EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1

FROM: P.A.M. TRANSPORTATION SERVICES, INC.
P.O. BOX 188
Tontitown, AR 72770
Robert W. Weaver
(479) 361-9111

P.A.M. TRANSPORTATION SERVICES, INC.
ANNOUNCES RESULTS FOR THE THIRD QUARTER
ENDED SEPTEMBER 30, 2006

Tontitown, Arkansas, October 25, 2006......P.A.M. Transportation Services, Inc. (NASDAQ: PTSI) today reported net income of $3,268,194 or diluted and basic earnings per share of $.32 for the quarter ended September 30, 2006, and $13,692,941 or diluted and basic earnings per share of $1.33 for the nine month period then ended. These results compare to net income of $2,213,089 or diluted and basic earnings per share of $.20, and $8,796,068 or diluted and basic earnings per share of $.79, respectively, for the three and nine months ended September 30, 2005.
 
Operating revenues excluding fuel surcharges were $85,502,372 for the third quarter of 2006, an 8.1% increase compared to $79,061,734 for the third quarter of 2005. Operating revenues excluding fuel surcharges were $266,043,526 for the nine months ended September 30, 2006, a 9.7% increase compared to $242,491,649 for the nine months ended September 30, 2005.

Robert W. Weaver, President of the Company, commented, “As our valued investors are aware, our predominant business mix spans a variety of manufacturing based customers with secondary interest in retail and consumer goods. Due to seasonal downtime and product mix changeover, the third quarter has not historically been our strongest quarter of the year. With that said, we are pleased with our solid results for the third quarter of 2006 of $.32 cents per share, a 60% increase from $.20 cents per share earned in the third quarter of 2005.

Our business mix helped insulate the company from the effects of a softer retail environment felt by the industry in general and allowed us to increase both revenue per mile and revenue per tractor per week, while reducing our operating ratio to 93.4% for the third quarter 2006, a 155 basis point improvement over the third quarter of 2005. Our brokerage division posted an increase in revenue of approximately 11% due to an increase in the number of loads and revenue per load in the third quarter 2006 as compared to the third quarter of 2005.

Our average revenue per total mile, before fuel surcharge, increased year over year from $1.23 in the third quarter of 2005 to $1.33 in the third quarter of 2006. The $1.33 reflects a slight decrease from the year-to-date average revenue per mile of $1.35, before fuel surcharge, as a result of spot-buy rates that include a fuel surcharge, which have been converted to long term contract rates with a fuel surcharge as a separate item.

Total miles for the third quarter of 2006 remained relatively flat compared to the third quarter of 2005, although the number of tractors increased by 99 units for the two quarters compared. This was primarily the result of a change in our business mix resulting in fewer tractors operated by team drivers, which yielded higher revenue per mile freight and more loads per day, but at a slight decrease in length of haul.


 
 
 

Revenue derived from the automotive business decreased approximately two percent from the third quarter of 2005 compared to the third quarter of 2006 primarily as a result of extended downtime in July. Total revenue derived from all dedicated freight business increased slightly when the same periods are compared, which resulted from an increase in dedicated lanes for non-automotive customers from the third quarter of 2005 to the third quarter of 2006.
 
We continue to monitor the freight environment for signs of change but at this point have not seen a significant degradation of freight demand. Management is cautious yet optimistic that our customer mix, positive driver situation, and continued focus on controlling cost will continue to add benefit throughout the remainder of the year and provide a firm foundation to begin 2007.”


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.

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 September 30,
  
Nine Months ended September 30,
  
   
2006
  
2005
  
2006
  
2005
  
                   
Revenue, before fuel surcharge
  
$
85,502,372
  
$
79,061,734
  
$
266,043,526
  
$
242,491,649
  
Fuel surcharge
    
14,371,284
    
9,422,167
    
37,720,232
    
23,211,328
  
     
99,873,656
    
88,483,901
    
303,763,758
    
265,702,977
  
                           
Operating expenses:
                          
Salaries, wages and benefits
    
31,459,051
    
29,991,254
    
96,574,233
    
92,641,383
  
Fuel expense
    
26,202,069
    
21,641,675
    
74,420,996
    
58,117,217
  
Operating supplies
    
6,783,166
    
5,947,789
    
19,288,900
    
17,239,938
  
Rent and purchased transportation
    
10,935,321
    
9,494,838
    
33,924,472
    
28,750,410
  
Depreciation and amortization
    
8,393,109
    
7,662,207
    
25,187,459
    
22,784,675
  
Operating taxes and license
    
4,113,558
    
3,907,169
    
12,284,028
    
11,910,961
  
Insurance and claims
    
4,221,133
    
3,584,093
    
12,508,963
    
12,214,796
  
Communications and utilities
    
638,261
    
638,169
    
1,961,595
    
1,979,997
  
Other
    
1,237,020
    
1,697,583
    
3,822,176
    
4,364,832
  
(Gain) loss on disposition of equipment
    
219,342
    
(94,167
)
  
77,783
    
(19,914
)
Total operating expenses
    
94,202,030
    
84,470,610
    
280,050,605
    
249,984,295
  
                           
Operating income
    
5,671,626
    
4,013,291
    
23,713,153
    
15,718,682
  
                           
Other income (expense):
                          
Interest expense
    
(159,529
)
  
(267,348
)
  
(803,310
)
  
(887,071
)
                           
Total other income (expense)
    
(159,529
)
  
(267,348
)
  
(803,310
)
  
(887,071
)
                           
Income before income taxes
    
5,512,097
    
3,745,943
    
22,909,843
    
14,831,611
  
Provision for income taxes
    
2,243,903
    
1,532,854
    
9,216,902
    
6,035,543
  
                           
Net income
  
$
3,268,194
  
$
2,213,089
  
$
13,692,941
  
$
8,796,068
  
                           
Diluted earnings per share
  
$
0.32
  
$
0.20
  
$
1.33
  
$
0.79
  
                           
Average shares outstanding - Diluted
    
10,309,331
    
10,821,065
    
10,299,749
    
11,090,483
  
                           

   
Quarter ended September 30,
  
Nine Months ended September 30,
  
Truckload Operations
 
2006
  
2005
  
2006
  
2005
  
                   
Total miles
    
56,371,548
    
56,334,157
    
172,829,844
    
173,782,938
  
Operating ratio*
    
93.22
%
  
94.87
%
  
90.54
%
  
93.27
%
Empty miles factor
    
6.19
%
  
5.70
%
  
5.70
%
  
5.35
%
Revenue per total mile, before fuel surcharge
  
$
1.33
  
$
1.23
  
$
1.35
  
$
1.23
  
Total loads
    
77,324
    
74,414
    
236,375
    
231,521
  
Revenue per truck per work day
  
$
665
  
$
641
  
$
681
  
$
624
  
Revenue per truck per week
  
$
3,325
  
$
3,205
  
$
3,405
  
$
3,120
  
Average company trucks
    
1,865
    
1,743
    
1,791
    
1,766
  
Average owner operator trucks
    
42
    
65
    
46
    
70
  
                           
Logistics Operations
                         
Total revenue
  
$
10,636,937
  
$
9,625,348
  
$
33,196,950
  
$
29,541,021
  
Operating ratio
    
94.42
%
  
95.30
%
  
94.93
%
  
95.27
%

   
As of September 30,
  
   
2006
  
2005
  
           
Long-term debt to book capitalization
    
12.08
%
  
12.31
%
Shareholders’ equity
  
$
179,974,575
  
$
168,134,007
  
___________________________________________________________
* 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