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 YEAR 2019
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
January 30, 2019
First Quarter Operating Results
The Company reported net income of $884,000, or $.27 per share, compared to
net income of $3,592,000, or $1.09 per share, in the same quarter last year.
First quarter 2018 net income included $3,041,000, or $.92 per share, due to
revaluing the company's net deferred tax liabilities per the Tax Cuts and Jobs
Act of 2017. First quarter 2019 net income included $634,000, or $.19 per
share, from gains on real estate sales.
Total revenues for the quarter were $28,054,000, up $153,000 from the same
quarter last year. Transportation revenues (excluding fuel surcharges) were
$24,980,000, down $590,000 mainly due to a $.07 per mile decrease on a higher
average haul length. Miles increased by 25,000 to 9,277,000 over the same
quarter last year partially offsetting the impact of the lower revenue per
mile ($67,000). Fuel surcharge revenue was $3,074,000, up $743,000 from the
same quarter last year due to higher diesel prices. Several locations were
impacted during the quarter by Hurricane Michael, and in particular our Panama
City location experienced severe damage and an extended shutdown period in
which we lost significant revenue that negatively impacted our operating
profit (~$50,000).
Compensation and benefits increased $165,000, or 2 cents per mile, mainly due
to increased driver training pay ($135,000) as average drivers in training
increased from 29 in the first quarter last year to 38 in this year's first
quarter. Owner operator count increased from 13 to 20 this quarter versus the
same quarter last year which increased our compensation and benefits cost. We
pay owner operators a higher percentage of the revenues they generate offset
by lower variable costs (e.g. fuel, maintenance) paid directly by the owner
operator. Fuel expenses increased $154,000, or 1 cent per mile, on higher
average diesel prices offset by improved fuel economy due to our longer
average haul length and more owner operators paying directly for their fuel.
Repair and tire expense increased $92,000 due to several high dollar repairs.
Other operating expenses were up $89,000 due to increased tolls, increased
driver hiring and travel expense and some site maintenance at a few of our
terminal offices. Insurance and losses increased $226,000 primarily due to
one very high dollar health claim ($334,000 in this quarter) partially offset
by reduced wreck repair expense ($119,000). Depreciation expense was down
$360,000 as a result of down sizing our fleet and placing twenty three full
service lease trucks in
certain markets where we do not have maintenance shops. However, during the
quarter we carried some excess equipment that we are currently in the process
of selling and that negatively impacted the quarter's results (~$100,000).
Sales, general & administrative costs increased $146,000 due mainly to accruals
for bonus compensation ($99,000) and higher IT and Payroll expense to support
the changes we are making to our systems and the way we compensate drivers.
Corporate expenses were up due mainly to non-recurring legal fees in connection
with becoming a "smaller reporting company" under new SEC guidelines. Gain on
sale of assets increased $759,000 due primarily to a gain of $866,000 on the
sale of a prior terminal site in Ocoee, Florida that was relocated to Orlando,
FL.
As a result, operating profit this quarter was $1,107,000 (which includes the
$866,000 gain from land sales and a $303,000 loss on health insurance) compared
to operating profit of $744,000 in the same quarter last year. Operating ratio
was 96.1 this quarter versus 97.3 in the same quarter last year.
Summary and Outlook
We sold an excess parcel of land in Ocoee, FL for $1,268,000 which benefitted
operating profit this quarter, increased our cash and reduced our capital
employed in the transportation business. This quarter was negatively impacted
by the large loss we experienced on health claims. We have implemented some
recent changes, in particular to our pharmacy and wellness plans, and expect
to see meaningful savings from those changes. The driver shortage and high
driver turnover remains a problem for the industry. With our number of drivers
in training improving over the prior several quarters, we are hopeful that our
initiatives are having their desired impact on attracting new drivers. Demand
for our services is still very high and we are continuing to allocate our
available resources 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.
Our team did an outstanding job throughout Hurricane Michael and its aftermath
and we are especially grateful for their dedication and perseverance. We are
in the process of repairing the damages to the Panama City terminal and
working with our insurance company to determine the insured value applicable
to the losses. At this point, we do not anticipate a material negative
financial impact from the damages we sustained.
We are not pleased with the bottom line operating results for this first
quarter but we do see several positive trends. Our balance sheet improved
during the quarter as we increased our cash and investments since September 30,
2018 by $2,903,000, increased shareholder equity by $942,000 and remained debt
free. We have seen a sustained improvement in the number of drivers in training
and are hopeful that will lead to an increase in our driver count. There has
been positive improvement in the market on pricing and there are plenty of
opportunities today to increase our business levels at better rates if we can
obtain additional driver capacity. We are in the process of selling excess
equipment which will reduce our depreciation, maintenance, tire and tag
expense. The recent changes we made to our pharmacy and wellness plans are
expected to generate material recurring savings on our health expense.
Management expects all of our IT
system related upgrades to be fully implemented during the second quarter of
fiscal 2019 and anticipate these changes will greatly enhance the capabilities
of our field personnel and our back office staff to provide improved customer
service. We are optimistic that the strategic plan we have in place will lead
to the improved operating profit we targeted for this fiscal year.
The Company will host a conference call on January 30, 2019 at 3:00 PM (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 83270. 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/pth013019 or
http://stream.conferenceamerica.com/pth013019.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 26726183. An audio archive can be accessed via the internet at
http://archive.conferenceamerica.com/archivestream/pth013019.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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2018 2017
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Revenues:
Transportation revenues $ 24,980 25,570
Fuel surcharges 3,074 2,331
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Total revenues 28,054 27,901
Cost of operations:
Compensation and benefits 12,038 11,873
Fuel expenses 4,276 4,122
Repairs & tires 1,665 1,573
Other operating 1,132 1,043
Insurance and losses 2,942 2,716
Depreciation expense 1,970 2,330
Rents, tags & utilities 847 855
Sales, general & administrative 2,468 2,322
Corporate expenses 532 487
Gain on disposition of PP&E (923) (164)
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Total cost of operations 26,947 27,157
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Total operating profit 1,107 744
Interest income and other 101 2
Interest expense (10) (10)
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Income before income taxes 1,198 736
Provision for (benefit from) income taxes 314 (2,856)
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Net income $ 884 3,592
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Unrealized investment gains, net 2 -
Tax reform gain on retiree health - 32
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Comprehensive Income $ 886 3,624
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Earnings per common share:
Net Income-
Basic 0.27 1.09
Diluted 0.27 1.09
Number of shares (in thousands)
used in computing:
-basic earnings per common share 3,328 3,303
-diluted earnings per common share 3,331 3,304
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
December 31, September 30,
2018 2018
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Assets
Current assets:
Cash and cash equivalents $ 436 1
Treasury bills available for sale 19,766 17,298
Accounts receivable (net of allowance
for doubtful accounts of $151 and $153,
respectively) 7,684 7,866
Federal and state taxes receivable 299 547
Inventory of parts and supplies 890 895
Prepaid tires on equipment 1,699 1,746
Prepaid taxes and licenses 397 609
Prepaid insurance 1,994 2,348
Prepaid expenses, other 116 134
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Total current assets 33,281 31,444
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Property and equipment, at cost 93,622 94,710
Less accumulated depreciation 60,636 60,799
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Net property and equipment 32,986 33,911
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Goodwill 3,431 3,431
Intangible assets, net 816 855
Other assets, net 181 176
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Total assets $ 70,695 69,817
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 3,589 3,271
Bank overdraft - 625
Accrued payroll and benefits 3,918 3,963
Accrued insurance 2,358 1,896
Accrued liabilities, other 237 408
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Total current liabilities 10,102 10,163
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Deferred income taxes 5,941 5,940
Accrued insurance 204 204
Other liabilities 1,100 1,104
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Total liabilities 17,347 17,411
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Commitments and contingencies
Shareholders' Equity:
Preferred stock, 5,000,000 shares authorized,
of which 250,000 shares are designated
Series A Junior Participating Preferred
Stock; $0.01 par value; none issued and
outstanding - -
Common stock, $.10 par value; (25,000,000
shares authorized; 3,328,466 and 3,328,466
shares issued and outstanding,
respectively) 333 333
Capital in excess of par value 37,492 37,436
Retained earnings 15,356 14,472
Accumulated other comprehensive income, net 167 165
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Total shareholders' equity 53,348 52,406
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Total liabilities and shareholders' equity $ 70,695 69,817
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