Patriot Transportation Holding, Inc. (NASDAQ:PATI)
Third Quarter Operating
Results
The Company reported net income of $1,086,000,
or $.33 per share, compared to net income of $456,000, or $.14 per
share, in the same quarter last year.
Total revenues for the quarter were $29,404,000,
up $1,300,000 from the same quarter last year. Transportation
revenues (excluding fuel surcharges) were $26,445,000, up $170,000
or 0.6%. Miles increased by 288,000, or 3.0%, to 9,812,000
versus 9,524,000 in the same quarter last year. During the second
and third quarters of last fiscal year we lost sizeable pieces of
business with two large customers most of which was shorter run,
higher revenue per mile business. Since that time, we added back a
meaningful portion of that lost business with longer run, lower
revenue per mile business. As a result, our overall average haul
length has increased by 5.9% and our transportation revenue per
mile has decreased by 2.2%.
Compensation and benefits decreased $142,000, or
4 cents per mile, mainly due to a one-time accrual of $264,000 in
the same quarter last year resulting from the award of two
additional vacation days for drivers. Gross fuel expense was
up $1,001,000 while fuel surcharges were up $1,130,000. Other
operating expenses were up $113,000 due mainly to increased
business in areas with tolls and maintenance at some of our
terminals. Depreciation expense was down $212,000 as a result of
right sizing our fleet in the first and second quarters. Corporate
expenses were down by $192,000 due mainly to lower legal fees and
corporate management changes that occurred at the beginning of
fiscal 2018. Gain on sale of assets increased $80,000 as we sold
excess equipment, including excess trailers. Total cost of
operations improved by $.03 cents per mile over last year’s 3rd
quarter.
As a result of the increased miles and revenues
coupled with the improved cost of operations per mile, operating
profit this quarter was $1,353,000 compared to operating profit of
$534,000 in the same quarter last year. Operating ratio was
95.4 this quarter versus a 98.1 in the same quarter last year.
First Nine Months Operating Results for
Fiscal year 2018.
The Company reported net income of $4,490,000,
or $1.35 per share, compared to net income of $1,628,000, or $.49
per share in the same period last year. This year’s first nine
months’ net income included $3,041,000, or $.92 per share, due to a
deferred tax benefit resulting from revaluing the company’s net
deferred tax liabilities per the Tax Cuts and Jobs Act of
2017.
Total revenues for the first nine months were
$85,284,000, up $1,029,000 from the same period last year.
Transportation revenues (excluding fuel surcharges) were
$77,391,000, down $1,836,000 or 2.3%. Miles declined by
291,000, or 1%, to 28,418,000 versus 28,709,000 in the same period
last year.
Compensation and benefits increased $235,000 as
a result of last summer’s driver pay increase. Net fuel expense
(i.e. gross fuel expenses less fuel surcharges) decreased by
$1,126,000 due to fewer miles driven and higher fuel surcharges due
to higher average diesel prices. Insurance and losses were up
$331,000 due mainly to higher liability and medical claims during
the first half of the fiscal year. Depreciation expense was
down $518,000 as a result of right sizing our fleet. SG&A was
up $191,000 due mainly to severance expense, reorganizing our IT
department and higher advertising costs related to hiring drivers.
Corporate expenses were down $530,000 due mainly to a decrease in
legal fees, consulting, and corporate management changes that
occurred at the beginning of fiscal 2018.
As a result, operating profit was $1,805,000
compared to $2,107,000 in the same period last year.
Operating ratio was 97.9 versus a 97.5 last year.
Summary and Outlook
Currently, the customer demand significantly
exceeds the tanker industry’s capacity in most markets in which we
operate. Every day we are allocating our resources to fulfill the
needs of those customers who are willing to partner with us on both
pricing and efficiently managing the day to day operation of our
business. Driver hiring and retention remains our greatest
challenge. Our turnover rate during this quarter was 82.4% versus
75.3% in the same quarter last year. We continue to experience a
positive trend in driver productivity as we saw our average
transportation revenue per company driver climb by 4.2% this
quarter versus the same quarter last year. During the quarter we
made significant process changes on both the recruiting and hiring
side as well as the retention side. We are optimistic these
changes will have positive impacts but will monitor the results
closely and make changes where necessary. We also made significant
progress on our IT overhaul with a goal to improve our employees’
and customers’ experience. The current quarter’s higher revenues
and lower operational costs per mile led to improved bottom line
results but we are not satisfied and will continue to push for
further improvement on both the top and bottom line. We remain debt
free and have increased cash from $11 million at the beginning of
the fiscal year to $17 million at the close of the 3rd quarter.
Conference Call
The Company will host a conference call on July
26, 2018 at 3:00 PM (EDT). Analysts, shareholders and other
interested parties may access the teleconference live by calling
1-800-311-9406 domestic or international at 1-334-323-7224 then
enter pass code 73185. Computer audio live streaming is available
via the Internet through the Company’s website at
www.patriottrans.com at the Investor Relations tab or at one of the
following links (whichever is most compatible with your device or
player)http://stream.conferenceamerica.com/pth072618 or
http://stream.conferenceamerica.com/pth072618.m3u
An audio replay will be available for sixty (60)
days following the conference call by dialing toll free
1-877-919-4059 domestic or international 1-334-323-0140 then enter
pass code 31783103. An audio archive can be accessed via the
internet
athttp://archive.conferenceamerica.com/archivestream/pth072618.mp3
Investors are cautioned that any statements in
this press release which relate to the future are, by their nature,
subject to risks and uncertainties that could cause actual results
and events to differ materially from those indicated in such
forward-looking statements. These include general economic
conditions; competitive factors; political, economic, regulatory
and climatic conditions; driver availability and cost; the impact
of future regulations regarding the transportation industry;
freight demand for petroleum product and levels of construction
activity in the Company's markets; fuel costs; risk insurance
markets; pricing; energy costs and technological changes.
Additional information regarding these and other risk factors and
uncertainties may be found in the Company’s filings with the
Securities and Exchange Commission.
Patriot Transportation Holding, Inc. is engaged
in the transportation business. The Company’s transportation
business is conducted through Florida Rock & Tank Lines, Inc.
which is a Southeastern transportation company engaged in the
hauling of liquid and dry bulk commodities.
Contact:
Matt McNultyChief Financial Officer904/858-9100
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PATRIOT TRANSPORTATION HOLDING, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In thousands)(Unaudited) |
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THREE MONTHS ENDED |
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NINE MONTHS ENDED |
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JUNE 30, |
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JUNE 30, |
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2018 |
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2017 |
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2018 |
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2017 |
Revenues: |
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Transportation
revenues |
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$ |
26,445 |
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|
26,275 |
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$ |
77,391 |
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|
|
79,227 |
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Fuel
surcharges |
|
|
2,959 |
|
|
|
1,829 |
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|
7,893 |
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|
5,028 |
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Total revenues |
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|
29,404 |
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|
28,104 |
|
|
|
85,284 |
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|
|
84,255 |
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Cost of
operations: |
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Compensation and
benefits |
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12,132 |
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|
12,274 |
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36,048 |
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35,813 |
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Fuel
expenses |
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4,623 |
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|
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3,622 |
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13,049 |
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|
11,310 |
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Repairs &
tires |
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1,817 |
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1,862 |
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|
5,075 |
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|
5,125 |
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Other
operating |
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1,247 |
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|
|
1,134 |
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|
|
3,353 |
|
|
|
3,144 |
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Insurance and
losses |
|
|
2,614 |
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|
|
2,567 |
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|
8,499 |
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|
8,168 |
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Depreciation
expense |
|
|
2,137 |
|
|
|
2,349 |
|
|
|
6,690 |
|
|
|
7,208 |
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Rents, tags &
utilities |
|
|
792 |
|
|
|
820 |
|
|
|
2,534 |
|
|
|
2,543 |
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Sales, general
& administrative |
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2,465 |
|
|
|
2,446 |
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|
7,229 |
|
|
|
7,038 |
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Corporate
expenses |
|
|
399 |
|
|
|
591 |
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|
1,676 |
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|
2,206 |
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Gain on equipment
sales |
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(175 |
) |
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(95 |
) |
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(674 |
) |
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(407 |
) |
Total cost of
operations |
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28,051 |
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27,570 |
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|
|
83,479 |
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|
82,148 |
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Total operating
profit |
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1,353 |
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|
534 |
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1,805 |
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2,107 |
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Interest income and
other |
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64 |
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|
1 |
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|
97 |
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4 |
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Interest expense |
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(10 |
) |
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(15 |
) |
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(29 |
) |
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|
(79 |
) |
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Income before income
taxes |
|
|
1,407 |
|
|
|
520 |
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|
|
1,873 |
|
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|
2,032 |
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Provision for income
taxes |
|
|
321 |
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|
64 |
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(2,617 |
) |
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404 |
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Net
income |
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$ |
1,086 |
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|
456 |
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$ |
4,490 |
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|
1,628 |
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Tax reform gain on
retiree health |
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— |
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— |
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32 |
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— |
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Comprehensive
income |
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$ |
1,086 |
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|
456 |
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$ |
4,522 |
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|
1,628 |
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Earnings per
common share: |
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Net Income - |
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Basic |
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$ |
0.33 |
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|
0.14 |
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|
1.35 |
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|
|
0.49 |
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Diluted |
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$ |
0.33 |
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|
|
0.14 |
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|
|
1.35 |
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|
0.49 |
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Number of shares (in thousands) used in
computing: |
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-basic
earnings per common share |
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3,324 |
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3,304 |
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3,315 |
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|
3,298 |
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-diluted
earnings per common share |
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3,328 |
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|
3,305 |
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|
3,316 |
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|
3,301 |
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