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 2019
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
December 4, 2019
Fourth Quarter Operating Results
The Company reported net income of $194,000, or $.06 per share, compared to
net income of $629,000, or $.19 per share, in the same quarter last year.
Net income in the fourth quarter of 2018 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 $26,128,000, down $2,653,000 from the same
quarter last year. Transportation revenues (excluding fuel surcharges) were
$23,855,000, down $1,885,000 or 7.3%. The decrease in transportation revenues
is primarily due to the decrease of 1,039,000 miles, or 10.9%, over the same
quarter last year as we had 18 less average drivers. Transportation revenue
per mile was up $.11 due to increased freight rates which has helped to offset
the negative impact of fewer miles. Fuel surcharge revenue was $2,273,000,
down $768,000 from the same quarter last year.
Compensation and benefits decreased $288,000 mainly due to lower company miles
partially offset by higher driver training pay and more owner operators. Fuel
expenses decreased $848,000 due to lower company miles and lower cost per
gallon. Repair and tire expense decreased $318,000 due to lower company miles.
Insurance and losses decreased $959,000 primarily due to lower health and
liability claims and higher wreck expense in the same quarter last year.
Depreciation expense was down $121,000 as a result of downsizing our fleet.
Gain on disposition of assets was $216,000 this quarter versus $356,000 in the
same quarter last year. Sales, general & administrative costs decreased
$130,000.
As a result, operating profit this quarter was $156,000 compared to operating
profit of $241,000 in the same quarter last year. Operating ratio was 99.4
this quarter versus 99.2 the same quarter last year.
Operating Results for Fiscal year 2019.
The Company reported net income of $1,763,000, or $.53 per share, compared to
net income of $5,119,000, or $1.54 per share in the same period last year.
This year's net income included $634,000, or $.19 per share, from gains on
real estate sales. Net income last year included $3,444,000, or $1.04 per
share, due to a deferred tax benefit resulting from the Tax Cuts and Jobs Act
of 2017. Income before income taxes was $2,393,000 this period versus
$2,197,000 in the same period last year.
Total revenues for the year were $108,716,000, down $5,349,000 from the prior
year. Transportation revenues (excluding fuel surcharges) were $98,279,000,
down $4,852,000. Miles declined by 2,258,000 to 35,666,000 versus 37,924,000
last year. The decline in miles and revenues was primarily due to the decline
in our average number of drivers from 580 in fiscal year 2018 to 538 in fiscal
year 2019 and the closure of our Charlotte terminal in May 2019.
Fuel expenses decreased by $1,629,000 due to fewer miles driven. Repair and
tire expense increased $179,000 due to more high-dollar repairs this fiscal
year versus last fiscal year. Other operating expenses were up $132,000 due
to increased tolls (most of which is billed to the customer), driver hiring
and out of town driver expense. Insurance and losses were down $2,303,000 due
mainly to lower auto liability expense ($1,355,000) resulting from the
favorable settlement of several prior years' claims and lower health expense
($657,000) due in large part to the recent changes to our wellness and
specialty drug plans. Depreciation expense was down $889,000 as we sold
excess equipment to right size our fleet. Sales, general & administrative
costs increased $149,000 due mainly to increased driver recruiting efforts
and higher IT expense (on now completed system upgrades). Gain on disposition
of assets increased $627,000 due primarily to a gain of $866,000 on the sale
of a prior terminal site in Ocoee, Florida and a gain of $231,000 on the
insurance settlement for hurricane damages and losses sustained at our Panama
City, Florida location.
As a result, operating profit was $1,979,000 compared to $2,046,000 in the
prior fiscal year. Operating ratio was 98.2 versus a 98.2 last year.
Summary and Outlook
Our balance sheet remains solid with $21 million of cash and investments and
no outstanding debt. We have grown our shareholder equity by $2.4 million this
fiscal year. Management is optimistic about the rate environment in light of
an increase of $.11 per mile, or 4.0%, on transportation revenue this quarter
versus the same quarter last year.
This year's revenue was negatively impacted mainly by the lower driver count
but also by Hurricanes Michael and Dorian. In the beginning of fiscal 2019,
we implemented a new driver "productivity/minimum" pay program designed to
attract and retain new drivers. As the year progressed, we did see a
meaningful increase in new hires, however, the desired positive impact on new
driver retention did not materialize resulting in significant added costs in
both driver training expense as well as driver minimum pay (>$1,000,000).
As a result, we eliminated that program at the beginning of October, 2019
and implemented a completely new driver pay package that includes seniority
raises, weekly productivity bonuses, a PTO buyback program and several other
features we hope will encourage retention as well as attract new drivers.
Auto liability insurance premiums across the transportation industry continue
to rise mainly as a result of an increase in nuclear verdicts. As a result,
the Company did experience a significant increase in premiums on our excess
layers upon renewal this year. On a positive insurance note, we recently
renegotiated our pharmacy and health plan agreements and are optimistic about
additional recurring savings throughout fiscal 2020.
In early November, 2019 the company closed on the acquisition of the assets
of Danfair Transport out of Americus, GA which had total revenues of
~$2,000,000 in 2018. We are very
excited about this acquisition as it fits nicely into one of the most stable
market areas in our network and provides an opportunity to grow with some
new customers in other markets we serve.
We completed the transition of our critical operating systems to a 3rd party
cloud service provider during fiscal 2019 and are seeing the benefits both
in improved operating efficiencies as well as reduced expense in our IT
department. During the remainder of fiscal year 2020, we will be piloting
on-board tractor camera systems to assist us in managing insurance claims as
well as improving driving behaviors.
We are focusing on strategies to diversify our product mix (e.g. chemicals)
and customer base if we determine we can achieve revenue growth as well as
margin improvement through those strategies. We will be implementing a new
automated dispatch module which management believes will bring significant
efficiencies to our operations and our customers. A great deal of our
success in fiscal 2020 is dependent upon our ability to push freight rates
higher, improve our driver retention and continue to focus on managing our
liability and health insurance programs. If we are successful in meeting
these goals, we are confident fiscal 2020 will see improved operating
results.
Conference Call
The Company will host a conference call on December 4, 2019 at 3:00 PM (EST).
Analysts, shareholders and other interested parties may access the
teleconference live by calling 1-844-602-0380 domestic or international at
1-862-298-0970. Computer audio live streaming is available via the Internet
through the Company's website at www.patriottrans.com at the Investor Relations
tab or https://www.investornetwork.com/event/presentation/56836. An audio
replay will be available for sixty (60) days following the conference call by
dialing toll free 1-877-481-4010 domestic or international 1-919-882-2331 then
enter pass code 56836. An audio archive can be accessed through the Company's
website at www.patriottrans.com on the Investor Relations tab or at
https://www.investornetwork.com/event/presentation/56836.
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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2019 2018 2019 2018
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Revenues:
Transportation revenues $ 23,855 25,740 $ 98,279 103,131
Fuel surcharges 2,273 3,041 10,437 10,934
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Total revenues 26,128 28,781 108,716 114,065
Cost of operations:
Compensation and benefits 11,674 11,962 47,549 48,010
Fuel expenses 3,537 4,385 15,805 17,434
Repairs & tires 1,801 2,119 7,373 7,194
Other operating 1,301 1,326 4,811 4,679
Insurance and losses 2,271 3,230 9,426 11,729
Depreciation expense 1,948 2,069 7,870 8,759
Rents, tags & utilities 835 851 3,406 3,385
Sales, general & administrative 2,376 2,506 9,884 9,735
Corporate expenses 445 448 2,270 2,124
Gain on dispositions of PP&E (216) (356) (1,657) (1,030)
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Total cost of operations 25,972 28,540 106,737 112,019
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Total operating profit 156 241 1,979 2,046
Interest income and other 116 93 446 190
Interest expense (7) (10) (32) (39)
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Income before income taxes 265 324 2,393 2,197
Provision for (benefit from)
income taxes 71 (305) 630 (2,922)
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Net income $ 194 629 $ 1,763 5,119
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Unrealized investment gains
(loss), net (5) (9) 14 (9)
Loss on retiree health, net (51) (32) (51) (32)
Tax reform gain on retiree health - - - 32
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Comprehensive income $ 138 588 $ 1,726 5,110
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Earnings per common share:
Net Income -
Basic $ 0.06 0.19 0.53 1.54
Diluted $ 0.06 0.19 0.53 1.54
Number of shares (in thousands)
used in computing:
-basic earnings
per common share 3,349 3,328 3,342 3,318
-diluted earnings
per common share 3,350 3,332 3,343 3,320
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
September 30, September 30,
2019 2018
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Assets
Current assets:
Cash and cash equivalents $ 15,233 1
Treasury bills available for sale 5,983 17,298
Accounts receivable (net of allowance
for doubtful accounts of $133 and $153,
respectively) 6,588 7,866
Federal and state taxes receivable 290 547
Inventory of parts and supplies 949 895
Prepaid tires on equipment 1,616 1,746
Prepaid taxes and licenses 536 609
Prepaid insurance 2,895 2,348
Prepaid expenses, other 334 134
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Total current assets 34,424 31,444
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Property and equipment, at cost 91,332 94,710
Less accumulated depreciation 57,765 60,799
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Net property and equipment 33,567 33,911
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Goodwill 3,431 3,431
Intangible assets, net 701 855
Other assets, net 170 176
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Total assets $ 72,293 69,817
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 3,184 3,271
Bank overdraft - 625
Accrued payroll and benefits 3,906 3,963
Accrued insurance 1,339 1,896
Accrued liabilities, other 398 408
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Total current liabilities 8,827 10,163
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Deferred income taxes 6,237 5,940
Accrued insurance 1,339 204
Other liabilities 1,093 1,104
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Total liabilities 17,496 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; 3,351,329 and 3,328,466
shares issued and outstanding,
respectively) 335 333
Capital in excess of par value 38,099 37,436
Retained earnings 16,235 14,472
Accumulated other comprehensive income, net 128 165
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Total shareholders' equity 54,797 52,406
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Total liabilities and shareholders' equity $ 72,293 69,817
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