P.A.M. Transportation Services, Inc. Announces Results for the Fourth Quarter and Year Ended December 31, 2023

Rhea-AI Summary

P.A.M. Transportation Services, Inc. (PTSI) reported a consolidated net loss of $2.2 million for the quarter ended December 31, 2023, with a diluted loss per share of $0.10. Consolidated operating revenues decreased by 24.2% to $180.2 million for the fourth quarter of 2023 compared to the same period in 2022. The company's President attributed the weak freight environment and the impact of the UAW strike as the primary reasons for the challenging business backdrop. Despite this, the company had an aggregate of $203.7 million of cash, marketable equity securities, and available liquidity under their line of credit as of December 31, 2023.

Positive

• None.

Negative

• Consolidated operating revenues decreased by 24.2% to $180.2 million for the fourth quarter of 2023 compared to $237.6 million for the same period in 2022.
• The company reported a consolidated net loss of $2.2 million for the quarter ended December 31, 2023.
• The diluted loss per share was $0.10 for the quarter ended December 31, 2023.

Insights

Financial Analyst

The reported 24.2% year-over-year decline in total revenues for P.A.M. Transportation Services indicates a significant contraction in the company's business operations. This performance is particularly concerning given that it contrasts with a consolidated net income of $18.4 million for the year, which itself is a stark decrease from the previous year's $90.7 million. The operating ratio exceeding 100% suggests that the company is spending more on operating expenses than it is generating in revenues, which is not sustainable in the long term.

From a liquidity perspective, the company seems to maintain a healthy position with $203.7 million in cash and marketable securities. However, the operating cash flow of $114.6 million, while positive, must be viewed in the context of the overall decline in profitability. Investors should consider the potential for continued pressure on earnings due to the weak freight environment and the recent UAW strike's impact on the automotive sector, a key market for P.A.M. Transportation.

Market Research Analyst

The weak freight environment cited by the company's president reflects broader industry challenges, possibly including overcapacity, rate pressures and a cyclical downturn in freight demand. The specific mention of the UAW strike's impact on the automotive sector reveals a significant industry exposure that investors should be aware of. The lack of a post-strike surge in business deviates from historical patterns, hinting at potential structural changes in the automotive industry or the economy at large.

It's also important to note the strategic focus on longer-term objectives and sustainable progress. While this outlook may reassure some investors about the company's commitment to improvement, it is essential to balance this against the immediate financial realities and the need for the company to adapt to current market conditions.

Economist

The financial results of P.A.M. Transportation Services could be indicative of macroeconomic headwinds affecting the freight and logistics industry. The decline in revenues and net income may reflect a broader economic slowdown, which could lead to reduced consumer spending and subsequently less demand for freight services. Additionally, the UAW strike's impact suggests vulnerability to labor disputes, which can have far-reaching effects on a company's operational efficiency and profitability.

Investors should monitor economic indicators that could affect the freight market, such as GDP growth, manufacturing output and trade volumes. These factors can offer insights into the potential for a market rebound or further contraction. The company's financial resilience, as evidenced by its liquidity, will be critical in navigating these economic cycles.

Fourth Quarter 2023 Summary Results

• Total revenues of $180.2 million, down 24.2% YoY
• Operating loss of $0.8 million
• Operating ratio of 100.4%
• Diluted loss per share of $0.10

TONTITOWN, Ark.--(BUSINESS WIRE)-- P.A.M. Transportation Services, Inc. (NASDAQ: PTSI) (“we” or the “Company”) today reported consolidated net loss of $2.2 million, or diluted and basic loss per share of $0.10, for the quarter ended December 31, 2023 and consolidated net income of $18.4 million, or diluted and basic earnings per share of $0.83, for the year ended December 31,2023. These results compare to consolidated net income of $18.0 million, or diluted and basic earnings per share of $0.81, for the quarter ended December 31, 2022, and consolidated net income of $90.7 million, or diluted earnings per share of $4.04 ($4.08 basic), for the year ended December 31, 2022.

Consolidated operating revenues decreased 24.2% to $180.2 million for the fourth quarter of 2023 compared to $237.6 million for the fourth quarter of 2022. For the year ended December 31, 2023, consolidated operating revenues decreased 14.4% to $810.8 million compared to $946.9 million for the year ended December 31, 2022.

Joe Vitiritto, President of the Company, commented, “Our consolidated operating results for the three and twelve months ended December 31, 2023 reflect a continued weak freight environment and the impact of the UAW strike against several customers in the automotive sector in which the Company has significant exposure. Unlike previous UAW strikes, the approach taken in the 2023 strike was impactful to the majority of our auto customer base including both auto manufacturers and suppliers. While the strike ended by mid-November, the negative impact carried on through the typical holiday shutdowns with no post-strike surge in automotive business that we have sometimes experienced after past UAW strikes.

“These factors combined to create a challenging backdrop for our business for the quarter and year. Our team is working to constantly keep improving our results and we will continue to take advantage of opportunities to improve. We are staying focused on our longer-term objectives and seeing sustainable progress in areas that will put us in a position to get back to profitable growth that aligns with our expectations.”

Liquidity, Capitalization, and Cash Flow

As of December 31, 2023, we had an aggregate of $203.7 million of cash, marketable equity securities, and available liquidity under our line of credit and $314.2 million of stockholders’ equity. Outstanding debt was $261.7 million as of December 31, 2023, which represents a $2.6 million decrease from December 31, 2022.

During 2023, we generated $114.6 million in operating cash flow while net capital expenditures resulted in a cash outflow of $11.4 million.

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; a significant reduction in or termination of the Company's trucking service by a key customer, including as a result of future labor disruptions; 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 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, rules regarding the classification of independent contractors as employees, tariffs, import/export, trade and immigration regulations or policies; 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,
	2023		2022		2023		2022
	(in thousands, except earnings per share)				(in thousands, except earnings per share)
Revenue, before fuel surcharge	$156,229		$203,449		$706,114		$818,751
Fuel surcharge	23,939		34,167		104,693		128,111
Operating Revenue	180,168		237,616		810,807		946,862
Operating expenses and costs:
Salaries, wages and benefits	44,084		48,849		186,223		181,918
Operating supplies and expenses	36,939		42,849		160,527		166,005
Rent and purchased transportation	71,627		91,450		315,647		364,971
Depreciation	16,800		16,159		64,605		62,806
Insurance and claims	5,564		13,235		30,769		32,516
Other	5,833		5,415		23,769		18,128
Loss(gain) on disposition of equipment	132		(587)		(1,043)		(3,250)
Total operating expenses and costs	180,979		217,370		780,497		823,094
Operating (loss)income	(811)		20,246		30,310		123,768
Interest expense	(2,611)		(2,343)		(9,177)		(7,929)
Non-operating income	3,716		5,997		7,446		3,168
Income before income taxes	294		23,900		28,579		119,007
Income tax expense	2,525		5,917		10,163		28,334
Net (loss)income	($2,231)		$17,983		$18,416		$90,673
Diluted (loss)earnings per share	($0.10)		$0.81		$0.83		$4.04
Average shares outstanding – Diluted	22,021		22,319		22,197		22,436
	Quarter Ended December 31,				Twelve Months Ended December 31,
	2023		2022		2023		2022
Truckload Operations
Total miles (in thousands)	43,970		52,451		200,867		203,982
Operating ratio (1)	103.7%		91.0%		97.7%		83.7%
Empty miles factor	8.6%		9.03%		8.51%		9.29%
Revenue per total mile, before fuel surcharge	$2.35		$2.60		$2.30		$2.65
Total loads	94,776		104,719		411,548		406,053
Revenue per truck per workday	$744		$893		$772		$919
Revenue per truck per week	$3,722		$4,466		$3,861		$4,593
Average company-driver trucks	1,938		2,056		2,014		1,915
Average owner operator trucks	299		405		345		394
Logistics Operations
Total revenue (in thousands)	$52,993		$67,172		$245,196		$277,816
Operating ratio	94.3%		88.1%		91.9%		87.2%

P.A.M. Transportation Services, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited)
	December 31,		December 31,
	2023		2022
	(in thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$100,614		$74,087
Trade accounts receivable, net	80,604		134,739
Other receivables	7,203		6,263
Inventories	2,321		2,570
Prepaid expenses and deposits	13,213		15,729
Marketable equity securities	43,203		41,728
Income taxes refundable	3,883		5,650
Total current assets	251,041		280,766
Property and equipment	771,131		705,919
Less: accumulated depreciation	266,412		242,324
Total property and equipment, net	504,719		463,595
Other non-current assets	4,697		4,801
Total Assets	$760,457		$749,162
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$62,652		$48,917
Accrued expenses and other liabilities	16,799		34,233
Current portion of long-term debt	57,645		58,815
Total current liabilities	137,096		141,965
Long-term debt, net of current portion	204,064		205,466
Deferred income taxes	104,331		101,445
Other long-term liabilities	750		103
Total liabilities	446,241		448,979
STOCKHOLDERS’ EQUITY
Common stock	223		223
Additional paid-in capital	40,825		40,472
Treasury stock, at cost	(8,736)		(4,000)
Retained earnings	281,904		263,488
Total stockholders’ equity	314,216		300,183
Total liabilities and stockholders’ equity	$760,457		$749,162

___________________________________________
1)		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.

 

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P.A.M. TRANSPORTATION SERVICES, INC.

Lance K. Stewart

(479) 361-9111

Source: P.A.M. Transportation Services, Inc.

FAQ

What were P.A.M. Transportation Services, Inc.'s total revenues for the fourth quarter of 2023?

The total revenues for the fourth quarter of 2023 were $180.2 million, down 24.2% year-over-year.

What was P.A.M. Transportation Services, Inc.'s operating loss for the fourth quarter of 2023?

The operating loss for the fourth quarter of 2023 was $0.8 million.

What was P.A.M. Transportation Services, Inc.'s diluted loss per share for the quarter ended December 31, 2023?

The diluted loss per share for the quarter ended December 31, 2023, was $0.10.

What was P.A.M. Transportation Services, Inc.'s ticker symbol?

The ticker symbol for P.A.M. Transportation Services, Inc. is PTSI.

What were the consolidated net income and earnings per share for P.A.M. Transportation Services, Inc. for the year ended December 31, 2023?

The consolidated net income was $18.4 million, and the diluted and basic earnings per share were $0.83 for the year ended December 31, 2023.

What were P.A.M. Transportation Services, Inc.'s liquidity and capitalization as of December 31, 2023?

As of December 31, 2023, the company had an aggregate of $203.7 million of cash, marketable equity securities, and available liquidity under their line of credit, and $314.2 million of stockholders' equity.

What was P.A.M. Transportation Services, Inc.'s outstanding debt as of December 31, 2023?

The outstanding debt was $261.7 million as of December 31, 2023, representing a $2.6 million decrease from December 31, 2022.

What was the operating cash flow and net capital expenditures for P.A.M. Transportation Services, Inc. during 2023?

During 2023, the company generated $114.6 million in operating cash flow while net capital expenditures resulted in a cash outflow of $11.4 million.