Patriot Transportation Holding, Inc.

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PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES IMPROVED PROFITABILITY FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF FISCAL YEAR 2002.

Jacksonville, Florida; August 7, 2002 -- Patriot Transportation Holding, Inc. (NASDAQ-PATR) reported improved profitability on lower revenue for the third quarter and nine months of fiscal 2002. Momentum continued positive within the real estate segment's developed properties but was offset by lower mining royalties. Encouraging results for operating margins and income also were achieved for the Company's transportation business.

The Company reported net income of $1,577,000 or $.50 per diluted share for the third quarter of fiscal year 2002, an increase of $420,000 or 36.3% when compared to the same quarter last year. Net income for the first nine months of fiscal 2002 was $4,347,000 or $1.37 diluted share, an increase of $311,000 or 7.7% from the nine months of fiscal 2001.

Third Quarter Operating Results. For the third quarter of fiscal 2002, consolidated revenues were $24,876,000 a decrease of $6,776,000 or 21.4% over the same period last year. The transportation segment's revenues for the third quarter of fiscal 2002 were $21,280,000 a decrease of $5,299,000 or 19.9% due to the closing of the Company's third-party agent/owner-operator subsidiary in September, 2001. This subsidiary had revenues of $6,470,000 in the third quarter of fiscal 2001. The revenues of the transportation segment's continuing operations increased $1,171,000 in the third quarter of 2002 as compared to the same quarter of 2001. Approximately 38% of this increase was due to additional miles hauled with the balance due to modest price increases. The increase in miles hauled was primarily a result of new business generated from the May 30, 2002 acquisition of the operating assets of Infinger Transportation, Inc. (Infinger), a small southeastern U.S. tank truck company, partially offset by lower demand for petroleum products caused by decreased tourism and air travel since the September 11 tragedy.

Real estate revenues were $3,596,000 a decrease of $1,477,000 or 29.1% from the third quarter of 2001. During the third quarter of 2002, the Company had $199,000 in property sales as compared to property sales of $1,250,000 for the third quarter of 2001. Real estate revenues, excluding property sales, decreased $426,000 primarily as a result of lower royalties of $661,000 from mining properties, partially offset by additional rental income from newly developed commercial properties and rent increases. The lower mining royalties resulted from completion of mining at two locations.

Consolidated gross profit was $5,458,000 for the third quarter of 2002, an increase of $220,000 or 4.2% as compared to the same period last year. Gross profit in the transportation segment increased $1,165,000 or 51.6% as a result of the increase in miles hauled, improved margins resulting from modest price increases, and the discontinuation of the third-party subsidiary which had a negative gross profit of $394,000 in the third quarter of last year. Gross profit in the real estate segment decreased $945,000 or 31.7% for the third quarter of 2002 due to the decline in gross profit of $579,000 from lower property sales and decreased royalties from mining operations partially offset by increased gross profits from newly developed commercial properties and rent increases.

Selling, general and administrative expense decreased $337,000 or 13.7% for the third quarter compared to the same period last year due to the elimination of expenses and support costs for the closed subsidiary.

During the third quarter, the Company completed a substantial portion of its activities related to the closure of its third-party agent/owner-operator subsidiary. As a result, an adjustment to the restructuring charges in the amount of $100,000 was recorded in the third quarter. The adjustment was caused by better than expected recovery of both owned and leased trailers, partially offset by higher severance costs.

Interest expense, net of capitalized interest, decreased $50,000 in the third quarter of 2002 from the third quarter of 2001 due to lower average borrowings and interest rates.

Net income was $1,577,000 or $.50 per diluted share for the third quarter of fiscal 2002 compared to $1,157,000 or $.37 per diluted share for the same quarter last year.

Nine Months Operating Results. For the first nine months of fiscal 2002, consolidated revenues were $71,375,000 a decrease of $22,369,000 or 23.9% from the same period last year. The transportation segment revenues for the first nine months of fiscal 2002 were $60,239,000 a decrease of $18,989,000 or 24.0% over the same period last year. Of this decrease $18,302,000 resulted from the closing of the Company's third-party agent/owner-operator subsidiary in September, 2001. The revenues of the transportation segment's continuing operations decreased $687,000 due to a 2.9% decline in miles hauled for the first nine months of fiscal 2002 as compared to the same period last year, partially offset by modest price increases. The decline in miles hauled was primarily a result of lower demand for petroleum products and decreased tourism and air travel since the September 11 tragedy, partially offset by the new business generated from the acquisition of the operating assets of Infinger.

Real estate revenues were $11,136,000 for the nine months of 2002, a decrease of $3,380,000 or 23.3% from the first nine months of 2001. For the first nine months of fiscal 2002, the Company had revenues from property sales of $219,000 as compared to $3,978,000 for the first nine months of 2001. Other real estate revenues for the first nine months of 2002 increased as a result of additional rental income from newly developed commercial properties and rent increases, which were mostly offset by lower royalties of $581,000 due to the completion of mining at two locations.

Consolidated gross profit was $15,491,000 for the nine months of 2002, a decrease of $2,307,000 or 13.0% as compared to the same period last year. Gross profit in the transportation segment increased $620,000 or 7.3% for the first nine months of 2002 as a result of improved margins due to price increases, improved equipment utilization and reduced operating expenses, partially offset by a decrease in miles hauled. Gross profit in the real estate segment decreased $2,927,000 or 31.4% for the first nine months primarily due to the decline in gross profit of $2,776,000 from property sales. Real estate gross profit excluding property sales decreased slightly due to lower mining royalties, mostly offset by additional rental income from newly developed commercial properties and rent increases.

Selling, general and administrative expenses decreased $2,481,000 or 29.4% for the first nine months compared to the same period last year. This improvement is primarily due to the elimination of expenses for the closed subsidiary of $1,405,000 in the first nine months of last year and also included a benefit of $177,000 primarily from the recovery of the closed subsidiary's accounts receivable in excess of amounts anticipated. The balance of the decrease was due to elimination of support costs for the closed subsidiary and expenses incurred last year related to a litigation settlement.

Interest expense, net of capitalized interest, decreased $241,000 in the first nine months due to a decrease in the average debt outstanding and a decrease in the average interest rate.

Net income was $4,347,000 or $1.37 per diluted share for the first nine months of fiscal 2002 compared to $4,036,000 or $1.28 per diluted share for the first nine months of 2001.

Summary and Outlook.The Company's real estate development business continues to indicate encouraging progress. Demand appears to be continuing for the Company's flexible office warehouse product. Completion of mining at two locations will reduce royalty revenues and related income.

The transportation segment needs to be viewed according to its two operating components, tank truck and flatbed operations. Excluding small volume benefits from the Infinger acquisition, year-over-year revenue miles for the Company's tank truck business remain modestly lower. Changes in tourism and air travel and associated decreased demand for petroleum products since the September 11 tragedy account for this continuing softness. Flatbed freight demand, by contrast, has been slowly increasing.

Future national and regional economic behavior will govern operating prospects for both real estate and transportation. Operating margins for U.S. domestic trucking will also continue to be challenged by escalating health and liability insurance expenses.

Patriot Transportation Holding, Inc. is engaged in the transportation and real estate businesses. The Companys transportation business is conducted through two wholly owned subsidiaries. Florida Rock & Tank Lines, Inc. is a Southeastern transportation company concentrating in the hauling by motor carrier of liquid and dry bulk commodities. SunBelt Transport, Inc. serves the flatbed portion of the trucking industry in the Southeast, Midwest and Mid-Atlantic States, hauling primarily construction materials. The Companys real estate group, through subsidiaries, acquires, constructs, leases, operates and manages land and buildings to generate both current cash flows and long-term capital appreciation.

Patriot Transportation Holding, Inc.
Summary of Consolidated Revenues and Earnings - Unaudited
(Amounts in thousands except per share amounts)

Three Months Ended
June 30

Nine Months Ended
June 30

Revenues
Gross Profit
Income before income taxes
Net income

Earnings per common share:
  -Basic
  -Diluted

Weighted average shares outstanding:
  -Basic
  -Diluted

2002

$24,876
$5,458
$2,629
$1,577

$.50
$.50

3,145
3,178

2001

$31,652
5,238
1,929
1,157

$.37
$.37

3,140
3,145

2002

$71,375
15,491
7,245
4,347

$1.38
$1.37

3,141
3,166

2001

$93,744
17,798
6,727
4,036

$1.28
$1.28

3,163
3,164

Investors are cautioned that statements in this press release which relate 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 in such forward-looking statements. These include general business conditions, competitive factors, political, economic, regulatory, climatic, pricing, energy costs and technological contingencies. Additional information regarding these and other risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission.