UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) July 29, 2020

 

 

PATRIOT TRANSPORTATION HOLDING, INC.

(Exact name of registrant as specified in its charter)

 

FLORIDA

(State or other jurisdiction of incorporation)

001-36605

(Commission File Number)

47-2482414

(IRS Employer Identification No.)

 

200 W. FORSYTH STREET, 7TH FLOOR

JACKSONVILLE, FLORIDA

(Address of principal executive offices)

32202

(Zip Code)

 

(904) 858-9100

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock PATI Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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.

 
 

Item 2.02. Results of Operations and Financial Condition.

 

On July 29, 2020, Patriot Transportation Holding, Inc. issued a press release announcing results of operations for the third quarter ended June 30, 2020. A copy of the press release is furnished as Exhibit 99.1.

 

The information in this report (including the exhibit) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No. Description

 

99.1 Patriot Transportation Holding, Inc. Press Release dated July 29, 2020

 

 
 

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 hereunto duly authorized.

 

 

PATRIOT TRANSPORTATION HOLDING, INC.

Registrant

 

Date: July 29, 2020                                                                   By: /s/ Matthew C. McNulty

                                                                                                   Matthew C. McNulty

       Chief Financial Officer

PATRIOT TRANSPORTATION HOLDING, INC./NEWS

 

Contact: Matt McNulty

Chief Financial Officer                                                                                                             904/858-9100

 

 

PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES RESULTS FOR

THE THIRD QUARTER AND FISCAL YEAR 2020

 

Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida; July 29, 2020

 

Third Quarter Operating Results

 

The Company reported net income of $573,000, or $.17 per share, compared to $396,000, or $.12 per share, in the same quarter last year.

 

Transportation revenues (excluding fuel surcharges) were $18,032,000, down $6,875,000 due to lower miles versus the same quarter last year. Revenue miles were down 2,775,000 miles, or 31.0%, over the same quarter last year primarily due to the COVID-19 pandemic, the downsizing of certain customer business due to inadequate freight rates earlier this fiscal year, and the closure of our Wilmington terminal on April 25, 2020. Transportation revenue per mile was up $.14, or 5.0%, which has helped to offset the negative impact of fewer miles. Fuel surcharge revenue was down $1,640,000, or $.13 per mile, from the same quarter last year.

 

Compensation and benefits decreased $3,410,000, mainly due to lower company miles and reduced driver training expense. Gross fuel expense decreased $2,250,000, or $.17 per mile, due to lower company miles and lower cost per gallon. Repair and tire expense decreased $719,000, or $.02 per mile, due to lower miles this quarter and several high dollar repairs in the 3rd quarter last year. Insurance and losses decreased $768,000, or $.02 per mile, primarily due to favorable closure of prior year worker’s compensation claims, lower health care claims, favorable results on prior and current year auto liability claims and lower wreck repair costs. Depreciation expense was down $161,000 in the quarter as we continue to adjust our fleet size to meet our business levels. Gain on disposition of assets was $224,000 this quarter versus a loss of $115,000 in the same quarter last year due primarily to a loss from a single vehicle rollover accident during the same quarter last year.

 

As a result, operating profit this quarter was $794,000, compared to $423,000 in the same quarter last year. Operating ratio was 95.8 this quarter versus 98.5 in the same quarter last year.

 

First Nine Months Operating Results for Fiscal year 2020

 

The Company reported a net loss of ($292,000), or ($.09) per share, compared to net income of $1,569,000, or $.47 per share, in the same period last year. Net income in the first nine months of 2019 included $634,000, or $.19 per share, from gains on real estate sales.

 

Transportation revenues (excluding fuel surcharges) were $62,191,000, down $12,233,000 on 5,657,000 fewer miles primarily due to the COVID-19 pandemic, the downsizing of certain customer business due to freight rates earlier this fiscal year, and the closure of our Charlotte terminal in May, 2019 and our Wilmington terminal on April 25, 2020. Transportation revenue

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per mile was up $.15 per mile, or 5.5%, due to increased freight rates which has helped to offset the negative impact of fewer miles. Fuel surcharge revenue was $5,156,000, down $3,008,000, or $.06 per mile, from the same period last year.

 

Compensation and benefits decreased $5,921,000 mainly due to lower company miles and lower driver training expense. Gross fuel expenses decreased $4,121,000, or $.07 per mile, due to lower company miles and lower cost per gallon. Repair and tire expense decreased $1,068,000 due to reduced miles in the first nine months of this year. Insurance and losses decreased $388,000, but were up $.05 per mile, primarily due to higher health claims in the first six months of this fiscal year. Gain on disposition of assets was $674,000 this period versus $1,441,000 in the same period last year which included a gain of $866,000 on the sale of a prior terminal site in Ocoee, Florida and a gain of $231,000 on the insurance settlement for hurricane damages sustained at our Panama City, Florida location.

 

As a result, operating loss was ($518,000) compared to operating profit of $1,823,000 in the same period last year. Operating ratio was 100.8 in the first nine months versus 97.8 in the same period last year.

 

Impact of the COVID-19 Pandemic

 

The COVID-19 pandemic continues to have an impact on demand for oil and petroleum products. Volume declines due to COVID-19 vary by market but management estimates the range to be ~10-25% down across our network. As an essential business, we have continued to operate throughout the pandemic in accordance with CDC guidance and orders issued by state and local authorities. We anticipate the impacts from social distancing, work/school from home programs and any continued mandatory business closures or reduced patron occupancy levels will adversely affect petroleum sales and therefore the demand for our services as long as they remain in place.

 

Summary and Outlook

 

Prior to the outbreak of the COVID-19 pandemic, Management was encouraged about the rate environment. Our intent was to continue to push rates higher to offset the rising costs associated with the on-going driver shortage and rising risk insurance premiums while exiting customer relationships that did not allow us to earn an acceptable profit on our services. During the 1st quarter, the Company renegotiated one of our largest customer contracts resulting in the Company turning back ~$3.5M of annualized revenue on marginally rated business while receiving a ~4.5% rate increase on a substantially larger volume of business we retained. Those rate increases were fully in effect as of February 1, 2020. We also walked away from some smaller accounts due to freight rates. As a result, we had capacity in our system as we headed into the typically busier spring and summer months and were heavily focusing our sales efforts to gain meaningful volume with customers with whom we felt we could partner. We were starting to see success on new revenue gains and operating results in early March until the outbreak of COVID-19.

 

Beginning in late March, due to impacts from COVID-19, our focus shifted to managing the business through the crisis, dealing with reduced volumes and controlling costs. We experienced a very difficult April due to significantly reduced volumes. Volumes improved incrementally during May and June but still remained below our pre-COVID-19 expectations throughout the

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quarter. The many steps we took to reduce costs early on in the quarter, coupled with strong insurance results and some gains from equipment sales, allowed us to make a profit during the quarter. Some of the expense reductions related to reduced hours for certain employees, the inability for many of our employees to travel overnight and lower costs associated with hiring and training drivers will increase as the impacts from COVID-19 subside. However, we are intent on minimizing those cost increases as we move forward.

 

Our balance sheet remains solid with $13.6 million of cash and cash equivalents as of June 30, 2020, versus $11.3 million on March 31, 2020, and no outstanding debt. We did not order any new equipment during the quarter and will not order additional equipment during the remainder of this fiscal year which reduces our planned capital outlay by ~$3.5 million for the fiscal year. Today, we are continuing to manage through the day to day impacts of the virus but are also refocusing our efforts back to growing our business with both new and existing customers with whom we feel can partner long term.

 

Conference Call

 

The Company will host a conference call on July 29, 2020 at 3:00 PM (EDT). Analysts, shareholders and other interested parties may access the teleconference live by calling 1-877-407-0778 domestic or international at 1-201-689-8565. Computer audio live streaming is available via the Internet through the Company’s website at www.patriottrans.com at the Investor Relations tab or https://www.webcaster4.com/Webcast/Page/2058/35687. An audio replay will be available for sixty (60) days following the conference call by dialing toll free 1-877-481-4010 domestic or international 1-919-882-2331 then enter pass code 35687. An audio archive can be accessed through the Company’s website at www.patriottrans.com on the Investor Relations tab or at https://www.webcaster4.com/Webcast/Page/2058/35687.

 

 

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 the impact of the COVID-19 pandemic on our revenues, operations and financial condition; 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.

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PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands)

(Unaudited)

 

    THREE MONTHS ENDED   NINE MONTHS ENDED
    JUNE 30,   JUNE 30,
    2020   2019   2020   2019
Revenues:                                
  Transportation revenues   $ 18,032       24,907      $ 62,191       74,424  
  Fuel surcharges     979       2,619       5,156       8,164  
Total revenues     19,011       27,526       67,347       82,588  
                                 
Cost of operations:                                
  Compensation and benefits     8,575       11,985       29,954       35,875  
  Fuel expenses     1,738       3,988       8,147       12,268  
  Repairs & tires     1,182       1,901       4,504       5,572  
  Other operating     768       1,189       2,699       3,510  
  Insurance and losses     1,443       2,211       6,767       7,155  
  Depreciation expense     1,815       1,976       5,604       5,922  
  Rents, tags & utilities     719       833       2,222       2,571  
  Sales, general & administrative     1,839       2,479       6,929       7,508  
  Corporate expenses     362       426       1,713       1,825  
  Loss (gain) on disposition of PP&E     (224     115       (674     (1,441
Total cost of operations     18,217       27,103       67,865       80,765  
                                 
Total operating profit (loss)     794       423       (518     1,823  
                                 
Interest income and other     4       116       131       330  
Interest expense     (8     (8     (23     (25
                                 
Income (loss) before income taxes     790

 

 

    531       (410     2,128  
Provision for (benefit from) income taxes     217       135       (118     559  
                                 
Net income (Loss)   $ 573       396     (292     1,569  
                                 
Unrealized investment gains, net     —         7       —         19  
Reclassification adjust for net investment gains realized in net income     —         —         (5     —    
                                 
Comprehensive income (loss)   $ 573       403     (297     1,588  
                                 
Earnings per common share:                                
  Net Income (loss) -                                
    Basic   0.17       0.12       (0.09     0.47  
    Diluted   0.17       0.12       (0.09     0.47  
                                 
Number of shares (in thousands) used in computing:        
-basic earnings per common share     3,377       3,347       3,366       3,339  
-diluted earnings per common share     3,377       3,348       3,366       3,340  
                                   

 

 

 

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PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands) (Unaudited)

      June 30,     September 30,
Assets     2020       2019  
Current assets:                
  Cash and cash equivalents   $ 13,646       21,216  
  Accounts receivable (net of allowance for                
  doubtful accounts of $93 and $133, respectively)     5,188       6,588  
  Federal and state taxes receivable     —         290  
  Inventory of parts and supplies     801       949  
  Prepaid tires on equipment     1,431       1,616  
  Prepaid taxes and licenses     156       536  
  Prepaid insurance     1,578       2,895  
  Prepaid expenses, other     315       334  
    Total current assets     23,115       34,424  
                 
Property and equipment, at cost     84,842       91,332  
Less accumulated depreciation     52,948       57,765  
Net property and equipment     31,894       33,567  
                 
Operating lease right-of-use assets     3,227       —    
Goodwill     3,637       3,431  
Intangible assets, net     1,007       701  
Other assets, net     176       170  
Total assets   $ 63,056       72,293  
                 
Liabilities and Shareholders’ Equity                
Current liabilities:                
  Accounts payable   $ 1,755       3,184  
  Federal and state taxes payable     413       —    
  Accrued payroll and benefits     2,962       3,906  
  Accrued insurance     1,685       1,339  
  Accrued liabilities, other     860       398  
  Operating lease liabilities, current portion     1,166       —    
    Total current liabilities     8,841       8,827  
                 
Operating lease liabilities less current portion     2,249       —    
Deferred income taxes     5,280       6,237  
Accrued insurance     1,339       1,339  
Other liabilities     890       1,093  
    Total liabilities     18,599       17,496  
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; 3,377,279 and 3,351,329 shares issued                  
   and outstanding, respectively)     338       335  
  Capital in excess of par value     38,610       38,099  
  Retained earnings     5,386       16,235  
  Accumulated other comprehensive income, net     123       128  
    Total shareholders’ equity     44,457       54,797  
Total liabilities and shareholders’ equity   $ 63,056       72,293