P.A.M. Transportation Services, Inc. (Nasdaq:PTSI) today reported
net loss of $1,978,279 or diluted and basic loss per share of $0.21
for the quarter ended March 31, 2011. These results compare to net
loss of $315,444 or diluted and basic loss per share of $0.03 for
the quarter ended March 31, 2010. Operating revenues were
$85,026,175 for the first quarter of 2011 compared to $81,846,822
for the first quarter of 2010.
Daniel H. Cushman, President of the Company, commented, "I have
very mixed emotions regarding our results from the first quarter
2011. On one hand, we have made great progress in key strategic
areas, while on the other hand, expenses have increased and more
than offset our successes during the quarter.
On the success hand, we have increased our rate per total mile,
excluding revenue from fuel surcharges, by 7.2% from $1.23 for the
first quarter 2010 to $1.32 for the first quarter 2011. This
increase was achieved by strategic growth with existing customers,
as well as bringing on new business with better rates. We saw a
strengthening in customer demand beginning in the third week of
February that added support to our continued focus on growth in our
Automotive, Mexico, Expedited and Dedicated service offerings.
Automotive – we have brought on significant new customers and
have improved margins with existing customers by obtaining rate
increases and by discontinuing lanes that did not fit our freight
network or where a particular market would not support rates
capable of yielding acceptable margins.
Mexico – we have continued to grow with existing customers and
to diversify our customer base. For 2009, our Mexico business was
approximately 85% automotive but by the first quarter of 2011,
automotive business was reduced to 55% of total Mexico revenues,
not by a reduction in automotive business, but by growth with
non-automotive customers. First quarter 2011 demand in this market
was strong.
Expedited – we have seen greater success growing our Expedited
business in the first quarter 2011 than in the entire last half of
2010. We are expanding our presence with existing accounts and
bringing on new customers as well.
Dedicated – We have had some success in growing this portion of
our business and believe that demand for this service offering will
increase as shippers desire to lock in dependable transportation in
a market currently trending towards capacity shortages.
On the expense hand, we experienced many of the same increases
that applied to our industry as a whole during the first quarter
2011 – sharply escalating fuel prices, unusually harsh winter
weather, increased demand and competition for qualified drivers,
and regulatory pressures.
The average price of diesel fuel rose to $3.63 during the first
quarter of 2011, up 27% from $2.85 during the first quarter of
2010, and up 16% from $3.14 during the fourth quarter 2010. This
steep increase outpaced our fuel surcharges for the quarter largely
due to an average one week hold back before fuel surcharges reset.
This means that we pay higher fuel prices for a minimum of one week
before our surcharges adjust to cover our increased costs. While
fuel prices are largely out of our control, we intensely focus on
managing the impact of aspects within our control including
increasing fuel efficiency, negotiating lower prices with suppliers
and surcharge coverage with customers.
Storms during January and the first half of February suppressed
utilization, causing an approximate 1.5 million reduction in miles
for the first quarter of 2011 compared to the same quarter in 2010,
while at the same time increasing costs such as maintenance,
layovers, and idle fuel consumption. By the third week of February,
the weather related disruptions in our freight lanes had diminished
and we were able to get our first look at demand for 2011, which
appeared to be strong.
In 2008 and 2009, we made many decisions to help adapt to the
downturn in demand for our services experienced during the
recessionary economy. Among these decisions was a reduction to our
maintenance staff and to extend the life of our tractor fleet.
While those decisions served their purpose during the recession,
with the uptick in demand we saw in May and June of 2010, it
quickly became evident that changes were necessary in order to
provide a reliable supply of equipment to our operation. A second
event in 2010 that necessitated change were the mandates imposed by
the Compliance, Safety, and Accountability (CSA) program. Both
events have led to a re-investment in our maintenance program,
including hiring technicians, expanding maintenance facilities and
outsourcing work. The results of this focus have been a reduction
in equipment that was unavailable for use due to mechanical
reasons, and at the same time significantly increasing year over
year first quarter maintenance wages, inside repairs expense and
outside repair expense as deferred repairs were being caught
up.
We are currently taking delivery of the first tractors of our
450 new truck purchase for 2011, with continuing purchase plans for
2012 and 2013. The reduction in the average age of our fleet will
benefit maintenance expenditures, equipment utilization, CSA
compliance, and driver recruiting and retention. However, we will
go through a period of time as we transition back to a newer fleet
where depreciation will be higher without receiving the full
benefit of offsetting operational expense reductions. Depreciation
expense increased approximately $1.5 million for the first quarter
2011 compared to the same quarter 2010 as we shortened equipment
lives on existing tractors to reflect the accelerated trade
cycle.
While we lost some ground in our efforts to improve earnings
year over year for the first quarter, many of our expense increases
were investments necessary to position ourselves favorably in a
market currently characterized by a decreasing capacity of
qualified drivers, increased regulation and operational costs. We
continue to focus on revenue and margin improvement by adding new
customers, improving freight mix, increasing our rate per mile and
equipment utilization."
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.
The PAM Transportation Services, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5148
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 March 31, |
|
2011 |
2010 |
|
|
|
Revenue, before fuel surcharge |
$68,123,458 |
$70,358,934 |
Fuel surcharge |
16,902,717 |
11,487,888 |
|
85,026,175 |
81,846,822 |
|
|
|
Operating expenses and costs: |
|
|
Salaries, wages and benefits |
28,828,505 |
26,995,848 |
Fuel expense |
31,263,530 |
24,299,382 |
Operating supplies and expenses |
9,155,321 |
6,963,445 |
Rent and purchased transportation |
4,884,115 |
11,036,981 |
Depreciation |
8,031,873 |
6,536,027 |
Operating taxes and licenses |
1,266,429 |
1,048,366 |
Insurance and claims |
3,279,241 |
3,238,567 |
Communications and utilities |
721,323 |
705,336 |
Other |
1,383,824 |
1,054,275 |
Loss (gain) on disposition of
equipment |
24,981 |
(1,678) |
Total operating expenses and costs |
88,839,142 |
81,876,549 |
|
|
|
Operating loss |
(3,812,967) |
(29,727) |
|
|
|
Interest expense |
(490,465) |
(498,343) |
Non-operating income |
1,126,494 |
6,934 |
|
|
|
Loss before income taxes |
(3,176,938) |
(521,136) |
Income tax benefit |
(1,198,659) |
(205,692) |
|
|
|
Net loss |
$(1,978,279) |
$(315,444) |
|
|
|
Diluted loss per share |
$(0.21) |
$(0.03) |
|
|
|
Average shares outstanding – Diluted |
9,392,460 |
9,413,663 |
|
|
|
|
|
|
|
Quarter Ended March 31, |
Truckload Operations |
2011 |
2010 |
|
|
|
Total miles |
48,461,855 |
48,705,081 |
Operating ratio* |
106.12% |
100.49% |
Empty miles factor |
7.24% |
6.44% |
Revenue per total mile, before fuel
surcharge |
$1.32 |
$1.23 |
Total loads |
68,622 |
72,384 |
Revenue per truck per work day |
$571 |
$549 |
Revenue per truck per week |
$2,855 |
$2,745 |
Average company trucks |
1,722 |
1,702 |
Average owner operator trucks |
31 |
32 |
|
|
|
Logistics Operations |
|
|
Total revenue |
$4,114,980 |
$10,378,122 |
Operating ratio |
97.54% |
97.48% |
|
|
|
___________________________________________________________ |
|
|
* 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. |
|
|
|
CONTACT: P.A.M. Transportation Services, Inc.
P.O. BOX 188
Tontitown, AR 72770
Lance K. Stewart
(479) 361-9111
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