MRTN 10-K & 10-Q changes, risk factors and insider trading

ItLastly, it is not possible to predict the effects of actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against any foreign state, heightened security requirements or other related events and the subsequent effects on the economy or on consumer confidence in the United States, or the impact, if any, on our future results of operations.

Ongoing insurance and claims expenses could significantly affect our earnings. Our future insurance and claims expense might exceed historical levels, which could reduce our earnings. We self-insure for a portion of our claims exposure resulting from workers’ compensation, auto liability, general liability, cargo and property damage claims, as well as employees’ health insurance. We also are responsible for our legal expenses relating to such claims. We reserve currently for anticipated losses and expenses. We periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts. For a detailed discussion of our self-insurance programs, including self-insurance retention limits, please refer to Note 1 to the consolidated financial statements, included in Part II, Item 8 of this Annual Report.

We maintain insurance with licensed insurance carriers above the amounts for which we self-insure withand licensedoutside insuranceof carriers.certain liability tiers for which we retain liability. Although we believe the aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed our aggregate coverage limits. Insurance carriers have significantly raised premiums for trucking companies due, in part, to the increase in the number of nuclear verdicts in trucking accident cases. As a result, our insurance and claims expense has increased. If these expenses increase, or if we experience a claim in excess of our coverage limits, or we experience a claim for which coverage is not provided, results of our operations and financial condition could be materially and adversely affected.

If demand declines for our used revenue equipment, it could result in decreased equipment sales, resale values and gains on sales of assets. The market for used revenue equipment is subject to a number of factors, including fluctuations in demand and prices. We do not have any agreements with tractor manufacturers pursuant to which they agree to repurchase our tractors or guarantee a residual value. As such, we are sensitive to changes in used equipment prices and demand, especially with respect to tractors. Reduced demand for used equipment could result in a lower volume of sales or lower sales prices, either of which could negatively affect our gains on sales of assets. We have seen a softening of the used equipment market, which could lead to a lower gain on sale.

We may be adversely affected by the physical effects of climate change as well as legal, regulatory or market responses to climate change concerns. Risks associated with climate change are subject to increasing societal, regulatory and political focus. Shifts in weather patterns caused by climate change may lead to an increase in the frequency, severity or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures or flooding, which could cause more significant business interruptions, damage to our revenue equipment and facilities, reduced workforce availability, increased costs, increased liabilities and decreased revenue than what we have experienced in the past from such events. For example, severe sustained heat in multiple regions of the United States during therecent summeryears of 2023has resulted in increased fuel expense due to decreased engine fuel efficiency and increased idling, along with additional damage and wear on tires. In addition, increased public and political concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change and greenhouse gas emissions such as carbon dioxide, a by-product of burning fossil fuels such as those used in our tractors and in the refrigeration units on our trailers and formerly on our containers, which could include the adoption of more stringent environmental laws and regulations or stricter enforcement of existing laws and regulations. Due to such increased concerns, there could be an increase in regulation from federal, state and local governments related to our carbon footprint, including with respect to vehicle engine emissions. This increase in regulation could result in increased direct costs, such as taxes, fees, fuel, or capital costs, or changes to our operations in order to comply. There is also a focus from regulators and our customers on sustainability issues. This focus may result in new legislation or customer requirements, such as limits on vehicle weight and size or energy source. TheIn October 2023, the State of California recently passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us,us. startingFollowing inlegal challenges and due to a high volume of public comments, the California Air Resources Board, has delayed issuing draft regulations pursuant to these laws until the first quarter of 2026. Additionally, on March 6, 2024, the SEC adopted climate-related disclosure rules,rules which couldbecame increasethe compliancesubject burdens and associated regulatory costs and complexity. Followingof a number of petitionslegal forchallenges. reviewOn filedMarch against27, the SEC, on April 4, 2024,2025 the SEC issuedvoted anto orderend stayingits defense of the proposed rules, though the rules pendinghave judicialnot review.been formally withdrawn. While we are continuing to monitor the evolution of these rules, it is difficult to predict when and to what extent they may impact us. Costs associated with future climate change concerns or environmental laws and regulations and sustainability requirements could have a material adverse effect on our operations and operating results.

We are subject to risks associated with public health crises, such as pandemics and epidemics, which could negatively impact our business and results of operations. Our operations are subject to risks related to pandemics, epidemics or other infectious disease outbreaks and government responses thereto. COVID-19,The whichCOVID-19 waspandemic, initiallyfor declared a pandemic by the World Health Organization on March 11, 2020 and was declared no longer a global health emergency on May 5, 2023,example, negatively affected economic conditions, supply chains, labor markets and demand for certain shipped goods.

The extent to which our business, results of operations and financial condition may be negatively affected by the COVID-19 pandemic or future pandemics, epidemics or other outbreaks of infectious diseases is highly uncertain and will depend on numerous evolving factors that we cannot predict, including, but not limited to (i) the duration and severity of the infectious disease outbreak; (ii) the imposition of restrictive measures to combat the outbreak and slow disease transmission; (iii) the introduction of financial support measures to reduce the impact of the outbreak on the economy; (iv) volatility in the demand for and price of oil and gas; (v) shortages or reductions in the supply of essential goods, services or labor; and (vi) fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the availability of credit. We cannot predict the effect that an outbreak of a new COVID-19 variant or strain, or any future infectious disease outbreak, pandemic or epidemic may have on our business, results of operations and financial condition, which could be material and adverse.

The conflict between Russia and Ukraine, conflicts in the Middle East, potential conflict between IsraelChina and Hamas,Taiwan and the expansion of such conflicts to other areas or countries or similar conflicts could adversely impact our business and financial results. Although we do not have any operations outside of North America, we may be affected by the broader consequences of the ongoing international conflicts or expansion of such conflicts to other areas or countries or similar conflicts elsewhere, such as, increased inflation, supply chain issues, including access to parts for our revenue equipment, embargoes, geopolitical shift, access to diesel fuel, higher energy prices, potential retaliatory action by the Russian or other governments and the extent of the conflict’s effect on the global economy. The magnitude of these risks cannot be predicted, including the extent to which these conflicts may heighten other risks disclosed herein. Any of the above-mentioned factors could materially adversely affect our business and financial results.

The DOT, through the Federal Motor Carrier Safety Administration, or FMCSA, imposes safety and fitness regulations on us and our drivers. In December 2010, the FMCSA introduced the Compliance, Safety, Accountability, or CSA, system to measure and evaluate the on-road safety performance of commercial carriers and individual drivers. CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently putting in place changes to generally simplify the agency’s safety and fitness regulations.regulations using an enhanced safety prioritization methodology.

Our business is subject to the risk of litigation, which may adversely affect our business and operating results. We are subject to litigation resulting from trucking accidents. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and could impact our insurance costs. In particular, the trucking industry has seen a trend of nuclear verdicts, resulting in the payment of substantial damages for claims related to trucking accidents. Additionally, a number of trucking companies, including us, have been subject to lawsuitslawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants.

The outcome of litigation, particularly class action lawsuits, is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. Not all claims are covered by our insurance, and there can be no assurance that our coverage limits will be adequate to cover all amounts in dispute. To the extent we experience claims that are uninsured, exceed our coverage limitslimits, involve significant aggregate use of our self-insured retention amounts or cause increases in future premiums, the resulting expense could have a materially adverse effect on our business and operating results.

If we are unable to retain our executive officers and key management employees, our business, financial condition and results of operations could be adversely affected. We are highly dependent upon the services of our executive officers and key management employees, including our Chairman of the Board and Chief Executive Officer. Currently, we do not have employment agreements with these employees and the loss of their services for any reason could have a materially adverse effect on our operations and future profitability. We have entered into agreements with our executive officers that require us to provide compensation to them in the event of termination of their employment without cause in connection with or within a certain period of time after a “change in control” of our Company. In addition, we must continue to develop and retain a core group of managers if we are to realize our goal of expanding our operations and continuing our growth. While our Board regularly engages in succession planning for our Chairman of the Board and Chief Executive Officer and executive leadership team, there is no guarantee that a candidate or plan will be successful. Although we strive to reduce the potential negative impact of any such changes, the loss of any executive officers or key management employees could result in disruptions to our operations. In addition, hiring, training and successfully integrating replacement personnel, whether internal or external, could be time consuming, may cause additional disruptions to our operations and may be unsuccessful, which could negatively impact our business, financial condition and results of operations.

We have strategically transitioned from a refrigerated long-haul carrier to a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our sixcurrent five distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. As discussed in Note 13, our Intermodal operations were sold effective September 30, 2025.

Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the United States Department of Transportation, or DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers.

Operating results of our MRTN de Mexico businessbusiness, which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carrierscarriers, is reported within our Truckload and Brokerage segments.

Our operating revenue decreased $167.7$80.1 million, or 14.8%,8.3%, in 20242025 from 2023.2024. Our operating revenue, net of fuel surcharges, decreased $132.0$61.0 million, or 13.6%,7.3%, compared with 2023.2024. Truckload segment revenue, net of fuel surcharges, decreased 4.6%3.6% from 2023,2024, primarily due to a decrease in our average revenuefleet persize, tractor,partially despiteoffset by an increase in our average fleetrevenue size.per tractor. Dedicated segment revenue, net of fuel surcharges, decreased 20.3%11.4% from 2023,2024, primarily due to decreasesa decrease in both our average fleet sizesize, andpartially offset by an increase in our average revenue per tractor. Intermodal segment revenue, net of fuel surcharges, decreased 34.8%41.9% from 2023,2024, primarily due to decreasesa decrease in both our number of loads and our revenue per load.loads. Brokerage segment revenue decreasedincreased 11.8%2.6% from 2023,2024, primarily due to an increase in our number of loads, partially offset by a decrease in our revenue per load. Fuel surcharge revenue decreased to $104.7 million in 2025 from $123.7 million in 2024 from $159.4 million in 2023.2024.

Our profitability is impacted by the variable costs of transporting freight for our customers, fixed costs, and expenses containing both fixed and variable components. The variable costs include fuel expense, driver-related expenses, such as wages, benefits, training and recruitment, and independent contractor costs, which are recorded under purchased transportation. Expenses that have both fixed and variable components include maintenance and tire expense and our cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs relate to the acquisition and subsequent depreciation of long-term assets, such as revenue equipment and operating terminals. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of higher prices of new equipment, along with any increases in fleet size. Although certain factors affecting our expenses are beyond our control, we monitor them closely and attempt to anticipate changes in these factors in managing our business. For example, fuel prices have significantly fluctuated over the past several years. We manage our exposure to changes in fuel prices primarily through fuel surcharge programs with our customers, as well as through volume fuel purchasing arrangements with national fuel centers and bulk purchases of fuel at our terminals. To help further reduce fuel expense, we have installed and tightly manage the use of auxiliary power units in our tractors to provide climate control and electrical power for our drivers without idling the tractor engine, and also have improved the fuel usage in the temperature-control units on our trailers. For our IntermodalBrokerage segment and Brokerageformerly segments,our Intermodal segment, our profitability is impacted by the percentage of revenue which is payable to the providers of the transportation services we arrange. This expense is included within purchased transportation in our consolidated statements of operations.

Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. At December 31, 2024,2025, we had $17.3$48.3 million of cash and cash equivalents,equivalents $767.9and an escrow deposit, $767.6 million in stockholders’ equity and no long-term debt outstanding. In 2024,2025, net cash flows provided by operating activities of $134.8$93.5 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $146.8$40.0 million, to pay cash dividends of $19.5$19.6 million and to constructpurchase andother upgrade regional operating facilitiesassets in the amount of $4.3$2.9 million, resulting in a $35.9$31.0 million decreaseincrease in cash and cash equivalents.equivalents and an escrow deposit. We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $150$92 million in 2025.2026. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 20242025 which totaled $19.5$19.6 million. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.

Salaries, wages and benefits consist of compensation for our employees, including both driver and non-driver employees, employees’ health insurance, 401(k) plan contributions and other fringe benefits. These expenses vary depending upon the size of our Truckload, Dedicated and Intermodal tractor fleets, the ratio of company drivers to independent contractors, our efficiency, our experience with employees’ health insurance claims, changes in health care premiums and other factors. Salaries, wages and benefits expense decreased $37.1 million, or 9.8%, in 2024 from 2023. This decrease resulted primarily from both lower company driver compensation expense of $29.5 million and non-driver compensation expense of $3.6 million.

Purchased transportation consists of amounts payable to railroads and carriers for transportation services we arrange in connection with Brokerage and Intermodal operations and to independent contractor providers of revenue equipment. This category will vary depending upon the amount and rates, including fuel surcharges, we pay to third-party railroad and motor carriers, the ratio of company drivers versus independent contractors and the amount of fuel surcharges passed through to independent contractors. Purchased transportation expense decreased $30.2 million in total, or 15.1%, in 2024 from 2023. Amounts payable to carriers for transportation services we arranged in our Brokerage segment decreased $13.7 million to $122.4 million in 2024 from $136.1 million in 2023, primarily due to a decrease in our cost per load. Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $31.6 million in 2024 from $47.5 million in 2023, primarily due to a decrease in the number of loads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased $649,000 in 2024.

Fuel and fuel taxes decreased by $33.3 million, or 18.5%, in 2024 from 2023. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) decreased $3.6 million, or 9.7%, to $33.5 million in 2024 from $37.1 million in 2023. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $10.0 million from $16.0 million in 2023. The United States Department of Energy, or DOE,DOE national average cost of fuel decreased to $3.76 per gallon from $4.21 per gallon in 2023. Despite this price decrease, our net fuel expense increased to 4.8% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in 2024 from 4.6% in 2023. We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers. Auxiliary power units, which we have installed in our company-owned tractors, provide climate control and electrical power for our drivers without idling the tractor engine.

Supplies and maintenance consist of repairs, maintenance, tires, parts, oil and engine fluids, along with load-specific expenses including loading/unloading, tolls, pallets and trailer hostling. Our supplies and maintenance expense decreased $4.1 million, or 6.0%, from 2023 primarily due to lower outside repair and loading/unloading costs.

Depreciation relates to owned tractors, trailers, containers, auxiliary power units, communication units, terminal facilities and other assets. The $5.1 million, or 4.3%, decrease in depreciation in 2024 was primarily due to a decrease in our average tractor fleet size, partially offset by higher prices of new equipment. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of continued higher prices of new equipment, which will result in greater depreciation over the useful life.

Gain on disposition of revenue equipment was $5.0 million in 2024, down from $13.6 million in 2023 due to decreases in the average gain for our tractor and trailer sales, despite an increase in the number of units sold. Future gains or losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control.

In August 2019, our Board of Directors approved and we announced an increase from current availability in ourOur existing share repurchase program providing for the repurchase of up to $34.0 million, or approximately 1.8 million shares, of our common stock,program, which was increasedinitially by our Board of Directors to 2.7 million sharesannounced in AugustDecember 20202007, tocurrently reflect the three-for-two stock split effected in the form of a stock dividend on August 13, 2020. On May 3, 2022, our Board of Directors approved and we announced an additional increase from current availability in our existing share repurchase program providingprovides for the repurchase of up to $50.0 million, or approximately 3.1 million shares,shares of our common stock. The share repurchase program allows purchases on the open market or through private transactions in accordance with Rule 10b-18 of the Securities Exchange Act.Act of 1934, as amended. The timing and extent to which we repurchase shares depends on market conditions and other corporate considerations. The repurchase program does not have an expiration date.

We have not repurchased and retired 1.3 millionany shares ofunder commonthis stockprogram for $25.0 million in the first quarter of 2022, and 963,000 shares of common stock for $16.8 million insince the second quarter of 2022. We did not repurchase any shares in 2024, in 2023, or in the third or fourth quarters of 2022. As of December 31, 2024,2025, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.

In 2025, net cash flows provided by operating activities of $93.5 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $40.0 million, to pay cash dividends of $19.6 million and to purchase other assets in the amount of $2.9 million, resulting in a $31.0 million increase in cash and cash equivalents and an escrow deposit. In 2024, net cash flows provided by operating activities of $134.8 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $146.8 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $4.3 million, resulting in a $35.9 million decrease in cash and cash equivalents. In 2023, net cash flows provided by operating activities of $164.4 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $163.9 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $8.6 million, resulting in a $27.4 million decrease in cash and cash equivalents. In 2022, net cash flows provided by operating activities of $219.5 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $120.9 million, to repurchase and retire 2.3 million shares of our common stock for $41.8 million, to pay cash dividends of $19.6 million and to construct and upgrade regional operating facilities in the amount of $11.2 million, resulting in a $23.6 million increase in cash and cash equivalents.

We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $150$92 million in 2025.2026. This amount includes commitments to purchase $191.2$31.1 million of new revenue equipment, prior to considering proceeds from dispositions. Additionally, operating lease obligations total $627,000$510,000 through 2028. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2025 which totaled $19.6 million, and in each quarter of 2024 and 2023 which totaled $19.5 million in each year, and in each quarter of 2022 which totaled $19.6 million.year. We currently expect to continue to pay quarterly cash dividends in the future. The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.

Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million. OurThe previouscurrent credit agreement prohibited us from making such payments in excess of 25% of our net income from the prior fiscal year. A waiver allowing stock redemptions and dividends in excess of the 25% limitation in total amounts of up to $80 million in 2022 was obtained from the lender in March 2022. The current and previous credit agreements also containcontains restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at December 31, 20242025 and December 31, 2023.2024.

Auto Liability and Workers’ Compensation Claims Reserves. We self-insure for our portion of claims exposure resulting from auto liability and workers’ compensation claims. We renewed our liability insurance policies effective June 1, 20242025, and are responsible for the first $3.0 million on each auto liability claim. For the policy year effective June 1, 2024, we are responsible for the first $2.0 million on each auto liability claimclaim. withFor both policy years, we are also responsible for an annual $5.0 million aggregate for claims between $10.0 million and $20.0 million. For the policy years effective June 1, 2022 and June 1, 2023, we are responsible for the first $1.0 million on each auto liability claim with no aggregates. We continue to be responsible for the first $750,000 on each workers’ compensation claim. Additionally, we have $23.1$24.1 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities. We maintain insurance coverage with licensed insurance carriers for per-incident and total losses in excess of thesethe riskamounts retentionfor levelswhich we self-insure up to specified policy limits and outside of certain liability tiers for which we retain liability. The level of our insurance coverage is in amounts we consider adequate based upon historical experience and our ongoing review. However, we could suffer a series of losses within our self-insured retention limits or losses over our policy limits which could negatively affect our financial condition and operating results. Our auto liability and workers’ compensation claims expense and the related claims reserves will vary primarily based upon the frequency and severity of our accident experience. The total auto liability and workers’ compensation claims reserves within the insurance and claims accruals in our consolidated balance sheets were $37.5$35.9 million and $40.3$37.5 million as of December 31, 20242025 and 2023,2024, respectively. The excess of the insurance and claims accruals over these amounts relates to general liability, cargo and property damage claims, along with reserves for physical damage to our equipment and outstanding employees’ health insurance claims.

There have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in theour Annual Report on Form 10-K for the year ended December 31, 2025, except for anin updateour ofForm 10-Q for the followingquarter riskended factor:March 31, 2026.

The following discussion and analysis of our financial condition and results of operations should be read together with the selected consolidated financial data and our consolidated condensed financial statements and the related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those included in our Form 10-K, Part I, Item 1A for the year ended December 31, 2025, and in thisour Form 10-Q, Part II, Item 1A.1A for the quarter ended March 31, 2026. We do not assume, and specifically disclaim, any obligation to update any forward-looking statement contained in this report.

Our operating revenue decreased $19.6$26.0 million, or 8.8%,5.7%, in the first threesix months of 2026 from the first threesix months of 2025. Our operating revenue, net of fuel surcharges, decreased $18.6$37.2 million, or 9.5%,9.3%, compared with the first threesix months of 2025. Truckload segment revenue, net of fuel surcharges, decreased 0.9%0.3% from the first threesix months of 2025, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. Dedicated segment revenue, net of fuel surcharges, decreased 14.8%14.5% from the first threesix months of 2025, also primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. Brokerage segment revenue increased 5.0%2.4% from the first threesix months of 2025, primarily due to an increase in our number of loads, partially offset by a decrease in our revenue per load. Intermodal segment revenue, net of fuel surcharges, decreased 100% from the first threesix months of 2025. Fuel surcharge revenue decreasedincreased to $26.4$64.7 million in the first threesix months of 2026 from $27.4$53.5 million in the first threesix months of 2025.

Our operating income declined 72.8%45.4% to $1.6$8.5 million in the first threesix months of 2026 from $5.9$15.6 million in the first threesix months of 2025. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 99.2%98.0% in the first threesix months of 2026 and 97.4%96.6% in the first threesix months of 2025. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 99.1%97.7% in the first threesix months of 2026 from 97.0%96.1% in the first threesix months of 2025. Our net income declined 68.1%41.7% to $1.4$6.7 million, or $0.02$0.08 per diluted share, in the first threesix months of 2026 from $4.3$11.5 million, or $0.05$0.14 per diluted share, in the first threesix months of 2025.

Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. At MarchJune 31,30, 2026, we had $74.8$109.0 million of cash and cash equivalents and an escrow deposit, $764.2$766.0 million in stockholders’ equity and no long-term debt outstanding. In the first threesix months of 2026, net cash flows provided by operating activities oftotaled $33.0$60.7 millionmillion. wereNet cash flows provided by investing activities totaled $9.1 million, primarily reflecting proceeds from the sale of used to purchase new revenue equipment, net of proceedspurchases fromof dispositions,new equipment. In addition, the Company paid $9.8 million in thecash amountdividends. As a result of $2.7these million and to pay cash dividends of $4.9 million, resulting in a $26.5 million increase inactivities, cash and cash equivalents and an escrow deposit.deposit increased by $60.7 million during the period. We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $100$109 million for the remainder of 2026. Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first threetwo monthsquarters of 2026, which totaled $4.9$9.8 million. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.

Comparison of Three Months Ended MarchJune 31,30, 2026 to Three Months Ended MarchJune 31,30, 2025

Our operating revenue decreased $19.6$6.4 million, or 8.8%,2.8%, to $203.5$223.5 million in the 2026 period from $223.2$229.9 million in the 2025 period. Our operating revenue, net of fuel surcharges, decreased $18.6$18.5 million, or 9.5%,9.1%, to $177.2$185.2 million in the 2026 period from $195.8$203.8 million in the 2025 period. This decrease in the 2026 period was primarily due to aan $9.2$8.8 million decrease in Dedicated revenue, net of fuel surcharges, a $796,000 decrease in Truckload revenue, net of fuel surcharges, a $1.7 million increase in Brokerage revenue and a $10.3$10.1 million decrease in Intermodal revenue, net of fuel surcharges. Fuel surcharge revenue decreasedincreased to $26.4$38.3 million in the 2026 period from $27.4$26.1 million in the 2025 period.

Truckload segment revenue increased $999,000,$9.8 million, or 1.0%,9.2%, to $105.4$116.3 million in the 2026 period from $104.4$106.5 million in the 2025 period. Truckload segment revenue, net of fuel surcharges, decreasedincreased $796,000,$237,000, or 0.9%,0.3%, to $89.3$92.7 million in the 2026 period from $90.1$92.5 million in the 2025 period, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor.tractor, partially offset by a decrease in our average fleet size. The operating ratio was 100.9%97.9% in the 2026 period and 100.3%97.8% in the 2025 period. Impacting the 2026 period operating ratio was higher fuel costs,costs and a lower gain on disposition of revenue equipment, partially offset by lower company driver compensation,compensation bothand insurance and claims costs, all as a percentage of revenue, along with the improved average revenue per tractor.

Dedicated segment revenue decreased $10.2$4.6 million, or 13.8%,6.4%, to $63.5$67.3 million in the 2026 period from $73.6$71.9 million in the 2025 period. Dedicated segment revenue, net of fuel surcharges, decreased 14.8%,14.3%, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. The operating ratio increased to 97.4%96.4% in the 2026 period from 93.4%92.4% in the 2025 period. Impacting the 2026 period operating ratio was higher fuel,fuel non-driver compensationcosts and a lower gain on disposition of revenue equipment, partially offset by lower insurance and claims and company driver compensation costs, all as a percentage of revenue, partiallyalong offsetwith bythe increasedimproved average revenue per tractor.

Brokerage segment revenue increased $1.70.2% million,and orwas 5.0%, to $34.7$39.9 million in each of the 2026 period from $33.0 million in theand 2025 period,periods, primarily due to an increase in our number of loads, partially offset by a decrease in our revenue per load. The operating ratio in the 2026 period of 97.4%94.8% was up from 93.5%93.2% in the 2025 period. This increase was primarily due to an increase in the amounts payable to carriers for transportation services which we arrangedarranged, andpartially higheroffset by lower insurance and claims costs, both as a percentage of revenue.

Fuel and fuel taxes increased by $790,000,$13.2 million, or 2.4%,40.4%, in the 2026 period from the 2025 period. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) increased $518,000,$187,000, or 6.7%,2.3%, to $8.2$8.5 million in the 2026 period from $7.7$8.3 million in the 2025 period. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $658,000$1.0 million from $1.9$1.8 million in the 2025 period. The United States Department of Energy, or DOE, national average cost of fuel increased to $4.12$5.35 per gallon from $3.63$3.56 per gallon in the 2025 period. This price increase primarily drove the increase in our net fuel expense to 5.8% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in the 2026 period from 4.7%5.1% in the 2025 period. We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers. Auxiliary power units, which we have installed in our company-owned tractors, provide climate control and electrical power for our drivers without idling the tractor engine.

Insurance and claims consist of the costs of insurance premiums and accruals we make for claims within our self-insured retention amounts, primarily for personal injury, property damage, physical damage to our equipment, cargo claims and workers’ compensation claims. These expenses will vary primarily based upon the frequency and severity of our accident experience, our self-insured retention levels and the market for insurance. The $132,000,$6.5 million, or 1.0%,41.3%, decrease in insurance and claims in the 2026 period was primarily due to a decreasedecreases in our self-insured auto liability, brokerage liability and workers’ compensation claim costs, partiallyalong offsetwith by increasesdecreases in both our self-insured costs of physical damage claims related to our revenue equipment and brokeragein claiminsurance costs.premiums. Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods which could materially impact our financial results depending on the frequency, severity and timing of claims.

The table below reflects our net cash flows provided by operating activities, net cash flows provided by/(used for) investing activities and net cash flows used for financing activities for the periods indicated.

We have not repurchased any shares under this program since the second quarter of 2022. As of MarchJune 31,30, 2026, future repurchases of up to $33.2 million were available in the share repurchase program.

We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $100$109 million for the remainder of 2026. This amount includes commitments to purchase $130.4$127.3 million of new revenue equipment, prior to considering proceeds from dispositions. We are also committed to new revenue equipment purchases of $31.2$32.8 million in 2027. Additionally, operating lease obligations total $434,000$358,000 through 2028. Quarterly cash dividends of $0.06 per share of common stock were paid in each of the first two quarters of 2026 and 2025, which totaled $4.9$9.8 million in each period. We currently expect to continue to pay quarterly cash dividends in the future. The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.

In August 2022, we entered into a credit agreement that provides for an unsecured committed credit facility with an aggregate principal amount of $30.0 million which matures in August 2027. The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended. In June 2026, the credit agreement was amended to increase the aggregate principal amount to $35.0 million. At MarchJune 31,30, 2026, there was no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $24.1$33.2 million and remaining borrowing availability of $5.9$1.8 million. At December 31, 2025, there was also no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $24.1 million on the facility. This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins. The interest rate for the facility that would apply to outstanding principal balances was 6.75% at MarchJune 31,30, 2026.

Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million. The credit agreement also contains restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at MarchJune 31,30, 2026 and December 31, 2025.

Other than our obligations for revenue equipment and operating lease expenditures, along with our outstanding standby letters of credit to guarantee settlement of self-insurance claims, which are each mentioned above, we did not have any material off-balance sheet arrangements at MarchJune 31,30, 2026.