Patriot Transportation Holding, Inc. Announces Results for the First Quarter of Fiscal 2016
January 27 2016 - 9:00AM
First Quarter Operating
Results.
Patriot Transportation Holding, Inc.
(NASDAQ:PATI) reported net income of $1,508,000 or $.46 per share
(which included $1,029,000, or $0.31 per share, of net income from
the settlement of a claim in connection with the 2010 Deepwater
Horizon event) compared to net income of $1,102,000 or $.34 per
share in the same quarter last year.
Total revenues were $29,371,000, down $2,346,000
over the same quarter last year due to lower fuel surcharges of
$3,063,000 as the price of diesel fuel was significantly lower this
quarter versus the same quarter last year. Additionally, the
first quarter of fiscal 2015 benefited greatly from the time lag
involved in reducing fuel surcharges during a rapidly declining
diesel fuel price environment. Transportation revenues
(excluding fuel surcharges) were up $717,000, or 2.6%, to
$28,009,000 on 368,000 fewer revenue miles. That is an
increase of 6.3% per mile versus the same quarter last year.
During the quarter, the Company successfully completed negotiations
and entered into a settlement agreement with BP Exploration and
Production, Inc. resulting in other income of $1,687,000 as
compensation for damages arising out of the Deepwater Horizon event
that occurred in 2010.
Cost of fuel was down $2,180,000 over the same
quarter last year which was not enough to fully off-set the
$3,063,000 reduction in fuel surcharge revenues resulting in a
negative impact of $883,000 this quarter versus the same quarter
last year. Fuel surcharge tables are customer specific and
can vary considerably from customer to customer. The typical
fuel surcharge table provides some margin contribution at higher
diesel fuel prices but that is not the case at the lower diesel
fuel prices we have been experiencing the past several
quarters. As long as the low diesel fuel prices continue, our
net fuel cost will be higher, negatively impacting our operating
profit. It will take some time to adjust our pricing to
reflect more accurately the current cost of doing
business.
Compensation and benefits costs were up $589,000
versus the first quarter of fiscal 2015 as we continue to invest in
improving in the areas of driver hiring, training and retention
through driver pay increases, additional recruiting costs, higher
training costs and a newly implemented “minimum pay” scale to help
us retain drivers. We are beginning to see the benefits of
our investments as we grew our ending driver count for this quarter
to 704 versus 686 in the same quarter last year.
SG&A was up $77,000 (despite $171,000 lower bonus accruals) as
we have invested in more resources to help better manage and
support our people in the field, to resolve issues with driver
hiring and turnover and to support our safety performance.
Corporate expense was $179,000 lower due to $73,000 lower bonus
accruals and also because the same quarter last year included
$250,000 in one-time spin-off costs.
Insurance and losses were up $179,000 as we
experienced two incidents in which our equipment was significantly
damaged.
As a result, operating profit this quarter was
$817,000 versus $1,833,000 in the same quarter last year.
Summary and Outlook.
During the quarter, higher costs associated with
hiring drivers, insurance and losses and the lower fuel surcharges
more than offset the growth in our transportation revenue.
Management believes we are seeing the benefits of our investment on
the driver hiring and retention front as our driver count has grown
and our annualized turnover rate improved from 79% in the fourth
quarter of last year to 65% this quarter. Our primary goal
for our shareholders is to grow profitably, maintain a strong
balance sheet and get back to our targeted returns on capital
employed. To that end, we remain focused on improving our
transportation revenue per mile, adjusting the fuel surcharge
pricing structure with our customers, and growing our driver count
to meet the strong seasonal demand typically beginning at the end
of the second quarter.
Conference Call.
The Company will also host a conference call on
Wednesday afternoon, January 27, 2016 at 3:00 PM (ET). Analysts,
shareholders and other interested parties may access the
teleconference live by calling 1-716-247-4865 or toll free
1-844-815-2880 then enter pass code 30819501. A live audio webcast
will be available at http://www.patriottrans.com/stock_page.asp. An
audio replay will be available for seven (7) days following the
conference call. To listen to the audio replay, dial toll free
800-585-8367 then enter pass code 30819501.
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 concentrating in the
hauling by motor carrier of liquid and dry bulk commodities.
|
PATRIOT TRANSPORTATION HOLDING, INC. AND
SUBSIDIARIES |
CONSOLIDATED AND COMBINED STATEMENTS OF
INCOME |
(In thousands) |
(Unaudited) |
|
|
|
THREE MONTHS ENDED |
|
|
DECEMBER 31, |
|
|
2015 |
|
2014 |
Revenues: |
|
|
|
|
|
|
|
|
Transportation revenues |
|
$ |
28,009 |
|
|
|
27,292 |
|
Fuel surcharges |
|
|
1,362 |
|
|
|
4,425 |
|
Total revenues |
|
|
29,371 |
|
|
|
31,717 |
|
|
|
|
|
|
|
|
|
|
Cost of
operations: |
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
12,572 |
|
|
|
11,983 |
|
Fuel expenses |
|
|
3,825 |
|
|
|
6,005 |
|
Repairs & tires |
|
|
1,809 |
|
|
|
1,814 |
|
Other operating |
|
|
1,090 |
|
|
|
1,137 |
|
Insurance and losses |
|
|
3,018 |
|
|
|
2,839 |
|
Depreciation expense |
|
|
2,148 |
|
|
|
2,108 |
|
Rents, tags & utilities |
|
|
949 |
|
|
|
941 |
|
Sales, general &
administrative |
|
|
2,399 |
|
|
|
2,322 |
|
Corporate expenses |
|
|
740 |
|
|
|
919 |
|
Loss (Gain) on equipment sales |
|
|
4 |
|
|
|
(184 |
) |
Total cost of
operations |
|
|
28,554 |
|
|
|
29,884 |
|
|
|
|
|
|
|
|
|
|
Total operating
profit |
|
|
817 |
|
|
|
1,833 |
|
|
|
|
|
|
|
|
|
|
BP Claim
Settlement |
|
|
1,687 |
|
|
|
— |
|
Interest income and
other |
|
|
3 |
|
|
|
— |
|
Interest expense |
|
|
(35 |
) |
|
|
(26 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
2,472 |
|
|
|
1,807 |
|
Provision for income
taxes |
|
|
964 |
|
|
|
705 |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
1,508 |
|
|
|
1,102 |
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income |
|
$ |
1,508 |
|
|
|
1,102 |
|
|
|
|
|
|
|
|
|
|
Earnings per
common share: |
|
|
|
|
|
|
|
|
Net Income- |
|
|
|
|
|
|
|
|
Basic |
|
|
0.46 |
|
|
|
0.34 |
|
Diluted |
|
|
0.46 |
|
|
|
0.34 |
|
|
|
|
|
|
|
|
|
|
Number of
shares (in thousands)used in computing: |
|
|
|
|
|
|
|
|
-basic earnings per common
share |
|
|
3,273 |
|
|
|
3,243 |
|
-diluted earnings per common
share |
|
|
3,277 |
|
|
|
3,243 |
|
|
|
|
|
|
|
|
|
|
Contact:
John D. Milton, Jr.
Chief Financial Officer
904/858-9100
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