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
RESULTS FOR THE THIRD QUARTER OF FISCAL 2016
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
July 27, 2016 -
Third Quarter Results for Fiscal Year 2016.
The Company reported net income of $1,379,000, or $0.42 per share, compared
to net income of $1,003,000, or $0.31 per share, in the same quarter last
year.
Total revenues for the quarter were $31,362,000, up $263,000 from $31,099,000
in the same quarter last year. Fuel surcharge revenues were lower by
$1,315,000 as the average price of diesel fuel was lower ($.54 per gallon)
this quarter versus the same quarter last year. Transportation revenues
(excluding fuel surcharges) were up $1,578,000 (or 5.5%) to $30,187,000 on
134,000 more revenue miles and an increase of 4.3% revenue per mile versus
the same quarter last year.
Compensation and benefits costs were up $482,000 (or $.04 per mile) versus
the third quarter of fiscal 2015 due primarily to driver pay enhancements
and increased miles.
The Company's gross cost of fuel was down $1,064,000 over the same quarter
last year which was not enough to off-set the $1,315,000 decline in fuel
surcharge revenues resulting in a negative margin impact of $251,000 (or $.02
per mile) this quarter. In the first and second quarters of this fiscal year
we experienced a negative margin impact of $883,000 (or $.09 per mile) and
$719,000 (or $.07 per mile), respectively, as a result of declining fuel
surcharges outpacing the decline in our gross fuel cost. During the fiscal
year we were able to negotiate positive adjustments to the fuel surcharge
tables of some of our customers and those adjustments have contributed to the
positive trend of less margin erosion resulting from lower diesel prices.
SG&A was up $261,000 as we have increased staff 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. Corporate expense was
$280,000 lower compared to the same quarter last year due mainly to reduced
airplane expenses following the sale of a 75% interest in the corporate
airplane last quarter.
Operating profit this quarter was $2,290,000, an increase of $617,000 or 37%
compared to $1,673,000 in the same quarter last year. Our operating ratio
improved to 92.7% compared to 94.6% in the same quarter last year.
First Nine Months' Results for Fiscal Year 2016.
The Company reported net income of $3,617,000, or $1.10 per share compared to
net income of $1,754,000, or $0.54 per share in the same period last year.
The current year income includes $1,029,000, or $0.31 per share, of net income
from the settlement of a claim with BP for $1,687,000 in connection with the
2010 Deepwater Horizon event. The prior year included a $2,074,000 intangible
asset impairment charge with an after tax impact to net income of $1,265,000
or $0.39 per share, related to the Pipeline Transportation acquisition.
Total revenues were $89,781,000 down from $92,553,000 last year as a result of
$6,488,000 lower fuel surcharges. Transportation revenues (excluding fuel
surcharges) were up $3,716,000 to $86,710,000 on 118,000 fewer miles and an
increase of 5.1% revenue per mile versus the same period last year.
The Company's gross cost of fuel was down $4,635,000 over the same period last
year which was not enough to off-set the $6,488,000 reduction in fuel
surcharge revenues resulting in a negative margin impact of $1,853,000 (or
$.06 per mile) this period versus the same period last year.
Compensation and benefits costs were up $2,050,000 (or $.06 per mile) versus
the same period last year due primarily to driver pay enhancements and
increased driver training.
Corporate expense was lower by $545,000 compared to the same period last year
due mainly to the sale of a 75% interest in the corporate airplane during the
last quarter.
We had $663,000 less in gains on equipment sales this period versus the same
period last year.
Operating profit this period was $4,336,000 versus an operating profit of
$2,953,000 in the same period last year. The prior year included the
$2,074,000 intangible asset impairment charge.
Adjusted operating profit was $4,336,000 versus adjusted operating profit of
$5,027,000 in the same period last year. Adjusted net income was $2,588,000
compared to adjusted net income of $3,019,000 in the same period last year.
These non-GAAP financial measures exclude the BP Settlement gain realized in
the first quarter of fiscal 2016 and the intangible asset impairment charge
incurred in the second quarter of fiscal 2015. Management believes these
adjusted measures better reflect our operating performance during the periods
discussed and reflect how management evaluates our operational results.
Refer to "Non-GAAP Financial Measures" below in this press release for a more
detailed discussion, including reconciliations of these non-GAAP financial
measures to their most directly comparable GAAP financial measures".
Summary and Outlook.
We have been successful the past several quarters in growing our per mile
transportation revenue while adding revenue miles through new business
opportunities. We were pleased to see
the improvements in our operating margin during the 3rd quarter and are
optimistic that we can retain that margin in the 4th quarter. The substantial
improvement in net fuel expense this quarter was encouraging and we will
continue to work to neutralize the negative margin effects of lower fuel
prices but this effort at neutralization will take some time to resolve as it
is an industry wide issue.
We operate in many of the best markets in the country and are known in those
markets, and beyond, as a top rated carrier for both safety and customer
satisfaction. We are committed to continuing our focus on safety and customer
satisfaction and are confident that execution of that focus will enable us to
continue our growth in our excellent markets. We plan to maintain a strong
balance sheet as we work to achieve our targeted operating ratio in the low
nineties and double digit returns on after tax capital employed.
Conference Call.
The Company will host a conference call on Wednesday, July 27, 2016 at 2:00
p.m. (EDT). Analysts, stockholders and other interested parties may access the
teleconference live by calling 1-800-933-4911 (pass code 94564) for domestic
or 1-334-323-7224 (pass code 94564) for international. Computer audio live
streaming is available via the Internet through the Company's website at
www.patriottrans.com at the Investor Relations tab. You may click on this link
for the live streaming http://stream.conferenceamerica.com/pth072716. Click on
the following link
http://archive.conferenceamerica.com/archivestream/pth072716.mp3 to access the
archived internet audio replay. A telephonic audio replay will be available for
sixty days following the conference call and is accessible by dialing toll free
877-919-4059 domestic or 334-323-0140 international. The passcode of the audio
replay is 31774712. Replay options: "1" begins playback, "4" rewind 30 seconds,
"5" pause, "6" fast forward 30 seconds, "0" instructions, and "9" exits
recording. There may be a short delay until the archive is available following
the conclusion of the conference call.
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.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
2016 2015 2016 2015
---- ---- ---- ----
Revenues:
Transportation revenues $ 30,187 28,609 $ 86,710 82,994
Fuel surcharges 1,175 2,490 3,071 9,559
------ ------ ------ ------
Total revenues 31,362 31,099 89,781 92,553
Cost of operations:
Compensation and benefits 13,034 12,552 38,358 36,308
Fuel expenses 4,031 5,095 11,326 15,961
Repairs & tires 2,061 2,019 5,806 5,739
Other operating 1,195 1,090 3,464 3,215
Insurance and losses 2,736 2,681 7,972 8,298
Depreciation expense 2,245 2,098 6,518 6,330
Rents, tags & utilities 949 987 2,853 2,882
Sales, general &
administrative 2,404 2,143 7,016 6,779
Corporate expenses 502 782 2,288 2,833
Intangible asset impairment - - - 2,074
Gain on equipment sales (85) (21) (156) (819)
------ ------ ------ ------
Total cost of operations 29,072 29,426 85,445 89,600
------ ------ ------ ------
Total operating profit 2,290 1,673 4,336 2,953
BP claim settlement - - 1,687 -
Interest income and other 1 - 4 -
Interest expense (31) (29) (98) (78)
------ ------ ------ ------
Income before income taxes 2,260 1,644 5,929 2,875
Provision for income taxes 881 641 2,312 1,121
------ ------ ------ ------
Net income $ 1,379 1,003 $ 3,617 1,754
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Comprehensive income $ 1,379 1,003 $ 3,617 1,754
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Earnings per common share:
Net Income -
Basic 0.42 0.31 1.10 0.54
Diluted 0.42 0.31 1.10 0.54
Number of shares
(in thousands) used in computing:
-basic earnings
per common share 3,287 3,268 3,281 3,265
-diluted earnings
per common share 3,289 3,276 3,284 3,273
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with GAAP,
Patriot presents certain non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission. The
non-GAAP financial measures included in this press release are adjusted net
income, adjusted operating profit and adjusted operating ratio. Patriot uses
these non-GAAP financial measures to analyze its continuing operations and to
monitor, assess, and identify meaningful trends in its operating and financial
performance. These measures are not, and should not be viewed as, substitutes
for GAAP financial measures.
Adjusted Net Income
Adjusted net income excludes the impact of the BP settlement and intangible
asset impairment charge. Adjusted net income is presented to provide
additional perspective on underlying trends in Patriot's core operating
results. A reconciliation between net income and adjusted net income is as
follows:
Nine months ended Nine months ended
June 30, 2016 June 30, 2015
------------------ ------------------
Net Income $ 3,617 1,754
Adjustments:
Intangible asset impairment charge - 2,074
Provision for deferred income taxes - (809)
BP claim settlement (1,687) -
Provision for cash income taxes 658 -
------------------ ------------------
Adjusted net income $ 2,588 3,019
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Adjusted Operating Ratio
Adjusted operating ratio excludes the impact of the intangible asset
impairment charge. Adjusted operating ratio is presented to provide
additional perspective on underlying trends in Patriot's core operating
results. A reconciliation between operating ratio and adjusted operating
ratio is as follows:
Nine months ended Nine months ended
June 30, 2016 June 30, 2015
------------------ ------------------
Operating ratio 95.2% 96.8%
Adjustments:
Intangible asset impairment charge - (2.42%)
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Adjusted operating ratio 95.2% 94.6%
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Adjusted Operating Profit
Adjusted operating profit excludes the impact of the intangible asset
impairment charge. Adjusted operating profit is presented to provide
additional perspective on underlying trends in Patriot's core operating
results. A reconciliation between operating profit and adjusted operating
profit is as follows:
Nine months ended Nine months ended
June 30, 2016 June 30, 2015
------------------ ------------------
Operating profit $ 4,336 2,953
Adjustments:
Intangible asset impairment charge - 2,074
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Adjusted operating profit $ 4,336 5,027
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