PATRIOT TRANSPORTATION HOLDING, INC./NEWS
Contact: Matt McNulty
Chief Financial Officer 904/858-9100
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PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES
RESULTS FOR THE FIRST QUARTER OF FISCAL 2018
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
January 31, 2018 -
First Quarter Operating Results.
The Company reported net income of $3,592,000, or $1.09 per share, compared
to net income of $912,000, or $.28 per share, in the same quarter last year.
First quarter 2018 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. The company's net
deferred tax liability was reduced as a result of the lower corporate income
tax rates applicable to the Company going forward. As the Company has a
September 30 fiscal year-end, the lower corporate income tax rate will be
phased in, resulting in a U.S. statutory federal rate of approximately 24.28%
for our fiscal year ending September 30, 2018, and 21% for subsequent fiscal
years. The effective tax rate including the effect of state income taxes, but
not including excess tax benefits from stock option exercises, is projected to
decrease from 39.5% to 30.5% for fiscal 2018 and 27.5% for subsequent years.
Total revenues for the quarter were $27,901,000, down $857,000 from the same
quarter last year. Transportation revenues (excluding fuel surcharges) were
$25,570,000, down $1,689,000. Miles declined by 599,000, or 6%, to 9,252,000
versus 9,851,000 in the same quarter last year.
The lower revenues in the quarter resulted from the impact of the business
lost during the second quarter of fiscal 2017. We have been successful at
replacing some of this lost business by expanding business with existing
customers and are focused on continuing to add business in markets where we
can hire drivers.
Compensation and benefits decreased $211,000 due to fewer miles driven but
were 5.7 cents per mile higher as a result of the recent driver pay increase
and higher training costs. Insurance and losses were only up $11,000 but were
1.9 cents per mile higher as last year's costs were reduced by a favorable
settlement of $152,000 of older insurance claims in the first quarter last
year. SG&A was also only up $11,000 but was 1.6 cents higher on a per mile
basis.
Net fuel expense (i.e. gross fuel expenses less fuel surcharges) decreased by
$614,000, or 5.1 cents per mile, due to fewer miles driven and higher fuel
surcharges due to higher average diesel prices.
Depreciation expense was down $132,000 as we sold excess equipment in our
efforts to right size our fleet. Corporate expenses were down by $130,000 due
mainly to the corporate management changes that occurred during fiscal 2017.
As a result, operating profit this quarter was $744,000 compared to $1,248,000
in the same quarter last year. Operating ratio was 97.3 this quarter versus
a 95.7 in the same quarter last year.
Summary and Outlook.
We continue to focus on adding business to replace the loss of business that
occurred last year. We recently entered into a new, three year agreement with
one of our top five largest accounts that will significantly increase our
business levels with this customer. This increased business is starting in
February and should be fully integrated in our results beginning in the third
quarter.
The driver market remains very tight. We implemented several hiring and
retention enhancements during fiscal 2017, including a pay increase in June
2017. In the first quarter, the driver turnover rate was 62.0% versus 55.8% in
the same quarter last year and 67.1% in the 4th quarter of fiscal 2017. This
quarter, our 3rd party insurance broker will be performing a Safety and Culture
perception survey throughout our organization in an effort to improve in these
areas and positively impact our bottom line results.
Our management team is committed to running the business efficiently,
measuring ourselves on equipment utilization and driver productivity, while
still maintaining a high level of safety and customer satisfaction. We have
made significant reductions to overhead costs this fiscal year and are
continuing the process of selling excess equipment to right-size the company
for our current business levels. We expect to have fully accomplished this
objective by the end of the 2nd quarter.
Management is committed to investing in our technology in order to set
ourselves apart from our competition and improve efficiencies. To date, we are
roughly 90% complete on installing our new in-cab PeopleNet delivery system as
well as our companywide IT network upgrades. This quarter we will be focused
on implementation of our new automated billing software and conversion of our
servers and systems to a 3rd party cloud services provider. These are being
done with the focus of enhancing the employee experience, improving customer
satisfaction and ultimately reducing expenses and improving our bottom line
results.
We operate in many of the best markets in the country and are known as a top
rated carrier in both safety and customer satisfaction. We are committed to
focusing on safety, revenue growth, driver retention, equipment utilization
and customer satisfaction. We 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 get to our operating ratio in the low to mid nineties.
Conference Call.
The Company will host a conference call on January 31, 2017 at 3:00 PM (EDT).
Analysts, shareholders and other interested parties may access the
teleconference live by calling 1-800-311-9408 domestic or international at
1-334-323-7224 then enter pass code 2365. 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/pth013118
or http://stream.conferenceamerica.com/pth013118.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 39897760. An audio archive can be accessed via the internet at
http://archive.conferenceamerica.com/archivestream/pth013118.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.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
THREE MONTHS ENDED
DECEMBER 31,
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2017 2016
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Revenues:
Transportation revenues $ 225,570 27,259
Fuel surcharges 2,331 1,499
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Total revenues 27,901 28,758
Cost of operations:
Compensation and benefits 11,873 12,084
Fuel expenses 4,122 3,904
Repairs & tires 1,573 1,638
Other operating 1,043 1,034
Insurance and losses 2,716 2,705
Depreciation expense 2,330 2,462
Rents, tags & utilities 855 863
Sales, general & administrative 2,322 2,311
Corporate expenses 487 617
(Gain) Loss on equipment sales (164) (108)
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Total cost of operations 27,157 27,510
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Total operating profit 744 1,248
Interest income and other 2 2
Interest expense (10) (32)
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Income before income taxes 736 1,218
Provision for income taxes (2,856) 306
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Net income $ 3,592 912
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Tax reform gain on retiree health 32 -
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Comprehensive Income $ 3,624 912
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Earnings per common share:
Net Income-
Basic 1.09 0.28
Diluted 1.09 0.28
Number of shares (in thousands)
used in computing:
-basic earnings per common share 3,303 3,290
-diluted earnings per common share 3,304 3,294