P.A.M. Transportation Services, Inc. Announces Results for the First Quarter Ended March 31, 2017
April 27 2017 - 4:42PM
P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) today reported
net income of $2,283,164 or diluted and basic earnings per share of
$0.36 for the quarter ended March 31, 2017. These results compare
to net income of $2,934,651 or diluted and basic earnings per share
of $0.41 for the quarter ended March 31, 2016.
Operating revenues increased 5.6% to $109,404,531
for the first quarter of 2017 compared to $103,589,221 for the
first quarter of 2016. The increase in operating revenues includes
an increase in fuel surcharge revenue from $9,940,274 for the first
quarter of 2016 to $15,801,816 for the first quarter of 2017 as
fuel prices were significantly higher during the first quarter of
2017 compared to the first quarter of 2016.
Daniel H. Cushman, President of the Company,
commented, “The first quarter of 2017 was somewhat of a
continuation of the trends we experienced in 2016 where we saw
higher costs and downward rate pressure from customers. While we
have had some success in implementing cost reduction strategies, we
have yet to achieve success in obtaining any significant rate
increases from customers. In fact, the largest variance in our
results during the first quarter of 2017, compared to the first
quarter of 2016, has been the variance in our rates charged to
customers. The impact of the continuous downward rate pressure
experienced throughout 2016 is evident, as after a full year of
monthly customer rate reductions, our average rate per mile has
declined to a point well below that of last year at this time.
“Some of our customer base are beginning to show
concern for future truck capacity due to the electronic logging
device regulations that are scheduled to become effective in
December of this year, and we believe industry capacity will begin
to tighten as this timeframe approaches. These customers are
looking to lock in multi-year rates while rates are at depressed
levels. Other customers seem to be taking the position that the new
regulations will not have an impact on their capacity needs as
their current carrier base is already compliant with the
regulations. These customers appear to be willing to accept the
exposure that their current carrier base could begin to transfer
capacity to other customers who were previously using non-compliant
carriers, and now need a compliant carrier base. This could lead to
certain customers having capacity pulled or capacity generally
being less available to all shippers. We believe that compliant
carriers, including us, are likely to witness better margin
opportunities as non-compliant carriers exit the marketplace and
capacity becomes less available.
“Although not as significant as the reduction
experienced in rates, another major difference in our
year-over-year financial operating performance relates to the lack
of gains on the sale of company-owned equipment. During the first
quarter of 2016, we reported $1.4 million in pre-tax gains from the
sale of used equipment which compares to almost no equipment gain
reported in the first quarter of this year. The used equipment
market continues to be soft and due to our equipment fleet being
one of the newest in the industry, we continued to use our
equipment in our operations instead of selling that equipment for
little to no gain. We did sell certain investments in marketable
equity securities during the first quarter of this year and
recognized non-operating pre-tax gains of $1.8 million, which
compares to a small non-operating pre-tax loss on marketable equity
security sales during last year’s first quarter.
“Our strategy for the remainder of 2017 includes
efforts to continue to reduce operating costs and to seek new
business opportunities at higher rates than some of our existing
customer’s rates. We have already succeeded in replacing some
freight in that endeavor, but it will take time to grow the
business with those higher margin customers in order to offset the
rate decreases experienced over the last year.”
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.
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.
P.A.M.
Transportation Services, Inc. and Subsidiaries |
Key
Financial and Operating Statistics |
(unaudited) |
|
Quarter ended March 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
Revenue, before fuel surcharge |
$ |
93,602,715 |
|
|
$ |
93,648,947 |
|
Fuel surcharge |
|
15,801,816 |
|
|
|
9,940,274 |
|
|
|
109,404,531 |
|
|
|
103,589,221 |
|
|
|
|
|
Operating expenses and costs: |
|
|
|
Salaries, wages and benefits |
|
25,904,215 |
|
|
|
27,482,330 |
|
Operating supplies and expenses |
|
20,232,072 |
|
|
|
19,118,663 |
|
Rent and purchased transportation |
|
43,122,782 |
|
|
|
37,387,040 |
|
Depreciation |
|
10,671,391 |
|
|
|
9,176,736 |
|
Insurance and claims |
|
4,696,261 |
|
|
|
4,058,436 |
|
Other |
|
2,116,602 |
|
|
|
2,169,614 |
|
Gain on disposition of equipment |
|
(629 |
) |
|
|
(1,389,834 |
) |
Total operating expenses and costs |
|
106,742,694 |
|
|
|
98,002,985 |
|
|
|
|
|
Operating income |
|
2,661,837 |
|
|
|
5,586,236 |
|
|
|
|
|
Interest expense |
|
(976,619 |
) |
|
|
(822,322 |
) |
Non-operating income (loss) |
|
2,052,160 |
|
|
|
(22,266 |
) |
|
|
|
|
Income before income taxes |
|
3,737,378 |
|
|
|
4,741,648 |
|
Income tax expense |
|
1,454,214 |
|
|
|
1,806,997 |
|
|
|
|
|
Net income |
$ |
2,283,164 |
|
|
$ |
2,934,651 |
|
|
|
|
|
Diluted earnings per share |
$ |
0.36 |
|
|
$ |
0.41 |
|
|
|
|
|
Average shares outstanding – Diluted |
|
6,425,056 |
|
|
|
7,144,644 |
|
|
|
|
|
|
|
|
Quarter ended March 31, |
Truckload
Operations |
|
2017 |
|
|
|
2016 |
|
Total miles |
|
60,124,609 |
|
|
|
57,362,679 |
|
Operating ratio (1) |
|
97.24 |
% |
|
|
93.72 |
% |
Empty miles factor |
|
6.81 |
% |
|
|
6.55 |
% |
Revenue per total mile, before fuel surcharge |
$ |
1.38 |
|
|
$ |
1.43 |
|
Total loads |
|
83,751 |
|
|
|
79,692 |
|
Revenue per truck per work day |
$ |
678 |
|
|
$ |
678 |
|
Revenue per truck per week |
$ |
3,390 |
|
|
$ |
3,390 |
|
Average company-driver trucks |
|
1,281 |
|
|
|
1,379 |
|
Average owner operator trucks |
|
631 |
|
|
|
511 |
|
|
|
|
|
Logistics
Operations |
|
|
|
Total revenue |
$ |
10,684,582 |
|
|
$ |
11,541,840 |
|
Operating ratio |
|
96.57 |
% |
|
|
96.24 |
% |
|
|
_____________________________________
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.
Allen W. West
(479) 361-9111
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