P.A.M. Transportation Services Inc. reported $7 million in net income, or 94 cents a share, for the second quarter of 2015, turning in another record-breaking earnings period.
The Tontitown-based trucking and logistics company saw profits rise by 42.3 percent compared with the $4.9 million in net income, or 62 cents per share, from the second quarter of 2014. P.A.M. also reported $108 million in revenue, which was a 3.5 percent increase from $104.3 million.
Dan Cushman, P.A.M.'s chief executive officer, said in a news release that favorable rates, improvement in the company's logistics division and additional trucks operating in the fleet were among the "significant factors" contributing to the revenue growth. It helped P.A.M. set quarterly records for net income, earnings per share and operating income of $11.9 million.
"The level of freight demand experienced this year continues to allow us to be more selective in choosing the business that most favorably fits our model and our rate expectations," Cushman said.
The results continue a strong start to the year. P.A.M.'s net income for the first six months was $12.4 million, which nearly doubled profits of $6.3 million for the same period in 2014.
The company's earnings per share of $1.66 for the first six months was a 113 percent increase from last year's performance of 78 cents per share.
P.A.M.'s plan to double its revenue in the logistics business this year remained on track in the second quarter. The division produced $11.5 million in revenue, up from $5.2 million a year ago. The company reported $21.7 million in logistics revenue for the first six months of the year, doubling the six-month total of $10.7 million in 2014.
Growth and diversification in the company's automotive, Mexico and dedicated divisions also continued in the second quarter.
Total loads increased to 77,903, up from 73,268 in the second quarter of 2014. So did revenue per truck per week, which grew from $3,310 to $3,420. Empty miles decreased from 6.63 percent to 6.45 percent.
All were factors in helping the three divisions become more "driver friendly" and lead to lower turnover trends, Cushman said.
"They're getting into other areas of growth that I think, some of that work may turn out to be more appealing to the drivers," said Bob Williams, senior vice president and managing director of Simmons First Investment Group Inc. in Little Rock. "Hopefully they get that double whammy from their integration there. Not only do they make their drivers happier and maybe be able to attract some additional workers, but they've got a more diverse revenue base."
Cushman said continued growth hinges on the company's ability to provide drivers with "opportunities to maximize their earnings while also allowing for their desired home time." He called the ongoing development of a freight base that meets those needs a top priority.
But Cushman cautioned that the company, like most in the industry, continues to feel the effect of a driver shortage as it tries to attract and retain qualified drivers.
The American Trucking Associations recently reported the driver turnover rate fell to its lowest point since 2011 during the first quarter. Bob Costello, the organization's chief economist, said in a statement an ongoing shortage poses a risk to the industry.
The lingering shortage has led P.A.M. to make "significant investments" in driver recruiting and retention efforts, Cushman said.
"We cannot dismiss the possibility that a more comprehensive increase in our driver pay packages may be necessary should the industrywide driver shortage condition persist," Cushman said.
Shares of P.A.M. stock closed trading Thursday at $57.60, down $2.12. Shares have traded as low as $31.82 and as high as $67.61 over the past year.
Business on 07/24/2015