PAM Transportation Inc. of Tontitown on Monday reported a fourth-quarter net loss of $13.6 million, down from a profit of $6.1 million in the same quarter last year as revenue sank and the company faced a host of challenges.
The publicly traded truckload dry van carrier (Nasdaq: PTSI) reported a quarterly loss of $2.37 per share, down from a profit of $1.01 a year ago. Excluding one-time items related to the anticipated settlement of a minimum wage lawsuit, the company reported fourth-quarter net income of $1.6 million, or 28 cents per share, missing analysts' expectations.
"In my entire career, I don’t know that I have experienced a year in which we were presented with so many challenges," CEO Dan Cushman said in a news release. "Not necessarily broad industry challenges, but challenges specific to PAM Transport.
"In the third quarter, our Mexico border-crossings, which affect almost 50% of our freight, were shut down for two days due to a hurricane. Then we experienced extreme border-crossing inefficiencies at Laredo when border agents were pulled from Laredo to help with immigration issues at other border towns, which resulted in delays and cancellations of cross-border shipments for up to two weeks.
"Then there was the United Auto Workers labor strike against General Motors, our largest customer, which lasted almost six weeks. This impacted two weeks in September and the entire month of October," Cushman said. "All these challenges were presented against a backdrop of consistent downward rate pressure, similar to what was experienced in 2016 and 2017."
Cushman also noted the expected settlement of a class-action minimum wage lawsuit, which cost the company $19.9 million.
For the year, net income was $7.9 million, or $1.34 per share, down from $24 million, or $3.90, in 2018.
Revenue fell for both the quarter and the year; fuel surcharge revenue also decreased year-over-year. PAM reported quarterly revenue of $123.5 million, down from $138.2 million in the same quarter last year, and annual revenue of $514.2 million, down from $533.3 million in 2018.
Fuel surcharge revenue dropped to $16.8 million in the quarter, down from $21.6 million a year ago. For the year, fuel surcharge revenue was $74.7million, down from $87.4 million.
Cushman noted that the company finished the year with its second-best year of operating income, excluding gains on sales of equipment and the litigation reserve expenses. He also said nearly all of its 400 drivers who were dependent on running GM freight lanes chose to work during the strike.
Revenue per truck per week for the quarter was $3,317, down from $3,680, and, for the year, it was $3,449, down from $3,691.
PAM's asset-light logistics division saw a drop in revenue. For the quarter, revenue was $18.4 million, compared to $22.5 million in the same quarter of 2018; for 2019, revenue was $75.9 million, down from $89.3 million a year ago.
"Our Logistics division, we believe, outperformed industry averages, both in revenue and profitability," Cushman said in the release. "Our revenue was down from 2018, as were most other logistic providers, and we made less money than 2018. But, our revenue was down less than most and our profitability was impacted much less."
