Patriot Transportation Holding (PATI) 6 Dec 222022 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Patriot Transportation Holdings, Inc. Earnings Call for Fourth Quarter 2022. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Sandlin, Chief Executive Officer of Patriot Transportation Holding. Sir, the floor is yours.

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

cause let uncertainties into nature forward-looking results the that future indicated actual by caution their any that that statements differ we get those me call to Before made to statements. relate and risks subject could our results, to from events you during this and or materially such by

Additional company's information and filings factors Commission. risk the Securities may the and Exchange and uncertainties regarding these with in be found other

for of ended Now for $X.XX per fourth for $X,XXX,XXX Today, year, share Operating improved $XX,XXX year. in XX, were income revenues and September the surcharges rate quarter our business results. last or income quarter same same an the mix. up $XXX,XXX quarter the due share quarter quarter net higher compared or company fuel of the to XXXX, the $XX,XXX,XXX, per net increases, $X.XX to a last reported from

in fatality offset per revenue the XX $XXX,XXX, fourth by miles benefits rollover increased $XX,XXX, and third-party $XXX,XXX Operating terminal. by Depreciation quarter. down Unfortunately, a to increased a due losses $XX,XXX due reduction with the single of was compared was was $X.XX other package, rollover fatality to in were on -- loss and in by negatively staff. mile profit quarter expense up approximately $XX,XXX rollover mentioned due in loss mainly an and a assets operating driver the sales in Equipment sale lower rollout and above. $XXX,XXX, the which $XXX,XXX, year's $XXX,XXX, the resulting health to impacted quarter. or vehicle higher to driver quarter, of year's gains on caused and versus gains count last mostly and accident, Compensation insurance were compared was XX.X%. year's by last support negatively driver increased separate was reduction the of The compensation $XXX,XXX along to vehicle Nashville to the and last our revenue $XXX,XXX, impacted driver underinsured due shortage quarter's closing quarter This this the revenue fourth per claims.

rates, per of year-to-date The last $XXX,XXX improved $X,XXX,XXX net the count lower higher was to improved of pay driver Operating per and share the of income for operating from lower non-driver operation. Compensation $X,XXX,XXX income $X.XX increased improved per from XX.X%. due included up real taxes. taxes. or mix, offset mainly or prior miles, results. being were Now or X.X The on or estate $X.XX $X.XX included year's net Nashville income real down our by The gains year. to estate company's per business share, share net driver surcharges and $X.XX or reductions. personnel $X.XX income closing $XX,XXX,XXX, and net The an share due and driver results at to on count mile revenue income of despite net $X,XXX,XXX revenues fuel increases because benefits of compared the $X,XXX,XXX gains per

of claim of $XXX,XXX. the negative a accidents a mainly second that depreciation loss by claim of $X,XXX,XXX insurance expenses Tampa last was on COVID the transaction by compared and one-time earlier, year $XXX,XXX the $X,XXX,XXX by was We of detailed versus of in increased to expense and year. mostly and $XXX,XXX year $XXX,XXX was gain the SG&A sale $X,XXX,XXX, prior workers losses in the higher $XXX,XXX. sale terminal to a $XXX,XXX with gain last while compared resulting equipment last fourth a property The year, downsizing assets half decreased $XXX,XXX bonus $X,XXX,XXX, the was of The due mostly expense due quarter a XXXX. $X,XXX,XXX to following loss of fiscal operating limit to sales Tampa of was on the over adjustment on last on the gain year. compensation land The maximum fuel year. Our for increased a by $XXX,XXX, profit sale completed of $XXX,XXX land

rollover the highly resulted and unusual compared of comp $XXX,XXX and Tampa of year, two not an these and $X,XXX,XXX, the levels. charge adjusted negative for to $X,XXX,XXX claim a land operating year. the operating for adjusted one-time at for claims sale the previously last something the workers The in health prior is transaction claim the QX Excluding bonus year management, profit year loss was which COVID seen

for Now outlook. and summary the

During the XXXX total April subsequent in driver the year, count driver our and steady due pay remained increase to pay increases during XXXX. large fiscal driver

announced which markets in all we of increases driver most our increases quarter We in effect effective additional XXXX. During February additional first in took August the XXXX. about announced pay markets fiscal of half XXXX, early early pay of in

increases We which to that markets, pay the on to the increases means the of are depending process these in will driver have XX% market. XX% announcing in driver pay added remaining

economic service designed and outcomes. task and transitioning involved is industry improve be to security movement, stakeholders continue in together to to veterans, force members, national families bring We military which

increase our some transitioning the and military. members DoD We that soon driver venture Skill military transitioning Bridge with are applicants involvement we have military will from allow hopeful our force from seen us to

investment. same areas, particularly cost XX% climb insurance The to to the parts, We markets the labor. to cover we the To our up along increases, understand incidents $X.X to over won't continue pay increases have rates and but and with still return year been XX% write-offs battling tight, the cover make million. and to the everyone have rates insurance and I Insurance very single-digit and in a belabor at are layers with claims in freight many excess challenges difficult coverage. we face successful this levels us along our need with the equipment repair partnering at inflation for customers layers. costing of pressures point, and driver excess particularly on delays cost with an lower tires this added raising as challenge are and we on supply the acceptable was including chain four

health, history We each claims work comp periods, have on compared premium waive high during deductibles to cost. insurance auto these our renewal and and claims our we and year

trailers with cash $X.X Our balance debt. this year. XX, with sheet September replaced five stable no We of as of and XXXX million XX during tractors outstanding remained

business we drybulk We also as expand trailers added five this continue to offering.

replacement will replace we XXXX, XX planning units. that service lease purchase XX tractors, For including to are year full fiscal

We this nine were also with my safety the capital We named plan $XX fiscal expenditure I three Spring to met the total look to team trailers for purchase forward express Year Water want future. frequency targets during their of we year. our Carrier safety million recently to a water by for as members growing and in approximately the of of of we customer also all to gratitude our our for all business dedication to XXXX.

entertain over operating improved the of retool management for business size our again we our last lifting for will cost, continue business, profit questions. heavy results. to company will improved price done your we you for couple drive improved with right and to have Thank and our to to and interest happy be any streamline years results work encouraged We forward. the in XXXX team moving I'm our by

Fund. gentlemen, Value from the [Operator ladies Christian Olson for Instructions] and open question is Certainly, now Olson floor from coming is questions. Your first

is line live. Your

you. Thank

So it's my customer understanding come renewal that many a for up once of your year. contracts about

that up next the approximately over there it out contracts renegotiation? the quarter? look there Or four more you quarters if where are quarters, amount so for every same And is certain are are

lot contract. really on more be a works increases. the comes depending There's we customer, pricing of It's happen way And of have rate getting business lot our the goes, that and you. throughout they thinking one-year contracts this can do year a mean rolling about just negotiation with the when it not basis. are how the the those, to Really honest renewing kind basically on I really whole of to and

So you're due that's are there's is -- ever contracts if coming that renewal, what of real there no no asking. pack for

And only we do would multi-year tied a contracts CPI, to about have handful that food is especially that and of I was less thing that Christian, are Matt. energy add two-year and The that Rob. deals. so is are those and this one-year deals on

you obviously, know, the in that we so price And recent of in because terms times, increases inflation. what of means

typically what guess for any and was was does at it well, it -- a a I I -- happen your Yes. pretty much once you go so ask Or any year? time not to customers at can say getting increase? of price And is

a that once inflationary customers as been additional through gone our driver asked and increases, pay mixed It's gone plus It's intermittently. historically a bag. we've increase rate but we've for cover to year, to cost these

And those over have some gave been so our pricing escalators a increase annual on CPI. based times I frequent do cover the that would last XX-months, in negotiations cases, have driver But the us lot say than contracts rate more been pay cost. or additional and We year. once the are a it's that of forthcoming customers to during

far quite compensation see been going so gotten months? increases rate you increases especially next Have all expense push over through from being over aggressive able much few do clearly you going next the how to lot. And a And is rate your anticipate so your you've you but do or up year Okay. forward pretty some, the customers? especially

of big for our going that with is because in and gone since understood those pass to They increase they the XXXX first I think, in along said rate those we majority chain. understood along the April costs. Christian was supply what understood adjustments, they what the put really customers shortage the have vast need on we've us driver when price of

resistance. say little would been there's I very So

partner where The told we calls we made other in there and changes. with is thing been willing that was that do needed you of we've those these go resistance have else that some and to we to than all somebody have

drybulk then and mentioned just drybulk in if there's some they paying still Got industry? you. were plans raises. ask And pressure upcoming if can on also about real you I And upward pay, the

as are go there April April XX% our increases much from in we're And upward are rate There before those, price to where as to along in the planned is pressure there up as increases are those planned XXXX. budgeted XX% I obviously -- we think raises of was don't with definitely and and well. were once for

double-digit us for the behind think of I probably so increases now. And are type at least

Got you. right. you. All Thank

Yes, you. sir. Thank

Your Blackwell. [Operator question next is Steve coming you. from Instructions] Rudd Thank from

is line live. Your

bunch a on large And a amount year, quite new Hi, of relative CapEx expected sounds well. guys. what like we're that's it hear the buying been next $XX million question sounds to of everyone spending. to A Glad we've equipment. for

me and an phrase If give setting market we trailers of what adding Just need the rigs, we're let based on take our better. stock in significant? initial if replacement? to for to underlying terms take the from our how add it's do a both million? capital for we much initial we baseline, of And that demand, out me what's idea if it of this Basically, -- rationale this projected $XX are

the question Steve, more this we the quarter. that purchase run that's on makes on we've financial trucks will answer a service oddity lease. trucks probably XX tractors have particular we the that the And are throughout we leasing trade fiscal when that easiest us purchase that model, cycle to those normal a outright. units a way it for And got we XX pretty sense for then full to that me year, have is XX you is year

over of we looking don't would trucks those And number exact kind the XX of $X that of of spend. than that's spend of our at million what million in but a there. me, it's little I we're the front in So normal. right excess have differently $X

if out, back closer to normal. it's a that you So lot

those of expensing that -- probably on very those I is see. trucks the understand is just of curious significantly the on so on do the expense expense that on which stuff increased versus them we we were relative And we we And the compare well, of those? expense lease to XX does for interest I'm depreciation off when I depreciation leasing the when the how rates, expense be coming and are Matt to through this trucks purchase save got out or compare -- but the know lease which lower really lease trucks? going higher justify purchase, shakes we've lease -- but it than depreciation what particular I

newer trucks. depreciation inherent truck be higher for I the so costs gone up, mean, component the have the will

However, first were Yes. service on paying new you these the as might full have year leases, maintenance for truck. that not were we as

and line, the owned line truck they and a truck charge So the leased for is depreciation flat. relatively rents

equipment a be So expense see change up shifting won't leases just bottom going depreciation. we'll much rents perspective, line and forward. to that from you But from

management demand drybulk better customers I'm there do or and or turns demand business pricing looking grade what and Okay. business off But curious it's All so relative just on that's them lease, All some we're and it? dropping year in there? Our our off normal you cycle, our the we're increases know, normal are that we're right, new replacement additional to structure Basically, upcoming and on increased some off, them, we getting trucks seeing? getting any rates on what at right. demand in replacement obviously still see the cycle. purchasing taking our taking cost hopes the

is doesn't quite up through have late the van any that see to going as We're and businesses rates is peaks South Central valleys where be flatbed good, the start month their and don't heavy demand I businesses down as down some think our pick an mean, -- see and up moves a example. expect and of this bit. demand not and and seasonal Florida run to have I their the to up different. that demand still business Florida dry pretty or March. We move We

guess hope year COVID. it further better may we're and a fact, I away In be because I from

If ability I we've able add a to think been before growth at those to to And in mentioned few same our and to capacity rates. answers and of been add the what that good to and freight are consider recently, the business And go of markets would I've add ability miles part that we've I and in out revenue get our able our tied started -- where new still so thing we've that's markets. it? drivers

Well, right. we'll sit All to holidays tight enjoy does. it and have shapes the think I year a I up. guess, out coming

Thanks call. you, great. Steve. right, for Thank All your

you. Thank

Thank you. the [Operator no in Instructions] further Thank you. There are questions queue.

have for and hope interest Thank Patriot we Transportation you safe happy in holiday. your and a all we

concludes gentlemen. ladies you, today's This Thank and event.

a You at have you wonderful may disconnect this your Thank day. time and participation. for