Note 7 - Lease Obligations

9 Months Ended

Sep. 30, 2026

Note 7.

Leases

Lessee Disclosures

The finance leases in effect at September 30, 2026 terminate from June 2028 through November 2033 and contain guarantees of the residual value of the related equipment by us.

A summary of our lease costs and other lease information at September 30, 2026 and 2025 is as follows:

(dollars in thousands)	Three Months Ended			Three Months Ended			Nine Months Ended		Nine Months Ended
	September 30, 2026			September 30, 2025			September 30, 2026		September 30, 2025
Finance lease cost:
Amortization of right-of-use assets	$	1,206		$	218		$	1,649	$	655
Interest on lease liabilities		101			112			307		355
Operating lease cost		3,543			3,390			10,856		11,219
Variable lease cost		29			(3	)		83		(71	)
Short-term lease cost		2,246			1,652			6,396		4,336
Total lease cost		7,125			5,369			19,291		16,494

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases		101			112			307		355
Operating cash flows from operating leases		3,069			2,534			9,208		8,578
Financing cash flows from finance leases		248			190			708		555
Right-of-use assets obtained in exchange for new finance lease liabilities		77			-			580		-
Right-of-use assets obtained in exchange for new operating lease liabilities		-			702			818		4,991
Weighted-average remaining lease term—finance leases (in years)		3.4			4.9
Weighted-average remaining lease term—operating leases (in years)		3.1			3.8
Weighted-average discount rate—finance leases		12.2	%		6.1	%
Weighted-average discount rate—operating leases		8.7	%		8.8	%

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

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

(in thousands)	*Operating*			*Finance*
2026 ⁽¹⁾		3,682		$	348
2027		13,216			1,392
2028		7,046			1,111
2029		4,074			479
2030		2,602			333
Thereafter		2,102			356
Total minimum lease payments	$	32,722		$	4,019
Less: amount representing interest		(3,658	)		(954	)
Present value of minimum lease payments	$	29,064		$	3,065
Less: current portion		(12,498	)		(1,254	)
Lease obligations, long-term	$	16,566		$	1,811

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

Lessor Disclosures

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

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

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

(in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Operating lease income	$	889	$	418	$	2,625	$	1,278
Sales-type lease selling profit		-		-		-		1
Interest income on net investment in sales-type lease		2		3		8		4
Total lease income	$	891	$	421	$	2,633	$	1,283