PATRIOT TRANSPORTATION HOLDING, INC./NEWS
Contact: John D. Milton, Jr.
Chief Financial Officer 904/858-9100
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PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES
REVISED RESULTS FOR THE FIRST QUARTER OF FISCAL 2016
Jacksonville, Florida; February 4, 2016 -
First Quarter Operating Results.
Patriot Transportation Holding, Inc. (NASDAQ-PATI) reported revised net income
of $1,375,000 or $.42 per share (which included $1,029,000, or $0.31 per share,
of net income from the settlement of a claim in connection with the 2010
Deepwater Horizon event) compared to net income of $1,102,000 or $.34 per
share in the same quarter last year.
The revised results include $218,000 of professional fees related to a
corporate opportunity that has since been abandoned that were not included in
the earnings release issued on January 27, 2016.
Total revenues were $29,371,000, down $2,346,000 over the same quarter last
year due to lower fuel surcharges of $3,063,000 as the price of diesel fuel
was significantly lower this quarter versus the same quarter last year.
Additionally, the first quarter of fiscal 2015 benefited greatly from the
time lag involved in reducing fuel surcharges during a rapidly declining
diesel fuel price environment. Transportation revenues (excluding fuel
surcharges) were up $717,000, or 2.6%, to $28,009,000 on 368,000 fewer
revenue miles. That is an increase of 6.3% per mile versus the same quarter
last year. During the quarter, the Company successfully completed
negotiations and entered into a settlement agreement with BP Exploration and
Production, Inc. resulting in other income of $1,687,000 as compensation for
damages arising out of the Deepwater Horizon event that occurred in 2010.
Cost of fuel was down $2,180,000 over the same quarter last year which was
not enough to fully off-set the $3,063,000 reduction in fuel surcharge
revenues resulting in a negative impact of $883,000 this quarter versus the
same quarter last year. Fuel surcharge tables are customer specific and can
vary considerably from customer to customer. The typical fuel surcharge
table provides some margin contribution at higher diesel fuel prices but that
is not the case at the lower diesel fuel prices we have been experiencing the
past several quarters. As long as the low diesel fuel prices continue, our
net fuel cost will be higher, negatively impacting our operating profit.
It will take some time to adjust our pricing to reflect more accurately the
current cost of doing business.
Compensation and benefits costs were up $589,000 versus the first quarter of
fiscal 2015 as we continue to invest in improving in the areas of driver
hiring, training and retention through driver pay increases, additional
recruiting costs, higher training costs and a newly implemented "minimum pay"
scale to help us retain drivers. We are beginning to see the benefits of our
investments as we grew our ending driver count for this quarter to 704 versus
686 in the same quarter last year. SG&A was up $77,000 (despite $171,000
lower bonus accruals) as we have
invested in more resources to help better manage and support our people in the
field, to resolve issues with driver hiring and turnover and to support our
safety performance. Although the same quarter last year included $250,000 in
one-time spin-off costs, corporate expense was $39,000 higher compared to the
same quarter last year due to $218,000 professional fees for a corporate
opportunity and higher professional fees for our first year end as a public
company partially offset by $73,000 lower bonus accruals.
Insurance and losses were up $179,000 as we experienced two incidents in which
our equipment was significantly damaged.
As a result, operating profit this quarter was $599,000 versus $1,833,000 in
the same quarter last year.
Summary and Outlook.
During the quarter, higher costs associated with hiring drivers, insurance and
losses and the lower fuel surcharges more than offset the growth in our
transportation revenue. Management believes we are seeing the benefits of our
investment on the driver hiring and retention front as our driver count has
grown and our annualized turnover rate improved from 79% in the fourth quarter
of last year to 65% this quarter. Our primary goal for our shareholders is to
grow profitably, maintain a strong balance sheet and get back to our targeted
returns on capital employed. To that end, we remain focused on improving our
transportation revenue per mile, adjusting the fuel surcharge pricing
structure with our customers, and growing our driver count to meet the strong
seasonal demand typically beginning at the end of the second quarter.
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
concentrating in the hauling by motor carrier of liquid and dry bulk
commodities.
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PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
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CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
THREE MONTHS ENDED
DECEMBER 31,
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2015 2014
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Revenues:
Transportation revenues $ 28,009 27,292
Fuel surcharges 1,362 4,425
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Total revenues 29,371 31,717
Cost of operations:
Compensation and benefits 12,572 11,983
Fuel expenses 3,825 6,005
Repairs & tires 1,809 1,814
Other operating 1,090 1,137
Insurance and losses 3,018 2,839
Depreciation expense 2,148 2,108
Rents, tags & utilities 949 941
Sales, general & administrative 2,399 2,322
Corporate expenses 958 919
Loss (Gain) on equipment sales 4 (184)
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Total cost of operations 28,772 29,884
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Total operating profit 599 1,833
BP Claim Settlement 1,687 -
Interest income and other 3 -
Interest expense (35) (26)
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Income before income taxes 2,254 1,807
Provision for income taxes 879 705
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Net income $ 1,375 1,102
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Comprehensive Income $ 1,375 1,102
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Earnings per common share:
Net Income-
Basic 0.42 0.34
Diluted 0.42 0.34
Number of shares (in thousands)
used in computing:
-basic earnings per common share 3,273 3,243
-diluted earnings per common share 3,277 3,243