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 March 31, 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 April 30, 1996: 3,555,694 shares of $.10 par value
common stock.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, September 30,
1996 1995
ASSETS
Current assets:
Cash and cash equivalents $ 222 $ 392
Accounts receivable:
Affiliate 262 300
Other 5,476 5,504
Less allowance for doubtful accounts (240) (218)
Inventory of parts and supplies 424 501
Prepaid expenses 2,192 2,016
Total current assets 8,336 8,495
Other assets:
Real estate held for investment, at cost 6,093 6,065
Goodwill 1,348 1,368
Other 1,886 2,110
Total other assets 9,327 9,543
Property, plant and equipment, at cost 132,616 127,174
Less accumulated depreciation and
depletion (42,724) (43,855)
Net property, plant and equipment 89,892 83,319
$ 107,555 $101,357
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 8,400 $ 1,800
Accounts payable:
Affiliate 145 136
Other 2,095 1,415
Accrued liabilities 3,347 3,419
Long-term debt due within one year 356 347
Total current liabilities 14,343 7,117
Long-term debt 23,365 25,503
Deferred income taxes 5,246 4,220
Other liabilities 2,912 2,895
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,590,694 shares issued
(3,681,594 at September 30, 1995) 359 368
Capital in excess of par value 21,773 23,622
Retained earnings 39,557 37,632
Total stockholders' equity 61,689 61,622
$ 107,555 $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 SIX MONTHS
ENDED MARCH 31 ENDED MARCH 31
1996 1995 1996 1995
Revenues:
Affiliates $ 1,610 $ 1,427 $ 3,107 $ 2,857
Non-affiliates 14,339 13,089 28,163 25,135
15,949 14,516 31,270 27,992
Cost of operations 12,583 10,377 24,056 20,898
Gross profit 3,366 4,139 7,214 7,094
Selling, general and
administrative expense:
Affiliate 351 320 702 635
Non-affiliates 1,157 1,107 2,263 2,138
1,508 1,427 2,965 2,773
Operating profit 1,858 2,712 4,249 4,321
Interest expense (564) (447) (1,110) (831)
Interest income 10 12 17 26
Other income, net - 8 - 28
Income before income taxes 1,304 2,285 3,156 3,544
Provision for income taxes 509 891 1,231 1,382
Net income $ 795 $1,394 $ 1,925 $ 2,162
Earnings per common share $.21 $.36 $.51 $.56
Cash dividends NONE NONE NONE NONE
Number of shares used
in computing earnings
per common share 3,718,327 3,869,927 3,743,632 3,868,346
See accompanying notes.
<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1996 and 1995
(In thousands)
(Unaudited)
1996 1995
Cash flows from operating activities:
Net Income........................................ $1,925 $2,162
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization...... 3,679 3,663
Net changes in operating assets and liabilitie
(Increase) decrease in accounts receivable.. 76 (206)
Decrease in inventory of parts and supplies. 77 36
Increase in prepaid expenses................ (176) (444)
Increase (decrease) in accounts payable and 605 (1,144)
Increase in deferred taxes.................... 1,038 345
Net change in insurance reserve and other liab 18 (2)
Gain on sale of real estate, plant and equipme (264) (390)
Other, net.................................... (25) 24
Net cash provided from operating activities......... 6,953 4,044
Cash flows from investing activities:
Purchase of property, plant and equipment......... (9,920) (11,167)
Purchase of real estate held for investment.......... (32) -
Additions to other assets......................... (129) (113)
Proceeds from sale of real estate held for investm
property, plant and equipment, and other assets. 345 52
Net cash used in investing activities............... (9,736) (11,228)
Cash flows from financing activities:
Proceeds from long-term debt...................... - 8,000
Net increase in short-term debt................... 6,600 100
Repayment of debt................................. (2,129) (92)
Repurchase of Company stock....................... (1,858) (1,524)
Net cash provided from financing activities........ 2,613 6,484
Net decrease in cash and cash equivalents........... (170) (700)
Cash and cash equivalents at beginning of year...... 392 821
Cash and cash equivalents at end of the period...... $222 $121
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized....... $1,118 $749
Income taxes paid (received)...................... ($128) $2,268
Noncash investing and financing activities:
Additions to property, plant and equipment
from exchanges $1,270 $393
See accompaning notes.
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 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 six months ended March 31,
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 this Form 10-Q,. Such information is
incorporated herein by reference.
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 Six Months
Ended March 31, Ended March 31,
1996 1995 1996 1995
Revenues:
Transportation $13,792 $12,066 $27,127 $23,634
Real estate 2,149 2,450 4,135 4,358
Sale of real estate 8 - 8 -
$15,949 $14,516 $31,270 $27,992
Cost of operations:
Transportation $11,510 $ 9,687 $22,154 $19,532
Real estate 1,069 690 1,898 1,366
Sale of real estate 4 - 4 -
$12,583 $10,377 $24,056 $20,898
Gross profit:
Transportation $ 2,282 $ 2,379 $ 4,973 $ 4,102
Real estate 1,080 1,760 2,237 2,992
Sale of real estate 4 - 4 -
$ 3,366 $ 4,139 $ 7,214 $ 7,094
For the second quarter and first six months of fiscal 1996, ended March 31,
1996, consolidated revenues increased 10% and 12%, respectively, over the
same periods last year. The Transportation segment had increased revenue for
the second quarter and first half of 14% and 15%, respectively, due
principally from increased volume in Florida Rock & Tank Lines, Inc. and the
continuing expansion of SunBelt Transport, Inc.
Real estate revenues declined $301,000 or 12% for the second quarter and
$223,000 or 5% for the first half from the same periods last year. The
decreases were due to the one-time royalty collection and timber sales of
approximately $600,000 in the second quarter of last year. Excluding these
one-time revenues, Real Estate revenues increased 16% for the quarter and 10%
for the first half due to increased royalty and rent revenue.
The Transportation segment's gross profit was negatively impacted in the
second quarter of this year by increased casualty losses of approximately
$125,000 due to two severe accidents. The Company has experienced
accelerating increases in fuel prices particularly during the last two months
of the quarter, which for the most part, after short delays, it has passed on
to its tank truck customers. However, in its flatbed business, current
market conditions are inhibiting passing such increases on to customers at
this time, with only a very few exceptions.
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 second quarter and first six
months due principally to the one-time royalty collection and timber sales of
approximately $600,000 in the second quarter 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 to 9.5% from 9.9% in
both current periods as compared to the same periods last year.
The increase in interest expense in the current second quarter and six 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.
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 this Form 10-Q. Such information is
incorporated herein by reference.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In December of 1990, the Environmental Protection Agency ("EPA") notified the
Company's subsidiary, Florida Rock & Tank Lines, Inc., of its potential
liability as a generator of waste oil at the Whitehouse Oil Pits Superfund
Site ("Whitehouse"). A former waste oil hauler in the Jacksonville area has
stated that he delivered spent motor oil from a terminal operated by the
Company's subsidiary to Seaboard Oil and later to Allied Fuel Oil to be
recycled. The residue from the recycling process was deposited in
Whitehouse. There is no documentation to confirm or deny this statement.
The subsidiary has participated in the investigatory work necessary to
develop the Remedial Design for Whitehouse. In March 1996, the EPA decided
to proceed with a pilot superfund cost allocation project ("Pilot") at
Whitehouse. The subsidiary, along with other potentially responsible
parties, has elected to participate in that Pilot. The subsidiary continues
to monitor EPA and PRP activities pertaining to Whitehouse. This matter was
previously reported in the Form 10-Q for the quarters ending March 31, 1991,
December 31, 1991, March 31, 1992, December 31, 1992, June 30, 1993 and March
31, 1994 and in the Form 10-K for the years ending September 30, 1991,
September 30, 1993, and September 30, 1994.
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 are incorporated herein by reference.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
On February 7, 1996, the Company held its annual shareholders meeting. At
the meeting the stockholders elected the following directors by the vote
shown:
NOT VOTED
TERM VOTES VOTES BROKER/
ENDING FOR WITHHELD NOMINEES
Ish Copley 2000 2,993,046 1,018 560,622
John D. Baker II 2000 2,993,043 1,021 560,622
Luke E. Fichthorn III 2000 2,993,046 1,018 560,622
Robert H. Paul III 2000 2,945,646 48,418 560,622
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 March 31, 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.
May 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 MARCH 31, 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 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 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 December13,
1988. File No. 33-26115.
(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)(j)(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 SIX MONTHS
ENDED MARCH 31 ENDED MARCH 31
1996 1995 1996 1995
Net income $ 795,000 $1,394,000 $1,925,000 $2,162,000
Common shares:
Weighted average shares
outstanding during the
period 3,620,865 3,772,025 3,647,220 3,782,244
Shares issuable under stock
options which are poten-
tially dilutive and affect
primary earnings per share 97,462 97,902 96,412 86,102
Maximum potential shares
includable in computation
of primary earnings per
share 3,718,327 3,869,927 3,743,632 3,868,346
Additional shares issuable
under stock options which
are potentially dilutive
and affect fully diluted
earnings per share - - - 8,765
Maximum potential shares
included in computation
of fully diluted earnings
per share 3,718,327 3,869,927 3,743,632 3,877,111
Primary earnings per
common share $.21 $.36 $.51 $.56
Fully diluted earnings
per common share (a) $.21 $.36 $.51 $.56
(a) Fully diluted earnings per common share are not presented on the income
statement since the potential effect would have been less than 3% dilutive.<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 222
<SECURITIES> 0
<RECEIVABLES> 5,738
<ALLOWANCES> 240
<INVENTORY> 424
<CURRENT-ASSETS> 8,336
<PP&E> 132,616
<DEPRECIATION> 42,724
<TOTAL-ASSETS> 107,555
<CURRENT-LIABILITIES> 14,343
<BONDS> 23,365
<COMMON> 359
0
0
<OTHER-SE> 61,330
<TOTAL-LIABILITY-AND-EQUITY> 107,555
<SALES> 31,270
<TOTAL-REVENUES> 31,270
<CGS> 24,056
<TOTAL-COSTS> 24,056
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,110
<INCOME-PRETAX> 3,156
<INCOME-TAX> 1,231
<INCOME-CONTINUING> 1,925
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,925
<EPS-PRIMARY> .51
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