Patriot Transportation Holding posts higher 2Q net income

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Patriot Transportation

Patriot Transportation Holding on Wednesday, May 5, reported net income of $1,442,000 in the second quarter of fiscal 2010, an increase of $33,000 or 2.3 percent compared to net income of $1,409,000 in the same period last year. Net income for the first six months of fiscal 2010 was $2,778,000, a decrease of $378,000 or 12.0 percent compared to net income of $3,156,000 for the same period last year.

The Jacksonville, Fla.-based company said results for its transportation segment, which includes Florida Rock & Tank Lines, were impacted favorably by lower vehicle accident costs, mostly offset by reduced miles driven and lower equipment sale gains. Income from discontinued operations favorably impacted net income due losses from operations in the prior year and lower-than-expected retained liabilities.

For the second quarter, consolidated revenues were $27,510,000, a decrease of $267,000 or 1.0 percent. The company announced on Jan. 6 that the transportation group had been unsuccessful in renewing certain contracts with significant customers. For the fiscal year ending Sept. 30, 2009, the revenue from these customers was $10,012,000 or about 11.0 percent of transportation group revenue. Revenue miles were down 5.7 percent, primarily due to this loss of business. About 2.9 percent of miles were from transition services related to the contracts that were not renewed. Transportation segment revenues were $21,658,000, an increase of $136,000.

Consolidated operating profit was $3,067,000, a decrease of $491,000 or 13.8 percent compared to $3,558,000. Operating profit in the transportation segment increased $116,000 or 7.9 percent due to reduced vehicle accident costs mostly offset by reduced miles driven and lower equipment sale gains. The after-tax income from discontinued operations was $94,000 versus a loss of $287,000.

For the first six months of fiscal 2010, consolidated revenues were $55,010,000, a decrease of $3,611,000 or 6.2 percent. Transportation segment revenues were $43,739,000, a decrease of $2,765,000. Revenue miles were down 7.5 percent due to the loss of business along with lower demand and a competitive economic climate. Consolidated operating profit was $6,109,000, a decrease of $1,480,000 or 19.5 percent compared to $7,589,000.

Operating profit in the transportation segment decreased $359,000 or 10.4 percent due to reduced miles driven and higher fuel cost net of surcharges. Consolidated operating profit includes corporate expenses in the amount of $735,000, a decrease of $112,000. The after-tax income from discontinued operations was $118,000 versus a loss of $483,000.

Patriot said its transportation segment results for the second quarter improved over the same quarter last year even though revenue miles were down 5.7 percent. The company said it continues to succeed in replacing customers from the nonrenewed contracts and anticipates recovering from new customers substantially all the lost revenue miles over the next few quarters, albeit at lower margins.