Good day, ladies and gentlemen, and welcome to the Patriot Transportation earnings call for the second quarter of fiscal year 2022. At this time, all participants have been placed on listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Sandlin, CEO and President of Patriot Transportation. Sir, the floor is yours. In our history that the outcome could have been much, much different. Rob, the floor is yours. Good afternoon. Sorry about that. Good afternoon, 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 statement made during this call that relates 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 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. For our second quarter results. Today, the company reported a second quarter net loss of $490,000, or a loss of $0.14 per share for the quarter ended March 31, 2022, compared to net income of $484,000 or $0.14 per share in the same quarter last year. Last year's quarter included $1,037,000 or $0.31 per share from gains on real estate net of income tax. Operating revenues for the quarter were $20,928,000, up $1,200,000 from the same quarter last year due to rate increases and higher fuel surcharges. This quarter's revenue miles were negatively impacted by the approximately 50 driver reduction versus last year's second quarter, mostly due to the driver shortage. Operating revenue per mile was up $0.65 or 19.8% due to an improved business mix and rate increases. Compensation and benefits increased $275,000, mainly due to the increased driver compensation package, mostly offset by the lower driver count and a reduction in support staff. Insurance and losses increased $645,000, primarily from higher healthcare costs caused by one COVID claim, which hit our maximum retention of $372,500, and a prior year workers' comp claim, which negatively impacted us by $380,000 in the quarter. The depreciation expense was down $265,000 in the quarter, and gains on sale of assets was $119,000 compared to a loss of $113,000 in last year's quarter. The operating loss this quarter was $639,000. The COVID claim and the prior year work comp claim resulted in a total charge of $752,000 to this quarter. Year-to-date results. The company's net income was $5,949,000 or $1.63 per share, compared to $262,000 or $0.08 per share in the same period last year. The net income this first six months included $6,281,000 or $1.72 per share from gains on real estate net of income taxes. The prior year six-month results included net income of $1,037,000 or $0.31 per share from gains on real estate net of income taxes. Operating revenues were up $1,543,000 due to improved rates and higher fuel surcharges, while miles were negatively impacted by the lower driver count. Operating revenue per mile improved $0.64 or 19.9% due to rate increases, higher fuel surcharges, and an improved business mix. Compensation and benefits increased mainly due to driver pay increases offset by lower driver count and non-driver personnel reductions versus last year. Diesel prices have increased to record levels, causing our fuel expenses to increase by $1.316 million over last year's second quarter, while insurance and losses increased $333,000, due mainly to the two claims mentioned earlier. We decreased depreciation expense by $533,000 with the downsizing of equipment that was mostly completed in the second half of fiscal 2021, while SG&A expense was higher by $340,000, mostly due to a one-time transaction bonus following the sale of the Tampa terminal property. The gain on the sale of the land was $8.33 million due to the sale of Tampa, compared to $1.431 million in the same period last year. The gain on sale of assets was $479,000 versus a loss of $199,000 last year. This year's gain was positively impacted by the dramatic increase in used truck prices. The operating profit for this period was $7.902 million compared to $370,000 last year. Including the Tampa land sale and the one-time transaction bonus for management, adjusted operating loss for the six months was $34,000. As stated earlier, the COVID and prior year workers' comp claim resulted in a negative charge of $752,000 to the first six months. Now for the summary and outlook. During the first six months, our driver count remained steady and similar to the previous two quarters following the large driver pay increase in April 2021. During the first quarter, we announced additional driver pay increases in all of our markets, most of which took effect in early February 2022. It bears repeating from last quarter's conference call that these increases added 21%-31% to driver pay, depending on the market, and our new driver pay is up a minimum of 26% over the same period. In addition, we have been successful in our rate increases since last April to more than cover the increased cost of the driver pay raises. Matt McNulty, our CFO, has settled into his new responsibility as COO after our Vice President of operations retired at the end of our first quarter. As mentioned on our call in February, we have made other personnel moves that will not be replaced. We continue to focus on growing our dry bulk segment into new markets as we are able to hire drivers. We continued to hire registered apprenticeship drivers for the dry bulk business as we have partnered with the Department of Labor in an effort to expand our hiring base. I have made multiple trips to Washington, D.C., and continue to work with senior staff at DOL and DOT, along with National Tank Truck Carriers, on the driver shortage and long-term solutions for us and the industry. We are in the final stages of an application and acceptance into the Department of Defense SkillBridge program, which will provide us better access to transitioning military personnel with truck driving experience. I was honored to be invited to the White House for a South Lawn celebration of President Biden's 90-day trucking challenge on April 4, and was asked to take one of our registered apprenticeship drivers, Joseph Britt Jr., along with me. Joseph is a seven-year Army veteran who is exactly the type of person we were looking for with the SkillBridge program. Joseph is now actively hauling petroleum loads for us after his initial training period. We had a great day together in Washington, D.C. The dividend paid in November reduced our cash balance by $12.8 million, but our balance sheet remains strong with $6.8 million of cash at the end of March 2022. We began replacing tractors in the first quarter of this fiscal year, and while we are experiencing delays due to supply chain issues, we anticipate receiving a total of 30 replacement tractors and a handful of trailers with capital expenditures of approximately $6 million during this fiscal year. We have also seen the prices of new tractors increase due to supply chain issues and inflation. Finally, we are all saddened at the passing of our Chairman Emeritus, Ted Baker, on April 28th. I've had the pleasure of working with Ted for a long time. His business record is well known, and I am honored to have known him and fortunate to have had the opportunity to learn from him over the last 38 years. He will be missed by us all. Thank you again for your interest in our company, and we will be happy to entertain any questions. Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. Today, we are asking that participants limit themselves to two questions at a time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, please press star one at this time if you have a question, and please hold while we poll for questions. Once again, ladies and gentlemen, if you do have any questions, please press star one on your phone at this time. We did have a couple of questions come in. The first question is coming from Steve Rudd from Blackwall. Steve, your line is live. Sure. First condolences to the Baker family. Obviously, I didn't meet Ted, but I know what it is to have an elderly parent and when they're gone, it's a massive loss. Really heartfelt condolences to the entire family. It's weird to transition to business questions, but I'll do my best, and I know you will too. On driver count, your press release and your comments noted that we've stabilized at around 355 drivers. The program you're participating in in Washington appears to be bearing fruit, as do the pay increases. What's your feeling now? I mean, we were down about 10 drivers this past quarter to quarter versus last conference call. Do we see that reverse now? I do have a follow-up question on. Yeah. We had a very small terminal in Nashville with about eight drivers, seven or eight drivers that we closed in February of this year. I'd have to rely on you that we had about 10 driver drop from the last call, but most of that was from that closure. We just could not. There was no reason for us to stay in Nashville with the labor market the way it is and the turnover, and the business there. It was just better for us to move on. Yeah, the only thing. This is Rob. The only thing I would add to that is on any given week, there's a little ebb and flow in those numbers, but what I think I would say is that since the driver pay increases, the driver turnover has stabilized. While you still see churn in the new drivers, it's way down from what it was pre-pay increases, as is the turnover for our senior drivers. Drivers, I should say, drivers that have been here for more than a year. Okay. My question on the drivers is, you know, this is all good news on the driver count, on the stabilization, and I appreciate the clarification on the Nashville closure. Going into the next quarter, and I'll ask a compound question or two-part, and then to the extent there's a line, I'll go back in it. The compound question is, do we think now that we will see an add to drivers by the end of this quarter? That's one part. Then the second part is we've always anticipated that each additional driver nets about $50K to the company. Do our price increases adjust that figure, and by about how much? The first part of that, I'll let Matt think about the second part for a second. The first part of the question really about drivers is, we've seen some uptick in the number of applicants, and we've seen some uptick in the number of trainees that we're getting on board, but not significant. It is still a very, very difficult driver market. There are terminals where we don't have any viable applicants. Probably looking through our recruiting report most recently, there are close to half of the terminals just don't have a lot of great applicants. It gets very difficult to hire and get a driver through training. We have other markets where we're being more successful. I don't have any reason to believe that we're gonna start making great gains on driver adds, and I just haven't seen that or heard that anywhere else in the marketplace. I think it's still gonna be a very difficult driver market going forward. Yeah. Um, now I- Mm-hmm. I think the one thing that while Matt's maybe thinking about your other question a little bit, I think we are certainly trying to outstrip the driver cost as much as possible to add margin in rate increases. I think the thing that nobody's factored in until now recently is we've got this thing called inflation that's hitting us in anywhere from tires to lube oils to parts to labor. A lot of those and tractor costs we're getting surcharges on tractors. We're having to monitor that as we go through and adjust accordingly. I think we'd probably be a little nervous about applying a number to what how much we're gonna gain above and beyond the driver pay on rate increases. I do believe we're gonna have a gain. Matt, do you wanna add to that a little? No, I think that's a good answer. To Rob's point, I think it's too new right now to see our costs, you know, with the inflation and other things happening, to understand how much of that additional revenue that driver is gonna bring in is gonna go to the bottom line. I still feel like a good number since it's, you know, is the $50,000. There's certainly some more that probably will be added to Rob's point, but I don't know that it's a giant amount of money that'll be to the bottom line per driver. Okay. I'll go back. I don't know if there is a queue. Is there a queue right now or am I the only one? Let's go back. We'll go back to the queue Yeah, he can pop you back in if We'll pop you back in if not. Okay. All right. Thanks. Thank you, Steve. We did have another question come in from Adam Ritzer. Adam is a private investor. Adam, your line is live. Thank you. I appreciate you taking my call. Thank you. I just had an overall larger picture question. I think, you know, you guys have done a great job on returning capital, selling assets, you know, paying out your free cash flow, you know, in terms of dividends the last couple of years. I congratulate you for doing that. But it seems as if, you know, this new driver problem never really goes away. You know, costs keep going up, so your overall profitability, even from a few years ago, is gonna be down, you know, even as you just kind of alluded to. What would it take for you guys to just say, "Look, you know, why don't we just sell the business? Maybe there's another buyer out there who could cut costs, kick up our assets, and just say, this is just too tough of a business for us to ever really make any money. Would you ever get to that point? You know, why or why not? I think there's I mean, I think every company that's managed by folks has to be aware that that's always, you know, that's always an option. Whether we're buying or we're selling, I mean, that's just part of your options as a strategy. But I don't think the business today itself will be pushing us to make that decision. I think we feel like we've managed through a lot of the tough times and are starting to see the curve, you know, to start to move in the right direction, especially with the driver stabilization and the rate increases. I think we'll just keep running the business as it is, and like I said, I mean, there's never gonna be a time where if somebody comes to us and wants to talk about an opportunity that we're not gonna listen, but that's not, it's not on the forefront of our minds right now. Okay. The plan is just kinda keep going at it, you know, trying to raise our prices, to offset our costs that are going up, try and look for new drivers and just keep plugging along. If somebody came to us, you know, and wanted to get us out of the situation, you guys would not be adverse to that? No, I think we have to look at all possibilities and then certainly get the board involved at that point if that were something that happened. You know, right now we have just been keenly focused on doing the things that you mentioned in the first part of your question, and then we've seen some improvement and we're trying to go back and do what we've done for years and put a reasonable return in on the bottom line and then, you know, the rest of that stuff should take care of itself. Yeah. Okay. Very good. You know, I'm not trying to, you know, be rude, but I just wanted. No. to put that out there and, you know, see what you guys have thought of it, because it has been tough now, you know, like you said, for the last couple of years. I appreciate Yeah. I appreciate. Yeah. You know, I see what's going on. No, we're not. That's a fair question. We don't take that as being rude at all. Certainly in any business life, those are things that you talk about. Okay. I appreciate it. Thanks very much. Great. Thank you. Thanks. Thank you. Steve Rudd from Blackwall, if you had a follow-up question, please go ahead. I do. I've got two. And Rob, thanks for your straightforward, and the team's straightforward approach on these things. So one question I have, you know, I invest in small cap companies like yours, you know, well-managed. One thing I'm hearing from them, everybody. I'm old enough to be familiar with the term inflation, like everybody on this call. But I'm hearing from most of them that they can adjust prices. The price increases are being accepted pretty well. I'm wondering how quickly you could adjust prices yet again. And then I have a further follow-up to Adam's point. Well, it's not. What you do. Yeah, that's a fair question. I mean, we are in a second and third round of rate increases, and there were prices that went up in February. There were prices that went up last month. There's prices that are scheduled to go up through the summer. I think as long as people are having difficulty getting their products delivered out there, it's, you know, this business is a pure supply and demand business. We've got the ability to haul products and partner with those customers that are interested in a long range partnership and understand the value of what we're doing for them. We think there's opportunities not only to increase price out in the future, but we also think there's opportunities to change partners if some of the folks that we're dealing with aren't interested in that type of a partnership with a company like ours. We've done that in a couple of cases already. We've really only had a couple of companies thus far, to your question, that have really pushed back to the point of losing business as it relates to rate increases. I think there's probably some still some more opportunity out there. Timing that properly is a thing that we have to be very aware of. All right. That's good. That's consistent with what you guys did last year. I think the opportunity runs quite deep. At least that's what, again, what I'm seeing. Your business is certainly a niche business. Adam, I don't remember his last name, raised an interesting question, particularly in light of Ted's passing. His shares, do we know what, you know, what happens to his shares? Do they pass to the family? I mean, is there a plan for those shares? If you know about- We won't have any insight on any of that. That's all handled internally for the family. Yeah, that's all his personal stuff. It hadn't come up to us, so I really don't know how they're handling that at this point. Okay. I understand it's a delicate question. The only thing triggered it was the prior question. Right. Again, you know, thank you guys for the hard work. I think we're in good hands and, you know, I know that you do your price increases thoughtfully. I think you've got room, not knowing your markets as well as you do, but at least from heard on the street is, you've got probably some room to be aggressive, but you'll do the right thing. Thanks again. Well, we appreciate your participation and your interest. Yeah. Thank you. Thank you. There were no other questions in queue at this time. I'd like to hand the call back to Rob Sandlin for closing remarks. Thank you all for your interest in Patriot Transportation. We look forward to talking with you again next quarter. Have a good day. Thank you, ladies and gentlemen. This does conclude today's conference. You may disconnect at this time. Have a wonderful day. Thank you for your participation.