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 December 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 February 3, 1997: 3,514,919 shares of $.10 par value
common stock.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, September 30,
1996 1996
ASSETS
Current assets:
Cash and cash equivalents $ 363 $ 313
Accounts receivable:
Affiliate 220 376
Other 5,081 5,158
Less allowance for doubtful accounts (246) (234)
Inventory of parts and supplies 500 502
Prepaid expenses and other 2,116 1,888
Total current assets 8,034 8,003
Other assets:
Real estate held for investment, at cost 5,791 5,791
Goodwill 1,318 1,328
Other 1,886 1,856
Total other assets 8,995 8,975
Property, plant and equipment, at cost 134,894 133,083
Less accumulated depreciation and
depletion (44,929) (43,025)
Net property, plant and equipment 89,965 90,058
$106,994 $107,036
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 3,600 $ 3,500
Accounts payable:
Affiliate 138 93
Other 1,502 1,686
Federal and state income taxes 114 342
Accrued liabilities 2,611 3,641
Long-term debt due within one year 334 333
Total current liabilities 8,299 9,595
Long-term debt 26,101 26,170
Deferred income taxes 6,304 6,240
Other liabilities 3,163 3,137
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,548,619 shares issued
(3,492,186 at September 30, 1996) 355 349
Capital in excess of par value 20,140 19,748
Retained earnings 42,632 41,797
Total stockholders' equity 63,127 61,894
$106,994 $107,036
See accompanying notes.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share and share amounts)
(Unaudited)
THREE MONTHS
ENDED DECEMBER 31
1996 1995
Revenues:
Affiliates $ 1,528 $ 1,497
Non-affiliates 14,870 13,824
16,398 15,321
Cost of operations 13,035 11,473
Gross profit 3,363 3,848
Selling, general and
administrative expense:
Affiliate 366 351
Non-affiliates 1,153 1,106
1,519 1,457
Operating profit 1,844 2,391
Interest expense (483) (546)
Interest income 7 7
Other income, net 1 -
Income before income taxes 1,369 1,852
Provision for income taxes 534 722
Net income $ 835 $ 1,130
Earnings per common share $.23 $.30
Cash dividends NONE NONE
Number of shares used
in computing earnings
per common share 3,589,665 3,766,144
See accompanying notes.
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
(In thousands)
(Unaudited)
1996 1995
Cash flows from operating activities:
Net income $ 835 $1,130
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 1,983 1,775
Net changes in operating assets and liabilities:
Accounts receivable 239 403
Inventory of parts and supplies (2) (27)
Prepaid expenses (228) (404)
Accounts payable and accrued liabilities (1,397) 122
Increase in deferred income taxes 64 -
Net change in insurance reserve and other
liabilities 26 3
(Gain) loss on disposition of real estate, plant
and equipment 134 (129)
Other, net (5) (13)
Net cash provided from operating activities 1,649 2,860
Cash flows from investing activities:
Purchase of property, plant and equipment (1,991) (5,574)
Additions to other assets (38) (107)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets - 13
Net cash used in investing activities (2,029) (5,668)
Cash flows from financing activities:
Net increase in short-term debt 100 5,200
Repayment of debt (68) (2,063)
Repurchase of Company stock (481) (379)
Exercise of stock options 879 -
Net cash provided from financing activities 430 2,758
Net increase (decrease) in cash and cash equivalents 50 (50)
Cash and cash equivalents at beginning of year 313 392
Cash and cash equivalents at end of the period $ 363 $ 342
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $475 $551
Income taxes $340 $18
Noncash investing and financing activities:
Additions to property, plant and equipment from exchanges - $759
See accompanying notes.
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 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 three months ended December
31, 1996, are not necessarily indicative of the results that may be
expected for the fiscal year ended September 30, 1997. 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, 1996.
(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 1996
Annual Report to stockholders. 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
Ended December 31,
1996 1995
Revenues:
Transportation $14,382 $13,335
Real estate 2,016 1,986
$16,398 $15,321
Cost of operations:
Transportation $12,117 $10,644
Real estate 918 829
$13,035 $11,473
Gross profit:
Transportation $ 2,265 $ 2,691
Real estate 1,098 1,157
$ 3,363 $ 3,848
For the first quarter of fiscal 1997, ended December 31, 1996, consolidated
revenues increased 7.0% over the same period last year. The Transportation
segment had increased revenue of 7.8% due principally to a 7.1% increase in
miles hauled coupled with a slight increase in the average hauling price.
Real Estate revenues were approximately level with last year.
Gross profit in Transportation decreased $426,000 from the first quarter last
year. The decrease was due primarily to a 19.6% per gallon increase in fuel
costs. Most other operating cost increased at a greater rate than the modest
price increases.
Gross profit in the Real Estate segment decreased $59,000 due to the leasing
of existing space to a new tenant necessitating the write-off of $134,000 of
prior tenant improvements.
The 4.3% increase in selling, general and administrative expense in the
current period was due principally to the increased revenue. Selling,
general and administrative expense as a percent of sales was 9.3% in the
current quarter, down from 9.5% in the same quarter last year.
In the first quarter of this year the Company capitalized $57,000 in interest
expense as part of the cost of two projects which are under construction.
This was the principal reason that interest expense declined $63,000 from the
same period last year.
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 1996, the transportation segment's ten largest customers
accounted for approximately 35% of transportation's revenue. The loss of any
one of these customers could have an adverse effect on the Company's revenue
and income.
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 1996 Annual Report to stockholders. 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
1996 Annual Report to stockholders is 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", starting on page 8.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
during the three months ended December 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.
February 5, 1997 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 DECEMBER 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. P
Previously filed with Form S-4 dated December 13, 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)(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 ENDED DECEMBER 31
1996 1995
Net income $ 835,000 $1,130,000
Common shares:
Weighted average shares
outstanding during the
period 3,522,262 3,673,289
Shares issuable under stock
options which are poten-
tially dilutive and affect
primary earnings per share 67,403 92,855
Maximum potential shares
includable in computation
of primary earnings per
share 3,589,665 3,766,144
Additional shares issuable
under stock options which
are potentially dilutive
and affect fully diluted
earnings per share 18,154 361
Maximum potential shares
included in computation
of fully diluted earnings
per share 3,607,819 3,766,505
Primary earnings per
common share $.23 $.30
Fully diluted earnings
per common share (a) $.23 $.30
(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.
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 363
<SECURITIES> 0
<RECEIVABLES> 5,301
<ALLOWANCES> 246
<INVENTORY> 500
<CURRENT-ASSETS> 8,034
<PP&E> 134,894
<DEPRECIATION> 44,929
<TOTAL-ASSETS> 106,994
<CURRENT-LIABILITIES> 8,299
<BONDS> 26,101
0
0
<COMMON> 355
<OTHER-SE> 62,772
<TOTAL-LIABILITY-AND-EQUITY> 106,994
<SALES> 16,398
<TOTAL-REVENUES> 16,398
<CGS> 13,035
<TOTAL-COSTS> 13,035
<OTHER-EXPENSES> 1,519
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 483
<INCOME-PRETAX> 1,369
<INCOME-TAX> 534
<INCOME-CONTINUING> 835
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 835
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
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