<PAGE>
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, 1998.
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 4, 1998: 3,459,230 shares of $.10 par value common
stock.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, September 30,
1998 1997
ASSETS
Current assets:
Cash and cash equivalents $ 325 $ 429
Accounts receivable:
Affiliates 174 283
Other 5,711 5,506
Less allowance for doubtful accounts (267) (258)
Inventory of parts and supplies 536 469
Prepaid expenses and other 1,999 2,120
Total current assets 8,478 8,549
Other assets:
Real estate held for investment, at cost 5,771 5,771
Goodwill 1,268 1,288
Other 1,966 5,956
Total other assets 9,005 13,015
Property, plant and equipment, at cost 150,685 142,671
Less accumulated depreciation and
depletion (50,540) (47,653)
Net property, plant and equipment 100,145 95,018
$117,628 $116,582
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 4,100 $ 4,000
Accounts payable:
Affiliates 264 77
Other 1,646 2,350
Federal and state income taxes 571 779
Accrued liabilities 2,826 3,439
Long-term debt due within one year 426 418
Total current liabilities 9,833 11,063
Long-term debt 30,438 30,647
Deferred income taxes 7,195 7,243
Other liabilities 3,976 3,895
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,458,230 shares issued
(3,439,235 at September 30, 1997) 346 344
Capital in excess of par value 17,678 17,333
Retained earnings 48,162 46,057
Total stockholders' equity 66,186 63,734
$117,628 $116,582
See accompanying notes.<PAGE>
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
1998 1997 1998 1997
Revenues:
Affiliates $ 1,473 1,409 2,936 2,937
Non-affiliates 16,358 14,812 32,566 29,682
17,831 16,221 35,502 32,619
Cost of operations 14,055 12,977 27,752 26,012
Gross profit 3,776 3,244 7,750 6,607
Selling, general and
administrative expense:
Affiliates 384 366 768 732
Non-affiliates 1,288 1,144 2,420 2,297
1,672 1,510 3,188 3,029
Operating profit 2,104 1,734 4,562 3,578
Interest expense (551) (473) (1,120) (956)
Interest income 3 14 8 21
Other income, net (1) (1) (1) -
Income before income taxes 1,555 1,274 3,449 2,643
Provision for income taxes 606 497 1,345 1,031
Net income $ 949 777 2,104 1,612
Basic earnings per
common share $ .28 .22 .61 .46
Diluted earnings per
common share $ .27 .22 .60 .45
Cash dividends NONE NONE NONE NONE
Number of shares used in computing:
Basic earnings per share 3,441 3,516 3,440 3,519
Diluted earnings per share 3,489 3,554 3,491 3,561
See accompanying notes.
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 1998 AND 1997
(In thousands)
(Unaudited)
1998 1997
Cash flows from operating activities:
Net income $2,104 1,612
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 4,462 3,988
Net changes in operating assets and liabilities:
Accounts receivable (93) (381)
Inventory of parts and supplies (67) 47
Prepaid expenses 121 (76)
Accounts payable and accrued liabilities (1,607) 481
Increase in deferred income taxes (61) 570
Net change in insurance reserve and other
liabilities 79 54
(Gain) loss on disposition of real estate, plant
and equipment (368) 131
Other, net (3) (19)
Net cash provided from operating activities 4,567 6,407
Cash flows from investing activities:
Purchase of property, plant and equipment (5,238) (6,133)
Additions to other assets (371) (199)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets 690 72
Net cash used in investing activities (4,919) (6,260)
Cash flows from financing activities:
Net increase in short-term debt 100 1,000
Repayment of debt (201) (137)
Repurchase of Company stock (33) (1,904)
Exercise of stock options 382 879
Net cash provided from financing activities 248 (162)
Net increase (decrease) in cash and cash equivalents (104) (15)
Cash and cash equivalents at beginning of year 429 313
Cash and cash equivalents at end of the period $ 325 298
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $ 716 940
Income taxes $1,438 745
Non cash investing activities:
Additions to property, plant and equipment from exchanges 284 20
Escrow cash included in other assets used to purchase
property, plant and equipment $3,811 -
See accompanying notes.
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1998
(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
periods have been included. Operating results for the six months
ended March 31, 1998, are not necessarily indicative of the
results that may be expected for the fiscal year ended September
30, 1998. 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, 1997.
(2) Earnings Per Share. Effective December 31, 1997, the Company
adopted Statement of Financial Accounting Standard No. 128,
"Earnings per Share" ("SFAS 128"). SFAS 128 replaced the
presentation of primary earnings per share (EPS) and fully
diluted EPS with a presentation of basic and diluted EPS. Basic
earnings per share are based on the weighted average number of
common shares outstanding during the periods. Diluted earnings
per share are based on the weighted average number of common
shares and potential dilution of securities that could share in
earnings. Earnings per share for all prior periods have been
restated.
(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
1997 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,
1998 1997 1998 1997
Revenues:
Transportation $15,673 14,318 31,001 28,700
Real estate 2,158 1,903 4,501 3,919
$17,831 16,221 35,502 32,619
Cost of operations:
Transportation $13,141 12,147 25,992 24,264
Real estate 914 830 1,760 1,748
$14,055 12,977 27,752 26,012
Gross profit:
Transportation $ 2,532 2,171 5,009 4,436
Real estate 1,244 1,073 2,741 2,171
$ 3,776 3,244 7,750 6,607
For the second quarter and first six month of fiscal 1998, ended March 31,
1998, consolidated revenues increased 9.9% and 8.8%, respectively, over the
same periods last year. The Transportation segment revenues for the
second quarter and first half increased 9.5% and 8.0%, respectively, due
principally to an increase in miles hauled coupled with a slight increase
in the average hauling price. Real Estate revenues increased 13.4% for the
second quarter and 14.9% for the first half from the same period last year.
Real Estate increase in revenues was primarily due to $195,000 of timber
sales in fiscal 1998, lease up from a warehouse/office building that was
under construction in the first half of 1997, and increased mining
royalties.
Gross profit in Transportation increased $361,000 for the second quarter
and $573,000 for the first six months from the same periods last year. The
increase was due primarily to increased gains on the sale of equipment and
increased revenues. Variances in fuel costs continued to be positive but
were largely offset by an increase in drivers wages. Equipment sales
increased $191,000 for the second quarter and $363,000 for the six months.
Gross profit in the Real Estate segment increased $171,000 for the second
quarter and $570,000 for the first six months. The improvement for the
second quarter was primarily due to one warehouse being vacated for two
months of last year and lease up of a warehouse/office building that was
under construction last year. For the first six months the increase was
primarily due to gross profit of $188,000 on the sales of timber in the
first half of 1998, the first half of 1997 included a write off of $134,000
in prior tenant improvement resulting from leasing existing space to a new
tenant and higher rental income due to leasing this space and lease up of
project under construction last year.
The selling, general and administrative expense increased $162,000 for the
second quarter, and $159,000 for the first six months from the same periods
last year. Selling, general and administrative expense as a percent of
sales was 9.4% for the second quarter which was level with the same period
last year, and for the first six months was 9.0% compared to 9.3% last
year.
Interest expense increased $78,000 for the second quarter, and $164,000 for
the first six months due primarily to an increase in the average debt
outstanding and, to a lesser extent, an increase in the average interest
rate. These increases were partially offset by a greater capitalization
of interest in fiscal 1998.
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 1997, the transportation segment's ten largest customers
accounted for approximately 31% 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 1997 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
1997 Annual Report to stockholders is incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
On February 4, 1998, 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 ABSTAIN NONVOTES
Edward L. Baker 2002 3,164,667 525 -0-
Thompson S. Baker, II 2002 3,164,664 528 -0-
Radford D. Lovett 2002 3,164,667 525 -0-
Martin E. Stein, Jr. 2002 3,164,667 525 -0-
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, 1998.
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 4, 1998 FRP PROPERTIES, INC.
JAMES J. GILSTRAP
James J. Gilstrap
Treasurer and Chief Financial
Officer
WALLACE A. PATZKE, JR.
Wallace A. Patzke, Jr.
Controller and Chief Accounting
Officer
<PAGE>
FRP PROPERTIES, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998
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.
Page No. in
Sequential
Numbering
(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.
(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>
<PAGE>
Exhibit (11)
FRP PROPERTIES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
THREE MONTHS SIX MONTHS
ENDED MARCH 31, ENDED MARCH 31,
1998 1997 1998 1997
Net income $ 949,000 777,000 2,104,000 1,612,000
Common shares:
Weighted average shares
outstanding during the
period - shares used for
basic earnings per share 3,441,463 3,516,258 3,440,166 3,519,293
Shares issuable under stock
options which are poten-
tially dilutive 47,834 38,596 50,358 22,210
Shares used for diluted earnings
per share 3,489,297 3,554,854 3,490,524 3,561,503
Basic earnings per
common share $.28 .22 .61 .46
Diluted earnings
per common share $.27 .22 .60 .45
<PAGE>
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<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 325
<SECURITIES> 0
<RECEIVABLES> 5,885
<ALLOWANCES> 267
<INVENTORY> 536
<CURRENT-ASSETS> 8,478
<PP&E> 150,685
<DEPRECIATION> 50,540
<TOTAL-ASSETS> 117,628
<CURRENT-LIABILITIES> 9,833
<BONDS> 30,438
0
0
<COMMON> 346
<OTHER-SE> 65,840
<TOTAL-LIABILITY-AND-EQUITY> 117,628
<SALES> 35,502
<TOTAL-REVENUES> 35,502
<CGS> 27,752
<TOTAL-COSTS> 27,752
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,120)
<INCOME-PRETAX> 3,449
<INCOME-TAX> 1,345
<INCOME-CONTINUING> 2,104
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,104
<EPS-PRIMARY> .61
<EPS-DILUTED> .60
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