FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-17554
PATRIOT TRANSPORTATION HOLDING, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2924957
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
1801 Art Museum Drive, Jacksonville, Florida 32207
(Address of principal executive offices)
(Zip Code)
904/396-5733
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 1, 2001: 3,145,566 shares of $.10 par value
common stock.
PATRIOT TRANSPORTATION HOLDING, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, September 30,
2000 2000
ASSETS
Current assets:
Cash and cash equivalents $ 817 $ 633
Accounts receivable:
Affiliates 353 233
Other 11,895 11,406
Less allowance for doubtful accounts (708) (869)
Inventory of parts and supplies 684 650
Prepaid expenses and other 3,711 3,036
Total current assets 16,752 15,089
Other assets:
Real estate held for investment, at cost 5,086 5,216
Goodwill 1,157 1,167
Other 2,542 2,513
Total other assets 8,785 8,896
Property, plant and equipment, at cost 187,538 184,583
Less accumulated depreciation and
depletion (62,829) (60,557)
Net property, plant and equipment 124,709 124,026
$150,246 $148,011
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 4,700 $ 5,600
Accounts payable:
Affiliates 181 569
Other 4,257 5,003
Federal and state income taxes 1,867 1,162
Accrued liabilities 4,032 4,368
Long-term debt due within one year 920 796
Total current liabilities 15,957 17,498
Long-term debt 46,853 42,015
Deferred income taxes 8,628 8,628
Accrued insurance reserves 4,884 4,884
Other liabilities 1,179 1,173
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,151,566 shares issued
(3,346,351 at September 30, 2000) 315 335
Capital in excess of par value 11,563 14,740
Retained earnings 60,867 58,738
Total stockholders' equity 72,745 73,813
$150,246 $148,011
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS
ENDED DECEMBER 31,
2000 1999
Revenues:
Affiliates $ 4,468 1,616
Non-affiliates 26,232 18,534
30,700 20,150
Cost of operations 23,692 16,543
Gross profit 7,008 3,607
Selling, general and
administrative expense:
Affiliates 132 207
Non-affiliates 2,410 1,755
2,542 1,962
Operating profit 4,466 1,645
Interest expense (923) (745)
Interest income 5 2
Income before income taxes 3,548 902
Provision for income taxes 1,419 352
Net income $ 2,129 $ 550
Basic earnings per
common share $ .66 .16
Diluted earnings per
common share $ .66 .16
Cash dividends NONE NONE
Number of shares used in computing:
Basic earnings per share 3,205 3,366
Diluted earnings per share 3,205 3,387
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999
(In thousands)
(Unaudited)
2000 1999
Cash flows from operating activities:
Net income $2,129 550
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 2,881 2,642
Net changes in operating assets and liabilities:
Accounts receivable (789) (1,126)
Inventory of parts and supplies (34) (112)
Prepaid expenses (675) (110)
Accounts payable and accrued liabilities (766) (644)
Net change in insurance reserve and other
liabilities 7 26
Gain on disposition of real estate, plant
and equipment (2,048) (252)
Other, net 31 14
Net cash provided from operating activities 736 988
Cash flows from investing activities:
Purchase of property, plant and equipment (4,058) (6,781)
Additions to other assets (106) (183)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets 2,747 338
Net cash used in investing activities (1,417) (6,626)
Cash flows from financing activities:
Proceeds from long-term debt 5,140 5,000
Net increase in short-term debt (900) 1,600
Repayment of debt (178) (147)
Repurchase of Company stock (3,197) (269)
Net cash provided from financing activities 865 6,184
Net increase in cash and cash equivalents 184 546
Cash and cash equivalents at beginning of year 633 2,593
Cash and cash equivalents at end of the period $ 817 3,139
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $ 920 722
Income taxes $ 715 131
Non cash investing activities:
Additions to property, plant and equipment from exchanges $ - 6
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 2000
(Unaudited)
(1) Basis of Presentation. The accompanying consolidated
condensed financial statements include the accounts of the
Company and its subsidiaries. These statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial
information and the instructions to Form 10-Q and do not include
all the information and footnotes required by accounting
principles generally accepted in the United States of America for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation of the results for the interim
periods have been included. Operating results for the three
months ended December 31, 2000, are not necessarily indicative of
the results that may be expected for the fiscal year ended
September 30, 2001. The accompanying consolidated financial
statements and the information included under the heading
"Management's Discussion and Analysis" should be read in
conjunction with the consolidated financial statements and
related notes of Patriot Transportation Holding, Inc. for the
year ended September 30, 2000.
(2) Industry Segments. The Company has identified two business
segments each of which is managed separately along product lines.
All the Company's operations are in the United States.
The transportation segment hauls liquid and dry commodities by
motor carrier. The real estate segment owns real estate of
which a substantial portion is under mining royalty agreements or
leased. They also hold certain other real estate for investment
and are developing commercial and industrial properties.
Operating results and certain other financial data for the
Company's business segments are as follows (in thousands):
Three Months Ended
December 31
2000 1999
Revenues:
Transportation $ 24,940 17,523
Real estate 5,760 2,627
$ 30,700 20,150
Operating profit
Transportation $ 904 561
Real estate 3,955 1,455
Corporate expenses (393) (371)
Operating profit $ 4,466 1,645
Identifiable assets, at
quarter end
Transportation $ 54,574 53,735
Real estate 94,347 89,411
Cash items 817 1,117
Unallocated corporate assets 508 509
$150,246 144,772
(3) Spin-off of Real Estate Business. On August 2, 2000, the
Board of Directors approved a resolution to delay consummation of
the previously approved reorganization of the Company until some
date beyond July 1, 2001. The reorganization will require
reauthorization by the Board. The reorganization would result
in spinning off to its shareholders a new company which would
include the real estate business, while retaining the
transportation business in Patriot Transportation Holding, Inc.
The Company has obtained a tax ruling from the Internal Revenue
Service that confirms that the proposed transaction will be tax-free
to the shareholders. Management has recommended delaying
the spin-off due to the turbulent conditions in the trucking
industry and the need to complete separate internal information
systems for its Transportation and Real Estate Groups. The
Company also wants to provide additional time for development of
its new agent/owner-operator subsidiary. For information
concerning selected information concerning real estate business,
see Note 2.
(4) Related Party Transaction. In November 2000, the Company
sold two parcels of land to Florida Rock Industries, Inc., an
affiliate for $2,607,000 and recognized a pre-tax gain of
$2,034,000. The transaction including the purchase price were
reviewed and approved on behalf of the Company by a committee of
independent directors after obtaining independent appraisals.
(5) Contingent Liabilities. The Company and its subsidiaries
are subject to legal proceedings and claims arising out of their
businesses that cover a wide range of matters. Additional
information concerning these matters is presented in Note 11 to
the consolidated financial statements included in the Company's
2000 Annual Report to Stockholders. Such information is
incorporated herein by reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
For the first fiscal quarter, ending December 31, 2000, consolidated
revenues increased 52.4% to $30,770,000 from $20,150,000 last year. The
Transportation Group revenues for the first quarter increased 42.3% to
$24,940,000 from $17,523,000 last year as a result of a 30% increase in
miles hauled and a modest increase in pricing over the same quarter last
year. Three-fourths of the increase in miles hauled resulted from growth
at the Company's new third-party agent/owner-operator subsidiary which
started operations in December 1999. Most of the balance of the increase
in miles hauled came from growth in the tank line operations which also
benefited from modest price increases. Real estate revenues for the first
quarter of fiscal 2001 were $5,760,000, an increase of $3,133,000 from the
same quarter last year primarily as a result of property sales of
$2,607,000. The Company did not have any property sales during the first
quarter of fiscal 2000.
Consolidated gross profit increased $3,401,000 to $7,008,000 for the first
fiscal quarter of 2001 due to gross profit from property sales of
$2,034,000, an increase in the Transportation Group's gross profit and an
increase in the real estate operations. The Transportation Group's gross
profit for the first quarter of fiscal 2001 was $3,048,000, an increase of
42% over the same quarter last year. This increase was primarily
attributed to the increased miles and improved gross margins and fuel
surcharges in the tank line business along with gross profits generated by
the new transportation subsidiary. The Real Estate Group's gross profit
excluding property sales increased 32% from the same quarter last year to
$1,926,000 as a result of increased royalties from the mining properties
and increased rentals from additional developed properties.
Administrative expense for the quarter increased to $2,542,000 from
$1,962,000 in the same quarter last year. This increase is primarily due
to additional administrative support for the start up the new
transportation subsidiary which began operations at the end of the first
quarter last year. Costs have also increased as the Company began
establishing its own in-house information technology resources.
Administrative expense as a percentage of consolidated revenues, excluding
property sales, was 9% compared to 9.7% in the same quarter last year.
Interest expense increased 23.9% to $923,000 from $745,000 last year, due
to an increase in the average debt outstanding and an increase in average
interest rate.
Income tax expense was $1,419,000 as compared to $352,000 last year
primarily as a result of higher income before tax. Income tax expense was
40% of income before income taxes as compared to 39% last year.
Summary and Outlook
A deteriorating economy will accentuate challenges already faced by the
U.S. domestic trucking industry. While labor markets loosen somewhat and
driver hiring becomes less of an obstacle, freight demand is slowing
markedly, risk insurance markets remain challenging and fuel pricing
continues as a critical issue. Corresponding softening within the
national manufacturing and distribution sectors could result in decreased
demand for flexible warehouse office capacities. While the Company's
growth objectives remain unchanged for both Transportation and Real Estate,
a slowing national economic picture could result in reduced progress until
firming occurs.
Financial Condition
For the first quarter of fiscal 2001, net cash flows from operating
activities were $736,000 which along with issuing long-term debt and sales
of real estate funded the Company's purchase of additional property, plant
and equipment of $4,058,000 and repurchase of 195,785 shares of common
stock for $3,197,000. For the first quarter of fiscal 2000, net cash flows
from operating activities were $988,000 which along with issuing addition
long and short term debt funded the Company's investing activities of
$6,626,000 and repurchase of common stock of $269,000.
The Company continues to maintain its sound financial condition with
sufficient resources to meet anticipated capital expenditures and other
operating requirements. The Company's revolving credit facility will
convert to a term loan on November 15, 2001 if not modified before then.
The Company will be evaluating and discussing its long-term credit needs
with its bank group and anticipates it will be extended or modified before
it converts to a term loan.
Other
During fiscal 2000, the transportation segment's ten largest customers
accounted for approximately 36% of transportation's revenue. The loss of
any one of these customers could have an adverse effect on the Company's
revenue and income.
While the Company is affected by environmental regulations, such
regulations are not expected to have a major effect on the Company's
capital expenditures or operating results. Additional information
concerning environmental matters is presented in Note 11 to the
consolidated financial statements included in the Company's 2000 Annual
Report to Stockholders. Such information is incorporated herein by
reference.
Forward-Looking Statements. Certain matters discussed in this report
contain forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from
those indicated by such forward-looking statements. These forward-looking
statements relate to, among other things, capital expenditures, liquidity,
capital resources, competition and may be indicated by words or phrases
such as "anticipate," "estimate," "plans," "projects," "continuing,"
"ongoing," "expects," "management believes," "the Company believes," "the
Company intends" and similar words or phrases. The following factors are
among the principal factors that could cause actual results to differ
materially from the forward-looking statements: deteriorating economy;
availability and terms of financing; competition; labor market for drivers;
freight demand; risk insurance markets; demand for flexible warehouse
office capacities; national economic picture; fuel costs; and inflation.
Quantitative and Qualitative Disclosure About Market Risks. There are no
material changes to the disclosures made in Form 10-K for the fiscal year
ended September 30, 2000 on this matter.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Note 11 to the consolidated financial statements included in the Company's
2000 Annual Report to Stockholders is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a separate
Section entitled "Exhibit Index", starting on page 10.
(b) Reports on Form 8-K. During the three months ended December 31,
2000, no reports on Form 8-K were filed by the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
February 7, 2001 PATRIOT TRANSPORTATION HOLDING, INC.
John E. Anderson
President and Chief Executive
Officer
Ray M. Van Landingham
Vice President Finance &
Administration and Chief
Financial Officer
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2000
EXHIBIT INDEX
(3)(a)(1) Articles of Incorporation of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(3)(a)(2) Amendment to the Articles of Incorporation of Patriot
Transportation Holding, Inc. filed with the Secretary
of State of Florida on February 19, 1991. Previously
filed with Form 10-K for the fiscal year ended
September 30, 1993. file No. 33-26115.
(3)(a)(3) Amendments to the Articles of Incorporation of Patriot
Transportation Holding, Inc. filed with the Secretary
of State of Florida on February 7, 1995. Previously
filed as appendix to the Company's Proxy Statement
dated December 15, 1994.
(3)(a)(4) Amendment to the Articles of Incorporation, filed with
the Florida Secretary of State on May 6, 1999. A form
of such amendment was previously filed as Exhibit 4 to
the Company's Form 8-K dated May 5, 1999. File No.
33-26115.
(3)(a)(5) Amendment to the Articles of Incorporation of Patriot
Transportation Holding, Inc. filed with the Secretary
of State of Florida on February 21, 2000. Previously
filed with Form 10-Q for the quarter ended March 31,
2000. File No. 33-26115.
(3)(b)(1) Restated Bylaws of Patriot Transportation Holding,
Inc. adopted December 1, 1993. Previously filed with
Form 10-K for the fiscal year ended September 30,
1993. File No. 33-26115.
(3)(b)(2) Amendment to the Bylaws of Patriot Transportation
Holding, Inc. adopted August 3, 1994. Previously
filed with Form 10-K for the fiscal year ended
September 30, 1994. File No. 33-26115.
(4)(a) Articles III, VII and XII of the Articles of
Incorporation of Patriot Transportation Holding, Inc.
Previously filed with Form S-4 dated December 13,
1988. And amended Article III filed with Form 10-K
for the fiscal year ended September 30, 1993. And
Articles XIII and XIV previously filed as appendix to
the Company's Proxy Statement dated December 15, 1994.
File No. 33-026115.
(4)(b) Specimen stock certificate of Patriot Transportation
Holding, Inc. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(4)(c) Credit Agreement dated as of November 15, 1995 among
Patriot Transportation Holding, Inc.; SunTrust Bank,
Central Florida, National Association; Bank of America
Illinois; Barnett Bank of Jacksonville, N.A.; and
First Union National Bank of Florida. Previously
filed with Form 10-Q for the quarter ended December
31, 1995. File No. 33-26115.
(4)(c)(1) First Amendment dated as of September 30, 1998 to the
Credit Agreement dated as of November 15, 1995.
Previously filed with Form 10-K for the year ended
September 30, 1998. File No. 33-26115.
(4)(c)(2) Second Amendment dated as of October 31, 2000 to the
Credit Agreement dated as of November 15, 1995. File
No. 33-26115.
(4)(d) The Company and its consolidated subsidiaries have
other long-term debt agreements which do not exceed
10% of the total consolidated assets of the Company
and its subsidiaries, and the Company agrees to
furnish copies of such agreements and constituent
documents to the Commission upon request.
(4)(e) Rights Amendment, dated as May 5, 1999 between the
Company and First Union National Bank. Previously
filed as Exhibit 4 to the Company's Form 8-K dated May
5, 1999. File No. 33-26115.
(10)(a) Post Distribution Agreement, dated May 7, 1986, by and
between Florida Rock Industries, Inc. and Florida Rock
& Tank Lines, Inc. and amendments thereto dated July
1, 1987 and September 27, 1988. Previously filed with
Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(b) Tax Sharing Agreement, dated May 7,1986, between
Florida Rock Industries, Inc. and Florida Rock & Tank
Lines, Inc. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(c) Various leasebacks and mining royalty agreements with
Florida Rock Industries, Inc., none of which are
presently believed to be material individually, except
for the Mining Lease Agreement dated September 1,
1986, between Florida Rock Industries Inc. and Florida
Rock Properties, Inc., successor by merger to Grandin
Land, Inc. (see Exhibit (10)(e)), but all of which
maybe material in the aggregate. Previously filed
with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(d) License Agreement, dated June 30, 1986, from Florida
Rock Industries, Inc. to Florida Rock & Tank Lines,
Inc. to use "Florida Rock" in corporate names.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(e) Mining Lease Agreement, dated September 1, 1986,
between Florida Rock Industries, Inc. and Florida Rock
Properties, Inc., successor by merger to Grandin Land,
Inc. Previously filed with Form S-4 dated December
13, 1988. File No. 33-26115.
(10)(f) Summary of Medical Reimbursement Plan of Patriot
Transportation Holding, Inc. Previously filed with
Form 10-K for the fiscal year ended September 30,
1993. File No. 33-26115.
(10)(g) Split Dollar Agreement dated October 3, 1984, between
Edward L. Baker and Florida Rock Industries, Inc. and
assignment of such agreement, dated January 31, 1986
from Florida Rock Industries, Inc. to Florida Rock &
Tank Lines, Inc. Previously filed with Form S-4
dated December 13, 1988. File No. 33-26115.
(10)(h) Summary of Management Incentive Compensation Plans.
Previously filed with Form 10-K for the fiscal year
ended September 30, 1994. File No. 33-26115.
(10)(I) Management Security Agreements between the Company and
certain officers. Form of agreement previously filed
as Exhibit (10)(I) with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(I)(1) Patriot Transportation Holding, Inc. Employee Stock
Option Plan. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(I)(2) Patriot Transportation Holding, Inc. 1995 Stock Option
Plan. Previously filed as an appendix to the Company's
Proxy Statement dated December 15, 1994. File No. 33-26115.
(10)(I)(3) Patriot Transportation Holding, Inc. 2000 Stock Option
Plan. Previously filed as an appendix to the Company's
Proxy Statement dated December 15, 1999. File No.
33-26115.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule
(99) Note 11 of the Notes to Financial Statements included
in the Company's Form 10-K for the year ended September
30, 2000.