Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to the Patriot Transportation Holdings Incorporated Earnings Call for the First Quarter of 2023. At this time all participants are placed on a listen-only mode and the floor will be open for questions and comments after the presentation.

It is now my pleasure to turn the floor over to your host, Mr. Rob Sandlin, President and CEO of Patriot Transportation. Sir, the floor is yours.

Rob Sandlin

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

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

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

of ended last Now, on for included $X.XX per first a for Today, $X,XXX,XXX XX, income the December gains the same our quarter estate. year, from after results. or income the $XXX,XXX share quarter quarter net compared share tax in real or company or of share which to XXXX, per $X.XX net per or $X.XX a $X,XXX,XXX reported

the for from $XX,XXX,XXX driver Miles surcharges or and count. improved quarter to mile up due mix. the per were $XXX,XXX, was last lower the rate down quarter $X.XX higher XX.X%. partially up were quarter Nashville and business due $X,XXX,XXX of closing fuel our this revenues increases, the year, Operating to same location Operating revenue

quarter package, mostly quarter. in The support last gain lower benefits was operating and to by to staff. $X,XXX,XXX to first $XXX,XXX quarter. in in was year’s sales increased was the Compensation offset expense the on and down compared $X,XXX,XXX, of compensation $XXX,XXX assets compared mainly count driver reduction Depreciation $XXX,XXX gains profit and for increased driver quarter a in this year’s last $XX,XXX due

and for acceptable quality looking goal investment. our return that at provides meets customers business on focused adding Outlook, year, an with business Summary stated of the XXXX adding we existing and new that For back our on

began and we had our cash end added of XXXX the no second going business debt. the and $X,XXX,XXX we new quarter with opportunities have the year, booked ﬁrst new with throughout outstanding quarter We at into As business quarter. of existing customers the forward

continue in will which rates put for to outstanding pressure the large calendar those the in with Interest rise industry XXXX, on more debt.

tractors provide XX tractors We believe will our lease of quarter. year replace is add replacing a and will existing ﬂeet company nine leased the use XX with tractors. owned ﬁnancial company during during company the better good result cash. We will tractors received tractors the units our will our and XX and replace of with XX a

the trailers lower down We and XXXX add at a trailers that forward, us of inﬂation replacement to prices, allowing price. small replace declines only more price will surcharges during going decline, also number hopes a and road

We our will and to focus continue driver on hiring retention.

low turnover During The our the seniority most with positive, late our resulting professionals. the group been among more quarter, we of year. among in year drivers or in results a XXXX has of adjusted drivers in was pay markets our raised dedicated not pay very on of this where

improved, year. New high slightly in this continues driver acquisitions slightly better time results while but to than last turnover, with result

company more drivers. monitor and rates experienced ability to this continue we have markets spot the to in on freight general declined, several As will have put operators and balance owner with

are volume Generally, and of positioned additional the new take industry for our ﬁrst and the petroleum committed closing, to year of believe are in increases, keep increases and during check. and well preventable target the with business. focus continue to on safety our In construction incidents seasonal advantage costs goals quarter we we business with second we'll to along quarter, we

questions. we again will in entertain interest Thank your and company, our happy for you any be to

Operator

you. Thank Instructions]. [Operator you. Thank

is first Olesen go from Olesen ahead. Our Christian Fund. with Value question Please coming

Christian Olesen

Thank you. and goals, of for more other and talk could about I quarter following rate little expectations bit guys maybe wanted the well? see your quarter you first plans XXXX calendar a as if increases to just in the

Rob Sandlin

thanks your question. for being for on the call Christian, Yeah and

that cost, is but market to is Certainly, of this added and some think additional I second I cover best of seeing, we good. rate. of budgeted the is far the for and inﬂation in price say would year, us that like but the going this of the along feel continuing are our have majority ﬁrst we're also that way as still allowing to some answer increases so and the quarter they planned so we help driver

Christian Olson

overall, pay, And is you great. drivers tank And more the a in bit that, could truck Okay, is in there industry pressures it drivers the comparing much? difference truck generally? terms comment any driver abating to on more just of

Rob Sandlin

driver more thing you night. is over think comparison weeks that let's say there they I out always always Yes, home time are our the industry, regional you a say and would mostly I ours at can in tank nature road and particularly drivers between the The draw. is a ﬁrst draw that in at for, the can truck are

with a that's drivers I their new family. think standpoint, a compensation typically our do driver over the from plus their road, than better home

haul though, that advantage bit that people is is into the So That most of in business. little of we there. industry I think way the long side getting the got a an break

six to working talking last for was So XX he of change to at he's said year and and for was out more fact want and a the road to years, us, on he's to our and home. he's happy making I they've got He drivers money. one gone jobs, weeks time, was really that be in

of real example life kind there. So a that's

so pay four that The half driver or had the far we of had year. this planned, terminals that did latter and six we increases in pay where not five the driver year increases of our had –

last, since lot April of I the And the over seen some, so pay while we've say 'XX. raised we've would a

and I between think XX% we save XX%.

inﬂation work chunks large with there's of Certainly, to part And routine some is, going so basis that something, but are of I where done. do on is the us. expectation behind to be real it think a that we think biggest

Christian Olson

much. Okay, thank you very

Rob Sandlin

Sure. you. Thank

Operator

you. Thank

Our next Close. ahead. with Koller question John coming Oppenheimer & from Please is go

John Koller

gentlemen. afternoon Good

Rob Sandlin

John. Hello

John Koller

have how training, because petered those curious questions and A into of I you as and about couple of the that could. that it largely progressing recruit number have out was they get you you’ve added. can drivers not calls any information also drivers idea give efforts those on had to was Usually if that some you these provide how and or if expected. are us I’m of you I wondering delivered new might

Matt McNulty

at the in producing drivers, from the slight revenue to somewhere year, start we a so currently there. roughly are yes, improvement XXX XXX’s So so

the as and January started for when second of And people is the then far fairly it typical start is mostly stays half seeing of trucking really in January, which making in through industry changes. holidays, and the as kind put everybody

seen before so we've mid so in we upper drivers up And that, prior were that's the of whereas training in in in actually the our weeks the mid-XXs couple last weeks to it. XXs,

certainly stick, through indicator, trend have it and positive So to see get training we'll a happens, because be if would a it continues. what but they leading

John Koller

seasonality has increasing, that. I've things pool you're too, been mask Okay, of that wondering if worker I'm some sounds might and that the reading some but seeing been been of yes, like the saying have it

Rob Sandlin

operators We the December, And today thing spot we've bit. prices than see does running a is we've the that in that owner owner other coming seen segment. don't freight come got back seen more year. little we much began we've down, to ﬁscal some did but when It with we the movement operators tank

and that keep to monitoring we're trying where we sure we like that balance so And make it.

a what positive happens. monitor continue folks those for and see that's haul, thing, freight so got So we'll that because we've to to

John Koller

on And getting come a risks might on may or Wondering been diﬃcult the producing I commercial with of think quick or I vehicle, on to balancing a I know that? saying wondering the and great. the like deductibles lot at just Okay, then reinsurance do about was read price is segment you self-insurance. at your place, has just and A But you out guys that insurance. somewhat the the diﬃcult you rewards which if where there if that? stuff question anything I'm least

Matt McNulty

those we I enough maybe we are sizable run retention would if spend there would were that spending is to our right we significantly between not numbers, plus them know a every cost. run we year. the lower today premium We that say our to seven what now figure in what versus gap

feel don’t to us us. and million see we’ve it of sweet kind the get expenses we surprised top comp a claim We although to the guess. and right we The we over $X.X deductible risk spot So still be the work at years are I last like you is that appears comp something one on premium. on really the and in look if did so work math to place at that year, decided have be a I for looked history the back of few

Rob Sandlin

a really premium, It's have the then the more been market. again way, the there past And would because that on wasn't at been deductible the looking hard market payback so risk, with four movement expensive. on lower a any or in hard it years other over the pretty to three of and really take

rewarded getting weren't as You much.

continue at. it of is groups, we've look stayed where but been for while we've kind a So in we those something to

Rob Sandlin

not this terrible. in our wasn't and year Yeah, not It few like the was it with – last been it years renewal everything being. had was

that was our the kind primary renewal range know and on the XX% under upper You on mid-teen layers. of in

John Koller

competition or guess? you that in get I'm you've more general, ﬁnding new wondering that and additional to business, know And have business, you're good adding Last curious, then how maybe you are ﬁnding just sharper? down how go. it know That's question the coming diﬃcult that know. I you're little and balancing you freight said been out it you're just I'm I'll Great! I rates able let and been given a to

Rob Sandlin

sure general those where lot down, and let operators have for freight industry When Yeah, of be I to the that's coming us, the and you rates for working. freight clarify, call. spot owner been not me and others say just on that's a for

of and revenue look you the making. been Hours spot when read the quarterly tank going trade truck about in up, per freight trade on industry. indicative our really not our journal and So be at the we've going announcements going that what's stuff and you to if mile are that's different prices, magazines

years see any rates to decline. over the freight don't dramatically are we that for last Our up two reason and

comparatively. a lot adds up decline partner per fuel and on it for service thing they that got going while freight looking basis, diesel selling and going It's compared for it's want supply, they've pretty certainly a us, the are or to to small, margin, that customers a because to at to is guarantee dollars that to quality gasoline not we're with this of portion of gallon people

rate not we're So really seeing any pressure downward.

John Koller

Great, thanks much. so

Rob Sandlin

Thank you.

Operator

you. Thank

ahead. Our coming Deysher next from is question Please John Pinnacle. go with

John Deysher

our Good afternoon questions. everyone. for take Thanks

Rob Sandlin

you. Thank

John Deysher

increases, revenue the fuel indicate talking because Could speciﬁcally? You charges higher about was improved are the and of on improved What business there mix? elaborate up business you you rate mix.

Rob Sandlin

you I'll examples. give Sure. of a Yes, couple

So into the marketplace. as improve one we and business of and then the everything our to things trying margin, about size downsizing were out we that was right talked to go

a going proﬁtable. Let's that are business to add decide can't market, more And we we a of driver capacity, given say number x that and have we've in to drivers. got make we how

a is and and rate business that's and Then and done a they it then x we driver we had up, them haul we we price, number to somebody a more them we with partners that's then if inﬂation, go can we've we've add ‘look, what got higher need downsize got in with to or what do said, different markets. stand, pay we've work well, for to just at than somebody go can they and at this, would increase exit if of else a of say, we can low get price, our

of products. it's – a combinate mix. More changing kind So than we're talking business what that's so about with

Matt McNulty

the customers. of It's one a just piece of higher for It's rated business. mix Yes. customer really swapping a

Rob Sandlin

Does that make sense?

John Deysher

sense. total Yeah, that makes

Rob Sandlin

good. Okay

John Deysher

swapping that you of are see customers customers the out margins there? terms you continuing do or higher for road in the end But, low of margin of reaching kind

Rob Sandlin

be we've ourselves some partners may we I a we a business and the two whole has There real, wake I had little the going and with that frankly up that. good aligned driver soon. are pocket think But and supply and are that time, end road. have with long it's it's shortage for anywhere and or customers hope reaching the good the and folks with done of really and a world to bit anytime to not chain

think products I customer the base end it's industry so really and our to to truck their realizes And user. that important the get tank

cycle I money going our we're are there pay return amount understand to a us in in where investment. to so for always be And reasonable reasonable a business, make are a they think willing that cycles to they and but of on

John Deysher

okay, Okay, makes that sense. Good.

In for the or the XXX driver What most recent the so. quarter? terms count mentioned – you turnover was

Matt McNulty

this turnover was Rough at XX%. quarter first

Rob Sandlin

our few a service. XX% of is and John, we're than year's is turning drivers churn what's of more have Most driver. year over ﬁrst interesting that that in very that all

John Deysher

Right, right? in ago? QX pretty Weren't were close a you but a that's ago, to year what XX% you around year

Matt McNulty

I back to that that. I know don’t ago get QX go year and could a

Rob Sandlin

were For up… the we year,

Matt McNulty

For about the year we were overall last year. XX%

John Deysher

right, All okay.

bit, good. down a little coming that’s So it’s

Matt McNulty

Two years it was XXX%. ago

Rob Sandlin

Yeah.

John Deysher

A was year ago it XXX%.

down. coming Okay, good, it so is

Rob Sandlin

time there. and of but trying see that money we what new these and something of the we it a lot can going want energy has so do we all a driver that lot staying we gyrations through time where more power, new to of spending we're spend because just training now so lot really impact a and to It’s are it, folks

John Deysher

good. right, all Okay,

talk you owned owning trucks, CapEx to lease results are - you replacing said you better opposed truck On us the economics side, as by better could results. behind explain versus it? the ﬁnancial why with through the leasing a replacing Could

Matt McNulty

on frankly purchase they tractor, down of we in are can throwing the significantly the ourselves. what quite it's of mean, I than then that fact cost higher they come are a interest building and that to top

John Deysher

truck? returns – are better the how leasing the the from the owning truck returns much versus So

Rob Sandlin

that that's You John, – that, out when is the I remember to per of can't those remember going number cents difference or that initially paying when the we mile dollars x ran paying you're thing happen ran of you're over lease you We the numbers. numbers. all life maintenance. the other for and of truck, truck,

to for ﬁrst that PM years, in maintenance see years, two at we're two when as the the doing going we're So signiﬁcant, a see we going be put type ﬁrst reduction to going trucks these work. least on, just cost a routine we're because well, to signiﬁcant

ﬁnance that in little even When what own with made a later the when for and that he bit life, in ran the leasing thing swing more that but the it and were you're might trucks. we getting whole around probably quite doing, us in substantial phone we was direction, we model, on other with companies, guy, it sense got agreed our, to

Matt McNulty

looking If you're money when less borrowing get number, their do rate us just that. makes money, high. with interest have for And pretty rates the higher, it the imputed to leasing we that's bank, sense companies to are into interest in

John Deysher

okay. Yeah,

Matt McNulty

year. rate last I in XX% did was our turnover same check, quarter the

John Deysher

It XX%, okay, it was XX%. now was and

Okay, that's good, that's ﬁne.

CapEx Q the yet, what for We was haven't QX? the seen but

Matt McNulty

$X million net.

John Deysher

roughly? How $XX $X three $XX the the million and million. be about million the net, going that next is total quarters, over unfold $XX to million, leaves does so

Rob Sandlin

coming of are provided vendors across a them maybe ﬁlter fourth lease quarter. the deliver quarter, trucks. tractors our spread on the one months that of But going they most then is time in I trackers to are bit little three the third we’ve way and the the hit the from in third over think about ten quarter a and that's and the So XX that's into got

Matt McNulty

Yes, second, mostly third. late

Rob Sandlin

third. mostly second, Late

Matt McNulty

Pretty Sure.

John Deysher

million three the out folds $XX next remaining So the quarters? then how over

Matt McNulty

I that for can so. do you,

Rob Sandlin

XX or XX trucks. heavy be XX, be to going It's maybe? and four Three can

Matt McNulty

be be it’ll No, at either It’ll more. heavy third.

more probably six two and two, like probably. it’s So

That's right. That's right.

Rob Sandlin

makes one Yeah, right. that sense. that's No,

John Deysher

time. If they come on

Rob Sandlin

have here here XX are be they on time. time. to If The on

Matt McNulty

will second that, locked late that much and with pretty them. quarter. we’re for XX ride third They in For

John Deysher

Okay.

four, two, three right? and six is that and two, two quarters So for

Rob Sandlin

Yes. Correct.

John Deysher

right, Thanks all much. have. we very good. That's All

Rob Sandlin

Okay, thank you.

Operator

questions There Thank in you. this at the no are time. queue further

will any I So comments back closing for hand you it to may Sandlin Mr. have.

Robert Sandlin

for Thank you, We your and to look all you talking you Transportation. quarter. with in interest Patriot forward next thank

Operator

Thank conclude you, today's does everyone, and conference call. this

wonderful you day time, thank have and You for at we your this may your lines a participation. disconnect and

Patriot Transportation Holding (PATI) 3 Feb 232023 Q1 Earnings call transcript