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, 1997.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-17554
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 May 1, 1997: 3,487,915 shares of $.10 par value common
stock.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, September 30,
1997 1996
ASSETS
Current assets:
Cash and cash equivalents $ 298 $ 313
Accounts receivable:
Affiliate 226 376
Other 5,696 5,158
Less allowance for doubtful accounts (252) (234)
Inventory of parts and supplies 455 502
Prepaid expenses and other 1,945 1,888
Total current assets 8,368 8,003
Other assets:
Real estate held for investment, at cost 5,791 5,791
Goodwill 1,308 1,328
Other 2,030 1,856
Total other assets 9,129 8,975
Property, plant and equipment, at cost 138,146 133,083
Less accumulated depreciation and
depletion (46,072) (43,025)
Net property, plant and equipment 92,074 90,058
$109,571 $107,036
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 4,500 $ 3,500
Accounts payable:
Affiliate 101 93
Other 2,221 1,686
Federal and state income taxes - 342
Accrued liabilities 3,922 3,641
Long-term debt due within one year 340 333
Total current liabilities 11,084 9,595
Long-term debt 26,025 26,170
Deferred income taxes 6,790 6,240
Other liabilities 3,191 3,137
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,491,915 shares issued
(3,492,186 at September 30, 1996) 349 349
Capital in excess of par value 18,723 19,748
Retained earnings 43,409 41,797
Total stockholders' equity 62,481 61,894
$109,571 $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 SIX MONTHS
ENDED MARCH 31 ENDED MARCH 31
1997 1996 1997 1996
Revenues:
Affiliates $ 1,409 $ 1,610 $ 2,937 $ 3,107
Non-affiliates 14,812 14,339 29,682 28,163
16,221 15,949 32,619 31,270
Cost of operations 12,977 12,583 26,012 24,056
Gross profit 3,244 3,366 6,607 7,214
Selling, general and
administrative expense:
Affiliate 366 351 732 702
Non-affiliates 1,144 1,157 2,297 2,263
1,510 1,508 3,029 2,965
Operating profit 1,734 1,858 3,578 4,249
Interest expense (473) (564) (956) (1,110)
Interest income 14 10 21 17
Other income (expense),
net (1) - - -
Income before income taxes 1,274 1,304 2,643 3,156
Provision for income taxes 497 509 1,031 1,231
Net income $ 777 $ 795 $ 1,612 $ 1,925
Earnings per common share $.22 $.21 $.45 $.51
Cash dividends NONE NONE NONE NONE
Number of shares used
in computing earnings
per common share 3,578,141 3,718,327 3,586,969 3,743,632
See accompanying notes.
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1997 AND 1996
(In thousands)
(Unaudited)
1997 1996
Cash flows from operating activities:
Net income $1,612 $1,925
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 3,988 3,679
Net changes in operating assets and liabilities:
Accounts receivable (381) 76
Inventory of parts and supplies 47 77
Prepaid expenses (76) (176)
Accounts payable and accrued liabilities 481 605
Increase in deferred income taxes 570 1,038
Net change in insurance reserve and other
liabilities 54 18
(Gain) loss on disposition of real estate, plant
and equipment 131 (264)
Other, net (19) (25)
Net cash provided from operating activities 6,407 6,953
Cash flows from investing activities:
Purchase of property, plant and equipment (6,133) (9,920)
Purchase of real estate held for investment - (32)
Additions to other assets (199) (129)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets 72 345
Net cash used in investing activities (6,260) (9,736)
Cash flows from financing activities:
Net increase in short-term debt 1,000 6,600
Repayment of debt (137) (2,129)
Repurchase of Company stock (1,904) (1,858)
Exercise of stock options 879 -
Net cash provided from financing activities (162) 2,613
Net increase (decrease) in cash and cash equivalents (15) (170)
Cash and cash equivalents at beginning of year 313 392
Cash and cash equivalents at end of the period $ 298 $ 222
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $ 940 $1,118
Income taxes $ 745 ($ 128)
Noncash investing and financing activities:
Additions to property, plant and equipment from exchanges $ 20 $1,270
See accompanying notes.
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1997
(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,
1997, 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 Six Months
Ended March 31, Ended March 31,
1997 1996 1997 1996
Revenues:
Transportation $14,318 $13,792 $28,700 $27,127
Real estate 1,903 2,149 3,919 4,135
Sale of real estate - 8 - 8
$16,221 $15,949 $32,619 $31,270
Cost of operations:
Transportation $12,147 $11,510 $24,264 $22,154
Real estate 830 1,069 1,748 1,898
Sale of real estate - 4 - 4
$12,977 $12,583 $26,012 $24,056
Gross profit:
Transportation $ 2,171 $ 2,282 $ 4,436 $ 4,973
Real estate 1,073 1,080 2,171 2,237
Sale of real estate - 4 - 4
$ 3,244 $ 3,366 $ 6,607 $ 7,214
For the second quarter and first six months of fiscal 1997, ended March 31,
1997, consolidated revenues increased 1.7% and 4.3%, respectively, over the
same periods last year.
The Transportation segment had increased revenue for the second quarter and
first half of 3.8% and 5.8%, respectively, due principally to a 3.3% increase
in the average hauling price in the quarter and in the first six month period
due to a 3.7% increase in miles hauled coupled with a 2.0% increase in the
average hauling price.
Real estate revenues declined $246,000 or 11.4% for the second quarter and
$216,000 or 5.2% for the first half from the same periods last year. The
decreases in revenue resulted principally from a decrease in royalty income
of approximately $170,000 for both the second quarter and first six months
and a decrease in rental income due to a portion of one warehouse being
vacant for two months in the second quarter while being refurbished for new
tenants. This space has subsequently been leased. The decrease in royalty
income was due principally to a decrease in mining activities on two of the
Company's properties.
For the second quarter and first six months gross profit decreased 3.6% and
8.4%, respectively, from the same periods last year.
Gross profit in the Transportation segment decreased $111,000 (4.9%) for the
second quarter and $537,000 (10.8%) for the first six months from the same
periods last year. The per gallon fuel cost has been trending down since
October 1996. However, the average per gallon cost for the second quarter
and first six months was 5.6% and 12.8% higher than the respective periods
last year. The Transportation segment's gross profit for the second quarter
and first six months of fiscal 1996 included a net gain from the sale of
revenue equipment of $282,000 and $412,000, respectively, over the same
periods in fiscal 1997.
Gross profit in the Real Estate segment decreased $7,000 and $66,000 for the
second quarter and first six months, respectively, from the same periods last
year. The decreases were due principally to the decrease in revenue and for
the first six month period, the write-off of tenant improvements in the first
quarter of fiscal 1997 of $134,000. The amount of the decreases were offset
because in the second quarter of fiscal 1996 the Company abandoned and wrote
off $150,000 in fees and other zoning costs associated with a potential
development property.
Selling, general and administrative expense in the second quarter remained
about level with the second quarter last year. The increase in selling,
general and administrative expense in the first six months was due
principally to the increased revenue. Selling, general and administrative
expense as a percent of sales was 9.3% in the current periods, down from 9.5%
in the same periods last year.
In the second quarter and first six months of this year the Company
capitalized $71,000 and $128,000, respectively, in interest expense as part
of the cost of two projects which are under construction. This was the
principal reason that interest expense declined $91,000 and $154,000 from the
same periods 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 4. Submission of Matters to a Vote of Security Holders
On February 5, 1997, the Company held its annual shareholders meeting. At
the meeting the stockholders elected the following directors by the vote
shown:
TERM VOTES VOTES BROKER
ENDING FOR WITHHELD NONVOTES
John E. Anderson 2001 3,207,000 2,449 -0-
Thompson S. Baker 2001 3,206,800 2,649 -0-
David H. DeVilliers, Jr. 2001 3,207,000 2,449 -0-
Albert D. Ernest, Jr. 2001 3,207,000 2,449 -0-
Thompson S. Baker died on February 24, 1997.
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 March 31, 1997.
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 6, 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 MARCH 31, 1997
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
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 SIX MONTHS
ENDED MARCH 31 ENDED MARCH 31
1997 1996 1997 1996
Net income $ 777,000 $ 795,000 $1,612,000 $1,925,000
Common shares:
Weighted average shares
outstanding during the
period 3,516,258 3,620,865 3,519,293 3,647,220
Shares issuable under stock
options which are poten-
tially dilutive and affect
primary earnings per share 61,883 97,462 67,676 96,412
Maximum potential shares
includable in computation
of primary earnings per
share 3,578,141 3,718,327 3,586,969 3,743,632
Additional shares issuable
under stock options which
are potentially dilutive
and affect fully diluted
earnings per share - - 3,945 -
Maximum potential shares
included in computation
of fully diluted earnings
per share 3,578,141 3,718,327 3,590,914 3,743,632
Primary earnings per
common share $.22 $.21 $.45 $.51
Fully diluted earnings
per common share (a) $.22 $.21 $.45 $.51
(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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