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P.A.M. Transportation scores record Q1 on higher rates

Stock pops 10% on better-than-expected report

A P.A.M. Transportation rig on highway (Photo: Jim Allen/FreightWaves)

P.A.M. Transportation Services used better rates and margins to best analysts’ expectations in the 2022 first quarter. The Tontitown, Arkansas-based truckload carrier reported adjusted net income of $1.18 per share, 66 cents better than the year-ago result and 39 cents ahead of the consensus estimate.

The result excluded a $3.3 million legal reserve associated with “a claim anticipated to settle in excess of insurance policy limits.”

“PAM. had its best first quarter in our history,” President Joe Vitiritto, stated in a press release.

Consolidated revenue increased 47% year-over-year to $219 million, 45% higher excluding fuel surcharge revenue. Sizable top-line increases were seen in both Pam’s (NASDAQ: PTSI) TL and logistics segments.

Table: P.A.M. Transportation’s key performance indicators

Revenue per truck per week (excluding fuel) in the TL segment increased 33% year-over-year to $4,736. The average truck count increased 2% with revenue per loaded mile excluding fuel jumping 46% to $3.04. Loaded miles per truck were down 7% in the quarter.  

“We experienced significant challenges through the quarter, specifically on the weather front,” Vitiritto said. “The challenges made us leave something on the table in the quarter.”

The improved rate profile drove expenses as a percentage of revenue lower in most cost buckets, notably salaries, wages and benefits, which were 450 basis points lower. Rent and purchased transportation expenses were 270 bps higher year-over-year. Nearly 20% of Pam’s active tractor count comes from owner-operators.

The TL adjusted operating ratio was 81.4%, 870 bps better year-over-year.

Logistics revenue increased 59% to $71 million. The company doesn’t provide load or revenue-per-load data for its brokerage business. Higher purchased transportation costs were a headwind, but the unit managed to improve the OR 90 bps to 88.6%.

“We are continuing to demonstrate the resiliency in our business and at the same time we are seeing significant growth in all our business units” Vitiritto said.

P.A.M. generated operating cash flow of $41 million in the period. It closed the quarter with $178 million in cash, marketable securities and availability on its credit line. Net debt increased $24 million from the end of the year to $142 million.

The company took delivery of most of its remaining 2021 equipment orders in the first quarter and began taking delivery of 2022 orders. However, Pam expects most of its deliveries to take place in the back half of the year as manufacturers attempt to catch up from parts shortages and production delays.

“We anticipate that the majority of our 2022 equipment deliveries will be made in the latter half of the year and due to the fleet growth experienced during the first quarter, we will be required to keep some of our current equipment longer than originally expected,” the press release stated.

The average age of Pam’s truck fleet ticked up slightly from the end of 2021 to 1.9 years at the end of the first quarter.

Shares of PTSI were up 10% at 12:37 p.m. EDT Wednesday compared to the S&P 500, which was up 0.2%.

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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.