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P.A.M. Transportation Services, Inc. Reports Second Consecutive Year of Record Annual Operating Results

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

_______________________________________

  1. 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.
  2. 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.
  3. The tax benefit is calculated using the effective tax rates for each respective period prior to any adjustments for non-GAAP amounts.

 

Contacts

P.A.M. TRANSPORTATION

Allen W. West

(479) 361-9111

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