P.A.M. Transportation Services, Inc. (NASDAQ: PTSI) (“the
Company”) today reported net income of $18.0 million, or diluted
and basic earnings per share of $0.81, for the quarter ended
December 31, 2022, and net income of $90.7 million, or diluted
earnings per share of $4.04 ($4.08 basic), for the year ended
December 31, 2022. These results compare to net income of $27.9
million, or diluted earnings per share of $1.24 ($1.25 basic), for
the quarter ended December 31, 2021, and net income of $76.5
million, or diluted earnings per share of $3.35 ($3.37 basic), for
the year ended December 31, 2021. Net income and diluted earnings
per share for the fourth quarter ended December 31, 2022 includes
the negative impact of a loss estimate for a claim anticipated to
settle in excess of insurance policy limits. Excluding the negative
impact of this loss estimate, adjusted (non-GAAP) net income for
the quarter ended December 31, 2022 was $24.0 million, or adjusted
(non-GAAP) diluted and basic earnings per share of $1.08.
Consolidated operating revenues increased 11.1% to $237.6
million for the fourth quarter of 2022 compared to $213.9 million
for the fourth quarter of 2021. For the year ended December 31,
2022, consolidated operating revenues increased 33.9% to $946.9
million compared to $707.1 million for the year ended December 31,
2021.
Joe Vitiritto, President of the Company, commented, “I am proud
of our team’s results and how we navigated 2022’s challenges. Our
driving associates have my utmost respect and admiration. Without
them we couldn’t have achieved these results. We did not see a
traditional peak in the fourth quarter as we anticipated, but our
entire team stepped up to the challenge and navigated a challenging
environment well. We continue to remain focused on continually
improving and delivering value to our customers, our team members
and our shareholders in 2023.”
Liquidity, Capitalization, and Cash
Flow
As of December 31, 2022, we had an aggregate of $175.5 million
of cash, marketable equity securities, and available liquidity
under our line of credit and $300.2 million of stockholders’
equity. Outstanding debt was $264.3 million as of December 31,
2022.
During 2022, we generated $168.8 million in operating cash flow
while net capital expenditures, excluding acquisition related
assets, resulted in a cash outflow of $46.6 million.
Equipment
During 2022, we achieved truck fleet growth of approximately
28%, including 17% growth related to the acquisition of the assets
of Metropolitan Trucking earlier in 2022, and by December 31, 2022,
we had received most trucks ordered for 2022. Our fleet growth
required us to keep existing trucks longer, and that negatively
impacted our truck fleet average age which increased from an
average age of 1.8 years at the end of 2021 to an average age of
2.1 years at the end of 2022. We did not receive all our trailing
equipment ordered for 2022 and due to growth in our truck fleet, we
were required to keep older trailers longer than our preferred
replacement cycle. As a result, the average age of our trailer
fleet increased from an average age of 5.5 years at the end of 2021
to an average age of 6.6 years at the end of 2022. We have
experienced a slight increase in repairs and maintenance costs as
our equipment aged and that increase is due more to a general
increase in the pricing of parts and labor needed to make the
repairs than in the frequency of repairs.
Share Repurchase Program
During the fourth quarter of 2022, the Company purchased 34,113
shares of its outstanding common stock under its authorized stock
repurchase program for a total cost of approximately $1.1 million,
bringing the year-to-date total purchases to 210,457 shares
(including 41,610 pre-split shares) at a cost of approximately $7.0
million. Approximately 331,000 shares remain available for purchase
under this program.
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 operating
income, adjusted operating ratio, adjusted net income and adjusted
diluted earnings per share. The Company defines adjusted operating
income, adjusted operating ratio, adjusted net income and adjusted
diluted earnings per share as GAAP operating income, GAAP operating
ratio, GAAP net income and GAAP diluted earnings per share,
respectively, excluding certain significant items, such as certain
litigation-related charges and any tax impact associated with such
items. Management believes that reporting adjusted operating
income, adjusted operating ratio, 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.
Management also believes that adjusted operating ratio is more
representative of our operations when excluding the volatility of
fuel prices, which we cannot control. In addition, the adjusted
results, although not a financial measure under GAAP, may
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 operating income, adjusted operating ratio,
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, operating income, operating ratio, net income
and diluted earnings per share, respectively, as defined under
GAAP.
Pursuant to the requirements of Regulation G, we have provided a
tabular reconciliation of GAAP operating income to adjusted
operating income and adjusted operating ratio, 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 holding company that
owns subsidiaries engaged in providing truckload dry van carrier
services transporting general commodities throughout the
continental United States, as well as in the Canadian provinces of
Ontario and Quebec. The Company’s consolidated operating
subsidiaries also provide 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, prospects, plans 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, ongoing and potential future
economic, business or operational disruptions or uncertainties due
to any further outbreaks of the COVID-19 pandemic or other public
health crises; 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, the price of new equipment and new equipment
availability; 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; our
ability to develop and implement suitable information technology
systems and prevent failures in or breaches of such systems; the
impact of pending or future litigation; general risks associated
with doing business in Mexico, including, without limitation,
exchange rate fluctuations, inflation, import duties, tariffs,
quotas, political and economic instability and terrorism; the
potential impact of new laws, regulations or policy, including,
without limitation, tariffs, import/export, trade and immigration
regulations or policies; 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 due to new
information, future events or otherwise. Considering 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 December 31,
Twelve Months Ended December
31,
2022
2021
2022
2021
(in thousands, except earnings
per share)
(in thousands, except earnings
per share)
Revenue, before fuel surcharge
$203,449
$194,606
$818,751
$641,253
Fuel surcharge
34,167
19,308
128,111
65,867
Operating Revenue
237,616
213,914
946,862
707,120
Operating expenses and costs:
Salaries, wages and benefits
48,849
38,845
181,918
141,019
Operating supplies and expenses
42,849
27,853
166,005
102,228
Rent and purchased transportation
91,450
86,629
364,971
279,016
Depreciation
16,159
13,586
62,806
55,012
Insurance and claims
13,235
8,986
32,516
18,792
Other
5,415
3,789
18,128
12,295
Gain on disposition of equipment
(587)
(484)
(3,250)
(1,447)
Total operating expenses and costs
217,370
179,204
823,094
606,915
Operating income
20,246
34,710
123,768
100,205
Non-operating (expense) income
5,997
3,486
3,168
10,339
Interest expense
(2,343)
(1,668)
(7,929)
(8,039)
Income before income taxes
23,900
36,528
119,007
102,505
Income tax expense
5,917
8,637
28,334
25,989
Net income
$17,983
$27,891
$90,673
$76,516
Diluted earnings per share (1)
$0.81
$1.24
$4.04
$3.35
Average shares outstanding – Diluted
(1)
22,319
22,528
22,436
22,864
P.A.M. Transportation Services, Inc. and Subsidiaries
Key Financial and Operating Statistics
(unaudited)
Quarter Ended December 31,
Twelve Months Ended December
31,
2022
2021
2022
2021
Truckload
Operations
Total miles (in thousands)
52,451
44,467
203,982
182,908
Operating ratio (2)
91.0%
79.2%
83.7%
82.3%
Empty miles factor
9.03%
9.79%
9.29%
8.81%
Revenue per total mile, before fuel
surcharge
$2.60
$2.94
$2.65
$2.35
Total loads
104,719
89,935
406,053
357,090
Revenue per truck per work day
$893
$1,077
$919
$864
Revenue per truck per week
$4,466
$5,385
$4,593
$4,320
Average company-driver trucks
2,056
1,545
1,915
1,582
Average owner operator trucks
405
381
394
375
Logistics
Operations
Total revenue (in thousands)
$67,172
$63,863
$277,816
$211,675
Operating ratio
88.1%
88.2%
87.2%
88.7%
P.A.M. Transportation Services, Inc. and
Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
December 31,
December 31,
2022
2021
(in thousands)
ASSETS
Current Assets:
Cash and cash equivalents
$74,087
$18,509
Trade accounts receivable, net
134,739
121,854
Other receivables
6,263
7,092
Inventories
2,570
1,456
Prepaid expenses and deposits
15,729
10,962
Marketable equity securities
41,728
39,424
Income taxes refundable
5,650
277
Total current assets
280,766
199,574
Property and equipment
705,919
585,303
Less: accumulated depreciation
242,324
201,124
Total property and equipment, net
463,595
384,179
Other non-current assets
4,801
3,628
Total assets
$749,162
$587,381
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$48,917
$43,381
Accrued expenses and other liabilities
34,232
14,114
Income taxes payable
-
4,364
Current portion of long-term debt
58,815
49,544
Total current liabilities
141,964
111,403
Long-term debt, net of current portion
205,466
172,733
Deferred income taxes
101,445
86,715
Other long-term liabilities
104
420
Total liabilities
448,979
371,271
STOCKHOLDERS’ EQUITY
Common stock
223
234
Additional paid-in capital
40,472
84,472
Treasury stock, at cost
(4,000)
(169,946)
Retained earnings
263,488
301,350
Total stockholders’ equity
300,183
216,110
Total liabilities and stockholders’
equity
$749,162
$587,381
P.A.M. Transportation Services, Inc. and
Subsidiaries
Reconciliation of GAAP Measures to
Non-GAAP Amounts (unaudited)
Adjusted Operating Income and Adjusted
Operating Ratio
Quarter Ended December 31,
Twelve Months Ended December
31,
2022
2021
2022
2021
(Dollars in thousands)
(Dollars in thousands)
GAAP Presentation
Total operating revenue
$237,616
$213,914
$946,862
$707,120
Total operating expenses
(217,370)
(179,204)
(823,094)
(606,915)
Operating income
$20,246
$34,710
$123,768
$100,205
Operating ratio
91.5%
83.8%
86.9%
85.8%
Non-GAAP Presentation
Total operating revenue
$237,616
$213,914
$946,862
$707,120
Fuel surcharge
(34,167)
(19,308)
(128,111)
(65,867)
Revenue, excluding fuel surcharge
203,449
194,606
818,751
641,253
Total operating expenses
217,370
179,204
823,094
606,915
Less: fuel surcharge
(34,167)
(19,308)
(128,111)
(65,867)
Less: specific legal reserves increase
(8,000)
(5,500)
(14,675)
(5,500)
Adjusted operating expenses
175,203
154,396
680,308
535,548
Adjusted Operating income
$28,246
$40,210
$138,443
$105,705
Adjusted Operating ratio
86.1%
79.3%
83.1%
83.5%
P.A.M. Transportation Services, Inc. and
Subsidiaries
Reconciliation of GAAP Measures to
Non-GAAP Amounts (unaudited)
Reconciliation of Net Income to Adjusted
Net Income
Quarter Ended December 31,
Twelve Months Ended December
31,
2022
2021
2022
2021
(in thousands)
(in thousands)
Net income (GAAP)
$17,983
$27,891
$90,673
$76,516
Adjustments:
Specific legal reserves increase
8,000
5,500
14,675
5,500
Tax benefit of adjustment (3)
(1,981)
(1,299)
(3,495)
(1,390)
Adjusted Net income (non-GAAP)
$24,002
$32,092
$101,853
$80,626
P.A.M. Transportation Services, Inc. and Subsidiaries
Reconciliation of GAAP Measures to
Non-GAAP Amounts (unaudited)
Reconciliation of Diluted Earnings Per
Share to Adjusted Diluted Earnings Per Share (1)
Quarter Ended December 31,
Twelve Months Ended December
31,
2022
2021
2022
2021
Diluted earnings per share (GAAP)
$0.81
$1.24
$4.04
$3.35
Adjustments:
Specific legal reserves increase
0.36
0.24
0.65
0.24
Tax benefit of adjustment (3)
(0.09)
(0.06)
(0.15)
(0.06)
Adjusted Diluted earnings per share
(non-GAAP)
$1.08
$1.42
$4.54
$3.53
_______________________________________
- All prior period share and per share data has been
retroactively adjusted to reflect the Company’s separate 2-for-1
forward stock splits effective August 16, 2021 and March 29, 2022,
respectively.
- The Truckload Operations 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.
- The tax benefit is calculated using the effective tax rates for
each respective period prior to any adjustments for non-GAAP
amounts.
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