Freight, Fuel Foul P.A.M. Earnings
Company Also Releases Proxy
Last updated Tuesday, April 29, 2008 5:58 PM CDT in Business
By THE MORNING NEWS
A combination of low freight demand and high diesel fuel prices resulted in a first-quarter loss of $2.82 million for P.A.M. Transportation Services Inc.
The Tontitown-based trucking company reported Tuesday that its total revenue - including revenues from fuel surcharges -for the quarter was $105.82 million, up more than 7 percent over the same quarter of 2007.
Robert Weaver, president of P.A.M., said the "unprecedented" rise in fuel costs reduced the company's operating income by seven cents a mile.
More to the point, the company said its fuel costs in the first quarter totaled $37.42 million, more than 52 percent more than the $24.59 million fuel bill in the first quarter of 2007.
However, the company's fuel surcharge it collects from customers totaled $19.37 million in the first quarter, up more than $8 million over the $11.26 million collected in the first quarter of 2007.
"The results for the current quarter are humbling, and are reflective of the continued economic weakness in truckload freight demand and upward volatility of fuel," Weaver said in a statement issued late Tuesday afternoon.
The company reduced the governed speed of its fleet from 67 to 65 miles per hour.
Low freight demand resulted in pricing competition that pushed rates to levels at which the company "opted to walk away from some business and reduce fleet capacity," the company said in the earnings statement.
The automotive business, historically the bulk of the company's revenue, for P.A.M. is seeing a downturn; dropping from 46 percent of total revenue in the fourth quarter of 2007 to 42 percent at the end of the first quarter 2008.
Even with walking away from some business, the company's operating ratio - a closely watched indicator of performance in the trucking industry - was 105.41 in the first quarter, meaning the company spent roughly $1.05 for every $1 in revenue. The operating ratio in the same period of 2007 was 97.4.
The company also released Tuesday its proxy statement.
Weaver saw his 2007 salary drop 44.2 percent compared to 2006. Weaver's 2007 salary was $501,923, compared to $900,861 in 2006.
W. Clif Lawson, vice president and chief operating officer, earned $312,346 in 2007, also down 44.2 percent compared to 2006 salary of $560,167.
Larry Goddard, vice president of finance and chief financial officer, earned $237,448 in 2007, down 48.2 percent from 2006. The compensation drops were largely the result of no bonuses paid to the three officers in 2007.
The company's shareholder meeting will be held at 9 a.m., May 29, at the Embassy Suites Dallas-DFW International Airport in Grapevine, Texas No shareholder proposals were filed. The company seeks re-election of all nine of its current board members.
P.A.M., which operates in the U.S., Canada and Mexico, has about 2,000 trucks and more than 4,800 trailers.
P.A.M. shares (NASDAQ: PTSI) closed Tuesday at $14.89, down 11 cents. During the past 52 weeks the share price has ranged from a $20.67 high to a $13.80 low.
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