Patriot Transportation Holding, Inc. (NASDAQ:PATI) Q2 2020 Earnings Conference Call - Final Transcript

May 11, 2020 • 03:00 pm ET


Patriot Transportation Holding, Inc. (NASDAQ:PATI) Q2 2020 Earnings Conference Call - Final Transcript


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Greetings, and welcome to Patriot Transportation Holding's Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Robert Sandlin, President and Chief Executive Officer of Patriot Transportation.

Robert E. Sandlin

Good morning, and thank you all for being on the call today and for your interest in Patriot Transportation. I am Rob Sandlin, CEO of Patriot Transportation. And with me today are Matt McNulty, our Chief Financial Officer; and John Klopfenstein, our Chief Accounting Officer.

Before we get into our results, let me caution you that any statements made during this call that relate to the future are by their nature, subject to risk and uncertainties that could cause actual results and events to differ materially from those indicated by such forward-looking statements. Additional information regarding these and other risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission.

Now, for our second quarter results. Transportation revenues were $21,560,000 a decrease of $2,977,000 on 1,565,000 less miles due to our decision to close our Charlotte terminal in late May 2019, the recent downsizing of certain customer accounts due to low freight rate, and the COVID-19 pandemic beginning in the middle of March, which accounted for approximately 240,000 miles. Our transportation revenue increased by $0.18 per mile versus last year's same quarter due to rate increases and eliminating lower rated business. Fuel surcharge revenue was down $504,000. Compensation and benefits decreased $1,471,000 mainly due to lower company miles and lower driver training pay. While training pay was lower than the prior year quarter, we continue to be challenged with driver hiring, driver travel and retention related costs.

Fuel expense decreased during the quarter and depreciation expense decreased by $137,000 as we continue to rightsize the fleet. Insurance and losses increased $553,000 for the quarter, primarily due to several large health claims and a lower gain on risk insurance versus last year's quarter. As a result, the operating loss for the quarter was $588,000 compared to an operating profit of $293,000 in last year's second quarter. The net loss for the company was $401,000 compared to a gain of $289,000 last year.

On to the year-to-date results. Transportation revenues were $44,159,000, down $5,358,000 or 10.8% on 2,882,000 fewer miles. The corresponding revenue per mile was up $0.16 per mile due to increased freight rates and the impact of lower rated freight we eliminated, which has helped to offset the negative impact of fewer miles. Fuel surcharge revenue was down $1,368,000 from the same period last year.

Compensation and benefits were lower due to lower miles and lower driver training pay. Gross fuel expense decreased along with repair and tire expense, which decreased $349,000 due to reduced miles in the first six months of this year and several high-dollar repairs last year. Our