P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) today reported
net income of $3,992,224, or diluted and basic earnings per share
of $0.61 for the quarter ended June 30, 2016, and net income of
$6,926,876, or diluted and basic earnings per share of $1.01 for
the six month period then ended. These results compare to net
income of $7,039,203, or diluted earnings per share of $0.94 ($0.95
basic), and net income of $12,408,422, or diluted earnings per
share of $1.66 ($1.67 basic), respectively, for the three and six
months ended June 30, 2015.
Base revenue, which excludes fuel surcharge
revenue, increased 8.6% to $98,920,847 for the second quarter of
2016 compared to $91,052,849 for the second quarter of 2015, while
fuel surcharge revenue decreased 25.8% to $12,594,737 for the
second quarter of 2016 compared to $16,980,278 for the second
quarter of 2015. As a result, total operating revenues increased to
$111,515,584 for the second quarter of 2016 compared to
$108,033,127 for the second quarter of 2015. For the six months
ended June 30, 2016, base revenue, which excludes fuel surcharge
revenue, increased 10.8% to $192,569,794 compared to $173,737,418
during the six months ended June 30, 2015, while fuel surcharge
revenue decreased 33.3% to $22,535,011 for the first six months of
2016 compared to $33,778,862 for the first six months of 2015. As a
result, total operating revenues increased 3.7% to $215,104,805 for
the first six months of 2016 compared to $207,516,280 for the first
six months of 2015. The decline in fuel surcharge revenue for each
of the periods was due to the significant decline in retail fuel
prices during the periods compared.
Daniel H. Cushman, President of the Company,
commented, “During the second quarter of 2016, we continued to
experience some weakness in the market for our services but were
able to continue our positive trend of revenue growth. Our base
revenue growth on a year-to-date basis is approximately 11% for our
trucking division, resulting primarily from an increase in our
overall fleet size and to growth in our Dedicated and Mexico
divisions. Fuel surcharge revenues continue to be lower on a
year-over-year basis as fuel prices remained lower in 2016. Our
lower margins are not necessarily the result of less profitable
freight selection but are primarily related to an increase in our
normal operating costs, which cannot currently be passed on to
customers, and to entry costs as we expand into new markets we wish
to add to our service profile.
“During the first quarter of this year, we
discussed enhancements to our driver recruiting and retention
programs which would continue to impact driver acquisition costs
throughout 2016. The related additional driver acquisition costs
during the second quarter of 2016 were approximately $1.0 million
when compared to the second quarter of 2015 and $2.5 million when
comparing the first six months of this year versus the first six
months of last year. Due to the incremental nature of costs under
these programs, we continue to expect the year-over-year impact to
lessen throughout the remainder of 2016.
“While the driver related costs were an expected
increase for 2016, we decided to push ahead with our growth
objectives in order to obtain market share in certain markets where
we have not historically had a strong presence. We have seen
tremendous downward rate pressure in the marketplace, which has
been very challenging but has also presented us with new
opportunities. In the automotive sector, where we have a
significant presence, we have seen shippers test the market for
lower rates and have experienced rate drops as a result of new
carriers entering that sector. We knew that testing would also be
happening in the retail and manufacturing sectors where there could
be opportunities for us to gain market share. As a result of the
market tests, shippers in these sectors were also adding to their
carrier base, which provided an opportunity for us to gain entry.
The entry costs would come at a higher price due to increased
driver costs; however, we wanted to maintain our current customer
base and build around that base with more capacity. We believe this
positions us for exponential improvement when the general freight
market rebounds and capacity begins to tighten, but also provides
us with the flexibility to downsize quickly should a freight
recovery take longer than anticipated. This approach has allowed us
to grow revenues and expand our market representation. We also
believe that more carriers were added to the retail and
manufacturing sectors than those added to the automotive sector.
The competition in those two sectors was intense, but the growth
was rewarding in that it was new business with new customers for
us.
“Also mentioned last quarter were challenges
faced with increased costs associated with fuel and employee health
care costs. During the second quarter of 2016, net fuel costs
began to normalize and were comparable to the second quarter of
last year and therefore remain at an increase of $1.2 million
during the first six months of 2016 when compared to the first six
months of 2015. However, our health care costs continued to be
elevated during the second quarter of 2016 when compared to the
second quarter of 2015 and are higher by $1.5 million for the first
six months of 2016 as compared to the first six months of 2015.
“We also experienced lower gains on the sale of
our used trucks during the second quarter of 2016 compared to the
second quarter of 2015, as used truck prices remain depressed due
to inflated used truck inventory levels.
“During the second quarter, we finalized the
modified Dutch auction tender offer that was initiated during the
first quarter of 2016. As a result of the Dutch auction, the
Company repurchased 567,413 shares of its common stock in April
2016. Also during the second quarter, the Company repurchased
106,895 shares of its common stock in open market transactions. A
total of approximately 2.3 million shares of common stock have been
repurchased by the Company since its first Dutch auction in 2013.
Approximately 330,000 shares remain available for purchase under
our previously authorized stock repurchase program.”
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,
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 SubsidiariesKey Financial and
Operating Statistics(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Revenue,
before fuel surcharge |
$ |
98,920,847 |
|
|
$ |
91,052,849 |
|
|
$ |
192,569,794 |
|
|
$ |
173,737,418 |
|
Fuel
surcharge |
|
12,594,737 |
|
|
|
16,980,278 |
|
|
|
22,535,011 |
|
|
|
33,778,862 |
|
|
|
111,515,584 |
|
|
|
108,033,127 |
|
|
|
215,104,805 |
|
|
|
207,516,280 |
|
|
|
|
|
|
|
|
|
Operating expenses and costs: |
|
|
|
|
|
|
|
Salaries, wages and benefits |
|
27,841,137 |
|
|
|
26,566,050 |
|
|
|
55,323,467 |
|
|
|
52,499,374 |
|
Operating supplies and
expenses |
|
21,041,769 |
|
|
|
24,125,503 |
|
|
|
40,160,433 |
|
|
|
47,290,781 |
|
Rent and purchased
transportation |
|
40,717,839 |
|
|
|
33,570,340 |
|
|
|
78,104,879 |
|
|
|
62,627,216 |
|
Depreciation |
|
9,668,445 |
|
|
|
7,743,511 |
|
|
|
18,845,181 |
|
|
|
15,300,712 |
|
Insurance and claims |
|
4,490,548 |
|
|
|
3,950,624 |
|
|
|
8,548,983 |
|
|
|
7,356,256 |
|
Other |
|
2,014,179 |
|
|
|
2,288,198 |
|
|
|
4,183,793 |
|
|
|
4,667,683 |
|
Gain on disposition of
equipment |
|
(1,612,392 |
) |
|
|
(2,092,948 |
) |
|
|
(3,002,226 |
) |
|
|
(3,254,360 |
) |
Total operating expenses and costs |
|
104,161,525 |
|
|
|
96,151,278 |
|
|
|
202,164,510 |
|
|
|
186,487,662 |
|
|
|
|
|
|
|
|
|
Operating income |
|
7,354,059 |
|
|
|
11,881,849 |
|
|
|
12,940,295 |
|
|
|
21,028,618 |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
(909,522 |
) |
|
|
(643,671 |
) |
|
|
(1,731,843 |
) |
|
|
(1,260,453 |
) |
Non-operating (loss) income |
|
(10,195 |
) |
|
|
272,298 |
|
|
|
(32,461 |
) |
|
|
516,977 |
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
6,434,342 |
|
|
|
11,510,476 |
|
|
|
11,175,991 |
|
|
|
20,285,142 |
|
Income
tax expense |
|
2,442,118 |
|
|
|
4,471,273 |
|
|
|
4,249,115 |
|
|
|
7,876,720 |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
3,992,224 |
|
|
$ |
7,039,203 |
|
|
$ |
6,926,876 |
|
|
$ |
12,408,422 |
|
|
|
|
|
|
|
|
|
Diluted
earnings per share |
$ |
0.61 |
|
|
$ |
0.94 |
|
|
$ |
1.01 |
|
|
$ |
1.66 |
|
|
|
|
|
|
|
|
|
Average
shares outstanding – Diluted |
|
6,571,527 |
|
|
|
7,474,026 |
|
|
|
6,858,333 |
|
|
|
7,470,787 |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, |
|
Six Months Ended June 30, |
Truckload Operations |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Total
miles |
|
|
60,682,053 |
|
|
|
55,604,228 |
|
|
|
118,044,732 |
|
|
|
107,440,496 |
|
Operating ratio (1) |
|
|
91.98 |
% |
|
|
85.58 |
% |
|
|
92.83 |
% |
|
|
86.60 |
% |
Empty
miles factor |
|
|
6.28 |
% |
|
|
6.45 |
% |
|
|
6.41 |
% |
|
|
6.52 |
% |
Revenue
per total mile, before fuel surcharge |
|
$ |
1.43 |
|
|
$ |
1.43 |
|
|
$ |
1.43 |
|
|
$ |
1.42 |
|
Total
loads |
|
|
84,540 |
|
|
|
77,903 |
|
|
|
164,232 |
|
|
|
150,039 |
|
Revenue
per truck per work day |
|
$ |
709 |
|
|
$ |
684 |
|
|
$ |
694 |
|
|
$ |
663 |
|
Revenue
per truck per week |
|
$ |
3,545 |
|
|
$ |
3,420 |
|
|
$ |
3,470 |
|
|
$ |
3,315 |
|
Average
company-driver trucks |
|
|
1,357 |
|
|
|
1,415 |
|
|
|
1,368 |
|
|
|
1,423 |
|
Average
owner operator trucks |
|
|
559 |
|
|
|
402 |
|
|
|
535 |
|
|
|
382 |
|
|
|
|
|
|
|
|
|
|
Logistics Operations |
|
|
|
|
|
|
|
|
Total
revenue |
|
$ |
12,041,179 |
|
|
$ |
11,541,414 |
|
|
$ |
23,583,019 |
|
|
$ |
21,696,580 |
|
Operating ratio |
|
|
96.81 |
% |
|
|
96.39 |
% |
|
|
96.53 |
% |
|
|
97.01 |
% |
_______________________________________
1) Operating ratio is calculated based upon total operating
expenses, net of fuel surcharge, as a percentage of revenue, before
fuel surcharge. We use 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.
P.A.M. TRANSPORTATION SERVICES, INC.
P.O. BOX 188
Tontitown, AR 72770
Allen W. West
(479) 361-9111
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