PAMT Corp (PAMT) 2005 Q2 法說會逐字稿

As a reminder, today’s call is being recorded. And I’d also like to take this time to remind you that certain information included in this document contains or may contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may relate to expected future financial and operating results or events and the best perspective. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.

And now at this time for opening remarks, I would like to turn the conference over to Mr. Bob Weaver. Please go ahead sir.

Thank you. Welcome everyone to the conference call. Appreciate you being on it. Appreciate your interest. You’ve seen the press release and in addition to that I would like to talk about some of the factors that bear mentioning that had both positive and negative impact on our end results.

Although total revenue was up some 5.3%, the increase in trucking revenue was up 7.6% year-over-year and sequentially 4% based on the same number of work days. Total miles were down modestly due to a fewer number of teams needed because of the change to diversify more from the automotive traffic. The decrease in GM and automotive freight respectively from second quarter ’04 to second quarter ’05 is 40% down to 35% and 52% down to 49% on a revenue basis. The percentages are greater when compared on a load-to-load basis.

Most of the cost categories were in line with our expectations. Training costs for drivers has seen a marked increase indicative of the changes in recruiting efforts being effective and finding enough qualified people to train to be first-seat drivers.

The rate increase from $1.11 a mile to $1.23 a mile, year-over-year, has been sufficient to deal with most of the expected cost increases in driver pay and other escalations. Although we have improved our ability to collect more money in the fuel surcharge, timing and the volatility and pricing does not allow for a full recovery as yet. As noted, this effect had an impact of $.09 per share on earnings to our second quarter ended June ’05.

We believe the changes in overall operations are correct and will continue to show improved operating results.

With those comments, I will now open the floor up to questions and we’ll start off.

Thank you sir. [OPERATOR INSTRUCTIONS] We’ll pause for just a moment to assemble the roster. Our first question, Shaun Nicholson, Kennedy Capital.

Hi guys, how you doing?

Hi Shaun.

A quick question on the, you know looking at the auto shipment set, you guys mentioned in the press release that you weren’t, you were going to expect kind of downtime to be minimal. Is that minimal in addition to what’s been going on in the past? Or is it going to climb back up to levels that you’ve seen in 2004?

You’re talking about going forward so--?

Yes going forward.

We expect the downtime going forward to be more what we’ve seen in the past, I guess in the far past rather than the recent past, to-- right now we don’t of any downtime that’s scheduled in the Q3 and Q4 of this year and there are-- there is some talk about some overtime.

Okay. I don’t know if you guys break it out to where total revs generated from that business line, how dependent are you on that?

Yes, we generally break it out and I think we’ve talked about that number before. Are you talking about General Motors in general?

Right.

It was right at $29 million for the second quarter of ’05.

Okay. Thank you very much. It’s all I had.

Okay.

[OPERATOR INSTRUCTIONS]. We’ll go next to Neil Gagnon at Gagnon Securities.

Hello Bob.

Hi Neil.

Given the change in your mix of business, what kind of seasonality should we be looking at now versus in the past?

Yes, I don’t know that our business particularly has a seasonal aspect to it because of the manufacturing end of it. I think the best answer to your question is that we won’t be subject to as big of a disruption or plant downtimes as they occur.

Not as much plant downtime as in Q2 or in the past?

As in Q2.

Can you quantify how much that was out of normal?

The plant downtime?

Yes.

You know it’s really difficult for us to give out that information. I think it’s, I think it’s fairly proprietary to our customer.

No I understand that. I guess I’m trying to understand more from, more from not how much it was exactly Bob, but if it was normal, what was your earnings power? You gave us a number on fuel. You’re saying, gee that costs you an extra $.09 a share and I assume that’s on a taxed basis.

It is. I would, Neil and I’d have to do a little bit of calculation, but in my head I think, I think we would have seen at least as much utilization on miles per truck as we did in Q2 of ’04. And had that been the case, there would have been another couple of million bucks, I guess, that would have gone to the top line and given the fact that it would have been additional revenue, a portion of it would have gone to the bottom. I’d have to do some calculation maybe and kind of model that to be able to tell you exactly. But it would have affected both top and bottom.

Okay.

Because we don’t get the utilization from the non-dedicated side and non-team trucks as we do on the team trucks and the dedicated business.

Okay. If fuel-- second question, if fuel were to stay at today’s price, constant through Q3, would that $.09 be made up or some significant part of it?

Some part of it would be but it would, it would certainly depend on if it stayed there and where the fuel surcharge was pegged at. But yes, the timing difference between the implementation of our surcharges and the changes in the price of fuel, if timings good, we recover more. If timings bad, why we recover less and June was one of those months when we got hit harder with fuel than we did in some of the other months. But most of that, a big portion of that $.09 was incurred in June.

Okay. Which would mean, if fuel stayed the same, you would pick it up in July?

Yes sir.

Okay. What’s the thoughts about increasing fleet in the rest of this year?

My thoughts are-- my thoughts about it would be that it would be through an acquisition. The driver market is simply too tight to allow for us to add equipment and bring on drivers. It’s a-- it’s a full time job keeping the trucks manned that we’ve got and acquisition would be the most logical way to do it. And your next question is going to be probably, is that going to happen? And I obviously can’t tell you that.

I would never ask that. How about the cost of maintaining your driver fleet now? Is that wrestled down to a fixed cost basis or does it still got escalations in it?

You talking about our training cost?

Yes.

I hope it stays high.

Training and whatever you have to pay to get new drivers.

Well I hope the training cost stays high because that means we’re continually able to bring on enough new hands to replenish what we lose. From a driver pay standpoint, I think probably there’s going to have to be some adjustment made in driver pay and I think our top pay is fine. I think our pay for the drivers that are at 6 to-- 6 months to 24 months may need to be adjusted up.

Okay and you get that back through, again, increasing prices because we constantly see this revenue per mile going up.

That’s our anticipation. Yes sir.

Okay, what’s happening to the cash in the balance sheet, Larry and what do you think it’s going to be maintained your current course by year end?

Be less, we think we’ll be about debt free by the end of the year. We’re about, at the end of second quarter, we have about $5 million of debt less cash equivalents and our stock that we’re buying.

Okay.

But we’re still on course to be debt-free by the end of the year.

Can you give us a review of how much stock you’ve purchased and what your plans are?

Yes, thus far we’ve got 485,000 shares and change and about $7 million that we’ve spent doing it and we’re still looking to buy back the full 600,000 that we’ve announced.

So you would have 215 to buy?

That’s right.

Good. Thanks.

All right.

[OPERATOR INSTRUCTIONS] We’ll go next to Donald Broughton at A. G. Edwards.

Afternoon gentlemen.

Hi Donald.

Salaries and wages, I expected it to drop a little bit more sequentially. Year-over-year, you’re up what looks like gosh a good almost $.04 a mile. What’s happening there? Can you give us a little bit more insight?

Yes I can probably explain part of that. Second quarter last year was the initial hacking and slashing that I had with Liberty Mutual on our work comp, so there was some credit that showed up in the second quarter last year on work comp, which made it abnormally low.

Okay.

And this year, it’s more normal. So I think there’s a, probably about a $300,000 or $400,000 difference in work comp if I remember right, between quarter year-over-year.

So tough comparison. And it looked like utilization went down slightly. Am I reading that right?

It did and that’s because we’re running less team trucks because we’re not as involved in the automotive dedicated as we were.

Of course, of course. How’s July shaping up so far? I guess July’s almost done. But how’s current demand, let’s ask that question?

How’s freight demand?

Yes.

It’s good.

Compared with last year? Compare it with what you saw in the second quarter?

It’s probably a little bit stronger than the second quarter so far what we’re seeing in July and probably even with second quarter of-- maybe a little bit better than ’04.

Really? That’s encouraging. Great. I’ll let someone ask a question. Thank you gentlemen.

Thank you.

[OPERATOR INSTRUCTIONS] And gentlemen, at this time, it appears I have no other questions holding.

Thank you very much operator and thank you all for joining the conference call.

Ladies and gentlemen that will conclude today’s teleconference. We do appreciate your participation. You may disconnect at this time.

Thank you.