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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 SECOND QUARTER OF FISCAL YEAR 2018
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida;
April 25, 2018 -
Second Quarter Operating Results.
The Company reported a net loss of $188,000, or ($.06) per share, compared to
net income of $260,000, or $.08 per share, in the same quarter last year.
Total revenues for the quarter were $27,979,000, up $586,000 from the same
quarter last year. Transportation revenues (excluding fuel surcharges) were
$25,376,000, down $317,000 or 1.2%. Miles increased by 20,000 to 9,354,000
versus 9,334,000 in the same quarter last year. During the second and third
quarters of last fiscal year we lost sizeable pieces of business with two
large customers. Since that time, we have secured some replacement business,
including the recent integration of a large piece of new business in this
second quarter that will be flowing through during the last two quarters of
the fiscal year.
Compensation and benefits increased $588,000, or $.06 per mile, as a result
of the recent driver pay increase and higher training costs. Insurance and
losses were up $273,000 due mainly to (i) two costly environmental spills
during the first half of this fiscal year, neither of which involved any
third party vehicles, resulting in an actuarial loss adjustment of $335,000
to risk insurance, and (ii) some high dollar health insurance claims
resulting in a loss adjustment this quarter of $323,000 to health insurance.
SG&A was up $161,000 due to the reversal of $123,000 in bonus accruals in
the second quarter last year and $36,000 from severance expensed during this
quarter as we reduced management personnel.
Net fuel expense (i.e. gross fuel expenses less fuel surcharges) decreased by
$383,000 due to higher fuel surcharges. Depreciation expense was down $174,000
as we continued our efforts to right size our fleet. Corporate expenses were
down by $208,000 due mainly to the corporate management changes that occurred
during fiscal 2017. Gain on sale of assets increased $131,000 as we sold
excess equipment to right size our tractor fleet. The company records all of
the director's stock compensation expense in the second quarter of the fiscal
year and in this year's second quarter that expense totaled $368,000.
As a result, operating loss this quarter was $292,000 compared to operating
profit of $325,000 in the same quarter last year. Operating ratio was 101.0
this quarter versus a 98.8 in the same quarter last year.
First Six Months Operating Results for Fiscal year 2018.
The Company reported net income of $3,404,000, or $1.03 per share, compared
to net income of $1,172,000, or $.35 per share in the same period last year.
This year's first six months' net income included $3,041,000, or $.92 per
share, due to a deferred tax benefit resulting from revaluing the company's
net deferred tax liabilities per the Tax Cuts and Jobs Act of 2017.
Total revenues for the first six months were $55,880,000, down $271,000 from
the same period last year. Transportation revenues (excluding fuel surcharges)
were $50,946,000, down $2,006,000 or 3.8%. Miles declined by 579,000, or 3%,
to 18,606,000 versus 19,185,000 in the same period last year.
Compensation and benefits increased $377,000 as a result of the recent driver
pay increase and higher training costs. Insurance and losses were up $284,000
due to higher claims. SG&A was up $172,000 due mainly to severance expense as
we downsized some positions, excess costs associated with reorganizing our IT
department and higher advertising costs related to hiring drivers.
Net fuel expense (i.e. gross fuel expenses less fuel surcharges) decreased by
$997,000 due to fewer miles driven and higher fuel surcharges due to higher
average diesel prices. Depreciation expense was down $306,000 as we sold
excess equipment in our efforts to right size our fleet. Corporate expenses
were down $338,000 due mainly to the corporate management changes that
occurred during fiscal 2017.
As a result, operating profit was $452,000 compared to $1,573,000 in the same
period last year. Operating ratio was 99.2 versus a 97.2 last year.
Summary and Outlook.
This second quarter our team was heavily focused on the integration of the
recently awarded new business which began February 1st and was substantially
integrated by March 31st. In addition, we took on some smaller pieces of new
dedicated business with a handful of customers. In this quarter, we did
experience some additional business loss in a particular market as a customer
continued its transition to its private fleet. We also closed down our
Birmingham terminal due to our inability to hire and retain drivers and make
a suitable return on our investment in that market.
Driver hiring and retention is still very difficult. We were successful at
adding drivers in a few markets this quarter, in particular in a couple of the
markets where we were adding the recently awarded new business. However, other
terminals experienced declines in driver count, in particular in the market
where our customer converted to its private fleet. As a result, our overall
company driver count remained flat this quarter. Our turnover rate during this
quarter was 59.9% versus 70.2% in the same quarter last year. We did experience
a positive trend in driver
productivity as we saw our average transportation revenue per company driver
climb by 5.7% this quarter versus the same quarter last year.
In the past six to eight weeks, capacity in the market has become very tight
and there are an abundance of good business opportunities arising. Our task is
to provide our drivers to those customers willing to compensate us, not only
for our superior customer service, but also for the rising costs of driver pay,
retention and insurance expense.
We have made reductions to overhead costs this fiscal year, much of it during
the second quarter, causing us to incur some severance expense. We completed
our initiative to sell excess equipment during the 2nd quarter and the full
impact of both the overhead and equipment reductions should be fully realized
beginning in the 3rd quarter.
The driver shortage remains a significant headwind and we will remain focused
on driver retention as we move forward. The combination of recently increased
business levels, the increase in driver and equipment productivity and the
headcount reductions we've made should benefit the second half of this fiscal
year.
Conference Call.
The Company will host a conference call on April 25, 2018 at 3:00 PM (EDT).
Analysts, shareholders and other interested parties may access the
teleconference live by calling 1-800-311-9406 domestic or international
at 1-334-323-7224 then enter pass code 34732. 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/pth042518 or
http://stream.conferenceamerica.com/pth042518.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 39897760. An audio archive can be accessed via the internet at
http://archive.conferenceamerica.com/archivestream/pth042518.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 Commissionn.
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 SIX MONTHS ENDED
MARCH 31, MARCH 31,
--------------------- ---------------------
2018 2017 2018 2017
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Revenues:
Transportation revenues $ 25,376 25,693 $ 50,946 52,952
Fuel surcharges 2,603 1,700 4,934 3,199
------ ------ ------ ------
Total revenues 27,979 27,393 55,880 56,151
Cost of operations:
Compensation and benefits 12,043 11,455 23,916 23,539
Fuel expenses 4,304 3,784 8,426 7,688
Repairs & tires 1,685 1,625 3,258 3,263
Other operating 1,072 976 2,115 2,010
Insurance and losses 3,169 2,896 5,885 5,601
Depreciation expense 2,223 2,397 4,553 4,859
Rents, tags & utilities 887 860 1,742 1,723
Sales, general & administrative 2,442 2,281 4,764 4,592
Corporate expenses 790 998 1,277 1,615
Gain on equipment sales (335) (204) (499) (312)
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Total cost of operations 28,280 27,068 55,437 54,578
------ ------ ------ ------
Total operating (loss) profit (301) 325 443 1,573
Interest income and other 31 1 33 3
Interest expense (9) (32) (19) (64)
------ ------ ------ ------
Income (loss) before income taxes (279) 294 457 1,512
Provision for (benefit from)
income taxes (85) 34 (2,941) 340
------ ------ ------ ------
Net income $ (194) 260 $ 3,398 1,172
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Tax reform gain on retiree health - - 32 -
Comprehensive income $ (194) 260 $ 3,430 1,172
Earnings per common share:
Net Income (Loss) -
Basic $ (0.06) 0.08 1.03 0.36
Diluted $ (0.06) 0.08 1.03 0.35
Number of shares (in thousands)
used in computing:
-basic earnings per
common share 3,316 3,300 3,310 3,295
-diluted earnings per
common share 3,316 3,309 3,311 3,303
