Company: PAMT
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001437749-25-015763
Chunk: 27

Company: PAMT CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 primarily to the interaction of expenses with fixed-cost characteristics, such as rents, driver training schools and operating taxes and licenses with a decrease in revenue.

Rent and purchased transportation increased from 22.2% of revenues, before fuel surcharges, during the first quarter of 2024 to 25.8% of revenues, before fuel surcharges, during the first quarter of 2025. The increase was primarily due to a quarter-over-quarter increase in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers.

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Depreciation increased from 18.3% of revenues, before fuel surcharges, during the first quarter of 2024 to 24.0% of revenues, before fuel surcharges, during the first quarter of 2025. The increase is primarily attributed to management’s change in accounting estimates related to the salvage values and useful lives of revenue equipment during the year ended December 31, 2024. During 2024, the Company conducted a review of its revenue equipment and determined that changes in market conditions and expected asset usage warranted a revision to the estimated useful lives and salvage values of certain equipment. As a result, during the year ended December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment to better reflect their expected residual values at the end of their service periods. This change in accounting estimates shortened the depreciable life and increased the depreciable base for a significant portion of the company’s revenue equipment, thus increasing future monthly depreciation expense for the affected assets. In addition to the effect from the Company’s previous change in accounting estimate, the year-over-year increase can also be attributed to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense.

Non-operating income decreased from 3.7% of revenues, before fuel surcharges, during the first quarter of 2024 to 2.7% of revenues, before fuel surcharges, during the first quarter of 2025. The decline was primarily driven by slower growth in the market value of our marketable equity securities as of March 31, 2025, compared to the same date in 2024, as well as a reduction in interest income recognized during the quarter ended March 31, 2025.

Interest expense increased from 2.5% of revenues, before fuel surcharges, during the first quarter of 2024 to 4.2% of revenues