Arkansas Democrat-Gazette

P.A.M. posts $13.6M loss for quarter

- JOHN MAGSAM

Tontitown-based P.A.M. Transporta­tion Services Inc. posted a loss in its fourth quarter as well as a dip in revenue, capping an exceptiona­lly challengin­g year, said the company’s top executive.

On Monday, the trucking firm reported a loss of $13.6 million, or $2.37 a share, for the quarter ended Dec. 31, compared with profits of $6.1 million, or $1.01 a share, for the same period the previous year. A single analyst had predicted earnings of $1.36 per share, according to Yahoo Finance.

“In my entire career I don’t know that I experience­d a year in which we were presented with so many challenges. Not necessaril­y broad industry challenges but challenges specific to P.A.M. Transport,” President Daniel Cushman said in a statement.

Revenue for the fourth quarter was $123.5 million, down nearly 11% compared with $138.2 million for the fourth quarter of 2018. The single analyst had forecast revenue of $132.6 million.

Profits were affected by nearly $20 million put aside for an expected settlement of a minimum wage lawsuit, according to a news release. The suit contended that some drivers were misclassif­ied as owner-operators.

Revenue took a hit because of a 22% decrease in fuel surcharge revenue — down to $16.8 million from $21.6 million for the fourth quarter of 2018.

Cushman said the company’s challenges for the year included freight from Mexico being affected by a hurricane

and problems at border crossings when border agents were pulled to help with immigratio­n issues, resulting in delays and cancellati­ons of shipments for as long as two weeks.

P.A.M.’s largest customer, General Motors, also weathered a strike by the United Auto Workers labor union that shut the company down and lasted a month and a half. In addition, P.A.M. booked a litigation expense of $19.9 million for a preliminar­y settlement in a classactio­n suit over minimum wage violations.

“From a quarterly financial perspectiv­e, we were able to maintain profitabil­ity throughout the strike period as we recorded positive operating income for October and for the fourth quarter overall on an adjusted basis, excluding the litigation charges,” Cushman said. “Notwithsta­nding the impact of these charges, we are proud of our results considerin­g the hurdles.”

For 2019 as a whole, P.A.M. reported earnings of $7.9 million, or $1.34 per share, down from $24 million, or $3.90 per share, for 2018. Revenue, including fuel surcharges, stood at $514.2 million for 2019, down 4% from $533.3 million the previous year.

P.A.M. shares closed at $48.30, down $1.41 or nearly 3%, in Monday’s trading on the Nasdaq exchange. The stock has traded as low as $41.82 and as high as $71.56 over the past year.

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Arkansas Democrat-Gazette

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