PAMT CORP

Notes to Condensed Consolidated Financial Statements (unaudited)

March 31, 2026

NOTE A: BASIS OF PRESENTATION

In accordance with generally accepted accounting principles (“GAAP”) and applicable rules of the Securities and Exchange Commission, the information reported in this Quarterly Report on Form10-Q for PAMT CORP and its legally distinct subsidiaries, unless otherwise indicated, is presented on a consolidated basis. Unless the context otherwise requires, all references in this Quarterly Report on Form10-Q to the “Company,” “we,” “our,” or “us” mean PAMT CORP and its consolidated subsidiaries.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form10-Q and Article10 of Regulation S-X. Accordingly, they donot include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included. The consolidated balance sheet at* December 31, 2025has been derived from the audited financial statements at that date but doesnot* include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for thethree-month period ended* March 31, 2026arenot* necessarily indicative of the results that* maybe expected for the year ending December 31, 2026.For further information, refer to the consolidated financial statements and the footnotes thereto included in the Company’s annual report on Form10*-K for the year ended* December 31, 2025.*

NOTE B: RECENT ACCOUNTING PRONOUNCEMENTS

In* November 2024,the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)No. 2024-03 (“ASU2024*-03”),Disaggregation of Income Statement Expenses. ASU2024-03 was issued to enhance the transparency of financial reporting by requiring public business entities to provide more detailed disclosures about certain operating expenses. The guidance is effective for annual reporting periods beginning after* December 15, 2026,and interim periods within fiscal years beginning after December 15, 2027.Early adoption is permitted. The Company has evaluated the new guidance and doesnot* expect it to have a material impact on its financial condition, results of operations, or cash flows.

The Company considered the applicability and impact of the above-referenced ASU and all other accounting standard updates issued by the Financial Accounting Standards Board to the Accounting Standards Codification (“ASC”) and determined there arenot any ASUs that havenot already been adopted which require significant consideration for disclosure as of* March 31, 2026.*

NOTE C: REVENUE RECOGNITION

The Company has a single performance obligation to transport our customers’ freight from a specified origin to a specified destination. The Company has the discretion to choose to self-transport or to arrange for alternate transportation to fulfill the performance obligation. Where the Company decides to self-transport the freight, the Company classifies the service as truckload services, and where the Company arranges for alternate transportation of the freight, the Company classifies the service as brokerage and logistics services. In either case, the Company is paid a rate to transport freight from its origin location to a specified destination. Because the primary factors influencing revenue recognition, including performance obligation, customer base, and timing of revenue recognition are the same for both of its service categories, the Company utilizes the same revenue recognition method throughout its operations.

Company revenue is generated from freight transportation services performed utilizing heavy truck trailer combinations. While various ownership arrangements* mayexist for the equipment utilized to perform these services, including Company-owned or leased, owner-operator owned, andthird*-party carriers, revenue is generated from the same base of customers. Contracts with these customers establish rates for services performed, which are predominantly rates that will be paid to pick up, transport and drop off freight at various locations. In addition to transportation, revenue is also awarded for various accessorial services performed in conjunction with the base transportation service. The Company also has other revenue categories that arenot discussed in this note or broken out in our consolidated statements of operations due to their immaterial amounts.

In fulfilling the Company’s obligation to transport freight from a specified origin to a specified destination, the control of freight is transferred to the Company at the point it has been loaded into the driver’s trailer, the doors are sealed and the driver has signed a bill of lading, which is the basic transportation agreement that establishes the nature, quantity and condition of the freight loaded, responsibility for invoice payment, and pickup and delivery locations. The Company’s revenue is generated, and our customer receives benefit, as the freight progresses towards delivery locations. In the event the Company’s customer cancels the shipment at some point prior to the final delivery location and re-consigns the shipment to an alternate delivery location, the Company is entitled to receive payment for services performed for the partial shipment. Shipments are generally conducted over a relatively short time span, generallyone tothree days; however, freight is sometimes stored temporarily in our trailer atone of our drop yard locations or at a location designated by a customer. The Company’s revenue is categorized as either Freight Revenue or Fuel Surcharge Revenue, and both are earned by performing the same freight transportation services, as discussed further below.

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Freight Revenue – revenue generated by the performance of the freight transportation service, including any accessorial service, provided to customers.

Fuel Surcharge Revenue – revenue designed to adjust freight revenue rates to an agreed-upon base cost for diesel fuel. Diesel fuel prices can fluctuate widely during the term of a contract with a customer. At the point that freight revenue rates are negotiated with customers, a sliding scale is agreed upon that systematically adjusts diesel fuel costs to an agreed-upon base amount. In general, as fuel prices increase, revenue from fuel surcharge increases, so that diesel fuel cost is adjusted to the approximate agreed upon base amount.

Revenue is recognized over time as the freight progresses towards its destination and the transportation service obligation is fulfilled. For loads picked up during the reporting period, but delivered in a subsequent reporting period, revenue is allocated to each period based on the transit time in each period as a percentage of total transit time. The contract asset, or the amount of remaining performance obligation relating to loads in process, at* March 31, 2026was $3.2 million compared to $2.4 million at December 31, 2025.Recorded contract assets are included in the accounts receivable line item of the balance sheet. Corresponding liabilities are recorded in the accrued expenses and other liabilities line items for the estimated expenses on these same in-process loads. The Company hadno contract liabilities associated with our operations as of March 31, 2026and December 31, 2025,respectively. The Company’s contracts with customers generally have original expected durations less thanone* year. Accordingly, the Company has elected the practical expedient and doesnot disclose information about remaining unsatisfied performance obligations.

The Company recognizes operating lease revenue from leasing tractors and related equipment tothird parties, including independent contractors. Operating lease revenue from rental operations is recognized in revenue as it is earned. Upon lease termination, losses* may*be incurred in the recovery of leased equipment which are recognized as an expense in the period in which they are incurred.

NOTE D: MARKETABLE EQUITY SECURITIES

The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income (expense).

Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note J.

The following table sets forth market value, cost, and unrealized gains on equity securities as of* March 31, 2026and December 31, 2025.*

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of* March 31, 2026and December 31, 2025.*

The following table shows the Company’s net realized gains during thethree months ending on* March 31, 2026and2025,* respectively, on certain marketable equity securities.

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For the quarter ended* March 31, 2026,the Company recognized dividends received of approximately $426,000 in non-operating income in its condensed consolidated statements of operations. For the quarter ended March 31, 2025,*the Company recognized dividends received of approximately $443,000 in non-operating income in its condensed consolidated statements of operations.

The Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. As of* March 31, 2026,the Company hadno outstanding borrowings under its margin account, which isno* change from* December 31, 2025,*when the Company hadno outstanding borrowings under the same account. Margin account borrowings, when utilized, are used for the purchase of marketable equity securities and as a source of short-term liquidity and are included in accrued expenses and other liabilities on our condensed consolidated balance sheets.

Our marketable equity securities portfolio had a net unrealized pre-tax loss in market value of approximately $1,626,000 during thefirst quarter of2026, and a net unrealized pre-tax gain in market value of approximately $1,316,000 during thefirst quarter of2025, which were reported as non-operating income in its condensed consolidated statements of operations for the respective periods.

NOTE E: STOCK-BASED COMPENSATION

The Company maintains a stock incentive plan under which incentive and nonqualified stock options and other stock awards* maybe granted. On February 15, 2024,the Company’s Board of Directors adopted, and on October 31, 2024,our shareholders approved, the2024* Equity Incentive Plan (the*“2024* Plan”). Under the2024 Plan,1,600,000 shares are reserved for the issuance of stock awards to employees, officers, directors, consultants and advisors of the Company. The stock option exercise price and the restricted stock purchase price under the2024 Plan shallnot be less than 100% of the fair market value of the Company’s common stock on the date the award is granted. The fair market value is determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award is granted.

The Company didnot grant any shares of common stock during thefirst three months of2026.

During thefirst three months of2025, the Company granted awards of restricted stock units representing 100,000 shares of common stock to certain key employees under the2024 Plan. These stock awards had grant date fair values of $16.10 per share, based on the closing price of the Company’s stock on the date of grant.52,500 of the awarded share units vest on thefour-year anniversary date of the award. The remaining 47,500 of the awarded share units vest on thefive-year anniversary date of the award.

Prior to the2024 Plan, the Company maintained the2014 Amended and Restated Stock Option and Incentive Plan (the*“2014* Plan”), which was adopted by the Company’s Board of Directors in* March 2014and approved by the Company’s shareholders in May 2014.Under the2014* Plan,3,000,000 shares (as adjusted for the Company’s 2-for-1 forward splits of its common stock paid in* August 2021and March 2022,respectively) were reserved for the issuance of stock awards to directors, officers, key employees, and others. The stock option exercise price and the restricted stock purchase price under the2014* Plan werenot to be less than 85% of the fair market value of the Company’s common stock on the date the award is granted. The fair market value was determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award was granted. The2014 Plan expired on* March 13, 2024,andno* further grants* maybe made under this plan. All outstanding unvested awards granted under the2014* Plan, however, remain subject to the terms and conditions of the2014 Plan.

The total grant date fair value of stock vested during thefirst three months of2026 was approximately $468,000. Total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during thefirst three months of2026, was approximately $98,000. The recognition of stock-based compensation expense didnot materially affect basic or diluted earnings per common share (less than $0.01 per share) during thefirst three months of2026. As of* March 31, 2026,the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $1,391,000, which is being amortized on a straight-line basis over the remaining vesting period. As a result, the Company expects to recognize approximately $361,000 in additional compensation expense related to unvested stock awards during the remainder of2026* and to recognize approximately $454,000, $449,000, $122,000 and $5,000 in additional compensation expense related to unvested stock-based awards during the years2027, 2028, 2029, and2030, respectively.

The total grant date fair value of stock vested during thefirst three months of2025 was approximately $354,000. The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during thefirst three months of2025, was approximately $266,000. The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $0.01 during thefirst three months of2025. As of* March 31, 2025,*the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $2,659,000, which was being amortized on a straight-line basis over the remaining vesting period.

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A summary of the status of the Company’s non-vested stock-based awards as of* March 31, 2026,and changes during thethree* months ended* March 31, 2026,*is as follows:

NOTE F: SEGMENT INFORMATION

The Company follows the guidance provided by ASC Topic280, Segment Reporting,in its identification of operating segments. The Company has determined that it has a total oftwo operating segments whose primary operations can be characterized as either Truckload Services or Brokerage and Logistics Services; however, in accordance with the aggregation criteria provided by FASB ASC Topic280, the Company has determined that the operations of thetwo operating segments can be aggregated into asingle reportable segment. Both our truckload operations and our brokerage/logistics operations have similar qualitative and quantitative economic characteristics and are impacted by virtually the same economic factors. Based on the Company’s segment identification, interpretation of the aggregation criteria outlined in ASC280-10-50-11, and the similar qualitative and quantitative economic characteristics of the Company’s operating segments, the operations of the Company are aggregated into a single motor carrier segment. The Company’s chief operating decision maker, the Chief Executive Officer, utilizes the metrics of net income and operating ratio to evaluate company performance and in competitive analysis when comparing to competing companies.

Truckload Services revenues and Brokerage and Logistics Services revenues, each before fuel surcharges, were as follows:

The Company provides truckload transportation services as well as brokerage and logistics services to customers throughout the United States and portions of Canada and Mexico. The table below presents revenues, including fuel surcharges, by geographic area, expressed in both dollars and as a percentage of total revenue.

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NOTE G: TREASURY STOCK

The Company’s stock repurchase program has been extended and expanded several times, most recently in* July 2023,when the Board of Directors reauthorized 500,000 shares of common stock for repurchase under the initial September 2011authorization. During thethree* months ended* March 31, 2026,the Company repurchased 1,171 shares of its common stock at an aggregate cost of approximately $11,300 under this program. As of March 31, 2026,*there remain 472,845 shares of common stock authorized for repurchase under this plan.

The Company accounts for treasury stock using the cost method. As of* March 31, 2026,*1,452,757 shares were held in the treasury at an aggregate cost of approximately $28,935,000.

NOTE H: EARNINGS PER SHARE

Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by adjusting the weighted average number of shares of common stock outstanding by common stock equivalents attributable to dilutive restricted stock. The computation of diluted earnings per share doesnot assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect on earnings per share. The computations of basic and diluted earnings per share were as follows:

NOTE I: INCOME TAXES

The Company and its subsidiaries are subject to U.S. and Canadian federal income tax laws as well as the income tax laws of multiple state jurisdictions. The major tax jurisdictions in which the Company operates generally provide for a deficiency assessment statute of limitations period ofthree years, and as a result, the Company’s tax years2022 and forward remain open to examination in those jurisdictions.

In determining whether a tax asset valuation allowance is necessary, management, in accordance with the provisions of ASC740-10-30, Accounting for Income Taxes, weighs all available evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance is necessary. If negative conditions exist which indicate a valuation allowance might be necessary, consideration is then given to what effect the future reversals of existing taxable temporary differences and the availability of tax strategies might have on future taxable income to determine the amount, if any, of the required valuation allowance. As of* March 31, 2026,management determined that the future reversals of existing taxable temporary differences and available tax strategies would generate sufficient future taxable income to realize its tax assets and therefore a valuation allowance wasnot* necessary.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely thannot that the position will be sustained on examination by taxing authorities, based on the technical merits of the position. As of* March 31, 2026,an adjustment to the Company’s condensed consolidated financial statements for uncertain tax positions hasnot* been required as management believes that the Company’s tax positions taken in income tax returns filed or to be filed are supported by clear and unambiguous income tax laws. The Company recognizes interest and penalties related to uncertain income tax positions, if any, in income tax expense. During thethree months ended* March 31, 2026and2025,* the Company hasnot recognized or accrued any interest or penalties related to uncertain income tax positions.

The Company’s effective income tax rates were 23.3% and 24.2% for thethree months ended* March 31, 2026and2025,* respectively. Our effective tax rate for thethree months ended* March 31, 2026differs from amounts computed by applying the United States federal statutory rates to pre-tax income primarily due to state income taxes. The Company’s income tax provision for interim periods is based on an estimated annual effective tax rate, adjusted for discrete items, if any. There wereno* material discrete tax items recorded during thethree months ended* March 31, 2026.*

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NOTE J: FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, marketable equity securities, accounts receivable, trade accounts payable, and borrowings.

The Company follows the guidance for financial assets and liabilities measured on a recurring basis. This guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describesthree levels of inputs that* may*be used to measure fair value:

The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

At* March 31, 2026,*the following items are measured at fair value on a recurring basis:

The Company’s investments in marketable securities are recorded at fair value based on quoted market prices. The carrying value of other financial instruments, including cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value due to their short maturities.

The carrying amount for the line of credit approximates fair value because the line of credit interest rate is adjusted frequently.

For long-term debt other than the lines of credit, the fair values are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The carrying value and estimated fair value of this other long-term debt at* March 31, 2026*was as follows:

The Company hasnot elected the fair value option for any of its financial instruments.

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NOTE K: NOTES PAYABLE

During thefirst three months of2026, the Company’s subsidiaries entered into installment obligations totaling approximately $7.4 million for the purpose of purchasing revenue equipment and other assets. These obligations are payable in monthly installments over a term of 60 months and are recorded in long-term debt and current maturities on the condensed consolidated balance sheets.

NOTE L: LITIGATION

We are involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. Since* September 1, 2020,we have been self-insured for certain layers of auto liability claims in excess of $2.0 million. We currently specifically reserve for claims that are expected to exceed $2.0 million when fully developed, based on the facts and circumstances of those claims. Based on our knowledge of the facts, and in certain cases, opinions of outside counsel, we believe the resolution of such claims and pending litigation willnot* have a material effect on our financial position, results of operations or cash flows. However, if we experience claims that arenot covered by our insurance or that exceed our estimated claim reserve, it could increase the volatility of our earnings and have a materially adverse effect on our financial condition, results of operations or cash flows.

We were previously a defendant in a motor vehicle accident lawsuit filed on* January 10, 2025in the State Court of Gwinnett County, Georgia, arising from a December 29, 2024accident between a Company tractor-trailer and a passenger vehicle. During thethree* months ended* March 31, 2026,the Company finalized a settlement agreement with the plaintiff for a total settlement amount of $30.0 million, of which $26.5 million represents the Company’s net exposure after consideration of applicable insurance coverage. The settlement agreement was executed by all parties on March 30, 2026*and resolves all claims related to this matter.

As of* March 31, 2026,the Company has paid $1.5 million related to this settlement. The remaining payments are expected to be made in accordance with the settlement agreement, with approximately $18.0 million due during the remainder of2026* and approximately $7.0 million due in2027.

The Company had previously recorded a liability of $26.5 million as of* December 31, 2025.As of March 31, 2026,the remaining liability was $25.0 million. This amount is recorded in accrued expenses and other liabilities on the condensed consolidated balance sheets. No adjustments to the previously recorded liability were required during thethree* months ended* March 31, 2026.There isno remaining material exposure related to this matter as of March 31, 2026.*

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NOTE M: LEASES

The Company currently leases shop, office and parking spaces in various locations in the United States and Mexico. The initial term for the majority of these leases isone year or less, with an option for early cancellation and an option to renew for subsequentone- month periods. These leases can be terminated by either party by providing notice to the other party of the intent to cancel or tonot extend. Relatively short lease durations for these properties are intended to provide flexibility to the Company as changing operational needs and shifting opportunities often result in cancellation or non-renewal of these leases by the Company or the lessor.

The initial lease term for certain shop and office locations is for periods ranging fromone tofive years with early cancellation options. The Company prefers that leases include early cancellation provisions to prevent them from becoming locked into long-term leases that become operationally unjustified and to allow the flexibility to pursue more cost-effective options for similar properties if they become available. These leases often include the option to extend for additional periods, which* mayor may**not* be exercised. Based on historical experience, the Company doesnot always extend these leases, sometimes exercises the option to cancel leases early and sometimes lessors choose to cancel leases ornot extend.

The Company leases trucks to owner-operators under our lease-to-own program. Prior to the sale of certain real property located in Laredo, Texas in* March 2026,*as described in Note O, the Company leased dock space at that facility to a related party. That lease arrangement terminated in connection with the sale of the property.

Right-of-Use Leases

The Company is party to operating leases which include initial terms ranging from three toten years and which donot include an option for early cancellation. In accordance with the provisions of ASC Topic842, these leases resulted in the recognition of right-of-use assets and corresponding operating lease liabilities, respectively, valued at $7.0 million as of* March 31, 2026.These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date, using the Company’s incremental borrowing rate as of the respective dates of lease inception, as the rate implicit in each lease isnot* readily determinable. The right-of-use assets are recorded in other assets, and the lease liability is recorded in accrued expenses and other liabilities and in other long-term liabilities on our condensed consolidated balance sheets. Lease expense is recorded on a straight-line basis over the lease term and is recorded in rent and purchased transportation in our condensed consolidated statements of operations. While these lease agreements* maycontain provisions to extend for a period of time after the initial term, the Company isnot* reasonably certain these extension options will be exercised. Therefore, potential lease payments that might occur under this extension period arenot included in amounts recorded in our condensed consolidated balance sheets as of* March 31, 2026.*

Scheduled amounts and timing of cash flows arising from operating lease payments at* March 31, 2026,*are:

Cash Flows

No new right-of-use assets were recognized as a non-cash asset addition that resulted from new operating lease liabilities during thethree months ended* March 31, 2026.Cash paid for amounts included in the present value of operating lease liabilities was $0.2 million during thethree* months ended* March 31, 2026,*and is included in operating cash flows within the condensed consolidated statement of cash flows.

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Operating Lease Costs

Lease Revenue

The Company's operating lease revenue is disclosed in the table below.

The Company has a lease-purchase program whereby we offer independent contractors the opportunity to lease a Company-owned truck. The terms associated with these leases require weekly lease payments over the terms of the leases, which range from 5 to 60 months. Payments under this program are classified in the Company’s financial statements under the consolidated statement of operations category Revenue.

As of* March 31, 2026,the gross carrying value of trucks underlying these leases was $86.7 million and accumulated depreciation was $39.8 million. Depreciation is calculated on a straight-line basis over the estimated useful life of the equipment, down to an estimated salvage value. In most cases, the Company has agreements in place with certain manufacturers whereby salvage values are guaranteed by the manufacturer. In other cases, where salvage values arenot* guaranteed, estimates of salvage value are based on the expected market values of equipment at the time of disposal. During the quarter ended* March 31, 2026,*the Company incurred $2.7 million of depreciation expense for these assets.

Lease Receivables

Future minimum operating lease payments receivable at* March 31, 2026:*

NOTE N: RELATED PARTY TRANSACTIONS

In* March 2026,the Company sold certain real property located in Laredo, Texas, consisting of land, office space, maintenance shop, and dock facilities, to Crown Enterprises, LLC (the “Buyer”), a related party. The Buyer is an affiliate of the Company due to common control by a significant shareholder. The transaction wasnot* part of a broader arrangement and didnot include any continuing involvement by the Company. The Company didnot enter into a lease or other ongoing contractual arrangement with the Buyer in connection with the sale.

The property had a carrying value of $7.1 million and was sold for $19.8 million, resulting in a gain of $12.7 million, which is included in “Gain on sale or disposition of assets” within operating expenses in the consolidated statement of operations. The sales price was based on an independentthird-party appraisal.

Cash proceeds from the transaction were $13.6 million, reflecting the $19.8 million sales price less repayment of approximately $6.0 million of outstanding debt secured by the property and transaction costs, which werenot material. The purchase price was paid in cash at closing.

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