P.A.M. Transportation posts record quarter, adds drivers

story by Kim Souza
ksouza@thecitywire.com

P.A.M. Transportation Services Inc. posted record quarter earnings behind 8.5% more loads hauled and a roughly 1.4% rise revenue per mile, before fuel surcharges. 

The Tontitown-based trucking firm reported net income of $4.945 million, or diluted earnings per share of 62 cents for the quarter ended June 30. These results compare to net income of $2.682 million, or diluted earnings per share of 31 cents a year ago.

Wall Street consensus for the quarter was 34 cents, on revenue of $105 million. Actual revenue for the second quarter totaled $104.34 million, including fuel surcharges. Revenue slid 5% from $104.40 million reported in the year-ago period.

For the first six months of 2014, P.A.M reported income of $6.3 million on revenue of $202.16 million, compared to $2.225 million on revenue of $204.38 million in the same period of 2013.

The solid earnings failed to impress investors as shares of P.A.M. Transportation (NASDAQ: PTSI) were trading at $34, down about 1% on the day. For the past 52 weeks the share price has ranged from a high of $34.90 to a low $11.26. The share price has already risen 65% this year from $20.75.

"We are very pleased to announce another quarter of improved results. The earnings per share results attained so far this year represent a 200% increase as compared to the same period last year. ... Also, considering that we are only halfway through the year and have already exceeded the net income posted for the entirety of last year, we are further satisfied that our strategic plans are maturing,” CEO Daniel Cushman noted in the release.

Cushman said the company continues to diversify some of its business away from the auto industry. 

“Our Automotive, Mexico, Expedited, and Dedicated divisions all continue to grow and improve financially. We continue to seek opportunities that we believe are driver friendly and as a result, we have increased our driver count despite the difficulties in the driver market,” Cushman added.

He said the automotive freight is generally very consistent and we are able to recruit and maintain drivers in this division. 

“Our Expedited Division continues to grow, and now comprises approximately 20% of our overall revenue. This division is very diverse and very service sensitive. By the nature of the business, we keep drivers moving and they get the miles they desire. We've focused on loading the expedited loads where they land, and as a result, we are experiencing positive trends in reducing deadhead,” Cushman said.

The company’s Mexico division is also growing because the lanes generally represent a long length of haul that drivers like, he said.  

"We have always had a lot of automotive dedicated business. In the past, we have had limited success in securing dedicated business outside of the automotive area, but within the last nine months we have been more successful in the diversification of our dedicated customer base. Again, this is freight that typically appeals to drivers,” Cushman said.

He said the company continued to move assets to its better performing divisions and away from the random freight business which is its lowest performing division.

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"The majority of the growth in our more profitable divisions has come primarily at the expense of our random fleet. The resulting decrease in our random fleet has made it difficult to support our customer base that only has one way business. We are working hard to find ways to bring this type of customer more solutions. Our brokerage division is obviously one way that we can support our customers. We are making progress but this continues to be a great opportunity,” Cushman added.

P.A.M.’s brokerage and logistics segment produced revenue of $5.229 million in the recent quarter, down 12% from the prior-year period.

The company trucks logged 53.67 million miles in the quarter, down 7.5% from a year ago. There were 73,268 loads transported, up 8.5% from the second quarter of 2013. P.A.M. averaged 1,437 company-owned trucks and utilized 341 owner-operated trucks in the quarter.  Company-owned fleet numbers are down from 1,471 and owner-operated trucks rose from 321 in the year-ago quarter.

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