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P.A.M. Transportation posts big Q4

Equipment delivery delays push fleet age higher

(Photo: Jim Allen/FreightWaves)

P.A.M. Transportation Services rode higher rates to improved margins and better-than-expected results again during the fourth quarter.

The Tontitown, Arkansas-based truckload carrier reported adjusted earnings per share of $2.85 Wednesday, more than double the year-ago amount and 88 cents better than the consensus estimate. The adjusted result excludes $5.5 million in settlement and reserve expenses related to losses in excess of insurance limits.

PAM (NASDAQ: PTSI) saw TL revenue increase 44% year-over-year to $150 million as revenue per loaded mile excluding fuel surcharges jumped 52% to $3.26. Even with an uptick in deadhead percentage, the carrier posted a 42% increase in revenue per truck per week at $5,385. Higher rates more than offset cost inflation in the period. The TL operating ratio improved 760 basis points to 79.2%.

Salaries, wages and benefits as a percentage of revenue declined 500 bps year-over-year, followed by 360-bp decline in depreciation and a 200-bp reduction in operating supplies.

“We made significant progress in the quarter and in 2021 at PAM with profitable organic growth, President Joe Vitiritto said in a press release. “The growth has allowed our team to offer creative capacity solutions to our customers in unprecedented times.”

Full-year 2021 adjusted net income was 4.5 times higher year-over-year at $81 million.

The logistics segment recorded a 67% year-over-year increase in revenue at $64 million. The division’s operating ratio improved 130 basis points to 88.2% even as consolidated rent and purchased transportation costs were up 460 bps due to higher third-party capacity costs.

Neither load nor revenue-per-load metrics were disclosed, but carriers with brokerage operations have benefited from surging TL rates. J.B. Hunt Transport Services’ (NASDAQ: JBHT) brokerage segment reported a 27% year-over-year increase in fourth-quarter revenue per load Tuesday, which drove profitability in the unit nearly four times higher.

PAM closed the year with $118 million in cash, marketable securities and available liquidity. Net debt was $166 million, 38% lower year-over-year. The company generated $102 million in cash flow from operations in 2021.

Its net capital expenditures efforts resulted in incoming cash of $13 million as receipts from the disposal of equipment more than offset payments for equipment deliveries, which were pushed out due to labor and parts shortages.

The company only received 60% of ordered equipment in 2021, which was lower than its diminished third-quarter expectation of 80%. The average truck age increased to 1.8 years in 2021, up from 1.4 years in 2020. However, the increase in equipment age hasn’t resulted in higher expenses yet.

“Due to the relatively new age of our equipment fleet and remaining unexpired warranty coverage for most of our trucks and trailers, we did not incur significant additional maintenance costs related to the delivery delays,” the press release stated.

Table: PAM’s key performance indicators

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes P.A.M. Transportation Services (No. 39) and  J.B. Hunt (No. 4).

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.