PAMT Corp PAMT Form 10-Q filing Q1 FY2026

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Form 10-K for the fiscal year ended December 31, 2025.

BUSINESS OVERVIEW

The Company is a holding company that owns subsidiaries engaged in providing truckload dry van carrier services transporting general commodities throughout the continental United States, as well as in certain Canadian provinces. The Company’s consolidated operating subsidiaries also provide transportation services in Mexico under agreements with Mexican carriers. Unless the context otherwise requires, this report presents information regarding the Company and its subsidiaries on a consolidated basis. The Company’s administrative headquarters are in Tontitown, Arkansas. From this location we manage operations conducted through our wholly owned subsidiaries based in various locations around the United States and in Mexico and Canada.

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.

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 and has determined that both our truckload operations and our brokerage/logistics operations have similar qualitative and quantitative economic characteristics and are impacted by virtually the same economic factors, such as rates per mile, equipment utilization and the percentage of non-compensated miles. 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.

Truckload services revenues, excluding fuel surcharges, represented 63.8% and 67.6% of total revenues, excluding fuel surcharges, for the quarters ended March 31, 2026, and 2025, respectively. The remaining operating revenues, before fuel surcharges, for the same periods were generated from brokerage and logistics services, representing 36.2% and 32.4%, respectively.

The main factors that impact our profitability on the expense side are the costs incurred in transporting freight for our customers. Currently, our most challenging costs include fuel, driver recruitment, training, wage and benefits costs, independent broker costs (which we record as purchased transportation), insurance, maintenance and capital equipment costs.

In discussing our results of operations, we use revenue, before fuel surcharge (and fuel 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 the three months ended March 31, 2026 and 2025, approximately $19.2 million and $18.6 million, respectively, of the Company’s total revenue was generated from fuel surcharges. We may 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 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. Fuel costs are reported net of fuel surcharges.

THREE MONTHS ENDED MARCH 31, 2026 VS. THREE MONTHS ENDED MARCH 31, 2025

During the first quarter of 2026, truckload services revenue, before fuel surcharges, decreased 15.3% to $78.3 million, compared to $92.4 million for the first quarter of 2025. The decrease was primarily due to a 7.0% decline in rate per mile, from $2.04 for the quarter ended March 31, 2025 to $1.90 for the quarter ended March 31, 2026, as well as a 5.8% decrease in the average number of manned trucks during the period. The impact of the reduction in manned trucks was partially offset by a 5.8% increase in truck utilization, as measured by miles per truck per day.

Salaries, wages and benefits increased from 41.3% of revenues, before fuel surcharges, in the first quarter of 2025 to 47.1% of revenues, before fuel surcharges, during the first quarter of 2026. 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 decreased from 25.8% of revenues, before fuel surcharges, during the first quarter of 2025 to 23.5% of revenues, before fuel surcharges, during the first quarter of 2026. The decrease was primarily due to a quarter-over-quarter decrease in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers.

Insurance and claims expense increased from 5.1% of revenues, before fuel surcharges, during the first quarter of 2025 to 6.5% of revenues before fuel surcharges, during the first quarter of 2026. This increase relates primarily to an increase in accident reserves recognized in the first quarter of 2026, as compared to the first quarter of 2025, as well as lower operating revenues, which reduced the leverage of certain fixed-cost elements of insurance and claims expense.

Other operating expenses increased from 4.5% of revenues, before fuel surcharges, during the first quarter of 2025 to 7.4% of revenues, before fuel surcharges, during the first quarter of 2026. The increase was primarily due to lower operating revenues, which reduced the leverage of certain fixed costs included in other operating expenses, such as supplies and advertising expense, as well as an increase in legal and professional expenses during the first quarter of 2026, primarily associated with general operational support initiatives.

Gain on sale or disposal of assets increased from 3.3% of revenues, before fuel surcharges, for the quarter ended March 31, 2025 to 19.3% of revenues, before fuel surcharges, for the quarter ended March 31, 2026. The increase was primarily due to a $12.7 million gain recognized on the sale of certain real property in Laredo, Texas, to a related party during the first quarter of 2026. The property consisted of land and operating facilities previously used in the Company’s trucking operations and was sold at a value determined based on an independent third-party appraisal. Gain on sale or disposal of assets for the first quarter of 2025 consisted solely of gains on the disposal of used revenue equipment. Excluding this transaction, gain on sale or disposal of assets for the first quarter of 2026 would have been consistent with historical levels.

Non-operating income increased from 2.7% to 4.3% of revenues, before fuel surcharges, for the periods presented. The increase was primarily due to net realized gains on the sale of marketable equity securities during the current quarter, partially offset by unrealized losses from declines in the market value of the Company’s investment portfolio.

Interest expense increased from 4.2% of revenues, before fuel surcharges, during the first quarter of 2025 to 5.4% of revenues, before fuel surcharges, during the first quarter of 2026. The increase is attributed to the Company’s increased weighted-average interest rate on debt from 5.04% during the first quarter of 2025 to 5.38% during the first quarter of 2026, 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 the first quarter of 2026, 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, decreased from 110.9% for the first quarter of 2025 to 103.0% for the first quarter of 2026.

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.

THREE MONTHS ENDED MARCH 31, 2026 VS. THREE MONTHS ENDED MARCH 31, 2025

During the first quarter of 2026, logistics and brokerage services revenue, before fuel surcharges, was $44.4 million, consistent with $44.3 million during the first quarter of 2025. The relatively flat performance was primarily related to a 4.2% increase in the number of brokered loads, offset by lower spot market rates during the first quarter of 2026 as compared to the prior-year period.

Rents and purchased transportation decreased from 88.4% of revenues, before fuel surcharges, during the first quarter of 2025 to 86.0% of revenues, before fuel surcharges, during the first quarter of 2026. The decrease was primarily due to lower purchased transportation costs, reflecting improved spread between customer rates and third-party carrier costs.

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, improved from 98.0% for the first quarter of 2025 to 95.4% for the first quarter of 2026.

RESULTS OF OPERATIONS – COMBINED SERVICES

THREE MONTHS ENDED MARCH 31, 2026 VS. THREE MONTHS ENDED MARCH 31, 2025

Net loss for all divisions was approximately $0.01 million, or (0.01)% of revenues, before fuel surcharges, for the first quarter of 2026 as compared to net loss of $8.1 million, or (6.0)% of revenues, before fuel surcharges, for the first quarter of 2025. The reduction in net loss resulted in diluted loss per share of $(0.00) for the first quarter of 2026 as compared to diluted loss per share of $(0.37) for the first quarter of 2025.

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 the first three months of 2026, we used $2.7 million in cash from operating activities. Investing activities generated $28.7 million in cash in the first three months of 2026. Financing activities used $20.7 million in cash in the first three months of 2026.

Our primary use of funds is for the purchase of revenue equipment. We typically use installment notes with fixed interest rates and terms ranging from 36 to 84 months, our existing line 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 the first three months of 2026, we utilized cash on hand, long-term debt, and our line of credit to finance purchases of revenue equipment and other assets of approximately $14.4 million. In addition, we acquired approximately $7.4 million of revenue equipment through vendor-direct financing arrangements during the first three months of 2026. This non-cash financing arrangement provides an additional source of liquidity for acquiring new equipment but does not result in cash inflows or outflows and, accordingly, is not reflected in the consolidated statement of cash flows.

During the remainder of 2026, we expect to purchase approximately 550 new trucks and 600 new trailers while continuing to sell or trade older equipment, which we expect to result in net capital expenditures of approximately $78.8 million.

We currently intend to retain our future earnings to finance our growth and do not anticipate paying cash dividends in the foreseeable future. However, we may from time to time repurchase shares of our outstanding common stock, subject to economic and market conditions, available cash flows and other factors.

During the first three months of 2026, 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% (7.02% at March 31, 2026), 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 March 31, 2026, we had no outstanding borrowings against the line of credit and approximately $0.2 million of outstanding letters of credit, with availability to borrow $59.8 million.

Trade accounts receivable increased by approximately $12.9 million from $66.9 million as of December 31, 2025 to $79.8 million as of March 31, 2026. The increase was primarily due to the timing of cash collections on revenue recognized during the latter part of the first quarter of 2026, which remained outstanding at quarter-end, as compared to the fourth quarter of 2025.

Our marketable equity securities portfolio decreased $7.7 million during the first quarter of 2026, from $48.5 million at December 31, 2025 to $40.8 million at March 31, 2026. The decrease was primarily attributed to the sale of marketable equity securities approximating $11.7 million, offset by the unrealized appreciation in the fair value of the remaining portfolio of $4.0 million. At March 31, 2026, the remaining marketable equity securities have a combined cost basis of approximately $22.1 million and a combined fair market value of approximately $40.8 million.

Property and equipment decreased from $792.4 million at December 31, 2025 to $760.0 million at March 31, 2026. The decrease is primarily due to the disposition of aging trucks and trailers, as well as the sale of certain real property located in Laredo, Texas to a related party, which had a cost basis of $11.4 million, during the first quarter of 2026. These decreases were partially offset by purchases of new trucks and trailers during the first quarter of 2026.

Accounts payable decreased from $32.8 million as of December 31, 2025 to $28.0 million as of March 31, 2026. The decrease was primarily due to the payment of invoices during the first quarter of 2026 related to revenue equipment purchases outstanding at December 31, 2025.

Long-term debt and current maturities of long term-debt are reviewed on an aggregate basis, as the classification of amounts in each category are typically affected merely by the passage of time. Long-term debt and current maturities of long-term debt, on an aggregate basis, decreased from $333.9 million at December 31, 2025 to $320.7 million at March 31, 2026. The decrease was primarily due to scheduled principal payments and the repayment of approximately $6.0 million of debt associated with the sale of certain real property in Laredo, Texas to a related party, during the first quarter of 2026, partially offset by new financing arrangements for revenue equipment.

NEW ACCOUNTING PRONOUNCEMENTS

See Note B to the condensed consolidated financial statements for a description of the most recent accounting pronouncements and their impact, if any, on the Company.

Item 3. 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 is 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. The 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 the current market price of such securities. The recorded value of marketable equity securities decreased to $40.8 million at March 31, 2026 from $48.5 million at December 31, 2025. 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 $4.1 million. For additional information with respect to the marketable equity securities, see Note D to our condensed consolidated financial statements.

Interest Rate Risk

Our line of credit bears interest at a floating rate equal to SOFR plus a fixed percentage. Accordingly, changes in SOFR, which are affected by changes in interest rates, or a change to a new index rate, 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 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 $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 in 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% increase in the exchange rate would increase our annual operating expenses by $1.1 million.

Item 4. Controls and Procedures.

Evaluation of disclosure controls and procedures. Our management, with the participation of our chief executive officer and chief 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 principal financial officer concluded that, as of March 31, 2026, 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 principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in internal controls 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 quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

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. 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 were previously 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. During the three months ended March 31, 2026, the Company finalized a 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 was executed by all parties on March 30, 2026 and resolves all claims related to this matter. For additional information regarding this settlement agreement, see Note L to our condensed consolidated financial statements.

Item 1A. Risk Factors.

There have been no material changes to the Company’s risk factors as previously disclosed in Item 1A to Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Repurchases of Equity Securities

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. Since the reauthorization, the Company has repurchased 27,155 shares of its common stock under this repurchase program.

The following table summarizes the Company’s common stock repurchases during the first quarter of 2026. No shares were purchased during the quarter other than through this program, and all purchases were made by or on behalf of the Company and not by any “affiliated purchaser.”

(1) The Company’s stock repurchase program does not have an expiration date.

Item 5. Other Information.

Rule 10b5-1 Trading Arrangements

During the three months ended March 31, 2026, none 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.

23

FILINGSOURCEITEMBOUNDARYBEGIN Item 6. Exhibits. FILINGSOURCEITEMBOUNDARYEND

SIGNATURES

25