P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) today reported
net income of $7,288,796, or diluted earnings per share of $1.17,
for the quarter ended June 30, 2018, and net income of $8,676,104,
or diluted earnings per share of $1.39, for the six-month period
then ended. These results compare to net income of $1,608,799, or
diluted earnings per share of $0.25, and net income of $3,891,963,
or diluted earnings per share of $0.61, respectively, for the three
and six months ended June 30, 2017. Excluding the impact of
recognized gains or losses associated with the Company’s
investments in marketable equity securities, the Company reported
adjusted net income (a non-GAAP measure) of $7,027,638, or adjusted
diluted earnings per share (a non-GAAP measure) of $1.13, for the
quarter ended June 30, 2018, and adjusted net income of $9,313,946,
or adjusted diluted earnings per share of $1.49, for the six-month
period then ended. These results compare to adjusted net income of
$1,400,604, or adjusted diluted earnings per share of $0.22, and
adjusted net income of $2,587,022, or adjusted diluted earnings per
share of $0.40, respectively, for the three and six months ended
June 30, 2017.
Operating revenues increased 24.5% to
$135,302,800 for the second quarter of 2018 compared to
$108,645,798 for the second quarter of 2017. The increase in
operating revenues includes an increase in fuel surcharge revenue
from $15,548,705 for the second quarter of 2017 to $22,421,490 for
the second quarter of 2018 as fuel prices were higher during the
second quarter of 2018 compared to the second quarter of 2017. For
the six months ended June 30, 2018, operating revenues increased
16.8% to $254,760,947 compared to $218,050,328 during the six
months ended June 30, 2017. The increase in operating revenues
includes an increase in fuel surcharge revenue from $31,350,520 for
the first six months of 2017 to $42,775,813 for the first six
months of 2018 as fuel prices were higher during the first six
months of 2018 compared to the first six months of 2017.
Daniel H. Cushman, President of the Company,
commented, “We have a lot to be happy and proud about when looking
at our second quarter results. One of the things I always look at,
and aspire to, is improving on our year-over-year results. But this
year is different in that 2017 was not a very satisfying year in
regards to our financial performance, so improving over 2017
results is not good enough. Coming off a year of lackluster
results, we wanted to set our goals higher. We aspire to get back
to the earnings level of 2015, which was a record earnings year for
the Company. Our financial results in the second quarter of 2018
were significantly better than those of both the second quarter of
2017 and 2016 but fell short of the second quarter of 2015
financial results, which was our target level. However, one notable
difference between the second quarter of 2018 and the second
quarter of 2015 was that in 2015 we recognized almost $1.6 million
more in pre-tax gains on the sales of our used equipment. This
difference ended up being the primary difference between falling
short of the targeted 2015 financial results and matching those
results. Since 2015, we have slowed our level of equipment sales in
order to allow for fleet growth and to avoid the stagnant, but
improving, used equipment market. As such, we do not expect gains
from equipment sales to be a major contributor to our 2018
financial results. With that said, in June of this year we did
achieve record high operating income results, regardless of the
level of equipment gains recognized.
“As mentioned in our previous earnings release,
we expected that our financial results would get progressively
better throughout 2018 due to the great successes we achieved in
improving our rates during the latter half of 2017 and the first
part of 2018. Those successes only addressed approximately 45% of
our business as we honored committed rates through the expiration
dates occurring later in 2018. A significant portion of our
business fell into this category with rates that did not expire
until June and July of this year. We continued to see rate
improvement as we addressed these expiring rates, and as a result,
our financial results became progressively better during each month
of the second quarter.
“We will continue to address our rate structure
throughout the remainder of 2018 as we strive to stay ahead of the
curve when it comes to increased costs. While we remain diligent in
our efforts to control costs, we are already experiencing attempts
from our suppliers to obtain financial relief as a result of our
improved results and when combined with other rising industry
costs, such as driver pay, insurance, and equipment costs, it is
paramount that we continue to have success in raising rates to stay
ahead of these cost increases.
“Driver recruiting and retention costs will
continue to rise as the competitiveness in the industry for
qualified drivers has intensified to unprecedented levels. As a
result, we implemented a significant driver pay increase at the end
of 2017, which has had a significant impact on our financial
results during 2018, and will continue to do so. While we believe
that we offer a competitive pay and benefits package, desirable
routes, favorable home time policies, and one of the newest truck
fleets in the industry, we anticipate that market forces will
continue to drive our total driver costs higher throughout the
remainder of the year and for the foreseeable future. Our efforts
have allowed us to increase our company manned truck count by 7%
over the count at the end of the previous quarter.
“We have had tremendous success in growing our
Mexico service offering and year-over-year second quarter revenue
in that division has grown by almost 30%. Our Mexico Division
continues to be one of our most profitable divisions, and we are
extremely pleased with that division’s performance. Revenue for the
second quarter in our Logistics Division has more than doubled when
compared to the second quarter of last year. Our Logistics Division
has now begun achieving our desired levels of growth and
profitability, and we expect 2018 to be a banner year for that
division. Due to capacity constraints in the market, we are also
experiencing, and securing, more dedicated freight opportunities
than experienced in the past. These dedicated business wins are
great for us in terms of profitability and great for our driving
professionals in terms of earnings and quality of life.
“We achieved another accomplishment of which we
are very proud. We have recently been named the FedEx Ground
‘Carrier of the Year’. We very proudly recognize that we are viewed
in the industry as an ‘automotive carrier’. That’s fine by us
because we are, and we are great at it. We were named Chrysler’s
‘Carrier of the Year’ last year, but as we have been proving to
shippers outside the automotive realm, we are so much more than
just an automotive carrier. Automotive OEMs and Tier 1 suppliers
are known for being extremely demanding in terms of their service
expectations. We recognize and embrace those expectations. Our
ability to succeed under such high levels of service expectations
can translate very well to every type of shipper no matter whether
they are an automotive, retail, manufacturing, or expedited
customer. With the company being recognized as a premium service
provider across industry segments, we are now, more than ever,
seeking opportunities with shippers that demand the highest levels
of service.
“During the remainder of the year, we expect to
continue implementing our strategic growth plan which incorporates
fleet growth of approximately 20%. Our fleet growth during the
second quarter has been somewhat limited as some truck
manufacturers experienced temporary delivery delays during the
period. With deliveries now ramping up to full speed, we expect to
be back on schedule soon. We have to, and will continue to, push
our rates higher. We will continue to reward our drivers with a
solid earnings opportunity. Our business mix is now comprised of
over 50% dedicated or quasi-dedicated business, which we believe
provides our driving professionals with some of the best, most
consistent home time opportunities in the industry.”
Non-GAAP Financial Measures
In addition to our results under United States
generally accepted accounting principles (GAAP), this press release
also includes non-GAAP financial measures termed adjusted net
income and adjusted diluted earnings per share. The Company defines
adjusted net income and adjusted diluted earnings per share as GAAP
net income and GAAP diluted earnings per share, respectively,
excluding any amount recognized as gain or loss on transactions
involving the Company’s investments in marketable equity
securities. Management believes that reporting adjusted net income
and adjusted diluted earnings per share more clearly reflects the
Company’s current operating results and provides investors with a
better understanding of the Company’s overall financial
performance. In addition, the adjusted results, although not a
financial measure under GAAP, facilitate the ability to analyze the
Company’s financial results in relation to those of its competitors
and to the Company’s prior financial performance by excluding items
which otherwise would distort the comparison. However, because not
all companies use identical calculations, the Company's
presentation of adjusted results may not be comparable to similarly
titled measures of other companies. Adjusted net income and
adjusted diluted earnings per share are not recognized terms under
GAAP, do not purport to be alternatives to, and should be
considered in addition to, and not as a substitute for or superior
to, net income or diluted earnings per share as defined under
GAAP.
Pursuant to the requirements of Regulation G, we
have provided a tabular reconciliation of GAAP net income to
adjusted net income and GAAP diluted earnings per share to adjusted
diluted earnings per share in this press release.
About P.A.M. Transportation Services,
Inc.
P.A.M. Transportation Services, Inc. is a
leading truckload dry van carrier transporting general commodities
throughout the continental United States, as well as in the
Canadian provinces of Ontario and Quebec. The Company also provides
transportation services in Mexico through its gateways in Laredo
and El Paso, Texas under agreements with Mexican carriers.
Forward-Looking Statements
Certain information included in this document
contains or may contain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements may relate to expected future
financial and operating results or events, and are thus
prospective. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties
include, but are not limited to, excess capacity in the trucking
industry; surplus inventories; recessionary economic cycles and
downturns in customers' business cycles; increases or rapid
fluctuations in fuel prices, interest rates, fuel taxes, tolls, and
license and registration fees; the resale value of the Company's
used equipment and the price of new equipment; increases in
compensation for and difficulty in attracting and retaining
qualified drivers and owner-operators; increases in insurance
premiums and deductible amounts relating to accident, cargo,
workers' compensation, health, and other claims; unanticipated
increases in the number or amount of claims for which the Company
is self-insured; inability of the Company to continue to secure
acceptable financing arrangements; seasonal factors such as harsh
weather conditions that increase operating costs; competition from
trucking, rail, and intermodal competitors including reductions in
rates resulting from competitive bidding; the ability to identify
acceptable acquisition candidates, consummate acquisitions, and
integrate acquired operations; a significant reduction in or
termination of the Company's trucking service by a key customer;
and other factors, including risk factors, included from time to
time in filings made by the Company with the Securities and
Exchange Commission. The Company undertakes no obligation to
publicly update or revise forward-looking statements, whether as a
result of new information, future events or otherwise. In light of
these risks and uncertainties, the forward-looking events and
circumstances discussed above and in company filings might not
transpire.
|
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|
P.A.M.
Transportation Services, Inc. and SubsidiariesKey Financial and
Operating Statistics(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Revenue, before fuel surcharge |
$ |
112,881,310 |
|
|
$ |
93,097,093 |
|
|
$ |
211,985,134 |
|
|
$ |
186,699,808 |
|
Fuel
surcharge |
|
22,421,490 |
|
|
|
15,548,705 |
|
|
|
42,775,813 |
|
|
|
31,350,520 |
|
|
|
135,302,800 |
|
|
|
108,645,798 |
|
|
|
254,760,947 |
|
|
|
218,050,328 |
|
|
|
|
|
|
|
|
|
Operating expenses and costs: |
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
29,970,937 |
|
|
|
25,262,505 |
|
|
|
58,610,243 |
|
|
|
51,166,719 |
|
Operating supplies and expenses |
|
23,505,674 |
|
|
|
19,410,185 |
|
|
|
46,176,260 |
|
|
|
39,642,257 |
|
Rent and purchased transportation |
|
52,075,208 |
|
|
|
43,716,716 |
|
|
|
97,991,801 |
|
|
|
86,839,498 |
|
Depreciation |
|
12,734,463 |
|
|
|
10,484,614 |
|
|
|
24,357,896 |
|
|
|
21,156,005 |
|
Insurance and claims |
|
4,451,309 |
|
|
|
4,438,887 |
|
|
|
8,719,163 |
|
|
|
9,135,148 |
|
Other |
|
3,067,107 |
|
|
|
2,304,033 |
|
|
|
5,647,595 |
|
|
|
4,420,635 |
|
Loss (gain) on disposition of equipment |
|
(518,509 |
) |
|
|
130,443 |
|
|
|
(515,206 |
) |
|
|
129,814 |
|
Total
operating expenses and costs |
|
125,286,189 |
|
|
|
105,747,383 |
|
|
|
240,987,752 |
|
|
|
212,490,076 |
|
|
|
|
|
|
|
|
|
Operating income |
|
10,016,611 |
|
|
|
2,898,415 |
|
|
|
13,773,195 |
|
|
|
5,560,252 |
|
|
|
|
|
|
|
|
|
Interest expense |
|
(1,355,106 |
) |
|
|
(935,060 |
) |
|
|
(2,515,430 |
) |
|
|
(1,911,679 |
) |
Non-operating (loss) income |
|
632,384 |
|
|
|
649,346 |
|
|
|
(246,823 |
) |
|
|
2,701,506 |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
9,293,889 |
|
|
|
2,612,701 |
|
|
|
11,010,942 |
|
|
|
6,350,079 |
|
Income tax expense |
|
2,005,093 |
|
|
|
1,003,902 |
|
|
|
2,334,838 |
|
|
|
2,458,116 |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
7,288,796 |
|
|
$ |
1,608,799 |
|
|
$ |
8,676,104 |
|
|
$ |
3,891,963 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
1.17 |
|
|
$ |
0.25 |
|
|
$ |
1.39 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
Average shares outstanding – Diluted |
|
6,228,727 |
|
|
|
6,430,005 |
|
|
|
6,257,320 |
|
|
|
6,412,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
Truckload
Operations |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Total
miles |
|
57,182,671 |
|
|
|
58,721,872 |
|
|
|
112,748,569 |
|
|
|
118,846,481 |
|
Operating ratio (1) |
|
90.26 |
% |
|
|
96.82 |
% |
|
|
93.16 |
% |
|
|
97.03 |
% |
Empty
miles factor |
|
6.08 |
% |
|
|
6.78 |
% |
|
|
6.25 |
% |
|
|
6.79 |
% |
Revenue per total mile, before fuel surcharge |
$ |
1.56 |
|
|
$ |
1.39 |
|
|
$ |
1.51 |
|
|
$ |
1.39 |
|
Total
loads |
|
103,511 |
|
|
|
84,726 |
|
|
|
198,486 |
|
|
|
168,477 |
|
Revenue per truck per work day |
$ |
743 |
|
|
$ |
674 |
|
|
$ |
725 |
|
|
$ |
677 |
|
Revenue per truck per week |
$ |
3,716 |
|
|
$ |
3,370 |
|
|
$ |
3,625 |
|
|
$ |
3,385 |
|
Average company-driver trucks |
|
1,324 |
|
|
|
1,219 |
|
|
|
1,279 |
|
|
|
1,250 |
|
Average owner operator trucks |
|
550 |
|
|
|
673 |
|
|
|
550 |
|
|
|
650 |
|
|
|
|
|
|
|
|
|
Logistics
Operations |
|
|
|
|
|
|
|
Total
revenue |
$ |
23,749,822 |
|
|
$ |
11,440,763 |
|
|
$ |
43,330,061 |
|
|
$ |
22,125,344 |
|
Operating ratio |
|
94.39 |
% |
|
|
97.38 |
% |
|
|
94.88 |
% |
|
|
96.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.A.M.
Transportation Services, Inc. and SubsidiariesReconciliation of
GAAP Measures to Non-GAAP AmountsReconciliation of Net Income to
Adjusted Net Income(unaudited) |
|
Quarter ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Net
income (GAAP) |
$ |
7,288,796 |
|
|
$ |
1,608,799 |
|
|
$ |
8,676,104 |
|
|
$ |
3,891,963 |
|
|
|
|
|
|
|
|
|
Adjustment to exclude (gain) loss recognized on marketable
equity securities |
|
(333,000 |
) |
|
|
(338,109 |
) |
|
|
809,492 |
|
|
|
(2,129,126 |
) |
|
|
|
|
|
|
|
|
Tax
benefit (expense) of adjustment (2) |
|
71,842 |
|
|
|
129,914 |
|
|
|
(171,650 |
) |
|
|
824,185 |
|
|
|
|
|
|
|
|
|
Adjusted net income (non-GAAP) |
$ |
7,027,638 |
|
|
$ |
1,400,604 |
|
|
$ |
9,313,946 |
|
|
$ |
2,587,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.A.M.
Transportation Services, Inc. and SubsidiariesReconciliation of
GAAP Measures to Non-GAAP AmountsReconciliation of Diluted Earnings
Per Share toAdjusted Diluted Earnings Per Share(unaudited) |
|
Quarter ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share (GAAP) |
$ |
1.17 |
|
|
$ |
0.25 |
|
|
$ |
1.39 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
Adjustment to exclude (gain) loss recognized on marketable
equity securities |
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
0.13 |
|
|
|
(0.33 |
) |
|
|
|
|
|
|
|
|
Tax
benefit (expense) of adjustment (2) |
|
0.01 |
|
|
|
0.02 |
|
|
|
(0.03 |
) |
|
|
0.12 |
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per share (non-GAAP) |
$ |
1.13 |
|
|
$ |
0.22 |
|
|
$ |
1.49 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________________________________
1) |
Operating ratio has been calculated based upon total operating
expenses, net of fuel surcharge, as a percentage of revenue, before
fuel surcharge. We used revenue, before fuel surcharge, and
operating expenses, net of fuel surcharge, because we believe that
eliminating this sometimes volatile source of revenue affords a
more consistent basis for comparing our results of operations from
period to period. |
2) |
The
tax benefit is calculated using the effective tax rates for each
respective period prior to any adjustments for non-GAAP
amounts. |
Contact:
Allen W. West(479) 361-9111
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