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 September 30, 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
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P.A.M. TRANSPORTATION SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 71-0633135
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Highway 412 West, Tontitown, Arkansas 72770
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(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 November 3, 2000
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Common Stock, $.01 Par Value 8,469,657
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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<CAPTION>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2000 1999
---- ----
(unaudited) (note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 312 $ 3,557
Receivables:
Trade, net of allowance 23,878 22,890
Other 1,244 1,032
Operating supplies and inventories 72 60
Deferred income taxes 281 378
Prepaid expenses and deposits 5,580 4,408
Income taxes refundable 459 113
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Total current assets 31,826 32,438
Property and equipment, at cost 181,566 177,502
Less: accumulated depreciation (56,808) (51,382)
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Net property and equipment 124,758 126,120
Other assets:
Excess of cost over net assets acquired 8,608 8,911
Non compete agreement 163 261
Other 1,516 1,231
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Total other assets 10,287 10,403
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Total assets $ 166,871 $ 168,961
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 16,840 $ 22,271
Trade accounts payable 15,175 11,210
Other current liabilities 9,097 7,674
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Total current liabilities 41,112 41,155
Long-term debt, less current portion 43,923 55,617
Non compete agreement 33 131
Deferred income taxes 21,959 18,693
Shareholders' equity:
Common stock 85 84
Additional paid-in capital 19,639 19,452
Retained earnings 40,120 33,829
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Total shareholders' equity 59,844 53,365
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Total liabilities and shareholders' equity $ 166,871 $ 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>
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<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 Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues $ 47,100 $ 51,284 $ 154,282 $ 156,350
Operating expenses:
Salaries, wages and benefits 21,137 22,084 68,187 67,796
Operating supplies 9,228 9,027 28,327 25,901
Rent/purchased transportation 2,498 3,076 9,429 10,399
Depreciation and amortization 4,629 4,833 14,253 13,712
Operating taxes and licenses 2,453 2,683 8,324 8,453
Insurance and claims 2,032 1,903 6,610 5,999
Communications and utilities 500 608 1,685 1,809
Other 874 1,163 2,851 3,270
(Gain) loss on sale of equipment 398 (149) 302 (262)
--------- --------- --------- ---------
43,749 45,228 139,968 137,077
--------- --------- --------- ---------
Operating income 3,351 6,056 14,314 19,273
Other income (expense)
Interest expense (1,184) (1,413) (3,906) (4,297)
--------- --------- --------- ---------
(1,184) (1,413) (3,906) (4,297)
Income before income taxes 2,167 4,643 10,408 14,976
Income taxes --current 618 547 923 1,620
--deferred 205 1,302 3,193 4,461
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823 1,849 4,116 6,081
Net income $ 1,344 $ 2,794 $ 6,292 $ 8,895
========= ========= ========= =========
Net income per common share:
Basic $ 0.16 $ 0.33 $ 0.74 $ 1.06
========= ========= ========= =========
Diluted $ 0.16 $ 0.33 $ 0.74 $ 1.05
========= ========= ========= =========
Average common shares outstanding-Basic 8,465,309 8,420,603 8,449,861 8,380,541
========= ========= ========= =========
Average common shares outstanding-Diluted 8,525,269 8,527,189 8,518,227 8,477,753
========= ========= ========= =========
See notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(in thousands)
Nine months Ended
September 30,
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 6,292 $ 8,895
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 14,253 13,712
Non compete agreement amortization 98 295
Provision for deferred income taxes 3,193 4,461
(Gain)/loss on retirement of property and equipment 302 (262)
Changes in operating assets and liabilities:
Accounts receivable (1,392) 34
Prepaid expenses and other current assets (1,467) (1,489)
Accounts payable 3,697 3,620
Accrued expenses 1,422 1,297
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Net cash provided by operating activities 26,398 30,563
INVESTING ACTIVITIES
Purchases of property and equipment (24,354) (37,151)
Acquisition of business, net of cash acquired - (9,642)
Proceeds from sales of assets 11,467 5,251
Lease payments received on direct financing leases 192 749
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Net cash used in investing activities (12,695) (40,793)
FINANCING ACTIVITIES
Borrowings under lines of credit 141,199 147,185
Repayments under lines of credit (139,999) (146,233)
Borrowings of long-term debt 4,204 18,469
Repayments of long-term debt (22,538) (14,861)
Proceeds from exercise of stock options 186 436
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Net cash (used in) provided by financing activities (16,948) 4,996
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Net decrease in cash and cash equivalents (3,245) (5,234)
Cash and cash equivalents at beginning of period $ 3,557 $ 5,963
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Cash and cash equivalents at end of period $ 312 $ 729
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 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 nine-month period ended September 30, 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
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In the first nine months of 2000, the Company's subsidiary, P.A.M. Transport,
Inc., entered into an installment obligation for the financing 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 SEPTEMBER 30, 2000 VS. THREE MONTHS ENDED SEPTEMBER 30, 1999
--------------------------------------------------------------------------------
For the quarter ended September 30, 2000, revenues decreased 8.2% to $47.1
million as compared to $51.3 million for the quarter ended September 30, 1999.
The principal reason for the decrease was a decrease in the average number of
tractors from 1,459 in the third quarter of 1999 to 1,379 in the third quarter
of 2000.
The Company's operating ratio increased to 92.9% in the third quarter of 2000
compared to 88.2% in the third quarter of 1999.
Salaries, wages and benefits increased from 43.1% of revenues in the third
quarter of 1999 to 44.9% of revenues in the third quarter of 2000. The increase
relates to an increase in driver pay packages during the third quarter of 2000.
Operating supplies and expenses increased from 17.6% of revenues in the third
quarter of 1999 to 19.6% of revenues in the third quarter of 2000. The
increase relates primarily to an increase in fuel costs of 1.8% net of a fuel
surcharge passed to customers.
Rent and purchased transportation decreased from 6.0% of revenues in the third
quarter of 1999 to 5.3% of revenues in the third quarter of 2000. The decrease
relates primarily to a decrease in amounts paid to other transportation
companies in the form of brokerage fees.
Insurance and claims increased from 3.7% of revenues in the third quarter of
1999 to 4.3% of revenues in the third quarter of 2000. The increase relates to
increased costs of auto liability insurance coverage.
The Company's effective tax rate decreased from 39.8% in the third quarter of
1999 to 38.0% in the third quarter of 2000. This decrease is related to an
increase in the deduction allowed for per diem payments made to drivers.
NINE MONTHS ENDED SEPTEMBER 30, 2000 VS. NINE MONTHS ENDED SEPTEMBER 30, 1999
--------------------------------------------------------------------------------
For the nine months ended September 30, 2000, revenues decreased 1.3% to $154.3
million as compared to $156.3 million for the nine months ended September 30,
1999. The principal reason for the decrease was a decrease in the average
number of tractors from 1,438 for the first nine months of 1999 to 1,418 for the
first nine months of 2000.
The Company's operating ratio increased to 90.7% in the first nine months of
2000 as compared to 87.7% in the first nine months of 1999.
Salaries, wages and benefits increased from 43.4% of revenues in the first
nine months of 1999 to 44.2% of revenues in the first nine months of 2000.
The increase relates to an increase in driver pay packages early in the third
quarter of 2000.
Operating supplies and expenses increased from 16.6% of revenues in the first
nine months of 1999 to 18.4% of revenues in the first nine months of 2000. The
increase relates primarily to an increase in fuel costs of 2.0% net of a fuel
surcharge passed to customers.
Rent and purchased transportation decreased from 6.7% of revenues in the first
nine months of 1999 to 6.1% of revenues in the first nine months of 2000. The
decrease relates primarily to the replacement of leased trailers with Company
owned trailers.
The Company's effective tax rate decreased from 40.6% in the first nine months
of 1999 to 39.5% in the first nine months 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 nine months of 2000, the Company generated $26.4 million in
cash from operating activities. Investing activities used $12.7 million in cash
in the first nine months of 2000. Financing activities used $16.9 million in
the first nine months of 2000 primarily for scheduled payments against 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% (8.03% at September 30, 2000). Outstanding advances
on this line of credit were approximately $8.4 million at September 30, 2000,
including $3.3 million in letters of credit. The Company's borrowing base
limitation at September 30, 2000 was $6.6 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 nine months of 2000 at a cost of approximately $22.8 million
using its existing line of credit. In addition, P.A.M. Transport, Inc. entered
into an installment obligation during the first nine months of 2000 in the
amount of approximately $4.2 million in order to finance revenue equipment
previously acquired utilizing its line of credit. This obligation is payable in
48 monthly installments at an interest rate of 7.25%.
During the remainder of 2000, the Company plans to replace 58 tractors which
would result in additional debt of approximately $2.7 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
September 30, 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
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Item 3. Quantitative and Qualitative Disclosures about Market Risk.
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The Company's line of credit agreement provides for borrowings which bear
interest at variable rates based on the LIBOR. At September 30, 2000, the
Company had approximately $8.4 million outstanding pursuant to the 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 did not engage in hedging transactions relating to diesel fuel or
any other commodity during the nine months ending September 30, 2000.
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: November 9, 2000 By: /s/ Robert W Weaver
---------------------------------
Robert W. Weaver
President and Chief Executive Officer
(principal executive officer)
Dated: November 9, 2000 By: /s/ Larry J. Goddard
---------------------------------
Larry J. Goddard
Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer
(principal accounting and financial officer)
