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 June 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
--------
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 August 1, 2000
----- -----------------------------
Common Stock, $.01 Par Value 8,444,957
<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)
June 30, December 31,
2000 1999
---- ----
(unaudited) (note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 482 $ 3,557
Receivables:
Trade, net of allowance 23,541 22,890
Other 1,115 1,032
Operating supplies and inventories 72 60
Deferred income taxes 272 378
Prepaid expenses and deposits 6,163 4,408
Income taxes refundable 434 113
--------- ---------
Total current assets 32,079 32,438
Property and equipment, at cost 186,747 177,502
Less: accumulated depreciation (58,987) (51,382)
--------- ---------
Net property and equipment 127,760 126,120
Other assets:
Excess of cost over net assets acquired 8,709 8,911
Non compete agreement 196 261
Other 1,255 1,231
--------- ---------
Total other assets 10,160 10,403
--------- ---------
Total assets $ 169,999 $ 168,961
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 21,718 $ 22,271
Trade accounts payable 8,371 11,210
Other current liabilities 9,595 7,674
--------- ---------
Total current liabilities 39,684 41,155
Long-term debt, less current portion 50,307 55,617
Non compete agreement 66 131
Deferred income taxes 21,598 18,693
Shareholders' equity:
Common stock 84 84
Additional paid-in capital 19,483 19,452
Retained earnings 38,777 33,829
--------- ---------
Total shareholders' equity 58,344 53,365
--------- ---------
Total liabilities and shareholders' equity $ 169,999 $ 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 Six Months Ended
June 30, June 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues $ 53,034 $ 53,675 $ 107,181 $ 105,066
Operating expenses:
Salaries, wages and benefits 22,807 23,310 47,050 45,712
Operating supplies 9,264 8,719 19,100 16,879
Rent/purchased transportation 3,374 3,293 6,931 7,323
Depreciation and amortization 4,806 4,649 9,623 8,879
Operating taxes and licenses 2,915 2,914 5,871 5,765
Insurance and claims 2,289 2,098 4,578 4,096
Communications and utilities 598 591 1,184 1,201
Other 962 1,124 1,977 2,107
(Gain) loss on sale of equipment (50) (90) (96) (113)
--------- --------- --------- ---------
46,965 46,608 96,218 91,849
--------- --------- --------- ---------
Operating income 6,069 7,067 10,963 13,217
Other income (expense)
Interest expense (1,368) (1,479) (2,722) (2,884)
--------- --------- --------- ---------
(1,368) (1,479) (2,722) (2,884)
Income before income taxes 4,701 5,588 8,241 10,333
Income taxes --current 168 488 304 1,072
--deferred 1,713 1,806 2,989 3,160
--------- --------- --------- ---------
1,881 2,294 3,293 4,232
Net income $ 2,820 $ 3,294 $ 4,948 $ 6,101
========= ========= ========= =========
Net income per common share:
Basic $ 0.33 $ 0.39 $ 0.59 $ 0.73
========= ========= ========= =========
Diluted $ 0.33 $ 0.39 $ 0.58 $ 0.72
========= ========= ========= =========
Average common shares outstanding-Basic 8,443,980 8,377,960 8,442,139 8,360,178
========= ========= ========= =========
Average common shares outstanding-Diluted 8,514,654 8,457,711 8,514,788 8,449,431
========= ========= ========= =========
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)
Six months Ended
June 30,
2000 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,948 $ 6,101
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,623 8,879
Non compete agreement amortization 65 196
Provision for deferred income taxes 2,989 3,160
Gain on retirement of property and equipment (96) (113)
Changes in operating assets and liabilities:
Accounts receivable (877) 469
Prepaid expenses and other current assets (2,111) (1,897)
Accounts payable (2,824) 4,389
Accrued expenses 1,920 1,688
--------- ---------
Net cash provided by operating activities 13,637 22,872
INVESTING ACTIVITIES
Purchases of property and equipment (15,120) (28,704)
Acquisition of business, net of cash acquired - (9,642)
Proceeds from sales of assets 4,162 2,750
Lease payments received on direct financing leases 144 582
--------- ---------
Net cash used in investing activities (10,814) (35,014)
FINANCING ACTIVITIES
Borrowings under lines of credit 94,901 100,491
Repayments under lines of credit (95,152) (100,491)
Borrowings of long-term debt 4,204 18,469
Repayments of long-term debt (9,881) (10,058)
Proceeds from exercise of stock options 30 76
--------- ---------
Net cash (used in) provided by financing activities (5,898) 8,487
--------- ---------
Net decrease in cash and cash equivalents (3,075) (3,655)
Cash and cash equivalents at beginning of period $ 3,557 $ 5,963
--------- ---------
Cash and cash equivalents at end of period $ 482 $ 2,308
========= =========
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
P.A.M. TRANSPORTATION SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 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 six-month period ended June 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
----------------------------------------------
In the first six 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 JUNE 30, 2000 VS. THREE MONTHS ENDED JUNE 30, 1999
--------------------------------------------------------------------------------
For the quarter ended June 30, 2000, revenues decreased 1.2% to $53.0 million
as compared to $53.7 million for the quarter ended June 30, 1999. The main
reason for the decrease was a decrease in the average number of tractors from
1,449 in the second quarter of 1999 to 1,434 in the second quarter of 2000.
The Company's operating ratio increased to 88.6% in the second quarter of 2000
compared to 86.8% in the second quarter of 1999.
Operating supplies and expenses increased from 16.2% of revenues in the second
quarter of 1999 to 17.5% of revenues in the second quarter of 2000. The
increase relates primarily to an increase in fuel costs of 1.1% net of a fuel
surcharge passed to customers.
The Company's effective tax rate decreased from 41.0% in the second quarter of
1999 to 40.0% in the second quarter of 2000. This decrease is related to
an increase in the deduction allowed for per diem payments made to drivers.
SIX MONTHS ENDED JUNE 30, 2000 VS. SIX MONTHS ENDED JUNE 30, 1999
-----------------------------------------------------------------------------
For the six months ended June 30, 2000, revenues increased 2.0% to $107.2
million as compared to $105.1 million for the six months ended June 30,1999. The
main reason for the increase was an increase in the average number of tractors
from 1,427 for the first six months of 1999 to 1,456 for the first six months of
2000.
The Company's operating ratio increased to 89.8% in the first six months of
2000 as compared to 87.4% in the first six months of 1999.
Operating supplies and expenses increased from 16.1% of revenues in the first
six months of 1999 to 17.8% of revenues in the first six months of 2000. The
increase relates primarily to an increase in fuel costs of 2.1% net of a fuel
surcharge passed to customers.
Rent and purchased transportation decreased from 7.0% of revenues in the first
six months of 1999 to 6.5% of revenues in the first six months of 2000. The
decrease relates to the replacement of leased trailers with Company owned
trailers.
Depreciation and amortization expense increased from 8.5% of revenues in the
first six months of 1999 to 9.0% of revenues in the first six months of
2000. The increase relates to the replacement of older tractors which were
fully depreciated.
The Company's effective tax rate decreased from 40.9% in the first six months of
1999 to 40.0% in the first six 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 six months of 2000, the Company generated $13.6 million in cash
from operating activities. Investing activities used $10.8 million in cash in
the first six months of 2000. Financing activities used $5.9 million in the
first six 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% (8.05% at June 30, 2000). Outstanding advances on this
line of credit were approximately $7.0 million at June 30, 2000, including
$3.3 million in letters of credit. The Company's borrowing base limitation
at June 30, 2000 was $8.0 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 six months of 2000 at a cost of approximately $13.8 million
using its existing line of credit. In addition, P.A.M. Transport, Inc. entered
into an installment obligation during the first six months of 2000 in the amount
of approximately $4.2 million in order to finance revenue equipment previously
acquired utilizing it 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 129 tractors which
would result in additional debt of approximately $6.7 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
June 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
------------------------------
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
-----------------------------------------------------------------------------
The Company's line of credit agreement provides for borrowings which bear
interest at variable rates based on the LIBOR. At June 30, 2000, the Company
had approximately $7.0 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 does not engage in hedging transactions relating to diesel fuel or
any other commodity.
Item 4. Submission of Matters to a Vote of Security Holders.
------------------------------------------------------------------------
The 2000 Annual Meeting of Stockholders of the Company was held on June 15,
2000. At the meeting, the following persons were elected as directors to serve
for a term of one year and until their successors are elected and qualified:
Robert W. Weaver, Daniel C. Sullivan, Matthew T. Moroun, Charles F. Wilkins,
Fredrick P. Calderone and Joseph J. Casaroll.
The results of voting with respect to the election of directors were as follows:
Votes Votes
FOR WITHHELD
--- --------
Robert W. Weaver 7,352,211 2,000
Daniel C. Sullivan 7,398,933 2,000
Charles F. Wilkins 7,398,933 2,000
Matthew T. Moroun 7,352,211 2,000
Fredrick P. Calderone 7,398,003 2,000
Joseph J. Casaroll 7,395,033 2,000
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: August 3, 2000 By: /s/ Robert W Weaver
---------------------------------
Robert W. Weaver
President and Chief Executive Officer
(principal executive officer)
Dated: August 3, 2000 By: /s/ Larry J. Goddard
---------------------------------
Larry J. Goddard
Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer
(principal accounting and financial officer)
