PAM Reports 1Q Loss As Auto Industry Pauses

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PAM Transport Inc. of Tontitown on Tuesday reported first-quarter loss.

The publicly traded trucking firm reported revenue of $129.2 million, up slightly from $128.7 million in the same quarter a year ago. But its quarterly loss came to $1.3 million, a drop from an $8.3 million profit in 2019.

Earnings per share was a negative 23 cents, down from a profit of $1.39 a year ago.

CEO Dan Cushman said the first two months of the quarter were among the best PAM had had in January and February. March came in like a lion, though, with the effects of the COVID-19 pandemic.

“[W]e encountered the very unexpected chain of events that took place around the world,” Cushman said. “Despite the slowdown that began around the middle of March, we were able to hold our own for those last two weeks and finished the first quarter of this year with operating results that were very close to the record-setting first quarter operating results of last year.”

PAM reported operating income of $9.5 million for the quarter, down slightly from $9.7 million a year ago. Cushman said, even though the company lost money for the quarter, it had a strong operational quarter and he was proud of his team’s efforts. 

About 45% of PAM’s business is delivering for automobile manufacturers, and the company learned that industry was shutting down in mid-March. Cushman said the company has worked hard in recent years to diversify its customer profile, an important factor when it was affected by a six-week strike by auto workers a year ago. 

“While I don’t really like having to learn life lessons from trials and tribulations, that seems to be where lessons come from,” Cushman said. 

Cushman said the company was able to have many of its non-driving employees work from home after the pandemic concerns. PAM was able to use its non-automobile customers for some of its sidelined drivers, while Cushman said he reached out to other trucking companies to offer his drivers.

“I’d like to think everyone won,” Cushman said. “We were able to do our much-needed part to keep North America’s needs on the shelves of stores, and we kept our driving professionals employed and running. We prevented what could have been a severe blow to our financial well-being, and we provided capacity to ‘our friends in the industry’ at a time their customers needed them. I’ve never seen so much cooperation amongst ‘competitors’ as I did during this very challenging time.”

Cushman said the expectation is that automobile manufacturers will start production again by early May. He said despite predictions that the automobile industry will struggle in 2020, PAM should be in good position because of less competition from other trucking companies that have left that market.

“We have established ourselves as the largest and premier service provider in this sector,” Cushman said. “We now do business with every [original equipment manufacturer] in North America and we love our position in this space. When combined with the fact that we do not currently haul all of the freight in this sector, we believe that lower automotive sales do not necessarily translate to lower revenues for PAM.”