Company: PAMT
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001437749-25-007273
Chunk: 146

Company: PAMT CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 146
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 oversupply of available trucks in the market compared to available freight.

Salaries, wages and benefits increased from 37.8% of revenues, before fuel surcharges, during 2023 to 38.9% of revenues, before fuel surcharges, during 2024. The percentage-based increase relates primarily to the interaction of a decrease in operating revenues with the fixed-cost nature of employing human capital.

Rent and purchased transportation increased from 23.5% of revenues, before fuel surcharges, during 2023 to 26.1% of revenues, before fuel surcharges, during 2024. The increase was primarily due to a year-over-year increase in the percentage of miles driven by third-party owner-operators as opposed to company-employed drivers and to a lesser extent increased rates paid to third-party carriers for the year ended December 31, 2024 compared to the year ended December 31, 2023. 

Depreciation increased from 13.8% of revenues, before fuel surcharges, during 2023 to 23.3% of revenues, before fuel surcharges, during 2024. 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 increased depreciation expense by approximately $24.7 million and increased basic and diluted loss per share by $0.86, net of tax, for the year ended December 31, 2024. In addition to the Company’s change in accounting estimate, the year-over-year increase can also be attributed to an increase in the cost for replacement revenue equipment compared to the cost of retired equipment and to the interaction of a decrease in operating revenues with the fixed-cost nature of depreciation expense. 

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Impairment loss accounted for 1.5% of revenues, before fuel surcharges, during 2024. The Company has not previously recognized an impairment loss on long-lived assets. Management determined that market conditions for used