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PATRIOT TRANSPORTATION HOLDING, INC./NEWS
Contact: John D. Milton, Jr.
Chief Financial Officer 904/396-5733
PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES RESULTS FOR THE THIRD
QUARTER AND FIRST NINE MONTHS OF FISCAL YEAR 2014
Jacksonville, Florida; August 6, 2014 - Patriot Transportation Holding, Inc.
(NASDAQ-PATR) reported net income of $3,485,000 or $.36 per diluted share in
the third quarter of fiscal 2014, an increase of $483,000 or 16.1% compared
to net income of $3,002,000 or $.31 per diluted share in the same period last
year. The third quarter of 2014 included gains from land sales and lower
interest expense due to prepayment of mortgages in the same quarter last
year. Net income for the first nine months of fiscal 2014 was $7,529,000 or
$.78 per diluted share, a decrease of $867,000 or 10.3% compared to net
income of $8,396,000 or $.88 per diluted share for the same period last year.
Third Quarter Operating Results. For the third quarter of fiscal 2014,
consolidated revenues were $41,248,000, an increase of $5,540,000 or 15.5%
over the same quarter last year.
Transportation segment revenues increased 16.6% compared to the third quarter
of fiscal 2013 due to a 19.2% increase in revenue miles. The Pipeline
acquisition in November 2013, new business and a longer average haul length
drove the increase in revenue miles. Revenue per mile decreased 2.3% over
the same period last year due to a longer average haul length and lower rates
on the business acquired in the Pipeline acquisition.
Mining royalty land segment revenues for the third quarter of fiscal 2014
were $1,395,000, an increase of $96,000 or 7.4% over the same quarter last
year due to increased tons mined.
Developed property rentals segment revenues for the third quarter of fiscal
2014 were $6,284,000, an increase of $669,000 or 11.9% primarily due to
revenue on the 125,550 square foot build to suit building completed and
occupied during the second quarter of fiscal 2014 and revenue on the
5 buildings added June 2013 related to the purchase of Transit Business
Park. Occupancy at June 30, 2014 was 89.5% as compared to 89.9% at June 30,
2013. As a result of the increased buildings-in-service platform average
square feet occupied during the quarter increased 270,386 or 9.7% versus the
same quarter last year.
Consolidated operating profit was $5,730,000 in the third quarter of fiscal
2014, a decrease of $340,000 or 5.6% compared to $6,070,000 in the same
period last year. Despite a 16.6% increase in revenues quarter over quarter,
operating profit in the transportation segment decreased $662,000 or 21.3%
primarily due to lower revenue per mile, higher health and accident claims,
higher fuel expense and costs associated with the use of out of town drivers.
Operating profit in the mining royalty land segment increased $73,000 or 7.4%
primarily due to an increase in tons mined. Operating profit in the
Continued
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200 W. Forsyth St., 7th Floor / Jacksonville, Florida 32202 / (904) 396-5733
Developed property rentals segment increased $204,000 or 9.3% due to the
125,550 square foot build to suit building completed and occupied during the
second quarter 2014 and lower professional fees offset by higher property
taxes. Consolidated operating profit includes corporate expenses not
allocated to any segment in the amount of $159,000 in the third quarter of
fiscal 2014, a decrease of $45,000 compared to the same period last year.
Gain on investment land sold for the third quarter of fiscal 2014 included
$327,000 for the sale of a parcel in Patriot Business Park and $123,000 of
deferred profits on prior year land sales related to post closing
development obligations.
Interest expense decreased $699,000 over the same quarter last year due to
accelerated prepayment costs in the same quarter last year and a declining
mortgage principal balance. On June 3, 2013 the Company prepaid the
$7,281,000 remaining principal balance on a 6.12% mortgage under an early
prepayment provision the note allowed after 7.5 years. The $561,000 cost
of the prepayment included a penalty of $386,000 and the remaining deferred
loan costs of $175,000.
Income tax expense increased $308,000 over the same quarter last year due to
higher earnings compared to the same quarter last year.
Nine Months Operating Results. For the first nine months of fiscal 2014,
consolidated revenues were $119,975,000, an increase of $17,342,000 or 16.9%
over the same period last year.
Transportation segment revenues increased 17.5% compared to the first nine
months ended June 30, 2013 due to a 20.4% increase in revenue miles.
The Pipeline acquisition in November 2013, new business and a longer average
haul length drove the increase in revenue miles. Revenue per mile decreased
2.3% over the same period last year due to a longer average haul length and
lower rates on the business acquired in the Pipeline acquisition.
Mining royalty land segment revenues for the first nine months of fiscal 2014
were $3,889,000, an increase of $15,000 or .4% over the same period last year.
Developed property rentals segment revenues for the first nine months of
fiscal 2014 were $19,026,000, an increase of $2,876,000 or 17.8% due to
higher average occupancy, snow removal reimbursements, revenue on the
117,600 square foot build to suit building completed and occupied during the
quarter ended March 2013, revenue on the 5 buildings added June 2013 related
to the purchase of Transit Business Park and revenue on the 125,550 square
foot build to suit building completed and occupied during the quarter ended
March 2014. Occupancy at June 30, 2014 was 89.5% as compared to 89.9% at
June 30, 2013. As a result of the increased buildings-in-service platform
average square feet occupied during the nine months increased 335,903 or
12.6% versus the same period last year.
Consolidated operating profit was $13,000,000 in the first nine months of
fiscal 2014, a decrease of $1,786,000 or 12.1% compared to $14,786,000 in the
same period last year. Although revenues for the transportation segment were
up 17.5% year over year, operating profit decreased $2,027,000 or 29.7%
Continued
due to lower revenue per mile, higher accident and health claims, costs
incurred to use out-of-town drivers to service new business and reduced
equipment sales and other expense increases. Operating profit in the mining
royalty land segment decreased $58,000 or 2.0% primarily due to increased
depletion and allocated corporate expenses. Operating profit in the Developed
property rentals segment increased $500,000 or 8.1% due to higher average
occupancy, the 117,600 square foot build to suit building completed and
occupied during the second quarter 2013, and the 125,550 square foot build to
suit building completed and occupied during the second quarter 2014 offset by
higher property taxes and professional fees. Consolidated operating profit
includes corporate expenses not allocated to any segment in the amount of
$1,337,000 in the first nine months of fiscal 2014, an increase of $201,000
compared to the same period last year primarily due to the higher market
value associated with the annual director stock grant.
Gain on investment land sold for the first nine months of fiscal 2014 included
$327,000 for the sale of a parcel in Patriot Business Park and $201,000 of
deferred profits on prior year land sales related to post closing development
obligations. Gain on investment land sold for the first nine months of fiscal
2013 included a gain on the sale of the developed property rentals
Commonwealth property of $1,116,000 before income taxes.
Interest expense decreased $1,050,000 over the same period last year due to
an accelerated payment on long-term debt and a declining mortgage principal
balance. On June 3, 2013 the Company prepaid the $7,281,000 remaining
principal balance on a 6.12% mortgage under an early prepayment provision the
note allowed after 7.5 years. The $561,000 cost of the prepayment included a
penalty of $386,000 and the remaining deferred loan costs of $175,000.
Income tax expense decreased $555,000 over the same period last year due to
lower earnings compared to the same period last year.
Summary and Outlook. Transportation revenues for the first nine months of
fiscal 2014 increased $14,451,000 or 17.5% over the first nine months of 2013.
The bottom line contribution of these additional revenues was not achieved as
duplicate expense of temporarily transferred drivers and extra driving and
training pay and higher health and accident claims nullified any return on
the added revenues. We made progress in the third quarter in reducing our
out-of-town driver costs and our operating profit margin improved over the
two previous sequential quarters.
Developed property rentals occupancy was 89.5% at June 30, 2014 and 89.9% at
June 30, 2013. Occupancy at June 30, 2014 and 2013 included 8,200 square feet
or .2% and 77,465 square feet or 2.3% respectively for temporary leases under
a less than full market lease rate. On June 6, 2014, the Company purchased
for approximately $4.8 million, the Kelso property in Baltimore, Maryland
which consists of 2 buildings on 10.2 acres totaling 69,680 square feet.
Total completed developed square footage increased 6.0% from June 30, 2013
to 3,472,309 at June 30, 2014. In addition to the completed buildings,
we own land in four separate distinct submarkets that we believe ultimately
could support up to 17 buildings totaling 1,406,906 square feet. The net
book value of these properties at June 30, 2014 was $25,435,000 (including
construction in progress of the third build-to-suit building of 129,850 sf
at Patriot Business Park on land with a net book value of $6,810,000).
On May 1, 2014, the Company entered into a long
Continued
term lease with VADATA for its third build-to-suit data warehouse for
129,850 sq. ft.; the first (117,600 sq. ft.) and second (125,550 sq. ft.)
build-to-suit data warehouses were completed and occupied in January 2013
and January 2014, respectively.
The Company anticipates commencement of construction of the first phase of
the four phase Anacostia development in late summer 2014 with lease up
scheduled between late 2015 and all of 2016.
On May 7, 2014, the Company announced that it planned to separate its
transportation business into an independent publicly traded company through
a tax free spin-off of the transportation business to Patriot shareholders.
The separation, which is subject to a number of conditions including final
Board approval, receipt of an opinion of tax counsel and effectiveness of a
registration statement on Form 10, is expected to be completed in the next
9 months.
Conference Call. The Company will also host a conference call on Wednesday
afternoon, August 6, 2014 at 2:00 p.m. (EDT). Analysts, stockholders and
other interested parties may access the teleconference live by calling
1-800-593-9034 (pass code 94687) within the United States. International
callers may dial 1-334-323-7224 (pass code 94687). Computer audio is
available via the Internet through the Conference America, Inc. website at
http://64.202.98.81/conferenceamerica or via the Company's website at
http://www.patriottrans.com. For the archived audio via the internet, click
on the following link http://wm.yourcall.com/archivestream/pth080614.wma.
If using the Company's website, click on the Investor Relations tab, then
select Patriot Transportation Holding, Inc. Conference Stream, next select
the appropriate link for the current conference. An audio replay will be
available for sixty days following the conference call. To listen to the audio
replay, dial toll free 877-919-4059, international callers dial 334-323-0140.
The passcode of the audio replay is 70366992. Replay options: "1" begins
playback, "4" rewind 30 seconds, "5" pause, "6" fast forward 30 seconds,
"0" instructions, and "9" exits recording. There may be a 30-40 minute delay
until the archive is available following the conclusion of the conference call.
Investors are cautioned that any statements in this press release which
relate to the future are, by their nature, subject to risks and uncertainties
that could cause actual results and events to differ materially from those
indicated in such forward-looking statements. These include general economic
conditions; competitive factors; political, economic, regulatory and climatic
conditions; driver availability and cost; the impact of future regulations
regarding the transportation industry; freight demand for petroleum product
and levels of construction activity in the Company's markets; fuel costs; risk
insurance markets; demand for flexible warehouse/office facilities; ability to
obtain zoning and entitlements necessary for property development; interest
rates; levels of mining activity; 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 and real
estate businesses. The Company's transportation business is conducted through
Florida Rock & Tank Lines, Inc. which is a Southeastern transportation company
concentrating in the hauling by motor carrier of liquid and dry bulk
commodities. The Company's real estate group, comprised of FRP Development
Corp. and Florida Rock Properties, Inc., acquires, constructs, leases,
operates and manages land and buildings to generate both current cash flows
and long-term capital appreciation. The real estate group also owns real
estate which is leased under mining royalty agreements or held for investment.
Continued
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
------- -------
2014 2013 2014 2013
---- ---- ---- ----
Revenues:
Transportation $33,569 28,794 97,060 82,609
Mining royalty land 1,395 1,299 3,889 3,874
Developed property rentals 6,284 5,615 19,026 16,150
------ ------ ------ ------
Total revenues 41,248 35,708 119,975 102,633
Cost of operations:
Transportation 31,124 25,687 92,262 75,784
Mining royalty land 342 319 1,018 945
Developed property rentals 3,893 3,428 12,358 9,982
Unallocated corporate 159 204 1,337 1,136
------ ------ ------ ------
Total cost of operations 35,518 29,638 106,975 87,847
Operating profit:
Transportation 2,445 3,107 4,798 6,825
Mining royalty land 1,053 980 2,871 2,929
Developed property rentals 2,391 2,187 6,668 6,168
Unallocated corporate (159) (204) (1,337) (1,136)
------ ------ ------ ------
Total operating profit 5,730 6,070 13,000 14,786
Gain on investment land sold 450 - 528 1,116
Interest income and other - - 1 37
Equity in loss of joint ventures (29) (11) (92) (30)
Interest expense (438) (1,137) (1,095) (2,145)
------ ------ ------ ------
Income before income taxes 5,713 4,922 12,342 13,764
Provision for income taxes (2,228) (1,920) (4,813) (5,368)
------ ------ ------ ------
Net income $3,485 3,002 7,529 8,396
====== ====== ====== ======
Comprehensive Income $3,485 3,002 7,529 8,396
====== ====== ====== ======
Earnings per common share:
Basic 0.36 0.31 0.78 0.88
Diluted 0.36 0.31 0.78 0.88
Number of shares (in thousands)
used in computing:
-basic earnings
per common share 9,651 9,549 9,613 9,511
-diluted earnings
per common share 9,718 9,625 9,700 9,592
