Covenant Logistics Group reports $10.7 million net income for Q3 2026

Cover page 3 changes

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For the quarterly period ended June September 30, 2026

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Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (August 5, (November 4, 2026).

Class A Common Stock, $.01 par value: 20,677,778 20,699,778 shares

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Financial statements 55 changes

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Accounts receivable and contract assets, net of allowance of $ 2,593 in 2026 and $ 2,780 in 2025

Drivers' advances and other receivables, net of allowance of $ 581 577 in 2026 and $ 584 in 2025

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Accrued purchased transportation

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Long-term debt, less current portion

Long-term portion of finance lease obligations, less current portion

Long-term portion of operating lease obligations, less current portion

Insurance and claims accrual, less current portion

Deferred income taxes, net

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Class A common stock, $ .01 par value; 40,000,000 shares authorized; 21,855,878 shares issued and 20,645,461 20,699,778 outstanding as of June September 30, 2026; and 21,855,878 shares issued and 20,370,361 outstanding as of December 31, 2025

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Treasury stock at cost; 1,210,417 1,156,100 and 1,485,517 shares as of June September 30, 2026 and December 31, 2025, respectively ( 30,238 29,351 ) ( 34,584 )

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(In thousands, except per share data)

Six Months Ended June 30,

FOR THE three and six nine months ended June September 30, 2026 and 2025 (In thousands, except per share data)

Three Months Ended June September 30,

Nine Months Ended September 30,

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(Gain) loss on disposition of property and equipment, net

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Income from continuing operations, net of tax

Income from discontinued operations, net of tax

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Income from continuing operations

Income from discontinued operations

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Income from continuing operations

Income from discontinued operations

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(Unaudited and in thousands )

Six Months Ended June 30,

FOR THE three and six nine months ended June September 30, 2026 and 2025 (Unaudited and in thousands )

Three Months Ended June September 30,

Nine Months Ended September 30,

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Unrealized gain (loss) on effective portion of cash flow hedges, net of tax of ($ 45 123 ) and ($ 71 194 ) in 2026 and ($ 23 1 ) and $ 90 88 in 2025, respectively

Reclassification of cash flow hedge gains into statement of operations, net of tax of $ 12 and $ 25 37 in 2026 and $ 21 20 and $ 42 62 in 2025, respectively ( 35 ) ( 60 58 ) ( 71 106 ) ( 120 178 )

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(Unaudited and in thousands)

FOR THE three and six nine months ended June September 30, 2026 and 2025 (Unaudited and in thousands)

For the Three Months Ended June September 30, 2026

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Issuance of restricted shares, net of shares withheld

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Issuance of restricted shares, net of shares withheld

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Cash dividend ($ 0.07 per common share)

Other comprehensive income

Stock-based employee compensation expense

Exercise of stock options

Issuance of restricted shares, net of shares withheld

Balances at September 30, 2026

For the Three Months Ended June September 30, 2025

5 unchanged paragraphs

Issuance of restricted shares, net of shares withheld

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Issuance of restricted shares, net of shares withheld

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Cash dividend ($ 0.07 per common share)

Other comprehensive income

Stock-based employee compensation expense

Issuance of restricted shares, net of shares withheld

Balances at September 30, 2025

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FOR THE six nine months ended June September 30, 2026 and 2025

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Six Months Ended June 30,

Nine Months Ended September 30,

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Deferred income tax benefit (expense)

Income tax expense arising from restricted share vesting and stock options exercised ( 1,724 2,146 ) 314 ( 322 )

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Loss Gain on disposition of property and equipment

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Change in checks outstanding in excess of bank balances

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Note 1: Significant Accounting Policies 7 changes

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Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 2025 , condensed consolidated balance sheet was derived from our audited balance sheet as of that date. Our operating results are subject to seasonal trends when measured on a quarterly basis; therefore, operating results for the six nine months ended June September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 . These condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in our Form 10 -K for the year ended December 31, 2025 .

Revenue, drivers' wages, and other direct operating expenses generated by our Expedited and Dedicated reportable segments are recognized proportionally as the transportation service is performed based on the percentage of miles completed as of the period end. Revenue is recognized on a gross basis at amounts charged to our customers because we control and are primarily responsible for the fulfillment of the promised service. Revenue includes transportation revenue, fuel surcharges, loading and unloading activities, equipment detention, lease revenue and other accessorial services.

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The Company's contracts with customers generally have original expected durations less than one year. Accordingly, the Company has elected the practical expedient to not disclose information about remaining unsatisfied performance obligations.

Contract assets for estimated revenue of in-process services were $ 1.5 million and $ 0.7 million at September 30, 2026 and December 31, 2025, respectively, compared with $ 1.1 million and $ 0.7 million at September 30, 2025 and December 31, 2024, respectively. Contract assets result from revenue recognized as services are performed before the Company's right to consideration becomes unconditional. These contract assets are included in the accounts receivable line item of our condensed consolidated balance sheet. The Company's contracts with customers generally have original expected durations of less than one year. Accordingly, the Company has elected the practical expedient to not disclose information about remaining unsatisfied performance obligations.

Accounts receivable, net were $ 191.7 million and $ 151.8 million at September 30, 2026 and December 31, 2025, respectively, compared to $ 150.4 million and $ 141.6 million at September 30, 2025 and December 31, 2024, respectively. Drivers' advances and other receivables, net were $ 6.0 million and $ 10.2 million at September 30, 2026 and December 31, 2025, respectively, compared with $ 4.8 million and $ 4.0 million at September 30, 2025 and December 31, 2024, respectively.

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Company-Owned Life Insurance

The Company maintains corporate-owned life insurance policies that are held in a rabbi trust to fund its nonqualified deferred compensation plan. The policies are carried at the amounts that could be realized under the insurance contracts as of the balance sheet date, which represent the cash surrender values provided by the insurance carriers. The carrying values of the policies were $ 5.5 million and $ 5.0 million as of September 30, 2026 and December 31, 2025, respectively, and are included in other assets, net in the condensed consolidated balance sheets.

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Note 2: Income Per Share 10 changes

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Income from continuing operations

Income from discontinued operations

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Equivalent shares issuable upon conversion of unvested vested employee stock options

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Net income per share:

Income from continuing operations

Income from discontinued operations

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Diluted income per share: (1)

Income from continuing operations

Income from discontinued operations

1 unchanged paragraph

There were no unvested restricted shares excluded from the calculation of diluted earnings per share as anti-dilutive for the three and six months ended June 30, 2026 . There were no vested or unvested employee stock options excluded from the calculation of diluted earnings per share as anti-dilutive for the three and six nine months ended June September 30, 2026 . For the three and six months ended June 30, 2025. approximately 1,000 and no restricted stock shares of common stock, respectively, and no unvested employee stock options were excluded from the calculation of diluted earnings per share because their effect was anti-dilutive.

Note 3: Fair Value of Financial Instruments 26 changes

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The fair value of the life insurance policies was determined by the underwriting insurance company's valuation models and represents the guaranteed value we would receive upon surrender of these policies as of the reporting date. The life insurance policies are held in a rabbi trust maintained by the Company with the intent to fund its non-qualified deferred compensation plan. The assets of the rabbi trust remain subject to the claims of the Company's general creditors and, therefore, do not represent assets restricted from the Company's use for purposes of fair value measurement. While the trustee is subject to customary administrative provisions that limit assignment of assets within the trust, such provisions do not restrict the Company's ability to access the cash surrender value of the policies and do not materially impact the determination of fair value or the exit price in an orderly transaction. Further, the insurance policies can be surrendered without penalties or charges imposed by the insurance carrier.

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Cash surrender value of life insurance policies

There were no transfers between Level 1, Level 2 and Level 3 during the six nine months ended June September 30, 2026 or for the year ended December 31, 2025.

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Interest rates that are currently available to us for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of our long-term debt, which primarily consists of equipment installment notes. The fair value of our equipment installment notes approximated the carrying value as of June September 30, 2026 , as the weighted average interest rate on these notes approximates the market rate for similar debt. Borrowings under our revolving Credit Facility (as defined herein) approximate fair value due to the variable interest rate on that facility.

The Company uses interest rate swap agreements to manage its exposure to fluctuations in interest rates on variable-rate debt. The interest rate swaps are designated as cash flow hedges and changes in the fair value of the swaps are recognized in accumulated other comprehensive income and reclassified into earnings as the hedged interest payments affect earnings. At September 30, 2026, the swaps had an aggregate notional amount of $ 15.3 million and a fair value asset of $ 1.4 million, of which $ 0.2 million is included in the other short-term assets and $ 1.2 million is included in other assets, net line items of the condensed consolidated balance sheet. At December 31, 2025, the swaps had an aggregate notional amount of $ 16.3 million and a fair value asset of $ 0.8 million, of which $ 0.2 million is included in the other short-term assets and $ 0.6 million is included in other assets, net line items of the condensed consolidated balance sheet. During the three and nine months ended September 30, 2026, amounts reclassified from accumulated other comprehensive income into interest expense, net were gains of less than $ 0.1 million and $ 0.1 million, respectively compared with $ 0.1 million and $ 0.2 million during the three and nine months ended September 30, 2025 respectively.

Contingent consideration arrangements require us to pay up to $ 30.0 million of additional consideration to Lew Thompson & Son Trucking, LLC's ("LTST's") former owners based on LTST's results during the first three calendar years following closing, up to $ 12.0 million of additional consideration to Sims Transport Services, LLC's ("Sims") former owners based on Sims' results during the first four calendar years following closing, and up to $ 5.0 million of additional consideration to the seller of the assets of a small, multi-stop distribution carrier we acquired in February 2025 ( the "Asset Acquisition"). Additionally, the acquisition of assets that are now operating as Star (the "Star Acquisition") requires us to pay additional consideration to the sellers as described in Note 13 "Acquisition of Assets of a Brokerage Business Operating as Star Logistics Solutions".

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During the three and six months ended June 30, 2026 , there were contingent payments made of $ 12.5 million and $ 12.5 million based on LTST's results for the second calendar year following closing and $ 0.3 million and $ 0.6 million as a result of the Asset Acquisition, respectively. Of the $ 13.1 million paid for the contingent consideration liability during 2026, $ 4.8 million was classified as financing cash flows within the condensed consolidated statements of cash flows and $ 8.3 million was classified as operating cash flows within the condensed consolidated statements of cash flows. During the three and six months ended June 30, 2025 , there were contingent payments made of $ 0.1 million and $ 0.1 million as a result of the Asset Acquisition and none and $ 12.5 million based on LTST's results for the first calendar year following closing, respectively. Of the $ 12.6 million paid for the contingent consideration liability during 2025, $ 4.6 million was classified as financing cash flows and $ 8.0 million was classified as operating cash flows within the condensed consolidated statements of cash flows.

For the three months ended June 30, 2026, the fair value of the contingent consideration decreased $ 1.0 million due to the change in the fair value for the Sim's contingent consideration partially offset by an increase of $ 0.3 million due to the change in the fair value for the LTST contingent consideration. The fair value for the LTST contingent consideration for the three months ended June 30, 2025 increased $ 0.7 million. For the six months ended June 30, 2026, the fair value of the contingent consideration decreased $ 1.0 million due to the decrease in the fair value for the Sim's contingent consideration, partially offset by the $ 0.7 million increase in the LTST contingent consideration. The contingent consideration increased $ 5.0 million as a result of the Asset Acquisition and $ 1.4 million due to a change in the fair value for the LTST contingent consideration for the six months ended June 30, 2025 . The adjustment to the fair value of the contingent consideration liability was recorded as a component of general supplies and expenses within the condensed consolidated statements of operations. The contingent consideration liability is included in accounts payable and other long-term liabilities in our condensed consolidated balance sheets.

The following table provides a summary (in thousands) of the contingent consideration payments made during the three and nine months ended September 30, 2026 and 2025:

Three Months Ended Nine Months Ended

September 30, September 30,

LTST $ - $ - $ 12,500 $ 12,500

Asset Acquisition 326 369 972 420

Total contingent consideration payments $ 326 $ 369 $ 13,472 $ 12,920

Of the $ 13.5 million paid for the contingent consideration liability during 2026, $ 5.1 million is classified as financing cash flows within the condensed consolidated statements of cash flows and $ 8.4 million is classified as operating cash flows within the condensed consolidated statements of cash flows. Of the $ 12.9 million paid for the contingent consideration liability during 2025, $ 5.0 million is classified as financing cash flows and $ 7.9 million is classified as operating cash flows within the condensed consolidated statements of cash flows.

The following table provides a summary (in thousands) of the changes in the fair value of the contingent consideration during the three and nine months ended September 30, 2026 and 2025:

Three Months Ended Nine Months Ended

September 30, September 30,

LTST $ 328 $ 710 $ 984 $ 2,130

Sims - - ( 1,000 ) -

Asset Acquisition - - - 5,000

Net change in fair value of contingent consideration $ 328 $ 710 $ ( 16 ) $ 7,130

The adjustment to the fair value of the contingent consideration liability was recorded as a component of general supplies and expenses within the condensed consolidated statements of operations. Of the $ 9.0 million and $ 22.5 million contingent consideration liability reported at September 30, 2026 and December 31, 2025, respectively, $ 5.4 million and $ 13.2 million are included in accounts payable, respectively, and $ 3.6 million and $ 9.3 million are included other long-term liabilities, respectively, in our condensed consolidated balance sheets.

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Contingent consideration $ ( 22,489 ) $ - $ 343 $ 13,146 $ ( 9,000 )

December 31, 2025 Additions Adjustments to fair market value Payments June September 30, 2026

Contingent consideration $ ( 22,489 ) $ - $ 16 $ 13,472 $ ( 9,001 )

Note 4: Segment Information 13 changes

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The following table summarizes our total revenue by our four reportable segments, as used by our CODM in making decisions regarding allocation of resources etc., for the three and six nine months ended June September 30, 2026 and 2025 :

Three Months Ended June September 30, 2026

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Loss Gain on disposition of property and equipment, net

7 unchanged paragraphs

Three Months Ended June September 30, 2025

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Six Months Ended June 30, 2026

Nine Months Ended September 30, 2026

10 unchanged paragraphs

Loss Gain on disposition of property and equipment, net

7 unchanged paragraphs

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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Gain Loss on disposition of property and equipment, net

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Interest expense, net

Income from equity method investment

Income before income taxes

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Note 5: Income Taxes 2 changes

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Our liability recorded for uncertain tax positions as of June September 30, 2026 is unchanged since December 31, 2025 .

The net deferred tax liability of $ 121.1 125.4 million primarily relates to differences in cumulative book versus tax depreciation of property and equipment, partially off-set by net operating loss carryovers and insurance claims that have been reserved but not paid. The carrying value of our deferred tax assets assumes that we will be able to generate, based on certain estimates and assumptions, sufficient future taxable income in certain tax jurisdictions to utilize these deferred tax benefits. If these estimates and related assumptions change in the future, we may be required to establish a valuation allowance against the carrying value of the deferred tax assets, which would result in additional income tax expense. On a periodic basis, we assess the need for adjustment of the valuation allowance. There was no material change to the valuation allowance as June of September 30, 2026 . The Company continues to have a significant amount of reversing temporary differences that can be considered as future sources of taxable income. If these estimates and related assumptions change in the future, we may be required to modify our valuation allowance against the carrying value of the deferred tax assets.

Note 6: Debt 8 changes

Current and long-term debt and lease obligations consisted of the following as of June September 30, 2026 and December 31, 2025 :

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Equipment installment notes; weighted average interest rate of 5.1 % at June September 30, 2026, and 5.1 % at December 31, 2025, due in monthly installments with final maturities at various dates ranging from July 2026 February 2027 to July September 2032, secured by related equipment (1)

Real estate notes; interest rate of 5.4 5.5 % at June September 30, 2026 and 5.6 % at December 31, 2025 due in monthly installments with a fixed maturity at August 2035, secured by related real estate

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We and substantially all of our subsidiaries are parties to the Third Amended and Restated Credit Agreement (the "Credit Facility") with Bank of America, N.A., as agent (the "Agent") and JPMorgan Chase Bank, N.A. (together with the Agent, the "Lenders"). The Credit Facility is a $ 130.0 million revolving credit facility, with an uncommitted accordion feature that, so long as no event of default exists, allows us to request an increase in the revolving credit facility of up to $ 75.0 million subject to Lender acceptance of the additional funding commitment. The Credit Facility includes a letter of credit sub facility in an aggregate amount of $ 105.0 million and a swing line sub facility in an aggregate amount equal to the greater of $ 10.0 million or 10 % of the Lenders' aggregate commitments under the Credit Facility from time-to-time. The Credit Facility matures in on June 17, 2031.

Borrowings under the Credit Facility are classified as either "base rate loans" or "SOFR loans." Base rate loans accrue interest at a base rate equal to the greater of the Agent's prime rate, the federal funds rate plus 0.5 %, or SOFR for a one month period as of such day, plus an applicable margin ranging from 0.25 % to 0.75%; while SOFR loans accrued accrue interest at SOFR, plus an applicable margin ranging from 1.25 % to 1.75 %. The applicable rates are adjusted quarterly based on average pricing availability. The unused line fee is the product of 0.25 % times the average daily amount by which the Lenders' aggregate revolving commitments under the Credit Facility exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility. The obligations under the Credit Facility are guaranteed by us and secured by a pledge of substantially all of our assets, with the notable exclusion of any real estate, revenue equipment pledged under other financing agreements, including equipment installment notes and finance leases, and revenue equipment that we do not designate as being included in the borrowing base.

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We had $ 51.0 35.1 million borrowings outstanding under the Credit Facility as of June September 30, 2026 , undrawn letters of credit outstanding of approximately $ 19.9 19.8 million, and available borrowing capacity of $ 59.1 75.2 million. As of June September 30, 2026 , there were $ 1.0 2.1 million base rate and $ 50.0 33.0 million of SOFR loans. Based on availability as of June September 30, 2026 and December 31, 2025 , there was no fixed charge coverage requirement.

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Pricing for the equipment installment notes is quoted by the respective financial affiliates of our primary revenue equipment suppliers and other lenders at the funding of each group of equipment acquired and include fixed annual rates for new equipment under retail installment contracts. The notes included in the funding are due in monthly installments with final maturities at various dates ranging from July 2026 February 2027 to July September 2032 . The notes contain certain requirements regarding payment, insuring of collateral, and other matters, but do not have any financial or other material covenants or events of default. Additional borrowings from the financial affiliates of our primary revenue equipment suppliers and other lenders are expected to be available to fund new tractors expected to be delivered in 2026 , while any other property and equipment purchases, including trailers, are expected to be funded with a combination of available cash, notes, operating leases, finance leases, and/or from the Credit Facility.

In August 2015, we financed a portion of the purchase of our corporate headquarters, a maintenance facility, and certain surrounding property in Chattanooga, Tennessee by entering into a $ 28.0 million variable rate note with a third -party lender. The note contains certain restrictions and covenants that are usual and customary for a note of this nature. Failure to comply with the covenants and restrictions set forth in the note could result in an event of default. Concurrently with entering into the note, we entered into an interest rate swap to effectively fix the related interest rate to 4.2 %. We expect to be were in compliance with our required debt covenants for the next 12 months. as of September 30, 2026 .

Other information 24 changes

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Thereafter 2,100 321

Total minimum lease payments $ 36,388 $ 4,159

Lease obligations, long-term $ 19,486 $ 2,258

As of June September 30, 2026 and December 31, 2025 , we had right-of-use assets of $ 30.3 27.4 million and $ 35.5 million for operating leases and $ 2.9 4.9 million and $ 2.8 million for finance leases, respectively. Finance leases are included in net property and equipment in our condensed consolidated balance sheets. Operating lease right-of-use asset amortization is included in revenue equipment rentals and purchased transportation, communications and utilities, and general supplies and expenses, depending on the underlying asset, in the condensed consolidated statement of operations. Amortization of finance leased assets is included in depreciation and amortization expense in the condensed consolidated statement of operations.

Our future minimum lease payments as of June September 30, 2026 , are summarized as follows by lease category:

Thereafter 2,102 356

Total minimum lease payments $ 32,722 $ 4,019

Less: amount representing interest ( 4,256 3,658 ) ( 923 954 )

Present value of minimum lease payments $ 32,132 29,064 $ 3,236 3,065

Less: current portion ( 12,646 12,498 ) ( 978 1,254 )

Lease obligations, long-term $ 16,566 $ 1,811

( 1 ) Excludes the six nine months ended June September 30, 2026 .

We lease certain revenue equipment and real estate to third parties under operating and sales-type lease arrangements. Revenue equipment arrangements generally consist of trailers leased to customers under agreements with varying contractual terms. Our real estate arrangements primarily consist of office, parking, warehouse and other property leased or subleased to third parties. Operating lease income is recognized on a straight-line basis over the lease term in freight revenue and general supplies and expense.

Certain revenue equipment leases are classified as sales-type leases when the terms of the arrangement result in the transfer of control of the underlying equipment to the lessee. At lease commencement, we derecognize the underlying asset and recognize a net investment in the lease and any related selling profit or loss. The net investment in sales-type leases is presented in drivers' advances and other receivables, net and other assets, net in our condensed consolidated balance sheets. Interest income on our net investment in sales-type leases is recognized over the lease term in a manner that produces a constant periodic rate of return on the remaining net investment and is reported in interest expense, net in our condensed consolidated statement of operations.

A summary of our lease income for the three and nine months ended September 30, 2026 and 2025 is as follows:

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,

Operating lease income $ 889 $ 418 $ 2,625 $ 1,278

Sales-type lease selling profit - - - 1

Interest income on net investment in sales-type lease 2 3 8 4

Total lease income $ 891 $ 421 $ 2,633 $ 1,283

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The Incentive Plan permits annual awards of shares of our Class A common stock to executives, other key employees, consultants, non-employee directors, and eligible participants under various types of options, restricted stock, or other equity instruments. As of June September 30, 2026 , there were 1,537,726 1,484,216 shares available for award under the Incentive Plan. No awards may be made under the Incentive Plan after May 1, 2033. To the extent available, we have issued treasury stock to satisfy all share-based incentive plans.

Included in salaries, wages, and related expenses within the condensed consolidated statements of operations is stock-based compensation reversal expense of less than $ 0.1 0.4 million and expense of $ 0.7 0.9 million for the three months ended June September 30, 2026 and 2025 , respectively, and expense of $ 0.7 1.1 million and $ 1.5 2.4 million for the six nine months ended June September 30, 2026 and 2025 , respectively. Included in general supplies and expenses within the condensed consolidated statements of operations is stock-based compensation expense for non-employee directors of $ 0.3 million and $ 0.2 million for each of the three months ended June September 30, 2026 and 2025 , and $ 0.4 0.7 million and $ 0.6 million for each of the six nine months ended June September 30, 2026 and 2025 , respectively. There were no unvested employee stock options or related stock compensation expense for the three or six nine months ended June September 30, 2026 or 2025 .

During the nine months ended September 30, 2026 , we issued 82,545 shares and 246,872 shares of Class A common stock for vested restricted stock units and exercised stock options, respectively. Of these totals, 27,317 shares and 27,000 shares of Class A common stock, respectively, were issued during the t hree months ended September 30, 2026 .

The Incentive Plan allows participants to pay the federal and state minimum statutory tax withholding requirements related to awards that vest or allows participants to deliver to us shares of Class A common stock having a fair market value equal to the minimum amount of such required withholding taxes. To satisfy withholding requirements for shares that vested through June September 30, 2026 , certain participants elected to forfeit receipt of an aggregate of 143,946 159,636 shares of Class A common stock at a weighted average per share price of $ 20.23 22.64 based on the closing price of our Class A common stock on the dates the shares vested in 2026 , in lieu of the federal and state minimum statutory tax withholding requirements. We remitted $ 2.9 3.6 million to the proper taxing authorities in satisfaction of the employees' minimum statutory withholding requirements.

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Legal proceedings 15 changes

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In 2025, a third -party trucking company hauling a load brokered by Covenant Transport Solutions, LLC, and using a trailer owned by Landair Leasing, Inc. was involved in an accident in Texas that resulted in five fatalities and injuries to at least one other person. There are several possible defendants in the case, facts are still being developed, alleged damages have not been specified, and there are significant factual and legal issues to be resolved. In September 2026, the litigation was remanded from Federal court to Texas state court. The Company has filed a notice of appeal to this decision, and the state court process has been stayed pending the appeal. The Company has concluded that a loss related to this claim is probable, in the litigation in Texas courts, but given the preliminary nature of the proceedings, the Company cannot reasonably estimate a range of possible losses at this time in excess of the amount accrued for legal costs. As of June September 30, 2026 , the Company has recognized approximately $ 1.5 million of legal costs related to this matter, of which approximately $ 0.9 1.3 million has been paid and approximately $0.6 $ 0.2 million has been accrued for estimated costs not yet paid. The Company has separately recognized insurance recovery assets of approximately $ 1.0 million, consisting of approximately $ 0.4 0.8 million for claim-related costs already paid by the Company in excess of its $ 0.5 million policy retention that are expected to be reimbursed by the insurer and approximately $ 0.6 0.2 million for accrued claim-related costs expected to be reimbursed by the insurer when those costs are paid or otherwise settled in the future. The Company has not recorded any other liability related to the accident. To the extent we or any of our subsidiaries is found to have liability related to the accident, and the damages awarded against the Company exceed the Company's coverage limits, involve significant aggregate use of the Company's self-insured retention amounts, or cause increases in the Company's insurance premiums, the Company's insurance and claims expense would be volatile and increase. Any resulting increases in such expenses could have a materially adverse effect on the Company's business, results of operations, financial condition, or liquidity.

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We had $ 19.9 19.8 million of outstanding and undrawn letters of credit as of June September 30, 2026 and December 31, 2025 . The letters of credit are maintained primarily to support our insurance programs.

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As of June September 30, 2026 , we had a revenue equipment operating lease liability to TEL of $ 6.7 6.1 million with final maturities at various dates ranging from April 2029 to August 2029. We received an equity distribution from TEL for $ 3.7 million during the three and nine months ended September 30, 2026, and $ 6.6 million during the year ended December 31, 2025, which was distributed to each member based on its respective ownership percentage. No other transactions with TEL were material for the three or six nine months ended June September 30, 2026 and 2025 .

We have evaluated our interest in TEL under the variable interest entity model including consideration of whether we have (i) the power to direct the activities of TEL that most significantly impact its economic performance and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to TEL. We have determined that we are not the primary beneficiary of TEL because we do not have the power to direct the activities that most significantly impact TEL's economic performance, which are directed by the majority owners in accordance with TEL's operating agreement. While we hold a significant equity interest in TEL, we do not have unilateral or controlling decision-making authority over significant activities. Accordingly, we do not consolidate TEL and have accounted for our investment in TEL using the equity method of accounting, and thus our financial results include our proportionate share of TEL's 2026 net income through June September 30, 2026 , or $ 9.0 14.6 million.

Our accounts receivable from TEL, accounts payable to TEL, and investment in TEL as of June September 30, 2026 and December 31, 2025 are as follows (in thousands):

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Amortization expense of $ 6.0 3.0 million and $ 5.1 2.7 million for the six three months ended June September 30, 2026 and 2025, respectively, and $ 9.0 million and $ 7.8 million for the nine months ended September 30, 2026 and 2025 , respectively, was included in depreciation and amortization in the condensed consolidated statements of operations.

A summary of other intangible assets as of June September 30, 2026 and December 31, 2025 is as follows:

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( 1 ) Excludes the six nine months ended June September 30, 2026 .

The assignment of goodwill and intangible assets to our reportable segments was not complete as of June 30, 2026 due to the October 2025 Star Acquisition. The carrying amount of goodwill was $ 80.6 81.1 million at June September 30, 2026 and $ 80.5 million at December 31, 2025 . A summary of the changes in the carrying amount of goodwill by reportable segment is as follows:

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Balance at June September 30, 2026

At June September 30, 2026 , our insurance program involves self-insurance to certain risk retention levels. We accrue claims above our self-insured retention and record a corresponding receivable for the amounts we expect to collect from insurers upon settlement of such claims. We have $ 3.4 2.0 million and $ 14.6 million at June September 30, 2026 and December 31, 2025, respectively, included in other long-term receivables and as a corresponding accrual in the long-term portion of insurance and claims accruals on our condensed consolidated balance sheet for claims above our self-insured retention for which we believe it is reasonably assured that the insurers will pay their portion of such claims.

On April 23, 2025, our Board approved a stock repurchase authorization of up to $ 50.0 million of our Class A common stock. Under such authorization, we repurchased approximately 1.6 million shares of our Class A common stock for $ 36.2 million during the twelve months ended December 31, 2025 with no such repurchases during the six nine months ended June September 30, 2026 .

On February 5, 2026, our Board declared a cash dividend of $ 0.07 per share which was paid on March 27, 2026, to stockholders of record on March 6, 2026. On May 13, 2026, our Board declared a cash dividend of $ 0.07 per share which was paid on June 26, 2026, to stockholders of record on June 5, 2026. On August 13, 2026, our Board declared a cash dividend of $ 0.07 per share which was paid on September 25, 2026, to stockholders of record on September 4, 2026.

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Since acquisition we recognized measurement period adjustments which increased goodwill recognized for LTST Star by $ 0.1 0.6 million as of June September 30, 2026 primarily related to uncollectible accounts receivable. Goodwill and other intangible assets may change upon The finalization of the valuation of the contingent consideration liability and intangible assets as part of the purchase accounting for the acquisition. The goodwill recognized is attributable primarily to expected cost synergies as a result of overhead support. Refer to Note 11, "Goodwill, Intangibles, and Other Assets" for a summary of changes to goodwill during the period as well as information related to the summary of the other intangible assets which includes the identifiable intangible asset acquired within the Managed Freight reportable segment.

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The pro forma financial information for all periods presented above has been calculated after adjusting the results of Star to reflect the business combination accounting effects resulting from this acquisition, including the amortization expense from acquired intangible assets as though the acquisition occurred as of the beginning of the Company's fiscal year 2025. As noted above, the allocation is preliminary and changes to the value of the contingent consideration and finalization of our valuation could result in changes to the amount of amortization expense from acquired intangible assets included in the pro forma financial information presented above. The Company's historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination and factually supportable. The pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2025.

MD&A 74 changes

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This report contains certain statements that may be considered forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation: any projections of earnings, revenues, or other financial items; any statement of plans, strategies, and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; and any statements of belief and any statements of assumptions underlying any of the foregoing. In this Form 10-Q, statements relating to future impact of accounting standards, future third-party transportation provider expenses, future tax rates, expenses, and deductions, expected freight demand, capacity, and volumes and trucking industry conditions, potential defaults and results of a default and testing of our fixed charge covenant under the Credit Facility or other debt agreements, expected sources, as well as adequacy, of working capital and liquidity (including our mix of debt, finance leases, and operating leases as means of financing revenue equipment), future inflation, future stock repurchases and dividends, if any, expected capital expenditures, allocations, and requirements, future customer relationships, future interest expense, future driver market conditions, including driver satisfaction, future use of independent contractors, expected cash flows, future investments in and growth of our reportable segments and services, future margins of our reportable segments, future rates and prices, future depreciation and amortization, future salaries, wages, and related expenses, including driver compensation, expected net fuel costs, strategies for managing fuel costs, the effectiveness and impact of, and cash flows relating to, our fuel surcharge programs, future fluctuations in operations and maintenance expenses, expected effects and mix of our solo and team operations, future fleet size, management, utilization, upgrades, and age, availability and usage of tractors and trailers, the market value of used equipment, the anticipated impact of our investment in TEL, the future impact of our business model, service standards, strategic plan and other strategic initiatives, changes to and deviations from our business model, strategic plan, and other strategic initiatives, claims and litigation, anticipated levels of and fluctuations relating to insurance and claims expenses, including the erosion of available limits in our aggregate insurance policies, insurance and claims accruals, and the impact of a recent Supreme Court decision discussed in Item 1A of Part II in this Form 10-Q, regarding liability for freight brokers, contingent consideration related to our prior acquisitions, and the future impact of our prior acquisitions, among others, are forward-looking statements. Forward-looking statements may be identified by the use of terms or phrases such as "believe," "may," "could," "would," "will," "expects," "estimates," "projects," "appears," "mission," "anticipates," "plans," " outlook," "focus," "seek," "potential," "continue," "goal," "target," "objective," "optimistic," "intends," "improve," "remain," "strategy," derivations thereof, and similar terms and phrases. Such statements are based on currently available operating, financial, and competitive information. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled "Item 1A. Risk Factors," set forth in this our Form 10-Q for the quarter ended June 30, 2026 and our Form 10-K for the year ended December 31, 2025. Readers should review and consider the factors discussed in "Item 1A. Risk Factors," set forth in this our Form 10-Q for the quarter ended June 30, 2026 and our Form 10-K for the year ended December 31, 2025, along with various disclosures in our press releases, stockholder reports, and other filings with the Securities and Exchange Commission.

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Our second quarter earnings were $0.32 per diluted share, with constructive changes made on the revenue side of the business, but disappointing costs in the quarter. Our strategy remains to pursue durable margin improvement during the current freight market upcycle through committed contracts that phase in over the next several quarters and our goal is to have substantially all our asset-based business under long-term dedicated or other committed contracts by the end of this freight market upcycle.

Net income of $8.5 million, or $0.32 per diluted share, compared with $9.8 million, or $0.36 per diluted share, in the second quarter of 2025;

We were pleased with our third quarter earnings of $0.40 per diluted share. The third quarter reflected strong coordination between our Expedited, Dedicated, and Managed Freight segments as we continued to re-allocate assets to customers that are seeking long-term capacity for their needs and are willing to offer a reasonable return on our meaningful investments in professional drivers, new equipment, and advanced technology. Exiting the third quarter, approximately 80% of our fleet assets were under long-term contracts, and we continue to receive inbound demand from our customers on growing our committed capacity. Repositioning for new contracts created some disruption to utilization and added cost to the Expedited and Dedicated fleets. This was more than countered by higher revenue and operating income in Managed Freight, as our historical brokerage operations successfully sourced capacity for overflow Expedited freight, and the brokerage operations we acquired in the fourth quarter of 2025 had their best quarter as part of the Company. Margin improvement reflected customer rate increases implemented during the first half of the year and lower purchased transportation costs as spot rates eased during the quarter. These improvements followed three consecutive quarters of margin compression.

From a market perspective, freight demand is adequate in most sectors and strong in specific sectors that are aligned with U.S. economic growth. Driver capacity is tight, and the cost of recruiting, retaining, and compensating drivers is increasing significantly. Cost inflation is weighing on nearly every significant line item in our business, including wages and benefits, equipment ownership and maintenance, and technology. In this environment, rate increases have been largely offset by cost increases. However, we expect sequential improvement to continue in the fourth quarter as a higher percentage of our fleet operates under committed arrangements and we incur less repositioning cost.

Our goal is to place substantially all of our asset-based business under long-term dedicated or other committed contracts by the end of this freight market upcycle. Consistent with our strategy, which reduced volatility during the recent freight market downturn, we intend to remain disciplined and patient in pursuing customers and markets that support sustainable long-term value creation.

Additional items of note for the second third quarter of 2026 include the following:

Total revenue of $332.9 $353.9 million, an increase of 9.9% 19.2% compared with the second third quarter of 2025, and freight revenue (which excludes revenue from fuel surcharges) of $294.7 $315.1 million, an increase of 6.6% 17.2% compared with the second third quarter of 2025;

Operating income of $8.8 $12.5 million, compared with $11.6 $7.9 million in the second third quarter of 2025;

Net income of $10.7 million, or $0.40 per diluted share, compared with $9.1 million, or $0.35 per diluted share, in the third quarter of 2025. Of the net income for the third quarter of 2025, $2.8 million, or $0.11 per share, was from discontinued operations;

Our equity investment in TEL provided $5.3 $5.7 million of pre-tax earnings in the second third quarter of 2026 compared to $4.3 $3.6 million in the second third quarter of 2025;

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We were pleased with the recent progress in our top-line results, despite incurring higher costs to serve our customers. Based on our growing pipeline of customer demand, we expect our fleet count to stabilize, our fleet percentage under dedicated and committed capacity contracts to grow, and our margins to expand gradually. Most of our Expedited and Dedicated fleets are under dedicated or similar committed capacity contracts, which will extend our renewal cycle compared with companies that operate largely in the uncommitted market. In the near term, approximately 40% of our Expedited fleet and 25% of our Dedicated fleet are operating under contracts that renew over the next 12 months, with many of these contracts being our least profitable. Additionally, we are intensely focused on reducing overhead and other controllable costs as a percentage of revenue. Despite our safety efforts, insurance and claims expense is expected to remain volatile due to high retention levels, the potential that we could be uninsured, underinsured, or experience claims that fall outside of our insurance coverage, the unpredictability of so-called nuclear verdicts in our industry, and the potential for higher costs and expansion of liability to Managed Freight operations after a recent Supreme Court decision, as discussed in Item 1A of Part II in this Form 10-Q. For the third quarter of 2026, we expect a modest sequential increase to earnings per share as anticipated operating margin improvement is partially offset by the absence of higher TEL equipment sales, lower income tax rate, and interest income that benefitted the second quarter. In the longer term, we are confident in our ability to grow revenue and materially improve our Expedited and Dedicated reportable segments operating margin as we continue offering world-class service to our customers and proactively reallocate assets to operations that we believe will enhance margins and returns.

Since December 31, 2025, total indebtedness, comprised of total debt and finance leases, net of cash, decreased by $6.6 $12.4 million to $289.7 $283.9 million, primarily due to fleet downsizing and selling excess equipment. With available borrowing capacity of $59.1 $75.2 million under our Credit Facility at June September 30, 2026 we do not expect to be required to test our fixed charge covenant in the foreseeable future;

Stockholders' equity at June September 30, 2026, was $412.9 $422.3 million; and

Tangible book value at June September 30, 2026, was $232.7 $244.6 million.

Based on our growing customer pipeline, we expect Dedicated fleet growth, and a stable Expedited fleet with a higher proportion of capacity under dedicated or committed contracts. We are also focused on reducing overhead and other controllable costs as a percentage of revenue, which we expect will support gradual margin expansion. For the fourth quarter of 2026, we expect a modest sequential increase in earnings per share, with anticipated operating margin improvement from our asset-based operations partially offset by lower income from our equity method investment, TEL. Longer term, we believe our strategy can materially improve the combined operating margins of our Expedited and Dedicated reportable segments through continued world-class customer service and disciplined asset reallocation to operations offering higher margins and returns.

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Employee separation costs

Lease abandonment and customer exit costs

Abandonment of long-lived software

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At June September 30, 2026, we operated 2,202 2,178 tractors and 7,142 7,011 trailers. Of such tractors, 2,117 2,107 were owned, 15 were financed under finance or operating leases, and 70 56 tractors were provided by independent contractors, who own and drive their own tractors. Of such trailers, 6,405 6,280 were owned and 737 731 were held under finance or operating leases. At June September 30, 2026, our fleet had an average tractor age of 2.2 years and an average trailer age of 6.1 6.2 years.

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COMPARISON OF three and six nine months ended June September 30, 2026 TO three and six nine months ended June September 30, 2025

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The increase in total revenue for the three months ended June September 30, 2026 compared to 2025 primarily resulted from a $22.0 $49.4 million, $3.9 $3.8 million, and $1.1 $1.9 million increase in freight revenue for Managed Freight, Dedicated, and Warehousing, respectively, partially offset by a $9.5 $9.6 million decrease in freight revenue for Expedited, as well as an $11.9 a $10.8 million increase in fuel surcharge revenue. The increase in total revenue for the six nine months ended June September 30, 2026 compared to 2025 primarily resulted from a $55.9 $105.3 million, $12.8 $16.7 million, and $4.7 $6.6 million increase in freight revenue for Managed Freight, Dedicated, and Warehousing, respectively, partially offset by a $17.8 $27.4 million decrease in freight revenue for Expedited, as well as an $11.0 $21.8 million increase in fuel surcharge revenue.

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Salaries, wages, and related expenses remained relatively even increased on a dollars basis for the three months ended June 30, 2026 compared to the same 2025 period and increased on a dollars basis for the six nine months ended June September 30, 2026 compared to the same 2025 period periods primarily as a result of growth in our Dedicated and Warehousing reportable segments, pay increases since the prior period, and group health expenses, partially offset by a lower percentage of revenue from Expedited. As a percentage of freight revenue for the three and six nine months ended June September 30, 2026, salaries, wages, and related expenses decreased as the foregoing factors increasing these expenses were offset by a lower percentage of revenue from Expedited, where we incur driver pay for team-driven tractors, and a higher percentage of revenue from Managed Freight, where we don't incur driver pay.

We believe driver and non-driver, including shop technicians, pay and benefits will continue to increase as the result of wage inflation, higher healthcare costs, and, in certain periods, increased incentive compensation due to better performance. Driver pay may also fluctuate based on the number of miles driven. While Driver pay remains stable at capacity is tight, and the present time, cost of recruiting, retaining, and compensating drivers is increasing significantly. We have historically put driver pay increases in place as necessary to address driver market pressure and will continue to do so in the future as necessary. If As the freight market rates increase, we would expect to, as we have historically, pass a portion of those rate increases on to our professional drivers. Salaries, wages, and related expenses will fluctuate to some extent based on the percentage of revenue generated by independent contractors and our Managed Freight reportable segment, for which payments are reflected in the purchased transportation line item, as well as the mix of specialized freight (which requires higher driver pay) and commoditized freight.

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Total fuel expense for the three and six nine months ended June September 30, 2026 increased on a dollars basis primarily due to higher fuel prices partially offset by a 15.9% 19.3% and 12.1% 14.5% decrease in total miles, respectively, compared to the 2025 periods. As a percentage of freight revenue for the three and six nine months ended June September 30, 2026, total fuel expense increased as the foregoing factors partially offset a lower percentage of revenue from Expedited, where we incur fuel expense, and a higher percentage of revenue from Managed Freight, where we don't incur fuel expense.

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The rate of fuel price changes also can have an impact on results. Most fuel surcharges are based on the average fuel price as published by the Department of Energy ("DOE") for the week prior to the shipment, meaning we typically bill customers in the current week based on the previous week's applicable index. Therefore, in times of increasing fuel prices, we do not recover as much as we are currently paying for fuel. In periods of declining prices, the opposite is true. Average fuel prices as measured by the DOE wer e $1.43 $2.54 per g allon, or 39.6%, 67.8%, higher for the quarter ended June September 30, 2026 compared with the same quarter in 2025.

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For the periods presented, net fuel expense remained relatively even decreased, including as a percentage of freight revenue, primarily due to improved fuel surcharge recovery compared to the prior periods.

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The increase in operations and maintenance for the three and six nine months ended June September 30, 2026 was primarily the result of the increased average age of tractors, high demands on equipment as we grow our fleet in niche service areas, and increased recruiting costs due to the tight driver market.

Going forward, we believe this category will fluctuate based on several factors, including the condition of the driver market and our ability to hire and retain drivers, the average age of our tractor fleet, accident severity and frequency, weather, the reliability of new and untested revenue equipment models, our mix of specialty and commoditized freight, wage and parts inflation, and any disruption of the supply chain. Our operations and maintenance expenses for the three and six months ended June 30, 2026 were at an elevated level, which we do not expect to continue going forward.

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The increases in revenue equipment rentals and purchased transportation for the three and six nine months ended June September 30, 2026 were primarily the result of the 2025 Star Acquisition and heightened costs associated with securing capacity within the Managed Freight reportable segment, especially during the first half of 2026 until spot rates started to ease during the third quarter of 2026. Additionally, total miles run by independent contractors decreased from 7.1% 7.7% and 7.0% 7.2% for the three and six nine months ended June September 30, 2025, to 6.0% 5.7% and 6.4% 6.1% for the same 2026 periods, respectively.

We expect purchased transportation to fluctuate as volumes in our Managed Freight reportable segment may be volatile. In addition, if fuel prices increase, it would result in a further increase in what we pay third-party providers and independent contractors. However, this expense category will fluctuate with the number and percentage of loads hauled by independent contractors, loads handled by Managed Freight, and tractors, trailers, and other assets financed with operating leases. In addition, factors such as the cost to obtain third party transportation services and the amount of fuel surcharge revenue passed through to the third-party providers and independent contractors will affect this expense category. As industry-wide trucking capacity tightens in relation to freight demand, we have needed to increase the amounts we pay to third-party transportation providers and independent contractors, which increased this expense category on an absolute basis and as a percentage of freight revenue due to heightened costs outpacing our ability to capture contractual rate increases with certain of our customers. This trend may is expected to continue if as capacity tightens further. and we are unable to capture contractual rate increases to cover the heightened costs. If we were to recruit more independent contractors, we would expect this line item to increase as a percentage of revenue.

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On a cents per mile basis, insurance and claims increased decreased to 31.3 17.9 cents per mile and 26.3 increased to 23.6 cents per mile for the three and six nine months ended June September 30, 2026, respectively, compared to 25.1 20.9 cents per mile and 24.5 23.3 for the 2025 periods , respectively. For the three month period, the decrease on a cents per mile basis was primarily due to decreased insurance and claims expense, partially offset by decreased miles. compared to For the same 2025 periods and increased settlements in nine month period, the three months ended June 30, 2026, increase on a cents per mile basis was primarily due to decreased miles, partially offset by reduced insurance and claims expense. during the six months ended June 30, 2026. Miles decreased primarily due to reducing our Expedited fleet as well as weather in 2026. .

Our insurance program includes multi-year policies with specific insurance limits that may be eroded over the course of the policy term. If that occurs, we will be operating with less liability insurance coverage at various levels of our insurance tower and may incur additional premiums. For the policy period that ran from April 1, 2018 to March 31, 2021, the aggregate limits available in the coverage layer $9.0 million in excess of $1.0 million were fully eroded based on claims expense. We replaced our $9.0 million in excess of $1.0 million layer with a new $7.0 million in excess of $3.0 million policy that we continue to maintain. Due to the erosion of the $9.0 million in excess of $1.0 million layer, any adverse developments in claims filed between April 1, 2018 and March 31, 2021, could result in additional expense accruals. As of June September 30, 2026, there were no outstanding claims in this layer. We have maintained our retention and limits set in place during the prior renewal cycle. Due to these developments, we may experience additional expense accruals, increased insurance and claims expenses, and greater volatility in our insurance and claims expenses, which could have a materially adverse effect on our business, results of operations, financial condition, or liquidity.

We expect insurance and claims expense to continue to be volatile over the long-term. The May 2026 United States Supreme Court decision that the Federal Aviation Administration Authorization Act does not preempt state law liability claims against freight brokers could lead to additional volatility in our insurance and claims expense, as discussed in Item 1A of Part II in this our Form 10-Q for the quarter ended June 30, 2026. To the extent damages awarded against us for any claims exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts, are uninsured, or cause increases in our insurance premiums, our insurance and claims expense would be volatile and increase. Any resulting increases in such expenses could have a materially adverse effect on our business, results of operations, financial condition, or liquidity. For additional details regarding our claims accruals, see Note 9, "Commitments and Contingencies" of the accompanying condensed consolidated financial statements.

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For the periods presented, the change in communications and utilities were was insignificant both as a percentage of total revenue and freight revenue.

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For the three and six months ended June September 30, 2026 , general supplies and expenses decreased increased as a result of the $0.7 a $1.2 million increase in legal and other professional service costs compared to the prior 2025 period. This increase was partially offset by the $0.3 million decreases increase in the fair value of the contingent consideration recognized during the 2026 periods, respectively, period, compared to increases the increase of $0.7 million during the same 2025 period. For the nine months ended September 30, 2026 , general supplies and $1.4 expenses decreased as a result of the less than $0.1 million decrease in the fair value of the contingent consideration recognized during the 2026 period, compared to an increase of $2.1 million recognized during the same 2025 periods, period, partially offset by increased technology costs during the 2026 periods. period.

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Depreciation expense decreased $0.6 increased $0.2 million to $19.8 $20.5 million for the three months ended June September 30, 2026 and increased $1.0 $1.2 million to $40.8 $61.3 million for the six nine months ended June September 30, 2026 , compared to $20.3 million and $39.8 $60.1 million in the same 2025 periods. Amortization of intangible assets was $3.0 million and $6.0 $9.0 million for the three and six nine months ended June September 30, 2026 compared to $2.8 $2.7 million and $5.1 $7.8 million for the same 2025 periods. The increase for the three and six nine months ended June September 30, 2026 is due to the amortization of the intangible asset related to the Star Acquisition.

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(Gain) loss on disposition of property and equipment, net

(Gain) loss on disposition of property and equipment, net

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For the periods presented, the change in (gain) loss on disposition of property and equipment, net was insignificant both as a percentage of total revenue and freight revenue.

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We have accounted for our investment in TEL using the equity method of accounting and thus our financial results include our proportionate share of TEL's net income or loss. The change in TEL's contribution to our results for the three and six nine months ended June September 30, 2026 was insignificant for primarily due to equipment leasing growth with better lease rates and improvement in gain on sale of equipment as a result of improvements in the periods presented. used equipment market. For the remainder of 2026, we expect TEL's earnings to remain relatively similar to those of the current period. However, due to TEL's business model, gains and losses on sale of equipment is a normal part of the business and can cause earnings to fluctuate from period to period and therefore our income from investment to similarly fluctuate.

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The decreases increases in income tax expense for the three and six nine months ended June September 30, 2026 were the result of a $2.2 $6.3 million and $4.7 $1.6 million decrease increase in pre-tax income, respectively, compared to the same 2025 periods. The changes in pre-tax income resulted from the aforementioned changes in operating income, interest expense, net, and income from equity method investment.

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COMPARISON O F three and six nine months ended June September 30, 2026 TO three and six nine months ended June September 30, 2025

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The decrease in segment operating income for Managed Freight for the three and six months ended June 30, 2026 was primarily the result of an increase in Managed Freight segment operating expenses partially offset by the aforementioned increase in Managed Freight revenue. The increase in Managed Freight segment operating expenses for the three and six months ended June 30, 2026 was primarily the result of the increases in revenue driving increases in variable expenses, primarily purchased transportation as well as heightened costs associated with securing capacity currently outpacing our ability to capture contractual rate increases with certain of our customers. Going forward, we seek to grow Managed Freight with profitable revenue from new customers from organic initiatives and the Star Acquisition, working closely with our asset-based segments to capitalize on overflow opportunities when available, and optimizing costs to yield longer-term margin goals in the mid-single digits, which would generate an acceptable return on capital given the asset light nature of the business.

The decrease in Expedited revenue for the three months ended June September 30, 2026 relates to a decrease of 17.0% 21.5% in average total tractors compared to the 2025 quarter partially offset by a $5.6 $4.5 million increase in fuel surcharge revenue. Average freight revenue per tractor per week increased 6.8% 12.0% a result of a 25.0 42.0 cents per mile (or 11.8%) 20.0%) increase in average rate per total mile partially offset by a 4.2% 6.5% decrease in average miles per unit compared to the 2025 quarter. Expedited team-driven tractors averaged 659 613 and 806 781 tractors in the second third quarter of 2026 and 2025, respectively. During the quarter, our Expedited fleet continued to transition to multi-year committed capacity agreements.

For the six nine months ended June September 30, 2026 the decrease in Expedited revenue relates to a decrease of 13.8% 16.4% in average total tractors compared to the 2025 period partially offset by a $3.9 $8.4 million increase in fuel surcharge revenue. Average freight revenue per tractor per week increased 3.3% 6.1% compared to the 2025 period as a result of a 16.0 24.0 cents per mile (or 7.5%) 11.4%) increase in average rate per total mile partially offset by a 3.8% 4.5% decrease in average miles per unit as compared to the 2025 period. Expedited team-driven tractors averaged 683 660 and 801 794 tractors in the six nine months ended June September 30, 2026 and 2025, respectively.

The increase in Dedicated revenue for the three months ended June September 30, 2026 relates to an increase in average freight revenue per tractor per week of 8.6% 6.2% partially offset by a 61, 30, or 3.9%, 1.9%, average tractor decrease compared to the 2025 quarter. The increase in average freight revenue per tractor per week was the result of a 47.0 49.0 cents per mile (or 15.4%) 16.0%) increase in average rate per total mile partially offset by a 6.1% 8.3% decrease in average miles per unit compared to the 2025 quarter, as a result of the expansion of our agricultural protein-related business and exiting non-specialized dedicated business that has struggled to meet profitability thresholds.

For the six nine months ended June September 30, 2026 the increase in Dedicated revenue relates to an increase in average freight revenue per tractor per week of 8.5%, 7.8%, partially offset by a 15, 31, or 1.0%, 1.3%, average tractor decrease compared to the 2025 period. The increase in average freight revenue per tractor per week was the result of a 41.0 45.0 cents per mile (or 13.3%) 14.3%) increase in average rate per total mile partially offset by a 4.4% 5.7% decrease in average miles per unit compared to the 2025 period.

For the three and six nine months ended June September 30, 2026, Managed Freight total revenue increased compared to the 2025 periods primarily as a result of the fourth quarter 2025 Star Acquisition with the second quarter of 2026 total revenue partially offset by the benefit of a surge contract and customer rate increases obtained during the second quarter first half of 2025 that was later discontinued. the year.

For the three and six nine months ended June September 30, 2026, Warehousing total revenue increased $1.1 $1.9 million and $4.7 $6.6 million compared to the 2025 periods primarily due to onboarding a significant customer in the fourth quarter of 2025.

The increase in Expedited segment operating income for the three months ended June September 30, 2026 was primarily the result of a decrease in Expedited segment operating expenses partially offset by the aforementioned decrease in revenue. For the six nine months ended June September 30, 2026 the decrease increase in Expedited segment operating income was primarily the result of the aforementioned decrease in revenue, partially offset by a decrease in Expedited segment operating expenses, partially offset by the aforementioned decrease in revenue. The decrease in Expedited segment operating expenses for the three and six nine months ended June September 30, 2026 was primarily the result of decreases in salaries, wages, and benefits for our professional drivers, operations and maintenance, and purchased transportation as compared to the same 2025 periods as a result of fewer average miles per unit and a decrease in the average number of Expedited team-driven tractors. Going forward, As we progress throughout this cycle, our focus in for our Expedited will be on improving margins through rate increases, exiting less profitable business, fleet is to serve customers who truly need our teams and adding more profitable business. are willing to agree to multi-year agreements as a sign of their commitment.

The increase in Dedicated segment operating income for the three and six nine months ended June September 30, 2026 was primarily the result of aforementioned increase in revenue, partially offset by an increase in Dedicated segment operating expenses. The increase in Dedicated segment operating expenses for the three and six nine months ended June September 30, 2026 , was primarily the result of increased salaries, wages, and benefits for our professional drivers, fuel expenses, and operations and maintenance costs since the 2025 periods as a result of productivity from our agricultural protein related fleet which was negatively impacted by avian influenza during the prior year periods as well as exiting non-specialized dedicated business that was below our preferred profitability thresholds. Going forward, we remain focused on our strategy of growing our dedicated fleet, specifically in areas that provide value-added services for customers. We believe that if we are successful in providing best in class service and controlling our costs, growth and improved profitability will result.

The increase in segment operating income for Managed Freight for the three and nine months ended September 30, 2026 was primarily the result of the aforementioned increase in Managed Freight revenue partially offset by an increase in Managed Freight segment operating expenses. The increase in Managed Freight segment operating expenses for the three and nine months ended September 30, 2026 was primarily the result of the increases in revenue driving increases in variable expenses, primarily purchased transportation as well as heightened costs associated with securing capacity. The segment operating income improved compared to the periods last year due to the combination of customer rate increases obtained during the first half of the year and sequentially easing capacity costs experienced during the quarter. As supply continues to exit the freight market, our ability to source quality carrier capacity below contractual freight pricing can be challenging at times, leading to periods of margin compression. Additionally, higher insurance and claims expense has become a greater risk in Managed Freight.

The decrease in segment operating income for Warehousing for the three and six nine months ended June September 30, 2026 is primarily due to startup-related costs and inefficiencies for a significant customer onboarded during the fourth quarter of 2025 that more than offset the aforementioned increase in revenue as well as general labor inflation. Going forward, as activities within this startup normalize, our goal is to have operating income margins in the high-single digit range through a combination of rate increases and cost reductions.

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Our business requires significant capital investments over the short-term and the long-term. Historically, we have financed our capital requirements with borrowings under our Credit Facility, cash flows from operations, long-term operating leases, finance leases, secured installment notes with finance companies, and proceeds from the sale of our used revenue equipment. Going forward, we expect revenue equipment acquisitions to primarily be through purchases and finance leases. Further, we expect to increase our capital allocation toward our Dedicated, Managed Freight, and Warehousing reportable segments to become the go-to partner for our customers' most critical transportation and logistics needs. We had working capital (total current assets less total current liabilities) of $26.6 $31.7 million and $22.8 million at June September 30, 2026 and December 31, 2025, respectively. Our working capital on any particular day can vary significantly due to the timing of collections and cash disbursements. Based on our expected financial condition, net capital expenditures, results of operations, related net cash flows, installment notes, and other sources of financing, we believe our working capital and sources of liquidity will be adequate to meet our current and projected needs, and we do not expect to experience material liquidity constraints in the foreseeable future.

With an average tractor fleet age of 2.2 years at June September 30, 2026, we believe we have flexibility to manage our fleet, and we plan to regularly evaluate our tractor replacement cycle, new tractor purchase requirements, and purchase options. If we were to grow our independent contractor fleet, our capital requirements would be reduced.

As of June September 30, 2026 and December 31, 2025 we had $324.4 $316.7 million and $338.7 million in debt and lease obligations, respectively, consisting of the following:

$51.0 $35.1 million and $30.0 million outstanding borrowings under the Credit Facility;

$222.3 $234.2 million and $251.7 million in equipment installment notes, respectively;

$15.8 $15.3 million and $16.3 million in real estate notes, respectively;

$3.2 $3.1 million and $3.2 million of the principal portion of financing lease obligations, respectively; and

$32.1 $29.1 million and $37.5 million of the operating lease obligations, respectively.

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As of June September 30, 2026, we had $51.0 $35.1 million borrowings outstanding, undrawn letters of credit outstanding of approximately $19.9 $19.8 million, and available borrowing capacity of $59.1 $75.2 million under the Credit Facility. Fluctuations in the outstanding balance and related availability under our Credit Facility are driven primarily by cash flows from operations and the nature and timing of property and equipment additions that are not funded through notes payable, as well as the nature and timing of collection of accounts receivable, payments of accrued expenses, and receipt of proceeds from disposals of property and equipment.

Our net capital expenditures for the six nine months ended June September 30, 2026 totaled $0.2 $18.6 million of expenditures, as compared to $52.8 $88.4 million of expenditures for the six nine months ended June September 30, 2025. During the six nine months ended June September 30, 2026, we took delivery of approximately 181 362 new tractors and 116 154 new trailers, while disposing of approximately 573 799 used tractors and 113 253 used trailers. Net losses gains on disposal of equipment and real estate in were $0.3 million for the six nine months ended June September 30, 2026 and 2025 were $0.6 compared to a net loss of $0.1 million for each period. the nine months ended September 30, 2025. Our current fleet plan for the balance of 2026 ranges from $50.0 $35.0 million to $60.0 $40.0 million, which is a significant reduction compared to 2025. Our expected capital expenditures are subject to change based on growth opportunities in our Dedicated fleet and the potential impacts of tariffs during the year. Our equipment plan reflects our priorities of maintaining the average age of our fleet in a manner that allows us to optimize operational uptime and related operating costs and offer a fleet of equipment that our professional drivers are proud to operate. We expect the benefits of improved utilization, fuel economy and maintenance costs to produce acceptable returns despite increased prices of new equipment and potentially lower values of used equipment. Given the mix change between our high mileage Expedited fleet and lower mileage Dedicated fleets, going forward, we anticipate the average age of our equipment to range from 25 to 28 months.

We distributed a total of $3.5 $5.3 million to stockholders in the first six nine months of 2026 through dividends.

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Net cash flows provided by operating activities decreased to $18.1 $44.9 million for the six nine months ended June September 30, 2026, compared to $46.7 $88.1 million for the same 2025 period. Changes in operating assets and liabilities used $35.5 $43.6 million and $7.7 $3.7 million during the six nine months ended June September 30, 2026 and 2025, respectively, largely due to an increase in the cash used for receivables and advances driven by an increase in our days sales outstanding of 51 days compared to 48 days in the 2025 period. Additionally net income decreased to $13.0 $23.7 million for the six nine months ended June September 30, 2026, compared to $16.4 $25.5 million for the same 2025 period. These increases in cash used during the 2026 period were partially offset by higher non-cash expenses such as adjustments, including deferred income tax expense benefit and depreciation and amortization.

Net cash flows used by investing activities were $0.8 $19.1 million for the six nine months ended June September 30, 2026, compared to $53.5 $89.2 million used in the same 2025 period. The decrease in net cash flows used by investing activities was primarily due to disposing of a large amount of unproductive used revenue equipment and buying very little new equipment, whereby we took delivery of approximately 181 362 new tractors and 116 154 new trailers, while disposing of approximately 573 799 used tractors and 113 253 used trailers during the 2026 period compared to delivery of 385 438 new tractors and 425 440 new trailers, while disposing of approximately 193 615 used tractors and 242 271 used trailers in the same 2025 period.

Net cash flows used by financing activities were $19.7 $27.0 million for the six nine months ended June September 30, 2026, compared to $28.7 $31.9 million used in the same 2025 period. The decrease in net cash used by financing activities was primarily attributable to the absence of common stock repurchases during the 2026 period compared to $35.6 $36.6 million of net common stock repurchases (inclusive of excise tax) in the 2025 period. This decrease in net cash usage was partially offset by net repayments relating to our notes payable and our Credit Facility of $9.0 $13.5 million in the 2026 period compared to net borrowings of $14.0 $16.3 million in the 2025 period.

Net cash flows provided by operating activities included contingent consideration payments related to the LTST acquisition of $8.3 million and $8.0 million during the 2026 and 2025 periods, respectively. Net cash flows used by financing activities included contingent consideration payments of $4.2 million related to the LTST acquisition and $0.6 $1.0 million related to the Asset Acquisition during 2026, compared to contingent consideration payments of $4.5 million related to the LTST acquisition during 2025.

On April 23, 2025, the Board approved a stock repurchase program authorizing the purchase of up to $50 million of the Company's Class A common stock from time-to-time based upon market conditions and other factors. The stock may be repurchased on the open market, in privately negotiated transactions, or other legally permissible means, including pursuant to Rule 10b5-1 trading plans. The Company did not place a limit on the duration of the repurchase program. The stock repurchase program does not obligate the Company to repurchase any specific number of shares, and the Company may suspend or terminate the program at any time without prior notice. There were no shares repurchased during six nine months ended June September 30, 2026 and approximately 1.6 million shares of our class A common stock for $35.2 $36.2 million (excluding excise tax) repurchased during the six nine months ended June September 30, 2025 and the year ended December 31 2025.

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The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires us to make decisions based upon estimates, assumptions, and factors we consider as relevant to the circumstances. Such decisions include the selection of applicable accounting principles and the use of judgment in their application, the results of which impact reported amounts and disclosures. Changes in future economic conditions or other business circumstances may affect the outcomes of our estimates and assumptions. Accordingly, actual results could differ from those anticipated. There have been no material changes to our most critical accounting policies and estimates during the three and six nine months ended June September 30, 2026, compared to those disclosed in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Form 10-K for the year ended December 31, 2025.

Controls and procedures 2 changes

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As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June September 30, 2026.

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There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the three months ended June September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Risk factors 6 changes

Litigation may adversely affect our business, financial condition, and results of operations.

Our business is subject to the risk of litigation by employees, independent contractors, customers, vendors, government agencies, stockholders, and other parties through private actions, class actions, administrative proceedings, regulatory actions, and other processes. Recently, trucking companies, including us, have been and currently are subject to lawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws regarding, among other things, employee meal breaks, rest periods, overtime eligibility, and failure to pay for all hours worked. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants. We operate a business that hauls arms, ammunitions, explosives, and other hazardous materials that could increase our exposure if there were an accident involving this freight.

The outcome of litigation, particularly class action lawsuits and regulatory actions, 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. Additionally, our premiums for certain insurance layers are subject to upward adjustments based on claims experience. To the extent we experience claims that are uninsured, exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts, or cause increases in our insurance premiums, it could lead to increased volatility in our insurance and claims expense and any resulting increases in such expenses could have a materially adverse effect on our business, results of operations, financial condition, or cash flows.

In addition, we may be subject, and have been subject in the past, to litigation resulting from trucking accidents. The number and severity of litigation claims may be worsened by distracted driving by both truck drivers and other motorists. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and increases of our insurance costs.

In the Montgomery v. Caribe Transport II, LLC case, decided in May 2026, the United States Supreme Court (the "Supreme Court") determined that the Federal Aviation Administration Authorization Act does not preempt state law liability claims against freight brokers. As a result of the Supreme Court decision, freight brokers, including certain of our subsidiaries, can be held liable if proven to be negligent or otherwise culpable in connection with selecting or interacting with a motor carrier it selects that injures a plaintiff in a motor vehicle accident. Because the law varies from state-to-state, we may experience inconsistent outcomes depending on where a claim is filed. If we are found liable for the acts or omissions of third‑party providers, we could be subject to significant damages, increased insurance and claims costs, volatility in our results, and other adverse impacts that could be materially adverse to our business, financial condition, and results of operations. For additional clarification, see Note 9, "Commitments and Contingencies" of our condensed consolidated financial statements.

While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. Our Form 10-Q for the quarter ended June 30, 2026 and Form 10-K for the year ended December 31, 2025, in the section sections entitled "Item 1A. Risk Factors," describe some of the risks and uncertainties associated with our business. The information below supplements such risk factors. We are amending and restating in its entirety the risk factor entitled "Litigation may adversely affect our business, financial condition, and results of operations" from our Form 10-K for the year ended December 31, 2025, as set forth below. The risk factor set forth below should be read in conjunction with the risk factors included in our Form 10-K for the year ended December 31, 2025. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects.

Unregistered sales of stock 2 changes

During the quarter ended June September 30, 2026, we did not engage in unregistered sales of securities or any other transactions required to be reported under this Item 2 of Part II on Form 10-Q.

The payment of cash dividends is currently limited by our financing arrangements, including certain covenants under our Credit Facility. We distributed a total of $3.5 $5.3 million to stockholders in the first six nine months of 2026 through dividends.

Exhibits 5 changes

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Twenty-First Amendment to Third Amended and Restated Credit Agreement, dated as of June 17, 2026, among Covenant Logistics Group, Inc., Covenant Transport, LLC, CTG Leasing Company, Covenant Asset Management, LLC, Covenant Transport Solutions, LLC, Star Logistics Solutions, LLC, Covenant Logistics Holdings, Inc., Transport Management Services, LLC, Landair Holdings, Inc., Landair Transport, LLC, Landair Logistics, LLC, Landair Leasing, Inc., AAT Carriers, Inc., Lew Thompson & Son Trucking, LLC, Lew Thompson & Son Dedicated Leasing, LLC, Josh Thompson Trucking, LLC, Lew Thompson & Son Leasing, LLC, Sims Transport Services, LLC, and Bank of America, N.A.

Form of Performance Restricted Stock Unit Award

Form of Executive Severance Agreement (2026)

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Date: August 7, 2026

Date: November 6, 2026

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