements over the long-term, which may require us to incur debt or seek additional equity capital. The availability of additional capital will depend upon prevailing market conditions, the market price of our common stock and several other factors over which we have limited control, as well as our financial condition and results of operations. Nevertheless, based on our anticipated future cash flows and sources of financing that we expect will be available to us, we do not expect that we will experience any significant liquidity constraints in the foreseeable future.
Inflation
Inflation has an impact on most of our operating costs. Over the past three years, the effect of inflation has been significant. If the current rate of inflation persists, inflation, coupled with supply chain issues and international events, such factors could continue to result in increased costs for drivers, employee wages, equipment, fuel and other costs.
Adoption of Accounting Policies
See “Item 8. Financial Statements and Supplementary Data, Note 1 to the Consolidated Financial Statements – Accounting Policies, Recent Accounting Pronouncements.”
Critical Accounting Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to adopt accounting policies and make significant judgments and estimates that impact the amounts reported in our consolidated financial statements and accompanying notes. Therefore, the reported amounts of assets, liabilities, revenue, expenses, and associated disclosures of contingent assets and liabilities are affected by judgments and estimates. In some cases, there are alternative assumptions, policies, or estimation techniques that could be used. Management evaluates its assumptions, policies, and estimates on an ongoing basis, utilizing historical experience, and other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates and assumptions, and it is possible that materially different amounts would be reported using differing estimates or assumptions. Management considers our critical accounting estimates to be those that require more significant judgments and estimates when we prepare our consolidated financial statements.
Note 1 in Part II, Item 8 of this Annual Report describes the Company's accounting policies. The following discussion of accounting estimates should be read in conjunction with Note 1, as it provides additional insight into critical accounting estimates. Our critical accounting estimates include the following:
Depreciation and Amortization. Depreciation of trucks and trailers is calculated by the straight-line method over the assets’ estimated useful lives, which generally range from three to ten years, down to an estimated salvage value at the end of the assets’ estimated useful lives. Management must use its judgment in the selection of estimated useful lives and salvage values for purposes of this calculation. In some 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.
The depreciation of trucks and trailers over their estimated useful lives and the determination of any salvage value also require management to make judgments about future events. Therefore, the Company’s management periodically evaluates whether changes to estimated useful lives or salvage values are necessary to ensure these estimates accurately reflect the economic reality of the assets. This periodic evaluation may result in changes in the estimated lives and/or salvage values used by the Company to depreciate its assets, which can affect the amount of periodic depreciation expense recognized and, ultimately, the gain or loss on the disposal of an asset. Future changes in our estimated useful life or salvage value estimates, or fluctuations in market value that are not reflected in current estimates, could have a material effect on the Company’s consolidated financial statements.
During the year ended December 31, 2024, the Company conducted a review of its revenue equipment and determined that changes in market conditions and expected asset usage warranted a revision to the estimated useful lives and salvage values of certain equipment. As a result, during the year ended December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment to better reflect their expected residual values at the end of their service periods.
In accordance with ASC 250-10-45-17, this change is considered a change in accounting estimate and has been applied prospectively during the year ended December 31, 2024. The effect of this change increased depreciation expense by $24.7 million and increased basic and diluted loss per share by $0.86 net of tax, for the year ended December 31, 2024. The impact of this change on depreciation expense and earnings per share for the year ended December 31, 2025 was not material.
Impairment of Long-Lived Assets. We review our property, plant, and equipment and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Indicators of impairment may include, but are not limited to, declining operating performance, adverse changes in market conditions, regulatory developments, or planned asset dispositions.
When an indicator of impairment is identified, we perform a recoverability test by comparing the undiscounted future cash flows expected to be generated by the asset group to its carrying amount. If the carrying amount exceeds the undiscounted cash flows, we recognize an impairment loss equal to the excess of the carrying amount over the asset’s fair value. Fair value is typically estimated using a combination of market prices (if available), appraisals, or discounted cash flow analyses. The determination of fair value involves significant management judgment, including assumptions about future revenue growth, operating costs, asset utilization, and discount rates.
During the year ended December 31, 2025, management evaluated its long-lived assets for impairment and performed recoverability testing where indicators were present. Based on these analyses, management concluded that all asset groups were recoverable and no impairment charges were recorded in 2025.
During the year ended December 31, 2024, management determined that the market conditions for used revenue equipment had deteriorated since its peak in 2022. This decline in market conditions prompted the requirement for a recoverability test and subsequent impairment charge against certain asset groups of used trucks and trailers. Management tested all applicable asset groups and determined certain asset groups of used 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.
If our business is negatively impacted by prolonged economic downturns, the market for used equipment may decline and our ability to generate cash from the utilization of our equipment could decrease, necessitating future impairment charges. Conversely, an improvement in market conditions or operational performance may reduce the likelihood of future impairments.
Management will continue to monitor our property, plant, and equipment and other long-lived assets for impairment as necessary. Additional impairment charges, if any, could have a material impact on our financial position and results of operations.
Claims accruals. The Company is self-insured for health and workers' compensation benefits up to certain stop-loss limits. Such costs are accrued based on known claims and an estimate of incurred but not reported (IBNR) claims. IBNR claims are estimated using historical lag information and other data either provided by outside claims administrators or developed internally. Actual claims payments may differ from management’s estimates as a result of a number of factors, including evaluation of severity, increases in legal or medical costs, and other case-specific factors. The actual claims payments are charged against the Company’s recorded accrued claims liabilities and have been historically reasonable with respect to the estimates of the liabilities made under the Company’s methodology. However, the estimation process is generally subjective, and to the extent that future actual results materially differ from original estimates made by management, adjustments to recorded accruals may be necessary which could have a material effect on the Company’s consolidated financial statements. Based upon our 2025 health and workers' compensation expenses, a 10% increase in both claims incurred and IBNR claims would increase our annual health and workers' compensation expenses by approximately $0.8 million.
On September 1, 2020, the Company elected to become 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.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Our primary market risk exposures include equity price risk, interest rate risk, commodity price risk (the price paid to obtain diesel fuel for our trucks), and foreign currency exchange rate risk. The potential adverse impact of these risks are discussed below. While the Company has used derivative financial instruments in the past to manage its interest rate and commodity price risks, the Company does not currently enter into such instruments for risk management purposes or for speculation or trading.
The following sensitivity analyses do not consider the effects that an adverse change may have on the overall economy nor do they consider additional actions we may take to mitigate our exposure to such changes. Actual results of changes in prices or rates may differ materially from the hypothetical results described below.
Equity Price Risk
We hold certain actively traded marketable equity securities, which subjects the Company to fluctuations in the fair market value of its investment portfolio based on current market price. The recorded value of marketable equity securities increased from $42.6 million at December 31, 2024 to $48.5 million at December 31, 2025. The increase was primarily attributable to $4.8 million of unrealized appreciation in the fair value of the portfolio and $4.2 million of purchases, partially offset by $3.1 million of sales during the year. A 10% decrease in the market price of our marketable equity securities would cause a corresponding 10% decrease in the carrying amounts of these securities, or approximately $4.9 million. For additional information with respect to the marketable equity securities, see “Item 8. Financial Statements and Supplementary Data, Note 4 to the Consolidated Financial Statements – Marketable Equity Securities.”
Interest Rate Risk
Our line of credit bears interest at a floating rate equal to Term SOFR plus a fixed percentage. Accordingly, changes in Term SOFR, which are affected by changes in interest rates, will affect the interest rate on, and therefore our costs under, the line of credit. Assuming $12.0 million of variable rate debt was outstanding under our line of credit for a full fiscal year, a hypothetical 100 basis point increase in Term SOFR would result in approximately $120,000 of additional interest expense.
Commodity Price Risk
Prices and availability of all petroleum products are subject to political, economic and market factors that are generally outside of our control. Accordingly, the price and availability of diesel fuel, as well as other petroleum products, can be unpredictable. Because our operations are dependent upon diesel fuel, significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition. Based upon our 2025 fuel consumption, a 10% increase in the average annual price per gallon of diesel fuel would increase our annual fuel expenses by approximately $5.4 million.
Foreign Currency Exchange Rate Risk
We are exposed to foreign currency exchange rate risk related to the activities of our branch office located in Mexico. Currently, we do not hedge our exchange rate exposure through any currency forward contracts, currency options, or currency swaps as all of our revenues, and substantially all of our expenses and capital expenditures are transacted in U.S. dollars. However, certain operating expenditures and capital purchases related to our Mexico branch office are incurred within or exposed to fluctuations in the exchange rate between the U.S. dollar and the Mexican peso. Based on 2025 expenditures denominated in pesos, a 10% decrease in the exchange rate would increase our annual operating expenses by approximately $1.1 million. Foreign currency exchange rates did not have a material impact to our financial condition, results of operations or cash flows for the years ended December 31, 2025 or 2024.
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
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
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/
We have served as the Company’s auditor since 2005.
March 12, 2026
|
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 | $ | $ | ||||||
| Accounts receivable—net: | ||||||||
| Trade, less current estimated credit loss of $ and $, respectively | ||||||||
| Other | ||||||||
| Inventories | ||||||||
| Prepaid expenses and deposits | ||||||||
| Marketable equity securities | ||||||||
| Income taxes refundable | ||||||||
| Total current assets | ||||||||
| PROPERTY AND EQUIPMENT: | ||||||||
| Land | ||||||||
| Structures and improvements | ||||||||
| Revenue equipment | ||||||||
| Office furniture and equipment | ||||||||
| Total property and equipment | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Net property and equipment | ||||||||
| OTHER ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| (Continued) |
|
| See notes to consolidated financial statements. |
|
| 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 | $ | $ | ||||||
| Accrued expenses and other liabilities | ||||||||
| Current maturities of long-term debt | ||||||||
| Total current liabilities | ||||||||
| Long-term debt—less current portion | ||||||||
| Deferred income taxes | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES (Note 16) | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ par value, shares authorized; issued | ||||||||
| Common stock, $ par value, shares authorized; and shares issued; and shares outstanding at December 31, 2025 and 2024, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Treasury stock, at cost; and shares at December 31, 2025 and 2024, respectively | ( | ) | ( | ) | ||||
| Retained earnings | ||||||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ | ||||||
| (Concluded) |
|
| See notes to consolidated financial statements. |
|
|
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 | $ | $ | $ | |||||||||
| Fuel surcharge | ||||||||||||
| Total operating revenues | ||||||||||||
| OPERATING EXPENSES AND COSTS: | ||||||||||||
| Salaries, wages and benefits | ||||||||||||
| Operating supplies and expenses | ||||||||||||
| Rents and purchased transportation | ||||||||||||
| Depreciation | ||||||||||||
| Impairment Loss | ||||||||||||
| Insurance and claims | ||||||||||||
| Other | ||||||||||||
| (Gain) loss on disposition of equipment | ( | ) | ( | ) | ||||||||
| Total operating expenses and costs | ||||||||||||
| OPERATING (LOSS) INCOME | ( | ) | ( | ) | ||||||||
| NON-OPERATING INCOME | ||||||||||||
| INTEREST EXPENSE | ( | ) | ( | ) | ( | ) | ||||||
| (LOSS) INCOME BEFORE INCOME TAXES | ( | ) | ( | ) | ||||||||
| FEDERAL & STATE INCOME TAX (BENEFIT) EXPENSE: | ||||||||||||
| Current | ||||||||||||
| Deferred | ( | ) | ( | ) | ||||||||
| Total federal & state income tax (benefit) expense | ( | ) | ( | ) | ||||||||
| NET (LOSS) INCOME | $ | ( | ) | $ | ( | ) | $ | |||||
| (LOSS) EARNINGS PER COMMON SHARE: | ||||||||||||
| Basic | $ | ( | ) | $ | ( | ) | $ | |||||
| Diluted | $ | ( | ) | $ | ( | ) | $ | |||||
| AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||
| Basic | ||||||||||||
| Diluted | ||||||||||||
| See notes to consolidated financial statements. |
|
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 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net income | ||||||||||||||||||||||||
| Restricted stock issued | ||||||||||||||||||||||||
| Treasury stock repurchases | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Restricted stock net settlement | ( | ) | ( | ) | ||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||
| BALANCE— December 31, 2023 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Restricted stock issued | ( | ) | ||||||||||||||||||||||
| Treasury stock repurchases | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Restricted stock net settlement | ( | ) | ( | ) | ||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||
| BALANCE— December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Restricted stock issued | ||||||||||||||||||||||||
| Treasury stock repurchases | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Restricted stock net settlement | ( | ) | ( | ) | ||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||
| BALANCE— December 31, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| See notes to consolidated financial statements. |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023 (in thousands) |
| 2025 | 2024 | 2023 | ||||||||||
| OPERATING ACTIVITIES: | ||||||||||||
| Net (loss) income | $ | ( | ) | $ | ( | ) | $ | |||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||
| Depreciation | ||||||||||||
| Impairment Loss | ||||||||||||
| Bad debt expense | ||||||||||||
| Stock compensation—net of excess tax benefits | ||||||||||||
| Provision for deferred income tax (benefit) expense | ( | ) | ( | ) | ||||||||
| Recognized (gain) on marketable equity securities | ( | ) | ( | ) | ( | ) | ||||||
| (Gain) loss on sale or disposal of equipment | ( | ) | ( | ) | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | ( | ) | ||||||||||
| Prepaid expenses, deposits, inventories, and other assets | ||||||||||||
| Income taxes refundable | ||||||||||||
| Income taxes payable | ||||||||||||
| Trade accounts payable | ( | ) | ( | ) | ( | ) | ||||||
| Accrued expenses and other liabilities | ( | ) | ( | ) | ||||||||
| Net cash provided by operating activities | ||||||||||||
| INVESTING ACTIVITIES: | ||||||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from disposition of equipment | ||||||||||||
| Sales of marketable equity securities | ||||||||||||
| Purchases of marketable equity securities, net of return of capital | ( | ) | ||||||||||
| Net cash provided by (used in) investing activities | ( | ) | ( | ) | ||||||||
| FINANCING ACTIVITIES: | ||||||||||||
| Borrowings under line of credit | ||||||||||||
| Repayments under line of credit | ( | ) | ( | ) | ( | ) | ||||||
| Borrowings of long-term debt | ||||||||||||
| Repayments of long-term debt | ( | ) | ( | ) | ( | ) | ||||||
| Borrowings under margin account | ||||||||||||
| Repayments under margin account | ( | ) | ( | ) | ||||||||
| Repurchases of treasury stock | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from exercise of stock options | ( | ) | ||||||||||
| Net cash (used) provided by financing activities | ( | ) | ( | ) | ||||||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||||||
| CASH AND CASH EQUIVALENTS—Beginning of year | ||||||||||||
| CASH AND CASH EQUIVALENTS—End of year | $ | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION— | ||||||||||||
| Cash paid during the period for: | ||||||||||||
| Interest | $ | $ | $ | |||||||||
| Income taxes | $ | $ | $ | |||||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES— | ||||||||||||
| Purchases of revenue equipment included in accounts payable | $ | $ | $ | |||||||||
| See notes to consolidated financial statements. |
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.
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 $
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, 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 $
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 | - | ||||
| Office furniture and equipment | - | ||||
| Revenue equipment | - | ||||
| Structures and improvements | - | ||||
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 $
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.
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 $
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
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.
| 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.
| 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 | $ | $ | ||||||
| Unbilled | ||||||||
| Current estimated credit losses | ( | ) | ( | ) | ||||
| Total accounts receivable—net | $ | $ | ||||||
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 | $ | $ | $ | |||||||||
| Provision for bad debts | ||||||||||||
| Charge-offs | ( | ) | ( | ) | ||||||||
| Balance—end of year | $ | $ | $ | |||||||||
| 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 | $ | $ | ||||||
| Cost | ||||||||
| Unrealized gain | $ | $ | ||||||
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 | $ | $ | ||||||
| Gross unrealized losses | ||||||||
| Net unrealized gains | $ | $ | ||||||
For the years ended December 31, 2025, 2024 and 2023, the Company recognized dividends of approximately $
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 | $ | $ | $ | |||||||||
| Cost of securities sold | ||||||||||||
| Realized (losses) / gains | $ | $ | $ | |||||||||
At December 31, 2025, the Company’s investments’ approximate fair value of securities in a loss position and related gross unrealized losses were $
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 outstanding borrowings under its margin account.
| 5. | ACCRUED EXPENSES AND OTHER LIABILITIES |
Accrued expenses and other liabilities at December 31 are summarized as follows:
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Payroll | $ | $ | ||||||
| Taxes—other than income | ||||||||
| Interest | ||||||||
| Driver escrows | ||||||||
| Self-insurance claims and legal reserves | ||||||||
|
| ||||||||
| Other liabilities | ||||||||
| Total accrued expenses and other liabilities | $ | $ | ||||||
The Company’s accounts payable as of December 31, 2025 is $
| 6. | CLAIMS LIABILITIES |
The Company maintains cargo insurance coverage to protect it from certain business risks. This policy has a per occurrence deductible of $
Since September 1, 2020, the Company has been self-insured for certain layers of auto liability claims in excess of $
During the fourth quarter of 2025, the Company recorded a $
The Company has self-insurance status for workers’ compensation coverage in Arkansas, Florida, Ohio, Oklahoma, and Mississippi with a $
| 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) | ||||||||
| Real estate financing (3) | ||||||||
| Total long-term debt | ||||||||
| Less current maturities | ( | ) | ( | ) | ||||
| Long-term debt—net of current maturities | $ | $ | ||||||
| (1) | Line of credit agreement with a bank provides for maximum borrowings of $ |
| (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 |
| (3) | Real estate financing consisting of an installment obligation for the purchase of real estate in Laredo, TX, payable in |
The Company has provided letters of credit to third parties totaling approximately $
Scheduled annual maturities on long-term debt outstanding at December 31, 2025, are:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
| 8. | NONCASH INVESTING AND FINANCING ACTIVITIES |
The Company financed approximately $
| 9. | CAPITAL STOCK |
The Company's authorized capital stock consists of
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
On April 3, 2025, the Company commenced a tender offer to repurchase up to
On April 24, 2024, the Company commenced a tender offer to repurchase up to
The Company accounts for Treasury stock using the cost method, and as of December 31, 2025,
| 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 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 | $ | $ | $ | |||||||||||||||||||||
| Shipments to or from Mexico | ||||||||||||||||||||||||
| Shipments to or from Canada | ||||||||||||||||||||||||
| Total | $ | % | $ | % | $ | % | ||||||||||||||||||
Our five largest customers, for which we provide carrier services covering a number of geographic locations, accounted for approximately
We also provide transportation services to other manufacturers who are suppliers for automobile manufacturers. Approximately
Accounts receivable from the three largest customers totaled approximately $
| 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.
| 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 | ( | ) | ||
| Foreign | ||||
| Total (loss) before income taxes | $ | ( | ) | |
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 | $ | $ | $ | |||||||||
| State | ||||||||||||
| Total current income tax provision | ||||||||||||
| Deferred: | ||||||||||||
| Federal | ( | ) | ( | ) | ||||||||
| State | ( | ) | ( | ) | ||||||||
| Total deferred income tax provision | ( | ) | ( | ) | ||||||||
| Total income tax provision expense | $ | ( | ) | $ | ( | ) | $ | |||||
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 | $ | ( | ) | |||||
| State income taxes, net of federal income tax effect (1) | ( | ) | ||||||
| Tax Credits | ||||||||
| Federal fuel tax credit | ( | ) | ||||||
| Nontaxable and nondeductible items | ||||||||
| Nondeductible per-diem paid to drivers | ( | ) | ||||||
| Dividend received deduction | ( | ) | ||||||
| Other | ( | ) | ||||||
| Other Adjustments | ( | ) | ||||||
| Total income tax (benefit) expense | $ | ( | ) | % | ||||
| (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. |
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 | $ | ( | ) | $ | ||||||||||||
| Federal income tax effects of: | ||||||||||||||||
| State income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Nondeductible per diem and meals | ( | ) | ||||||||||||||
| Other | ( | ) | ||||||||||||||
| Federal income tax provision | ( | ) | ||||||||||||||
| State income tax provision | ( | ) | ||||||||||||||
| Total income tax (benefit) expense | $ | ( | ) | $ | ||||||||||||
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 | $ | $ | ||||||
| Unrealized gains on securities | ||||||||
| Prepaid expenses | ||||||||
| Total deferred tax liabilities | ||||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryover | ||||||||
| Accrued Expenses | ||||||||
| Current expected credit losses | ||||||||
| Disallowed interest expense under Sec. 163(j) | ||||||||
| Other | ||||||||
| Total deferred tax assets | ||||||||
| Net deferred tax liability | $ | $ | ||||||
Income taxes paid, net of refunds received, during the year ended December 31, 2025 were as follows:
| 2025 | ||||
| (in thousands) | ||||
| Federal | ||||
| State | ||||
| Arkansas | ||||
| Tennessee | ||||
| Louisiana | ||||
| Alabama | ||||
| Pennsylvania | ||||
| Georgia | ||||
| Other (net refund) | ( | ) | ||
| Total income taxes paid, net of refunds | $ | |||
Income taxes paid, net of refunds received totaled $
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 $
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 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 years and as a result, the Company’s tax years 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,
In January 2025, the Company granted awards of restricted stock units representing
In May 2025, the Company granted
In August 2025, the Company granted awards of restricted stock units representing
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,
During May 2024, the Company issued
During February 2023, the Company granted
During May 2023, the Company granted
During 2025, 2024 and 2023, there were grants of stock options and there were outstanding stock options at December 31, 2025 or December 31, 2024. At December 31, 2025, approximately
The grant date fair value of stock and stock options vested during 2025, 2024 and 2023 was approximately $
| 2026 | $ | |||
| 2027 | $ | |||
| 2028 | $ | |||
| 2029 | $ | |||
| 2030 | $ |
Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $
Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits was approximately $
There were 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 | $ | |||||||
| Granted | ||||||||
| Canceled/forfeited/expired | ( | ) | ||||||
| Vested | ( | ) | ||||||
| Nonvested—December 31, 2025: | $ | |||||||
| 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 | $ | ( | ) | $ | ( | ) | $ | |||||
| Basic weighted average common shares outstanding | ||||||||||||
| Dilutive effect of common stock equivalents | ||||||||||||
| Diluted weighted average common shares outstanding | ||||||||||||
| Basic (loss) earnings per share | $ | ( | ) | $ | ( | ) | $ | |||||
| Diluted (loss) earnings per share | $ | ( | ) | $ | ( | ) | $ | |||||
| 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
| 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 $
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 $
| 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 years and in October 2025, the Company entered into an operating lease for terminal space for an initial term of 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 $
Scheduled amounts and timing of cash flows arising from operating lease payments at December 31, 2025, are:
| (in thousands) | ||||
| Maturity of Lease Liabilities | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 and Thereafter | ||||
| Total undiscounted operating lease payments | $ | |||
| Less: Imputed interest | ( | ) | ||
| Present value of operating lease liabilities | $ | |||
| Balance Sheet Classification | ||||
| Right-of-use assets (recorded in ) | $ | |||
| Current lease liabilities (recorded in other current liabilities) | $ | |||
| Long-term lease liabilities (recorded in ) | ||||
| Total operating lease liabilities | $ | |||
| Other Information | ||||
| Weighted-average remaining lease term for operating leases (in years) | ||||
| Weighted-average discount rate for operating leases | % | |||
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.
Cash Paid for Operating Leases
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Right-of-Use leases | $ | $ | ||||||
| Short-term leases (1) | ||||||||
| Total | $ | $ | ||||||
(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 to
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 $
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 $
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) | $ | $ | $ | |||||||||
| Leased building space revenue (recorded in non-operating income) | ||||||||||||
| Total lease revenue | $ | $ | $ | |||||||||
Lease Receivable
Future minimum operating lease payments receivable at December 31, 2025:
| (in thousands) | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 & Thereafter | ||||
| Total future minimum lease payments receivable | $ | |||
Lease Payments to Related Parties
Payments to related parties of $
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 $
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 $
| 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 | $ | $ | $ | $ | ||||||||||||||||||||||||||||
During 2025 and 2024, there were no transfers of marketable securities between levels of fair value measurement.
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 | $ | $ | $ | $ | ||||||||||||
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 $
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 $
Amounts owed to the Company by these affiliates were approximately $
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and our principal financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our chief executive officer and our principal financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and our principal financial and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.
There were no changes in our internal control over financial reporting that occurred during the last quarter of the period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
PAMT CORP
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of PAMT CORP (a Nevada corporation) and subsidiaries (the “Company”) 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”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated March 12, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/S/ GRANT THORNTON LLP
Tulsa, Oklahoma
March 12, 2026
During the three months ended December 31, 2025, of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable
PART III
Portions of the information required by Part III of Form 10-K are, pursuant to General Instruction G(3) of Form 10-K, incorporated by reference from our definitive proxy statement which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days of the end of our fiscal year 2025.
Item 10. Directors, Executive Officers and Corporate Governance.
The information presented under the captions “Election of Directors,” “Executive Compensation,” “Delinquent Section (a) Reports,” “Corporate Governance – Code of Ethics,” “Corporate Governance – Director Nominating Process” and “Corporate Governance – Board Committees,” in the proxy statement is incorporated herein by reference.
The information presented under the captions “Executive Compensation,” “Corporate Governance – Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” in the proxy statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information presented under the caption “Security Ownership of Certain Beneficial Owners and Management” in the proxy statement is incorporated herein by reference.
Equity Compensation Plan Information
The following table summarizes, as of December 31, 2025, information about compensation plans under which equity securities of the Company are authorized for issuance:
| Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights(1) (a) |
Weighted-average exercise price of outstanding options, warrants and rights(1) (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) |
|||||||||
| Equity Compensation Plans approved by Security Holders |
174,105 | - | 1,432,500 | |||||||||
| Equity Compensation Plans not approved by Security Holders |
- | - | - | |||||||||
| Total |
174,105 | - | 1,432,500 | |||||||||
(1) Consists of unvested shares of restricted stock, which do not require the payment of an exercise price.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information presented under the captions “Transactions with Related Persons” and “Corporate Governance – Director Independence” in the proxy statement is incorporated here by reference.
Item 14. Principal Accounting Fees and Services.
The information presented under the caption “Independent Public Accountants – Principal Accountant Fees and Services” in the proxy statement is incorporated here by reference.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
| (a) |
Financial Statements and Schedules. |
| (1) |
Financial Statements: See Part II, Item 8 hereof. |
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 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
| (2) |
Financial Statement Schedules. |
All schedules for which provision is made in the applicable accounting regulations of the SEC are omitted as the required information is inapplicable, or because the information is presented in the consolidated financial statements or related notes.
| (3) |
Exhibits. |
| Exhibit # |
Description of Exhibit |
|
| 3.1 |
||
| 3.2 |
||
| 4.1 |
||
| 10.1 |
(1) |
|
| 10.2 |
(1) |
|
| 10.3 |
(1) |
|
| 10.4 |
(1) |
|
| 10.5 |
(1) |
|
| 10.6 |
||
| 10.7 |
||
| 10.8 |
||
| 10.9 |
||
| 10.10 |
||
| 10.11 |
||
| 19.1 |
||
| 21.1 |
||
| 23.1 |
||
| 31.1 |
| 31.2 |
||
| 32.1 |
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer |
|
| 97.1 |
||
| 101.INS |
Inline XBRL Instance Document |
|
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
|
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
| 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|
| (1) Management contract or compensatory plan or arrangement. |
||
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PAMT CORP |
|||
| Dated: March 12, 2026 |
By: |
/s/ Lance K. Stewart | |
| LANCE K. STEWART |
|||
| President and Chief Executive Officer |
|||
| (principal executive officer) |
|||
| Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
|||
| Dated: March 12, 2026 |
By: |
/s/ Michael D. Bishop | |
| MICHAEL D. BISHOP, Director |
|||
| Dated: March 12, 2026 |
By: | /s/ FREDERICK P. CALDERONE | |
| FREDERICK P. CALDERONE, Director |
|||
| Dated: March 12, 2026 |
By: |
/s/ W. SCOTT DAVIS | |
| W. SCOTT DAVIS, Director |
|||
| Dated: March 12, 2026 |
By: |
/s/ EDWIN J. LUKAS | |
| EDWIN J. LUKAS, Director |
|||
| Dated: March 12, 2026 |
By: |
/s/ Franklin H. McLarty |
|
| FRANKLIN H. MCLARTY, Director |
|||
| Dated: March 12, 2026 |
By: |
/s/ H. Pete Montaño |
|
| H. PETE MONTAÑO, Director |
|||
| Dated: March 12, 2026 |
By: |
/s/ Matthew J. Moroun |
|
| MATTHEW J. MOROUN, Director |
|||
| Dated: March 12, 2026 |
By: |
/s/ Matthew T. Moroun |
|
| MATTHEW T. MOROUN, Director and Chairman of the Board |
|||
| Dated: March 12, 2026 |
By: |
/s/ Lance K. Stewart |
|
| LANCE K. STEWART |
|||
| President and Chief Executive Officer |
|||
| (principal executive officer) |
|||
| Dated: March 12, 2026 |
By: |
/s/ Daniel C. Kleine |
|
| DANIEL C. KLEINE |
|||
| Sr. Vice President-Finance and Treasurer |
|||
| (principal financial and accounting officer) |
|||