COVENANT LOGISTICS GROUP, INC.
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
CVLG$31.55-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001437749-26-026547
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001437749-26-035431
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 107 current paragraphs.
58 unchanged; 45 reworded; 4 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 24 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Removed paragraphs (2)
Previous report
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.
Previous report
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.
Reworded paragraphs (45)
Previous wording
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,* …
Excerpt shortened here; the source contains the full paragraph.
Current wording
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,* …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Additional items of note for the second quarter of 2026 include the following:
Current wording
Additional items of note for the third quarter of 2026 include the following:
Previous wording
At June 30, 2026, we operated 2,202 tractors and 7,142 trailers. Of such tractors, 2,117 were owned, 15 were financed under finance or operating leases, and 70 tractors were provided by independent contractors, who own and drive their own tractors. Of such trailers, 6,405 were owned and 737 were held under finance or operating leases. At June 30, 2026, our fleet had an average tractor age of 2.2 years and an average trailer age of 6.1 years.
Current wording
At September 30, 2026, we operated 2,178 tractors and 7,011 trailers. Of such tractors, 2,107 were owned, 15 were financed under finance or operating leases, and 56 tractors were provided by independent contractors, who own and drive their own tractors. Of such trailers, 6,280 were owned and 731 were held under finance or operating leases. At September 30, 2026, our fleet had an average tractor age of 2.2 years and an average trailer age of 6.2 years.
Previous wording
COMPARISON OF three and six months ended June 30, 2026** TO three and six months ended June 30, 2025**
Current wording
COMPARISON OF three and nine months ended September 30, 2026** TO three and nine months ended September 30, 2025**
Previous wording
The increase in total revenue for the three months ended June 30, 2026 compared to 2025 primarily resulted from a $22.0 million, $3.9 million, and $1.1 million increase in freight revenue for Managed Freight, Dedicated, and Warehousing, respectively, partially offset by a $9.5 million decrease in freight revenue for Expedited, as well as an $11.9 million increase in fuel surcharge revenue. The increase in total revenue for the six months ended June 30, 2026 compared to 2025 primarily resulted from a $55.9 million, $12.8 million, and $4.7 million increase in freight revenue for Managed Freight, Dedicated, and Warehousing, respectively, partially offset by a $17.8 million decrease in freight revenue for Expedited, as well as an $11.0 million increase in fuel surcharge revenue.
Current wording
The increase in total revenue for the three months ended September 30, 2026 compared to 2025 primarily resulted from a $49.4 million, $3.8 million, and $1.9 million increase in freight revenue for Managed Freight, Dedicated, and Warehousing, respectively, partially offset by a $9.6 million decrease in freight revenue for Expedited, as well as a $10.8 million increase in fuel surcharge revenue. The increase in total revenue for the nine months ended September 30, 2026 compared to 2025 primarily resulted from a $105.3 million, $16.7 million, and $6.6 million increase in freight revenue for Managed Freight, Dedicated, and Warehousing, respectively, partially offset by a $27.4 million decrease in freight revenue for Expedited, as well as an $21.8 million increase in fuel surcharge revenue.
Previous wording
Salaries, wages, and related expenses remained relatively even on a dollars basis for the three months ended June 30, 2026 compared to the same 2025 period and increased on a dollars basisfor the six months ended June 30, 2026 compared to the same 2025 period 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 months ended June 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.
Current wording
Salaries, wages, and related expenses increased on a dollars basis for the three and nine months ended September 30, 2026 compared to the same 2025 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 nine months ended 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.
Previous wording
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 the present time, 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 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.
Current wording
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. Driver capacity is tight, and the 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 as necessary. 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.
Previous wording
Total fuel expense for the three and six months ended June 30, 2026 increasedon a dollars basis primarily due to higher fuel prices partially offset by a 15.9% and 12.1% decrease in total miles, respectively, compared to the 2025 periods. As a percentage of freight revenue for the three and six months ended June 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.
Current wording
Total fuel expense for the three and nine months ended September 30, 2026 increasedon a dollars basis primarily due to higher fuel prices partially offset by a 19.3% and 14.5% decrease in total miles, respectively, compared to the 2025 periods. As a percentage of freight revenue for the three and nine months ended 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.
Previous wording
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. Fuel prices as measured by the DOE were $1.43 per gallon, or 39.6%, higher for the quarter ended June 30, 2026 compared with the same quarter in 2025.
Current wording
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 were $2.54 per gallon, or 67.8%, higher for the quarter ended September 30, 2026 compared with the same quarter in 2025.
Previous wording
For the periods presented, net fuel expense remained relatively even as a percentage of freight revenue.
Current wording
For the periods presented, net fuel expense decreased, including as a percentage of freight revenue, primarily due to improved fuel surcharge recovery compared to the prior periods.
Previous wording
The increase in operations and maintenance for the three and six months ended June 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.
Current wording
The increase in operations and maintenance for the three and nine months ended 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.
Previous wording
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.
Current wording
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.
Previous wording
The increases in revenue equipment rentals and purchased transportation for the three and six months ended June 30, 2026 were primarily the result of the 2025 Star Acquisition and heightened costs associated with securing capacity within the Managed Freight reportable segment. Additionally, total miles run by independent contractors decreased from 7.1% and 7.0% for the three and six months ended June 30, 2025, to 6.0% and 6.4% for the same 2026 periods, respectively.
Current wording
The increases in revenue equipment rentals and purchased transportation for the three and nine months ended 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 7.7% and 7.2% for the three and nine months ended September 30, 2025, to 5.7% and 6.1% for the same 2026 periods, respectively.
Previous wording
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 continue if 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.
Current wording
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 is expected to continue as capacity tightens further. If we were to recruit more independent contractors, we would expect this line item to increase as a percentage of revenue.
Previous wording
On a cents per mile basis, insurance and claims increased to 31.3 cents per mile and 26.3 cents per mile for the three andsix months ended June 30, 2026, respectively, compared to 25.1 cents per mile and 24.5 for the 2025 periods, respectively, primarily due to decreased miles compared to the same 2025 periods and increased settlements in the three months ended June 30, 2026, partially offset by reduced insurance and claims expense during thesix months ended June 30, 2026. Miles decreased primarily due to reducing our Expedited fleet as well as weather in 2026.
Current wording
On a cents per mile basis, insurance and claims decreased to 17.9 cents per mile and increased to 23.6 cents per mile for the three andnine months ended September 30, 2026, respectively, compared to 20.9 cents per mile and 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. For the nine month period, the increase on a cents per mile basis was primarily due to decreased miles, partially offset by reduced insurance and claims expense. Miles decreased primarily due to reducing our Expedited fleet as well as weather in 2026.
Previous wording
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 Form 10-Q. 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.
Current wording
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 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.
Previous wording
For the periods presented, the change in communications and utilities were insignificant both as a percentage of total revenue and freight revenue.
Current wording
For the periods presented, the change in communications and utilities was insignificant both as a percentage of total revenue and freight revenue.
Previous wording
For the three and six months ended June 30, 2026, general supplies and expenses decreased as a result of the $0.7 million and $0.3 million decreases in the fair value of the contingent consideration recognized during the 2026 periods, respectively, compared to increases of $0.7 and $1.4 million recognized during the same 2025 periods, partially offset by increased technology costs during the 2026 periods.
Current wording
For the three months ended September 30, 2026, general supplies and expenses increased as a result of 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 increase in the fair value of the contingent consideration recognized during the 2026 period, compared to the increase of $0.7 million during the same 2025 period. For the nine months ended September 30, 2026, general supplies and 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 period, partially offset by increased technology costs during the 2026 period.
Previous wording
Depreciation expense decreased $0.6 million to $19.8 million for the three months ended June 30, 2026 and increased $1.0 million to $40.8 million for the six months ended June 30, 2026, compared to $20.3 million and $39.8 million in the same 2025 periods. Amortization of intangible assets was $3.0 million and $6.0 million for thethree and six months ended June 30, 2026 compared to $2.8 million and $5.1 million for the same 2025 periods. The increase for thethree and six months ended June 30, 2026 is due to the amortization of the intangible asset related to the Star Acquisition.
Current wording
Depreciation expense increased $0.2 million to $20.5 million for the three months ended September 30, 2026 and increased $1.2 million to $61.3 million for the nine months ended September 30, 2026, compared to $20.3 million and $60.1 million in the same 2025 periods. Amortization of intangible assets was $3.0 million and $9.0 million for thethree and nine months ended September 30, 2026 compared to $2.7 million and $7.8 million for the same 2025 periods. The increase for thethree and nine months ended September 30, 2026 is due to the amortization of the intangible asset related to the Star Acquisition.
Previous wording
Loss on disposition of property and equipment, net
Current wording
(Gain) loss on disposition of property and equipment, net
Previous wording
For the periods presented, the change in loss on disposition of property and equipment, net was insignificant both as a percentage of total revenue and freight revenue.
Current wording
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.
Previous wording
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 thethree and six months ended June 30, 2026 was insignificant for the periods presented. 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.
Current wording
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 thethree and nine months ended September 30, 2026 was 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 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.
Previous wording
The decreases in income tax expense for thethree and six months ended June 30, 2026 were the result of a $2.2 million and $4.7 million decrease 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.
Current wording
The increases in income tax expense for thethree and nine months ended September 30, 2026 were the result of a $6.3 million and $1.6 million 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.
Previous wording
COMPARISON OF three and six months ended June 30, 2026** TO three and six months ended June 30, 2025**
Current wording
COMPARISON OF three and nine months ended September 30, 2026** TO three and nine months ended September 30, 2025**
Previous wording
The decrease in Expedited revenue for the three months ended June 30, 2026 relates to a decrease of 17.0% in average total tractors compared to the 2025 quarter partially offset by a $5.6 million increase in fuel surcharge revenue. Average freight revenue per tractor per week increased 6.8% a result of a 25.0 cents per mile (or 11.8%) increase in average rate per total mile partially offset by a 4.2% decrease in average miles per unit compared to the 2025 quarter. Expedited team-driven tractors averaged 659 and 806 tractors in the second quarter of 2026 and 2025, respectively.
Current wording
The decrease in Expedited revenue for the three months ended September 30, 2026 relates to a decrease of 21.5% in average total tractors compared to the 2025 quarter partially offset by a $4.5 million increase in fuel surcharge revenue. Average freight revenue per tractor per week increased 12.0% a result of a 42.0 cents per mile (or 20.0%) increase in average rate per total mile partially offset by a 6.5% decrease in average miles per unit compared to the 2025 quarter. Expedited team-driven tractors averaged 613 and 781 tractors in the third quarter of 2026 and 2025, respectively. During the quarter, our Expedited fleet continued to transition to multi-year committed capacity agreements.
Previous wording
For the six months ended June 30, 2026 the decrease in Expedited revenue relates to a decrease of 13.8% in average total tractors compared to the 2025 period partially offset by a $3.9 million increase in fuel surcharge revenue. Average freight revenue per tractor per week increased 3.3% compared to the 2025 period as a result of a 16.0 cents per mile (or 7.5%) increase in average rate per total mile partially offset by a 3.8% decrease in average miles per unit as compared to the 2025 period. Expedited team-driven tractors averaged 683 and 801 tractors in the six months ended June 30, 2026 and 2025, respectively.
Current wording
For the nine months ended September 30, 2026 the decrease in Expedited revenue relates to a decrease of 16.4% in average total tractors compared to the 2025 period partially offset by a $8.4 million increase in fuel surcharge revenue. Average freight revenue per tractor per week increased 6.1% compared to the 2025 period as a result of a 24.0 cents per mile (or 11.4%) increase in average rate per total mile partially offset by a 4.5% decrease in average miles per unit as compared to the 2025 period. Expedited team-driven tractors averaged 660 and 794 tractors in the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
The increase in Dedicated revenue for the three months ended June 30, 2026 relates to an increase in average freight revenue per tractor per week of 8.6% partially offset by a 61, or 3.9%, 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 cents per mile (or 15.4%) increase in average rate per total mile partially offset by a 6.1% decrease in average miles per unit compared to the 2025 quarter.
Current wording
The increase in Dedicated revenue for the three months ended September 30, 2026 relates to an increase in average freight revenue per tractor per week of 6.2% partially offset by a 30, or 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 49.0 cents per mile (or 16.0%) increase in average rate per total mile partially offset by a 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.
Previous wording
For the six months ended June 30, 2026 the increase in Dedicated revenue relates to an increase in average freight revenue per tractor per week of 8.5%, partially offset by a 15, or 1.0%, 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 cents per mile (or 13.3%) increase in average rate per total mile partially offset by a 4.4% decrease in average miles per unit compared to the 2025 period.
Current wording
For the nine months ended September 30, 2026 the increase in Dedicated revenue relates to an increase in average freight revenue per tractor per week of 7.8%, partially offset by a 31, or 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 45.0 cents per mile (or 14.3%) increase in average rate per total mile partially offset by a 5.7% decrease in average miles per unit compared to the 2025 period.
Previous wording
For the three and six months ended June 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 during the second quarter of 2025 that was later discontinued.
Current wording
For the three and nine months ended September 30, 2026, Managed Freight total revenue increased compared to the 2025 periods primarily as a result of the fourth quarter 2025 Star Acquisition and customer rate increases obtained during the first half of the year.
Previous wording
For the three and six months ended June 30, 2026, Warehousing total revenue increased $1.1 million and $4.7 million compared to the 2025 periods primarily due to onboarding a significant customer in the fourth quarter of 2025.
Current wording
For the three and nine months ended September 30, 2026, Warehousing total revenue increased $1.9 million and $6.6 million compared to the 2025 periods primarily due to onboarding a significant customer in the fourth quarter of 2025.
Previous wording
The increase in Expedited segment operating income for the three months ended June 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 months ended June 30, 2026 the decrease 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. The decrease in Expedited segment operating expenses for thethree and six months ended June 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, our focus in Expedited will be on improving margins through rate increases, exiting less profitable business, and adding more profitable business.
Current wording
The increase in Expedited segment operating income for the three months ended 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 nine months ended September 30, 2026 the increase in Expedited segment operating income was primarily the result of a decrease in Expedited segment operating expenses, partially offset by the aforementioned decrease in revenue. The decrease in Expedited segment operating expenses for thethree and nine months ended 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. As we progress throughout this cycle, our focus for our Expedited fleet is to serve customers who truly need our teams and are willing to agree to multi-year agreements as a sign of their commitment.
Previous wording
The increase in Dedicated segment operating income for thethree and six months ended June 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 thethree and six months ended June 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.
Current wording
The increase in Dedicated segment operating income for thethree and nine months ended 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 thethree and nine months ended 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.
Previous wording
The decrease in segment operating income for Managed Freight for thethree 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 thethree 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.
Current wording
The increase in segment operating income for Managed Freight for thethree 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 thethree 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.
Previous wording
The decrease in segment operating income for Warehousing for thethree and six months ended June 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. 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.
Current wording
The decrease in segment operating income for Warehousing for thethree and nine months ended 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.
Previous wording
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 million and $22.8 million at June 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.
Current wording
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 $31.7 million and $22.8 million at 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.
Previous wording
As of June 30, 2026 and December 31, 2025 we had $324.4 million and $338.7 million in debt and lease obligations, respectively, consisting of the following:
Current wording
As of September 30, 2026 and December 31, 2025 we had $316.7 million and $338.7 million in debt and lease obligations, respectively, consisting of the following:
Previous wording
As of June 30, 2026, we had $51.0 million borrowings outstanding, undrawn letters of credit outstanding of approximately $19.9 million, and available borrowing capacity of $59.1 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.
Current wording
As of September 30, 2026, we had $35.1 million borrowings outstanding, undrawn letters of credit outstanding of approximately $19.8 million, and available borrowing capacity of $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.
Previous wording
Our net capital expenditures for the six months ended June 30, 2026 totaled $0.2 million of expenditures, as compared to $52.8 million of expenditures for the six months ended June 30, 2025. During the six months ended June 30, 2026, we took delivery of approximately 181 new tractors and 116 new trailers, while disposing of approximately 573 used tractors and 113 used trailers. Net losses on disposal of equipment and real estate in the six months ended June 30, 2026 and 2025 were $0.6 million for each period. Our current fleet plan for the balance of 2026 ranges from $50.0 million to $60.0 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.
Current wording
Our net capital expenditures for the nine months ended September 30, 2026 totaled $18.6 million of expenditures, as compared to $88.4 million of expenditures for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, we took delivery of approximately 362 new tractors and 154 new trailers, while disposing of approximately 799 used tractors and 253 used trailers. Net gains on disposal of equipment were $0.3 million for the nine months ended September 30, 2026 compared to a net loss of $0.1 million for the nine months ended September 30, 2025. Our current fleet plan for the balance of 2026 ranges from $35.0 million to $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.
Previous wording
We distributed a total of $3.5 million to stockholders in the first six months of 2026 through dividends.
Current wording
We distributed a total of $5.3 million to stockholders in the first nine months of 2026 through dividends.
Previous wording
Net cash flows provided by operating activities decreased to $18.1 million for the six months ended June 30, 2026, compared to $46.7 million for the same 2025 period. Changes in operating assets and liabilities used $35.5 million and $7.7 million during the six months ended June 30, 2026 and 2025, respectively, and net income decreased to $13.0 million for the six months ended June 30, 2026, compared to $16.4 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 deferred income tax expense and depreciation and amortization.
Current wording
Net cash flows provided by operating activities decreased to $44.9 million for the nine months ended September 30, 2026, compared to $88.1 million for the same 2025 period. Changes in operating assets and liabilities used $43.6 million and $3.7 million during the nine months ended 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 $23.7 million for the nine months ended September 30, 2026, compared to $25.5 million for the same 2025 period. These increases in cash used during the 2026 period were partially offset by higher non-cash adjustments, including deferred income tax benefit and depreciation and amortization.
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