Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

_________________

(Mark One)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

[_]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________ to _________

Commission File Number: 001-36605

_____________________

PATRIOT TRANSPORTATION HOLDING, INC.

(Exact name of registrant as specified in its charter)

_____________________

Florida		47-2482414
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 W. Forsyth St., 7th Floor, Jacksonville, florida		32202
(Address of principal executive offices)		(Zip Code)

904-396-5733

(Registrant’s telephone number, including area code)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $.10 par value		PATI		NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [_]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [x] No [_] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]

Non-accelerated filer [ ]		Smaller reporting company [x]

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [x]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Class				August 3, 2023
	Common Stock				3,526,489

PATRIOT TRANSPORTATION HOLDING, INC.

FORM 10-Q

QUARTER ENDED JUNE 30, 2023

CONTENTS

Page No.

Preliminary Note Regarding Forward-Looking Statements		3

	Part I. Financial Information

Item 1.	Financial Statements
	Consolidated Balance Sheets	4
	Consolidated Statements of Income & Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Shareholders’ Equity	7
	Condensed Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures about Market Risks	18

Item 4.	Controls and Procedures	18

	Part II. Other Information

Item 1A.	Risk Factors	19

Item 2.	Purchase of Equity Securities by the Issuer	19

Item 6.	Exhibits	19

Signatures		20

Exhibit 31	Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	22

Exhibit 32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	25

Preliminary Note Regarding Forward-Looking Statements.

Certain matters discussed in this report contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements.

These forward-looking statements relate to, among other things, capital expenditures, liquidity, capital resources and competition and may be indicated by words or phrases such as “anticipate”, “estimate”, “plans”, “projects”, “continuing”, “ongoing”, “expects”, “management believes”, “the Company believes”, “the Company intends” and similar words or phrases. The following factors and others discussed in the Company’s periodic reports and filings with the Securities and Exchange Commission are among the principal factors that could cause actual results to differ materially from the forward-looking statements: freight demand for petroleum products, as well as increased vehicle fuel efficiency, potential impacts on the COVID-19 pandemic on our operations and financial results; the increased popularity of electric vehicles; recessionary and terrorist impacts on travel in the Company’s markets; fuel costs and the Company’s ability to recover fuel surcharges; accident severity and frequency; risk insurance markets; driver availability and cost; the impact of future regulations, including regulations regarding the transportation industry and regulations intended to reduce greenhouse gas emissions; cyber-attacks; competition in our markets; interest rates, and inflation and general economic conditions. However, this list is not a complete statement of all potential risks or uncertainties.

These forward-looking statements are made as of the date hereof based on management’s current expectations, and the Company does not undertake an obligation to update such statements, whether as a result of new information, future events or otherwise. Additional information regarding these and other risk factors may be found in the Company’s other filings made from time to time with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

PART I. FINANCIAL INFORMATION, ITEM 1. FINANCIAL STATEMENTS

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

		June 30,		September 30,
Assets		2023			2022
Current assets:
Cash and cash equivalents	$	7,425			8,302
Accounts receivable (net of allowance for doubtful accounts of $62 and $68, respectively)		5,690			5,296
Inventory of parts and supplies		928			1,006
Prepaid tires on equipment		1,656			1,486
Prepaid taxes and licenses		151			378
Prepaid insurance		2,301			3,927
Prepaid expenses, other		136			163
Total current assets		18,287			20,558

Property and equipment, at cost		76,106			72,816
Less accumulated depreciation		51,393			52,567
Net property and equipment		24,713			20,249

Operating lease right-of-use assets		2,969			2,424
Goodwill		3,637			3,637
Intangible assets, net		408			556
Other assets, net		129			142
Total assets	$	50,143			47,566

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,882			1,964
Federal and state taxes payable		122			594
Accrued payroll and benefits		3,902			3,208
Accrued insurance		525			1,053
Accrued liabilities, other		327			1,010
Operating lease liabilities, current portion		738			884
Total current liabilities		7,496			8,713

Operating lease liabilities, less current portion		2,615			1,705
Deferred income taxes		3,944			3,631
Accrued insurance		1,476			1,476
Other liabilities		836			854
Total liabilities		16,367			16,379
Commitments and contingencies		—			—
Shareholders’ Equity:
Preferred stock, 5,000,000 shares authorized, of which 250,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; None issued and outstanding		—			—
Common stock, $.10 par value; (25,000,000 shares authorized; 3,526,489 and 3,484,004 shares issued and outstanding, respectively)		353			348
Capital in excess of par value		40,390			39,958
Accumulated deficit		(7,043	)		(9,190	)
Accumulated other comprehensive income, net		76			71
Total shareholders’ equity		33,776			31,187
Total liabilities and shareholders’ equity	$	50,143			47,566

See notes to consolidated financial statements.

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	THREE MONTHS ENDED						NINE MONTHS ENDED
	JUNE 30,						JUNE 30,
	2023			2022			2023			2022

Operating revenues	$	24,253			23,501			70,568			65,000

Cost of operations:
Compensation and benefits		11,264			9,774			32,512			27,820
Fuel expenses		2,723			3,965			9,041			9,843
Repairs & tires		1,649			1,502			4,390			4,163
Other operating		792			739			2,300			2,193
Insurance and losses		1,652			1,918			5,280			6,302
Depreciation expense		1,360			1,363			3,933			4,246
Rents, tags & utilities		669			651			1,960			2,032
Sales, general & administrative		2,709			2,328			7,732			6,945
Corporate expenses		368			511			1,490			1,613
Gain on sale of terminal sites		—			—			—			(8,330	)
Gain on disposition of PP&E		(432	)		(163	)		(773	)		(642	)
Total cost of operations		22,754			22,588			67,865			56,185

Total operating profit		1,499			913			2,703			8,815

Interest income and other		87			13			228			17
Interest expense		(4	)		(4	)		(13	)		(13	)

Income before income taxes		1,582			922			2,918			8,819
Provision for income taxes		395			151			771			2,099

Net income	$	1,187			771			2,147			6,720

Unrealized investment gains (losses), net		(1	)		(4	)		5			(7	)

Comprehensive income	$	1,186			767			2,152			6,713

Earnings per common share:
Net income -
Basic	$	0.34			0.22			0.61			1.95
Diluted	$	0.33			0.22			0.60			1.85

Number of shares (in thousands) used in computing:
-basic earnings per common share		3,527			3,483			3,511			3,453
-diluted earnings per common share		3,630			3,504			3,585			3,628

See notes to consolidated financial statements.

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JUNE 30, 2023 AND 2022

(In thousands)

(Unaudited)


	Nine months ended June 30,
		2023		2022
Cash flows from operating activities:
Net income	$	2,147		6,720
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,379		4,666
Non-cash lease expense		691		724
Deferred income taxes		313		(1,086	)
Gain on asset dispositions		(783	)	(9,033	)
Stock-based compensation		320		340
Net changes in operating assets and liabilities:
Accounts receivable		(394	)	(574	)
Inventory of parts and supplies		78		(357	)
Prepaid expenses		1,710		1,865
Other assets		17		2
Accounts payable and accrued liabilities		(599	)	(49	)
Income taxes payable and receivable		(472	)	1,412
Operating lease liabilities		(472	)	(638	)
Long-term insurance liabilities and other long-term liabilities		(18	)	(17	)
Net cash provided by operating activities		6,917		3,975

Cash flows from investing activities:
Purchase of property and equipment		(8,816	)	(2,859	)
Proceeds from the sale of property, plant and equipment		905		10,427
Net cash (used in) provided by investing activities		(7,911	)	7,568

Cash flows from financing activities:
Dividends paid		—		(12,808	)
Expired stock options		(10	)	—
Proceeds from exercised stock options		127		315
Net cash provided by (used in) financing activities		117		(12,493	)

Net decrease in cash and cash equivalents		(877	)	(950	)
Cash and cash equivalents at beginning of period		8,302		10,899
Cash and cash equivalents at end of the period	$	7,425		9,949

Supplemental disclosures of cash flow information:
Cash paid during the period for
Interest	$	12		12
Income taxes		931		1,770
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities		1,236		1,453

See notes to consolidated financial statements.

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

THREE AND NINE MONTHS ENDED JUNE 30, 2023 AND 2022

(In thousands)

(Unaudited)


							(Accum.			Accumulated
				Capital in			Deficit)			Other			Total
	Common Stock			Excess of			Retained			Comprehensive			Shareholders'
	Shares		Amount	Par Value			Earnings			Income, net			Equity


Balance as of October 1, 2021	3,415,643	$	342	$	39,257		$	(3,572	)	$	89		$	36,116

Stock-based compensation	—		—		160			—			—			160
Exercise of stock options	46,377		4		311			—			—			315
Director grant	21,984		2		178			—			—			180
Expired stock options														—
Cash dividends paid ($3.75 per share)	—		—		—			(12,808	)		—			(12,808	)
Net income	—		—		—			6,720			—			6,720
Unrealized investment losses, net	—		—		—			—			(7	)		(7	)
Balance as of June 30, 2022	3,484,004	$	348	$	39,906		$	(9,660	)	$	82		$	30,676

Balance as of October 1, 2022	3,484,004	$	348	$	39,958		$	(9,190	)	$	71		$	31,187

Stock-based compensation	—		—		123			—			—			123
Exercise of stock options	17,285		2		125			—			—			127
Director grant	25,200		3		194			—			—			197
Expired stock options	—		—		(10	)		—			—			(10	)
Cash dividends
Net income	—		—		—			2,147			—			2,147
Unrealized investment gains, net	—		—		—			—			5			5
Balance as of June 30, 2023	3,526,489	$	353	$	40,390		$	(7,043	)	$	76		$	33,776

Balance as of April 1, 2022	3,480,920	$	348	$	39,831		$	(10,431	)	$	86		$	29,834

Stock-based compensation	—		—		51			—			—			51
Exercise of stock options														—
Director grant	3,084		—		24			—			—			24
Expired stock options														—
Cash dividends
Net income	—		—		—			771			—			771
Unrealized investment losses, net	—		—		—			—			(4	)		(4	)
Balance as of June 30, 2022	3,484,004	$	348	$	39,906		$	(9,660	)	$	82		$	30,676

Balance as of April 1, 2023	3,526,489	$	353	$	40,351		$	(8,230	)	$	77		$	32,551

Stock-based compensation	—		—		39			—			—			39
Exercise of stock options														—
Director grant
Expired stock options														—
Cash dividends
Net income	—		—		—			1,187			—			1,187
Unrealized investment gains, net	—		—		—			—			(1	)		(1	)
Balance as of June 30, 2023	3,526,489	$	353	$	40,390		$	(7,043	)	$	76		$	33,776

PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023

(Unaudited)

(1) Description of Business and Basis of Presentation.

Description of Business

Company’s Business. The business of the Company, conducted through our wholly owned subsidiary, Florida Rock & Tank Lines, Inc., is to transport petroleum and other liquids and dry bulk commodities. We do not own any of the products we haul; rather, we act as a third party carrier to deliver our customers’ products from point A to point B, using predominantly Company employees driving Company owned tractors and tank trailers. Approximately 85% of our business consists of hauling liquid petroleum products (mostly gas and diesel fuel) from large scale fuel storage facilities to our customers’ retail outlets (e.g., convenience stores, truck stops and fuel depots) where we off-load the product into our customers’ fuel storage tanks for ultimate sale to the retail consumer. The remaining 15% of our business consists of hauling dry bulk commodities such as cement, lime and various industrial powder products, water and liquid chemicals. As of June 30, 2023, we employed 336 revenue-producing drivers who operated our fleet of 253 Company tractors (excluding 19 being placed in service), 52 owner operators and 402 trailers from our 17 terminals and 6 satellite locations in Florida, Georgia, Alabama, and Tennessee.

Basis of Presentation

These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (primarily consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the nine months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023. The accompanying consolidated financial statements and the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the audited financial statements and notes for the year ended September 30, 2022.

Operating Revenues

Our revenues are primarily based on a set rate per volume of product hauled to arrive at a desired rate per mile traveled. The rate also incorporates the cost of fuel at an assumed price plus fuel surcharges to address the fluctuation in fuel prices. Over time, the fuel surcharge tables in the industry have become so numerous and varied, both by carriers and customers, that they have simply become a part of the overall rating structure to arrive at that desired price per mile by market. We consider fuel surcharge revenue to be revenue from services rather than other revenues. As a result, the Company determined there is no reason to report fuel surcharges as a separate revenue line item and fuel surcharges are reported as part of Operating revenues.

(2) Recently Issued Accounting Standards. None.

(3) Related Party Agreements. The Company provides FRP Holdings, Inc. (FRP) certain services

including the services of certain shared executive officers. FRP may be considered a related party due to common significant shareholder ownership and shared common officers. A written agreement exists outlining the terms of such services and the boards of the respective companies amended and extended this agreement for one year effective April 1, 2023.

The consolidated statements of income reflect charges and/or allocation to FRP Holdings, Inc. for these services of $226,000 and $224,000 for the three months ended June 30, 2023 and 2022, and $674,000 and $700,000 for the nine months ended June 30, 2023 and 2022, respectively. These charges to FRP are reflected as a reduction to the Company’s corporate expenses.

We employ an allocation method to allocate said expenses and thus we believe that the allocations to FRP are a reasonable approximation of the costs related to FRP’s operations, but any such related-party transactions cannot be presumed to be carried out on an arm’s-length basis.

(4) Long-Term debt. The Company had no long-term debt outstanding at June 30, 2023 and September 30, 2022. On July 6, 2021, the Company entered into the 2021 Amended and Restated Credit Agreement (the “The Amended and Restated Credit Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”). The Amended and Restated Credit Agreement modifies the Company's prior Credit Agreement with Wells Fargo, dated January 30, 2015, as amended by that certain First Amendment dated December 28, 2018. The Amended and Restated Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $15 million, with a separate sublimit for standby letters of credit. The credit facility limit may be increased to $25 million upon request by the Company, subject to the lender's discretion and the satisfaction of certain conditions. The interest rate under the Amended and Restated Credit Agreement is 1.10% over the Secured Overnight Financing Rate (“SOFR”). A commitment fee of 0.12% per annum is payable quarterly on the unused portion of the commitment. The Amended and Restated Credit Agreement contains certain conditions, affirmative financial covenants and negative covenants including a minimum tangible net worth of $25 million. As of June 30, 2023, we had no outstanding debt borrowed on this revolver, $1,854,000 in commitments under letters of credit and $13,146,000 available for additional borrowings. The letter of credit fee is 1% and the applicable interest rate for borrowings would have been 6.16% on June 30, 2023.

This credit agreement contains certain conditions, affirmative financial covenants and negative covenants including a minimum tangible net worth. The Company was in compliance with all of its loan covenants as of June 30, 2023. As of June 30, 2023, the tangible net worth covenant would have limited our ability to pay dividends or repurchase stock with borrowed funds to a maximum of $4,731,000 combined.

(5) Earnings per share. Basic earnings per common share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per common share are based on the weighted average number of common shares and potential dilution of securities that could share in earnings. The differences between basic and diluted shares used for the calculation are the effect of employee and director stock options.

The following details the computations of the basic and diluted Earnings per common share (dollars and shares in thousands, except per share amounts):


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022
Weighted average common shares outstanding during the period – shares used for basic earnings per common share		3,527		3,483		3,511		3,453

Common shares issuable under share based payment plans which are potentially dilutive		103		21		74		175

Common shares used for diluted earnings per common share		3,630		3,504		3,585		3,628

Net income	$	1,187		771		2,147		6,720

Earnings per common share:
-basic	$	0.34		0.22		0.61		1.95
-diluted	$	0.33		0.22		0.60		1.85

For the three and nine months ended June 30, 2023, 160,483 and 72,828 shares attributable to outstanding stock options, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and nine months ended June 30, 2022, 529,213 and 27,082 shares attributable to outstanding stock options, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

(6) Stock-Based Compensation Plans.

Participation in FRP Plans

Prior to the Company’s spin-off from FRP Holdings, Inc. (FRP) in January 2015, the Company's directors, officers and key employees previously were eligible to participate in FRP's 2000 Stock Option Plan and the 2006 Stock Option Plan under which options for shares of common stock were granted to directors, officers and key employees.

Post Spin-Off Patriot Incentive Stock Plan

As part of the spin-off transaction, the Board of Directors of the Company adopted the Patriot Transportation Holding, Inc. Incentive Stock Plan (“Patriot Plan”) in January, 2015. In exchange for all outstanding FRP options held on January 30, 2015, existing Company directors, officers and key employees holding option grants in the FRP Stock Option Plan(s) were issued new grants in the Patriot and FRP Plans based upon the relative value of Patriot and FRP immediately following the completion of the spin-off with the same remaining terms. All related compensation expense has been allocated to the Company (rather than FRP) and included in corporate expenses. The number of common shares available for future issuance in the Patriot Plan was 10,611 at June 30, 2023.

On November 15, 2021, the Company paid an extraordinary dividend of $3.75 per share to all shareholders of record. In accordance with Section 4.2 of the 2006 Stock Incentive Plan, Section 11 of the 2014 Equity Incentive Plan, and Section 409A of the Internal Revenue Code, the Company has adjusted the terms of all stock option grants outstanding and the stock appreciation rights as of the close of business on November 15, 2021.

In December 2016, the Company approved and issued a long-term performance incentive to an officer in the form of stock appreciation rights. As adjusted for the extraordinary dividend the Company granted 257,009 stock appreciation rights. The adjusted market price of the grant was $8.66, and the executive will get a cash award at age 65 based upon the stock price at that date compared to the adjusted market price of $8.66 but in no event will the award be less than $500,000. The Company is expensing the fair value of the award over the 9.1 year vesting period to the officer’s attainment of age 65, with periodic adjustments to the liability estimate based upon changes in the assumptions used to calculate the liability. The accrued liability under this plan as of June 30, 2023 and 2022 was $424,000 and $394,000, respectively.

The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands):


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022
Stock option grants	$	39		51		123		160
Annual director stock award		—		24		197		180
Stock based compensation	$	39		75		320		340

A summary of Company stock options is presented below (in thousands, except share and per share amounts):

Summary of stock options

				Weighted	Weighted		Weighted
	Number			Average	Average		Average
	of			Exercise	Remaining		Grant Date
Options	Shares			Price	Term (yrs)		Fair Value

Outstanding at October 1, 2022	777,752		$	7.44	5.3	$	1,731
Expired	(10,174	)		7.31			(22	)
Exercised	(17,285	)		7.31			(50	)
Outstanding at June 30, 2023	750,293		$	7.44	4.7	$	1,659

Exercisable at June 30, 2023	599,867		$	7.77	4.2	$	1,413

Vested during nine months ended June 30, 2023	92,797					$	171

The aggregate intrinsic value of exercisable Company options was $632,000 and the aggregate intrinsic value of all outstanding in-the-money options was $979,000 based on the Company’s market closing price of $8.46 on June 30, 2023 less exercise prices.

The realized tax benefit from option exercises during the nine months ended June 30, 2023 was $4,000. The unrecognized compensation expense of Patriot options granted as of June 30, 2023 was $231,000, which is expected to be recognized over a weighted-average period of 1.9 years.

(7) Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 means the use of quoted prices in active markets

for identical assets or liabilities. Level 2 means the use of values that are derived principally from or corroborated by observable market data. Level 3 means the use of inputs of those that are unobservable and significant to the overall fair value measurement.

At June 30, 2023 and September 30, 2022, the carrying amount reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and other financial instruments approximate their fair value based upon the short-term nature of these items.

(8) Contingent liabilities. The Company is involved in litigation on a number of matters and is subject to certain claims which arise in the normal course of business. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage. There is a reasonable possibility that the Company’s estimate of vehicle and workers’ compensation liability may be understated or overstated but the possible range cannot be estimated. The liability at any point in time depends upon the relative ages and amounts of the individual open claims. In the opinion of management none of these matters are expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

(9) Concentrations.

Market: The Company primarily serves customers in the petroleum industry in the Southeastern U.S. Significant economic disruption or downturn in this geographic region or within the industry could have an adverse effect on our financial statements.

Customers: During the first nine months of fiscal 2023, the Company’s ten largest customers accounted for approximately 60.1% of our revenue and one of these customers accounted for 16.9% of our revenue. Accounts receivable from the ten largest customers was $3,124,000 and $2,861,000 at June 30, 2023 and September 30, 2022 respectively. The loss of any one of these customers could have a material adverse effect on the Company’s revenues and income.

Deposits: Cash and cash equivalents are comprised of cash and an FDIC insured investment account at Wells Fargo Bank, N.A. and U.S. Treasury bills. The balance in the cash account may exceed FDIC limits.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our annual report on Form 10-K for the fiscal year ending September 30, 2022. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including

the risks and uncertainties described in “Forward-Looking Statements” below and “Risk Factors” on page 7 of our annual report on Form 10-K for the fiscal year ending September 30, 2022. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this quarterly report on Form 10-Q, unless required by law.

Overview

The business of the Company, conducted through our wholly owned subsidiary, Florida Rock & Tank Lines, Inc., is to transport petroleum and other liquids and dry bulk commodities. We do not own any of the products we haul, rather, we act as a third party carrier to deliver our customers’ products from point A to point B predominately using Company employees driving Company owned tractors and tank trailers. Approximately 85% of our business consists of hauling liquid petroleum products (mostly gas and diesel fuel) from large scale fuel storage facilities to our customers’ retail outlets (e.g., convenience stores, truck stops and fuel depots) where we off-load the product into our customers’ fuel storage tanks for ultimate sale to the retail consumer. The remaining 15% of our business consists of hauling dry bulk commodities such as cement, lime and various industrial powder products, water and liquid chemicals. In June 2023, we employed 336 revenue-producing drivers who operated our fleet of 253 Company tractors (excluding 19 being placed in service), 52 owner operators and 402 trailers from our 17 terminals and 6 satellite locations in Florida, Georgia, Alabama, and Tennessee. We experience increased seasonal demand in Florida in the spring and in most of our other locations during the summer months.

Our industry is characterized by such barriers to entry as the time and cost required to develop the capabilities necessary to handle hazardous material, the resources required to recruit, train and retain drivers, substantial industry regulatory and insurance requirements and the significant capital investments required to build a fleet of equipment, establish a network of terminals and, in recent years, the cost to build and maintain sufficient information technology resources to allow us to interface with and assist our customers in the day-to-day management of their product inventories.

Our industry is experiencing a severe shortage of qualified professional drivers with a tenured safe driving career. The trend we are seeing is that more and more of the applicants are drivers with little to no experience in the tank truck business, short driving careers in other lines of trucking, poor safety records and a pattern of job instability in their work history. As a result, in many markets we serve it is difficult to grow the driver count and, in some cases, to even maintain our historical or desired driver counts.

The Company’s operations are influenced by a number of external and internal factors. External factors include levels of economic and industrial activity in the United States and the Southeast, driver availability and cost, government regulations regarding driver qualifications and limitations on the hours drivers can work, petroleum product demand in the Southeast which is driven in part by tourism and commercial aviation, and fuel costs. Internal factors include revenue mix, equipment utilization, Company imposed restrictions on hiring drivers under the age of 21 or drivers without at least one year of driving experience, auto and workers’ compensation accident frequencies and severity, administrative costs, and group health claims experience.

To measure our performance, management focuses primarily on revenue growth, revenue miles, operating revenue per mile, our preventable accident frequency rate (“PAFR”), our operating ratio

(defined as our operating expenses as a percentage of our operating revenue), turnover rate (excluding drivers related to terminal closures) and average driver count (defined as average number of revenue producing drivers including owner operators under employment over the specified time period) as compared to the same period in the prior year.

ITEM	Nine months ended June 30, 2023 vs. 2022
Operating Revenues	Up 8.6%
Revenue Miles	Up 1.1%
Revenue Per Mile	Up 7.2%
PAFR (incidents per 1M miles) goal of 1.87	1.54 vs. 1.61
Operating Ratio	96.2% vs. 86.4%
Driver Turnover Rate	73.4% vs. 77.0%
Avg. Driver Count incl. owner operators	Up 3.5%

Third Quarter Highlights

Revenue miles were up 379,000, or 7.1%, over the same quarter last year.

Comparative Results of Operations for the Three Months ended June 30, 2023 and 2022

	Three months ended June 30
(dollars in thousands)		2023		%		2022		%

Revenue miles (in thousands)		5,713				5,334

Operating revenues	$	24,253		100.0	%	23,501		100.0	%

Cost of operations:
Compensation and benefits		11,264		46.4	%	9,774		41.6	%
Fuel expenses		2,723		11.2	%	3,965		16.9	%
Repairs & tires		1,649		6.8	%	1,502		6.4	%
Other operating		792		3.3	%	739		3.1	%
Insurance and losses		1,652		6.8	%	1,918		8.1	%
Depreciation expense		1,360		5.6	%	1,363		5.8	%
Rents, tags & utilities		669		2.8	%	651		2.8	%
Sales, general & administrative		2,709		11.2	%	2,328		9.9	%
Corporate expenses		368		1.5	%	511		2.2	%
Gain on disposition of PP&E		(432	)	-1.8	%	(163	)	-0.7	%
Total cost of operations		22,754		93.8	%	22,588		96.1	%

Total operating profit	$	1,499		6.2	%	913		3.9	%

The Company reported net income of $1,187,000, or $.33 per share for the quarter ended June 30, 2023, compared to $771,000, or $.22 per share in the same quarter last year.

Revenue miles were up 379,000, or 7.1%, over the same quarter last year. Operating revenues for the quarter were $24,253,000, up $752,000 from the same quarter last year due to higher miles, rate increases, and an improved business mix. Operating revenue per mile was down $.16, or 3.6% due mainly to lower fuel surcharges as diesel prices have declined since the same quarter last year.

Compensation and benefits increased $1,490,000, mainly due to the increases in driver compensation, a $126,000 increase in training pay versus the same quarter last year and an increase in owner operators. Fuel expense decreased $1,242,000 due to lower diesel prices in the quarter. Insurance and losses decreased $266,000 due to lower risk insurance claims offset by increased health insurance claims. Sales, general & administrative increased $381,000 due mainly to bonus accruals. Gain on sale of equipment was $432,000 versus $163,000 in the same quarter last year.

As a result, operating profit this quarter was $1,499,000 compared to $913,000 in the same quarter last year.

Comparative Results of Operations for the Nine Months ended June 30, 2023 and 2022

	Nine months ended June 30
(dollars in thousands)		2023		%		2022		%

Revenue miles (in thousands)		16,282				16,105

Operating revenues	$	70,568		100.0	%	65,000		100.0	%

Cost of operations:
Compensation and benefits		32,512		46.1	%	27,820		42.8	%
Fuel expenses		9,041		12.8	%	9,843		15.1	%
Repairs & tires		4,390		6.2	%	4,163		6.4	%
Other operating		2,300		3.3	%	2,193		3.4	%
Insurance and losses		5,280		7.5	%	6,302		9.7	%
Depreciation expense		3,933		5.6	%	4,246		6.5	%
Rents, tags & utilities		1,960		2.8	%	2,032		3.1	%
Sales, general & administrative		7,732		10.9	%	6,945		10.7	%
Corporate expenses		1,490		2.1	%	1,613		2.5	%
Gain on sale of terminal sites		—		0.0	%	(8,330	)	-12.8	%
Loss (gain) on disposition of PP&E		(773	)	-1.1	%	(642	)	-1.0	%
Total cost of operations		67,865		96.2	%	56,185		86.4	%

Total operating profit	$	2,703		3.8	%	8,815		13.6	%

The Company reported net income of $2,147,000, or $.60 per share for the nine months ended June 30, 2023, compared to $6,720,000, or $1.85 per share in the same period last year. Net income in the nine months ended June 30, 2022 included $6,281,000, or $1.73 per share, from gains on real estate net of income taxes that did not occur in the current period.

Revenue miles were up 177,000, or 1.1%, over the same period last year. Operating revenues for the period were $70,568,000, up $5,568,000 from the same period last year due to rate increases and an improved business mix. Operating revenue per mile was up $.29, or 7.2%.

Compensation and benefits increased $4,692,000, mainly due to the increases in driver compensation, a $422,000 increase in training pay versus the same period last year and increases in owner operators. Fuel expense decreased $802,000 due to declining diesel prices in the second and third quarters offset by higher diesel prices in the first quarter. Insurance and losses decreased $1,022,000 due to lower risk and health insurance claims. Depreciation expense was down $313,000 in the period. Sales, general & administrative increased $787,000 due mainly to bonus accruals, increased travel and higher 401(k) match. Gain on sale of equipment was $773,000 versus $642,000 in the same period last year.

As a result, operating profit this period was $2,703,000 compared to $8,815,000 in the same period last year. Prior year gain on the sale of land was $8,330,000 due to the sale of our former terminal location in Tampa, FL. Operating ratio was 96.2 in the first nine months of the current year versus 86.4 in the same period last year.

Liquidity and Capital Resources. The Company maintains its operating accounts with Wells Fargo Bank, N.A. and these accounts directly sweep overnight against the Wells Fargo revolver. As of June 30, 2023, we had no debt outstanding on this revolver, $1,854,000 letters of credit and $13,146,000 available for additional borrowings. The Company expects our fiscal year 2023 cash generation to cover the cost of our operations and our budgeted capital expenditures.

Cash Flows - The following table summarizes our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars):

	Nine months
	Ended June 30,
	2023			2022
Total cash provided by (used for):
Operating activities	$	6,917			3,975
Investing activities		(7,911	)		7,568
Financing activities		117			(12,493	)
Decrease in cash and cash equivalents	$	(877	)		(950	)

Outstanding debt at the beginning of the period		—			—
Outstanding debt at the end of the period		—			—

Operating Activities - Net cash provided by operating activities was $6,917,000 for the nine months ended June 30, 2023, compared to $3,975,000 in the same period last year. The total of net income plus depreciation and amortization and less gains on sales of property and equipment increased $3,390,000 versus the same period last year. These changes are described above under "Comparative Results of Operations." These changes comprise the majority of the increase in net cash provided by operating activities.

Investing Activities – Investing activities include the purchase of property and equipment, any business acquisitions and proceeds from sales of property and equipment upon retirement. For the nine months ended June 30, 2023, cash used in investing activities was $7,911,000 which included the purchase of plant, property and equipment net of the proceeds from retirements. For the nine months ended June 30, 2022, cash provided by investing activities was $7,568,000 which included the proceeds from retirements net of the purchase of plant, property and equipment.

Financing Activities – Financing activities primarily include net changes to our outstanding revolving debt, proceeds from the sale of shares of common stock through employee equity incentive plans, and dividends. For the nine months ended June 30, 2023, cash provided by financing activities was $117,000 due to proceeds from exercised stock options offset by expired stock options. For the nine months ended June 30, 2022, cash used in financing activities was $12,493,000 due to dividends paid offset by proceeds from exercised stock options. We had no outstanding long-term debt on June 30, 2023 or 2022.

Credit Facilities - The Company has a five-year credit agreement with Wells Fargo Bank N.A. which provides a $15 million revolving line of credit with a $10 million sublimit for stand-by letters of credit. The amounts outstanding under the credit agreement bear interest at a rate of 1.1% over the Secured Overnight Financing Rate (“SOFR”), which may change quarterly based on the Company’s ratio of consolidated total debt to consolidated total capital. A commitment fee of 0.12% per annum is payable quarterly on the unused portion of the commitment. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth. As of June 30, 2023, the tangible net worth covenant would have limited our ability to pay dividends or repurchase stock with borrowed funds to a maximum of $4,731,000 combined.

Cash Requirements - The Company currently expects its fiscal 2023 capital expenditures to be approximately $12.0 million for replacement equipment which we expect to be fully funded by our cash generated from our operations. The amount of capital expenditures through June 30, 2023 were $8,816,000.

Summary and Outlook. The adjustments we made to customer rates and driver pay beginning back in April, 2021 have benefitted us throughout this fiscal year. Our driver count has increased by approximately 12% since October 1 2022, our total revenue per mile is up over 7% and our annualized turnover rate has declined from 77.0% last year to 73.4% in fiscal 2023. While the driver training cost has increased significantly year over year, the added driver capacity has allowed us to add some quality new business with both existing and new customers in a few markets and we are working to continue that trend.

Our balance sheet remained stable with $7.4 million of cash as of June 30, 2023, with no outstanding debt. Through the first nine months we have purchased 52 new tractors. For the remainder of fiscal 2023 we are planning to replace 21 additional tractors (16 are replacing lease units) and anticipate a total capital expenditure of approximately $12 million in fiscal 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Interest Rate Risk - We are exposed to the impact of interest rate changes through our variable-rate borrowings under the credit agreement. Under the Wells Fargo revolving credit line, the applicable spread for borrowings at June 30, 2023 was 1.1% over SOFR.

Commodity Price Risk - The price and availability of diesel fuel are subject to fluctuations due to changes in the level of global oil production, seasonality, weather, global politics and other market factors. Historically, we have been able to recover a significant portion of fuel price increases from our customers in the form of fuel surcharges. The typical fuel surcharge table provides some margin contribution at higher diesel fuel prices but also results in some margin erosion at the lower diesel fuel prices. The price and availability of diesel fuel can be unpredictable as well as the extent to which fuel surcharges can be collected to offset such increases.

ITEM 4. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

The Company also maintains a system of internal accounting controls over financial reporting that are designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving the desired control objectives.

As of June 30, 2023, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company’s CEO, CFO and CAO concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in periodic SEC filings.

There have been no changes in the Company’s internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2022, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER

						(c)
						Total
						Number of
						Shares		(d)
						Purchased		Approximate
		(a)				As Part of		Dollar Value of
		Total		(b)		Publicly		Shares that May
		Number of		Average		Announced		Yet Be Purchased
		Shares		Price Paid		Plans or		Under the Plans
Period		Purchased		per Share		Programs		or Programs (1)
	April 1 through April 30		—	$	—		—	$	5,000,000

	May 1 through May 31		—	$	—		—	$	5,000,000

	June 1 through June 30		—	$	—		—	$	5,000,000

	Total		—	$	—		—

(1)

On February 4, 2015, the Board of Directors authorized management to expend up to $5,000,000 to repurchase shares of the Company’s common stock from time to time as opportunities arise. To date, the Company has not repurchased any common stock of the Company.

Item 6. EXHIBITS

(a)

Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", on page 21.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

		PATRIOT TRANSPORTATION HOLDING, INC.


Date: August 3, 2023	By	ROBERT E. SANDLIN
		Robert E. Sandlin
		President and Chief Executive Officer
		(Principal Executive Officer)


	By	MATTHEW C. MCNULTY
		Matthew C. McNulty
		Vice President, Chief Operating Officer,
		Chief Financial Officer and Secretary
		(Principal Financial Officer)


	By	JOHN D. KLOPFENSTEIN
		John D. Klopfenstein
		Controller, Chief Accounting Officer and
		Treasurer
		(Principal Accounting Officer)

PATRIOT TRANSPORTATION HOLDING, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023

EXHIBIT INDEX

(31)(a)

Certification of Robert E. Sandlin

(31)(b)

Certification of Matthew C. McNulty

(31)(c)

Certification of John D. Klopfenstein

(32)

Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Section 906 of the Sarbanes-Oxley Act of 2002.

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104.	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

CERTIFICATIONS Exhibit 31(a)

I, Robert E. Sandlin, certify that:

I have reviewed this report on Form 10-Q of Patriot Transportation Holding, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial report; and

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023		/s/Robert E. Sandlin
		President and Chief
		Executive Officer

CERTIFICATIONS Exhibit 31(b)

I, Matthew C. McNulty, certify that:

I have reviewed this report on Form 10-Q of Patriot Transportation Holding, Inc.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023		/s/Matthew C. McNulty
		Vice President, Chief Operating Officer,
		Chief Financial Officer and Secretary

CERTIFICATIONS Exhibit 31(c)

I, John D. Klopfenstein, certify that:

I have reviewed this report on Form 10-Q of Patriot Transportation Holding, Inc.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023		/s/John D. Klopfenstein
		Controller, Chief Accounting Officer and
		Treasurer

Exhibit 32

CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of Patriot Transportation Holding, Inc.

		PATRIOT TRANSPORTATION HOLDING, INC.


Date: August 3, 2023	By	/s/ROBERT E. SANDLIN
		Robert E. Sandlin
		President and Chief Executive Officer



	By	/s/MATTHEW C. MCNULTY
		Matthew C. McNulty
		Vice President, Chief Operating Officer, Chief
		Financial Officer Secretary


	By	/s/JOHN D. KLOPFENSTEIN
		John D. Klopfenstein
		Controller, Chief Accounting Officer and Treasurer

A signed original of this written statement required by Section 906 has been provided to Patriot Transportation Holding, Inc. and will be retained by Patriot Transportation Holding, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification accompanies the issuer’s Quarterly report on Form 10-Q and is not filed as provided in SEC Release Nos. 33-8212, 34-4751 and IC-25967, dated June 30, 2003.

Cover - shares	3 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 03, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--09-30
Entity File Number	001-36605
Entity Registrant Name	PATRIOT TRANSPORTATION HOLDING, INC.
Entity Central Index Key	0001616741
Entity Tax Identification Number	47-2482414
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	200 W. Forsyth St.
Entity Address, Address Line Two	7th Floor
Entity Address, City or Town	Jacksonville
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32202
City Area Code	904
Local Phone Number	396-5733
Title of 12(b) Security	Common Stock, $.10 par value
Trading Symbol	PATI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		3,526,489

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Current assets:
Cash and cash equivalents	$ 7,425	$ 8,302
Accounts receivable (net of allowance for doubtful accounts of $62 and $68, respectively)	5,690	5,296
Inventory of parts and supplies	928	1,006
Prepaid tires on equipment	1,656	1,486
Prepaid taxes and licenses	151	378
Prepaid insurance	2,301	3,927
Prepaid expenses, other	136	163
Total current assets	18,287	20,558
Property and equipment, at cost	76,106	72,816
Less accumulated depreciation	51,393	52,567
Net property and equipment	24,713	20,249
Operating lease right-of-use assets	2,969	2,424
Goodwill	3,637	3,637
Intangible assets, net	408	556
Other assets, net	129	142
Total assets	50,143	47,566
Current liabilities:
Accounts payable	1,882	1,964
Federal and state taxes payable	122	594
Accrued payroll and benefits	3,902	3,208
Accrued insurance	525	1,053
Accrued liabilities, other	327	1,010
Operating lease liabilities, current portion	738	884
Total current liabilities	7,496	8,713
Operating lease liabilities, less current portion	2,615	1,705
Deferred income taxes	3,944	3,631
Accrued insurance	1,476	1,476
Other liabilities	836	854
Total liabilities	16,367	16,379
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, 5,000,000 shares authorized, of which 250,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; None issued and outstanding	0	0
Common stock, $.10 par value; (25,000,000 shares authorized; 3,526,489 and 3,484,004 shares issued and outstanding, respectively)	353	348
Capital in excess of par value	40,390	39,958
Accumulated deficit	(7,043)	(9,190)
Accumulated other comprehensive income, net	76	71
Total shareholders’ equity	33,776	31,187
Total liabilities and shareholders’ equity	$ 50,143	$ 47,566

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Sep. 30, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 62	$ 68
Preferred shares authorized	5,000,000	5,000,000
Preferred Series A Junior Participating	250,000	250,000
Preferred stock, par value	$ 0.01	$ 0.01
Preferred Stock, Shares Outstanding	0	0
Preferred Stock, Shares Issued	0	0

CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Operating revenues	$ 24,253	$ 23,501	$ 70,568	$ 65,000
Cost of operations:
Compensation and benefits	11,264	9,774	32,512	27,820
Fuel expenses	2,723	3,965	9,041	9,843
Repairs & tires	1,649	1,502	4,390	4,163
Other operating	792	739	2,300	2,193
Insurance and losses	1,652	1,918	5,280	6,302
Depreciation expense	1,360	1,363	3,933	4,246
Rents, tags & utilities	669	651	1,960	2,032
Sales, general & administrative	2,709	2,328	7,732	6,945
Corporate expenses	368	511	1,490	1,613
Gain on sale of terminal sites	0	0	0	(8,330)
Gain on disposition of PP&E	(432)	(163)	(773)	(642)
Total cost of operations	22,754	22,588	67,865	56,185
Total operating profit	1,499	913	2,703	8,815
Interest income and other	87	13	228	17
Interest expense	(4)	(4)	(13)	(13)
Income before income taxes	1,582	922	2,918	8,819
Provision for income taxes	395	151	771	2,099
Net income	1,187	771	2,147	6,720
Unrealized investment gains (losses), net	(1)	(4)	5	(7)
Comprehensive income	$ 1,186	$ 767	$ 2,152	$ 6,713
Earnings per common share:
Basic	$ 0.34	$ 0.22	$ 0.61	$ 1.95
Diluted	$ 0.33	$ 0.22	$ 0.60	$ 1.85
Number of shares (in thousands) used in computing:
-basic earnings per common share	3,527	3,483	3,511	3,453
-diluted earnings per common share	3,630	3,504	3,585	3,628

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 2,147	$ 6,720
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,379	4,666
Non-cash lease expense	691	724
Deferred income taxes	313	(1,086)
Gain on asset dispositions	(783)	(9,033)
Stock-based compensation	320	340
Net changes in operating assets and liabilities:
Accounts receivable	(394)	(574)
Inventory of parts and supplies	78	(357)
Prepaid expenses	1,710	1,865
Other assets	17	2
Accounts payable and accrued liabilities	(599)	(49)
Income taxes payable and receivable	(472)	1,412
Operating lease liabilities	(472)	(638)
Long-term insurance liabilities and other long-term liabilities	(18)	(17)
Net cash provided by operating activities	6,917	3,975
Cash flows from investing activities:
Purchase of property and equipment	(8,816)	(2,859)
Proceeds from the sale of property, plant and equipment	905	10,427
Net cash (used in) provided by investing activities	(7,911)	7,568
Cash flows from financing activities:
Dividends paid	0	(12,808)
Expired stock options	(10)	0
Proceeds from exercised stock options	127	315
Net cash provided by (used in) financing activities	117	(12,493)
Net decrease in cash and cash equivalents	(877)	(950)
Cash and cash equivalents at beginning of period	8,302	10,899
Cash and cash equivalents at end of the period	7,425	9,949
Supplemental disclosures of cash flow information:
Interest	12	12
Income taxes	931	1,770
Right-of-use assets obtained in exchange for operating lease liabilities	$ 1,236	$ 1,453

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Beginning balance, value at Sep. 30, 2021	$ 342	$ 39,257	$ (3,572)	$ 89	$ 36,116
Common Stock, Shares, Outstanding, Beginning Balance at Sep. 30, 2021	3,415,643
Stock-based compensation	$ 0	160	0	0	160
Expired stock options	$ 4	311	0	0	315
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period	46,377
Director grant	$ 2	178	0	0	180
Stock Issued During Period, Shares, Issued for Services	21,984
Expired stock options					0
Cash dividends	$ 0	0	(12,808)	0	(12,808)
Net income	0	0	6,720	0	6,720
Unrealized investment gains, net	0	0	0	(7)	(7)
Ending balance, value at Jun. 30, 2022	$ 348	39,906	(9,660)	82	30,676
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022	3,484,004
Beginning balance, value at Mar. 31, 2022	$ 348	39,831	(10,431)	86	29,834
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2022	3,480,920
Stock-based compensation	$ 0	51	0	0	51
Expired stock options					0
Director grant	$ 0	24	0	0	24
Stock Issued During Period, Shares, Issued for Services	3,084
Net income	$ 0	0	771	0	771
Unrealized investment gains, net	0	0	0	(4)	(4)
Ending balance, value at Jun. 30, 2022	$ 348	39,906	(9,660)	82	30,676
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2022	3,484,004
Beginning balance, value at Sep. 30, 2022	$ 348	39,958	(9,190)	71	31,187
Common Stock, Shares, Outstanding, Beginning Balance at Sep. 30, 2022	3,484,004
Stock-based compensation	$ 0	123	0	0	123
Expired stock options	$ 2	125	0	0	127
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period	17,285
Director grant	$ 3	194	0	0	197
Stock Issued During Period, Shares, Issued for Services	25,200
Expired stock options	$ 0	(10)	0	0	(10)
Net income	0	0	2,147	0	2,147
Unrealized investment gains, net	0	0	0	5	5
Ending balance, value at Jun. 30, 2023	$ 353	40,390	(7,043)	76	33,776
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2023	3,526,489
Beginning balance, value at Mar. 31, 2023	$ 353	40,351	(8,230)	77	32,551
Common Stock, Shares, Outstanding, Beginning Balance at Mar. 31, 2023	3,526,489
Stock-based compensation	$ 0	39	0	0	39
Expired stock options					0
Net income	0	0	1,187	0	1,187
Unrealized investment gains, net	0	0	0	(1)	(1)
Ending balance, value at Jun. 30, 2023	$ 353	$ 40,390	$ (7,043)	$ 76	$ 33,776
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2023	3,526,489

Description of Business and Basis of Presentation

3 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

(1) Description of Business and Basis of Presentation.

Description of Business

Basis of Presentation

Operating Revenues

Recently Issued Accounting Standards

3 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Recently Issued Accounting Standards

(2) Recently Issued Accounting Standards. None.

Related Party Agreements

3 Months Ended

Jun. 30, 2023

Related Party Agreements

(3) Related Party Agreements. The Company provides FRP Holdings, Inc. (FRP) certain services

Long-Term debt

3 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Long-Term debt

Earnings per share

3 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per share

The following details the computations of the basic and diluted Earnings per common share (dollars and shares in thousands, except per share amounts):


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022
Weighted average common shares outstanding during the period – shares used for basic earnings per common share		3,527		3,483		3,511		3,453

Common shares issuable under share based payment plans which are potentially dilutive		103		21		74		175

Common shares used for diluted earnings per common share		3,630		3,504		3,585		3,628

Net income	$	1,187		771		2,147		6,720

Earnings per common share:
-basic	$	0.34		0.22		0.61		1.95
-diluted	$	0.33		0.22		0.60		1.85

Stock-Based Compensation Plans

3 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

(6) Stock-Based Compensation Plans.

Participation in FRP Plans

Post Spin-Off Patriot Incentive Stock Plan

The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands):


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022
Stock option grants	$	39		51		123		160
Annual director stock award		—		24		197		180
Stock based compensation	$	39		75		320		340

A summary of Company stock options is presented below (in thousands, except share and per share amounts):

Summary of stock options

				Weighted	Weighted		Weighted
	Number			Average	Average		Average
	of			Exercise	Remaining		Grant Date
Options	Shares			Price	Term (yrs)		Fair Value

Outstanding at October 1, 2022	777,752		$	7.44	5.3	$	1,731
Expired	(10,174	)		7.31			(22	)
Exercised	(17,285	)		7.31			(50	)
Outstanding at June 30, 2023	750,293		$	7.44	4.7	$	1,659

Exercisable at June 30, 2023	599,867		$	7.77	4.2	$	1,413

Vested during nine months ended June 30, 2023	92,797					$	171

Fair Value Measurements

3 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Contingent liabilities

3 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingent liabilities

Concentrations

3 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Concentrations

(9) Concentrations.

Description of Business and Basis of Presentation (Policies)	3 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (primarily consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the nine months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023. The accompanying consolidated financial statements and the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the audited financial statements and notes for the year ended September 30, 2022.
Operating Revenues	Operating Revenues Our revenues are primarily based on a set rate per volume of product hauled to arrive at a desired rate per mile traveled. The rate also incorporates the cost of fuel at an assumed price plus fuel surcharges to address the fluctuation in fuel prices. Over time, the fuel surcharge tables in the industry have become so numerous and varied, both by carriers and customers, that they have simply become a part of the overall rating structure to arrive at that desired price per mile by market. We consider fuel surcharge revenue to be revenue from services rather than other revenues. As a result, the Company determined there is no reason to report fuel surcharges as a separate revenue line item and fuel surcharges are reported as part of Operating revenues.

Earnings per share (Tables)

3 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Earnings per common share

The following details the computations of the basic and diluted Earnings per common share (dollars and shares in thousands, except per share amounts):


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022
Weighted average common shares outstanding during the period – shares used for basic earnings per common share		3,527		3,483		3,511		3,453

Common shares issuable under share based payment plans which are potentially dilutive		103		21		74		175

Common shares used for diluted earnings per common share		3,630		3,504		3,585		3,628

Net income	$	1,187		771		2,147		6,720

Earnings per common share:
-basic	$	0.34		0.22		0.61		1.95
-diluted	$	0.33		0.22		0.60		1.85

Stock-Based Compensation Plans (Tables)

3 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock compensation expense

The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands):


	Three months ended				Nine months ended
	June 30,				June 30,
	2023		2022		2023		2022
Stock option grants	$	39		51		123		160
Annual director stock award		—		24		197		180
Stock based compensation	$	39		75		320		340

Summary of stock options

A summary of Company stock options is presented below (in thousands, except share and per share amounts):

Summary of stock options

				Weighted	Weighted		Weighted
	Number			Average	Average		Average
	of			Exercise	Remaining		Grant Date
Options	Shares			Price	Term (yrs)		Fair Value

Outstanding at October 1, 2022	777,752		$	7.44	5.3	$	1,731
Expired	(10,174	)		7.31			(22	)
Exercised	(17,285	)		7.31			(50	)
Outstanding at June 30, 2023	750,293		$	7.44	4.7	$	1,659

Exercisable at June 30, 2023	599,867		$	7.77	4.2	$	1,413

Vested during nine months ended June 30, 2023	92,797					$	171

Description of Business and Basis of Presentation (Details Narrative)	Jun. 30, 2023 Integer
Product Information [Line Items]
Number of revenue producting drivers	336
Number of company tractors	253
Number of tractors being placed in service	19
Number of owner operator drivers	52
Number of company trailers	402
Number of terminals	17
Number of satellite locations	6
Petroleum Products [Member]
Product Information [Line Items]
Percent of other than petroleum based business	85.00%
Other Products [Member]
Product Information [Line Items]
Percent of other than petroleum based business	15.00%

Related Party Agreements (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
Related Party Agreements (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transactions [Abstract]
Related party transactions	$ 226,000	$ 224,000	$ 674,000	$ 700,000

Long-Term debt (Details Narrative) - Revolving Credit Facility [Member] - USD ($)	1 Months Ended	9 Months Ended
	Jul. 31, 2021	Jun. 30, 2023
Line of Credit Facility [Line Items]
Term of credit agreement	5 years
Maximum facility amount		$ 15,000,000
Increase limit		$ 25,000,000
Interest over SOFR		1.10%
Commitment fee		0.12%
Minimum tangible net worth		$ 25,000,000
Outstanding debt		0
LOC Commitments		1,854,000
Available for borrowing		$ 13,146,000
Letter of credit fee		1.00%
Applicable interest rate for borrowing		6.16%
Compliance		The Company was in compliance with all of its loan covenants as of June 30, 2023.
Maximum net worth		$ 4,731,000

Earnings per common share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Weighted average common shares outstanding during the period – shares used for basic earnings per common share	3,527	3,483	3,511	3,453
Common shares issuable under share based payment plans which are potentially dilutive	103	21	74	175
Common shares used for diluted earnings per common share	3,630	3,504	3,585	3,628
Net income	$ 1,187	$ 771	$ 2,147	$ 6,720
-basic	$ 0.34	$ 0.22	$ 0.61	$ 1.95
-diluted	$ 0.33	$ 0.22	$ 0.60	$ 1.85

Earnings per share (Details Narrative) - shares	3 Months Ended		9 Months Ended
Earnings per share (Details Narrative) - shares	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Anti-dilutive stock options	160,483	529,213	72,828	27,082

Stock compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock based compensation	$ 39	$ 75	$ 320	$ 340
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock based compensation	39	51	123	160
Director Stock Award [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock based compensation	$ 0	$ 24	$ 197	$ 180

Summary of stock options (Details) - Share-Based Payment Arrangement, Option [Member] - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares outstanding	750,293	777,752
Weighted average exercise price, outstanding	$ 7.44	$ 7.44
Weighted average remaining term, outstanding	4 years 8 months 11 days	5 years 3 months 18 days
Weighted average grant date fair value, outstanding	$ 1,659	$ 1,731
Shares expired	(10,174)
Weighted average exercise price, forfeited	$ 7.31
Weighted average grant date fair value, forfeited or expired	$ (22)
Shares exercised	(17,285)
Weighted average exercise price, exercised	$ 7.31
Weighted average grant date fair value, exercised	$ (50)
Shares exerciseable	599,867
Weighted average exercise price, exercisable	$ 7.77
Weighted average remaining term, exercisable	4 years 2 months 12 days
Weighted average grant date fair value, exercisable	$ 1,413
Shares vested	92,797
Weighted average grant date fair value, vested	$ 171

Stock-Based Compensation Plans (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Dec. 31, 2016	Dec. 31, 2021	Jun. 30, 2023	Jun. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common shares available for future issuance			10,611
Market closing price			$ 8.46
Realized tax benefit from option exercises			$ 4,000
Stock Appreciation Rights (SARs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock appreciation rights	257,009
Market closing price			$ 8.66
Minimum cash award	$ 500,000
Vesting period for SAR	9 years 1 month 3 days
Accured liability under SAR			$ 424,000	$ 394,000
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Aggregate intrinsic value, exercisable options			632,000
Aggregate intrinsic value, outstanding in-the-money options			979,000
Unrecognized compensation			$ 231,000
Weighted average period			1 year 10 months 24 days
Dividend Paid [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Extraordinary dividend		$ 3.75

Concentrations (Details Narrative) - USD ($)	9 Months Ended
Concentrations (Details Narrative) - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Top Ten Customers [Member]
Concentration Risk [Line Items]
One customer revenue	60.10%
Top Customers [Member]
Concentration Risk [Line Items]
One customer revenue	16.90%
Top Ten Custpmers [Member]
Concentration Risk [Line Items]
Ten largest customers AR	$ 3,124,000	$ 2,861,000