P.A.M. Transportation Services (NASDAQ: PTSI) announced second-quarter 2021 net income of $15.3 million after the market close Wednesday. The result reflected a sharp turnaround from the year-ago quarter during which the company recorded an $800,000 loss as the auto manufacturing sector, from which it generates roughly half of its revenue, was shut down due to COVID protocols.
“It was only one year ago that we were scrambling to find replacement freight as many of our largest customers reacted to the pandemic by completely suspending their operations,” said Joe Vitiritto, president, in the press release. “Now, just one year later and with a redesigned network, we are pleased to report record revenue and record operating income for the quarter.”
The Tontitown, Arkansas-based company’s revenue increased 73% year-over-year to $161 million. Loads in the truckload division were up 18% with revenue total per mile (excluding fuel) up 33% to $2.11. Total miles grew 6% and deadhead declined more than 300 basis points to 8.5%. The result was a 44% increase in revenue per truck per week to $3,882.
“While we believe that there remains plenty of opportunity to improve on our recent operating results and we expect our team to continue to exceed expectations, it is satisfying to see such marked improvement so quickly,” Vitiritto continued.
The improved operating environment led to a reduction on every expense line (as a percentage of revenue) except purchased transportation and rent expense, which was up 560 bps. Spot market rates have shot higher as truck capacity remains hard to find, which is weighing on the expense line.
The improved revenue makeup, due in large part to much higher freight rates and higher utilization, led to 1,520 bps of margin improvement, or an 87% operating ratio on a consolidated basis (2,000 bps better in the TL segment at 84%).
Elevated demand and a lack of truck supply drove a much-improved operating result for the carrier. Throughout the quarter, carriers were rejecting one in every four loads tendered to them under contract.
The logistics segment saw revenue grow 3x year-over-year to $47 million. P.A.M. Transportation doesn’t provide operating metrics for the division but OR improved 660 bps to 88.7%. Increases in brokered loads and rate per load were the likely catalysts.
P.A.M. Transportation’s board declared Tuesday a 2-for-1 stock split of common shares.
The company enacted the split “to increase the availability of our stock and enhance liquidity within the marketplace.” Management believes the split signals “confidence in our long-term potential” and that the lower share price will make the stock more affordable to a larger number of investors.
The additional shares will be distributed to stockholders on Aug. 16 in the form of a stock dividend. The stock is expected to start trading on a split-adjusted basis the following day. The company’s share count will double to 11.4 million after the split.