The unprecedented rise in fuel costs, net of fuel surcharge, has
negatively impacted our operating income by approximately
The lack of truckload freight demand and resulting pricing competition
continues to exert downward pressure on rates, impeding our ability to
negotiate rate increases and often resulting in rates that are unacceptable in
light of current costs. As a result of these downward rate pressures we have
opted to walk away from some business and reduce fleet capacity to compensate
when replacement freight was not added. This has also impacted our automotive
business which has historically comprised a large portion of our total
revenue. As a result, the percentage of our revenue generated by automotive
business has decreased from 46% of total revenue in the fourth quarter of 2007
to 42% at the end of
The Company continuously seeks ways to reduce operating costs through price negotiation, gains in efficiency and cost control. Through efforts to eliminate non-essential personnel we have been able to further improve our driver to non-driver ratio from an average of 5.9:1 for the first quarter of 2007 to 6.2:1 for the first quarter of 2008.
Looking forward, we don't see much improvement in truckload freight demand in the near future. However, we do hear that capacity reductions are occurring in the industry, both by fleet reduction and through bankruptcies. This reduction is reported to be approximately 42,000 trucks or 2.1% of the nation's over-the-road heavy truck capacity that was idled in the first quarter of 2008. As we continue to aggressively seek and capitalize on ways to control costs we hope to see industry capacity reductions resolve the current imbalance between truckload freight and available capacity in the industry and create opportunities for us to negotiate rate increases that more fairly compensate us for our services."
P.A.M. Transportation Services, Inc. is a leading truckload dry van
carrier transporting general commodities throughout the continental
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, 2008 2007 Revenue, before fuel surcharge $86,445,200 $87,543,603 Fuel surcharge 19,375,496 11,264,853 Operating revenue 105,820,696 98,808,456 Operating expenses: Salaries, wages and benefits 34,497,654 33,704,998 Fuel expense 37,422,944 24,591,642 Operating supplies 8,019,353 7,482,006 Rent and purchased transportation 9,520,022 10,034,037 Depreciation and amortization 8,987,058 9,348,883 Operating taxes and license 4,359,027 4,350,689 Insurance and claims 4,551,876 4,535,814 Communications and utilities 811,696 768,163 Other 1,383,591 1,640,347 Loss on disposition of equipment 233,799 17,822 Total operating expenses 109,787,020 96,474,401 Operating (loss) income (3,966,324) 2,334,055 Other income (expense): Interest expense (568,612) (486,736) Other (205,804) 240,715 Total other income (expense) (774,416) (246,021) (Loss) income before income taxes (4,740,740) 2,088,034 Income tax (benefit) expense (1,912,414) 823,103 Net (loss) income $(2,828,326) $1,264,931 Diluted (loss) earnings per share $(0.29) $0.12 Average shares outstanding - Diluted 9,795,302 10,307,581 Quarter ended March 31, Truckload Operations 2008 2007 Total miles 62,074,954 60,621,197 Operating ratio* 105.41% 97.40% Empty miles factor 7.25% 6.42% Revenue per total mile, before fuel surcharge $1.26 $1.29 Total loads 96,943 83,250 Revenue per truck per work day $596 $592 Revenue per truck per week $2,980 $2,960 Average company trucks 1,999 2,018 Average owner operator trucks 54 52 Logistics Operations Total revenue $8,089,097 $9,169,332 Operating ratio 96.65% 96.79% As of March 31, 2008 2007 Long-term debt to book capitalization 20.86% 17.48% Shareholders' equity $173,835,238 $186,574,230 * 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.
SOURCE P.A.M. Transportation Services, Inc.