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 2020
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
January 29, 2020
First Quarter Operating Results
The Company reported a net loss of ($464,000), or ($.14) per share, compared
to net income of $884,000, or $.27 per share, in the same quarter last year.
Net income in the first quarter of 2019 included $634,000, or $.19 per share,
from gains on real estate sales.
Total revenues for the quarter were $24,809,000, down $3,245,000 from the
same quarter last year. Transportation revenues (excluding fuel surcharges)
were $22,599,000, down $2,381,000 or 9.5%. The decrease in transportation
revenues is primarily due to the decrease of 1,317,000 miles, or 14.2%, over
the same quarter last year as we closed our Charlotte terminal in May of 2019
and have downsized certain customer accounts due to low freight rates.
Transportation revenue per mile was up $.15, or 5.6%, due to improved freight
rates on the majority of our business which produced $1,194,000 in additional
revenue in the quarter. Fuel surcharge revenue was $2,210,000 down $864,000
from the same quarter last year due to lower miles and lower diesel prices.
Compensation and benefits decreased $1,040,000 mainly due to lower company
miles, fewer non-driver employees and lower driver training pay. Fuel
expenses decreased $813,000 due to lower company miles and lower cost per
gallon. Insurance and losses decreased $173,000 primarily due to lower risk
insurance offset by higher health claims. Gain on disposition of assets was
$122,000 this quarter versus $923,000 in the same quarter last year which
included a gain of $866,000 on the sale of a prior terminal site in Ocoee,
Florida.
As a result, operating loss this quarter was ($724,000) compared to
operating profit of $1,107,000 in the same quarter last year. Operating
ratio was 102.9 this quarter versus 96.1 the same quarter last year.
Dividend
In December, the Company declared a special cash dividend of $3.00 per share,
or approximately $10 million in the aggregate, on the Company's outstanding
common stock. This one-time, special dividend is payable on January 30, 2020,
to shareholders of record at the close of business on January 15, 2020. The
Company also declared a quarterly dividend of $0.15 per share, payable on
January 30, 2020, to shareholders of record on January 15, 2020.
Summary and Outlook
Our balance sheet remains solid with $19 million of cash and investments and
no outstanding debt. The biggest headwinds facing us today continue to be
driver turnover, risk insurance premiums and retaining business volumes with
certain customers at profitable freight rates. During the 1st quarter, the
Company renegotiated one of our largest customer contracts resulting in the
Company turning back ~$3.8M of annualized revenue on marginally rated business
while receiving an average additional 2.5% rate increase in addition to the
2.3% contractual CPI increase on a substantially larger volume of business
we retained. We also walked away from some smaller accounts due to freight
rates. As a result, we have capacity in our system as we head into the busy
season and will offer that capacity to customers willing to pay for high
quality customer service and safety.
We are very focused on controlling our fixed costs. We spent the past year
retooling our health benefits platform, most of which was fully flowing
through in the 1st quarter of 2020. Those efforts have resulted in quarterly
savings of ~$300,000 over prior years. However, we remain self-insured on our
health care and pharmacy plans and our Q1 medical claims exceeded our recent
average quarterly claims rate by ~$575,000 resulting in a quarterly charge of
$588,000 on health benefits.
Beginning in October, 2019 we implemented a completely new driver pay package
that by and large has been a success. We were able to remain relatively flat
on our driver count with fewer average drivers in training resulting in a
savings of $134,000 on training pay this quarter versus the same quarter
last year.
Auto liability insurance expense was down quarter over quarter as we
experienced relatively good performance on our safety metrics and negotiated
the closure of three years' worth of prior claims resulting in a gain to the
Company.
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
~$2,300,000 in 2018. The transition has gone very smoothly and to date we
have retained all of the customers and added some new business with one of
their customers in another market. This is a very exciting opportunity for
us and one we believe will add a meaningful benefit to the Company longer
term.
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In summary, we are not pleased with our operating performance in Q1 and have
a lot of work ahead to be successful during the remainder of this fiscal
year. Q1 is typically the slowest seasonal revenue quarter in our fiscal year
and volumes will start to pick up as we move into the 2nd half of Q2 and into
the summer travel season. While we still have some room for improvement in
certain areas related to expense, we have taken many steps over the past
several quarters to align our costs with current business levels. We will
continue to push freight rates to profitable levels as we move forward. The
greater challenge we face today is adding back revenue at acceptable freight
rates with new and existing customers who value service-oriented
partnerships. We are focusing on strategies to diversify our product mix
(e.g. chemicals) and customer base. We have recently added two additional
members to our sales team in an effort to explore the long-haul chemical
market and gain exposure to petroleum customers that we do not haul for
today. These efforts are an integral part of strategically growing our
revenues back and returning to acceptable levels of operating profit as we
move into the busy season in 2020.
Conference Call
The Company will host a conference call on January 29, 2019 at 3:00 PM (EST).
Analysts, shareholders and other interested parties may access the
teleconference live by calling 1-844-369-8770 domestic or international at
1-862-298-0840. 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.webcaster4.com/Webcast/page/2058/32833. 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 57403. An audio archive can be accessed through the
Company's website at www.patriottrans.com on the Investor Relations tab or at
https://www.webcaster4.com/Webcast/page/2058/32833.
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.
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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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2019 2018
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Revenues:
Transportation revenues $ 22,599 24,980
Fuel surcharges 2,210 3,074
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Total revenues 24,809 28,054
Cost of operations:
Compensation and benefits 10,998 12,038
Fuel expenses 3,463 4,276
Repairs & tires 1,751 1,665
Other operating 956 1,132
Insurance and losses 2,769 2,942
Depreciation expense 1,950 1,970
Rents, tags & utilities 750 847
Sales, general & administrative 2,481 2,468
Corporate expenses 537 532
Gain on disposition of PP&E (122) (923)
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Total cost of operations 25,533 26,947
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Total operating profit (loss) (724) 1,107
Interest income and other 85 101
Interest expense (8) (10)
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Income (loss) before income taxes (647) 1,198
Provision for (benefit from) income taxes (183) 314
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Net income (loss) $ (464) 884
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Unrealized investment gains, net - 2
Reclassification adjust for net
investment gains realized in net income (5) -
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Comprehensive Income (Loss) $ (469) 886
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Earnings per common share:
Net Income (loss)-
Basic (0.14) 0.27
Diluted (0.14) 0.27
Number of shares (in thousands)
used in computing:
-basic earnings per common share 3,351 3,328
-diluted earnings per common share 3,351 3,331
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
December 31, September 30,
2019 2019
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Assets
Current assets:
Cash and cash equivalents $ 19,123 15,233
Treasury bills available for sale - 5,983
Accounts receivable (net of allowance
for doubtful accounts of $131 and $133,
respectively) 6,294 6,588
Federal and state taxes receivable 486 290
Inventory of parts and supplies 907 949
Prepaid tires on equipment 1,580 1,616
Prepaid taxes and licenses 387 536
Prepaid insurance 2,810 2,895
Prepaid expenses, other 332 334
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Total current assets 31,919 34,424
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Property and equipment, at cost 89,990 91,332
Less accumulated depreciation 55,830 57,765
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Net property and equipment 34,160 33,567
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Operating lease right-of-use assets 3,595 -
Goodwill 3,637 3,431
Intangible assets, net 1,112 701
Other assets, net 165 170
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Total assets $ 74,588 72,293
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 2,421 3,184
Accrued payroll and benefits 3,295 3,906
Accrued insurance 1,112 1,339
Accrued liabilities, other 575 398
Operating lease liabilities,
current portion 1,166 -
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Total current liabilities 9,112 8,827
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Operating lease liabilities less
current portion 2,642 -
Deferred income taxes 6,237 6,237
Accrued insurance 1,339 1,339
Other liabilities 871 1,093
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Total liabilities 20,201 17,496
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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 3,351,329
shares issued and outstanding,
respectively) 335 335
Capital in excess of par value 38,158 38,099
Retained earnings 15,771 16,235
Accumulated other comprehensive income, net 123 128
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Total shareholders' equity 54,387 54,797
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Total liabilities and shareholders' equity $ 74,588 72,293
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