UNIVERSAL LOGISTICS HOLDINGS, INC.

Consolidated Balance Sheets

(In thousands, except share data)

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

Unaudited Consolidated Statements of Comprehensive Income

(In thousands)

Unaudited Consolidated Statements of Cash Flows

(In thousands)

Unaudited Consolidated Statements of Stockholders’ Equity

(In thousands, except per share data)

Notes to Unaudited Consolidated Financial Statements

(1)

Basis of Presentation

The accompanying unaudited consolidated financial statements of Universal Logistics Holdings, Inc. and its wholly owned subsidiaries (“Universal”) have been prepared by the Company’s management. In these notes, the terms “us,” “we,” “our,” or the “Company” refer to Universal and its consolidated subsidiaries. In the opinion of management, the unaudited consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. All intercompany transactions and balances have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, should be read in conjunction with the consolidated financial statements as of December 31, 2025 and 2024 and for each of the years in the three-year period ended December 31, 2025 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates, and operating results for the thirteen and twenty-six weeks ended July 4, 2026 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2026.

Our fiscal year ends on December 31 and consists of four quarters, each with thirteen weeks. There were no material changes in significant accounting policies from those described in the Form 10-K, other than as otherwise disclosed in these notes to unaudited consolidated financial statements.

The Company made certain immaterial reclassifications to items in its prior financial statements so that their presentation is consistent with the format in the financial statements for the period ended July 4, 2026. These reclassifications, however, had no effect on reported consolidated net income, comprehensive income, earnings per common share, cash flows, total assets or stockholders’ equity as previously reported.

During the second quarter of 2026, the Company identified certain triggering events related to a group of tractors that are no longer expected to be utilized in revenue-generating activities over their remaining useful life. The Company evaluated this asset group in accordance with ASC 360 Property, Plant, and Equipment and concluded that an impairment was present. The aggregate carrying value of the asset group was $9.4 million with an estimated fair value of $5.5 million. The fair value of the tractor group was based on market data for comparable equipment. As a result of the assessment, during the thirteen weeks ended July 4, 2026, the Company recognized a non-cash impairment charge of $3.9 million in the other non-reportable segment.

Current Economic Conditions

The Company makes estimates and assumptions that affect reported amounts and disclosures included in its financial statements and accompanying notes and assesses certain accounting matters that require consideration of forecasted financial information. The Company's assumptions about future conditions important to these estimates and assumptions are subject to uncertainty, including softness in freight demand, continuing weakness in certain industrial and automotive end markets, labor availability and wage pressures, elevated interest rates and borrowing costs, and volatility in fuel, insurance, equipment and maintenance costs. These factors may adversely affect customer demand, operating margins, capital expenditures, asset utilization, liquidity and the valuation of certain long-lived assets. Actual results could differ materially from the Company’s estimates and assumptions.

(2)

Recent Accounting Pronouncements

In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025‑05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The update provides a practical expedient that permits entities to assume that current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets when estimating expected credit losses. The Company adopted ASU 2025‑05 effective January 1, 2026 and elected the practical expedient. Adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The ASU requires new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions. In addition, the ASU requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses, among other disclosure requirements. This ASU is effective for annual periods beginning in 2027, and for interim periods beginning January 1, 2028. Early adoption is permitted. We are currently evaluating the impact of the new standard, which is limited to financial statement disclosures. Since the impact is expected to be limited to expanded disclosures, management does not expect the standard to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

(3)

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The Company generates revenue primarily from truckload, brokerage, intermodal, dedicated, and value-added logistics services, which are reported separately in the Consolidated Statements of Income.

Truckload services include dry van, flatbed, heavy-haul and refrigerated operations. We transport a wide variety of general commodities, including automotive parts, machinery, building materials, paper, food, consumer goods, furniture, steel and other metals on behalf of customers in various industries.

To complement our available capacity, we also provide customers with freight brokerage services by utilizing third-party transportation providers to move freight.

Intermodal services include rail-truck, steamship-truck and support services. Our intermodal support services are primarily short- to medium-distance delivery of rail and steamship containers between the railhead or port and the customer.

Dedicated services are primarily provided in support of automotive and retail customers using van equipment. Our dedicated services are primarily short-run or round-trip moves within a defined geographic area.

We determine revenue in-transit using the input method, under which revenue is recognized based on the duration of time that has lapsed from the departure date (start of transportation services) to the arrival date (completion of transportation services). Measurement of revenue in-transit requires the application of significant judgment. We calculate the estimated percentage of an order’s transit time that is complete at period end, and we apply that percentage of completion to the order’s estimated revenue.

Value-added services, which are typically dedicated to individual customer requirements, include lift services, material handling, consolidation, sequencing, sub-assembly, cross-dock services, kitting, repacking, warehousing, returnable container management and specialty project development. Value-added revenues are substantially driven by the level of demand for outsourced logistics services and specialty project needs. Major factors that affect value-added service revenue include changes in manufacturing supply chain requirements and production levels in specific industries, particularly the North American automotive and Class 8 heavy-truck industries.

Revenue is recognized as control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to receive in exchange for its services. We have elected to use the “right to invoice” practical expedient to recognize revenue, reflecting that a customer obtains the benefit associated with value-added services as they are provided. The contracts in our value-added services businesses are negotiated agreements, which contain both fixed and variable components. The variability of revenues is driven by volumes and transactions, which are known as of an invoice date. Value-added service contracts typically have terms that extend beyond one year, and they do not include financing components.

During each of the twenty-six week periods ended July 4, 2026 and June 28, 2025, two original equipment manufacturers in the automotive industry accounted for approximately 32% and 30% of our total operating revenues, respectively.

In 2024, the Company completed a specialty project development arrangement for a customer that was accounted for as a single performance obligation. The Company has a related contract receivable with amounts payable in 120 equal monthly installments, including interest. During the thirteen week periods ended July 4, 2026 and June 28, 2025, the Company recorded interest income of $2.5 million and $2.8 million, respectively. During the twenty-six week periods ended July 4, 2026 and June 28, 2025, the Company recorded interest income of $5.1 million and $5.7 million, respectively. As of July 4, 2026, the remaining impact of this arrangement relates primarily to the collection of the related contract receivable and associated interest income.

(4)

Marketable Securities

During the first quarter of 2026, the Company sold its remaining marketable securities portfolio. Historically, marketable equity securities were carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities was determined based on quoted market prices in active markets, as described in Note 9.

The following table sets forth market value, cost basis, and unrealized gains on equity securities (in thousands):

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities (in thousands):

The following table sets forth the Company’s net realized gains (losses) on marketable securities (in thousands):

During the thirteen-week and twenty-six week periods ended June 28, 2025, the Company recognized a net unrealized pre-tax gain (loss) of approximately $(254,000) and $264,000, respectively, on its marketable equity securities portfolio, which was reported in other non-operating income (expense) for the period.

(5)

Allowance for Credit Losses

The allowance for credit losses is our best estimate of the amount of probable credit losses in our existing accounts receivable. We determine the allowance based on historical write-off experience, specific customer collection issues, the aging of our outstanding accounts receivable, and the credit quality of our customers. In determining our allowance for credit losses, we also consider current conditions and forecasts of future economic conditions and their expected impact on collections. Balances are considered past due based on invoiced terms. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Following is a summary of the activity in the allowance for credit losses during the twenty-six weeks ended July 4, 2026 and June 28, 2025 (in thousands):

(6)

Inventories

Included in prepaid expenses and other is inventory used in a portion of our value-added service operations. Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Provisions for excess and obsolete inventories are based on our assessment of excess and obsolete inventory on a product-by-product basis.

At July 4, 2026 and December 31, 2025, inventory consists of the following (in thousands):

(7)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are comprised of the following (in thousands):

(8)

Debt

Debt is comprised of the following (in thousands):

(1)Our Revolving Credit Facility provides us with a revolving credit commitment of up to $500 million. We may borrow under the Revolving Credit Facility until maturity on September 30, 2027, and this indebtedness bears interest at index-adjusted SOFR, or a base rate, plus an applicable margin based on the Company’s leverage ratio. The Revolving Credit Facility is secured by a first-priority pledge of the capital stock of applicable subsidiaries, as well as first-priority perfected security interests in cash, deposits, accounts receivable, and selected other assets of the applicable borrowers. The Revolving Credit Facility includes customary affirmative and negative covenants and events of default, as well as financial covenants requiring minimum fixed charge coverage and leverage ratios, and customary mandatory prepayment provisions. At July 4, 2026, we were in compliance with all covenants under the facility, and $238.8 million was available for borrowing on the revolver.

(2)In October 2025, we completed a credit tenant lease (“CTL”) financing transaction by issuing a senior secured promissory note in the principal amount of $195.9 million. We used the net proceeds of the CTL financing to repay existing indebtedness. The note bears interest at a fixed rate of 6.84% per annum and matures on November 15, 2034. The note is secured primarily by our interests under a long-term composite sublease agreement. The CTL debt is generally non-recourse to the Company and its subsidiaries, except for customary limited-recourse obligations under indemnity and guaranty agreements relating to environmental matters, lease-term compliance, and certain representations, warranties, and covenants. At July 4, 2026, we were in compliance with all covenants under the note.

(8)

Debt – continued

(3)Our Equipment Financing consists of a series of promissory notes issued by wholly owned subsidiaries. The equipment notes are secured by liens on specific titled vehicles and operating equipment. The notes are generally payable in monthly installments over terms of approximately 60 months and bear interest at fixed rates ranging from 2.68% to 7.22%. One equipment note is payable over a 72-month term and bears interest at Term SOFR plus an applicable margin of 2.25%.

(4)In June 2026, we repaid in full our then outstanding obligations under the Real Estate Facility.

(9)

Fair Value Measurements and Disclosures

ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.

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Level 2 — Observable inputs other than quoted prices included in Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets, and other observable inputs.

•

Level 3 — Unobservable inputs supported by little or no market activity that are significant to the fair value measurement.

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at December 31, 2025 (in thousands):

There were no similar financial assets held by the Company and measured at fair value on a recurring basis at July 4, 2026.

The valuation techniques used to measure fair value for the items in the tables above are as follows:

•

Cash equivalents – This category consists primarily of money market funds and is measured at fair value based on quoted prices for identical instruments in active markets.

•

Marketable securities – Marketable securities consisted of common and preferred equity securities actively traded on public exchanges and were measured based on quoted prices in active markets. During the first quarter of 2026, the Company sold its remaining marketable securities portfolio.

•

Interest rate swap – The fair value of the interest rate swap was determined using discounted cash flow methodologies based on observable market inputs, including forward interest rate curves and credit valuation adjustments for both the Company and the counterparty.

The carrying amount of our receivables, prepaid expenses, other current assets, accounts payable, accrued expenses and other current liabilities approximate fair value due to their short maturities.

(9)

Fair Value Measurements and Disclosures – continued

The Company’s Revolving Credit Facility and one equipment note bear interest at variable rates and are categorized as Level 2 liabilities. The carrying value of these borrowings approximates fair value because the applicable interest rates are adjusted frequently based on short-term market rates.

The fair values of the Company’s fixed-rate equipment promissory notes and CTL financing are estimated using discounted cash flow analyses based on current incremental borrowing rates for similar borrowing arrangements and are categorized as Level 2 liabilities.

The carrying value and estimated fair value of these promissory notes at July 4, 2026 and December 31, 2025 are summarized as follows:

The Company has not elected the fair value option for any of its financial instruments.

(10)

Leases

As of July 4, 2026, our obligations under operating lease arrangements primarily related to the rental of office space, warehouses, freight distribution centers, terminal yards and equipment. Right-of-use assets represent our right to use an underlying asset over the lease term and lease liabilities represent the obligation to make lease payments resulting from the lease agreement. We recognize a right-of-use asset and a lease liability on the effective date of a lease agreement. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using our incremental borrowing rate as of the respective dates of lease inception, as the rate implicit in each lease is not readily determinable. Our incremental borrowing rate is based on collateralized borrowings of similar assets with terms that approximate the lease term when available and when collateralized rates are not available, we use uncollateralized rates with similar terms adjusted for the fact that it is an unsecured rate.

Our lease obligations typically do not include options to purchase the leased property, nor do they contain residual value guarantees or material restrictive covenants. Options to extend or terminate an agreement are included in the lease term when it becomes reasonably certain the option will be exercised. As of July 4, 2026, we were not reasonably certain of exercising any renewal or termination options, and as such, no adjustments were made to the right-of-use lease assets or corresponding liabilities.

Leases with an initial term of 12 months or less, short-term leases, are not recorded on the balance sheet. Lease expense for short-term and long-term operating leases is recognized on a straight-line basis over the lease term. For facility leases, variable lease costs include the costs of common area maintenance, taxes, and insurance for which we pay the lessors an estimate that is adjusted to actual expense on a quarterly or annual basis depending on the underlying contract terms. For equipment leases, variable lease costs may include additional fees associated with using equipment in excess of estimated amounts.

(10)

Leases – continued

The following table summarizes lease costs for the thirteen weeks and twenty-six weeks ended July 4, 2026 and June 28, 2025 (in thousands):

(10)

Leases – continued

The following table summarizes other lease related information as of and for the twenty-six week periods ended July 4, 2026 and June 28, 2025 (in thousands):

Future minimum lease payments under these operating leases as of July 4, 2026, are as follows (in thousands):

(11)

Transactions with Affiliates

Matthew T. Moroun is Chair of our Board of Directors and his son, Matthew J. Moroun, is a member of our Board. Certain Moroun family trusts beneficially own a majority of our outstanding shares. Matthew T. Moroun has investment authority over the shares held by such trusts and has the power to appoint and remove the special trustee. Frederick P. Calderone, a member of our Board, serves as special trustee of such trusts and exercises voting authority over the shares. The Moroun family also owns or significantly influences the management and operating policies of other businesses engaged in transportation, insurance, business services and real estate development and management. In the ordinary course of business, we procure from these companies certain supplementary administrative support services, including legal, human resources, tax and IT infrastructure services. The Audit Committee of our Board reviews and approves related-party transactions. The cost of these services is based on the actual or estimated utilization of the specific service.

We also purchase other services from affiliates. The following is a schedule of cost incurred and included in operating expenses for services provided by affiliates for the thirteen weeks and twenty-six weeks ended July 4, 2026 and June 28, 2025, respectively (in thousands):

We pay the direct variable cost of maintenance, fueling and other operational support costs for services delivered at our affiliates’ trucking terminals that are geographically remote from our own facilities. Such costs are billed when incurred, paid on a routine basis, and reflect actual labor utilization, repair parts costs or quantities of fuel purchased.

We lease 24 facilities from related parties. Our occupancy is based on either month-to-month or contractual multi-year lease arrangements that are billed and paid monthly. Leasing properties from related parties affords us significant operating flexibility; however, we are not limited to such arrangements. See Note 10, “Leases,” for further information regarding the cost of leased properties.

We also purchase employee medical, workers’ compensation, property and casualty, cargo, warehousing and other general liability insurance from an affiliated insurance company. In our Consolidated Balance Sheets, we record our insured claims liability and the related recovery in insurance and claims, and other receivables. At July 4, 2026 and December 31, 2025, there were $19.0 million and $18.0 million, respectively, included in each of these accounts for insured claims.

Other services from affiliates, including contracted transportation services, are delivered to us on a per-transaction basis or pursuant to separate contractual arrangements provided in the ordinary course of business. At July 4, 2026 and December 31, 2025, amounts due toaffiliates were $23.0 million and $17.2 million, respectively.

During the twenty-six weeks ended June 28, 2025, we contracted with an affiliate to provide real property improvements for us totaling $4.4 million. There wereno such purchases made during the twenty-six weeks ended July 4, 2026.

(11)

Transactions with Affiliates – continued

Services provided by Universal to Affiliates

We periodically provide transportation, logistics and facility-related services to companies affiliated with our controlling stockholder in connection with their customer contracts, purchase orders and operational needs. Certain truck fueling and administrative costs are netted against the related affiliate revenues in operating expense.

The following table summarizes services provided to affiliates for the thirteen weeks and twenty-six weeks ended July 4, 2026 and June 28, 2025 (in thousands):

At July 4, 2026 and December 31, 2025, amounts due from affiliates were $1.1 million and $1.0 million, respectively.

During the twenty-six weeks ended July 4, 2026, we sold used equipment to affiliates totaling $2.0 million. There wereno such sales during the twenty-six weeks ended June 28, 2025.

As previously disclosedin our Current Report on Form 8-K filed June 26, 2026, in June 2026, we sold a real property facility located in Kearny, New Jersey (the “Kearny Facility”) to Lakeshore Ventures LLC, an affiliate. In exchange, we received cash consideration of approximately $38.0 million and all of the outstanding membership interests of Passaic Ventures LLC (“Passaic”). Passaic owns a real property facility located in Newark, New Jersey (the “Newark Facility”), which is utilized in our intermodal operations pursuant to a prior leasing arrangement. See Note 10, “Leases,” for further information regarding right-of-use asset change due to lease termination. The Newark Facility had a fair value of approximately $55.6 million and represents substantially all of the assets of Passaic. The Kearny Facility had a fair value of $93.6 million. The fair values of each facility were established by independent third-party appraisals

The Kearny Facility had a carrying value of approximately $46.9 million. The sale of the Kearny Facility resulted in a gain of approximately $45.3 million, which is included in gain on disposal of property and equipment in the consolidated statements of income and included in the other non-reportable segment. Net cash proceeds received at closing were approximately $11.0 million after the repayment of approximately $26.1 million of outstanding debt secured by the Kearny facility and transaction costs, which were not material.

We evaluated the acquisition of Passaic under ASC 805, Business Combinations, to determine whether Passaic constitutes a “business” as defined therein. Because substantially all of the fair value of Passaic’s assets is concentrated in a single identifiable asset, the Newark Facility, Passaic does not meet the definition of a business, and the transaction has been accounted for as an asset acquisition. No goodwill has been recognized in connection with acquisition.

(12)

Earnings Per Share

Basic earnings per common share amounts are based on the weighted average number of common shares outstanding, excluding outstanding non-vested restricted stock. Diluted earnings per common share include dilutive common stock equivalents determined by the treasury stock method. No shares of restricted stock were included in the denominator for the calculation of diluted earnings per share in either the thirteen weeks or twenty-six weeks ended July 4, 2026. For the thirteen weeks and twenty-six weeks ended June 28, 2025,9,810 and 16,002 weighted average non-vested shares of restricted stock, respectively, were included in the denominator for the calculation of diluted earnings per share.

In each of the thirteen weeks and twenty-six weeks ended July 4, 2026, we excluded 104,916 shares of non-vested restricted stock from the calculation of diluted earnings per share because such shares were anti-dilutive. In the thirteen weeks and twenty-six weeks ended June 28, 2025, we excluded 57,585 and 40,022 shares, respectively, of non-vested restricted stock from the calculation of diluted earnings per share because such shares were anti-dilutive.

(13)

Dividends

On April 30, 2026, our Board of Directors declared a cash dividend of $0.105 per share of common stock, paid on July 1, 2026 to stockholders of record at the close of business on June 1, 2026. Declaration of future cash dividends is subject to final determination by the Board each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board deems relevant.

(14)

Income Taxes

Income tax expense for the thirteen and twenty-six weeks ended July 4, 2026 was $8.4 million and $7.3 million representing an effective tax rate of 24.3% and 24.3%, respectively. Income tax expense for the thirteen and twenty-six weeks ended June 28, 2025 was $2.9 million and $4.9 million representing an effective tax rate of 25.7% and 25.5%, respectively. The effective tax rate is primarily driven by U.S. state income tax partially offset by income/(losses) earned in foreign jurisdictions with a statutory rate different than the United States.

(15)

Segment Reporting

We report our financial results inthree reportable segments: contract logistics, intermodal and trucking. These segments are based primarily on the services provided by each segment and reflect the manner in which management evaluates the Company’s operations, including the economic characteristics and applicable aggregation criteria of the underlying businesses.

Our contract logistics segment includes value-added and dedicated transportation services that support inbound logistics to industrial customers and major retailers, generally pursuant to contracts with terms of one year or longer. Our intermodal segment is associated with local and regional drayage moves coordinated by company-managed terminals using a mix of owner-operators, company equipment and third-party capacity providers. Our trucking segment is associated with individual freight shipments coordinated by our agents and company-managed terminals using a mix of owner-operators, company equipment and third-party capacity providers. Other non-reportable segments include subsidiaries that provide administrative and support services to other Company subsidiaries.

The Company’s President and Chief Executive Officer serves as the chief operating decision maker (“CODM”). The CODM evaluates segment performance primarily based on income from operations and reviews segment results against internal budgets, forecasts and prior period performance. The CODM also regularly reviews significant segment expense categories, including purchased transportation and equipment rent, direct personnel and related benefits, operating supplies and expenses, commission expense, occupancy expense, depreciation and amortization, and other segment items. Separate balance sheet information is not regularly provided to the CODM.

The following tables summarize financial information about our reportable segments for the thirteen week and twenty-six week periods ended July 4, 2026 and June 28, 2025 (in thousands):

(1)Total operating revenues are presented net of intersegment revenues eliminated in consolidation. Intersegment revenues eliminated in consolidation were $0.1 million in contract logistics, $0.2 million in intermodal and $0.0 million in trucking.

(3)Other segment items primarily include general and administrative expense, insurance and claims expense, gains on disposals of property and equipment, impairment expense and other corporate allocations.

(15)

Segment Reporting – continued

(1)Total operating revenues are presented net of intersegment revenues eliminated in consolidation. Intersegment revenues eliminated in consolidation were $0.1 million in contract logistics, $1.1 million in intermodal and $0.0 million in trucking.

(3)Other segment items primarily include general and administrative expense, insurance and claims expense, gains on disposals of property and equipment, and other corporate allocations.

(1)Total operating revenues are presented net of intersegment revenues eliminated in consolidation. Intersegment revenues eliminated in consolidation were $0.5 million in contract logistics, $1.1 million in intermodal and $0.1 million in trucking.

(3)Other segment items primarily include general and administrative expense, insurance and claims expense, gains on disposals of property and equipment, impairment expense and other corporate allocations.

(15)

Segment Reporting – continued

(1)Total operating revenues are presented net of intersegment revenues eliminated in consolidation. Intersegment revenues eliminated in consolidation were $0.2 million in contract logistics, $2.2 million in intermodal and $0.0 million in trucking.

(3)Other segment items primarily include general and administrative expense, insurance and claims expense, gains on disposals of property and equipment, and other corporate allocations.

(16)

Commitments and Contingencies

Our principal commitments relate to long-term real estate leases and payment obligations to equipment vendors.

The Company is involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. The Company records accruals for claims within its self-insured retention amounts when losses are probable and reasonably estimable. Based on the facts currently known and, in certain cases, the opinions of outside counsel, management believes that the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, if the Company experiences claims that are not covered by insurance, exceed policy limits or exceed estimated reserves, it could increase the volatility of earnings and adversely affect the Company’s financial condition, results of operations or cash flows.

At July 4, 2026, approximately 37% of our employees were subject to collective bargaining agreements that are renegotiated periodically, approximately 27% of which are subject to contracts that expire in 2026. While the Company expects to negotiate successor agreements in the ordinary course of business, there can be no assurance that such negotiations will be completed without increased labor costs, work stoppages or other disruptions that could adversely affect the Company’s operations, financial condition or results of operations.

(17)

Subsequent Events

On July 31, 2026, our Board of Directors declared a cash dividend of $0.105 per share of common stock, payable on October 1, 2026 to stockholders of record at the close of business on September 1, 2026. Declaration of future cash dividends is subject to final determination by the Board each quarter after its review of our financial condition, results of operations, capital requirements, any legal or contractual restrictions on the payment of dividends and other factors the Board deems relevant.