TL Fleets, Broker Among Forbes 'Best Small' Firms

Tucked into the same northwest Arkansas neighborhood as truckload giant J.B. Hunt Transport and Wal-Mart Stores, the nation’s biggest retailer and a huge private fleet, P.A.M. Transportation Services may be easy to overlook.

But the Tontitown, Ark., truckload carrier has emerged from the shadows of its bigger competitors in a big way: It was selected as one of Forbes magazine’s 200 Best Small Companies of 1998, based on profitability and growth over the past five years.

P.A.M. ranked No. 140 in its first appearance on the prestigious list, described by Forbes as “Survival of the Fittest,” in its Nov. 2 issue. The roster is limited to public companies with annual revenue below $350 million.

Other transportation companies among the 200 were two other truckload carriers, Knight Transportation (No. 92) and Covenant Transport (No. 158); and freight broker and logistics provider C.H. Robinson Worldwide (No. 107).

Unitrans, a transportation services firm in South Africa, was identified as one of the 100 fastest-growing small companies based outside the U.S.

Covenant and Robinson also were first-timers on the list, but Phoenix-based Knight earned the further distinction of being one of only 15 companies on Forbes’s 1998 Honor Roll. The honor roll group had made the 200 Best list at least three times in the last five years, and showed above-average returns and growth rates.

Criteria for this year’s list were more stringent than usual, since growth in sales and per-share earnings were added to return on equity.

“This gives a better measure than past methods of whether these companies are likely to sustain their momentum,” Forbes said.

The 1998 standards included a minimum ROE of 12% for both the past five years and the most recent four quarters, as well as minimum five-year sales and earnings-per-share growth of 10% a year.

ther minimum requirements included stock price ($5 a share), average daily float (1,000 shares), sales of at least $5 million and status as a public company since November 1997.

Knight, which provides short- and medium-haul service, posted a 21% average annual ROE, plus annual revenue and earnings-per-share growth of 40% and 36%, respectively, over each of the past five years.

Covenant, Chattanooga, Tenn., a long-haul carrier specializing in transcontinental service, had a five-year ROE of 16%; growth in sales of 38%; and per-share earnings growth of 25%.

For the full story, see the Nov. 30 print edition of Transport Topics. Subscribe today.