P.A.M. Transportation Services reported Thursday after the market close that its third-quarter earnings more than tripled year-over-year. The Tontitown, Arkansas-based truckload carrier posted earnings per share of $1.87, compared to 52 cents per share in the same quarter of 2020, a period hindered by an industrial customer base that was still digging out from COVID-related shutdowns.
“We have had another record quarter for revenue and operating statistics at PAM. I am excited to see the work that continues to go into making PAM what our customers and employees expect from a growing transportation company,” said President Joe Vitiritto in the press release.
Vitiritto said PAM (NASDAQ: PTSI) is still working through the obstacles brought about by a market that continues to experience high freight demand alongside severely constrained transportation capacity.
“We continued to see significant disruptions from some of our biggest customers in the third quarter and it accelerated quarter-over-quarter, but we are getting better at navigating the disruptions and that shows in our results this quarter,” he said.
Revenue in the TL division increased 34% year-over-year to $127 million as revenue per truck per week was up 30% at $4,512. Loaded miles were off 8% with the average truck count inching 2% higher. However, the biggest lever in the quarter came from pricing, which more than offset declines in utilization.
Revenue per loaded mile excluding fuel surcharges increased 45% year-over-year to $2.70. That provided the topline lift needed to drive operating results higher. PAM recorded a 77.9% operating ratio in its TL division, 1,180 basis points of improvement.
Increased revenue drove most expense lines lower as a percentage of revenue.
Salaries, wages and benefits (-600 bps), depreciation (-400 bps) and operating supplies (-310 bps) were the biggest movers. The rent and purchased transportation expense line increased 580 bps but that line includes the cost to procure capacity in the brokerage division.
Logistics revenue more than doubled in the quarter to $56 million. Even with soaring spot rates, 20% to 30% higher year-over-year during most weeks of the quarter, the segment saw OR improve 570 bps to 88.6%.
“We still have plenty of opportunity to continue to improve from here and our team will continue to press for profitable growth as we move through the rest of the year and into 2022,” Vitiritto said.
PAM ended the quarter with $58 million in cash and marketable securities, double the balance at the end of 2020. Net debt has been reduced by $83 million to $186 million this year.
The company has generated $74 million in cash flow from operations so far in 2021. Net capital expenditures have resulted in nearly $13 million of incoming cash. PAM has received payments for its equipment retirements but at the same time has been unable to take delivery of new equipment due to manufacturer delays.
PAM plans to take delivery of only 80% of its 2021 orderbook. The company’s average tractor fleet age increased from 1.6 years to 1.8 years but it does not expect delivery delays to result in a material uptick in maintenance expense given the young age of the fleet.
Share repurchases have accounted for a cash use of less than $11 million so far this year.
PAM executed a 2-for-1 stock split during the quarter and repurchased almost 275,000 shares through a Dutch auction, which represented 2.4% of its split-adjusted share count of more than 11 million units. The split was facilitated to draw more investors to the stock at the lower share price. The company also bought nearly 13,000 shares under its open share repurchase authorization during the quarter.
