Fourth Quarter 2021 Highlights
- Total revenues of $213.9 million, up 49.9% YoY
- Operating income of $34.7 million, up 112.0% YoY; non-GAAP adjusted operating income of $40.2 million, up 145.6% YoY
- Operating ratio of 83.8%, an improvement of 470 bps YoY; non-GAAP adjusted operating ratio of 79.3%, an improvement of 830 bps YoY
- Diluted EPS of $2.48, up 105.0% YoY; non-GAAP adjusted diluted EPS of $2.85, up 135.5% YoY
TONTITOWN, AR / ACCESSWIRE / January 19, 2022 / P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) ("the Company") today reported net income of $27.9 million, or diluted earnings per share of $2.48 ($2.50 basic), for the quarter ended December 31, 2021, and net income of $76.5 million, or diluted earnings per share of $6.69 ($6.74 basic), for the year ended December 31, 2021. These results compare to net income of $14.0 million, or diluted and basic earnings per share of $1.21, for the quarter ended December 31, 2020, and net income of $17.8 million, or diluted and basic earnings per share of $1.55, for the year ended December 31, 2020. Net income and diluted earnings per share for the fourth quarter and year ended December 31, 2021 include the negative impact of a lawsuit settlement for a loss in excess of insurance policy limits and loss estimates for two claims anticipated to settle in excess of insurance policy limits. Excluding the negative impact of these litigation charges, adjusted (non-GAAP) net income for the quarter ended December 31, 2021 was $32.1 million, or adjusted (non-GAAP) diluted earnings per share of $2.85 ($2.87 basic).
Operating revenues increased 49.9% to $213.9 million for the fourth quarter of 2021 compared to $142.8 million for the fourth quarter of 2020. For the year ended December 31, 2021, operating revenues increased 45.3% to $707.1 million compared to $486.8 million for the year ended December 31, 2020.
Joe Vitiritto, President of the Company, commented, "I am proud of our team and the work that went into producing our 4th quarter and FY 2021 results. We made significant progress in the quarter and in 2021 at PAM with profitable organic growth. The growth has allowed our team to offer creative capacity solutions to our customers in unprecedented times. Our drivers are owed a big thanks for how they navigated the many challenges that 2021 presented them both personally and professionally. We couldn't be doing what we are here at PAM without their commitment to our company, customers, and our country. As we move into 2022, our team is ready to continue to build off what we learned from and executed in 2021."
Stock split
During 2021, the Company announced and completed a 2-for-1 forward stock split in the form of a 100% stock dividend which was paid on August 16, 2021, to stockholders of record on July 30, 2021. Immediately following payment of the 100% stock dividend, our outstanding common stock increased from 5,726,243 shares to 11,452,486 shares. Our current per-share results and prior periods per-share results have been adjusted accordingly to reflect the impact of these additional shares.
Share Repurchase Program and Self Tender Offer
During the fourth quarter of 2021, the Company's Board of Directors reauthorized the Company to repurchase up to 500,000 shares of the Company's common stock. The Company's repurchase program has been extended and expanded several times since the original authorization in 2011, and this reauthorization acts as a replenishment of shares under the program. During 2021, the Company announced and completed a modified "Dutch auction" tender offer to purchase up to 200,000 shares of its outstanding common stock. Including allowances for oversubscribed submissions, the Company accepted for purchase a total of 272,405 shares of its common stock, representing approximately 2.4% of the Company's issued and outstanding stock. The Company has completed eight such self tender offer's during the past nine years. Including the shares purchased under the self tender, the Company repurchased 285,225 shares of its common stock during 2021.
Liquidity, Capitalization, and Cash Flow
As of December 31, 2021, we had an aggregate of $117.6 million of cash, marketable equity securities, and available liquidity under our line of credit and $216.1 million of stockholders' equity. Outstanding debt was $223.5 million as of December 31, 2021, which represents a $73.9 million decrease from December 31, 2020, while net debt, defined as debt less cash and marketable equity securities, was $165.6 million as of December 31, 2021, a $103.5 million decrease from December 31, 2020.
During 2021, we generated $101.7 million in operating cash flow and returned $10.8 million to shareholders in the form of share repurchases. Net capital expenditures during 2021 resulted in a cash inflow of $12.5 million due to payments received early in 2021 which were related to December 2020 asset retirements and to 2021 equipment delivery delays.
Equipment
During 2021, we received approximately 60% of our 2021 equipment order and expect the remaining deliveries to occur in early 2022. Due to the relatively new age of our equipment fleet and remaining unexpired warranty coverage for most of our trucks and trailers, we did not incur significant additional maintenance costs related to the delivery delays. The average ages of our truck and trailer fleets were 1.8 years and 5.5 years, respectively, at the end of 2021 as compared to 1.4 years and 4.9 years, respectively, at the end of 2020.
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 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.
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 and operational disruptions and uncertainties due to 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 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; 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, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (in thousands, except earnings per share) | (in thousands, except earnings per share) | |||||||||||||||
Revenue, before fuel surcharge | $ | 194,606 | $ | 131,546 | $ | 641,253 | $ | 438,987 | ||||||||
Fuel surcharge | 19,308 | 11,204 | 65,867 | 47,838 | ||||||||||||
Operating Revenue | 213,914 | 142,750 | 707,120 | 486,825 | ||||||||||||
Operating expenses and costs: | ||||||||||||||||
Salaries, wages and benefits | 38,845 | 33,107 | 141,019 | 124,098 | ||||||||||||
Operating supplies and expenses | 27,853 | 21,409 | 102,228 | 84,275 | ||||||||||||
Rent and purchased transportation | 86,629 | 51,296 | 279,016 | 165,984 | ||||||||||||
Depreciation | 13,586 | 14,232 | 55,012 | 56,168 | ||||||||||||
Insurance and claims | 8,986 | 3,165 | 18,792 | 8,866 | ||||||||||||
Other | 3,789 | 2,727 | 12,295 | 13,138 | ||||||||||||
(Gain) loss on disposition of equipment | (484 | ) | 444 | (1,447 | ) | 373 | ||||||||||
Total operating expenses and costs | 179,204 | 126,380 | 606,915 | 452,902 | ||||||||||||
Operating income | 34,710 | 16,370 | 100,205 | 33,923 | ||||||||||||
Non-operating income (expense) | 3,486 | 4,510 | 10,339 | (1,699 | ) | |||||||||||
Interest expense | (1,668 | ) | (2,214 | ) | (8,039 | ) | (8,815 | ) | ||||||||
Income before income taxes | 36,528 | 18,666 | 102,505 | 23,409 | ||||||||||||
Income tax expense | 8,637 | 4,713 | 25,989 | 5,582 | ||||||||||||
Net income | $ | 27,891 | $ | 13,953 | $ | 76,516 | $ | 17,827 | ||||||||
Diluted earnings per share | $ | 2.48 | $ | 1.21 | $ | 6.69 | $ | 1.55 | ||||||||
Average shares outstanding - Diluted | 11,264 | 11,504 | 11,432 | 11,536 | ||||||||||||
P.A.M. Transportation Services, Inc. and Subsidiaries
Key Financial and Operating Statistics
(unaudited)
| Quarter Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
Truckload Operations | ||||||||||||||||
Total miles (in thousands) | 44,467 | 47,539 | 182,908 | 193,481 | ||||||||||||
Operating ratio (1) | 79.2 | % | 86.8 | % | 82.3 | % | 92.0 | % | ||||||||
Empty miles factor | 9.79 | % | 8.67 | % | 8.81 | % | 8.83 | % | ||||||||
Revenue per total mile, before fuel surcharge | $ | 2.94 | $ | 1.96 | $ | 2.35 | $ | 1.75 | ||||||||
Total loads | 89,935 | 87,017 | 357,090 | 349,803 | ||||||||||||
Revenue per truck per work day | $ | 1,077 | $ | 758 | $ | 864 | $ | 663 | ||||||||
Revenue per truck per week | $ | 5,385 | $ | 3,788 | $ | 4,320 | $ | 3,317 | ||||||||
Average company-driver trucks | 1,545 | 1,606 | 1,582 | 1,567 | ||||||||||||
Average owner operator trucks | 381 | 350 | 375 | 429 | ||||||||||||
Logistics Operations | ||||||||||||||||
Total revenue (in thousands) | $ | 63,863 | $ | 38,234 | $ | 211,675 | $ | 101,458 | ||||||||
Operating ratio | 88.2 | % | 89.5 | % | 88.7 | % | 93.3 | % | ||||||||
P.A.M. Transportation Services, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (in thousands, except share amounts) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 18,509 | $ | 337 | ||||
Trade accounts receivable, net | 121,854 | 77,731 | ||||||
Other receivables | 7,092 | 5,127 | ||||||
Inventories | 1,456 | 1,345 | ||||||
Prepaid expenses and deposits | 10,962 | 10,172 | ||||||
Marketable equity securities | 39,424 | 27,941 | ||||||
Income taxes refundable | 277 | 868 | ||||||
Total current assets | 199,574 | 123,521 | ||||||
Property and equipment | 585,303 | 653,676 | ||||||
Less: accumulated depreciation | 201,124 | 202,851 | ||||||
Total property and equipment, net | 384,179 | 450,825 | ||||||
Other non-current assets | 3,628 | 4,246 | ||||||
Total Assets | $ | 587,381 | $ | 578,592 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 43,381 | $ | 46,102 | ||||
Accrued expenses and other liabilities | 14,114 | 26,601 | ||||||
Income taxes payable | 4,364 | - | ||||||
Current portion of long-term debt | 49,544 | 57,776 | ||||||
Total current liabilities | 111,403 | 130,479 | ||||||
Long-term debt, net of current portion | 172,733 | 228,330 | ||||||
Deferred income taxes | 86,715 | 68,883 | ||||||
Other long-term liabilities | 420 | 919 | ||||||
Total liabilities | 371,271 | 428,611 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, $.01 par value, 40,000,000 authorized; 23,400,796 and 23,391,438 shares issued; 11,174,011 and 11,455,790 shares outstanding, respectively | 234 | 117 | ||||||
Additional paid-in capital | 84,472 | 84,148 | ||||||
Treasury stock, at cost; 12,226,785 and 11,935,648 shares, respectively | (169,946 | ) | (159,118 | ) | ||||
Retained earnings | 301,350 | 224,834 | ||||||
Total stockholders' equity | 216,110 | 149,981 | ||||||
Total liabilities and stockholders' equity | $ | 587,381 | $ | 578,592 | ||||
P.A.M. Transportation Services, Inc. and Subsidiaries
Reconciliation of GAAP Measures to Non-GAAP Amounts (unaudited)
Adjusted Operating Income and Adjusted Operating Ratio
(Dollars in thousands)
| Quarter ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
GAAP Presentation | ||||||||||||||||
Total operating revenue | $ | 213,914 | $ | 142,750 | $ | 707,120 | $ | 486,825 | ||||||||
Total operating expenses | (179,204 | ) | (126,380 | ) | (606,915 | ) | (452,902 | ) | ||||||||
Operating income | $ | 34,710 | $ | 16,370 | $ | 100,205 | $ | 33,923 | ||||||||
Operating ratio | 83.8 | % | 88.5 | % | 85.8 | % | 93.0 | % | ||||||||
Non-GAAP Presentation | ||||||||||||||||
Total operating revenue | $ | 213,914 | $ | 142,750 | $ | 707,120 | $ | 486,825 | ||||||||
Fuel surcharge | (19,308 | ) | (11,204 | ) | (65,867 | ) | (47,838 | ) | ||||||||
Revenue, excluding fuel surcharge | 194,606 | 131,546 | 641,253 | 438,987 | ||||||||||||
Total operating expenses | 179,204 | 126,380 | 606,915 | 452,902 | ||||||||||||
Less: fuel surcharge | (19,308 | ) | (11,204 | ) | (65,867 | ) | (47,838 | ) | ||||||||
Less: lawsuit settlement and reserve | (5,500 | ) | - | (5,500 | ) | - | ||||||||||
Adjusted operating expenses | 154,396 | 115,176 | 535,548 | 405,064 | ||||||||||||
Adjusted Operating income | $ | 40,210 | $ | 16,370 | $ | 105,705 | $ | 33,923 | ||||||||
Adjusted Operating ratio | 79.3 | % | 87.6 | % | 83.5 | % | 92.3 | % | ||||||||
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
(in thousands)
| Quarter ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
Net income (GAAP) | $ | 27,891 | $ | 13,953 | $ | 76,516 | $ | 17,827 | ||||||||
Additions: | ||||||||||||||||
Lawsuit settlement and reserve | 5,500 | - | 5,500 | - | ||||||||||||
Reductions: | ||||||||||||||||
Tax benefit of lawsuit settlement and reserve deduction (2) | 1,299 | - | 1,390 | - | ||||||||||||
Adjusted Net income (non-GAAP) | $ | 32,092 | $ | 13,953 | $ | 80,626 | $ | 17,827 | ||||||||
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
| Quarter ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
Diluted earnings per share (GAAP) | $ | 2.48 | $ | 1.21 | $ | 6.69 | $ | 1.55 | ||||||||
Additions: | ||||||||||||||||
Lawsuit settlement and reserve | 0.49 | - | 0.48 | - | ||||||||||||
Reductions: | ||||||||||||||||
Tax benefit of lawsuit settlement and reserve deduction (2) | 0.12 | - | 0.12 | - | ||||||||||||
Adjusted Diluted earnings per share (non-GAAP) | $ | 2.85 | $ | 1.21 | $ | 7.05 | $ | 1.55 | ||||||||
_______________________________________
- 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.
- The tax benefit is calculated using the effective tax rates for each respective period prior to any adjustments for non-GAAP amounts.
FROM: P.A.M. TRANSPORTATION SERVICES, INC.
P.O. BOX 188
Tontitown, AR 72770
Allen W. West
(479) 361-9111
SOURCE: P.A.M. Transportation Services, Inc.
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