Stronger freight demand and lower fuel costs resulted in a profitable mix for Tonititown-based P.A.M. Transportation Services who reported another record quarter ending Sept. 30.
P.A.M. posted third quarter net income of $5.056 million, a 111% gain over the $2.393 million recorded a year ago. On a per-share basis the profits were 63 cents, more than double the 28 cents earned in the third quarter of 2012 and well ahead of the 33 cents Wall Street expected.
CEO Daniel Cushman noted in the earnings release Tuesday (Oct. 28) that the recent quarter represents the highest single quarter of earnings per share in company’s history. He attributed the gains to heightened demand and better operating metrics related in part to lower fuel costs.
"The current level of demand allows us to be more selective in choosing lanes which offer both driver satisfaction and higher returns. As a result, we have been able to further reduce the number of empty miles driven as well as recognize an increase in the average revenue per truck each day. These efficiency gains have a significant impact on bottom line results,” Cushman said.
He said growing the company is a priority, but admits there are constant challenges with the driver market.
“We do feel that we have a competitive advantage in the driver market because we have business that is driver friendly in terms of pay, miles, and home time as well as one of the newest truck fleets in the industry at an average age of 1.6 years old. That said, we also continue to review our driver compensation package in order to retain our current drivers and attract new drivers. Our ability to attain our driver recruitment and driver retention goals will be vital to growth in top-line revenues,” Cushion said.
Operating revenues, including fuel surcharges, increased 5.1% to $107.058 million for the third quarter, up from $100.877 million in the prior-year period. The higher revenue relates to 6,658 more loads carried in the third quarter compared to the prior year.
The trucks traveled 54.115 million miles in the quarter at a rate of $1.41 per mile. That compared to 53.131 million miles in the same period last year, at a rate of $1.39 per mile. The revenue generated per truck per day increased to $673, up from $644 in the year-ago period. Empty miles improved to slightly in the quarter to 6.65%, down from 7.06% a year ago.
Cushman said the company’s dedicated automotive business has been strong this entire year.
“The expedited division continues to improve in terms of profitability and we have experienced decreasing driver turnover. Our dedicated division is growing and the driver turnover is much lower in this division than the company average. Another driver friendly division, our Mexico division, is also growing and profitable,” he said.
P.A.M. continues to grow its logistics business which contributed $6.122 million to the total company revenue in the quarter. Segment revenue grew from $5.305 million in the third quarter of 2013.
"Although currently a small piece of our business, our logistics division continues to grow and operate more profitably as we further develop our model in order for us to offer our customers additional capacity solutions," Cushman said.
Through the first nine months of 2014 P.A.M. had net income of $11.358 million, up 145% from the $4.619 million earned in the same period last year. That equates to $1.41 per share, nearly triple the 53 cents profited a year ago.
Total revenue through nine months of 2014 were $309.222 million compared to $306.267 million in the same nine months of 2013.
"We continue to be very focused on growing the company. To this point, our focus has been to achieve that internally,” Cushman said.
P.A.M. shares (NASDAQ: PTSI) closed Tuesday at $40.53 per share, up 78 cents on the positive news. The share price has ranged from a $16.01 low to a high of $41.23 during the past 52 weeks. The share price is up 96% after opening 2014 at $20.65.