FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-26115
FRP PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2924957
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
155 East 21st Street, Jacksonville, Florida 32206
(Address of principal executive offices)
(Zip Code)
904/355-1781
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 1, 1996: 3,500,194 shares of $.10 par value
common stock.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
June 30, September 30,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $ 304 $ 392
Accounts receivable:
Affiliate 266 300
Other 5,585 5,504
Less allowance for doubtful accounts (244) (218)
Inventory of parts and supplies 391 501
Prepaid expenses 1,818 2,016
Total current assets 8,120 8,495
Other assets:
Real estate held for investment, at cost 6,093 6,065
Goodwill 1,338 1,368
Other 1,861 2,110
Total other assets 9,292 9,543
Property, plant and equipment, at cost 132,165 127,174
Less accumulated depreciation and
depletion (42,067) (43,855)
Net property, plant and equipment 90,098 83,319
$ 107,510 $101,357
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 5,400 $ 1,800
Accounts payable:
Affiliate 126 136
Other 977 1,415
Accrued liabilities 3,791 3,419
Long-term debt due within one year 326 347
Total current liabilities 10,620 7,117
Long-term debt 26,286 25,503
Deferred income taxes 5,787 4,220
Other liabilities 2,922 2,895
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,541,194 shares issued
(3,681,594 at September 30, 1995) 354 368
Capital in excess of par value 20,769 23,622
Retained earnings 40,772 37,632
Total stockholders' equity 61,895 61,622
$ 107,510 $101,357
See accompanying notes.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share and share amounts)
(Unaudited)
THREE MONTHS NINE MONTHS
ENDED JUNE 30 ENDED JUNE 30
1996 1995 1996 1995
Revenues:
Affiliates $ 1,621 $ 1,514 $ 4,728 $ 4,371
Non-affiliates 15,085 13,935 43,248 39,070
16,706 15,449 47,976 43,441
Cost of operations 12,656 11,367 36,712 32,265
Gross profit 4,050 4,082 11,264 11,176
Selling, general and
administrative expense:
Affiliate 351 324 1,053 959
Non-affiliates 1,130 1,083 3,393 3,221
1,481 1,407 4,446 4,180
Operating profit 2,569 2,675 6,818 6,996
Interest expense (595) (551) (1,705) (1,382)
Interest income 18 11 35 37
Other income (expense),
net - 1 - 29
Income before income taxes 1,992 2,136 5,148 5,680
Provision for income taxes 777 833 2,008 2,215
Net income $1,215 $1,303 $ 3,140 $ 3,465
Earnings per common share $.33 $.34 $.84 $.90
Cash dividends NONE NONE NONE NONE
Number of shares used
in computing earnings
per common share 3,650,401 3,811,828 3,712,615 3,846,463
See accompanying notes. <PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 1996 and 1995
(In thousands)
(Unaudited)
1996 1995
Cash flows from operating activities:
Net Income $3,140 $3,465
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 5,682 5,605
Net changes in operating assets and liabilitie
Increase in accounts receivable (36) (874)
Decrease in inventory of parts and supplies 110 49
(Increase) decrease in prepaid expenses 198 (271)
Decrease in accounts payable and accrued
liabilities (9) (901)
Increase in deferred taxes 1,500 912
Net change in insurance reserve and other
liabilities 28 21
Gain on sale of real estate, plant
and equipment (647) (587)
Other, net (38) (89)
Net cash provided from operating activities 9,928 7,330
Cash flows from investing activities:
Purchase of property, plant and equipment (12,069) (14,468)
Purchase of real estate held for investment (32) -
Additions to other assets (130) (269)
Proceeds from sale of real estate held for
investment, property, plant and equipment,
and other assets. 720 300
Net cash used in investing activities (11,511) (14,437)
Cash flows from financing activities:
Proceeds from long-term debt 3,000 10,750
Net increase (decrease) in short-term debt 3,600 (2,000)
Repayment of debt (2,238) (179)
Repurchase of Company stock (2,867) (2,038)
Net cash provided from financing activities 1,495 6,533
Net decrease in cash and cash equivalents (88) (574)
Cash and cash equivalents at beginning of year 392 821
Cash and cash equivalents at end of the period $304 $247
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $1,724 $1,347
Income taxes paid (received) ($28) $2,813
Noncash investing and financing activities:
Additions to property, plant and equipment
from exchanges $1,900 $495
See accompaning notes. <PAGE>
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
(1) Basis of Presentation. The accompanying consolidated
condensed financial statements include the accounts of the Company
and its subsidiaries. These statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and
do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
a fair presentation of the results for the interim period have been
included. Operating results for the nine months ended June 30,
1996, are not necessarily indicative of the results that may be
expected for the year ended September 30, 1996. The accompanying
consolidated financial statements and the information included
under the heading "Management's Discussion and Analysis" should be
read in conjunction with the consolidated financial statements and
related notes of FRP Properties, Inc. for the year ended September
30, 1995.
(2) Earnings Per Share. Earnings per share are based on the
weighted average number of shares outstanding and common stock
equivalents, where applicable, during the periods. Fully diluted
earnings per share are not reported because the effect would have
been less than 3% dilutive.
(3) Contingent Liabilities. The Company and its subsidiaries are
subject to legal proceedings and claims arising out of their
businesses that cover a wide range of matters. Additional
information concerning these matters is presented in Note 10 to the
consolidated financial statements included in the Company's 1995
Annual Report to stockholders, in Item 3 "Legal Proceedings" of
the Company's Form 10-K for fiscal 1995 and in Part II, Item 1
"Legal Proceedings" of the Company's Form 10-Q for the quarter
ended March 31, 1996. Such information is incorporated herein by
reference. <PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
The following table summarizes the Company's revenues, cost of operations,
and gross profit by its business segments (in thousands):
Three Months Nine Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
Revenues:
Transportation $14,402 $12,727 $41,529 $36,361
Real estate 2,144 2,524 6,279 6,882
Sale of real estate 160 198 168 198
$16,706 $15,449 $47,976 $43,441
Cost of operations:
Transportation $11,722 $10,278 $33,876 $29,810
Real estate 863 970 2,761 2,336
Sale of real estate 71 119 75 119
$12,656 $11,367 $36,712 $32,265
Gross profit:
Transportation $ 2,680 $ 2,449 $ 7,653 $ 6,551
Real estate 1,281 1,554 3,518 4,546
Sale of real estate 89 79 93 79
$ 4,050 $ 4,082 $11,264 $11,176
For the third quarter and first nine months of fiscal 1996, ended June 30,
1996, consolidated revenues increased 8% and 10%, respectively, over the same
periods last year. The Transportation segment had increased revenue for the
third quarter and first nine months of 13% and 14%, respectively, due
principally from increased volume in Florida Rock & Tank Lines, Inc. and the
continuing expansion of SunBelt Transport, Inc.
Real estate revenues declined $380,000 or 15% for the third quarter and
$603,000 or 9% for the first nine months from the same periods last year.
The decreases were due to timber sales of $442,000 in the third quarter of
last year and the one-time royalty collection and timber sales of
approximately $1,091,000 in the nine month period of last year, respectively.
Excluding these one-time revenues, Real Estate revenues increased 3% for the
quarter and 8% for the first nine months due to increased royalty and rent
revenue.
The Transportation segment's gross profit was negatively impacted in the
third quarter and nine month period of this year by increased risk insurance
cost of approximately $200,000 and $600,000, respectively, due principally to
three severe accidents. Fuel prices peaked in April 1996 and subsequently
have trended down, but remain higher than last year. <PAGE>
Effective October 1, 1994, for financial reporting purposes, the Company
extended the estimated lives of its tractors and substantially all trailers
and reduced the salvage values on such equipment. The one-time attendant
reduction in salvage values resulted in a $583,000 reduction in
transportation gross profit in the first quarter of fiscal 1995.
Gross profit in Real Estate decreased for the third quarter and first nine
months due principally to the timber sales yielding gross profit of
approximately $238,000 in the third quarter of last year and the one-time
royalty collection and timber sales yielding gross profit of approximately
$961,000 in the first nine months last year and to the abandonment and
write-off in the second quarter of this year of $150,000 in fees and other
zoning costs associated with a potential development property.
The increases in selling, general and administrative expense in the current
periods were principally due to increased revenue. Selling, general and
administrative expense as a percent of sales decreased in both current
periods as compared to the same periods last year.
The increase in interest expense in the current third quarter and nine months
over the same periods last year is due principally to the increase in average
debt outstanding.
Financial Condition
The Company continues to maintain its sound financial condition with
sufficient resources to meet anticipated capital expenditures and other
operating requirements.
Other.
During fiscal 1995, the transportation segment's ten largest customers
accounted for approximately 34% of transportation's revenue. The loss of any
one of these customers could have an adverse effect on the Company's revenue
and income.
Effective January 1, 1995, intrastate as well as interstate trucking was
deregulated with regard to both pricing and access to statewide markets.
Approximately 50% of the Transportation Group's revenues are generated in
formerly regulated markets. Florida has been deregulated for many years.
The Transportation Group can look forward to expanding in its target
Southeastern markets without prior state regulatory approval. This will also
allow it to expand service with its current customers as well as new ones. <PAGE>
Although deregulation presents a significant unknown variable, management is
cautiously optimistic about its long-term impact on the future growth
prospect of its transportation business.
While the Company is affected by environmental regulations, such regulations
are not expected to have a major effect on the Company's capital expenditures
or operating results. Additional information concerning environmental
matters is presented in Note 10 to the consolidated financial statements
included in the Company's 1995 Annual Report to stockholders, in Item 3
"Legal Proceedings" of the Company's Form 10-K for fiscal 1995 and in Part
II, Item 1 "Legal Proceedings" of the Company's Form 10-Q for the quarter
ended March 31, 1996. Such information is incorporated herein by reference.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Note 10 to the consolidated financial statements included in the Company's
1995 Annual Report to stockholders and Item 3 "Legal Proceedings" of the
Company's Form 10-K for fiscal 1995 and Part II, Item 1 "Legal Proceedings"
of the Company's Form 10-Q for the quarter ended March 31, 1996 are
incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a separate
Section entitled "Exhibit Index," immediately following this page.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
during the three months ended June 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
August 1, 1996 FRP PROPERTIES, INC.
RUGGLES B. CARLSON
Ruggles B. Carlson
Assistant Treasurer
(Principal Financial and Accounting
Officer)<PAGE>
FRP PROPERTIES, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996
EXHIBIT INDEX
Page No. in
Sequential
Numbering
(3)(a)(1) Articles of Incorporation of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(3)(a)(2) Amendment to the Articles of Incorporation of FRP
Properties, Inc. filed with the Secretary of State
of Florida on February 19, 1991. Previously filed
with Form 10-K for the fiscal year ended September
30, 1993. file No. 33-26115.
(3)(a)(3) Amendments to the Articles of Incorporation of FRP
Properties, Inc. filed with the Secretary of State
of Florida on February 7, 1995. Previously filed
as appendix to the Company's Proxy Statement dated
December 15, 1994.
(3)(b)(1) Restated Bylaws of FRP Properties, Inc. adopted
December 1, 1993. Previously filed with Form 10-K
for the fiscal year ended September 30, 1993. File
No. 33-26115.
(3)(b)(2) Amendment to the Bylaws of FRP Properties, Inc.
adopted August 3, 1994. Previously filed with Form
10-K for the fiscal year ended September 30, 1994.
File No. 33-26115.
(4)(a) Articles III, VII and XII of the Articles of
Incorporation of FRP Properties, Inc. Previously
filed with Form S-4 dated December 13, 1988. And
amended Article III filed with Form 10-K for the
fiscal year ended September 30, 1993. And Articles
XIII and XIV previously filed as appendix to the
Company's Proxy Statement dated December 15, 1994.
File No. 33-026115.
(4)(b) Specimen stock certificate of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115. <PAGE>
Page No. in
Sequential
Numbering
(4)(c) Credit Agreement dated as of November 15, 1995
among FRP Properties, Inc.; SunTrust Bank, Central
Florida, National Association; Bank of America
Illinois; Barnett Bank of Jacksonville, N.A.; and
First Union National Bank of Florida. Previously
filed with Form 10-Q for the quarter ended December
31, 1995. File No. 33-26115.
(4)(d) The Company and its consolidated subsidiaries have
other long-term debt agreements which do not exceed
10% of the total consolidated assets of the Company
and its subsidiaries, and the Company agrees to
furnish copies of such agreements and constituent
documents to the Commission upon request.
(10)(a) Post Distribution Agreement, dated May 7, 1986, by
and between Florida Rock Industries, Inc. and
Florida Rock & Tank Lines, Inc. and amendments
thereto dated July 1, 1987 and September 27, 1988.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(b) Tax Sharing Agreement, dated May 7,1986, between
Florida Rock Industries, Inc. and Florida Rock &
Tank Lines, Inc. Previously filed with Form S-4
dated December 13, 1988. File No. 33-26115.
(10)(c) Various leasebacks and mining royalty agreements
with Florida Rock Industries, Inc., none of which
are presently believed to be material individually,
except for the Mining Lease Agreement dated
September 1, 1986, between Florida Rock Industries
Inc. and Florida Rock Properties, Inc., successor
by merger to Grandin Land, Inc. (see Exhibit
(10)(e)), but all of which maybe material in the
aggregate. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(d) License Agreement, dated June 30, 1986, from
Florida Rock Industries, Inc. to Florida Rock &
Tank Lines, Inc. to use "Florida Rock" in corporate
names. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(e) Mining Lease Agreement, dated September 1, 1986,
between Florida Rock Industries, Inc. and Florida
Rock Properties, Inc., successor by merger to
Grandin Land, Inc. Previously filed with Form S-4
dated December 13, 1988. File No. 33-26115. <PAGE>
Page No. in
Sequential
Numbering
(10)(f) Summary of Medical Reimbursement Plan of FRP
Properties, Inc. Previously filed with Form 10-K
for the fiscal year ended September 30, 1993. File
No. 33-26115.
(10)(g) Split Dollar Agreement dated October 3, 1984,
between Edward L. Baker and Florida Rock
Industries, Inc. and assignment of such agreement,
dated January 31, 1986 from Florida Rock
Industries, Inc. to Florida Rock & Tank Lines, Inc.
Previously filed with Form S-4 dated December 13, 1988.
File No. 33-2611.
(10)(h) Summary of Management Incentive Compensation Plans.
Previously filed with Form 10-K for the fiscal year
ended September 30, 1994. File No. 33-26115.
(10)(i) Management Security Agreements between the Company
and certain officers. Form of agreement previously
filed as Exhibit (10)(I) with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(i)(1) FRP Properties, Inc. 1989 Employee Stock Option Plan.
Previously filed with Form S-4 dated December
13, 1988. File No. 33-26115.
(10)(j)(2) FRP Properties, Inc. 1995 Stock Option Plan.
Previously filed as an appendix to the Company's Proxy
Statement dated December 15, 1994.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule <PAGE>
Exhibit (11)
FRP PROPERTIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS NINE MONTHS
ENDED JUNE 30 ENDED JUNE 30
1996 1995 1996 1995
Net income $1,215,000 $1,303,000 $3,140,000 $3,465,000
Common shares:
Weighted average shares
outstanding during the
period 3,557,276 3,710,304 3,617,348 3,758,264
Shares issuable under stock
options which are poten-
tially dilutive and affect
primary earnings per share 93,125 101,524 95,267 88,199
Maximum potential shares
includable in computation
of primary earnings per
share 3,650,401 3,811,828 3,712,615 3,846,463
Additional shares issuable
under stock options which
are potentially dilutive
and affect fully diluted
earnings per share 91 - - 7,655
Maximum potential shares
included in computation
of fully diluted earnings
per share 3,650,492 3,811,828 3,712,615 3,854,118
Primary earnings per
common share $.33 $.34 $.84 $.90
Fully diluted earnings
per common share (a) $.33 $.34 $.84 $.90
(a) Fully diluted earnings per common share are not presented on the
income statement sinc the potential effect would have been less
than 3% dilutive.<PAGE>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 304
<SECURITIES> 0
<RECEIVABLES> 5,851
<ALLOWANCES> 244
<INVENTORY> 391
<CURRENT-ASSETS> 8,120
<PP&E> 132,165
<DEPRECIATION> 42,067
<TOTAL-ASSETS> 107,510
<CURRENT-LIABILITIES> 10,620
<BONDS> 26,286
<COMMON> 354
0
0
<OTHER-SE> 61,541
<TOTAL-LIABILITY-AND-EQUITY> 107,510
<SALES> 47,976
<TOTAL-REVENUES> 47,976
<CGS> 36,712
<TOTAL-COSTS> 36,712
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,705
<INCOME-PRETAX> 5,148
<INCOME-TAX> 2,008
<INCOME-CONTINUING> 3,140
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,140
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
</TABLE>
