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PATRIOT TRANSPORTATION HOLDING, INC./NEWS
Contact: John D. Milton, Jr.
Chief Financial Officer 904/858-9100
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PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES RESULTS FOR THE FOURTH QUARTER
AND FISCAL YEAR ENDED SEPTEMBER 30, 2015
Jacksonville, Florida; November 18, 2015 -
Fourth Quarter Operating Results.
Patriot Transportation Holding, Inc. (NASDAQ-PATI) reported net income of
$1,585,000 or $.48 per diluted share in the fourth quarter of fiscal 2015,
an increase of $816,000 or $.24 per diluted share compared to net income
of $769,000 or $.24 per diluted share in the same period last year.
Transportation revenues were up $1,290,000, or 4.8%, on just 68,000 fewer
miles as management was successful at replacing the business we let go in
the second quarter. Operating profit was $2,633,000, an improvement of
$1,357,000 or 106% versus $1,276,000 in the same quarter last year and
operating ratio was 91.3% versus 96.0% in the same quarter last year.
These results were positively impacted by a $1,031,000 improvement in
insurance and losses as we experienced lower self-insured medical,
workers' compensation and liability claims, a $444,000 gain on equipment
sales, a $250,000 improvement in SG&A due to a one-time expense incurred
in the fourth quarter of 2014 and a $243,000 improvement in corporate
overhead due mainly to no spin-off costs in this quarter offset by higher
compensation and benefits costs ($1,013,000) as we continue to experience
cost increases associated with hiring and retaining drivers in this tight
driver market.
Fiscal Year 2015 Operating Results.
The following discussion includes certain non-GAAP financial measures
("adjusted") within the meaning of Regulation G promulgated by the
Securities and Exchange Commission ("Regulation G") to supplement the
financial results as reported in accordance with GAAP. The non-GAAP
financial measures discussed below include adjusted net income, adjusted
operating profit and adjusted operating ratio. These non-GAAP financial
measures exclude the intangible asset impairment charge incurred in the
second quarter. Patriot uses these metrics to analyze its continuing
operations and to monitor, assess, and identify meaningful trends in its
operating and financial performance. These measures are not, and should
not be viewed as, substitutes for GAAP financial measures. Refer to
"Non-GAAP Financial Measures" below in this press release for a more
detailed discussion, including reconciliations of these non-GAAP
financial measures to their most directly comparable GAAP financial
measures.
Net income for fiscal 2015 was $3,339,000 or $1.02 per share, an increase
of $142,000 or $.03 per share compared to net income of $3,197,000 or $.99
per share in the same period last year. During the second quarter, as part
of a competitive bid, we elected not to pursue a significant piece of
business acquired in the Pipeline transaction (closed in early fiscal 2014).
The absence of this business required us to take an impairment charge of
$2,074,000 against the intangible asset "customer relationships".
Rather than lower our quoted rates to retain that
business, management determined it was in our best interest to employ our
capital and resources to find new business at better rates. During the
latter half of the year, our sales team did an excellent job replacing those
lost revenue miles. In the end, we were able to haul almost as many miles
in fiscal 2015 (43,220,000) as we did in fiscal 2014 (43,865,000) while
increasing our transportation revenue by $2,870,000. The Company's adjusted
net income for fiscal 2015 was $4,604,000, or $1.41 per share, an improvement
of $1,407,000 or $.42 per share as compared to net income of $3,197,000, or
$.99 per share, last fiscal year. FY 2015 adjusted operating profit increased
43% to $7,660,000 and 2015 adjusted operating ratio improved to 93.8% versus
last year's 95.9%, more in line with our goals.
For fiscal 2015, total revenue was down $6,280,000 due mainly to
significantly lower fuel surcharges. Total revenue is made up of
transportation revenue (up $2,870,000, a 2.6% improvement over the same
period last year) and fuel surcharge revenue (down $9,150,000 due to the
dramatic decrease in fuel prices experienced over the past 12 months).
Comparing the lower fuel surcharge revenue ($9,150,000) to the lower fuel
cost ($8,986,000) resulted in a $164,000 negative impact to the Company from
the lower price of diesel in 2015 versus 2014.
Compensation and benefits expense was up significantly for a series of reasons
including, an increase in pay for all of our drivers, higher driver training
pay and an increase in support wages as we continue to hire people in the
field to enhance our ability to hire and retain drivers to meet our customers'
growing demands. The demand for drivers continues to increase with the
expansion of the US economy while the pool of qualified drivers so far has not
grown at a sufficient pace to meet that demand; thus, finding and retaining
qualified drivers to grow our business is an ever increasing challenge.
Management believes that we need to be a leader in our industry at attracting,
hiring and retaining drivers. We will continue to focus more of our resources
on meeting this goal.
Operating expenses improved by $731,000 over last year due in large part to
lower out-of-town driver costs (as we improved on managing our customer's
business demands with more local drivers in fiscal 2015 versus 2014) and lower
rigging, tolls, and operating supplies expense. Gains on equipment sales were
up significantly in 2015 ($959,000) due in large part to the sale of 47
trailers during fiscal 2015 versus no trailer sales in fiscal 2014. Insurance
and loss expense improved by $480,000 due in large part to lower workers' comp
expense. Depreciation expense increased $276,000 due to the increased cost of
new tractors year over year. Corporate overhead saw an increase of $518,000
due mainly to higher medical claims, a significant repair to the corporate
aircraft (management is in the process of selling a significant stake in the
corporate aircraft to reduce the Company's on-going expenses related thereto),
higher management incentive compensation expense and the additional costs of
operating as a stand-alone public company.
Summary and Outlook.
Fiscal 2015 was highlighted by the completion of the spin-off of our business
from FRP Holdings, Inc. in the second quarter and the beginning of the
Company's future as a stand-alone public trucking company. Throughout the
year our managers and employees focused on our core goals of (i) safety first,
(ii) customer service and satisfaction, and (iii) instilling a culture where
our drivers feel appreciated for the hard work and many sacrifices required of
them to perform a very difficult job. Our primary goal for our shareholders
is to grow profitably while maintaining a strong balance sheet and solid
returns on capital employed. The major headwind to our
improvement and growth is the continuing high costs associated with hiring,
training and retaining drivers. Our objective remains to grow our driver
count to meet a strong customer demand. Due to the tight driver market, and
our proven history of safe business practices and high customer satisfaction,
we are optimistic we will improve our transportation revenues and bottom line
results in fiscal 2016.
Conference Call.
The Company will also host a conference call on Wednesday afternoon,
November 18, 2015 at 4:00 p.m. (EST). Analysts, stockholders and other
interested parties may access the teleconference live by calling
1-800-311-9404 (pass code 86912) within the United States. International
callers may dial 1-334-323-7224 (pass code 86912). Computer audio live
streaming is available via the Internet through the Company's website at
www.patriottrans.com. You may also click on this link for the live streaming
http://stream.conferenceamerica.com/pth111815. For the archived audio via
the internet, click on the following link
http://archive.conferenceamerica.com/archivestream/pth111815.wma. If using
the Company's website, click on the Investor Relations tab, then select the
earnings conference stream. 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 79105435. 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; 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
concentrating in the hauling by motor carrier of liquid and dry bulk
commodities.
Continued
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(In thousands)
(Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30
2015 2014 2015 2014
---- ---- ---- ----
Revenues:
Transportation revenues $ 28,300 27,010 $ 111,294 108,424
Fuel surcharges 2,029 5,092 11,588 20,738
------ ------ ------ ------
Total revenues 30,329 32,102 122,882 129,162
Cost of operations:
Compensation and benefits 12,742 11,729 49,050 47,431
Fuel expenses 4,334 6,816 20,295 29,281
Repairs & tires 2,137 2,025 7,876 7,831
Other operating 1,305 1,209 4,520 5,251
Insurance and losses 1,951 2,982 10,249 10,729
Depreciation expense 2,156 2,111 8,486 8,210
Rents, tags & utilities 1,010 956 3,892 3,706
Sales, general &
administrative 2,409 2,659 9,188 9,273
Corporate expenses 370 613 3,203 2,685
Intangible asset impairment - - 2,074 -
Gain on equipment sales (718) (274) (1,537) (578)
------ ------ ------ ------
Total cost of operations 27,696 30,826 117,296 123,819
------ ------ ------ ------
Total operating profit 2,633 1,276 5,586 5,343
Interest income and other - - - 7
Interest expense (34) (16) (112) (109)
------ ------ ------ ------
Income before income taxes 2,599 1,260 5,474 5,241
Provision for income taxes 1,014 491 2,135 2,044
------ ------ ------ ------
Net income $ 1,585 769 $ 3,339 3,197
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Earnings per common share:
Net Income-
Basic 0.48 0.24 1.02 0.99
Diluted 0.48 0.24 1.02 0.99
Number of shares (in thousands)used in computing:
-basic earnings per
common share 3,272 3,243 3,268 3,243
-diluted earnings per
common share 3,276 3,243 3,275 3,243
Non-GAAP Financial Measures.
To supplement the financial results presented in accordance with GAAP,
Patriot presents certain non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission.
The non-GAAP financial measures included in this press release are adjusted
net income, adjusted operating profit and adjusted operating ratio. Patriot
uses these non-GAAP financial measures to analyze its continuing operations
and to monitor, assess, and identify meaningful trends in its operating and
financial performance. These measures are not, and should not be viewed as,
substitutes for GAAP financial measures.
Adjusted Net Income
Adjusted net income excludes the impact of the intangible asset impairment
charge. Adjusted net income is presented to provide additional perspective on
underlying trends in Patriot's core operating results. A reconciliation between
net income and adjusted net income is as follows:
Year ended
September 30, 2015
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Net Income $ 3,339
Adjustments:
Intangible asset impairment charge 1,265
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Adjusted net income $ 4,604
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Adjusted Operating Ratio
Adjusted operating ratio excludes the impact of the intangible asset
impairment charge. Adjusted operating ratio is presented to provide
additional perspective on underlying trends in Patriot's core operating
results. A reconciliation between operating ratio and adjusted operating
ratio is as follows:
Year ended
September 30, 2015
------------------
Operating ratio $ 95.5%
Adjustments:
Intangible asset impairment charge (1.7%)
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Adjusted operating ratio $ 93.8%
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Adjusted Operating Profit
Adjusted operating profit excludes the impact of the intangible asset
impairment charge. Adjusted operating profit is presented to provide
additional perspective on underlying trends in Patriot's core operating
results. A reconciliation between operating profit and adjusted operating
profit is as follows:
Year ended
September 30, 2015
------------------
Operating profit $ 5,586
Adjustments:
Intangible asset impairment charge 2,074
------------------
Adjusted operating profit $ 7,660
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