PAMT Breaches Debt Covenant Amid Mounting Losses

Truckload carrier PAMT disclosed in a recent SEC filing that it violated a key debt covenant at the end of the second quarter, further bringing out the financial pressures at the company. The covenant required PAMT to maintain a debt-to-EBITDA ratio of less than 4:1, measured on a rolling four-quarter basis.

According to the filing, the company was not in compliance as of June 30, 2025. While PAMT was granted a 45-day “cure period,” it secured a waiver from its lender on August 7 and said it is working to amend covenant terms going forward.

Debt Pressures Driven by Equipment Purchases

The filing noted that the breach stemmed from higher debt taken on to fund $144.2 million in equipment purchases in 2024, combined with weaker EBITDA performance as stronger quarters dropped out of the rolling calculation.

As of June 30, PAMT reported $331.2 million in long-term debt and current maturities, up from $325.6 million at the end of 2024. The company also has access to a $60 million revolving line of credit, with no borrowings against it, at a variable rate tied to SOFR plus 1.85%.

Financial Performance and Market Position

The company’s performance has deteriorated sharply. PAMT’s second-quarter operating ratio reached 112.5%, worsening from 110.9% in the first quarter and marking the seventh consecutive quarter of operating losses.

Stock performance has mirrored the financial struggles. Since peaking around $40 per share in March 2022, PAMT’s stock has lost more than 70% of its value and is down about a third in the past year alone. The pressure led to the resignation of CEO Joe Vitiritto following first-quarter earnings earlier this year.

Far from Growth Targets

In 2021, PAMT’s leadership set an ambitious goal of $1 billion in revenue by 2025. Midway through this year, the company reported $306.5 million in six-month revenue, leaving it well short of that target.

The carrier’s challenges are compounded by its concentration in the automotive sector and reliance on U.S.–Mexico cross-border freight, which accounts for more than 40% of its revenues. SeekingAlpha recently described PAMT as a “cyclical carrier with low multiples, with certain problems controlling margins, very dependent on the auto sector.”

The same analysis amplifies the seriousness of the covenant breach:

“The recent breach of financial covenants, even though the bank has granted a waiver, only reinforces this weak position.”

Source: FreightWaves