SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 33-26115
PATRIOT TRANSPORTATION HOLDING, 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.)
1801 Art Museum Drive, Jacksonville, Florida 32207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 904/396-5733
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.10 par value
(Title of class)
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K. [ ]
At December 1, 2000 aggregate market value of the shares of Common Stock
held by non-affiliates of the registrant was $24,633,328. At such date
there were 3,170,566 shares of the registrant's Stock outstanding.
Documents Incorporated by Reference
Portions of the Patriot Transportation Holding, Inc. 2000 Annual Report
to Stockholders are incorporated by reference in Parts I, II, III and IV.
Portions of the Patriot Transportation Holding, Inc. Proxy Statement
dated December 20, 2000 are incorporated by reference in Part III.
PART I
Item 1. BUSINESS.
Patriot Transportation Holding, Inc., which was incorporated in
Florida in 1988, and its subsidiaries (the "Company") are engaged
in the transportation and real estate businesses. The Company's
transportation business is conducted through three wholly-owned
subsidiaries. Florida Rock & Tank Lines, Inc.("Tank Lines"),
SunBelt Transport, Inc. ("SunBelt") and Patriot Transportation,
Inc.("Patriot"). Tank Lines is a Southeastern transportation
company concentrating in the hauling by motor carrier of liquid and
dry bulk commodities. SunBelt serves the flatbed portion of the
trucking industry in the Southeast and Mid-Atlantic states, hauling
primarily construction materials. Patriot hauls a variety of
cargo, throughout the United States, through independent
contractors. Another wholly owned subsidiary, Florida Rock
Properties, Inc. ("Properties"), owns real estate of which a
substantial portion is under mining royalty agreements or leased to
Florida Rock Industries, Inc. ("FRI"). The Company also holds
certain other real estate for investment. Other wholly owned
subsidiaries of the Company own and are developing certain
industrial rental properties near Baltimore, Maryland.
Substantially all of the real estate operations are conducted
within the Southeastern and Mid-Atlantic United States.
The Company has two major business segments: transportation and
real estate. Industry segment information is presented in Notes 2
and 9 to the consolidated financial statements included in the
accompanying 2000 Annual Report to Stockholders and is incorporated
herein by reference.
The Board of Directors on August 2, 2000, approved a resolution to
delay consummation of the previously approved reorganization until
some date beyond July 1, 2001. The reorganization will require
reauthorization by the Board. The reorganization would result in
spinning off to its shareholders in a tax free distribution of a
new company which would include the real estate business, while
retaining the transportation business in Patriot Transportation
Holding, Inc. For additional information, see Note 13 to the
Consolidated Financial Statements.
FRI accounted for approximately 7.6% of the Company's consolidated
revenues for fiscal 2000.
Revenues from royalties and from a portion of the trucking
operations are subject to factors affecting the level of general
construction activity. A decrease in the level of general
construction activity in any of the Company's market areas may have
an adverse effect on such revenues and income derived therefrom.
Transportation. Tank Lines is engaged in hauling liquid and dry
bulk commodities in tank trucks. SunBelt is engaged in hauling
primarily building and construction materials on flatbed trailers.
Patriot is engaged in the hauling of a variety of cargo through
independent agents and owner-operators. Information as to
Transportation's revenue by principal markets is presented on page
5 of the accompanying 2000 Annual Report to Stockholders under the
caption, "Management Analysis" and is incorporated herein by
reference.
Tank Lines' owned and leased tank truck fleet hauls liquid and dry
bulk commodities, including petroleum and chemicals. It operates
from terminals in Jacksonville, Orlando, Panama City, Pensacola,
Port Everglades, Tampa and White Springs, Florida; Albany, Atlanta,
Augusta, Bainbridge, Columbus, Dalton, Macon and Savannah, Georgia;
Knoxville, Tennessee; and Birmingham, Alabama. It also has a
central dispatch/office in Montgomery, Alabama. The Company has
from 4 to 8 major tank truck competitors in each of its markets.
SunBelt's owned flatbed fleet is based at Jacksonville and Tampa,
Florida; Atlanta and Savannah, Georgia; Salisbury, North Carolina
and South Pittsburg, Tennessee and hauls primarily building and
construction materials in Southeastern and Mid-Atlantic states.
There are 10 major competitors in the Company's market area and
numerous small competitors in the various states served.
Patriot is a non-asset based variable cost transportation company
which provides transportation services to shippers through a
growing network of independent sales agents and independent
contractors. Patriot's business is such that a significant
portion of its operating costs vary directly with revenue.
Independent sales agents and independent contractors are
compensated based on a percentage of revenue generated by them.
Patriot hauls a variety of cargo including metal products, building
materials, dry freight and machinery and equipment throughout the
United States. Trailers are hauled exclusively by tractors
belonging to the independent contractors and independent fleet
owners. Patriot markets its transportation services through 64
independent commissioned sales agents and operates in highly
competitive markets.
At September 30, 2000, the Company was not committed to purchasing
additional tractors and/or trailers.
Price, service, and location are the major factors which affect
competition within a given market.
During fiscal 2000 the transportation segment's ten largest
customers accounted for approximately 36% of transportation's
revenue. The loss of any one of these customers could have an
adverse effect on the Company's revenues and income.
Real Estate. The Company's real estate and property development
activities are conducted through several wholly owned subsidiaries.
The Company owns real estate in Florida, Georgia, Virginia,
Maryland, and Washington, D.C. The real estate owned falls
generally into one of three categories. The first is construction
aggregates properties with stone or sand and gravel deposits, of
which substantially all is leased to Florida Rock Industries, Inc.
under mining royalty agreements. The Company is paid a percentage
of the revenues generated by the material mined and sold, or
minimum royalties where there is no current, or only limited,
mining activity. The second is land and/or buildings leased under
rental agreements or which are being developed for rental. The
third is land which is being held for future appreciation or
development.
Additional information about the Company's Real Estate segment is
contained on page 1 under the captions "Real Estate Group" and in
Note 9 to the consolidated financial statements included in the
accompanying 2000 Annual Report to stockholders and is incorporated
herein by reference.
The Company's real estate strategy of developing high quality,
flexible warehouse/office space in the Baltimore-Washington markets
continues to be successful. Ninety-five percent of the
warehouse/office portfolio of approximately 1.2 million square feet
was leased at September 30, 2000.
Price, location, rental space availability, structural design,
property management services and flexibility are the major factors
which affect competition in the warehouse rental market. The
Company experiences considerable competition in all of its markets.
In fiscal 2000 real estate revenues, excluding the sale of real
estate, were divided approximately 42% from mining and minimum
royalties and 58% from rentals. FRI accounted for approximately
52% of such revenue.
Environmental Matters. 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 11 to the consolidated financial
statements included in the accompanying 2000 Annual Report to
Stockholders and in Item 3 "Legal Proceedings" of this Form 10-K,
and such information is incorporated herein by reference.
Employees. The Company employed approximately 818 people in its
Transportation Group, 9 people in its Real Estate Group, and 2
people in its Corporate offices at September 30, 2000.
Item 2. PROPERTIES.
The Company's principal properties are located in Florida, Georgia,
Virginia, Washington, D.C., and Maryland.
Transportation Properties. At September 30, 2000, the Company
operated and owned a fleet of 547 trucks, two of which were leased,
and owned a fleet of 926 trailers. The Company has 19 sites for
its trucking terminals in Florida, Georgia, Alabama and Tennessee
totaling approximately 90 acres. Of these acres, the Company owned
approximately 79 and leased approximately 11. The Company also
leases a central dispatch/office in Montgomery, Alabama which is
leased year-to-year.
Construction Aggregates Properties. The following table summarizes
the Company's principal construction aggregates locations and
estimated reserves at September 30, 2000, substantially all of
which are leased to FRI.
Tons of
Tons Mined Estimated
in Year Reserves
Ended at
9/30/00 9/30/00 Approximate
(000's) (000's) Acres Owned
The Company owns fifteen
locations currently being
mined in Brooksville,
Astatula, Miami, Grandin,
Gulf Hammock, Keuka, Lake
Lake Wales, Newberry and
in Marion and Lake
Counties, Florida;
Forest Park, Macon and
Tyrone, Georgia; St. Mary's
County, Maryland; and
Manassas, Virginia. 14,395 540,000 18,686
The Company owns four locations
being leased but not currently
being mined, in Ft. Myers
and Grandin, Florida; Rome
and Columbus, Georgia. - 180,000 2,461
Other Properties. The Company owns approximately 120 acres of land
in Virginia and Washington, D.C. and an office building and
approximately 6 acres in Florida which are leased to FRI. The
Company owns eight parcels of land near Baltimore, Maryland. One
contains approximately 11 acres with a commercial warehouse and
office space (162,587 square feet), which at November 1, 2000 was
100% leased. The second contains approximately 17 acres with
195,615 square feet of commercial warehouse and office space of
which at November 1, 2000 was 100% leased. The third contains
approximately 10 acres with 189,212 square feet of
commercial/warehouse space that was 100% leased at November 1,
2000. The fourth contains 8.5 acres with an office building
(28,533 square feet) which is 6% occupied by the Company with the
balance 100% leased, including a portion leased to FRI. The fifth
site contains 5.285 acres with 83,100 square feet of warehouse
space that was 100% leased at November 1, 2000. The sixth site
contains 5.849 acres with 85,100 square feet of warehouse space
that was 75% leased at November 1, 2000.
The seventh site is a 134 acre tract of land in Harford County,
Maryland. The site is being used for the development of the
Lakeside Business Park. A 5.2 acre section has been developed with
110,875 square feet of commercial warehouse space that was 100%
leased on November 1, 2000. Two sections of 4.25 acres each have
been developed with 132,484 square feet of commercial warehouse
space that was 100% leased at November 1, 2000. A 6.11 acre
section has been developed with 96,800 square feet of warehouse
space that was 100% leased at November 1, 2000. An 8.28 acre site
is being developed with 93,340 square feet of commercial warehouse
space under construction at September 30, 2000. A 13.91 acre site
is being developed with 99,100 square feet of commercial warehouse
space under construction at September 30, 2000 that is 100% pre-leased.
The eighth site is a 59 acre tract in Anne Arundel County, Maryland
near the Baltimore-Washington International Airport. The project,
Hillside Business Park, will provide the Company an opportunity to
develop 575,000 square feet of warehouse/office space. Grading
and infrastructure work on the site began in the spring of 2000,
and construction of the first building is anticipated to commence
during the spring of 2001.
In addition to the development, mining and rental sites, the
Company owns approximately 9,267 acres of investment and other real
estate, of which approximately 6,326 acres are in Suwannee County
and Columbia County, Florida.
As part of the Company's ongoing asset management activities, it
made application before the Zoning Commission of the District of
Columbia to re-zone its 5.8 acre site on the banks of the Anacostia
River from industrial to Planned Unit Development(PUD). Approval
of the application would allow the development of a 1.5 million
square foot commercial office component together with associated
waterfront enhancements in the Washington DC area. In November
1999, the Zoning Commission approved the Company's application.
At September 30, 2000 certain property, plant and equipment having
a carrying value of $26,778,000 was pledged on certain notes and
contracts with an outstanding principal balance totaling
$22,496,000.
In addition, certain properties having a carrying value at
September 30, 2000 of $1,118,000 were encumbered by industrial
revenue bonds which are the liability of FRI. FRI has agreed to
pay such debt when due (or sooner if FRI cancels its lease of such
property), and further has agreed to indemnify and hold harmless
the Company.
Item 3. LEGAL PROCEEDINGS.
Note 11 to the Consolidated Financial Statements included in the
accompanying 2000 Annual Report to Stockholders is incorporated
herein by reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No reportable events.
<PAGE>
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
There were approximately 796 holders of record of Patriot
Transportation Holding, Inc. common stock, $.10 par value, as of
December 1, 2000. The Company's common stock is traded on the
Nasdaq Stock Market (Symbol PATR). Information concerning stock
prices is included under the caption "Quarterly Results" on page 4
the Company's 2000 Annual Report to stockholders, and such
information is incorporated herein by reference. The Company has
not paid a cash dividend during the past two years. It is the
present policy of the Board of Directors not to pay cash dividends.
Information concerning restrictions on the payment of cash
dividends is included in Note 3 to the consolidated financial
statements included in the accompanying 2000 Annual Report to
Stockholders and such information is incorporated herein by
reference.
Item 6. SELECTED FINANCIAL DATA.
Information required in response to this Item 6 is included under
the caption "Five Year Summary" on page 4 of the Company's 2000
Annual Report to Stockholders and such information is incorporated
herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Information required in response to this Item 7 is included under
the caption "Management Analysis" on pages 5 and 6; under the
caption "Capital Expenditures" on page 1; and in Notes 1 through 13
to the consolidated financial statements included in the
accompanying 2000 Annual Report to Stockholders and in Item 3
"Legal Proceedings" of this Form 10-K. Such information is
incorporated herein by reference.
Item 7.A QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest
rates. For its cash and cash equivalents a change in interest
rates affects the amount of interest income that can be earned.
For its debt instruments changes in interest rates affect the
amount of interest expense incurred.
The following table provides information about the Company's
financial instruments that are sensitive to changes in interest
rates:
Interest rate sensitivity
2001 2002 2003 2004 2005 Thereafter Total Fair Value
Liabilities:
Bank lines of credit $ 5,600 5,600 5,600
Weighted average
Interest rate 7.2%
Long-term debt at
Fixed rates $ 796 862 933 1,010 1,030 18,180 22,810 22,555
Weighted average
Interest rate 7.8% 7.8 7.8 7.8 7.8 7.8
Bank Revolving Credit
Variable interest $20,000 20,000 20,000
Rate
Weighted average
Interest 7.2%
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information required in response to this Item 8 is included under
the caption "Quarterly Results" on page 4 and on pages 7 through 15
of the Company's 2000 Annual Report to Stockholders. Such
information is incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
No reportable events.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Office Position Since
Edward L. Baker 65 Chairman of the Board May 3, 1989
John E. Anderson 55 President & Chief Feb. 17, 1989
Executive Officer
James B. Shephard 63 Vice President and Feb. 2, 2000
Secretary
David H.
deVilliers, Jr. 49 Vice President June 1, 1989
James J. Gilstrap 53 Treasurer, Assistant Aug. 6, 1997
Secretary and Chief
Financial Officer
Wallace A. Patzke, 53 Controller and Chief Aug. 6, 1997
Jr. Accounting Officer
All of the above officers have been employed in their respective
positions for the past five years, except James B.Shephard, James
J. Gilstrap and Wallace A. Patzke,Jr.
James B. Shephard was President and Chief Executive Officer of
Landstar Ranger from 1989 to 1998, Senior Vice President of
Landstar from 1998 to March 1999, Chairman of the Board of Florida
Rock & Tank Lines, Inc. from March 1999 to November 1999 when he
was appointed President of the Company's Transportation Group.
James J. Gilstrap joined FRI in March 1997 and was elected Vice
President and Chief Financial Officer in May 1997. In August 1997
Mr. Gilstrap was elected Treasurer of FRI. From 1993 to 1997 he
was self-employed as a private investor. He resigned his
positions with the Company and FRI effective January 1, 2001.
Wallace A. Patzke, Jr. has been Vice President, Administration and
Chief Accounting Officer of FRI since January 2000, Vice President
and Chief Accounting Officer, from August 1999 to January 2000,
Vice President, Controller and Chief Accounting Officer from August
1997 to August 1999 Vice President and Controller from October 1996
to August 1997 and Controller from December 1991 to October 1996.
John D. Baker II, who is the brother of Edward L. Baker, and
Thompson S. Baker II, who is the son of Edward L. Baker, are on the
Board of Directors of the Company.
All executive officers of the Company are elected annually by the
Board of Directors.
Information concerning directors, required in response to this Item
10, is included under the captions "Election of Directors" and
Section 16(a) Beneficial Ownership Reporting Compliance in the
Company's Proxy Statement dated December 20, 2000; and such
information is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION.
Information required in response to this Item 11 is included under
the captions "Executive Compensation," "Compensation Committee
Report," "Compensation Committee Interlocks and Insider
Participation," and "Shareholder Return Performance" in the
Company's Proxy Statement dated December 20, 2000; and such
information is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information required in response to this Item 12 is included under
the captions "Common Stock Ownership of Certain Beneficial Owners"
and "Common Stock Ownership by Directors and Officers" in the
Company's Proxy Statement dated December 20, 2000; and such
information is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required in response to this Item 13 is included under
the captions "Compensation Committee Interlocks and Insider
Participation" and "Certain Relationships and Related
Transactions" in the Company's Proxy Statement dated December 20,
2000 and in Note 2 captioned "Transactions with Related Parties" in
the Company's 2000 Annual Report to Stockholders; and such
information is incorporated herein by reference.
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
(a) (1)and(2) Financial Statements and Financial Statement
Schedules.
The response to this item is submitted as a
separate section. See Index to Financial
Statements and Financial Statement Schedules on
page 18 of this Form 10-K.
(3)Exhibits.
The response to this item is submitted as a
separate section. See Exhibit Index on pages 14
through 17 of this Form 10-K.
(b) Reports on Form 8-K.
During the three months ended September 30, 2000, no
reports on Form 8-K were filed by the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Patriot Transportation Holding, Inc.
Date: December 6, 2000 By JAMES J. GILSTRAP
James J. Gilstrap
Treasurer, Assistant Secretary and
Chief Financial Officer
By WALLACE A. PATZKE JR.
Wallace A. Patzke Jr.
Controller and Chief Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on December 6, 2000.
JOHN E. ANDERSON DAVID H. deVILLIERS JR.
John E. Anderson David H. deVilliers Jr.
Director, President, and Chief Director
Executive Officer
(Principal Executive Officer) LUKE E.FICHTHORN III
LUKE E. FICHTHORN III
JAMES J. GILSTRAP Director
James J. Gilstrap
Treasurer, Assistant Secretary FRANCIS X. KNOTT
and Chief Financial Officer Francis X. Knott
(Principal Financial Officer) Director
WALLACE A. PATZKE JR. RADFORD D. LOVETT
Wallace A. Patzke Jr. Radford D. Lovett
Controller and Chief Accounting Director
Officer
(Principal Accounting Officer) ROBERT H. PAUL III
Robert H. Paul III
EDWARD L. BAKER Director
Edward L. Baker
Director JAMES B. SHEPHARD
James B. Shephard
JOHN D. BAKER II Director
John D. Baker II
Director MARTIN E. STEIN
Martin E. Stein
THOMPSON S. BAKER II Director
Thompson S. Baker II
Director JAMES H. WINSTON
James H. Winston
Director
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
EXHIBIT INDEX
[Item 14(a)(3)]
(3)(a)(1) Articles of Incorporation of Patriot Transportation
Holding, 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
Patriot Transportation Holding, 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
Patriot Transportation Holding, 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)(a)(4) Amendment to the Articles of Incorporation, filed
with the Florida Secretary of State on May 6, 1999.
A form of such amendment was previously filed as
Exhibit 4 to the Company's Form 8-K dated May 5,
1999. File No. 33-26115
(3)(a)(5) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with the
Secretary of State of Florida on February 21, 2000.
Previously filed with Form 10-Q for the quarter
ended March 31, 2000. File No. 33-26115.
(3)(b)(1) Restated Bylaws of Patriot Transportation Holding,
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 Patriot Transportation
Holding, 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 Patriot Transportation Holding,
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. 33-26115.
(4)(b) Specimen stock certificate of Patriot
Transportation Holding, Inc. Previously filed
with Form S-4 dated December 13, 1988. File No.
33-26115.
(4)(c) Credit Agreement dated as of November 15, 1995
among Patriot Transportation Holding, 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)(c)(1) First Amendment dated as of September 30, 1998
to the Credit Agreement dated as of November
15, 1995.
(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.
(4)(e) Rights Agreement, dated as May 5, 1999 between the
Company and First Union National Bank. Previously
filed as Exhibit 4 to the Company's Form 8-K dated
May 5, 1999. File No. 33-26115.
(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 lease backs 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 may be 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.
(10)(f) Summary of Medical Reimbursement Plan of Patriot
Transportation Holding, 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) Patriot Transportation Holding, Inc. 1989 Employee
Stock Option Plan. Previously filed with Form S-4
dated December 13, 1988. File No. 33-26115
(10)(I)(2) Patriot Transportation Holding, 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.
(13) The Company's 2000 Annual Report to stockholders,
portions of which are incorporated by reference in
this Form 10-K. Those portions of the 2000 Annual
Report to stockholders which are not incorporated
by reference shall not be deemed to be filed as
part of this Form 10-K.
(22) Subsidiaries of Registrant at September 30, 2000:
Florida Rock & Tank Lines, Inc. (a Florida
corporation) Florida Rock Properties, Inc. (a
Florida corporation) FRP Development Corp. (a
Maryland corporation) FRP Maryland, Inc. (a
Maryland corporation) 34 Loveton Center Limited
Partnership (a Maryland limited partnership) FRTL,
Inc. (a Florida corporation)SunBelt Transport, Inc.
(a Florida Corporation)Oz Limited Partnership (a
Maryland limited partnership) FRP Delaware, Inc. (a
Delaware corporation) FRP Lakeside L.P. (a Maryland
limited partnership) FRP Lakeside L.L.C. #1 (a
Maryland limited company) FRP Lakeside L.L.C. #2 (a
Maryland limited liability corporation), FRP
Lakeside L.L.C. #3 (a Maryland limited liability
company), FRP Lakeside L.L.C. #4 (a Maryland
limited liability company), FRP Lakeside L. L.C.#5
(a Maryland limited liability company), FRP
Hillside L.L.C. (a Maryland limited liability
company) FRP Windsor LLC (a Maryland limited
liability company), FRP Dorsey L.L.C. (a Maryland
limited liability company) Patriot Transportation,
Inc.(a Florida corporation)
(23)(a) Consent of Deloitte & Touche LLP, Independent
Certified Public Accountants, appears on page 16 of
this Form 10-K.
(27) Financial Data Schedule
<PAGE>
PATRIOT TRANSPORTATION HOLDING, INC.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a) (1) and 2))
Page
Consolidated Financial Statements:
Consolidated balance sheet at September 30, 2000
and 1999 8(a)
For the years ended September 30, 2000, 1999 and 1998:
Consolidated statement of income 7(a)
Consolidated statement of stockholders' equity 10(a)
Consolidated statement of cash flows 9(a)
Notes to consolidated financial statements 11-15(a)
Independent Auditors' Report 16(a)
Selected quarterly financial data (unaudited) 4(a)
Consent of Independent Certified Public Accountants 19(b)
Independent Auditors' Report 20(b)
Consolidated Financial Statement Schedules:
II - Valuation and qualifying accounts 21(b)
III - Real estate and accumulated depreciation and
depletion 22-23(b)
(a) Refers to the page number in the Company's
2000 Annual Report to Stockholders. Such
information is incorporated by reference in
Item 8 of this Form 10-K.
(b) Refers to the page number in this Form 10-K.
All other schedules have been omitted, as they are not required under
the related instructions, are inapplicable, or because the information
required is included in the consolidated financial statements.
Independent Auditors' Consent
We consent to the incorporation by reference in Registration Statement
(Form S-8 No. 33-43215) pertaining to the Patriot Transportation
Holding, Inc. 1989 Stock Option Plan and in the related Prospectus of
our report dated December 8, 2000, appearing in and incorporated by
reference in this Annual Report (Form 10-K) for the year ended
September 30, 2000.
DELOITTE & TOUCHE LLP
Jacksonville, Florida
December 15, 2000
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Patriot Transportation Holding, Inc.
Jacksonville, Florida
We have audited the consolidated financial statements of Patriot
Transportation Holding, Inc. and subsidiaries ("Patriot") as of
September 30, 2000 and 1999, and for each of the three years in the
period ended September 30, 2000, and have issued our report thereon
dated December 8, 2000; such consolidated financial statements and
report are included in your 2000 Annual Report to Stockholders and are
incorporated herein by reference. Our audits also included the
financial statement schedules of Patriot, listed in Item 14. These
financial statement schedules are the responsibility of Patriot's
management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements
taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Certified Public Accountants
Jacksonville, Florida
December 8, 2000
<PAGE>
PATRIOT TRANSPORTATION HOLDING, INC.
SCHEDULE II (CONSOLIDATED) - VALUATION
AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
ADDITIONS ADDITIONS
BALANCE CHARGED TO CHARGED TO BALANCE
AT BEGIN. COST AND OTHER AT END
OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
Year Ended
September 30, 2000:
Allowance for
doubtful accounts $ 284,318 $ 858,629 - $ 274,406(a) $ 868,541
Accrued risk
insurance $5,385,393 $4,452,376 - $4,440,327(b) $5,397,442
Accrued health
insurance 913,377 2,187,462 - 2,111,231(b) 989,608
Totals -
insurance $6,298,770 $6,639,838 $0 $6,551,558 $6,387,050
September 30, 1999:
Allowance for
doubtful accounts $272,318 $12,000 - $284,318
Accrued risk
insurance $4,545,457 $4,016,846 - $3,176,910(b) $5,385,393
Accrued health
insurance 841,789 1,480,947 - 1,409,359(b) 913,377
Totals -
insurance $5,387,246 $5,497,793 $0 $4,586,269 $6,298,770
Year Ended
September 30, 1998:
Allowance for
doubtful accounts $257,952 $12,000 - ($2,366)(a) $272,318
Accrued risk
insurance $4,217,714 $4,401,537 - $4,073,794(b)$4,545,457
Accrued health
insurance 964,698 1,340,998 - 1,463,907(b) 841,789
Totals -
insurance $5,182,412 $5,742,535 $0 $5,537,701 $5,387,246
(a) Accounts written off less recoveries
(b) Payments
PATRIOT TRANSPORTATION HOLDING, INC.
SCHEDULE III(CONSOLIDATED)-REAL ESTATE & ACCUMULATED DEPRECIATION AND
DEPLETION
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cost capi- Gross amount Date Deprecia-
Encumb Initial cost talized at which Accumulated Of Date tion Life
County State rances to subsequent carried at DepreciationConstr-Acquired Computed
Company to acquisitionend of period tion on:
(a)
Construction Aggregates
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alachua Florida $1,442,011 0 1 ,442,011 59,592 n/a 4/86 unit
Clay Florida 518,741 0 518,741 - n/a 4/86 unit
Clayton Georgia 381,787 0 381,787 4,506 n/a 4/86 unit
Dade Florida 9,374,660 0 9,374,660 8,075,374 n/a 4/86 unit
Fayette Georgia 97,646 400,872 0 400,872 44,847 n/a 4/86 unit
Hernando Florida 3,174,084 0 3,174,084 933,701 n/a 4/86 unit
Lake Florida 1,464,625 20,528 1,485,153 1,034,694 n/a 4/86 unit
Lee Florida 4,690,269 5,937 4,696,206 2,226 n/a 4/86 unit
Floyd Georgia 300,000 0 300,000 - n/a 4/86 unit
Levy Florida 1,280,643 83,365 1,364,008 402,523 n/a 4/86 unit
Marion Florida 1,180,366 0 1,180,366 599,478 n/a 4/86 unit
Monroe Florida 840,442 0 840,442 216,726 n/a 4/86 unit
Muscogee Georgia 368,674 0 368,674 45,000 n/a 4/86 unit
Polk Florida 120,502 0 120,502 75,285 n/a 4/86 unit
Prince Wil.Virginia 298,464 0 298,464 273,330 n/a 4/86 unit
Putnam Florida 15,014,681 36,114 15,050,795 2,573,875 n/a 4/86 unit
St. MarysMaryland 1,269,878 5,140 1,275,018 519,162 n/a 4/86 unit
97,646 42,120,699 151,084 42,271,783 14,860,319
Land Rental Property
District of Columb 6,712,973 2,645,097 9,358,070 909,128 n/a 4/86 15 yr.
Fairfax Virginia 2,035,014 0 2,035,014 - n/a 4/86 -
Putnam Florida 360,241 0 360,241 290,549 n/a 4/86 10 yr.
Spalding Georgia 19,572 0 19,572 - n/a 4/86 -
Suwannee Florida 217,468 1,337,429 0 1,337,429 814,658 n/a 4/86 10 yr.
217,468 10,465,229 2,645,097 13,110,326 2,014,335
Commercial Property
BaltimoreMaryland1,560,631 439,120 2,836,019 3,285,139 1,063,263 1990 10/89 31 yr.
BaltimoreMaryland2,015,100 453,834 2,908,345 3,362,179 839,724 1992 12/91 31 yr.
BaltimoreMaryland 690,222 2,846,549 3,526,771 57,989 2000 7/99 31 yr.
BaltimoreMaryland2,404,896 507,545 2,859,841 3,367,386 608,530 1994 12/91 31yr.
Duval Florida 2,804,344 191,237 2,995,581 2,004,000 n/a 4/86 20 yr.
Harford Maryland3,018,942 109,226 3,747,294 3,856,520 300,563 1996 8/95 31 yr.
Harford Maryland 1,467,555 8,332,294 9,799,849 - n/a 8/95 31 yr.
Harford Maryland4,909,528 177,518 5,434,607 5,612,125 277,066 1999 8/95 31 yr.
Howard Maryland1,820,131 2,414,284 262,828 2,677,112 865,442 1987 9/88 31 yr.
Howard Maryland2,730,196 655,000 2,921,263 3,576,263 402,931 1996 9/88 31 yr.
Howard Maryland 2,473,277 310,392 2,783,669 48,306 n/a 2/00 31 yr.
Anne ArunMaryland 4,036,288 911,060 6,487,732 7,398,792 2,581,575 1989 9/88 31 yr.
Anne ArunMaryland 950,000 1,237,444 2,187,444 0 n/a 5/98 31 yr.
Orange Florida 57,047 1,647 58,694 12,223 n/a 4/86 10 yr.
22,495,712 14,110,032 40,377,492 54,487,524 9,061,612
Investment Property
Caroline Virginia 212,876 6,857 219,733 - n/a 4/86 unit
Duval Florida 684,695 0 684,695 - n/a 4/86 -
Fairfax Virginia 273,198 0 273,198 - n/a 4/86 -
Fayette Georgia 283,875 0 283,875 - n/a 4/86 -
Bartow Florida 121,493 0 121,493 - n/a 4/86 -
Putnam Florida 151,959 0 151,959 31,773 n/a 4/86 -
Suwannee Florida 3,258,243 0 3,258,243 - n/a 4/86 unit
4,986,339 6,857 4,993,196 31,773
Miscellaneous 365,920 0 365,920 -
GRAND TOTALS $22,810,826 72,048,219 43,180,530 115,228,749 25,968,039
(a) The aggregate cost for Federal income tax purposes is $105,327,346.
</TABLE>
PATRIOT TRANSPORTATION HOLDING, INC.
SCHEDULE III (CONSOLIDATED) - REAL ESTATE AND
ACCUMULATED DEPRECIATION AND DEPLETION
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
2000 1999 1998
Gross Carrying Cost of Real Estate:
Balance at beginning of period $106,930,861 98,302,279 86,939,335
Additions during period:
Other acquisitions 9,550,781 9,663,944 2,241,837
Improvements, etc. - - 5,480,287
Other (transfers) - - 3,811,104
Deductions during period:
Cost of real estate sold 742,939 704,062 170,284
Other (abandonments) 509,954 - -
Other (transfers
to Transportation) - 331,300 -
Balance at close of period $115,228,749 106,930,861 98,302,279
Accumulated Depreciation & Depletion:
Balance at beginning of period $ 23,676,964 21,655,393 19,463,097
Additions during period:
Charged to cost & expense 2,535,438 2,446,115 2,278,379
Deductions during period:
Cost of real estate sold 244,365 233,134 86,083
Other(transfer to Transp.) - 191,410 -
Balance at close of period $25,968,037 23,676,964 21,655,393
Annual Report 2000
CONSOLIDATED FINANCIAL HIGHLIGHTS
Years ended September 30
(Dollars in thousands except per share amounts)
%
2000 1999 Change
Revenues $93,862 82,019 +14.4
Gross profit $16,239 19,994 -18.8
Operating profit $ 6,840 12,380 -44.7
Income before income taxes $ 3,435 10,093 -66.0
Net income $ 2,044 6,157 -66.8
Per common share:
Basic earnings per share $ .61 1.79 -65.9
Diluted earnings per share $ .61 1.78 -65.7
Stockholders' equity $ 22.06 21.53 + 2.5
<PAGE>
2000 CORPORATE HIGHLIGHTS
Revenues - up 14.4% to $93,862,000
Gross profit - down 18.8% to $16,239,000
Net income - down 66.8% to $2,044,000
Diluted earnings per share - down 65.7% to $ .61 per share
Gains from sale of real estate of $1,533,000
$23,400,000 of borrowing capacity is available under the Company's
credit agreements at September 30, 2000
BUSINESS. The Company is engaged in the transportation and real
estate businesses. The Company's transportation business is
conducted through three wholly owned subsidiaries. Florida Rock &
Tank Lines, Inc. is a Southeastern transportation company
concentrating in the hauling by motor carrier of liquid and dry
bulk commodities. SunBelt Transport, Inc. serves the flatbed
portion of the trucking industry in the Southeast and Mid-Atlantic
States, hauling primarily construction materials. Patriot
Transportation, Inc. hauls a variety of cargo, primarily in the
United States, through independent sales agents and
owner/operators. The Company's Real Estate Group, through
subsidiaries, acquires, constructs, leases, operates and manages
land and buildings to generate both current cash flows and
long-term capital appreciation.
OBJECTIVES. The Company's dual objectives are to build a major
transportation company and a real estate company which provides
sound long-term growth, cash generation and asset appreciation.
Transportation
Internal growth is accomplished by a dedicated, competent and
loyal work force along with a growing network of third party
sales agents and owner/operators, emphasizing superior service
to customers in existing markets, developing new
transportation services for customers in current market areas
as well as expansion into new market areas.
External growth, through the acquisition program, is designed
to broaden the Company's geographic market area and delivery
services by acquiring related businesses.
Real Estate
The growth plan is based on the acquisition, management and
retention of real estate assets and the development of
industrial rental properties to provide long-term positive
cash flows and capital appreciation.
To Our Stockholders:
As your Company began Fiscal 2000 expectations were focused to
achieve the previously announced Plan of Reorganization formally
separating the transportation and real estate operations.
Consequently the Company changed its name to Patriot Transportation
Holding, Inc. on March 1 following shareholder approval at the
February 2 Annual Meeting.
But as the year unfolded the Transportation Group began to rapidly
encounter challenges related to both operating conditions and
information system/administrative support. Chronic driver shortages
retarded hauling capacity, pressured labor costs, and increased
turnover. Mushrooming diesel fuel prices severely inflated fuel
expenses beyond the industry's ability to offset via surcharges.
Trucking operating ratios suffered accordingly.
Transition to new electronic information software in
Transportation billing proved costly to the Group, with associated
disruptions in personnel costs and productivity.
Notwithstanding these adversities, important progress was achieved
in the first full year of operations for the new variable-cost, third
party subsidiary, Patriot Transportation, Inc. This new growth engine
favorably tracked its business plan considering industry conditions and
software hurdles.
Also in positive contrast to transportation difficulties, the
Company's Real Estate Group enjoyed another year of encouraging
performance. The Group's expanding portfolio of income producing,
flexible office warehouses continued on plan regarding square-footage
growth and ahead of plan for occupancy. Strategic progress in asset
management will assist in structuring an expanding asset foundation for
the future.
Nevertheless, continuing turbulence within the trucking industry
and the need to complete an internal information system for its
Transportation Group led the Company on August 2, 2000 to announce a
delay of its reorganization (spin-off) until some date beyond July 1,
2001 and subject to reauthorization by its Board of Directors.
Consolidated Results. Consolidated revenues for fiscal 2000 increased
14.4% to $93,862,000. Transportation revenues increased 19.5% to
$80,152,000 primarily aided by growth at Patriot Transportation, Inc.
Modest increases in both miles hauled and prices were contributed by
Florida Rock & Tank Lines and SunBelt Transport. Total real estate
revenues declined 8.4% due primarily to lower property and timber sales
while revenues from the Company's development activities increased
20.3%. Property sales in fiscal 2000 were $2,260,000 compared to
$3,788,000 the previous year.
Gross profit in 2000 declined 18.8% to $16,239,000 from
$19,994,000 in 1999. The Transportation Group's gross profit in fiscal
2000 experienced an 18.2% decrease to $7,892,000 driven mainly by
increases in direct labor and fuel expense in the face of only modest
price increases. The Group also incurred approximately $600,000 in
unanticipated health claims expense occurring substantially in the
fourth quarter. Real estate gross profit fell 19.3% to $8,347,000.
Gross profit from development operations increased 17.3% but lower
property sales in 2000 caused a 52.6% decline from related gains to
$1,533,000 in 2000 from $3,236,000 in 1999.
Selling, general and administrative expenses increased 23.4% from
$7,614,000 to $9,399,000 in 2000. This increase stemmed chiefly from
increased legal expenses and bad debt losses and other expenses at
Florida Rock & Tank Lines related to information software transition.
The total increase in selling, general and administrative expenses was
also impacted by administrative costs to support the new subsidiary,
Patriot Transportation, Inc., which was not in operation the previous
fiscal year.
Net interest expense increased 48.9% from $2,311,000 in 1999 to
$3,415,000 in 2000 as the result of higher levels of debt and higher
interest rates. Net income decreased 66.8% from $6,157,000 in 1999 to
$2,044,000 in 2000. Diluted earnings per share also decreased 65.7%
to $0.61 in 2000 from $1.78 the previous year.
Capital Expenditures. Capital expenditures in 2000 for the
transportation business totaled $12,091,000 versus $12,010,000 in 1999.
Capital expenditures for the real estate segment in 2000 totalled
$9,762,000 versus $9,344,000 in 1999. Total depreciation and depletion
for fiscal 2000 was $11,144,000 versus $10,065,000 in 1999.
The fiscal 2001 capital expenditure plan for the transportation
business is $6,934,000 primarily for continued modernization of the
tank truck and flatbed fleets. The capital budget for the real estate
segment for fiscal 2001 is $19,065,000 mainly for continued
office/warehouse development. Total depreciation and depletion expense
is expected to be approximately $11,212,000 on a consolidated basis.
Financial Management. The Company's $34,000,000 unsecured revolver and
term facility has a final maturity of November 15, 2003. At September
30, 2000, $20,000,000 was outstanding leaving a balance of $14,000,000
in availability under this committed facility. The Company also has
$15,000,000 of unsecured short term lines of credit under which
$5,600,000 was outstanding at the end of fiscal 2000. In addition,
$22,496,000 of the Company's total debt outstanding is non-recourse,
long-term fixed rate mortgages secured primarily by the Company's flex
warehouse/office projects. At September 30, 2000 the Company's
percentage of total funded debt to equity was 66%.
Annual Meeting. At the Annual Stockholders Meeting on February 2,
2000, the stockholders elected John D. Baker II, Luke E. Fichthorn III,
Robert H. Paul III, and James B. Shephard as directors to serve a
four-year term expiring in the year 2004.
Real Estate Group. Continuing healthy demand for well-located
distribution capacity, effective marketing, as well as a growing
reputation for quality design and follow-up property management,
combined to produce another year of noteworthy progress. The Group can
be proud of a record of achievement toward the key objective of
developing flexible warehouse/office square footage in targeted,
distribution-friendly markets.
Evidence of such progress occurred during 2000 in four different
sub-markets within the greater Baltimore, Maryland area. A new 83,100
square-foot build-to-suit office/warehouse, 6920 Tudsbury Road, was
completed, occupied and long-term financed. This property is located
near the beltway on Baltimore's western fringe. Development also
continued at Lakeside Business Park, a 134-acre development adjacent
to Interstate 95 north of Baltimore in Harford County. A 96,440
square-foot offering, 1504 Quarry Drive, was completed and occupied.
At 8620 Dorsey Run Road, 85,100 square feet, was purchased, renovated
and is now 75% occupied and financed. Finally, active site grading is
underway at Hillside Business Park, a 59-acre property in Anne Arundel
County, Maryland near both the Baltimore-Washington International
Airport and the new regional Arundel Mall. Hillside Business Park is
projected for a final total build-out of about 575,000 square feet.
The Group's total portfolio of developed buildings at September
30, 2000 was comprised approximately 1.2 million square feet with a
combined occupancy of 95%. Final build-out at Lakeside and Hillside
Business Parks will bring the Group's total developed building capacity
to approximately 2.77 million square feet.
Turning to the Group's other long-term focus, asset management,
much activity also occurred. Plans were finalized to construct a
bulkhead along the shoreline of the Group's 5.8 acre site on the banks
of the Anacostia River in the District of Columbia. This site, located
about one mile from the United States Capitol Building, was
successfully re-zoned by the Group early in fiscal 2000 from industrial
to Planned Unit Development(PUD). The new PUD zoning permits
development of up to 1.5 million square feet of commercial office space
together with related public amenities and waterfront enhancements.
Bulkhead construction will secure the site by adding a "hard edge"
along the waterfront to prevent further shoreline erosion and provide
foundation stability for anchoring vertical construction.
Asset management focus was also directed toward the Group's raw
land portfolio in Georgia and Florida. These holdings range from
leased long-term mining properties, which could offer future
development potential, to timberland, to scattered tracts with
potential warehouse distribution possibilities.
Finally, the Group made important progress toward implementing its
own in-house information software system tailored to its real estate
core business. Such progress will enable the Group to better define
and conduct itself as a distinct business unit.
Transportation Group. In contrast to the Real Estate Group the
Company's Transportation Group battled a chorus of adversities the full
year, both from within and external.
Several months before fiscal 2000 began the Transportation Group
initiated a planned program to achieve a level of cost-effective
administrative sufficiency. Previously it had depended wholly on
outsourcing for administrative support. Year 2000 (Y2K) compliance
weighed heavily on information software considerations, and the Group
had earlier selected core business support software. But serious
system transition problems unrelated to Y2K developed which caused tank
truck billing/credit issues. Unfortunately, the tank truck area
suffered approximately $760,000 in bad debt losses during the
transition.
The Group elected to implement its own in-house capability.
Start-up for the new software package is slated for about April 2001.
The Group anticipates that system shortcomings will be cured.
Turning to external conditions, the trucking industry confronted
very tight labor markets and high diesel fuel costs that keep operating
ratios under great pressure. To combat these forces both Florida Rock
& Tank Lines and SunBelt Transport are aggressively raising their
permanent freight rates while imposing fuel price surcharges to
essentially halt further profit erosion. If over the coming year
operating expenses continue under such pressure, each company is
notifying its customer base that additional permanent rate increases
will be forthcoming.
In further response to industry conditions the Group began
directing emphasis in its tank and flatbed companies to non-asset,
owner/operator hauling capacity. This should reduce average capital
employed, add variable cost protection and encourage improved returns
in the future.
Regarding owner/operators and third-party, independent freight
agents, Patriot Transportation, Inc. achieved good progress during the
year. Patriot successfully organized and launched into the industry
despite the operating climate. The new company continues to expand
satisfactorily with agents distributed in every geographic region of
the United States along with progress aimed at freight movements across
borders into Canada and Mexico. Patriot continues its expansion
program as planned with only modest capital outlays. Collateral
traffic lane and customer service efficiencies are developing with both
Florida Rock & Tank Lines and SunBelt Transport.
Related Developments and Outlook. Operating results for the
Transportation Group are clearly unacceptable. Our responses to
challenges within the trucking industry have been described, and they
will be executed vigorously. The Real Estate Group should enjoy
another year of momentum subject as always to continued strength in our
domestic economy.
Finally, the Company has recently employed a Vice President,
Finance and Administration with broad multi-industry seasoning.
We extend our gratitude for your support. And we again salute the
enthusiasm, commitment and loyalty of the employees who represent the
core strength of this enterprise.
Respectfully yours,
Edward L. Baker
Chairman
John E. Anderson
President & Chief Executive Officer
<PAGE>
Operating Review
Transportation. During fiscal 2000 the Company's Transportation Group
operated through three wholly owned subsidiaries. Florida Rock & Tank
Lines, Inc. is engaged in hauling liquid and dry bulk commodities in
tank trucks. SunBelt Transport, Inc. is engaged in hauling mostly
building and construction materials on flatbed trailers. Patriot
Transportation, Inc. is engaged in hauling a variety of cargo through
third party independent freight agents and owner/operators.
The tank trucks operate from terminals in Jacksonville, Orlando,
Panama City, Pensacola, Port Everglades, Tampa and White Springs,
Florida; Albany, Atlanta, Augusta, Bainbridge, Columbus, Dalton, Macon
and Savannah, Georgia; Knoxville, Tennessee; and Birmingham, Alabama
and has a central dispatch office in Montgomery, Alabama. SunBelt
operates in the Southeast and Mid-Atlantic states where as Patriot
operates through the United States.
Revenues and miles hauled were up 19.5% and 15.1%, respectively, in
2000 as a result of expansion of flatbed and tank truck hauling and the
start up of the independent agent and owner/operator business.
Gross profit decreased 18.2% from fiscal 1999 primarily as a result
of increased labor costs due to driver shortages, increased fuel costs
and increased health claims.
During fiscal 2000, the Group purchased new tractors and new
trailers. The fiscal 2001 capital expenditure plan is based on
maintaining a modernized tank and flatbed fleet. The fleet
modernization program has resulted in reduced maintenance expenses and
improved operating efficiencies.
Transportation labor, fuel and now risk insurance pressures are
expected to remain key factors. More comprehensive fuel price
sucharges are now in place at Florida Rock & Tank Lines and SunBelt
Transport. Assertive steps are underway at both carriers to
significantly boost permanent freight rates. The Transportation Group
is now well on its way to implementing new information systems specific
to its core businesses. Patriot Transportation, Inc., the
Company's new third party agent/owner-operator startup, should
see its expansion momentum continue.
Real Estate. The Real Estate Group operates the Company's real
estate and property development activities through subsidiaries.
The Company owns real estate in Florida, Georgia, Virginia, Maryland,
and Washington, D.C. The real estate owned generally falls into one
of three categories. The first is land with construction aggregates
deposits, substantially all of which is leased to Florida Rock
Industries, Inc. under mining royalty agreements, whereby the Company
is paid a percentage of the revenues generated or annual minimums. The
second is land and/or buildings leased under rental agreements or being
developed for future rentals, and the third is land and/or buildings
which are being developed for future rental or held for future
appreciation or development.
Real estate revenues, excluding property sales, increased 2.4% over
fiscal 1999 as a result increased royalties and rental revenue on the
Company's real estate projects partially offset by a decrease in timber
sales. The fiscal 2000 real estate revenues, excluding the sale of
real estate and timber, were divided approximately 42% from mining and
minimum royalties and 58% from rental.
A brief description of FRP Development Corp.'s projects at September
30, 2000 follows:
8230 Preston Court, 72,182 square feet of flexible warehouse/office
space and 59% leased.
8240 Preston Court, 90,405 square feet of flexible warehouse/office
space and 100% leased.
810 Oregon Avenue, 113,280 square feet of flexible warehouse/office
space and 100% leased.
812 Oregon Avenue, 82,335 square feet of flexible warehouse/office
space and 100% leased.
Rossville Business Center, a two building complex consisting of
189,212 square feet of flexible warehouse/office space and 100% leased.
34 Loveton Center, a 28,533 square foot suburban office building and
100% leased.
1502 Quarry Drive, 110,875 square feet of flexible warehouse/office
space and 100% leased.
1504 Quarry Drive, 96,800 square feet of flexible warehouse/office
space completed during fiscal 2000 and 100% leased.
1506 Quarry Drive, 93,340 square feet of flexible warehouse/office
space under construction.
2206 Lakeside Boulevard, 66,964 square feet of flexible
warehouse/office space completed during fiscal 1999 and 100% leased.
2208 Lakeside Boulevard, 65,520 square feet of flexible
warehouse/office space completed during fiscal 1999 and 100% leased.
6920 Tudsbury Road, 83,100 square feet, built to suit
warehouse/office under construction to be completed during fiscal 2000
and 100% pre-leased.
8620 Dorsey Run Road, 85,100 square feet, warehouse/office completed
during fiscal 2000 and 75% leased.
2203 Lakeside Boulevard, 99,100 square feet of flexible
warehouse/office space currently under construction and 100% pre-leased.
Lakeside Business Park is a 134 acre site capable of supporting
1,160,000 square feet of warehouse/office space. At September 30,
2000, 192,440 square feet was under construction and expected to be
completed during fiscal 2001. Approximately 42 acres remain available
for development and are capable of supporting 631,000 square feet of
new development.
Hillside Business Park, is a 59 acre site located in Anne Oriental
County, Maryland and capable of supporting 575,000 square feet of
warehouse/office space.
The Real Estate Group during fiscal 2001 will continue to focus on
buildings under construction and the continued development of the
property at Lakeside Business Park. Planning, development and
permitting for Hillside Business Park development will also continue.
At September 30, 2000 the Company owned approximately 1,200,000
square feet of developed building capacity that was 95% leased. The
Real Estate Group will continue its asset management functions for the
benefit of the Company's land portfolio. These activities will also
include but not be limited to the Company's site on the Anacostia River
in the District of Columbia. The Company's long-term plan is to
gradually build and own a portfolio of successful rental properties.
<PAGE>
Five Year Summary Years ended September 30
(Dollars and shares in thousands except per share amounts)
2000 1999 1998 1997 1996
Summary of Operations
Revenues $ 93,862 82,019 73,974 68,844 64,403
Gross profit(a) $ 16,239 19,994 16,493 14,908 14,615
Operating profit $ 6,840 12,380 9,625 8,977 9,017
Interest expense $ 3,438 2,357 2,300 2,061 2,234
Income before income taxes
$ 3,435 10,093 7,343 6,984 6,827
Provision for income taxes
$ 1,391 3,936 2,863 2,724 2,662
Net income $ 2,044 6,157 4,480 4,260 4,165
Per Common Share
Basic EPS $ .61 1.79 1.30 1.22 1.16
Diluted EPS $ .61 1.78 1.28 1.21 1.14
Stockholders' equity
$ 22.06 21.53 19.83 18.53 17.72
Financial Summary
Current assets $ 15,089 14,161 10,073 8,549 8,003
Current liabilities
$ 17,498 13,555 9,479 11,063 9,595
Working capital (deficit)
$ (2,409) 606 594 (2,514) (1,592)
Property, plant and
equipment, net $124,026 115,369 104,970 95,018 90,058
Total assets $148,011 138,655 123,965 116,582 107,036
Long-term debt $ 42,015 37,936 33,299 30,647 26,170
Stockholders' equity
$ 73,813 72,692 68,755 63,734 61,894
Other Data
Return on average
stockholders' equity
2.8% 8.7 6.7 6.8 6.7
Return on average capital
employed 1.6% 5.2 4.1 4.2 5.8
Net cash flow provided from
operating activities
$ 9,566 15,032 13,557 13,982 14,681
Additions to property,
plant and equipment
$ 21,861 21,359 19,901 13,746 15,970
Depreciation, depletion
and amortization
$ 11,144 10,065 9,146 8,356 7,667
Weighted average number
of shares - basic 3,334 3,444 3,452 3,490 3,588
Weighted average number
of shares - diluted 3,348 3,468 3,496 3,530 3,647
Number of employees at
end of year 829 877 753 721 665
Stockholders of record
801 834 850 873 913
(a) Fiscal 2000, 1999, 1998, 1997 and 1996 include gains on the
sale of real estate of $1,533,000, $3,236,000, $358,000,
$817,000 and $93,000, respectively.
Quarterly Results (unaudited)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
First Second Third Fourth
2000 1999 2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $20,150 19,031 21,566 21,016 24,258 19,854 27,888 22,118
Gross profit $ 3,607 4,393 3,819 5,539 4,685 4,382 4,128 5,680
Operating profit $ 1,645 2,299 1,655 3,868 2,351 2,470 1,189 3,743
Income before
income taxes $ 902 1,743 818 3,352 1,418 1,874 297 3,124
Net income $ 550 1,063 499 2,045 865 1,143 130 1,906
Per common share:
Basic EPS $.16 .31 .15 .59 .26 .33 .04 .56
Diluted EPS $.16 .30 .15 .59 .26 .33 .04 .56
Market price:
High $25.00 30.00 26.88 28.88 23.50 26.00 20.00 26.00
Low $20.00 19.50 16.38 23.00 17.19 21.25 15.50 21.63
</TABLE>
<PAGE>
Management Analysis
Operating Results. The Company's operations are influenced by a number
of external and internal factors. External factors include levels of
economic and industrial activity in the United States and the Southeast,
petroleum product usage in the Southeast, fuel costs, driver availability
and cost, construction activity, Florida Rock Industries, Inc.'s sales
from the Company's mining properties, interest rates and demand for
commercial warehouse space in the Baltimore/Washington area. Internal
factors include revenue mix, capacity utilization, safety records, other
operating factors, administrative costs, and construction costs of new
projects.
In fiscal 2000 and 1999, revenues increased 14.4% and 10.9%,
respectively. In the Transportation segment revenues and miles hauled
were up 19.5% and 15.1%, respectively, in 2000 were up 4.7% and 4.7%,
respectively, in 1999. The Real Estate segment's revenues, exclusive of
real estate sales, increased 2.4% and 17.3% in 2000 and 1999,
respectively.
The estimated contribution to Transportation revenues by principal
markets follows:
2000 1999 1998 1997 1996
Petroleum 60% 65 67 68 68
Construction 22% 24 21 21 20
Chemical 6% 7 7 6 7
Other 12% 4 5 5 5
Gross profit for fiscal 2000 decreased $3,755,000 and gross margin
decreased to 17% from 24%. The Transportation segment's gross profit
decreased $1,760,000 and gross margin decreased to 10% from 14%. These
decreases were primarily attributable to sharply higher fuel costs, a
tight labor market for drivers resulting in increased costs to hire and
retain personnel, unanticipated health claims, higher depreciation
expense resulting from an expanded and upgraded tractor fleet and start
up costs associated with owner/operator business. Gross profit for the
real estate segment decreased $1,955,000 primarily as a result of lower
real estate and timber sales in 2000 partially offset by increased rental
income. Gross profit on real estate sales was $1,533,000 as compared
to $3,236,000 in 1999.
Gross profit for fiscal 1999 increased $3,501,000 and gross margin
increased to 24% from 22%. The Transportation segment gross profit
decreased $360,000 and gross margin decreased to 14% from 15%. These
decreases were due to increased costs to attract and retain qualified
drivers and increased depreciation expense partially offset by reduced
fuel costs. Gross profit for the real estate segment increased
$3,861,000 primarily as a result of real estate sales, increased royalty
income and increased rental income. Gross profit on real estate sales
was $3,236,000 in 1999 and $358,000 in 1998.
Selling, general and administrative expense increased 23.4% in 2000
and increased 10.9% in 1999. The 2000 increase was due to additional
staffing for the owner/operator business, professional fees associated
with the proposed spin-off of the real estate business, increased bad
debt expense and other legal expenses. The 1999 increase was
attributable to non-recurring retirement and severance and systems
upgrades for Year 2000 compliance.
Interest expense in 2000 increased 45.9% or $1,081,000 from 1999. This
increase was primarily as a result of an increase in the average debt
outstanding and an increase in the average interest rate. Interest
expense in 1999 increased 2.5% or $57,000 from 1998.
Liquidity and Capital Resources. The following key financial
measurements reflect the Company's financial position and capital
resources at September 30 (dollars in thousands):
2000 1999 1998
Cash $ 633 2,593 663
Total debt $48,411 41,561 35,432
Debt as a percent of
capital employed 37% 34 32
Unused lines of credit $23,400 31,000 37,400
During 2000, net cash flows from operating activities were $9,566,000
which along with issuing additional long and short-term debt funded the
Company's investing activities of $17,453,000 and the repurchase of
common stock of $1,468,000. During 1999, net cash flows from operating
activities were $15,032,000 which along with exercise of stock options
and issuing of debt funded the Company's investing activities of
$16,746,000.
The Company is financially postured to be able to take advantage of
external and internal growth opportunities in real estate development and
in the motor carrier industry that may occur.
The Board of Directors has authorized management to repurchase shares
of the Company's common stock from time to time as opportunities may
arise. Currently the Company has approximately $4,177,000 available
under this authorization.
The Company has a $34,000,000 revolving credit agreement of which
$14,000,000 was available at fiscal year end. In addition, it has
unsecured short-term lines of credit under which it may borrow up to
$15,000,000 of which $5,600,000 was outstanding at September 30, 2000.
The Company currently expects its fiscal 2001 capital expenditures to
be approximately $26,000,000 and depreciation and depletion expense to
be $11,212,000. The expenditures are expected to be financed from the
cash flow from operating activities, financing of new real estate
projects, and the $14,000,000 unused and available under its revolving
credit agreement.
The Company believes it will be able to renegotiate its present credit
facilities or obtain similar replacement credit facilities when necessary
in the future.
Spin-off of Real Estate Business. On August 2, 2000, the Board of
Directors approved a resolution to delay consummation of the previously
approved reorganization until some date beyond July 1, 2001. The
reorganization will require reauthorization by the Board. The
reorganization would result in spinning off to its shareholders a new
company which would include the real estate business, while retaining the
transportation business in Patriot Transportation Holding, Inc. For
additional information, see Note 13 to the Consolidated Financial
Statements.
Inflation. Historically, the Company has been able to recover
inflationary cost increases through increased freight rates. It is
expected that over time justifiable and necessary rate increases will be
obtained in the future. Substantially all of the Company's royalty
agreements are based on a percentage of the sales price. Minimum
royalties and substantially all lease agreements provide various
escalation provisions.
Forward-Looking Statements. Certain matters discussed in this report
contain forward-looking statements that are subject to risks and
uncertainties that could cause actual results to differ materially from
these indicated by such forward-looking statements. These
forward-looking statements relate to, among other things, capital
expenditures, liquidity, capital resources and competition and may be
indicated by words or phrases such as "anticipate," "estimate," "plans,"
"projects," "continuing," "ongoing," "expects," "management believes,"
"the Company believes," "the Company intends" and similar words or
phrases. The following factors are among the principal factors that
could cause actual results to differ materially from the forward-looking
statements: driver availability and cost; availability and terms of
financing; competition; levels of construction activity in FRI's
markets; fuel costs; and inflation.
<PAGE>
Consolidated Statement of Income Years ended September 30
(Dollars and shares in thousands except per share amounts)
2000 1999 1998
Revenues:
Transportation $ 80,152 67,048 64,014
Real estate 11,450 11,183 9,534
Sale of real estate 2,260 3,788 426
Total revenues (including revenue from
related parties of $7,178, $6,999 and
$6,256) 93,862 82,019 73,974
Cost of operations:
Transportation 72,260 57,396 54,002
Real estate 4,636 4,077 3,411
Cost of real estate sold 727 552 68
Gross profit 16,239 19,994 16,493
Selling, general and administrative expense
(including expenses paid to related party
of $582, $1,656 and $1,515) 9,399 7,614 6,868
Operating profit 6,840 12,380 9,625
Interest expense (3,438) (2,357) (2,300)
Interest income 24 46 13
Other income, net 9 24 5
Income before income taxes 3,435 10,093 7,343
Provision for income taxes 1,391 3,936 2,863
Net income $ 2,044 6,157 4,480
Earnings per share:
Basic $ .61 1.79 1.30
Diluted $ .61 1.78 1.28
Number of shares used in computing:
Basic earnings per share 3,334 3,444 3,452
Diluted earnings per share 3,348 3,468 3,496
See accompanying notes.
<PAGE>
Consolidated Balance Sheet September 30
(Dollars in thousands)
2000 1999
Assets
Current assets:
Cash and cash equivalents $ 633 2,593
Accounts receivable, less allowance for doubtful
accounts of $869 ($284 in 1999) (including
related party of $233 and $399) 10,770 8,451
Inventory of parts and supplies 650 503
Prepaid expenses and other 3,036 2,614
Total current assets 15,089 14,161
Other assets:
Real estate held for investment, at cost 5,216 5,674
Goodwill, at cost less amortization of $443
($403 in 1999) 1,167 1,207
Other 2,513 2,244
Total other assets 8,896 9,125
Property, plant and equipment, at cost:
Land 60,886 56,937
Buildings 44,213 35,971
Plant and equipment 70,161 67,677
Construction in progress 9,323 12,162
184,583 172,747
Less accumulated depreciation and depletion 60,557 57,378
Net property, plant and equipment 124,026 115,369
$148,011 138,655
Liabilities and Stockholders' Equity
Current liabilities:
Short-term note payable to bank $ 5,600 3,000
Accounts payable (including related party of
$569 and $166) 5,572 5,565
Federal and state income taxes 1,162 499
Accrued liabilities:
Payroll and benefits 1,670 1,415
Taxes 1,040 604
Interest 154 193
Insurance reserves 1,504 1,654
Long-term debt due within one year 796 625
Total current liabilities 17,498 13,555
Long-term debt 42,015 37,936
Deferred income taxes 8,628 8,820
Accrued insurance reserves 4,884 4,644
Other liabilities 1,173 1,008
Commitments and contingent liabilities (Notes 11 and 12)
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized; 3,346,351
shares issued and outstanding
(3,375,817 shares in 1999) 335 338
Capital in excess of par value 14,740 15,660
Retained earnings 58,738 56,694
Total stockholders' equity 73,813 72,692
$148,011 138,655
See accompanying notes.
Consolidated Statement of Cash Flows Years ended September 30
(Dollars in thousands)
Cash flows from operating activities: 2000 1999 1998
Net income $ 2,044 6,157 4,480
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 11,144 10,065 9,146
Net changes in operating assets and liabilities:
Accounts receivable (3,177) (1,953) (993)
Inventory of parts and supplies (147) 49 (83)
Prepaid expenses (423) (265) (228)
Accounts payable and accrued liabilities 1,219 2,659 492
Increase in deferred income taxes (238) 1,089 620
Net change in insurance reserves and other
liabilities 405 876 879
Gain on sale of real estate, plant and
equipment (2,220) (3,638) (778)
Other, net 959 (7) 22
Net cash provided by operating activities 9,566 15,032 13,557
Cash flows from investing activities:
Purchase of property, plant and equipment (21,041) (20,475)(15,323)
Purchase of real estate held for investment - (315) -
Additions to other assets (777) (737) (451)
Proceeds from the sale of real estate held for
investment, property, plant and equipment, and
other assets 4,365 4,781 1,542
Net cash used in investing activities (17,453) (16,746)(14,232)
Cash flows from financing activities:
Proceeds from long-term debt 5,000 5,000 3,200
Net increase (decrease) in short-term debt 2,600 1,400 (2,400)
Repayment of long-term debt (750) (535) (432)
Exercise of employee stock options 545 - 574
Repurchase of Company stock (1,468) (2,221) (33)
Net cash provided by financing activities 5,927 3,644 909
Net increase (decrease) in cash and cash equivalents(1,960) 1,930 234
Cash and cash equivalents at beginning of year 2,593 663 429
Cash and cash equivalents at end of year $ 633 2,593 663
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest expense, net of amount capitalized $ 3,477 2,340 2,288
Income taxes $ 920 3,459 1,759
Noncash investing and financing activities:
Additions to property, plant and equipment from:
Exchanges $ 820 620 767
Other assets $ - - 3,811
Issuance of debt $ - 264 -
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with maturities of three months or less at time of
purchase to be cash equivalents.
See accompanying notes.
Consolidated Statement of Stockholders' Equity Years ended September 30
(Dollars in thousands)
Capital in
Common Stock Excess of Retained
Shares Amount Par Value Earnings
Balance at September 30, 1997 3,439,235 $344 17,333 46,057
Shares purchased and canceled (1,010) - (33) -
Exercise of stock options 30,000 3 571 -
Net income - - - 4,480
Balance at September 30, 1998 3,468,225 347 17,871 50,537
Shares purchased and canceled (92,408) (9) (2,211) -
Net income - - - 6,157
Balance at September 30, 1999 3,375,817 338 15,660 56,694
Shares purchased and canceled (69,466) (7) (1,461) -
Exercise of stock options 40,000 4 541 -
Net income - - - 2,044
Balance at September 30, 2000 3,346,351 $335 14,740 58,738
See accompanying notes.
<PAGE>
Notes to Consolidated Financial Statements
1. Accounting policies. CONSOLIDATION - The consolidated financial statements
include the accounts of the Company and its subsidiaries, all of which are
wholly owned. All significant intercompany transactions have been eliminated
in consolidation.
INVENTORY - Inventory of parts and supplies is valued at the lower of cost
(first-in, first-out) or market.
REVENUE AND EXPENSE RECOGNITION - Substantially all transportation revenue is
recognized when shipment is complete and transportation expenses are recognized
as incurred.
Real estate rental revenue and mining royalties are generally recognized when
due under the leases. The straight-line method is used to recognize rental
revenues under leases which provide for varying rents over their term.
Sales of real estate are recognized when the collection of the sales price
is reasonably assured and when the Company has fulfilled its obligation which
is typically as of the closing date.
PROPERTY, PLANT AND EQUIPMENT - Provision for depreciation of plant and
equipment is computed using the straight-line method based on the following
estimated useful lives:
Years
Buildings and improvements 8-32
Revenue equipment 5-10
Other equipment 3- 5
Furniture and fixtures 5-10
Depletion of sand and stone deposits is computed on the basis of units
of production in relation to estimated reserves. Goodwill is amortized over
forty years using the straight-line method.
The Company periodically reviews property and equipment for potential
impairment. If this review indicates that the carrying amount of the asset
may not be recoverable, the Company estimates the future cash flows expected
with regards to the asset and its eventual disposition. If the sum of these
future cash flows (undiscounted and without interest charges) is less than the
carrying amount of the assets, the Company records an impairment loss based
on the fair value of the asset.
RISK INSURANCE - The Company has a $100,000 to $500,000 self-insured
retention per occurrence in connection with its workers' compensation,
automobile liability, and general liability insurance programs ("Risk
Insurance"). The Company accrues monthly the estimated cost in connection
with its portion of its Risk Insurance losses. Claims paid by the Company are
charged against the reserve. Additionally, the Company maintains a reserve
for incurred but not reported claims based on historical analysis of such
claims.
INCOME TAXES - The Company uses an asset and liability approach to
financial reporting for income taxes. Under this method, deferred tax assets
and liabilities are recognized based on differences between financial
statement and tax bases of assets and liabilities using presently enacted tax
rates. Deferred income taxes result from temporary differences between
pre-tax income reported in the financial statements and taxable income.
EARNINGS PER COMMON SHARE - 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. The
only difference between basic and diluted shares used for the calculation is
the effect of employee stock options.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
ENVIRONMENTAL - Environmental expenditures that benefit future periods are
capitalized. Expenditures that relate to an existing condition caused by past
operations, and which do not contribute to current or future revenue
generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, and the costs can be
reasonably estimated. Estimation of such liabilities is extremely complex.
Some factors that must be assessed are engineering estimates, continually
evolving governmental laws and standards, and potential involvement of other
potentially responsible parties.
NEW ACCOUNTING REQUIREMENTS - In June 1998, the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", effective for
fiscal years beginning after June 15, 1999. In June 1999, the FASB issued
SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities -
Deferral of Effective Date SFAS No. 133" which deferred the effective date to
fiscal years beginning after June 15, 2000. SFAS 133 requires companies to
record derivatives on the balance sheet as assets and liabilities, measured
at fair value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivatives and
whether it qualifies for hedge accounting. The Company will adopt this
statement effective October 1, 2000 and it will have no impact.
2. Transactions with related parties. As of September 30, 2000 six of the
Company's directors were also directors of Florida Rock Industries, Inc.
("FRI"). Such directors own approximately 30% of the stock of FRI and 44% of
the stock of the Company. Accordingly, FRI and the Company are considered
related parties.
The Company, through its transportation subsidiaries, hauls construction
aggregates for FRI and customers of FRI. It also hauls diesel fuel and other
supplies for FRI. Charges for these services are based on prevailing market
prices. Other wholly owned subsidiaries lease certain construction aggregates
mining and other properties and provide construction management services to
FRI.
A summary of revenues derived from FRI follows (in thousands):
2000 1999 1998
Transportation $1,202 931 839
Real estate 5,976 6,068 5,417
$7,178 6,999 6,256
Prior to October 1, 1999, FRI furnished certain management and related
services, including financial, tax, legal, administrative, accounting and
computer to the Company and its subsidiaries under an agreement expiring
September 30, 2000. Effective October 1, 1999, the Company and FRI agreed
to amend the agreement. Under the amended agreement, Patriot assumed
responsibility for accounting, credit and certain computer functions.
Charges for services provided by FRI were $582,000 in 2000, $1,656,000 in 1999
and $1,515,000 in 1998.
3. Lines of credit and debt. Long-term debt at September 30 is summarized as
follows (in thousands):
2000 1999
Revolving credit (unsecured) $20,000 20,000
6.9% to 9.5% mortgage notes payable
in installments through 2015 22,811 18,561
42,811 38,561
Less portion due within one year 796 625
$42,015 37,936
The aggregate amount of principal payments, excluding the revolving
credit, due subsequent to September 30, 2000 is: 2001 - $796,000; 2002 -
$862,000; 2003 - $933,000; 2004 - $1,010,000; 2005-$1,030,000; 2006 and
subsequent years - $18,180,000.
The Company has a revolving credit agreement as amended on October 31,
2000 under which it may borrow from three banks up to $34,000,000 on term
loans payable 25% on November 15, 2002 and the balance on November 15, 2003.
Interest is payable at SunTrust Bank, Central Florida, N.A.'s prime rate until
November 15, 2001, and at 1/4 of 1% above such prime rate thereafter.
Alternative interest rates based on the London interbank rate and/or the
reserve-adjusted certificate of deposit rate are available at the Company's
option. A commitment fee of 1/4 of 1% is payable on the unused amount of the
commitment until November 15, 2001.
The revolving credit agreement contains restrictive covenants, including
limitations on paying cash dividends. As of September 30, 2000 $14,924,000
of consolidated retained earnings was not restricted as to payment of cash
dividends.
The mortgage notes payable are collateralized by real estate having a
carrying value of approximately $26,778,000 at September 30, 2000.
Certain properties having a carrying value at September 30, 2000 of
$1,118,000 were encumbered by industrial revenue bonds which are the liability
of FRI. FRI has agreed to pay such debt when due (or sooner if FRI cancels
its lease of such property) and further has agreed to indemnify and hold
harmless the Company.
The Company also has short-term lines of credit totaling $15,000,000 from
two banks. At September 30, 2000, $5,600,000 was borrowed. Under these lines
the Company can borrow funds for a period from one to ninety days. There is
no commitment fee and the banks can terminate the lines at any time. The
interest rate is determined at the time of each borrowing. The weighted
average interest rates of such borrowings on September 30, 2000 and 1999 were
7.2% and 5.6%, respectively.
During fiscal 2000, 1999 and 1998 the Company capitalized interest cost
of $279,000, $315,000 and $331,000, respectively.
4. Leases. At September 30, 2000, the total carrying value of property owned
by the Company which is leased or held for lease to others is summarized as
follows (in thousands):
Construction aggregates property $ 42,272
Commercial property 54,487
Land and other property 13,110
109,869
Less accumulated depreciation and depletion 25,936
$ 83,933
The minimum future rentals on noncancelable operating leases as of
September 30, 2000 are as follows: 2001 - $6,541,000; 2002 - $6,173,000; 2003
- $5,739,000; 2004 - $5,301,000; 2005 - $4,424,000; 2006 and subsequent years
$16,455,000.
5. Preferred Shareholder Rights Plan. On May 5, 1999, the Board of Directors
of the Company declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock. The dividend was
payable on June 2, 1999. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock of the Company, par value $.01 per share (The
"Preferred Shares"), at a price of $96 per one one-hundredth of a
Preferred Share, subject to adjustment.
In the event that any Person or group of affiliated or associated Persons (an
"Acquiring Person") acquires beneficial ownership of 15% or more of the
Company's outstanding common stock each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of the Right.
An Acquiring Person excludes any Person or group of affiliated or associated
Persons who were beneficial owners, individually or collectively, of 15% or
more of the Company's Common Shares on May 4, 1999.
The Rights will initially trade together with the Company's common stock and
will not be exercisable. However, if an Acquiring Person acquires 15% or
more of the Company's common stock the Rights may become exercisable and trade
separately in the absence of future board action. The Board of Directors
may, at its option, redeem all Rights for $.01 per right, at any time prior
to the Rights becoming exercisable. The Rights will expire September 30,
2009 unless earlier redeemed, exchanged or amended by the Board.
6. Stock option plan. The Company has a Stock Option Plan under which options
for shares of common stock may be granted to directors, officers and key
employees. At September 30, 2000 the number of shares available for issuance
is 560,400 shares.
Option transactions for the fiscal years ended September 30 are
summarized as follows:
2000 1999 1998
Average Average Average
Options Price(1) Options Price(1) Options Price(1)
Shares under option:
Beginning of year 144,600 17.62 120,000 16.31 150,000 15.25
Issued - - 24,600 24.00 - -
Cancelled (2,000) 24.00 - - - -
Exercised (40,000) 13.63 - - (30,000) 11.00
End of year 102,600 19.05 144,600 17.62 120,000 16.31
Options exercisable
at end of year 84,520 109,000 98,000
(1) Weighted average exercise price
The following table summarizes information concerning stock options
outstanding at September 30, 2000:
Options Options Weighted-Average
Exercise Price Outstanding Exercisable Remaining Life
17.25 15,000 15,000 4.2 years
17.75 65,000 65,000 4.1 years
24.00 22,600 4,520 8.2 years
Remaining non-exercisable options as of September 30, 2000 become exercisable
4,520 shares each year through 2004.
The options expire ten years from the date of grant and become
exercisable in cumulative installments of 20% to 33% each year after a one
year waiting period from date of grant.
If compensation cost for stock option grants had been determined based
on the Black-Scholes option pricing model value at the grant date for the
awards granted subsequent to October 1, 1996 consistent with the provisions
of SFAS No. 123, the Company's 2000 net income, basic and diluted earnings per
share would have been $2,001,000, $.60 and $.60, respectively, and 1999 net
income, basic and diluted earnings per share would have been $6,121,000, $1.78
and $1.76, respectively. The SFAS 123 method has not been applied to options
granted prior to October 1, 1996, and the pro forma compensation expense may
not be indicative of pro forma expense in future years. The fair value of
options granted in 1999 was estimated to be $14.40 on the date of grant using
the following assumptions; no dividends yield, expected volatility of 54.8%,
risk-free interest rates of 4.3% and expected lives of 7 years.
7. Income taxes. The provision for income taxes for fiscal years ended
September 30 consists of the following (in thousands):
2000 1999 1998
Current:
Federal $1,399 2,445 1,914
State 236 402 329
1,635 2,847 2,243
Deferred (244) 1,089 620
Total $1,391 3,936 2,863
A reconciliation between the amount of tax shown above and the amount
computed at the statutory Federal income tax rate follows (in thousands):
2000 1999 1998
Amount computed at statutory
Federal rate $1,168 3,432 2,497
State income taxes (net of Federal
income tax benefit) 135 370 277
Other, net 88 134 89
Provision for income taxes $1,391 3,936 2,863
The types of temporary differences and their related tax effects that give
rise to deferred tax assets and deferred tax liabilities at September 30, are
presented below:
2000 1999
Deferred tax liabilities:
Basis difference in property,
plant and equipment $10,333 10,241
Depletion 592 630
Prepaid expenses 1,079 980
Gross deferred tax liabilities 12,004 11,851
Deferred tax assets:
Insurance reserves 2,168 2,107
Other, net 972 641
Gross deferred tax assets 3,140 2,748
Net deferred tax liability $ 8,864 9,103
8. Employee benefits. The Company and certain subsidiaries have a
savings/profit sharing plan for the benefit of qualified employees. The
savings feature of the plan incorporates the provisions of Section 401(k) of
the Internal Revenue Code. Under the savings feature of the plan, an eligible
employee may elect to save a portion (within limits) of their compensation on
a tax deferred basis. The Company contributes to a participant's account an
amount equal to 50% (with certain limits) of the participant's contribution.
Additionally, the Company may make an annual contribution to the plan as
determined by the Board of Directors, with certain limitations. The plan
provides for deferred vesting with benefits payable upon retirement or earlier
termination of employment. The Company's cost was $433,000 in 2000, $458,000
in 1999 and $429,000 in 1998.
The Company provides certain health benefits for retired employees.
Employees may become eligible for those benefits if they were employed by the
Company prior to December 10, 1992, meet the service requirements and reach
retirement age while working for the Company. The plan is contributory and
unfunded. The Company accrues the estimated cost of retiree health benefits
over the years that the employees render service.
The following table sets forth the plan's status reconciled with the
accrued postretirement benefit cost included in the Company's consolidated
balance sheet at September 30 (in thousands):
2000 1999
Change in benefit obligation
Balance beginning of year $ 449 471
Service cost 23 30
Interest cost 26 29
Plan participants contribution 16 -
Actuarial gain (109) (76)
Benefits paid (25) (5)
Balance end of year $ 380 449
Change in plan assets
Balance beginning of year $ 0 0
Employer contributions 9 5
Plan participants contribution 16 -
Benefits paid (25) (5)
Balance end of year $ 0 0
Funded status $(380) (449)
Unrecognized net gain (224) (136)
Unrecognized prior service cost - -
Accrued postretirement benefit costs $(604) (585)
Net periodic postretirement benefit cost for fiscal years ended September 30
includes the following components (in thousands):
2000 1999 1998
Service cost of benefits earned during
the period $ 23 30 33
Interest cost on APBO 26 29 30
Net amortization and deferral (20) (23) (62)
Net periodic postretirement benefit
cost $ 29 36 1
The discount rate used in determining the Net Periodic Postretirement Benefit
Cost and the APBO was 7.75% for 2000 and 7.25% for 1999 and 1998.
9. Business segments. On September 30, 1999, the Company adopted SFAS No. 131,
"Disclosure about Segments of an Enterprise and Related Information". SFAS 131
established standards for reporting information about segments in annual
financial statements and requires selected information about segments in interim
financial reports issued to stockholders. In addition, SFAS 131 established
standards for related disclosures about products and services, and geographic
areas. Segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in accessing
performance.
The Company has identified two business segments each of which is managed
separately along product lines. The Company's operations are substantially in
the Southeastern and Mid-Atlantic states.
The transportation segment hauls liquid and dry commodities by motor carrier.
The real estate segment owns real estate of which a substantial portion is under
mining royalty agreements or leased. They also hold certain other real estate
for investment and are developing commercial and industrial properties.
Operating results and certain other financial data for the Company's business
segments are as follows (in thousands):
2000 1999 1998
Revenues:
Transportation $ 80,152 67,048 64,014
Real estate (a) 13,710 14,971 9,960
$ 93,862 82,019 73,974
Operating profit(b):
Transportation $ 118 3,589 4,371
Real estate (a) 8,258 10,177 6,357
Corporate expenses (1,536) (1,386) (1,103)
Operating profit $ 6,840 12,380 9,625
Capital expenditures:
Transportation $ 12,091 12,010 8,368
Real estate 9,762 9,344 11,504
Other 8 5 29
$ 21,861 21,359 19,901
Depreciation, depletion and
amortization:
Transportation $ 8,191 7,398 6,740
Real estate 2,897 2,612 2,356
Other 56 55 50
$ 11,144 10,065 9,146
Identifiable assets at September 30:
Transportation $ 54,836 49,816 43,976
Real estate 92,166 85,720 78,807
Cash items 633 2,593 663
Unallocated corporate assets 376 526 519
$148,011 138,655 123,965
(a) Fiscal 2000, 1999 and 1998 includes revenue of $2,260,000, $3,788,000 and
$426,000 and operating profit of $1,533,000, $3,236,000 and $358,000,
respectively, from the sale of real estate.
(b) Operating profit is earnings before interest expense, other income, interest
income and income taxes.
10. Fair values of financial instruments. At September 30, 2000 and 1999, the
carrying amount reported in the balance sheet for cash and cash equivalents,
short-term notes payable to bank and revolving credit approximate their fair
value. The fair values of the Company's other long-term debt are estimated
using discounted cash flow analysis, based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements. At September 30,
2000 the carrying amount and fair value of such other long-term debt was
$22,811,000 and $22,555,000, respectively. At September 30, 1999 the carrying
amount and fair value of such other long-term debt was $18,562,000 and
$18,033,000, respectively.
11. Contingent liabilities. Certain of the Company's subsidiaries are involved
in litigation on a number of matters and are subject to certain claims which
arise in the normal course of business. The Company has retained certain
self-insurance risks with respect to losses for third party liability and
property damage. In the opinion of management, none of these matters are
expected to have a materially adverse effect on the Company's consolidated
financial statements.
One of the Company's subsidiaries is potentially a responsible party in
connection with a Superfund Site. It is the policy of the Company to accrue
environmental contamination cleanup costs when it is probable that a liability
has been incurred and the amount of such liability is reasonably estimable. The
Company has made an estimate of its likely costs in connection with this site
and a liability has been recorded. Such liability is not material to the
financial statements of the Company.
12. Commitments. At September 30, 2000, the Company had entered into various
contracts to purchase and develop real estate and to purchase computer software
with remaining commitments totaling $3,192,000 and $69,000, respectively.
13. Spin-off of real estate business. On August 2, 2000, the Board of
Directors approved a resolution to delay consummation of the previously approved
reorganization of the Company until some date beyond July 1, 2001. The
reorganization will require reauthorization by the Board. The reorganization
would result in spinning off to its shareholders a new company which would
include the real estate business, while retaining the transportation business
in Patriot Transportation Holding, Inc. The Company has obtained a tax ruling
from the Internal Revenue Service that confirms that the proposed transaction
will be tax-free to shareholders. Management has recommended delaying the
spin-off due to the turbulent conditions in the trucking industry and the need
to complete an internal information system for its Transportation Group. The
Company also wants to provide additional time for development of its new
agent/owner-operator subsidiary. For information concerning selected
information concerning the real estate business, see Note 9.
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders
Patriot Transportation Holding, Inc.
We have audited the accompanying consolidated balance sheets of Patriot
Transportation Holding, Inc. and subsidiaries as of September 30, 2000 and
1999, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended
September 30, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Patriot Transportation Holding,
Inc. and subsidiaries at September 30, 2000 and 1999, and the results of
their operations and their cash flows for each of the three years in the
period ended September 30, 2000 in conformity with accounting principles
generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Certified Public Accountants
Jacksonville, Florida
December 8, 2000
<PAGE>
Directors and Officers
Directors
John E. Anderson (1)
President and Chief Executive
Officer of the Company
Edward L. Baker (1)
Chairman of the Board of the Company
John D. Baker II (1)
President and Chief Executive
Officer of Florida Rock Industries,
Inc.
Thompson S. Baker II
Vice President of
Florida Rock Industries, Inc.
David H. deVilliers, Jr.
Vice President of the Company and
President of FRP Development Corp.,
the Company's northern
real estate operations
Luke E. Fichthorn III (2)
Private Investment Banker,
Twain Associates and Chairman of the
Board and Chief Executive Officer of
Bairnco Corporation
Francis X. Knott (2)
Chief Executive Officer of
Partners Realty Trust, Inc.
Radford D. Lovett (2)(3)
Chairman of the Board of
Commodores Point Terminal Corp.
Robert H. Paul III (3)
Chairman of the Board, President
and Chief Executive Officer of
Southeast-Atlantic Beverage Corporation
James B. Shephard
Vice President and Secretary
of the Company
Martin E. Stein Jr. (3)
Chairman and Chief Executive Officer of
Regency Realty Corporation
James H. Winston (2)
President of LPMC of Jax, Inc.
and President of
Omega Insurance Company
________________
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Compensation Committee
Officers
Edward L. Baker
Chairman of the Board
John E. Anderson
President and Chief Executive Officer
James B.Shephard
Vice President and Secretary
David H. deVilliers Jr.
Vice President
President, FRP Development Corp.,
the Company's northern real estate
operations
James J. Gilstrap
Treasurer and Chief Financial Officer
Wallace A. Patzke Jr.
Controller and Chief Accounting Officer
Patriot Transportation Holding, Inc.
General Office: 1801 Art Museum Drive
Jacksonville, Florida 32207
Telephone: (904) 396-5733
Annual Meeting
Shareholders are cordially invited to attend the Annual Stockholders Meeting
which will be held at 2 p.m. local time, on Wednesday, February 7, 2001, 155
East 21st Street, Jacksonville, Florida.
Transfer Agent
First Union Customer Information Center
Corporate Trust Client Services NC-1153
1525 West W. T. Harris Boulevard - 3C3
Charlotte, NC 28288-1153
Telephone: 1-800-829-8432
General Counsel
Lewis S. Lee, Esquire
McGuireWoods LLP
Jacksonville, Florida
Independent Auditors
Deloitte & Touche LLP
Jacksonville, Florida
Common Stock Listed
The Nasdaq Stock Market
(Symbol: PATR)
Form 10-K
Stockholders may receive without charge a copy of Patriot Transporation Holding,
Inc.'s annual report to the Securities and Exchange Commission on Form 10-K by
writing to the Treasurer at P.O. Box 4667, Jacksonville, Florida 32201.
