PATI - Earnings call transcript Q4 2021 | Patriot Transportation Holding, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Patriot Transportation Holdings Inc. Earnings Call for the Fourth Quarter of Fiscal Year 2021. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Sandlin, CEO and President of Patriot Transportation Holdings Inc. Sir, the floor is yours.

Rob Sandlin

you your being interest thank today the and for and in afternoon all on for call Good Patriot Transportation. Sandlin, Matt Financial Rob me our am CEO Transportation Officer. Patriot I and Chief today Accounting are and McNulty, Officer; Chief our John Klopfenstein, of with

made events future and get statements and are actual differ nature to our risks by that those such that into that could indicated results call we forward-looking let me their this Before you materially from statements. relate uncertainties cause caution to results, any during to the by subject

factors Additional company's uncertainties information regarding and these and the with be other Exchange the risk in and found Securities Commission. may filing

by compensation offset rates surcharges. was customer revenues turnover late $X.XX Transportation driver Today fiscal compared excluding the partially same Now $X.XX the the last mainly surcharges the to wages, from of share XXXX. and negatively reduction up mile approximately quarter losses $X,XXX,XXX effective $X,XXX,XXX, XX, Insurance Fuel increases. benefits of for same fourth down lower in down driver quarter was due driver I'm company in for $XX,XXX same transportation continue reported and quarter quarter improved surcharge income reduce to per year. were continued claims. ended versus account sorry, by share and decreased from year. fuel or this risk driver year's and one $X.XX the year. from XX% $XXX,XXX last this for same at quarter the fleet Depreciation package compared support last the reduction quarter to expense $XXX,XXX down quarter improved XX, the was first XXXX to reduction profit in per due an was $XX,XXX,XXX September were care ratio $X,XXX,XXX shortage, starting quarter size. $XXX,XXX -- quarter to rate $XXX,XXX decreased claims and insurance in impacted higher per XX.X% and our freight and $XXX,XXX in lower and revenue $XXX,XXX, offset the by increased health Operating Operating of XX.X $XX,XXX,XXX the quarter as This primarily quarter results. year. same Compensation to or count mix our lower was XXXX we the revenues April Total XX%. was fuel up count of fourth partially XX.X a year quarter net last $XX,XXX last or Transportation quarter $XXX,XXX due business revenue or quarter

reduce driver the resulted the down primarily per the year-end was $XX,XXX,XXX size account business on or for expense $X.XX our $X.XX net which we to company from per or health decreased $XXX,XXX excluding fuel our miles. for compared declining levels. continue last were was our as and this year. was share up to decreased from Compensation or X.X% an rate $XX,XXX,XXX $X,XXX,XXX, count. last to per down mix year claims. to year downsizing net benefits or income were down non-driver late and fleet and $X,XXX,XXX income real from decreased $XXX,XXX in revenues included $XXX,XXX revenue due period Total reported support of lower remainder $X,XXX,XXX positions. customer one losses Transportation Now attributable to Insurance to Transportation income due from XX%. surcharges lower and of estate revenue sales the $XXX,XXX company full beginning quarter to Fuel revenues care fuel of last miles was company $X.XX lower improved expense $X,XXX,XXX of up Net increases. primarily share $X,XX,XXX mainly per The reductions year. mile business Gross variance gains due $X,XXX,XXX the $X.XX from and first Depreciation year, meet of revenue results. share tax. to $X,XXX,XXX $XXX,XXX or surcharge

overall we to single year. significant improved, profit experienced preventable two to year, which $XXX,XXX $XXX,XXX $XXX,XXX. incidents XX.X rollover this us accident frequency last versus cost our was ratio While compared was year. was combined operating The Operating last tractor XX.X

of the the of negative Excluding operating fiscal the for year terminal impacts gain on was profit rollover accidents, sale and two $XXX,XXX. sites

downsize, the to of United and of we the year our company in Fiscal the the cyber-attack, quickly making colonial highlighted XXXX see year shortage continue for summary on in in States. demand severity From the customer of that by approximately equipment decrease in pipeline driver year These the pent-up, and late travel of to of pricing. the thereafter, count our XX impact severe our February most experienced driver capacity release drivers which we fuel in the due Now short-lived million and making from October but U.S. similar driver early early March, year the unexpected an The presumably supply COVID with through to revenue additional and began the the In ongoing in one the continued low count surge count. the part dropped cost an following spent face and $X XXXX the two But decline Shortly fiscal to XX compared had annualized is gasoline count XX% months. was and head to lack modestly vaccines. outlook. a of very we carriers, a and due driver cost we count more decrease the Eastern decision did concern following of drivers. The drivers but experienced with the applicants, biggest the of and industry freight of approximately absorb events reductions March, week-to-week. driver increase markets driver And seen additional than In our of on that today. that announcement of pay and driver driver the result government. increase. the running able in and training voluntary rates, months the by federal plus six in improve and X% increase were flat to one which levels increase, continuing in was to months our an trend of year is and approximately fiscal pre-COVID decline recently six into announce we we're that The amongst their the rate changed April, pay is the six viable agreed of customer improvement pay average. increase X% in all line conversation we prior XX% the of to a That customers in have saw half first that a driver our levels approximately to small still less third count the turnover in and the pre-COVID our the and

to compensation program focus our competitive continue on to and remain the We attractive driver in marketplace.

of will fiscal most fleet to we that partnering additional additional model. more of - our significant have longer cover of we agreed in This term customers market-by-market dedicated XXXX as a exploring a run our These small and driver quarter two are XXXX, strategy, increases During first and urban during with small agreements on the is well. announced be pay beyond. customers two to pay cost of challenging markets of with a group

service nimble be on and provides allows to challenging pay customer, markets. and us rate partners and it level driver fewer a increases to As of more higher

understand for and return or customers on focus forward. we the as reasonable supply move will chain need challenges We

midst in continue the growth water We these XXXX We in diversification expanded efforts operation of Florida customers as to in see and late successfully additional as the business product their in our opportunities growth into XXXX. in well. hauling foresee expanding

piece of new approximately annualized bulk recently revenue We dry with an a also $X.X opportunity million. added of business

backfill the turn back five October We new revenue also trailers earlier hired acquired business in customers existing private five Florida of a of We portion four in added the of we XXXX. dedicated and in drivers with petroleum their an customers help to trucks, fleet two us year.

shareholders addition, third three-year Early our $X.X a $X declared existing fits property operations. recent balance signed paying Immediately share. agreement in In million dividend of and we no to to This Tampa have in of our the XXXX, acquisition our and we nicely million. $X.XX million XXX% Georgia fiscal with their and in shareholders haul special Cumulatively, sheet into our most $X of remains strong approximately to after cash declared just dividends years. debt. two for over $X.XX the dividend, we per freight sold paid a under

in finish a registered on with Department to Finally, issues FASTPORT Labor we our of our in driver shortage, up the in for of supply recently and Labor the program. apprenticeship Department chain partnering applied

non-hazardous segment prior if new We in and are the other DOL a they are come driver areas. FASTPORT a we in bulk from whether industry, can driver with working background, to our career learning that into FMCSA, entrants military applicants interested determine or attract

and capacity. Thank as are entertain driver see the again will positive partnership impact will opportunity and additional to any be in months hopeful We this that DOL we with a in if questions. this interest happy will coming your our provide company for you

Operator

from first from Rudd Blackwell. [Operator Instructions] Your is question coming Steve

live. is line Your

Steve Rudd

the well the thing questions follow-up and a for for A Thanks way update. not few thanks Thanks. by and the, done. small

So right the now? first, count how many what's have, drivers do our we driver

Rob Sandlin

XXX.

John Klopfenstein

operators. With owner

Rob Sandlin

got that we about operators, changes number day-to-day. and I because hesitate, XXX, owner With sometime

So you number. I'll that give approximate

Steve Rudd

call. less think XXX of the XXX on we beginning about at were spoke, I June and And time conference Okay. XX drivers the we same July

Rob Sandlin

last are we the several Yes, relatively flat months. in

Steve Rudd

All right.

the right in relatively be you what translate stuff. then calculation the revenue guess in the, flat. driver to traditional all plus out your work can from big is a I do then terms bottom that's of driver, there. and doing And we line each are So they translate, what - to

Rob Sandlin

XXX,XXX. the annually. number XXX, I customer. on use of just around and use But We would the It depends market

Steve Rudd

XXX profit? in terms not revenue of

Rob Sandlin

revenue. Yes,

Steve Rudd

cost work it plus know driver, driver is out? What I does Okay. work through what the And the when then we don't to with to follow. that

Matt McNulty

number, Which what.

Steve Rudd

and then driver. the cost got We've revenue of

Rob Sandlin

You standpoint. about are profit a taking from

Steve Rudd

a profit I'm from trying out to a line. Yes, get standpoint. to profit

Rob Sandlin

really because replacing is driver at you're totally that incremental driver. you're that business no dependent I if profit a it's there to all. is that driver or ad That's upon, you just mean, - hard are a replacing with doing do

Steve Rudd

No, incremental I'm sorry. driver. I'm the saying for

and have months, drivers. XXX two -- have we So if or months we XXX five drivers currently

me that million. So gets X

Rob Sandlin

will of I I growth. It's incremental how XX% for good use you. make about just a would round number probably

you. If

Steve Rudd

me, envelope, was back about XX,XXX yes number. of the excuse That

Rob Sandlin

a that's able if think to grow you're I Yes, business, your yes. estimation, actually fair

Steve Rudd

many thing weak, this. the drivers you're do join then and I not a stabilized guys good to how program, say And you Right. we it's I DOL know have and to stabilized doing small

many as think in conference to hats bleeding. I drivers months, three off I every How hope for you've the because months, - call you stopped now six do So next you. said, the

So wind where hope can we we up? do

Rob Sandlin

here's me for - I best way to Well, think, the that. answer

departures of flat will at we fortunate the the stay If to holiday. because voluntarily season, also be the down drivers holiday applicant holidays, the you and look the relatively slows typically flow the during through

the fewer held side then So today. January three had and XX typically between of call first and pick back now up drivers true the it We've it got but that's days normal. and things see we'll fairly training, call in ago, that's then we weeks applicant on

flat period with I We just this stay of don't this started we So And driver during are Steve, market I've really program. unlike seen. hope time. ever know getting would this anything apprenticeship to really, we just is

go recruited were part fact, drivers drivers it's those out. went through trying due of not it program, there come the and with of ago to they and we've to Department that But DC, and a we're apprenticeship Department In far Federal that something two I so Motor back Labor. and Carrier as added of to figure Labor to actually but weeks Safety two we this the meet I'm did up

these time. them the We'd our on on these additional have put I'm bulk that out people our some providing at XX We spread there metropolitan love to to feedback back demand. across as this large a particularly work, weekly and - of metropolitan is business going back on in - so side system. start areas more And to think, drivers be of to companies dry basis

trucks put is opportunity an to the incrementally business, be drivers grow believe do the got to And that. to we've in so there but to there able we

Steve Rudd

a them of drivers of So price get everything more XX party it understand with even they look It's the you're like mean, number be doing your or customers, makes it. to I is and that partnering which brilliant increase transparency. it at let's form is because

and direction. XX the the So of right to I sense, end year target we though that's in in have experienced terms a guys and most up that, sales. most the you and you is comes will are - I a for great the the it to have silly, done to XXXX end the that you up of well the headed the you do by experience similar the drivers. but of next have over think increase. And the I ramp XXX second that you maybe Can definitely year, think December on or think be in have year, for over has you ramp XXX saying, can can could we you next in said industry the in think would the year my part, the ramp year drivers. call direction be to that And the sense I up to is, still at the in be

Rob Sandlin

think by you next add We could haven't could seen if parts. And this two we indicates XX drivers that take anything then that let's time I year.

far that orders that constraint generating tractors. enough today equipment so If for might trouble we you have would could, are an - out you in tractors have the

marketplace driver be buy potentially us. used But not their I'd that supply in Now, not say But we just would a we conference we the them, in driver if this shortage comments be call, could we each cause sales DC me force or for based heard applicants market, what that year tractors that there said I a there's pre-COVID. if shape. in may much see had you CEOs you'd on challenge had can the we of a be are tell better that one But around you XX% some that what you care lot a I to and maybe really constraint this and their any in today this of would the is mean, could capacity could I read week be half somewhere were you'd tractors. I've viable are glad happy. add available. - don't we drivers pre-COVID, the of and year, of and driver lease

this you it. that. it, with probably right do So minute realistic love that We it's to can we think to think along we just not would could do because grow

Steve Rudd

talk them we let's revenue, how So through right. drive incremental

incremental unsophisticated don't out carry revenue, in that XX,XXX. and XXX,XXX purchase drivers get much saying demand economy. maybe and just existing based away, revenue drivers how we the So are your profit of on a know okay our I generally the we because for incremental the I'm increased existing products you the

existing we two much. I are drivers, take So if profit at and price increases, base a customer look additional pushing there base the one through and is driver pretty

Rob Sandlin

Yes.

Steve Rudd

we So we feel can increases. push through additional price

Rob Sandlin

that's market have to frankly money. this return yes, something pay The been we've more lose up pay pretty insurance back do and are in the to this be We, and driver nobody industry this We wants business to about going got need frankly to that we've because breakeven going costs or company to market. increases and is than clear just investment. a get on reasonable for

price margins. we are only at to to increase increase, increase add price we're price not cover so we looking at looking when looking are And at cost,

your that cost to that's you've we've reduce incremental it, got done we're do pretty can't bit of add a to is be then one in of still potentially heavily and increases. got to business prices going to go. able have you've excess there way then And raise and if outlined to little your which cost, so more you And that to we've

Steve Rudd

of I driver then know your of constraints we terms utilization be how the Great. there? room existing of But the That's much of course. have these and thematic, on - road. amount driver in on the of allocation And terms do can on incremental restraints in pool, time

Rob Sandlin

our I that We to customer work off that's work I drivers there week. want days you make should There is the a to six are to really throughout productive. no, true time drivers and get be ability the And none. right. cover just industry, only lot there's everybody have. little, of energy, just base more to their we now, days They, very really spend to getting a is pretty There like think say, the else,

life, they focus becomes of are to just to people whole of they issue to relates families, quality business, So to their going continue and times, as a if have industry, in so attract life many drivers with truck quality and we're this and be whole want this something to on going industry. and got within the have to to the we've that's it

they are think I maxed candidly. about out

Steve Rudd

production was China I amazing of the things and and crazy would be It's a maxed Yes, versus define documentary imagine comparing it that really we what out they define it. as could here case.

based shares, a is line add driver incremental math to $X.XX on are drivers. basically right, bottom we of able you each a added So of my number if get

Rob Sandlin

So I don't know.

Matt McNulty

have run it for that close, a you. don't but calculator I I can

Steve Rudd

be - to everything I me, it. out Go $X.XX, ahead. is Modeling which will - think it's literally is is But because the you're succeed great to doing count, this interesting I it. because happy think, driver obviously I'd are variables you to to can we stable do always I except and right. that It's, that now tough. think insurmountable continue succeed at not

Matt McNulty

$X.XX.

Rob Sandlin

Right, $X.XX.

Steve Rudd

Okay.

know, it's get All amazing margin right, obviously stay you won't I'll I back, have each well share more. if given well And queue the and our into, So listen, we pretty then how into count. come get I driver. if back but significant low additional guys. the

predicting work. is good Really listed. mean Your very appreciate I you're it. doing

Rob Sandlin

Thank questions. Thanks interest. your the appreciate for We Thanks. you.

Operator

conference Please Sandlin Instructions] will to the queue. are questions remarks. you. ahead. Rob for the now I There hand back in go [Operator Thank CEO, no further closing

Rob Sandlin

and being appreciate call interest Have day. Transportation. good Patriot today for the a you your on in Thank we

Patriot Transportation Holding (PATI) 3 Dec 212021 Q4 Earnings call transcript