PAMT CORP (PAMT)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 missed on both revenue and EPS vs S&P Global consensus: Revenue $151.13M vs $160.70M* and EPS (Primary) -$0.61 vs -$0.22*, while GAAP diluted EPS was -$0.46; operating ratio deteriorated to 107.3% as freight demand and pricing remained weak .
• YoY revenue fell 17.4% and diluted EPS worsened to -$0.46 from -$0.13; sequentially, revenue declined modestly (-2.7%) and EPS deteriorated from -$0.37 in Q1, reflecting lower miles, weaker mix, higher purchased transportation, and elevated depreciation .
• Truckload miles (-11.9% YoY) and logistics revenue (-23.6% YoY) fell; Mexico cross-border exposure rose to 44.0% of total revenue, highlighting a growing regional mix shift .
• Liquidity remained ample (aggregate liquidity + cash + marketable securities $177.1M) but the company breached a leverage covenant and secured a waiver; management is working to amend terms before Q3 end—an overhang until resolved .
• Potential H2 tailwind: 100% bonus depreciation reinstatement and EBIT-to-EBITDA interest deductibility switch expected to reduce 2025 cash taxes by ~+$4.5M, aiding liquidity .

What Went Well and What Went Wrong

• What Went Well

  • Equipment disposal gains and non-operating income provided partial offsets: gain on disposition rose to 4.8% of truckload revenue before fuel; marketable securities generated dividends and unrealized gains .
  • Cross-border momentum: Mexico-related shipments reached 44.0% of revenue (vs 35.4% LY), indicating diversified demand and possible relative resilience in that lane .
  • Tax policy tailwind: “restores 100% bonus depreciation” and reverts interest limitation to an EBITDA basis, expected to reduce cash taxes by ~+$4.5M in H2 2025 .

• What Went Wrong

  • Core demand/pricing weakness: management cites an “ongoing freight recession, characterized by an oversupply of available trucks in the market compared to available freight,” pressuring miles (-11.9% YoY), rate/mile (-2.4% YoY), and loads .
  • Cost pressure and mix: purchased transportation as a percent of revenue rose (truckload rent and purchased transportation 30.2% vs 26.7% LY) and depreciation surged due to 2024 useful life/salvage changes, hurting operating ratio (112.5% truckload; consolidated 107.3%) .
  • Balance sheet optics: debt increased to $331.2M; the company was not in compliance with the debt-to-adjusted EBITDA covenant as of 6/30 (waived subsequently), creating refinancing/credit flexibility uncertainty until amended .

Financial Results

Actual vs S&P Global consensus (Q2 2025):

• Revenue: $151.13M vs $160.70M* → Miss (~-$9.6M, ~-6.0%)*
• EPS (Primary): -$0.61 vs -$0.22* → Miss (~-$0.39)*
• Note: Company reported GAAP diluted EPS of -$0.46; S&P “Primary EPS” methodology differs from GAAP diluted EPS, explaining the discrepancy .
• Depth: 1 estimate for revenue and EPS*.

Values marked with * are retrieved from S&P Global.

Segment revenue (before fuel surcharge)

Selected KPIs

Balance sheet and cash flow highlights

• Debt: $331.2M (6/30/25) .
• Stockholders’ equity: $244.9M (6/30/25) .
• Aggregate liquidity, cash and marketable equity securities: $177.1M (6/30/25) .
• Operating cash flow: +$17.2M in 1H25; Q1 used -$1.4M .

Guidance Changes

Earnings Call Themes & Trends

Note: A Q2 2025 earnings call transcript was not available in the document set; themes below reflect 8-Ks and 10-Q commentary.

Management Commentary

• Demand backdrop: “ongoing freight recession, characterized by an oversupply of available trucks in the market compared to available freight,” driving lower miles and rate/mile .
• Cost/margin drivers: “Depreciation increased…primarily attributed to…change in accounting estimates related to the salvage values and useful lives of revenue equipment during…2024” and higher purchased transportation mix .
• Capital/tax policy: Law “restores 100% bonus depreciation…[and] reinstates the…EBITDA-based limitation on…interest expense…expected to reduce…income tax payable…by approximately $4.5 million” in 2H25 .
• Credit facility: “We were not in compliance…As of June 30, 2025…[received] a written waiver…We are currently working with the lender to amend the financial covenant terms…prior to the end of the quarter, ending September 30, 2025” .

Q&A Highlights

• No Q2 2025 earnings call transcript was available; Q&A themes and clarifications are therefore not disclosed in the document set.

Estimates Context

Q2 2025 vs S&P Global consensus:

Values marked with * are retrieved from S&P Global. Company-reported GAAP diluted EPS for Q2 2025 was -$0.46, which may differ from S&P’s Primary EPS methodology .

Key Takeaways for Investors

• Near-term margin pressure persists: weak freight demand, lower rate/mile, and higher purchased transportation share keep operating ratio elevated; depreciation will remain structurally higher due to 2024 estimate changes .
• Liquidity is solid today, but covenant structure needs resolution; progress on amending the leverage covenant is a key de-risking catalyst .
• Mix shift to Mexico cross-border (44% of revenue) is notable; monitor pricing and service levels in that corridor for relative performance vs domestic lanes .
• Non-operating gains/dividends and equipment sale gains provide some EPS cushion but are not a substitute for core margin repair .
• Policy tailwind: 100% bonus depreciation and 163(j) EBITDA switch should cut cash taxes (~+$4.5M in 2H25), modestly improving free cash flow .
• Capital allocation: completed 870k share tender at $17 in May; no dividend planned; watch for pacing of 2025 fleet capex vs demand .
• Estimate resets likely trend down given the Q2 miss and freight softness; upside requires clear evidence of cycle turn, covenant amendment, and improved truckload OR.

Appendix: Additional Data Points

• Consolidated Q2 2025 metrics: Revenue $151.13M; Operating loss $11.07M; Diluted EPS -$0.46; Operating ratio 107.3% .
• 1H25 operating cash flow +$17.2M; cash & equivalents $68.9M; marketable equity securities $48.4M; debt $331.2M as of 6/30/25 .