P.A.M. Transportation Services, Inc. Announces Preliminary Results of its Self Tender Offer

Rhea-AI Summary

P.A.M. Transportation Services (NASDAQ: PTSI) announced preliminary results for its modified 'Dutch auction' tender offer to repurchase up to 550,000 shares of common stock, which expired on May 22, 2024. Approximately 284,222 shares were properly tendered and accepted at a price of $18.00 per share, totaling around $5.1 million. This represents about 1.3% of the company's outstanding shares as of April 19, 2024. The final number of shares and purchase price will be confirmed by Computershare Trust Company, the depositary for the tender offer, by May 28, 2024. The company may repurchase additional shares after June 7, 2024, depending on various business and market conditions.

Positive

• Repurchase of 284,222 shares at $18.00 per share, totaling $5.1 million.
• Shares repurchased represent 1.3% of the company's outstanding shares.
• Further share repurchase plans post-June 7, 2024, indicating potential future shareholder value.

Negative

• Tendered shares were significantly below the 550,000 target, showing shareholder interest.
• Potential for changes in the final number of shares and purchase price due to verification processes.

Financial Analyst

P.A.M. Transportation Services, Inc. has announced the preliminary results of its self-tender offer. This move, aimed at repurchasing up to 550,000 shares, resulted in approximately 284,222 shares being tendered at a price of $18.00 per share. The total cost of the repurchase is around $5.1 million, representing about 1.3% of the company's outstanding shares as of April 19, 2024.

For investors, such share repurchases can be a significant indicator of a company’s strong financial position and confidence in its future performance. By reducing the number of shares outstanding, the company can increase its earnings per share (EPS), thereby potentially boosting the stock price in the long run. However, the fact that only about half of the targeted shares were tendered might indicate mixed sentiments among shareholders regarding the value of the company's stock at the offered price.

From a financial perspective, it will be important to watch the company's next moves, especially considering they have the flexibility to purchase additional shares in the market post-June 7, 2024. With this repurchase, the company is showing a commitment to returning value to its shareholders, though it remains to be seen if this action will significantly impact the stock price given the limited number of shares repurchased.

Market Research Analyst

This tender offer can be viewed as a strategic move to optimize the company's capital structure. By buying back shares, P.A.M. Transportation Services, Inc. may be aiming to enhance shareholder value, particularly in the short term. The reduced share count can make the stock more attractive, but the limited uptake in the tender offer—less than the maximum 550,000 shares—suggests that a large segment of shareholders might believe the shares are worth more than the offered $18.00 per share.

For retail investors, it’s worth noting the potential motivations behind such moves. A Dutch auction tender offer, where shareholders specify the price within a range at which they are willing to sell, often aims to surface the perceived fair market value of the stock. The final take-up rate and price provide insights into market sentiment—the general consensus on the stock's valuation.

Lastly, it’s important to consider the industry and market conditions. The transportation sector can be highly volatile, impacted by fuel prices, regulatory changes and economic fluctuations. The decision to conduct a share repurchase during uncertain times may signal the company's strong balance sheet and resilient business model.

TONTITOWN, Ark.--(BUSINESS WIRE)-- P.A.M. Transportation Services, Inc. (NASDAQ: PTSI) (the “Company” or “PTSI”) today announced the preliminary results of its modified “Dutch auction” tender offer to repurchase up to 550,000 shares of its outstanding common stock, which expired at 5:00 p.m., Eastern Time, on Wednesday, May 22, 2024.

Based on the preliminary count by Computershare Trust Company, N.A. (“Computershare”), the depositary for the tender offer, approximately 284,222 shares were properly tendered and not properly withdrawn at or below the expected final purchase price of $18.00 per share, including shares that were tendered through notices of guaranteed delivery.

In accordance with the terms and conditions of the tender offer, the Company expects to acquire 284,222 shares at a final purchase price of $18.00 per share, for an aggregate purchase price of approximately $5.1 million. These shares represent approximately 1.3% of the Company’s issued and outstanding shares as of April 19, 2024. The determination of the final number of shares to be purchased and the final price per share is subject to confirmation by Computershare of the proper delivery of the shares validly tendered and not withdrawn.

The number of shares to be purchased and the price per share are preliminary and are subject to verification by Computershare and subject to change for a number of reasons, including if some or all of the shares tendered through notices of guaranteed delivery are not delivered within the applicable two trading day settlement period. The actual number of shares to be purchased and the final price per share will be announced following the expiration of the guaranteed delivery period and completion of the confirmation process by Computershare and are not expected to be announced until at least May 28, 2024. Promptly after such announcement, Computershare will issue payment for the shares validly tendered and accepted for payment under the tender offer and will return shares tendered and not purchased in the tender offer.

The Company may purchase additional shares in the future in the open market subject to market conditions and through private transactions, tender offers or otherwise. Under applicable securities laws, however, the Company may not repurchase any shares until June 7, 2024. Whether the Company makes additional repurchases in the future will depend on many factors, including the number of shares purchased in this tender offer, its business and financial performance and situation, the business and market conditions at the time, including the price of the shares, and other factors the Company considers relevant.

The Company has retained Georgeson LLC as the information agent for the tender offer. All questions regarding the tender offer should be directed to the information agent (888) 680-1529 (toll free).

P.A.M. Transportation Services, Inc. is a holding company that owns subsidiaries engaged in providing truckload dry van carrier transporting general commodities throughout the continental United States, as well as in the Canadian provinces of Ontario and Quebec. The Company’s consolidated operating subsidiaries also provide transportation services in Mexico through its gateways in Laredo and El Paso, Texas under agreements with Mexican carriers.

Note Regarding Forward-Looking Statements

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 the expiration of the tender offer, the Company’s payment for the shares tendered in the offer, the terms and conditions of the tender offer, and other expected future financial and operating results or events, and are thus prospective. 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. Potential risks and uncertainties include, but are not limited to, excess capacity in the trucking industry; surplus inventories; general inflation, recessionary economic cycles and downturns in customers’ business cycles; a significant reduction in or termination of the Company's trucking service by a key customer, including as a result of future labor disruptions; increases or rapid fluctuations in fuel prices, interest rates, fuel taxes, tolls, and license and registration fees; potential future economic, business or operational disruptions or uncertainties that may result from any future public health crises; the resale value of the Company’s used equipment; the price and availability of new equipment consistent with anticipated acquisitions and replacement plans; increases in compensation for and difficulty in attracting and retaining qualified drivers and owner-operators; increases in insurance premiums and deductible amounts relating to accident, cargo, workers’ compensation, health, and other claims; increases in the number or amount of claims for which the Company is self-insured; inability of the Company to continue to secure acceptable financing arrangements; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors including reductions in rates resulting from competitive bidding; the ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; the impact of pending or future litigation; general risks associated with doing business in Mexico, including, without limitation, exchange rate fluctuations, inflation, import duties, tariffs, quotas, political and economic instability and terrorism; the potential impact of new laws, regulations or policy, including, without limitation, rules regarding the classification of independent contractors as employees, tariffs, import/export, trade and immigration regulations or policies; and other factors, including risk factors, included from time to time in filings made by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, the forward-looking events and circumstances discussed above and in company filings might not transpire.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240523229434/en/

Lance K. Stewart

(479) 361-9111

Source: P.A.M. Transportation Services, Inc.

FAQ

What is the share repurchase price for PTSI's tender offer?

The preliminary repurchase price is $18.00 per share.

How many shares did PTSI repurchase in its tender offer?

P.A.M. Transportation Services repurchased approximately 284,222 shares.

When did the PTSI tender offer expire?

The tender offer expired on May 22, 2024.

What is the total cost of PTSI's share repurchase?

The total cost is approximately $5.1 million.

How many outstanding shares does the repurchased stock represent for PTSI?

The repurchased shares represent about 1.3% of the company's outstanding shares.

When will the final number of shares repurchased by PTSI be confirmed?

The final number of shares will be confirmed by May 28, 2024.

When can PTSI make additional share repurchases?

P.A.M. Transportation Services may repurchase additional shares after June 7, 2024.