Patriot Transportation Holding, Inc. (NASDAQ:PATI)
Fourth Quarter Operating Results for
Fiscal year 2017.
The Company reported net income of $201,000, or
$.06 per share (inclusive of $38,000, or $.01 per share, due to a
reduced tax expense from stock option exercises in accordance with
newly adopted accounting guidance), compared to net income of
$2,088,000, or $.63 per share, in the same quarter last year.
Last year’s quarter included $779,000, or $.24 per share, from the
gain on the sale of an easement at our Tampa, FL terminal.
Total revenues for the quarter were $27,910,000,
down $2,481,000 from the same quarter last year. Transportation
revenues (excluding fuel surcharges) were $26,107,000, down
$2,775,000. Miles declined by 1,243,000, or 12%, to 9,292,000
versus 10,535,000 in the same quarter last year. The transportation
revenue per mile increased by 2.5% partially offsetting the mileage
decline.
The lower revenues in the quarter resulted from
the impact of the business lost during the second quarter with a
particular customer in a competitive bid and the transition of
another customer to its privately owned fleet. We have had some
success at replacing this lost business and are focused on
continuing to add business in markets where we can hire
drivers.
We also experienced lower revenues in the
quarter due to the impacts of Hurricanes Harvey and Irma as several
terminals closed completely during the storm and for several days
following some terminals were operating at less than full
capacity.
Compensation and benefits decreased $415,000 due
to fewer miles driven but were higher on a per mile basis as a
result of the recent driver pay increase and higher training
costs. Net fuel expense (i.e. gross fuel expenses less fuel
surcharges) decreased by $444,000 due to fewer miles driven and
higher fuel surcharges.
Insurance and losses were up by $174,000 versus
the same quarter last year due mainly to higher risk claims
partially offset by lower health claims. SG&A was down
$244,000 and corporate expenses were down by $153,000 due to no
bonus compensation expense in the current year and lower head
counts.
As a result, operating profit this quarter was
$265,000 compared to $3,454,000 in the same quarter last
year. Last year included $1,277,000 from the sale of the
easement in Tampa, FL. Operating ratio was 99.1 this quarter
versus a 92.8 in the same quarter last year excluding the gain on
the Tampa easement sale.
Results for Fiscal year
2017.
The Company’s net income was $1,829,000, or $.55
per share (inclusive of $427,000, or $.13 per share, due to a
reduced tax expense from stock option exercises in accordance with
newly adopted accounting guidance), compared to net income of
$5,705,000, or $1.74 per share, last year. The prior year
included $1,029,000, or $0.31 per share, of net income from the
settlement of a claim with BP over the Deepwater Horizon event and
$779,000, or $.24 per share, of net income from the sale of the
easement in Tampa, FL.
Total revenues were $112,165,000, down
$8,007,000 or 6.7% from last year. Transportation revenues
(excluding fuel surcharges) were down $10,258,000, or 8.9%, to
$105,334,000. Revenue miles declined by 4,884,000, or 11.4%,
to 38,000,000 versus last year mostly attributable to (i) business
lost in a competitive bid due to rates, (ii) privatization of a
customer fleet (iii) the lower demand for gasoline in the earlier
part of the fiscal year and (iv) Hurricanes Harvey and Irma.
Transportation revenue per mile increased by 2.8% over last
year which partially offset the reduced miles. Fuel surcharge
revenues were up $2,251,000 to $6,831,000 due to higher diesel
prices and the positive benefits of renegotiating fuel surcharge
tables with several key customers last year.
Compensation and benefits decreased $2,960,000,
or 5.8%, due to fewer miles driven partially offset by higher
driver pay following the pay increase that went into effect June
30, 2017. Net fuel expense (i.e. gross fuel expenses less
fuel surcharges) decreased by $2,417,000, or 23%, due to fewer
miles driven and higher fuel surcharges.
Insurance and losses were up $370,000 versus
last year due mainly to increased risk and health claims.
Depreciation increased $672,000 but was offset by lower repair and
equipment leasing costs as we have continued to replace leased
equipment from a prior acquisition with new equipment. SG&A was
down $222,000 and corporate expenses were down by $235,000 due to
no bonus compensation expense in the current year and lower legal
fees.
As a result, operating profit was $2,372,000
compared to $7,790,000 last year. Last year’s quarter
included $1,277,000 from the sale of the easement in Tampa, FL.
Operating ratio was 97.9 this year compared to 94.6 last year
excluding the gain on the Tampa easement sale.
Summary and Outlook.
We continue to focus on adding new business to
replace the loss of business that occurred mostly in the 2nd
quarter. We have added significant pieces of new business
throughout the fiscal year but not nearly enough to offset the
losses. The latter part of the fourth quarter was mired in
business interruption due to the impacts of Hurricanes Harvey and
Irma. However, our team performed very well during these crises and
hopefully garnered goodwill with many of our customers as we worked
through those challenges together.
The driver market remains very tight.
The average driver count of 614 this quarter is flat against
the 613 average driver count from the prior quarter signifying some
stabilization. We have taken several steps to drive future
growth in our driver count. We implemented a driver pay
increase effective June 30, 2017 increasing base pay by 2.5% and
awarding 2 additional vacation days. In this quarter we
implemented a new driver trainer academy which not only elevates
the position of driver trainer within our organization but
incentivizes the trainer with compensation based on retention of
the trainees. In the quarter the driver turnover rate
improved 8.6 percentage points versus the prior quarter.
We are focused on maintaining these trends as we work to grow
our driver count and revenues.
Our management team is committed to running the
business efficiently, measuring ourselves on equipment utilization
and driver productivity, while still maintaining a high level of
safety and customer satisfaction. We are currently in the
process of selling excess equipment and reducing our
overhead.
Management is committed to investing in our
technology in order to set ourselves apart from our competition and
improve efficiencies. We continue to upgrade our entire
network infrastructure to provide more speed and reliability to the
field and our customers and to implement several new software
upgrades which we believe will enhance the employee experience,
improve customer satisfaction and ultimately reduce expenses and
improve our bottom line results.
During the quarter, as a result of losing its
anchor tenant, the Buyer terminated the contract for the purchase
of our Tampa terminal facility ($10M sales price). We are
continuing to actively market the property for sale.
We operate in many of the best markets in the
country and are known as a top rated carrier in both safety and
customer satisfaction. We are committed to focusing on
revenue growth, safety, driver retention and customer
satisfaction. We are confident that execution of that focus
will enable us to improve our profitability. We plan to
maintain a strong balance sheet as we work to get back to our
targeted operating ratio in the low to mid nineties.
Conference Call.
The Company will host a conference call on
November 30, 2017 at 10:00 AM (EDT). Analysts, shareholders and
other interested parties may access the teleconference live by
calling 1-800-311-9404 domestic or international at 1-334-323-7224
then enter pass code 9558. 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/pth113017 or
http://stream.conferenceamerica.com/pth113017.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 69584360. An audio archive can
be accessed via the internet at
http://archive.conferenceamerica.com/archivestream/pth113017.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 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 engaged in the
hauling of liquid and dry bulk commodities.
Contact:
Matt McNultyChief Financial Officer904/858-9100
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PATRIOT TRANSPORTATION HOLDING, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(In thousands)(Unaudited) |
|
|
|
|
|
|
|
THREE MONTHS ENDED |
|
TWELVE MONTHS ENDED |
|
|
SEPTEMBER 30, |
|
SEPTEMBER 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation revenues |
|
$ |
26,107 |
|
|
|
28,882 |
|
|
$ |
105,334 |
|
|
|
115,592 |
|
Fuel
surcharges |
|
|
1,803 |
|
|
|
1,509 |
|
|
|
6,831 |
|
|
|
4,580 |
|
Total revenues |
|
|
27,910 |
|
|
|
30,391 |
|
|
|
112,165 |
|
|
|
120,172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
|
|
12,296 |
|
|
|
12,711 |
|
|
|
48,109 |
|
|
|
51,069 |
|
Fuel
expenses |
|
|
3,681 |
|
|
|
3,831 |
|
|
|
14,991 |
|
|
|
15,157 |
|
Repairs
& tires |
|
|
1,952 |
|
|
|
1,971 |
|
|
|
7,077 |
|
|
|
7,777 |
|
Other
operating |
|
|
1,274 |
|
|
|
1,255 |
|
|
|
4,418 |
|
|
|
4,719 |
|
Insurance
and losses |
|
|
2,560 |
|
|
|
2,386 |
|
|
|
10,728 |
|
|
|
10,358 |
|
Depreciation expense |
|
|
2,334 |
|
|
|
2,352 |
|
|
|
9,542 |
|
|
|
8,870 |
|
Rents,
tags & utilities |
|
|
841 |
|
|
|
981 |
|
|
|
3,384 |
|
|
|
3,834 |
|
Sales,
general & administrative |
|
|
2,366 |
|
|
|
2,610 |
|
|
|
9,404 |
|
|
|
9,626 |
|
Corporate
expenses |
|
|
505 |
|
|
|
658 |
|
|
|
2,711 |
|
|
|
2,946 |
|
Gain on
property sale |
|
|
— |
|
|
|
(1,277 |
) |
|
|
— |
|
|
|
(1,277 |
) |
Gain on
equipment sales |
|
|
(164 |
) |
|
|
(541 |
) |
|
|
(571 |
) |
|
|
(697 |
) |
Total cost of
operations |
|
|
27,645 |
|
|
|
26,937 |
|
|
|
109,793 |
|
|
|
112,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
profit |
|
|
265 |
|
|
|
3,454 |
|
|
|
2,372 |
|
|
|
7,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BP claim
settlement |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,687 |
|
Interest income and
other |
|
|
2 |
|
|
|
2 |
|
|
|
6 |
|
|
|
6 |
|
Interest expense |
|
|
(1 |
) |
|
|
(32 |
) |
|
|
(80 |
) |
|
|
(130 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
266 |
|
|
|
2,424 |
|
|
|
2,298 |
|
|
|
9,353 |
|
Provision for income
taxes |
|
|
65 |
|
|
|
1,336 |
|
|
|
469 |
|
|
|
3,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
201 |
|
|
|
2,088 |
|
|
$ |
1,829 |
|
|
|
5,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income |
|
$ |
201 |
|
|
|
2,211 |
|
|
$ |
1,829 |
|
|
|
5,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
|
0.63 |
|
|
|
0.55 |
|
|
|
1.74 |
|
Diluted |
|
$ |
0.06 |
|
|
|
0.63 |
|
|
|
0.55 |
|
|
|
1.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares (in thousands) used in
computing: |
|
|
|
|
-basic
earnings per common share |
|
|
3,304 |
|
|
|
3,289 |
|
|
|
3,299 |
|
|
|
3,283 |
|
-diluted
earnings per common share |
|
|
3,306 |
|
|
|
3,291 |
|
|
|
3,302 |
|
|
|
3,285 |
|
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