First Quarter 2023 Summary
Results
- Total revenues of $221.7 million, up 1.0% YoY
- Operating income of $8.5 million, down 72.9% YoY; non-GAAP
adjusted operating income of $18.5 million, down 46.7% YoY
- Operating ratio of 96.2%, an increase of 1050 bps YoY; non-GAAP
adjusted operating ratio of 90.4%, an increase of 810 bps YoY
- Diluted EPS of $0.23, down 78.3% YoY; non-GAAP adjusted diluted
EPS of $0.57, down 51.7% YoY
P.A.M. Transportation Services, Inc. (NASDAQ: PTSI) (“the
Company”) today reported net income of $5.2 million, or diluted
earnings per share of $0.23 ($0.24 basic), for the quarter ended
March 31, 2023. These results compare to net income of $23.9
million, or diluted earnings per share of $1.06 ($1.07 basic), for
the quarter ended March 31, 2022. Net income and diluted earnings
per share for both the first quarter ended March 31, 2023, and the
first quarter ended March 31, 2022, include the negative impact of
loss estimates for claims anticipated to settle in excess of
insurance policy limits. Excluding the negative impact of these
litigation charges, adjusted (non-GAAP) net income for the quarter
ended March 31, 2023, was $12.7 million, or adjusted (non-GAAP)
diluted and basic earnings per share of $0.57 compared to adjusted
(non-GAAP) net income for the quarter ended March 31, 2022, of
$26.5 million, or adjusted (non-GAAP) diluted earnings per share of
$1.18 ($1.19 basic).
Operating revenues increased 1.0% to $221.7 million for the
first quarter of 2023 compared to $219.4 million for the first
quarter of 2022.
Liquidity, Capitalization, and Cash
Flow
As of March 31, 2023, we had an aggregate of $193.8 million of
cash, marketable equity securities, and available liquidity under
our line of credit and $302.1 million of stockholders’ equity.
Outstanding debt was $251.3 million as of March 31, 2023, which
represents a $13.0 million decrease from December 31, 2022. During
the first quarter of 2023, we generated $34.2 million in operating
cash flow.
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 these
measures 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, excess capacity in the trucking
industry; surplus inventories; general inflation, 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; potential
economic, business or operational disruptions or uncertainties that
may result from any future outbreaks of the COVID-19 pandemic or
other public health crises; 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; 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 March 31,
2023
2022
(in thousands, except per share
amounts)
Revenue, before fuel surcharge
$ 193,454
$196,089
Fuel surcharge
28,270
23,359
Operating revenue
221,724
219,448
Operating expenses and costs:
Salaries, wages and benefits
48,278
39,275
Operating supplies and expenses
41,073
31,647
Rent and purchased transportation
87,096
91,376
Depreciation
16,497
14,877
Insurance and claims
15,435
6,863
Other
5,423
4,213
Gain on disposition of equipment
(577)
(147)
Total operating expenses and costs
213,225
188,104
Operating income
8,499
31,344
Interest expense
(2,356)
(1,667)
Non-operating income
899
1,929
Income before income taxes
7,042
31,606
Income tax expense
1,811
7,664
Net income
$5,231
$23,942
Diluted earnings per share
$0.23
$1.06
Average shares outstanding – Diluted
22,317
22,483
Quarter ended March 31,
Truckload
Operations
2023
2022
Total miles
53,729
45,256
Operating ratio (1)
99.3%
81.4%
Empty miles factor
8.96%
9.16%
Revenue per total mile, before fuel
surcharge
$2.33
$2.76
Total loads
102,430
91,555
Revenue per truck per work day
$802
$947
Revenue per truck per week
$4,010
$4,736
Average company-driver trucks
2,051
1,675
Average owner operator trucks
389
388
Logistics
Operations
Total revenue (in thousands)
$68,256
$71,111
Operating ratio
88.8%
88.6%
P.A.M. Transportation Services, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets (unaudited)
March 31,
December 31,
2023
2022
(in thousands)
ASSETS
Current Assets:
Cash and cash equivalents
$92,473
$74,087
Trade accounts receivable, net
131,431
134,739
Other receivables
7,443
6,263
Inventories
2,624
2,570
Prepaid expenses and deposits
14,136
15,729
Marketable equity securities
41,440
41,728
Income taxes refundable
3,280
5,650
Total current assets
292,827
280,766
Property and equipment
691,121
705,919
Less: accumulated depreciation
244,436
242,324
Total property and equipment, net
446,685
463,595
Other non-current assets
4,329
4,801
Total Assets
$743,841
$749,162
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$46,229
$48,917
Accrued expenses and other liabilities
43,342
34,233
Current portion of long-term debt
58,735
58,815
Total current liabilities
148,306
141,965
Long-term debt, net of current portion
192,522
205,466
Deferred income taxes
100,885
101,445
Other long-term liabilities
22
103
Total liabilities
441,735
448,979
STOCKHOLDERS’ EQUITY
Common stock
223
223
Additional paid-in capital
40,680
40,472
Treasury stock, at cost
(7,516)
(4,000)
Retained earnings
268,719
263,488
Total stockholders’ equity
302,106
300,183
Total liabilities and stockholders’
equity
$743,841
$749,162
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 March 31,
2023
2022
(Dollars in thousands)
GAAP Presentation
Total operating revenue
$221,724
$219,448
Total operating expenses
(213,225)
(188,104)
Operating income
$8,499
$31,344
Operating ratio
96.2%
85.7%
Non-GAAP Presentation
Total operating revenue
$221,724
$219,448
Fuel surcharge
(28,270)
(23,359)
Revenue, excluding fuel surcharge
193,454
196,089
Total operating expenses
213,225
188,104
Less: fuel surcharge
(28,270)
(23,359)
Less: specific legal reserve increase
(9,998)
(3,335)
Adjusted operating expenses
174,957
161,410
Adjusted Operating income
$18,497
$34,679
Adjusted Operating ratio
90.4%
82.3%
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 March 31,
2023
2022
(in thousands)
Net income (GAAP)
$5,231
$23,942
Additions:
Specific legal reserve increase
9,998
3,335
Reductions:
Tax benefit of specific legal reserve
increase (2)
(2,570)
(809)
Adjusted Net income (non-GAAP)
$12,659
$26,468
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
Quarter ended March 31,
2023
2022
Diluted earnings per share (GAAP)
$0.23
$1.06
Additions:
Specific legal reserve increase
0.45
0.15
Reductions:
Tax benefit of specific legal reserve
increase (2)
(0.11)
(0.03)
Adjusted Diluted earnings per share
(non-GAAP)
$0.57
$1.18
_______________________________________
- 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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P.A.M. TRANSPORTATION SERVICES, INC. Lance K. Stewart (479)
361-9111
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