JACKSONVILLE, Fla.,
May 7, 2014 /PRNewswire/
-- Patriot Transportation Holding, Inc. (NASDAQ: PATR)
reported net income of $1,703,000 or
$.18 per diluted share in the second
quarter of fiscal 2014, a decrease of $568,000 or 25.0% compared to net income of
$2,271,000 or $.24 per diluted share in the same period last
year. Net income for the first six months of fiscal 2014 was
$4,044,000 or $.42 per diluted share, a decrease of
$1,350,000 or 25.0% compared to net
income of $5,394,000 or $.56 per diluted share for the same period last
year. The first quarter of fiscal 2013 included a gain of
$681,000 after income taxes on the
sale of investment land.
Second Quarter Operating Results. For the second
quarter of fiscal 2014, consolidated revenues were $39,907,000, an increase of $6,039,000 or 17.8% over the same quarter last
year.
Transportation segment revenues were $31,900,000 in the second quarter of 2014, an
increase of $4,724,000 over the same
quarter last year. Revenue miles increased 19.7% compared to
the second quarter of fiscal 2013 due to the Pipeline acquisition
on November 7, 2013, additional
business growth and a longer average haul length. Revenue per
mile decreased 2.0% over the same quarter last year due to a longer
average haul length, a change in the mix of business and lower
rates on the business acquired in the Pipeline acquisition.
Mining royalty land segment revenues for the second quarter of
fiscal 2014 were $1,226,000, a
decrease of $18,000 or 1.4% over the
same quarter last year due to a shift in production at one location
decreasing the share of mining on property owned by the
Company.
Developed property rentals segment revenues for the second
quarter of fiscal 2014 were $6,781,000, an increase of $1,333,000 or 24.5% due to higher occupancy, snow
removal reimbursements, revenue on the 125,550 square foot build to
suit building completed and occupied during the quarter and revenue
on the 5 buildings added June 2013
related to the purchase of Transit Business Park. Occupancy
at March 31, 2014 was 89.8% as
compared to 88.5% at March 31,
2013. The second quarter of Fiscal 2014 contains an
additional 232,000 square feet of rentable space at Transit
Business Park and another 125,550 square feet of Patriot Business
Park which expanded our total leasable space by roughly 10% while
still increasing total occupancy to 89.8%.
Consolidated operating profit was $3,146,000 in the second quarter of fiscal 2014,
a decrease of $1,162,000 or 27.0%
compared to $4,308,000 in the same
period last year. Despite a 17% increase in revenues,
operating profit in the transportation group for the 2nd quarter
decreased $1,024,000 or 53%.
This decrease in margin was driven by several inter-related items:
(i) after the acquisition of Pipeline in the first quarter, we had
significant driver attrition. Simultaneously, we won several
new accounts throughout our system with great long-term prospects.
In order to service both shortfalls we hired drivers in every
available market and temporarily moved them to locations with
driver shortages. While this enabled us to service our
customers, we did so at increased expense. Out-of-town driver
pay and per diem costs were $303,000
for the quarter and driver training expense increased $128,000; (ii) though not directly related to the
driver turnover, wreck expense increased $120,000; and (iii) because the equipment demand
from the new accounts, we delayed normal equipment trade-ins which
lower equipment sales by $225,000 vs.
the second quarter of last year. As we hire drivers in the
appropriate markets, these expenses will abate, and while we have
made progress, we are not yet at equilibrium. During January, the
number of out-of-town drivers reached its peak of 35 and as of
March 31 had been reduced to
17. Operating profit in the mining royalty land segment
decreased $47,000 or 5.1% primarily
due to a shift in production at one location decreasing share of
mining on property owned by the Company. Operating profit in
the Developed property rentals segment increased $64,000 or 3.0% due to higher occupancy, the
125,550 square foot build to suit building completed and occupied
during the second quarter 2014, and the addition of Transit
Business Park offset by higher property taxes and professional
fees. Consolidated operating profit includes corporate
expenses not allocated to any segment in the amount of $824,000 in the second quarter of fiscal 2014, an
increase of $155,000 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 second quarter of fiscal
2014 included $22,000 of deferred
profits on prior year land sales.
Interest expense decreased $234,000 over the same quarter last year due to a
declining mortgage principal balance and higher capitalized
interest. The amount of interest capitalized on real estate
projects under development was $60,000 higher than the same quarter in fiscal
2013.
Income tax expense decreased $363,000 over the same quarter last year due to
lower earnings compared to the same quarter last year.
Six Months Operating Results. For the first six
months of fiscal 2014, consolidated revenues were $78,727,000, an increase of $11,802,000 or 17.6% over the same period last
year.
Transportation segment revenues were $63,491,000 in the first six months of 2014, an
increase of $9,676,000 over the same
period last year. Revenue miles in the first six months of
fiscal 2014 were up 21.0% compared to the first six months of
fiscal 2013 due to the Pipeline acquisition on November 7, 2013, business growth and a longer
average haul length. Revenue per mile decreased 2.7% 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 six months of
fiscal 2014 were $2,494,000, a
decrease of $81,000 or 3.1% over the
same period last year due to a shift in production at one location
decreasing the share of mining on property owned by the
Company.
Developed property rentals segment revenues for the first six
months of fiscal 2014 were $12,742,000, an increase of $2,207,000 or 20.9% due to higher 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 March 31, 2014 was 89.8% as compared to 88.5% at
March 31, 2013.
Consolidated operating profit was $7,270,000 in the first six months of fiscal
2014, a decrease of $1,446,000 or
16.6% compared to $8,716,000 in the
same period last year. Despite an 18% increase in revenues,
operating profit in the transportation group for the six months
decreased $1,365,000 or 36.7%.
This decrease in margin was driven by the same inter-related items
detailed in our discussion of second quarter operating results
above. As we hire drivers in the appropriate markets, we
expect expenses to abate, and while we have made progress, we are
not yet at equilibrium. As of March
31, the number of out-of-town drivers had been reduced to
17. Operating profit in the mining royalty land segment
decreased $131,000 or 6.7% primarily
due a shift in production at one location decreasing share of
mining on property owned by the Company. Operating profit in the
Developed property rentals segment increased $296,000 or 7.4% due to higher occupancy, the
117,600 square foot build to suit building completed and occupied
during the second quarter 2013, the addition of Transit Business
Park 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 $1,178,000 in the first
six months of fiscal 2014, an increase of $246,000 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 six months of fiscal
2014 included $78,000 of deferred
profits on prior year land sales. Gain on investment land
sold for the first six months of fiscal 2013 included a gain on the
sale of the developed property rentals Commonwealth property of
$1,116,000 before income taxes.
The book value of the property was $723,000.
Interest expense decreased $351,000 over the same period last year due to a
declining mortgage principal balance offset by lower capitalized
interest. The amount of interest capitalized on real estate
projects under development was $15,000 lower than the same period in fiscal
2013.
Income tax expense decreased $863,000 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 six months of fiscal 2014 increased $9,676,000 or 18.0% over the first six 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 nullified
any return on the added revenues. The company has been adding
approximately five net new drivers a month, exclusive of the
Pipeline acquisition, for the last nine months and anticipates
continuing a similar addition of drivers. As permanent drivers are
added to our employment rolls the company expects that the added
revenues will become contributory to our profitability.
Developed property rentals occupancy has increased from 88.5% to
89.8% over March 31, 2013 as the
market for new tenants has improved and traffic for vacant space
has increased. Occupancy at March 31,
2014 and 2013 included 8,200 square feet or .2% and 25,660
square feet or .9% respectively for temporary leases under a less
than full market lease rate. In November 2013 the Company signed an agreement to
sell 4.4 acres at Patriot Business Park for $2,000,000. The book value of the property
at March 31, 2014 was $1,319,000. The sale closed on April 21, 2014.
The Company anticipates commencement of construction of the
first phase of the four phase Anacostia development in mid 2014
with lease up scheduled between late 2015 and all of 2016.
Conference Call. The Company will also host a
conference call on Wednesday afternoon, May
7, 2014 at 1:00 p.m.
(EDT). Analysts, stockholders and other interested
parties may access the teleconference live by calling
1-800-351-6803 (pass code 36584) within the United States.
International callers may dial 1-334-323-7224 (pass code
36584). 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. 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 71336533. 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
MARCH
31,
|
|
SIX MONTHS
ENDED
MARCH
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
|
$
|
31,900
|
|
|
|
27,176
|
|
|
|
63,491
|
|
|
|
53,815
|
|
Mining
royalty land
|
|
1,226
|
|
|
|
1,244
|
|
|
|
2,494
|
|
|
|
2,575
|
|
Developed
property rentals
|
|
6,781
|
|
|
|
5,448
|
|
|
|
12,742
|
|
|
|
10,535
|
|
Total
revenues
|
|
39,907
|
|
|
|
33,868
|
|
|
|
78,727
|
|
|
|
66,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
|
|
31,003
|
|
|
|
25,255
|
|
|
|
61,138
|
|
|
|
50,097
|
|
Mining
royalty land
|
|
347
|
|
|
|
318
|
|
|
|
676
|
|
|
|
626
|
|
Developed
property rentals
|
|
4,587
|
|
|
|
3,318
|
|
|
|
8,465
|
|
|
|
6,554
|
|
Unallocated corporate
|
|
824
|
|
|
|
669
|
|
|
|
1,178
|
|
|
|
932
|
|
Total cost of
operations
|
|
36,761
|
|
|
|
29,560
|
|
|
|
71,457
|
|
|
|
58,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
|
|
897
|
|
|
|
1,921
|
|
|
|
2,353
|
|
|
|
3,718
|
|
Mining
royalty land
|
|
879
|
|
|
|
926
|
|
|
|
1,818
|
|
|
|
1,949
|
|
Developed
property rentals
|
|
2,194
|
|
|
|
2,130
|
|
|
|
4,277
|
|
|
|
3,981
|
|
Unallocated corporate
|
|
(824)
|
|
|
|
(669)
|
|
|
|
(1,178)
|
|
|
|
(932)
|
|
Total operating
profit
|
|
3,146
|
|
|
|
4,308
|
|
|
|
7,270
|
|
|
|
8,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on investment
land sold
|
|
22
|
|
|
|
—
|
|
|
|
78
|
|
|
|
1,116
|
|
Interest income and
other
|
|
—
|
|
|
|
5
|
|
|
|
1
|
|
|
|
37
|
|
Equity in loss of
joint ventures
|
|
(31)
|
|
|
|
(11)
|
|
|
|
(63)
|
|
|
|
(19)
|
|
Interest
expense
|
|
(346)
|
|
|
|
(580)
|
|
|
|
(657)
|
|
|
|
(1,008)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
2,791
|
|
|
|
3,722
|
|
|
|
6,629
|
|
|
|
8,842
|
|
Provision for income
taxes
|
|
(1,088)
|
|
|
|
(1,451)
|
|
|
|
(2,585)
|
|
|
|
(3,448)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
1,703
|
|
|
|
2,271
|
|
|
|
4,044
|
|
|
|
5,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
$
|
1,703
|
|
|
|
2,271
|
|
|
|
4,044
|
|
|
|
5,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.18
|
|
|
|
0.24
|
|
|
|
0.42
|
|
|
|
0.57
|
|
Diluted
|
|
0.18
|
|
|
|
0.24
|
|
|
|
0.42
|
|
|
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
used
in computing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-basic
earnings per common share
|
|
9,619
|
|
|
|
9,527
|
|
|
|
9,593
|
|
|
|
9,481
|
|
-diluted
earnings per common share
|
|
9,707
|
|
|
|
9,599
|
|
|
|
9,690
|
|
|
|
9,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Patriot Transportation Holding, Inc.