P.A.M. Transportation(PTSI) - 2022 Q3 - Quarterly Report

Part I. Financial Information Financial Statements (unaudited) Details unaudited financial results for the three and nine months ended September 30, 2022 Condensed Consolidated Balance Sheets Total assets grew to $719.5 million, driven by increases in property, equipment, and accounts receivable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total current assets | $255,583 | $199,574 | | Net property and equipment | $459,278 | $384,179 | | TOTAL ASSETS | $719,487 | $587,381 | | Total current liabilities | $131,553 | $111,403 | | Long-term debt - less current portion | $205,675 | $172,733 | | Total liabilities | $436,351 | $371,271 | | Total stockholders' equity | $283,136 | $216,110 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $719,487 | $587,381 | Condensed Consolidated Statements of Operations Reports Q3 2022 operating revenues of $252.6 million and net income of $24.6 million Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $252,630 | $183,085 | $709,246 | $493,206 | | Operating income | $35,495 | $30,823 | $103,522 | $65,496 | | Net income | $24,566 | $21,359 | $72,690 | $48,625 | | Diluted EPS | $1.09 | $0.93 | $3.24 | $2.12 | Condensed Consolidated Statements of Cash Flows Net cash from operations increased to $120.1 million for the nine months ended September 30, 2022 Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $120,073 | $73,956 | | Net cash (used in) provided by investing activities | $(95,620) | $9,944 | | Net cash used in financing activities | $(155) | $(62,662) | | Net increase in cash | $24,298 | $21,238 | Condensed Consolidated Statement of Stockholders' Equity Stockholders' equity grew to $283.1 million, driven by net income of $72.7 million - Key changes in stockholders' equity for the nine months ended Sep 30, 2022 include net income of $72.7 million, treasury stock repurchases totaling $5.9 million, and the retirement of 12.3 million treasury shares in Q1 2022[20] Notes to Condensed Consolidated Financial Statements Details accounting policies, the Metropolitan acquisition, stock splits, and segment reporting - The company completed two 2-for-1 forward stock splits, effective August 16, 2021, and March 29, 2022; all share and per-share amounts have been retrospectively adjusted[27] - On June 14, 2022, the Company acquired substantially all assets of Metropolitan Trucking, Inc for a total consideration of $79.9 million, which contributed 9.4% of operating revenue for Q3 2022[88][89][91] - A settlement agreement has been reached in a class-action lawsuit filed by a former driver concerning wage payments and has been fully reserved as of September 30, 2022[71] Revenue by Service (before fuel surcharge, in thousands) | Service | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | | Truckload Services | $404,658 | $298,835 | | Brokerage and Logistics | $210,645 | $147,812 | | Total | $615,303 | $446,647 | Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes strong revenue growth driven by higher rates and acquisitions, alongside cost impacts Results of Operations – Truckload Services Truckload revenue grew 31.3% in Q3 YoY, but the operating ratio deteriorated due to higher driver pay - The increase in the Q3 operating ratio was primarily due to higher salaries, wages, and benefits, which rose from 29.2% to 32.8% of revenue, reflecting increased driver pay[110] Truckload Services Performance vs. Prior Year | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue (ex-fuel, $M) | $145.0 | $110.4 | $404.7 | $298.8 | | Revenue Growth | +31.3% | - | +35.4% | - | | Operating Ratio | 82.6% | 77.9% | 81.3% | 83.6% | Results of Operations – Logistics and Brokerage Services Logistics revenue increased 27.9% in Q3 YoY, with an improved operating ratio of 85.7% - The improvement in operating ratio was driven by paying third-party carriers a smaller percentage of customer revenue[124][127] Logistics and Brokerage Services Performance vs. Prior Year | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Revenue (ex-fuel, $M) | $71.5 | $55.9 | $210.6 | $147.8 | | Revenue Growth | +27.9% | - | +42.5% | - | | Operating Ratio | 85.7% | 88.6% | 86.9% | 88.9% | Liquidity and Capital Resources Maintains strong liquidity from operations, funding acquisitions and capital expenditures with available credit - Generated $120.1 million in cash from operations and used $95.6 million in investing activities during the first nine months of 2022[132] - The company plans to purchase approximately 130 new trucks and 200 new trailers in the remainder of 2022, with expected net capital expenditures of $20.5 million[135] - As of September 30, 2022, the company had $59.6 million available for borrowing under its revolving line of credit, which matures in July 2024[136] Quantitative and Qualitative Disclosures about Market Risk Identifies market risks from equity prices, interest rates, fuel costs, and foreign currency - A hypothetical 10% decrease in the market price of its marketable equity securities would result in a $3.6 million decrease in their carrying value[146] - A 10% increase in the average annual price of diesel fuel would increase annual fuel expenses by approximately $5.2 million, based on 2021 consumption[148] - A hypothetical 100 basis point increase in the SOFR rate would result in approximately $10,000 of additional annual interest expense, assuming $1.0 million of variable rate debt was outstanding[147] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2022 - The CEO and CFO concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective to provide reasonable assurance that required information is properly recorded and reported[151] - No changes occurred during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[153] Part II. Other Information Legal Proceedings Details a settled class-action lawsuit from a former driver, for which a reserve has been established - A lawsuit filed on August 6, 2021, by a former driver alleges failure to pay minimum wage and other violations under federal and state laws[157] - A settlement agreement has been reached and is pending court approval; the company has fully reserved for this settlement as of September 30, 2022[157] Unregistered Sales of Equity Securities and Use of Proceeds Reports the repurchase of 93,124 shares of common stock during the third quarter of 2022 - As of September 30, 2022, 365,266 shares of common stock remain authorized for repurchase under the company's stock repurchase program, which has no expiration date[52][162] Issuer Purchases of Equity Securities (Q3 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2022 | -- | $ -- | | August 2022 | -- | $ -- | | September 2022 | 93,124 | $ 30.86 | | Total | 93,124 | $ 30.86 | Exhibits Lists all filed exhibits, including CEO/CFO certifications and Inline XBRL data files - Filed exhibits include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and Inline XBRL documents for financial data tagging (Exhibits 101 series)[164] Signatures - The report was signed on October 28, 2022, by Joseph A. Vitiritto, President and Chief Executive Officer, and Allen W. West, Vice President-Finance and Chief Financial Officer[168]