UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ _ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to______
Commission File Number 0-15057
--------
P.A.M. TRANSPORTATION SERVICES, INC.
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 71-0633135
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Highway 412 West, Tontitown, Arkansas 72770
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (501) 361-9111
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ _ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Class Outstanding at May 2, 2000
----- -------------------------------
Common Stock, $.01 Par Value 8,440,957
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE>
<TABLE>
<CAPTION>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2000 1999
---- ----
(unaudited) (note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 4,657 $ 3,557
Receivables:
Trade, net of allowance 27,227 22,890
Other 906 1,032
Operating supplies and inventories 72 60
Deferred income taxes 440 378
Prepaid expenses and deposits 6,487 4,408
Income taxes refundable 29 113
--------- ---------
Total current assets 39,818 32,438
Property and equipment, at cost 183,931 177,502
Less: accumulated depreciation (56,030) (51,382)
--------- ---------
Net property and equipment 127,901 126,120
Other assets:
Excess of cost over net assets acquired 8,810 8,911
Non compete agreement 228 261
Other 1,230 1,231
--------- ---------
Total other assets 10,268 10,403
--------- ---------
Total assets $ 177,987 $ 168,961
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 22,160 $ 22,271
Trade accounts payable 13,657 11,210
Other current liabilities 9,271 7,674
--------- ---------
Total current liabilities 45,088 41,155
Long-term debt, less current portion 57,247 55,617
Non compete agreement 98 131
Deferred income taxes 20,053 18,693
Shareholders' equity:
Common stock 84 84
Additional paid-in capital 19,460 19,452
Retained earnings 35,957 33,829
--------- ---------
Total shareholders' equity 55,501 53,365
--------- ---------
Total liabilities and shareholders' equity $ 177,987 $ 168,961
========= =========
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
Operating revenues $ 54,147 $ 51,391
Operating expenses:
Salaries, wages and benefits 24,243 22,405
Operating supplies 9,835 8,155
Rent/purchased transportation 3,556 4,030
Depreciation and amortization 4,817 4,231
Operating taxes and licenses 2,956 2,852
Insurance and claims 2,290 1,998
Communications and utilities 587 610
Other 1,015 983
(Gain) loss on sale of equipment (46) (23)
--------- ---------
49,253 45,241
--------- ---------
Operating income 4,894 6,150
Other income (expense)
Interest expense (1,354) (1,404)
--------- ---------
(1,354) (1,404)
Income before income taxes 3,540 4,746
Income taxes --current 136 584
--deferred 1,276 1,354
--------- ---------
1,412 1,938
Net income $ 2,128 $ 2,808
========= =========
Net income per common share:
Basic $ 0.25 $ 0.34
========= =========
Diluted $ 0.25 $ 0.33
========= =========
Average common shares outstanding-Basic 8,440,298 8,342,198
========= =========
Average common shares outstanding-Diluted 8,514,854 8,440,868
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in thousands)
Three months Ended
March 31,
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,128 $ 2,808
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,817 4,231
Non compete agreement amortization 33 96
Provision for deferred income taxes 1,276 1,354
(Gain)/loss on retirement of property and equipment (46) (23)
Changes in operating assets and liabilities:
Accounts receivable (4,312) 87
Prepaid expenses and other current assets (2,088) (1,424)
Accounts payable 2,554 1,671
Accrued expenses 1,597 1,998
--------- ---------
Net cash provided by operating activities 5,959 10,798
INVESTING ACTIVITIES
Purchases of property and equipment (6,650) (16,832)
Acquisition of business, net of cash acquired - (9,642)
Proceeds from sales of assets 200 1,046
Lease payments received on direct financing leases 99 134
--------- ---------
Net cash used in investing activities (6,351) (25,294)
FINANCING ACTIVITIES
Borrowings under lines of credit 46,975 53,644
Repayments under lines of credit (44,849) (53,644)
Borrowings of long-term debt 4,204 14,551
Repayments of long-term debt (4,845) (4,328)
Proceeds from exercise of stock options 7 63
--------- ---------
Net cash provided by financing activities 1,492 10,286
--------- ---------
Net increase (decrease) in cash and cash equivalents 1,100 (4,210)
Cash and cash equivalents at beginning of period $ 3,557 $ 5,963
--------- ---------
Cash and cash equivalents at end of period $ 4,657 $ 1,753
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2000
NOTE A: BASIS OF PRESENTATION
- ---------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In management's opinion, all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation have been included.
Operating results for the three-month period ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2000. For further information, refer to the consolidated financial
statements and the footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1999.
NOTE B: NOTES PAYABLE AND LONG-TERM DEBT
- ----------------------------------------------
In the first three months of 2000, the Company's subsidiary, P.A.M. Transport,
Inc., entered into an installment obligation for the purchase of revenue
equipment in the amount of approximately $4.2 million. This obligation is
payable in 48 monthly installments at an interest rate of 7.25%.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
- ----------------------------
Certain information included in this Quarterly Report on Form 10-Q contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements may relate to
financial results and plans for future business activities, 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,
general economic conditions, competition and other uncertainties detailed in
this report and detailed from time to time in other filings by the Company with
the Securities and Exchange Commission.
THREE MONTHS ENDED MARCH 31, 2000 VS. THREE MONTHS ENDED MARCH 31, 1999
- --------------------------------------------------------------------------------
For the quarter ended March 31, 2000, revenues increased 5.4% to $54.1 million
as compared to $51.4 million for the quarter ended March 31, 1999. The main
factor for the increase was an increase in the average number of tractors from
1,405 in the first quarter of 1999 to 1,477 in the first quarter of 2000.
The Company's operating ratio increased to 91.0% for the first quarter of 2000
as compared to 88.0% for the first quarter of 1999.
Salaries, wages and benefits increased from 43.6% of revenues in the first
quarter of 1999 to 44.8% of revenues in the first quarter of 2000. The
increase relates primarily to an increase in costs associated with providing
health care coverage to employees.
Operating supplies and expenses increased from 15.9% of revenues in the first
quarter of 1999 to 18.2% of revenues in the first quarter of 2000. The
increase relates primarily to an increase in fuel costs of 3.2% net of a fuel
surcharge passed to customers.
Rent and purchased transportation decreased from 7.8% of revenues in the first
quarter of 1999 to 6.6% of revenues in the first quarter of 2000. The decrease
relates primarily to the replacement of rental trailers with Company owned
trailers.
Depreciation and amortization increased from 8.2% of revenues in the first
quarter of 1999 to 8.9% of revenues in the first quarter of 2000. The increase
is due to the replacement of older tractors which were fully depreciated.
The Company's effective tax rate decreased from 40.8% in the first quarter of
1999 to 39.9% in the first quarter of 2000. This decrease is related to
an increase in the deduction allowed for per diem payments made to drivers.
LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------
During the first three months of 2000, the Company generated $6.0 million in
cash from operating activities. Investing activities used $6.4 million in cash
in the first three months of 2000. Financing activities generated $1.5 million
in the first three months of 2000 primarily from long-term borrowings.
The Company's principal subsidiary, P.A.M. Transport, Inc., has a $15.0 million
secured bank line of credit subject to borrowing limitations. Withdrawals
from the line of credit are at an interest rate of LIBOR as of the first day of
the month plus 1.40% (7.32% at March 31, 2000). Outstanding advances on this
line of credit were approximately $9.3 million at March 31, 2000, including $3.3
million in letters of credit. The Company's borrowing base limitation at
March 31, 2000 was $5.7 million. The line of credit is guaranteed by the
Company and matures on May 31, 2001.
In addition to cash flows from operations, the Company uses its existing line of
credit on an interim basis to finance capital expenditures and repay long-term
debt. Longer-term transactions, such as installment notes (generally three to
five year terms at fixed rates), are typically entered into for the purchase of
revenue equipment; however, the Company purchased additional revenue equipment
during the first three months of 2000 at a cost of approximately $4.6 million
using its existing line of credit. In addition, P.A.M. Transport, Inc.
entered into an installment obligation during the first three months of 2000 for
the purchase of revenue equipment in the amount of approximately $4.2 million,
payable in 48 monthly installments at an interest rate of 7.25%.
During the remainder of 2000, the Company plans to replace 219 tractors which
will result in additional debt of approximately $11.9 million. Management
expects that the Company's existing working capital and its available line of
credit will be sufficient to meet the Company's capital commitments as of
March 31, 2000, to repay indebtedness coming due in the current year, and to
fund its operating needs during the remainder of fiscal 2000.
<PAGE>
PART II. OTHER INFORMATION
------------------------------
Item 3. Quantitative and Qualitative Disclosure about Market Risk.
- ----------------------------------------------------------------------------
The Company's line of credit agreement provides for borrowings, which bear
interest at variable rates based on the LIBOR. At March 31, 2000, the
Company had approximately $9.3 million outstanding pursuant to the its line of
credit. The Company believes that the effect, if any, of reasonably possible
near-term changes in interest rates on the Company's financial position, results
of operations, and cash flows should not be material.
All customers are required to pay for the Company's services in U.S. dollars
and the Company does not engage in hedging transactions relating to diesel fuel
or any other commodity.
Item 6. Exhibits and Reports on Form 8-K.
- --------------------------------------------------
(a) The following exhibits are filed with this report:
11.1 - Statement Re: Computation of Diluted Earnings Per Share.
27.1 - Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
P.A.M. TRANSPORTATION SERVICES, INC.
Dated: May 9, 2000 By: /s/ Robert W Weaver
---------------------------------
Robert W. Weaver
President and Chief Executive Officer
(principal executive officer)
Dated: May 9, 2000 By: /s/ Larry J. Goddard
---------------------------------
Larry J. Goddard
Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer
(principal accounting and financial officer)
<PAGE>
EXHIBIT (11)----STATEMENT RE: COMPUTATION OF DILUTED EARNINGS PER SHARE
Diluted earnings per share computations assumes the exercise of stock purchase
warrants and options to purchase shares of common stock. The shares assumed
exercised are based on the weighted average number of warrants and options
outstanding during the period and only include those warrants and options whose
average share price during the period exceeds its related exercise price. The
net additional shares issuable are calculated based on the treasury stock
method and are added to the weighted average number of shares outstanding during
the period.
<TABLE>
<CAPTION>
DILUTED EARNINGS PER SHARE FOR THE PERIOD ENDED MARCH 31, 2000 Three Months
- -------------------------------------------------------------- ------------
<S> <C>
Actual net income (A) $ 2,127,748
==========
Assumed exercise of stock options and warrants 219,846
Application of assumed proceeds ($1,428,780) toward
repurchase of outstanding common stock at an average
market price of $9.834 (145,290)
----------
Net additional shares issuable 74,556
==========
Adjustment of shares outstanding:
Weighted average common shares outstanding 8,440,298
Net additional shares issuable 74,556
----------
Adjusted shares outstanding (B) 8,514,854
==========
Net income per common share (A) divided by (B) $ 0.25
==========
DILUTED EARNINGS PER SHARE FOR THE PERIOD ENDED MARCH 31, 1999 Three Months
- -------------------------------------------------------------- ------------
Actual net income (A) $ 2,807,575
==========
Assumed exercise of stock options and warrants 280,407
Application of assumed proceeds ($1,516,412) toward
repurchase of outstanding common stock at an average
market price of $8.344 (181,737)
----------
Net additional shares issuable 98,670
==========
Adjustment of shares outstanding:
Weighted average common shares outstanding 8,342,198
Net additional shares issuable 98,670
----------
Adjusted shares outstanding (B) 8,440,868
==========
Net income per common share (A) divided by (B) $ 0.33
==========
<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 4657
<SECURITIES> 0
<RECEIVABLES> 28773
<ALLOWANCES> 640
<INVENTORY> 72
<CURRENT-ASSETS> 39818
<PP&E> 183931
<DEPRECIATION> 56030
<TOTAL-ASSETS> 177987
<CURRENT-LIABILITIES> 45088
<BONDS> 57247
<COMMON> 84
0
0
<OTHER-SE> 55417
<TOTAL-LIABILITY-AND-EQUITY> 177987
<SALES> 0
<TOTAL-REVENUES> 54147
<CGS> 0
<TOTAL-COSTS> 49253
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1354
<INCOME-PRETAX> 3540
<INCOME-TAX> 1412
<INCOME-CONTINUING> 2128
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2128
<EPS-BASIC> .25
<EPS-DILUTED> .25
</TABLE>
