UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.02. Results of Operations and Financial Condition.
On May 9, 2023, Patriot Transportation Holding, Inc. issued a press release announcing results of operations for the second quarter ended March 31, 2023. 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 Press Release dated May 9, 2023
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: May 9, 2023 | 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 SECOND QUARTER AND FIRST SIX MONTHS OF FISCAL 2023
Patriot Transportation Holding, Inc. (NASDAQ-PATI) Jacksonville, Florida; May 9, 2023
Second Quarter Operating Results
The Company reported net income of $475,000, or $.13 per share for the quarter ended March 31, 2023, compared to a net loss of ($490,000), or ($.14) per share in the same quarter prior year.
Revenue miles were up 97,000, or 1.8%, over the same quarter last year. Operating revenues for the quarter were $23,465,000, up $2,537,000 from the same quarter last year due to rate increases, higher fuel surcharges and an improved business mix. Operating revenue per mile was up $.40, or 10.2%.
Compensation and benefits increased $2,081,000, mainly due to the increases in driver compensation, a $211,000 increase in training pay versus the same quarter last year and an increase in owner operators. Fuel expense decreased $162,000 due to lower diesel prices in the quarter. Insurance and losses decreased $930,000 due to lower health and risk insurance claims (the second quarter last year included two large claims that combined for $752,500 in expense in that quarter). Depreciation expense was down $107,000 in the quarter. Sales, general & administrative increased $544,000 due mainly to bonus accruals, increased travel and higher 401k match. Gain on sale of equipment was $275,000 versus $119,000 in the same quarter last year.
As a result, operating profit this quarter was $584,000 compared to an operating loss of ($639,000) in last year’s 2nd quarter.
First Six Months Operating Results for Fiscal year 2023
The Company reported net income of $960,000, or $.27 per share for the six months ended March 31, 2023, compared to $5,949,000, or $1.63 per share in the same period last year. Net income in the prior year first six months included $6,281,000, or $1.72 per share, from gains on real estate net of income taxes.
Revenue miles were down 202,000, or 1.9%, over the same period last year. Operating revenues for the period were $46,315,000, up $4,816,000 from the same period last year due to rate increases, higher fuel surcharges and an improved business mix. Operating revenue per mile was up $.53, or 13.8%.
Compensation and benefits increased $3,202,000, mainly due to the increases in driver compensation, a $296,000 increase in training pay versus the same period last year and increases in owner operators. Fuel expense increased $440,000 due to higher diesel prices in Q1 partially
offset by declining diesel prices in Q2. Insurance and losses decreased $756,000 due to lower health and risk insurance claims. Depreciation expense was down $310,000 in the period. Sales, general & administrative increased $406,000 due mainly to bonus accruals, increased travel and higher 401k match. Gain on sale of equipment was $341,000 versus $479,000 in the same period last year.
As a result, operating profit this period was $1,204,000 compared to $7,902,000 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 97.4 in the first six months versus 81.0 in the same period last year.
Summary and Outlook
While the driver market is still challenging, we are off to a solid start in fiscal 2023. Total revenue, revenue per mile and driver count have all increased since the same period last year. Since the start of our fiscal year we have increased our average driver count by ~30 drivers which resulted in the Company beating revenue miles versus the same quarter last year for the first time in several years. April of 2021 was when we made our first significant driver pay increase (15%) and focused on improving in many areas to help us retain our drivers. Since that time, our driver pay is up 25-35% across all markets and our turnover rate YTD has improved to 79% versus 105% in fiscal year 2021. While the training cost has increased significantly, the added driver capacity is welcome and has allowed us to continue 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 $6.9 million of cash as of March 31, 2023, with no outstanding debt. Through the first six months we have purchased 21 new tractors. For the remainder of fiscal 2023 we are planning to replace 52 additional tractors (29 are replacing lease units) and ~10 trailers and anticipate a total capital expenditure of ~$12 million in fiscal 2023.
Conference Call
The Company will host a conference call on May 9, 2023 at 3:00 PM (EST). Analysts, shareholders and other interested parties may access the teleconference live by calling 1-888-506-0062 domestic or international at 1-973-528-0011. Computer audio live streaming is available at https://www.webcaster4.com/Webcast/Page/2058/48279. 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 48279. An audio archive can also be accessed at https://www.webcaster4.com/Webcast/Page/2058/48279.
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.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
| THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
| MARCH 31, | MARCH 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating revenues | $ | 23,465 | 20,928 | 46,315 | 41,499 | |||||||||||
| Cost of operations: | ||||||||||||||||
| Compensation and benefits | 11,043 | 8,962 | 21,248 | 18,046 | ||||||||||||
| Fuel expenses | 2,998 | 3,160 | 6,318 | 5,878 | ||||||||||||
| Repairs & tires | 1,387 | 1,445 | 2,741 | 2,661 | ||||||||||||
| Other operating | 819 | 710 | 1,508 | 1,454 | ||||||||||||
| Insurance and losses | 1,644 | 2,574 | 3,628 | 4,384 | ||||||||||||
| Depreciation expense | 1,299 | 1,406 | 2,573 | 2,883 | ||||||||||||
| Rents, tags & utilities | 643 | 708 | 1,291 | 1,381 | ||||||||||||
| Sales, general & administrative | 2,696 | 2,152 | 5,023 | 4,617 | ||||||||||||
| Corporate expenses | 627 | 569 | 1,122 | 1,102 | ||||||||||||
| Gain on sale of terminal sites | — | — | — | (8,330 | ) | |||||||||||
| Gain on disposition of PP&E | (275 | ) | (119 | ) | (341 | ) | (479 | ) | ||||||||
| Total cost of operations | 22,881 | 21,567 | 45,111 | 33,597 | ||||||||||||
| Total operating profit (loss) | 584 | (639 | ) | 1,204 | 7,902 | |||||||||||
| Interest income and other | 76 | 3 | 141 | 4 | ||||||||||||
| Interest expense | (5 | ) | (4 | ) | (9 | ) | (9 | ) | ||||||||
| Income (loss) before income taxes | 655 | (640 | ) | 1,336 | 7,897 | |||||||||||
| Provision for (benefit from) income taxes | 180 | (150 | ) | 376 | 1,948 | |||||||||||
| Net income (loss) | $ | 475 | (490 | ) | $ | 960 | 5,949 | |||||||||
| Unrealized investment gains (losses), net | 2 | (3 | ) | 6 | (3 | ) | ||||||||||
| Comprehensive income (loss) | $ | 477 | (493 | ) | $ | 966 | 5,946 | |||||||||
| Earnings per common share: | ||||||||||||||||
| Net income (loss) - | ||||||||||||||||
| Basic | $ | 0.14 | (0.14 | ) | 0.27 | 1.73 | ||||||||||
| Diluted | $ | 0.13 | (0.14 | ) | 0.27 | 1.63 | ||||||||||
| Number of shares (in thousands) used in computing: | ||||||||||||||||
| -basic earnings per common share | 3,518 | 3,458 | 3,504 | 3,439 | ||||||||||||
| -diluted earnings per common share | 3,557 | 3,458 | 3,545 | 3,658 | ||||||||||||
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| March 31, | September 30, | |||||||
| Assets | 2023 | 2022 | ||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,941 | 8,302 | |||||
|
Accounts receivable (net of allowance for doubtful accounts of $62 and $68, respectively) |
6,118 | 5,296 | ||||||
| Inventory of parts and supplies | 1,007 | 1,006 | ||||||
| Prepaid tires on equipment | 1,576 | 1,486 | ||||||
| Prepaid taxes and licenses | 241 | 378 | ||||||
| Prepaid insurance | 3,538 | 3,927 | ||||||
| Prepaid expenses, other | 186 | 163 | ||||||
| Total current assets | 19,607 | 20,558 | ||||||
| Property and equipment, at cost | 74,360 | 72,816 | ||||||
| Less accumulated depreciation | 52,860 | 52,567 | ||||||
| Net property and equipment | 21,500 | 20,249 | ||||||
| Operating lease right-of-use assets | 3,200 | 2,424 | ||||||
| Goodwill | 3,637 | 3,637 | ||||||
| Intangible assets, net | 457 | 556 | ||||||
| Other assets, net | 134 | 142 | ||||||
| Total assets | $ | 48,535 | 47,566 | |||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,173 | 1,964 | |||||
| Federal and state taxes payable | 33 | 594 | ||||||
| Accrued payroll and benefits | 3,238 | 3,208 | ||||||
| Accrued insurance | 601 | 1,053 | ||||||
| Accrued liabilities, other | 227 | 1,010 | ||||||
| Operating lease liabilities, current portion | 802 | 884 | ||||||
| Total current liabilities | 7,074 | 8,713 | ||||||
| Operating lease liabilities, less current portion | 2,769 | 1,705 | ||||||
| Deferred income taxes | 3,824 | 3,631 | ||||||
| Accrued insurance | 1,476 | 1,476 | ||||||
| Other liabilities | 841 | 854 | ||||||
| Total liabilities | 15,984 | 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 | 40,351 | 39,958 | ||||||
| Accumulated deficit | (8,230 | ) | (9,190 | ) | ||||
| Accumulated other comprehensive income, net | 77 | 71 | ||||||
| Total shareholders’ equity | 32,551 | 31,187 | ||||||
| Total liabilities and shareholders’ equity | $ | 48,535 | 47,566 | |||||