Patriot Transportation Holding, Inc. (NASDAQ:PATI) Q2 2020 Earnings Conference Call - Final Transcript
May 11, 2020 • 03:00 pm ET
Robert E. Sandlin
insurance and losses increased $380,000 due to higher health claims. And gains on disposition of assets was lower due to a gain of $866,000 on the sale of land in Ocoee, Florida during last year's period and $247,000 gain on insurance related to hurricane damage. As a result, the operating loss for the first six month was $1,312,000 compared to operating profit of $1,400,000 in the same period last year. The Company reported a net loss of $865,000 compared to net income of $1,173,000 in last year's period. Net income in the same six-month period last year includes a gain on real estate sales of $634,000.
Now, for the summary and outlook. While our business has not produced the returns we prefer in the last couple of years, we believe the changes we made to our business were beginning to have a positive impact in March. Our plans were taking shape prior to COVID-19 with higher revenue per mile due to higher rate. We exited business with one of our large customers due to low rates during the first quarter of this year, and at the same time, increased the remaining rates on this account by approximately 4.5%. Our intent was to continue down this path of improving rates, while dealing with driver shortages and higher risk insurance rates driven by auto liability premiums in the primary and excess layers. Unfortunately, we experienced a rapid decline in business volume in the middle of March due to COVID-19, which negatively impacted the month and quarter.
April petroleum miles were off approximately 35% from anticipated levels. We have seen a recent uptick in volume in May versus April. But at this point, it's anyone's guess where we land. We are an essential business but too big to benefit from government subsidies like the PPP loan, but are fortunate to have zero debt on our balance sheet and $11 million of cash. Our profit will certainly be impacted by the loss of revenue, but management has taken the necessary steps to protect our cash. We will not order the remaining budgeted tractors and will reduce our expected fiscal year capital investment by 50%. Additionally, the Board voted to suspend the quarterly dividend until further notice.
During March, we immediately reduced the hours of our hourly staff, including mechanics, reduced the day's work by our drivers and furloughed some of our senior drivers who will return to work when business volumes increase. We also made a number of permanent layoffs of hourly and salaried staff and eliminated all of our weekly driver pay minimums. We have approximately $2 million of depreciation and another $1 million of non-cash expenses during the June quarter.
We have seen fewer drivers resign since the pandemic and applications -- applicants are available. But we will have to monitor the driver situation closely as our volume of business increases. We did not permanently lay off drivers during this time, and we feel that we are positioned to handle our normal