TONTITOWN, Ark., Oct. 25 /PRNewswire-FirstCall/ -- P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) today reported net income of $36,178 or diluted and basic earnings per share of $0.00 for the quarter ended September 30, 2007, and $3,493,402 or diluted and basic earnings per share of $0.34 for the nine month period then ended. These results compare to net income of $3,268,194 or diluted and basic earnings per share of $0.32, and $13,692,941 or diluted and basic earnings per share of $1.33, respectively, for the three and nine months ended September 30, 2006.
Operating revenues excluding fuel surcharges were $86,625,193 for the third quarter of 2007, a 1.3% increase compared to $85,502,372 for the third quarter of 2006. Operating revenues excluding fuel surcharges were $266,715,387 for the nine months ended September 30, 2007 compared to $266,043,526 for the nine months ended September 30, 2006.
Robert W. Weaver, President of the Company, commented, "Our third quarter financial results were disappointing as we continue to work through the sustained weakness in freight demand. The third quarter has traditionally been challenging, due to scheduled shutdowns for two or more weeks in July by customers for which we transport a large amount of freight. Although the months of August and September were profitable, they did not rebound as we have seen in years past. The prolonged softness of the freight market and continued aggressive price competition resulted in a 4.7% reduction in revenue per tractor per day for the quarter ended September 30, 2007 compared to the same quarter in 2006. The predominant factor in this decrease was a $.04 reduction in our average rate per total mile from $1.33 in the third quarter of 2006 to $1.29 in the third quarter of 2007. This rate reduction equates to an approximate $0.15 reduction in our diluted earnings per share for the third quarter 2007.
Additional key factors that contributed to the year-over-year reduction in third quarter profit included increases in depreciation and fuel expense. Depreciation expense increased approximately $1.7 million for the third quarter 2007 compared to the same quarter in 2006. This increase resulted from the combined effect of a 170 truck year-to-year growth in the average number of owned trucks coupled with higher prices paid for new equipment and a reduction in the residual trade price guaranteed by manufacturers.
The increase in fuel expense resulted from an increase in fuel cost per gallon without a corresponding increase in surcharges paid by our customers, as well as, a decrease in fuel efficiency measured in miles per gallon for the quarter ended September 30, 2007 compared to the quarter ended September 30, 2006. The majority of our fuel surcharge agreements are based on an index published by the Department of Energy that provides the weekly retail on- highway diesel price, and are generally based on an average that looks back at this weekly index over some period of time. In periods of rapidly rising diesel fuel prices, this lag results in the Company absorbing fuel increases for a period of time before surcharges increase. The decrease in fuel efficiency was caused by the addition of new tractors with 2007 low emission engines and the use of ultra low sulfur diesel fuel, both of which were mandated by the Environmental Protection Agency. This increase in fuel expense, net of fuel surcharge, equates to an approximate $.07 reduction in our diluted earnings per share for the third quarter 2007.
Looking ahead at the remainder of the year, we do not expect our current market environment to improve significantly, and intend to focus on cost control and reduction. Our balance sheet remains strong and we believe we are in position to take advantage of our fleet growth over the last twelve months when demand for our services improves. " 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 update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
P.A.M. Transportation Services, Inc. and Subsidiaries
Key Financial and Operating Statistics
(unaudited) Quarter ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006 Revenue, before
fuel surcharge $86,625,193 $85,502,372 $266,715,387 $266,043,526
Fuel surcharge 14,545,806 14,371,284 39,963,684 37,720,232
101,170,999 99,873,656 306,679,071 303,763,758 Operating expenses:
Salaries, wages and
benefits 33,582,985 31,459,051 101,323,701 96,574,233
Fuel expense 28,555,037 26,202,069 82,164,112 74,420,996
Operating supplies 8,026,619 6,783,166 23,462,330 19,288,900
Rent and purchased
transportation 9,676,834 10,935,321 29,245,541 33,924,472
Depreciation and
amortization 10,086,327 8,393,109 29,585,257 25,187,459
Operating taxes
and license 4,255,095 4,113,558 13,209,208 12,284,028
Insurance and claims 4,082,742 4,221,133 13,285,219 12,508,963
Communications
and utilities 783,595 638,261 2,313,911 1,961,595
Other 1,694,770 1,237,020 5,128,053 3,822,176
(Gain) loss on
disposition of
equipment (55,882) 219,342 (27,182) 77,783
Total operating
expenses 100,688,122 94,202,030 299,690,150 280,050,605 Operating income 482,877 5,671,626 6,988,921 23,713,153 Other income (expense):
Interest expense (420,757) (159,529) (1,175,305) (803,310) Total other income
(expense) (420,757) (159,529) (1,175,305) (803,310) Income before
income taxes 62,120 5,512,097 5,813,616 22,909,843 Provision for
income taxes 25,942 2,243,903 2,320,214 9,216,902 Net income $36,178 $3,268,194 $3,493,402 $13,692,941 Diluted earnings
per share $0.00 $0.32 $0.34 $1.33 Average shares
outstanding --
Diluted 10,265,758 10,309,331 10,293,407 10,299,749 Quarter ended Nine Months Ended
September 30, September 30,
Truckload Operations 2007 2006 2007 2006 Total miles 60,965,126 56,371,548 186,489,249 172,829,844
Operating ratio* 99.52% 93.22% 97.38% 90.54%
Empty miles factor 6.72% 6.19% 6.44% 5.70%
Revenue per total mile,
before fuel surcharge $1.29 $1.33 $1.29 $1.35
Total loads 91,929 77,324 265,006 236,375
Revenue per
truck per work day $634 $665 $619 $681
Revenue per
truck per week $3,170 $3,325 $3,095 $3,405
Average company trucks 2,035 1,865 2,036 1,791
Average owner
operator trucks 61 42 57 46 Logistics Operations
Total revenue $8,269,790 $10,636,937 $25,917,100 $33,196,950
Operating ratio 98.73% 94.42% 97.32% 94.93% As of September 30,
2007 2006 Long-term debt to book capitalization 17.43% 12.08%
Shareholders' equity $188,073,558 $179,974,575 * 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. DATASOURCE: P.A.M. Transportation Services, Inc.
CONTACT: Robert W. Weaver of P.A.M. Transportation Services, Inc., +1-479-361-9111
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