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 FOURTH QUARTER AND FISCAL YEAR 2018
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
November 28, 2018 -
Fourth Quarter Operating Results
The Company reported net income of $629,000, or $.19 per share, compared to
net income of $201,000, or $.06 per share, in the same quarter last year.
This quarter's net income included $403,000, or $.12 per share, due to a
deferred tax benefit resulting from finalizing the revaluation of the
company's net deferred tax liabilities per the Tax Cuts and Jobs Act of 2017.
Total revenues for the quarter were $28,781,000, up $871,000 from the same
quarter last year. Transportation revenues (excluding fuel surcharges) were
$25,740,000, down $367,000 or 1.4%. Hurricane Florence had an estimated impact
of $126,000 in lost revenue during the quarter. Miles increased by 215,000, or
2.3%, to 9,506,000 versus 9,291,000 in the same quarter last year. During the
second and third quarters of last fiscal year we lost sizeable pieces of
business with two large customers most of which was shorter run, higher
revenue per mile business. Since that time, we replaced a meaningful portion
of the lost business with longer run, lower revenue per mile business. As a
result, our average haul length increased by 6.8% while our transportation
revenue per mile has decreased by 3.6%, or $0.10 per mile.
Compensation and benefits decreased $334,000, or 6 cents per mile, mainly due
to (i) reducing personnel costs as our driver count declined (ii) lower
driving pay per mile due to a longer average haul length, and (iii) lower
driver training pay. Due to higher diesel prices, gross fuel expense was up
$704,000 while fuel surcharges were up $1,238,000. Other operating expenses
were up $52,000 inclusive of one-time environmental accruals for required
remediations at two locations ($88,000). Insurance and losses increased
$670,000 primarily due to higher health claims and some large wreck repairs.
Depreciation expense was down $265,000 as a result of right sizing our fleet
during the year. Sales, general & administrative costs increased $140,000
primarily due to higher health claims and increased HR/Payroll, driver
recruiting and IT spending to support the business. Corporate expenses were
down by $57,000 due mainly to lower legal fees and corporate management
changes that occurred at the beginning of fiscal 2018. Gain on sale of assets
increased $192,000 as we sold excess equipment, including excess trailers.
As a result, operating profit this quarter was $241,000 compared to operating
profit of $265,000 in the same quarter last year. Operating ratio was 99.2
this quarter versus 99.1 the same quarter last year.
Operating Results for Fiscal year 2018.
The Company reported net income of $5,119,000, or $1.54 per share, compared to
net income of $1,829,000, or $.55 per share in the same period last year. This
year's net income included $3,444,000, or $1.04 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.
Total revenues for the year were $114,065,000, up $1,900,000 from the prior
year. Transportation revenues (excluding fuel surcharges) were $103,131,000,
down $2,203,000 or 2.1% mainly due to the business losses in the second and
third quarters of last year partially offset by the replacement of a meaningful
portion of that business starting in the second quarter of this year. Miles
declined by 76,000 to 37,924,000 versus 38,000,000 last year.
Compensation and benefits decreased $99,000 as a result of reducing personnel
costs ($439,000) and lower driver pay and benefits expense ($1,155,000) mostly
offset by higher owner operator pay ($1,495,000) as we added owner operators
during the fiscal year. Net fuel expense (i.e. gross fuel expenses less fuel
surcharges) decreased by $1,660,000 due to higher fuel surcharges on higher
average diesel prices. Other operating expenses increased $261,000 due mainly
to increased tolls (in most cases we bill our customers for toll expenses),
environmental accruals and site maintenance and repairs at some of our
terminal offices. Insurance and losses were up $1,001,000 due mainly to higher
liability ($708,000) and medical ($575,000) claims partially offset by lower
workers' compensation expense. Depreciation expense was down $783,000 as a
result of right sizing our fleet. SG&A was up $331,000 due mainly to severance
expense, reorganizing our IT department, upgrading our IT infrastructure and
higher advertising costs related to hiring drivers. Corporate expenses were
down $587,000 due mainly to a decrease in legal and consulting fees and
corporate management changes that occurred at the beginning of fiscal 2018.
Gain on sale of assets increased $459,000 as we sold excess equipment,
including excess trailers.
As a result, operating profit was $2,046,000 compared to $2,372,000 in the
prior fiscal year Operating ratio was 98.2 versus a 97.9 last year.
Summary and Outlook
The big takeways from FY 2018 are a continued decline in quantity and quality
of driver applicants in the market and increased difficulty in hiring and
retaining drivers at a pace that exceeds our turnover rate. During the latter
half of the fiscal year, we implemented several changes focused on expediting
the interview and job offer to available drivers and retaining
them once they come on board, including a significant change in the way we pay
our drivers. The programs are still in their early days but we are encouraged
by the results thus far as we have seen a recent uptrend in the number of
drivers we have in training each week. Customer demand continues to challenge
the tanker industry's capacity in most markets in which we operate. We continue
to allocate our resources on a daily basis to fulfill the needs of those
customers who are willing to partner with us on both pricing and efficiently
managing the day to day operation of our business. We continue to experience
positive trends in our average transportation revenue per company driver
(increased by 9.4%) and our average total revenue per tractor (increased by
11.5%). We made significant progress on our IT and operational systems overhaul
and expect most of these upgrades to go live during the first quarter of fiscal
2019. We anticipate these changes will greatly enahnce the capabilities of our
field personnel and our back office staff to provide improved customer service.
We remain debt free and increased cash from $11 million to $17 million during
fiscal year 2018.
Conference Call
The Company will host a conference call on November 29, 2018 at 10:00 AM
(EDT). Analysts, shareholders and other interested parties may access the
teleconference live by calling 1-800-311-9409 domestic or international at
1-334-323-7224 then enter pass code 39873. 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/pth112918 or
http://stream.conferenceamerica.com/pth112918.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 81091827. An audio archive can be accessed via the internet at
http://archive.conferenceamerica.com/archivestream/pth112918.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 TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30
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2018 2017 2018 2017
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Revenues:
Transportation revenues $ 25,740 26,107 $ 103,131 105,334
Fuel surcharges 3,041 1,803 10,934 6,831
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Total revenues 28,781 27,910 114,065 112,165
Cost of operations:
Compensation and benefits 11,962 12,296 48,010 48,109
Fuel expenses 4,385 3,681 17,434 14,991
Repairs & tires 2,119 1,952 7,194 7,077
Other operating 1,326 1,274 4,679 4,418
Insurance and losses 3,230 2,560 11,729 10,728
Depreciation expense 2,069 2,334 8,759 9,542
Rents, tags & utilities 851 841 3,385 3,384
Sales, general &
administrative 2,506 2,366 9,735 9,404
Corporate expenses 448 505 2,124 2,711
Gain on equipment sales (356) (164) (1,030) (571)
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Total cost of operations 28,540 27,645 112,019 109,793
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Total operating profit 241 265 2,046 2,372
Interest income and other 93 2 190 6
Interest expense (10) (1) (39) (80)
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Income before income taxes 324 266 2,197 2,298
Provision for income taxes (305) 65 (2,922) 469
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Net income $ 629 201 $ 5,119 1,829
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Unrealized loss on investment, net (9) - (9) -
Loss on retiree health, net (32) - (32) -
Tax reform gain on retiree health - - 32 -
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Comprehensive income $ 588 201 $ 5,110 1,829
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Earnings per common share:
Net Income -
Basic $ 0.19 0.06 1.54 0.55
Diluted $ 0.19 0.06 1.54 0.55
Number of shares (in
thousands) used in computing:
-basic earnings
per common share 3,328 3,304 3,318 3,299
-diluted earnings
per common share 3,332 3,306 3,320 3,302