PATRIOT TRANSPORTATION HOLDING, INC./NEWS
Contact: John D. Milton, Jr.
Chief Financial Officer 904/858-9100
------------------------------------------------------------------------------
PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES RESULTS FOR THE FOURTH QUARTER
OF FISCAL YEAR ENDED SEPTEMBER 30, 2016
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
November 16, 2016 -
Fourth Quarter Results for Fiscal Year 2016.
The Company reported net income of $2,088,000, or $.63 per share, compared to
net income of $1,585,000, or $.48 per share, in the same quarter last year.
This fourth quarter's net income was benefitted by $.24 per share as the
result of a gain on the sale of an easement.
Total revenues for the quarter were $30,391,000, up $62,000 from $30,329,000
in the same quarter last year. Transportation revenues (excluding fuel
surcharges) were up $582,000 to $28,882,000 and fuel surcharge revenues were
down $520,000 to $1,509,000. As a result of improved pricing and better
utilization of equipment, our transportation revenue per mile increased by
4.2% over the same quarter last year.
The Company's gross cost of fuel was down $503,000 over the same quarter last
year which was not quite enough to off-set the $520,000 decline in fuel
surcharge revenues.
Insurance and losses were $435,000 higher than the same quarter last year
primarily due to higher self insured health claims.
Corporate expense was $288,000 higher than the same quarter last year due
mainly to increased bonus and contingent stock compensation accruals required
in the fourth quarter.
On September 30, 2016, the Company received $1,340,000 for an easement granted
to the state of Florida over the Company's 25.2 acre terminal facility in
Tampa, Florida resulting in a $1,277,000 gain. The easement prohibits
residential development on the site and limits hotel development to a portion
of the site. Gains from equipment sales were $177,000 lower than the same
quarter last year.
Including the gain from easement sale, operating profit this quarter was
$3,454,000 compared to $2,633,000 in the same quarter last year.
Adjusted operating profit this quarter was $2,177,000, down $456,000 or 17%
compared to $2,633,000 in the same quarter last year due mainly to the
increased insurance and losses and higher corporate expense this quarter
versus the same quarter last year. Our adjusted operating
ratio was 92.8% compared to 91.3% in the same quarter last year. These non-GAAP
financial measures exclude gain from easement sale realized in the fourth
quarter of fiscal 2016. 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.
Fiscal Year 2016 Operating Results.
The Company reported net income of $5,705,000, or $1.74 per share compared to
net income of $3,339,000 for $1.02 per share, in 2015. The current year net
income includes (i) $779,000, or $.24 per share, of net income from the
$1,277,000 gain on the sale of the Tampa easement and (ii) $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 negative impact
to net income of $1,265,000, or $0.39 per share, related to the Pipeline
Transportation acquisition.
Total revenues were $120,172,000, down $2,710,000 from $122,882,000 last year.
Transportation revenues (excluding fuel surcharges) were up $4,298,000 to
$115,592,000 and fuel surcharge revenues were down $7,008,000 to $4,580,000.
Our transportation revenue per mile increased by 4.7% over last year.
Compensation and benefits costs were up $2,019,000 (or $.05 per mile) versus
last year due mainly to driver pay enhancements as we continue to invest in
hiring and retaining our driver force.
The Company's gross cost of fuel was down $5,138,000 over last year which was
not enough to off-set the $7,008,000 reduction in fuel surcharge revenues
resulting in a negative margin impact of $1,870,000 (or $.04 per mile) this
year versus last year. The Company's gross price of diesel fuel remained low
and in a fairly tight range throughout the fiscal year with the second quarter
having the lowest average cost per mile at $.31 and the fourth quarter having
the highest average cost per mile at $.35. Since the price of diesel began
declining in late 2014, the Company has experienced margin erosion as the
decline in fuel surcharge revenue outpaced the decline in diesel fuel cost.
During the first half of this year we were able to implement positive
adjustments to the fuel surcharge tables with many of our customers and those
adjustments contributed significantly to a positive trend of less margin
erosion resulting from the lower diesel fuel price (negative margin impact:
Q1 - $883,000 (or $.09 per mile), Q2 - $719,000 (or $.07 per mile),
Q3 - $251,000 (or $.02 per mile), Q4 - $17,000 (or $.002)).
SG&A was up $438,000 as we have hired more management personnel to focus on the
issues of driver hiring and turnover and to support our safety performance.
Corporate expense was lower by $257,000 compared to last year due mainly to the
sale of a 75% interest in the corporate airplane during the second quarter of
fiscal 2016.
Gain on equipment sales were $840,000 lower compared to last year primarily due
to fewer trailers sold and lower average value of tractors sold. Gain on
property sales were $1,277,000 higher as a result of the sale of the easement
in the fourth quarter.
Operating profit this year was $7,790,000 versus an operating profit of
$5,586,000 last year. This year's operating profit benefitted from the gain on
easement sale of $1,277,000 while the prior year was negatively impacted by the
$2,074,000 intangible asset impairment charge.
Adjusted operating profit this year was $6,513,000 versus an adjusted operating
profit of $7,660,000 last year. The lower results were mainly due to the
higher net fuel cost of $1,870,000 which mostly occurred in the first half of
this fiscal year prior to the positive adjustments we made to the fuel
surcharge tables. Our adjusted operating ratio was 94.6% compared to an
adjusted operating ratio of 93.8% last year. These non-GAAP financial measures
exclude gain from easement sale realized in the fourth 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 were successful this year in growing our per mile transportation revenue by
4.7% over last fiscal year. The substantial improvement in net fuel expense
the last two quarters is a tribute, not only to our management team, but also
to our customers who worked very hard with us to neutralize the impacts of the
fluctuating price of diesel fuel. We continue to focus on the difficult
challenge of hiring and retaining qualified drivers. Our strategy going
forward is to concentrate our growth efforts in the markets where we have been
successful finding those drivers. We will also focus our efforts on improving
our technology to enhance both our driver's and our customer's experience while
also working to lower our costs by streamlining and automating many of our
day-to-day processes.
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, retention
and customer satisfaction and are confident that execution of that focus will
enable us to improve our profitability. 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 Thursday, November 17, 2016 at
10:00 a.m. (EST). Analysts, stockholders and other interested parties may
access the teleconference live by calling 1-800-853-3894 (pass code 36412) for
domestic or 1-334-323-7224 (pass code 36412) 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/pth111716. Click on
the following link http://archive.conferenceamerica.com/archivestream/
pth111716.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 10265241. 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 INCOME
(In thousands)
(Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30
------------------ -------------------
2016 2015 2016 2015
------ ------ ------ ------
Revenues:
Transportation revenues $ 28,882 28,300 $ 115,592 111,294
Fuel surcharges 1,509 2,029 4,580 11,588
------ ------ ------ ------
Total revenues 30,391 30,329 120,172 122,882
Cost of operations:
Compensation and benefits 12,711 12,742 51,069 49,050
Fuel expenses 3,831 4,334 15,157 20,295
Repairs & tires 1,971 2,137 7,777 7,876
Other operating 1,255 1,305 4,719 4,520
Insurance and losses 2,386 1,951 10,358 10,249
Depreciation expense 2,352 2,156 8,870 8,486
Rents, tags & utilities 981 1,010 3,834 3,892
Sales, general &
administrative 2,610 2,409 9,626 9,188
Corporate expenses 658 370 2,946 3,203
Intangible asset impairment - - - 2,074
Gain on property sale (1,277) - (1,277) -
Gain on equipment sales (541) (718) (697) (1,537)
------ ------ ------ ------
Total cost of operations 26,937 27,696 112,382 117,296
------ ------ ------ ------
Total operating profit 3,454 2,633 7,790 5,586
BP claim settlement - - 1,687 -
Interest income and other 2 - 6 -
Interest expense (32) (34) (130) (112)
------ ------ ------ ------
Income before income taxes 3,424 2,599 9,353 5,474
Provision for income taxes 1,336 1,014 3,648 2,135
------ ------ ------ ------
Net income $ 2,088 1,585 $ 5,705 3,339
====== ====== ====== ======
Earnings per common share:
Net Income -
Basic 0.63 0.48 1.74 1.02
Diluted 0.63 0.48 1.74 1.02
Number of shares (in
thousands) used in computing:
-basic earnings
per common share 3,289 3,272 3,283 3,268
-diluted earnings
per common share 3,291 3,276 3,285 3,275
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. 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 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:
Three months ended Three months ended
September 30, 2016 September 30, 2015
------------------ ------------------
Operating profit $ 3,454 2,633
Adjustments:
Gain on property sale (1,277)
------------------ ------------------
Adjusted operating profit $ 2,177 2,633
================== ==================
Twelve months ended Twelve months ended
September 30, 2016 September 30, 2015
------------------ ------------------
Operating profit $ 7,790 5,586
Adjustments:
Gain on property sale (1,277) -
Intangible asset impairment charge - 2,074
------------------ ------------------
Adjusted operating profit $ 6,513 7,660
================== ==================
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:
Three months ended Three months ended
September 30, 2016 September 30, 2015
------------------ ------------------
Operating ratio 88.6% 91.3%
Adjustments:
Gain on property sale 4.2% -
------------------ ------------------
Adjusted operating ratio 92.8% 91.3%
================== ==================
Twelve months ended Twelve months ended
September 30, 2016 September 30, 2015
------------------ ------------------
Operating ratio 93.5% 95.5%
Adjustments:
Gain on property sale 1.1% -
Intangible asset impairment charge - (1.7%)
------------------ ------------------
Adjusted operating ratio 94.6% 93.8%