FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 30, 2007
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)
904/396-5733
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No___
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of "accelerated filer and large
accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer[ ] Accelerated filer[X] Non-
accelerated filer[ ]
Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).
YES___ NO_X_
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of June 30, 2007:
3,049,364 shares of $.10 par value common stock.
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2007
CONTENTS
Page No.
Preliminary Note Regarding Forward-Looking Statements 3
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 4
Consolidated Statements of Income 5
Consolidated Statements of Cash Flows 6
Condensed Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures about Market Risks 23
Item 4. Controls and Procedures 23
Part II. Other Information
Item 1A. Risk Factors 24
Item 6. Exhibits 24
Signatures 25
Exhibit 31 Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 27
Exhibit 32 Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. 30
Preliminary Note Regarding 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 those 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 and others discussed in the
Company's periodic reports and filings with the Securities and
Exchange Commission are among the principal factors that could cause
actual results to differ materially from the forward-looking
statements: driver availability and cost; the impact of future
regulations regarding the transportation industry; availability and
terms of financing; freight demand for petroleum products including
recessionary and terrorist impacts on travel in the Company's markets;
freight demand for building and construction materials in the
Company's markets; risk insurance markets; competition; general
economic conditions; demand for flexible warehouse/office facilities
in the Baltimore/Washington area; ability to obtain zoning and
entitlements necessary for property development; interest rates;
levels of construction activity in Florida Rock Industries, Inc.'s
markets; fuel costs; and inflation. However, this list is not a
complete statement of all potential risks or uncertainties.
These forward-looking statements are made as of the date hereof based
on management's current expectations, and the Company does not
undertake an obligation to update such statements, whether as a result
of new information, future events or otherwise. Additional information
regarding these and other risk factors may be found in the Company's
other filings made from time to time with the Securities and Exchange
Commission.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited) June 30, September 30,
2007 2006
Assets
Current assets:
Cash and cash equivalents $ 861 154
Accounts receivable (including related party of
$477 and $546 and net of allowance for doubtful
accounts of $215 and $359, respectively) 10,603 11,761
Inventory of parts and supplies 681 854
Deferred income taxes 724 870
Prepaid tires on equipment 2,009 2,230
Prepaid taxes and licenses 266 1,216
Prepaid insurance 1,201 260
Prepaid expenses, other 113 67
Total current assets 16,458 17,412
Property, plant and equipment, at cost 278,873 277,635
Less accumulated depreciation and depletion 87,952 85,562
Net property, plant and equipment 190,921 192,073
Real estate held for investment, at cost 1,274 1,093
Investment in Brooksville Joint Venture 5,784 -
Goodwill 1,087 1,087
Unrealized rents 2,496 2,201
Other assets 5,206 5,349
Total assets $223,226 219,215
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 4,371 5,670
Federal and state income taxes payable 346 20
Accrued payroll and benefits 4,646 5,160
Accrued insurance reserves 3,799 4,297
Accrued liabilities, other 453 469
Long-term debt due within one year 2,702 2,576
Total current liabilities 16,317 18,192
Long-term debt 56,380 60,548
Deferred income taxes 15,709 14,968
Accrued insurance reserves 4,588 5,104
Other liabilities 2,451 2,351
Commitments and contingencies (Note 8)
Shareholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized; none issued - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,049,364 and 3,011,629 shares issued
and outstanding, respectively 305 301
Capital in excess of par value 32,251 29,169
Retained earnings 95,225 88,582
Total shareholders' equity 127,781 118,052
Total liabilities and shareholders' equity $223,226 219,215
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2007 2006 2007 2006
Revenues:
Transportation $ 34,107 32,435 98,419 93,080
Real estate 5,524 5,176 16,492 15,515
Total revenues (including revenue
from related parties of $2,152,
$2,257, $6,239 and $6,104
respectively) 39,631 37,611 114,911 108,595
Cost of operations:
Transportation 29,312 28,114 83,451 80,472
Real estate 2,525 2,157 7,784 7,164
Total cost of operations 31,837 30,271 91,235 87,636
Gross profit:
Transportation 4,795 4,321 14,968 12,608
Real estate 2,999 3,019 8,708 8,351
Total gross profit 7,794 7,340 23,676 20,959
Selling, general and administrative
expense (including expenses paid
to a related party of $48, $48,
$143 and $143, respectively) 2,933 3,286 9,196 9,209
Operating profit 4,861 4,054 14,480 11,750
Interest income and other 13 28 69 125
Equity in loss of Joint Venture (27) - (128) -
Interest expense (868) (1,036) (2,639) (3,018)
Income before income taxes 3,979 3,046 11,782 8,857
Provision for income taxes (1,553) (1,202) (4,599) (3,410)
Net income $ 2,426 1,844 7,183 5,447
Earnings per common share:
Basic $ .80 .62 2.38 1.83
Diluted $ .77 .59 2.30 1.77
Number of shares (in thousands)
used in computing:
-basic earnings per common share 3,035 2,985 3,016 2,974
-diluted earnings per common share 3,142 3,105 3,125 3,085
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 2007 AND 2006
(In thousands)
(Unaudited)
2007 2006
Cash flows from operating activities:
Net income $ 7,183 5,447
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 10,615 9,995
Deferred income taxes 887 (845)
Equity in loss of Brooksville Joint Venture 128 -
Gain on sale of property, plant and equipment (1,035) (917)
Stock-based compensation 945 778
Net changes in operating assets and liabilities:
Accounts receivable 1,158 880
Inventory of parts and supplies 173 44
Prepaid expenses and other current assets 184 (14)
Other assets (606) (831)
Accounts payable and accrued liabilities (2,327) 1,296
Income taxes payable 326 1,363
Long-term insurance reserves and other long-term
liabilities (416) 308
Net cash provided by operating activities 17,215 17,504
Cash flows from investing activities:
Purchase of transportation group property and equipment (6,051) (13,815)
Purchase of real estate group property and equipment (6,014) (17,194)
Investment in Brooksville Joint Venture (3,368) -
Proceeds from sale of property, plant and equipment 1,366 1,283
Net cash used in investing activities (14,067) (29,726)
Cash flows from financing activities:
Proceeds from issuance of long-term debt - 2,084
Net (decrease) increase in revolving debt (2,126) 8,420
Repayment of long-term debt (1,916) (1,695)
Excess tax benefits from exercise of stock options 644 406
Exercise of employee stock options 957 699
Net cash (used in) provided by financing activities (2,441) 9,914
Net increase (decrease) in cash and cash equivalents 707 (2,308)
Cash and cash equivalents at beginning of period 154 2,966
Cash and cash equivalents at end of the period $ 861 658
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2007
(Unaudited)
(1) Basis of Presentation. The accompanying consolidated financial
statements include the accounts of Patriot Transportation Holding,
Inc. and its subsidiaries (the "Company"). Investment in the 50% owned
Brooksville Joint Venture is accounted for under the equity method of
accounting. These statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America for interim financial information and the instructions to Form
10-Q and do not include all the information and footnotes required by
accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of
management, all adjustments (primarily consisting of normal recurring
accruals) considered necessary for a fair statement of the results for
the interim periods have been included. Operating results for the nine
months ended June 30, 2007 are not necessarily indicative of the
results that may be expected for the fiscal year ending September 30,
2007. The accompanying consolidated financial statements and the
information included under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" should be
read in conjunction with the Company's consolidated financial
statements and related notes included in the Company's Form 10-K for
the year ended September 30, 2006.
(2) Recent Accounting Pronouncements. In May 2005, the FASB issued
Statement No. 154, Accounting Changes and Error Corrections ("SFAS
154"). This Statement requires retrospective application for voluntary
changes in accounting principles unless it is impracticable to do so.
SFAS 154's retrospective application requirement replaces APB Opinion
No. 20's, Accounting Changes, requirement to recognize most voluntary
changes in accounting principle by including in net income of the
period of the change the cumulative effect of changing to the new
accounting principle. SFAS 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December
15, 2005. The adoption of Statement 154 did not have a material impact
on our financial statements.
In July 2006, the FASB issued FASB Interpretation No. 48 (FIN 48)
"Accounting for Uncertainty in Income Taxes" which prescribes a
recognition threshold and measurement process for recording in the
financial statements uncertain tax positions taken or expected to be
taken in a tax return. Additionally, FIN 48 provides guidance on
derecognition, classification, accounting in interim periods and
disclosure requirements for uncertain tax positions. In May 2007, the
FASB issued Staff Position FIN No. 48-1, "Definition of 'Settlement'
in FASB Interpretation No. 48" (FSP FIN 48-1). FSP FIN 48-1 provides
guidance on how a company should determine whether a tax position is
effectively settled for the purpose of recognizing previously
unrecognized tax benefits. The accounting provisions of FIN 48 and
FSP FIN 48-1 will be effective for the Company beginning October 1,
2007. The Company is in the process of determining the effect, if any,
the adoption of FIN 48 and FSP FIN 48-1 will have on its financial
statements.
In September 2006, the FASB issued Statement No. 157, Fair Value
Measurement (SFAS 157). The Statement defines fair value, establishes
a framework for measuring fair value in generally accepted accounting
principles (GAAP), and expands disclosures about fair value
measurements. This Statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. Management believes that the
adoption of SFAS 157 will not have a material impact on the
consolidated financial results of the Company.
In September 2006, the FASB issued Statement No. 158, Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans
(SFAS 158). The statement requires employers to recognize on their
balance sheets the funded status of pension and other postretirement
benefit plans. In addition, employers will recognize actuarial gains
and losses, prior service cost and unrecognized transition amounts as
a component of accumulated other comprehensive income. Furthermore,
SFAS 158 will also require fiscal year end measurements of plan assets
and benefit obligations, eliminating the use of earlier measurement
dates currently permissible. The disclosure requirements for SFAS 158
are effective as of the end of the fiscal year ending after December
15, 2006. The requirement to measure plan assets and benefit
obligations as of the date of the fiscal year end statement of
financial position is effective for fiscal years ending after December
15, 2008. The Company is currently evaluating the impact of SFAS 158,
but the adoption of SFAS 158 is not expected to have a material effect
on the Company's consolidated financial statements.
(3) Business Segments. 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 primarily petroleum related bulk
liquids, dry bulk commodities and construction materials by motor
carrier. The real estate segment owns real estate of which a
substantial portion is under mining royalty agreements or leased. The
real estate segment also holds certain other real estate for
investment and develops commercial and industrial properties.
Operating results and certain other financial data for the Company's
business segments are as follows (in thousands):
Three Months ended Nine Months ended
June 30,___ June 30,___
2007 2006 2007 2006
Revenues:
Transportation $ 34,107 32,435 98,419 93,080
Real estate 5,524 5,176 16,492 15,515
$ 39,631 37,611 114,911 108,595
Operating profit
Transportation $ 2,600 2,097 8,452 5,988
Real estate 2,999 3,019 8,708 8,351
Corporate expenses (738) (1,062) (2,680) (2,589)
$ 4,861 4,054 14,480 11,750
Identifiable assets June 30, September 30,
2007 2006
Transportation $ 55,170 57,715
Real estate 165,075 159,134
Cash items 861 154
Unallocated corporate assets 2,120 2,212
$223,226 219,215
(4) Long-Term debt. Long-term debt is summarized as follows (in
thousands):
June 30, September 30,
2007 2006
Revolving credit (uncollateralized) $ 10,326 12,452
5.7% to 8.6% mortgage notes
due in installments through 2020 48,756 50,672
59,082 63,124
Less portion due within one year 2,702 2,576
$ 56,380 60,548
The Company has a $37,000,000 uncollaterized Revolving Credit
Agreement (the Revolver) with four banks which is scheduled to
terminate on December 31, 2009. The Revolver currently bears interest
at a rate of 1.00% over the selected LIBOR and may change quarterly
based on the Company's ratio of Consolidated Total Debt to
Consolidated Total Capital, as defined. A commitment fee of 0.15% per
annum is payable quarterly on the unused portion of the commitment.
The commitment fee may also change quarterly based upon the ratio
described above. The Revolver contains restrictive covenants including
limitations on paying cash dividends. The Company is in compliance
with all restrictive covenants as of June 30, 2007.
On July 31, 2007, the Company borrowed $36,000,000 from a major
insurance company. The non-recourse mortgage loan fully amortizes on
a level term over 20 years and bears interest at 5.74%. The loan is
secured by seven developed properties with a net book value of
$31,074,000 at June 30, 2007. A portion of the proceeds were used to
repay balances outstanding under the Company's Revolver and the
remaining proceeds will be used to fund new construction and to
purchase land for future development.
(5) Related Party Transactions. The Company, through its
transportation subsidiaries, hauls commodities by tank and flatbed
trucks for Florida Rock Industries, Inc. (FRI). Charges for these
services are based on prevailing market prices. The real estate
subsidiaries lease certain construction aggregates mining and other
properties to FRI. The Company also outsources certain administrative
functions to FRI. The cost of these administrative functions was
$143,000 and $143,000 for the nine months ended June 30, 2007 and
2006, respectively.
On October 4, 2006, a subsidiary of the Company (FRP) entered into a
Joint Venture Agreement with Florida Rock Industries, Inc. (FRI) to
form Brooksville Quarry, LLC, a real estate joint venture to develop
approximately 4,300 acres of land near Brooksville, Florida. Under
the terms of the joint venture, FRP has contributed its fee interest
in approximately 3,443 acres formerly leased to FRI under a long-term
mining lease which had a net book value of $2,548,000. FRI is
entitled to mine the property and pay royalties for the benefit of FRP
for as long as mining does not interfere with the development of the
property. Real estate revenues included $110,000 of such royalties in
the first nine months of fiscal 2007 and $82,000 in the first nine
months of fiscal 2006. Allocated depletion expense of $4,000 was
included in real estate cost of operations for the first nine months
of fiscal 2007.
FRP also reimbursed FRI $3,018,000 for one-half of the acquisition
costs of a 288-acre contiguous parcel acquired by FRI in 2006 and
contributed by FRI to the joint venture. FRI also contributed 553
acres that it owns as well as its leasehold interest in the 3,443
acres that it leased from FRP. The joint venture is jointly
controlled by FRI and FRP, and they each have a mandatory obligation
to fund additional capital contributions of up to $2 million. Capital
contributions of $350,000 were made during the first nine months of
fiscal 2007. Distributions will be made on a 50-50 basis except for
royalties and depletion specifically allocated to FRP. Other income
for the nine months ended June 30, 2007 includes a loss of $128,000
representing the Company's equity in the loss of the joint venture.
The property does not yet have the necessary entitlements for real
estate development. Approval to develop real property in Florida
entails an extensive entitlements process involving multiple and
overlapping regulatory jurisdictions and the outcome is inherently
uncertain. The Company currently expects that the entitlement process
may take several years to complete.
(6) Earnings per common share. The following details the computations
of the basic and diluted earnings per common share (in thousands,
except per share amounts):
THREE MONTHS NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2007 2006 2007 2006
Weighted average common shares
outstanding during the
period - shares used for
basic earnings per share 3,035 2,985 3,016 2,974
Common shares issuable under
Share based payment plans
which are potentially dilutive 107 120 109 111
Common shares used for diluted
earnings per share 3,142 3,105 3,125 3,085
Net income $ 2,426 1,844 7,183 5,447
Earnings per common share
Basic $ .80 .62 2.38 1.83
Diluted $ .77 .59 2.30 1.77
For the nine months ended June 30, 2007 and 2006, all outstanding
stock options were included in the calculation of diluted earnings per
common share because the sum of the hypothetical amount of future
proceeds from the exercise price, unrecorded compensation, and tax
benefits to be credited to capital in excess of par for all grants of
stock options were lower than the average price of the common shares,
and therefore were dilutive. For the nine months ended June 30, 2007
and 2006, all outstanding restricted shares were included in the
calculation of diluted earnings per common share because the
unrecorded compensation and tax benefits to be credited to capital in
excess of par for all awards of restricted stock were lower than the
average price of the common shares, and therefore were dilutive.
(7) Stock-Based Compensation Plan. Effective October 1, 2005, the
Company adopted SFAS 123R "Share-Based Payment" for its stock-based
employee compensation plans. Under SFAS 123R, compensation expense
must be measured and recognized for all share-based payments at the
grant date based on the fair value of the award and such costs must be
included in the statement of operations over the requisite service
period. Prior to October 1, 2005 the Company followed APB Opinion No.
25, "Accounting for Stock Issued to Employees".
The Company has elected the modified prospective application
transition method whereby the provisions of the statement will apply
going forward only from the date of adoption to new share based
payments, and for the portion of any previously issued and outstanding
stock option awards for which the requisite service is rendered after
the date of adoption. The Company did not restate prior years for pro
forma expense amounts. In addition, compensation expense must be
recognized for any awards modified, repurchased or cancelled after the
date of adoption. The straight-line attribution model is used to
measure compensation expense.
The Company previously awarded stock options to directors, officers
and key employees under the 1995 Stock Option Plan and the 2000 Stock
Option Plan. The options awarded under these two plans are non-
qualified and expire ten years from the date of grant. Options
awarded to directors are exercisable immediately and options awarded
to officers and employees become exercisable in cumulative annual
installments of 20% at the end of each year following the date of
grant. When stock options are exercised the Company issues new shares
after receipt of exercise proceeds and taxes due from the grantee.
The 2006 Stock Incentive Plan, which replaced the 2000 Stock Option
Plan, permits the grant of stock options, stock appreciation rights,
restricted stock awards, restricted stock units, or stock awards. In
February, 2006, 15,960 shares of restricted stock were granted subject
to forfeiture restrictions, tied to continued employment, that lapse
25% annually beginning on January 1, 2007. The number of common shares
authorized for future issuance was 276,260 at June 30, 2007.
The Company utilized the Black-Scholes valuation model for estimating
fair value of stock compensation for options awarded to officers and
employees in prior periods. Each grant was evaluated based upon
assumptions at the time of grant. The assumptions were no dividend
yield, expected volatility between 41% and 53%, risk-free interest
rate of 3.2% to 4.9% and expected life of 6.2 to 7.0 years.
The dividend yield of zero is used because the Company does not pay
cash dividends and has no present intention to pay cash dividends.
Expected volatility was estimated based on the Company's historical
experience over a period equivalent to the expected life in years.
The risk-free interest rate was based on the U.S. Treasury constant
maturity interest rate with a term consistent with the expected life
of the options granted. The expected life calculation was based on
the observed and expected time to exercise options by the employees.
Under provisions of SFAS 123R, the Company recorded the following
stock compensation expense in its consolidated statement of income
(in thousands):
Three Months ended Nine Months ended
June 30,___ June 30,___
2007 2006 2007 2006
Issued before 123R adoption $ 132 133 394 394
Restricted stock awards 54 59 167 98
Annual Director stock award - - 388 286
186 192 949 778
Deferred income tax benefit 71 74 364 300
Stock compensation after tax $ 115 118 585 478
SFAS 123R also amended FASB Statement No. 95, Statement of Cash Flows,
to require that the benefits associated with the tax deduction in
excess of recognized compensation cost be reported as financing cash
flows, rather than as a reduction of taxes paid. This requirement
will reduce net operating cash flows and increase net financing cash
flows in periods after the effective date. Financing cash flows for
the nine months ended June 30, 2007 included $644,000 of excess tax
benefits from the exercise of stock options.
A summary of changes in outstanding options is presented below (in
thousands, except per share amounts):
Weighted Weighted Weighted
Number Average Average Average
Of Exercise Remaining Grant Date
Options Shares Price Term (yrs) Fair Value
Outstanding at
September 30, 2006 304,746 $31.03 6.9
Granted 0 $ 0 $ 0
Exercised 33,935 $28.08 $ 473
Forfeited 2,200 $37.70
Outstanding at
June 30, 2007 268,611 $31.35 6.1 $ 4,244
Exercisable at
June 30, 2007 204,711 $30.08 5.9 $ 3,157
Vested during
Nine months ended
June 30, 2007 37,100 $ 549
The aggregate intrinsic value of exercisable in-the-money options was
$11,592,000 based on the market closing price of $86.70 on June 29,
2007 less applicable exercise prices. The aggregate intrinsic value
of all outstanding options at June 30, 2007 was $14,868,000. Gains of
$2,017,000 were realized by option holders during the nine months
ended June 30, 2007. The realized tax benefit from options exercised
for the nine months ended June 30, 2007 was $773,000. Total
compensation cost of options granted but not yet vested as of June 30,
2007 was $767,000, which is expected to be recognized over a weighted-
average period of 1.5 years.
A summary of changes in restricted stock awards is presented below (in
thousands, except per share amounts):
Weighted Weighted Weighted
Number Average Average Average
Of Grant Remaining Grant Date
Restricted Stock Shares Price Term (yrs) Fair Value
Outstanding at
September 30, 2006 15,600 $63.64 3.3
Granted 0 $ 0
Vested 3,800 $63.65 $ 242
Forfeited 700 $63.54
Outstanding at
June 30, 2007 11,100 $63.65 2.5 $ 707
Total compensation cost of restricted stock granted but not yet vested
as of June 30, 2007 was $540,000 which is expected to be recognized
over a weighted-average period of 2.5 years.
(8) 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 material
adverse effect on the Company's consolidated financial condition,
results of operations or cash flows.
(9) Customer Concentration. During the first nine months of fiscal
2007 the transportation segment's petroleum customers accounted for
approximately 67% and building and construction customers accounted
for approximately 33% of transportation segment revenues. During the
first nine months of fiscal 2007, the transportation segment's ten
largest customers accounted for approximately 50.2% of the
transportation segment's revenue. One of these customers accounted for
12.0% of the transportation segment's revenue. The loss of any one of
these customers could have a material adverse effect on the Company's
revenues and income.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview - The Company has two business segments: transportation and
real estate.
The Company's transportation business is conducted through two wholly
owned subsidiaries, Florida Rock & Tank Lines, Inc. ("Tank Lines"),
and SunBelt Transport, Inc. ("SunBelt"). Tank Lines is a Southeastern
U.S. based transportation company concentrating in the hauling of
primarily petroleum related bulk liquids and dry bulk commodities by
tank trailers. SunBelt serves the flatbed portion of the trucking
industry primarily in the Southeastern U.S., hauling mainly
construction materials.
The Company's real estate activities are conducted through two wholly
owned subsidiaries. Florida Rock Properties, Inc. ("Properties") and
FRP Development Corp. ("Development"). Properties owns a number of
mining and other properties that are leased to Florida Rock
Industries, Inc. ("FRI"), a related party. Properties also owns
certain other real estate for investment. Development owns, manages
and develops commercial warehouse/office rental properties in the Mid-
Atlantic United States.
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, driver
availability and cost, regulations regarding driver qualifications and
hours of service, petroleum product usage in the Southeast which is
driven in part by tourism and commercial aviation, fuel costs,
construction activity in the Southeast, FRI's sales from the Company's
mining properties, interest rates, market conditions and attendant
prices for casualty insurance, demand for commercial warehouse space
in the Mid-Atlantic area, and ability to obtain zoning and
entitlements necessary for property development. Internal factors
include revenue mix, capacity utilization, auto and workers'
compensation accident frequencies and severity, other operating
factors, administrative costs, group health claims experience, and
construction costs of new projects.
Financial results of the Company for any individual quarter are not
necessarily indicative of results to be expected for the year.
Comparative Results of Operations for the Three Months Ended June
30, 2007 and 2006
Consolidated Results. - Net income for the third quarter of fiscal
2007 was $2,426,000, an increase of $582,000 or 31.6% compared to
$1,844,000 for the same period last year. Diluted earnings per common
share for the third quarter of fiscal 2007 were $0.77 compared to
$0.59 in the third quarter of fiscal 2006. Net income for the third
quarter of fiscal 2006 was adversely impacted by $649,000 ($.21 per
diluted common share) of vacation expense, net of income tax benefits,
that was not previously accrued.
Transportation
Three Months Ended June 30
(dollars in thousands) ___2007 % 2006 %_
Transportation revenue $ 29,582 87% 27,967 86%
Fuel surcharges 4,525 13% 4,468 14%
Revenues 34,107 100% 32,435 100%
Compensation and benefits 12,755 37% 12,637 39%
Fuel expenses 7,673 23% 7,257 22%
Insurance and losses 2,769 8% 2,602 8%
Depreciation expense 2,226 7% 2,109 7%
Other, net 3,889 11% 3,509 11%
Cost of operations 29,312 86% 28,114 87%
Gross profit $ 4,795 14% 4,321 13%
Transportation segment revenues were $34,107,000 in the third quarter
of 2007 an increase of $1,672,000 over the same quarter last year.
Excluding fuel surcharges, revenue per mile was the same quarter-over-
quarter primarily reflecting a trend in the Company's flatbed
operation of decreasing freight demand and corresponding pricing
softness from the housing downturn and attendant lower demand for
construction materials. Revenue miles in the current quarter were up
5.8% compared to the third quarter of 2006 primarily from improved
driver manning and higher tractor count.
The Transportation segment's cost of operations in the third quarter
of 2007 decreased as a percentage of revenue quarter-over-quarter
primarily due to lower compensation and benefits. Compensation and
benefits in the third quarter of fiscal 2006 included $712,000 of
vacation expense which was not previously accrued. Fuel expense as a
percentage of revenue increased slightly due to a decrease in fuel
surcharges as a percentage of total revenue while the fuel cost per
gallon was about the same.
Real Estate
Three Months Ended June 30
(dollars in thousands) ___2007 % 2006 %_
Royalties and rent $ 1,699 31% 1,753 34%
Developed property rentals 3,825 69% 3,423 66%
Total Revenue 5,524 100% 5,176 100%
Mining and land rent expenses 393 7% 351 7%
Developed property expenses 2,132 39% 1,806 35%
Cost of Operations 2,525 46% 2,157 42%
Gross profit $ 2,999 54% 3,019 58%
Real Estate segment revenues for the third quarter of fiscal 2007 were
$5,524,000, an increase of $348,000 or 6.7% over the same quarter last
year. Lease revenue from developed properties increased $402,000 or
11.7%, due to an increase in occupied square footage, higher rental
rates on new leases, and $145,000 in common area charges for repairs.
Royalties from mining operations decreased $54,000 or 3.1% due to
lower tons mined.
Real estate segment expenses increased $368,000 to $2,525,000 during
the third quarter of fiscal 2007 compared to $2,157,000 for the same
quarter last year. Expenses related to developed properties increased
as a result of new building additions, higher common area expenses
related to snow removal and repairs, and increased staffing to
facilitate continued portfolio expansion.
Consolidated Results
Gross Profit - Consolidated gross profit was $7,794,000 in the third
quarter of fiscal 2007 compared to $7,340,000 in the same period last
year, an increase of 6.2%. Gross profit in the transportation segment
increased $474,000 or 11.0% due to the inclusion of $712,000 of
vacation expense in the 2006 quarter partially offset by lower fuel
surcharge revenue as a percent of total revenues in the 2007 quarter.
Gross profit in the real estate segment decreased $20,000 or 0.7%
from the third quarter 2006, due primarily to the increased staffing
to facilitate portfolio expansion.
Selling, general and administrative expense - Selling, general and
administrative expenses decreased $353,000 over the same quarter last
year. Those costs decreased due to the inclusion in the third quarter
of fiscal 2006 of $261,000 of vacation expense which was not
previously accrued along with lower audit fees and Sarbanes-Oxley
compliance costs in fiscal 2007. SG&A expense was 7.4% of revenue for
the third quarter of fiscal 2007 compared to 8.7% for the same period
last year.
Interest expense - Interest expense decreased $168,000 over the same
quarter last year due to interest related to construction activities
of $229,000 that was capitalized in the third quarter of 2007 compared
to $54,000 interest capitalized in the same period last year. This was
partially offset by additional interest expense from higher borrowings
under the revolving credit agreement.
Income taxes - Income tax expense increased $351,000 over the same
quarter last year due to higher earnings before taxes and a slightly
higher effective tax rate.
Net income - Net income for the third quarter of fiscal 2007 was
$2,426,000, an increase of $582,000 or 31.6% compared to $1,844,000
for the same period last year. Diluted earnings per common share for
the third quarter of fiscal 2007 were $0.77 compared to $0.59 in the
third quarter of fiscal 2006. Net income for the third quarter of
fiscal 2006 was adversely impacted by $649,000 ($.21 per diluted
common share) of vacation expense, net of income tax benefits, that
was not previously accrued.
Comparative Results of Operations for the Nine Months Ended June 30,
2007 and 2006
Consolidated Results. - Net income for the first nine months of fiscal
2007 was $7,183,000, an increase of $1,736,000 or 31.9% compared to
$5,447,000 for the same period last year. Diluted earnings per common
share for the first nine months of fiscal 2007 were $2.30 compared to
$1.77 for the same period last year.
Transportation
Nine Months Ended June 30
(dollars in thousands) ___2007 % 2006 %_
Transportation revenue $ 86,375 88% 80,587 87%
Fuel surcharges 12,044 12% 12,493 13%
Revenues 98,419 100% 93,080 100%
Compensation and benefits 37,491 38% 35,643 38%
Fuel expenses 21,311 22% 19,936 21%
Insurance and losses 7,708 8% 8,751 9%
Depreciation expense 6,786 7% 6,286 7%
Other, net 10,155 10% 9,856 11%
Cost of operations 83,451 85% 80,472 86%
Gross profit $ 14,968 15% 12,608 14%
Transportation segment revenues were $98,419,000 in the first nine
months of 2007, an increase of $5,339,000 over the same period last
year. Excluding fuel surcharges, revenue per mile was the same year to
year reflecting a trend of decreasing freight demand and pricing
softness from the downturn in housing and attendant lower demand for
construction materials. Revenue miles in the first nine months were up
6.7% compared to the same period in 2006 primarily from improved
driver manning and higher tractor count.
The Transportation segment's cost of operations in the first nine
months of 2007 increased $2,979,000 due mostly to higher miles but
decreased as a percentage of revenue due to lower insurance and losses
of $1,043,000 along with $712,000 of vacation expense in third quarter
of fiscal 2006 which was not previously accrued. Insurance and losses
decreased due to changes in estimated prior year retained loss
reserves as of June 30, 2007 versus estimates as of September 30, 2006
as calculated by a third-party actuary along with a $357,000 recovery
of prior year insurance costs recorded in the three months ended
December 31, 2006. Fuel expense as a percentage of revenue increased
slightly due to increased miles and lower fuel surcharges while the
fuel cost per gallon was about the same.
Real Estate
Nine Months Ended June 30
(dollars in thousands) ___2007 % 2006 %_
Royalties and rent $ 4,827 29% 4,979 32%
Developed property rentals 11,665 71% 10,536 68%
Total Revenue 16,492 100% 15,515 100%
Mining and land rent expenses 1,239 7% 1,214 8%
Developed property expenses 6,545 40% 5,950 38%
Cost of Operations 7,784 47% 7,164 46%
Gross profit $ 8,708 53% 8,351 54%
Real Estate segment revenues for the first nine months of fiscal 2007
were $16,492,000, an increase of $977,000 or 6.3% over the same period
last year. Lease revenue from developed properties increased
$1,129,000 or 10.7%, due to an increase in occupied square footage and
higher rental rates on new leases. Royalties from mining operations
decreased $152,000 or 3.1% due to lower tons mined.
Real estate segment expenses increased $620,000 to $7,784,000 during
the first nine months of fiscal 2007 compared to $7,164,000 for the
same period last year. Expenses related to development activities
increased as a result of new building additions and increased staffing
to facilitate continued portfolio expansion.
Consolidated Results
Gross Profit - Consolidated gross profit was $23,676,000 in the first
nine months of fiscal 2007 compared to $20,959,000 in the same period
last year, an increase of 13.0%. Gross profit in the transportation
segment increased $2,360,000 or 18.7%, due to lower insurance reserves
and loss expense and increased revenue miles. Gross profit in the real
estate segment increased $357,000 or 4.3% over the same period last
year, due to the increased revenues partially offset by costs
associated with increased square footage leased and increased staffing
to facilitate continuing portfolio expansion.
Selling, general and administrative expense - Selling, general and
administrative expenses decreased $13,000 over the same period last
year. The decrease was primarily due to a $209,000 reduction in audit
fees and Sarbanes-Oxley compliance costs offset by a $171,000 increase
in stock compensation expense as required by SFAS 123R (see Note 9 of
Condensed Notes to Consolidated Financial Statements). SG&A expense
was 8.0% of revenue for the first nine months of fiscal 2007 compared
to 8.5% for the same period last year.
Interest expense - Interest expense decreased $379,000 over the same
period last year due to interest related to increased construction
activities of $782,000 that was capitalized in the first nine months
of 2007 compared to $73,000 capitalized in the same period last year.
This was offset by additional interest expense from higher borrowings
under the revolving credit agreement.
Income taxes - Income tax expense increased $1,189,000 over the same
period last year. This is due to higher earnings before taxes and an
increase in the effective tax rate to 39.0% versus 38.5% for the same
period last year.
Net income - Net income for the first nine months of fiscal 2007 was
$7,183,000, an increase of $1,736,000 or 31.9% compared to $5,447,000
for the same period last year. Diluted earnings per common share for
the third quarter of fiscal 2007 were $2.30 compared to $1.77 in the
same period of fiscal 2006. Net income for the first nine months of
fiscal 2006 was adversely impacted by $649,000 ($.21 per diluted
common share) of vacation expense, net of income tax benefits, that
was not previously accrued.
Liquidity and Capital Resources. For the first nine months of fiscal
2007, the Company used cash provided by operating activities of
$17,215,000, $1,601,000 from exercises of stock options, and
$1,366,000 from sales of equipment to purchase $12,065,000 in property
and equipment, to invest $3,368,000 in the Brooksville Joint Venture,
to reduce borrowings under its Revolver $2,126,000, to make $1,916,000
scheduled payments on long-term debt and to increase cash $707,000.
Cash flows from operating activities for the first nine months of
fiscal 2007 were $289,000 lower than the same period last year
primarily reflecting net changes in accounts payable due to the timing
of payments in our payment cycle.
Cash flows used in investing activities for the first nine months of
fiscal 2007 were $15,659,000 lower than the same period last year due
to the purchase in fiscal 2006 of property for future development and
accelerated equipment replacement in fiscal 2006.
Cash flows from financing activities for the first nine months of
fiscal 2007 were $12,355,000 lower than the same period last year due
to lower borrowings on the Revolver corresponding to lower cash needed
for investing activities.
The Company has a $37,000,000 revolving credit agreement (the
Revolver) of which $26,674,000 was available at June 30, 2007. The
Revolver contains restrictive covenants including limitations on
paying cash dividends. The Revolver will expire on December 31, 2009.
On July 31, 2007, the Company borrowed $36,000,000 from a major
insurance company. The non-recourse mortgage loan fully amortizes
on a level term over 20 years and bears interest at 5.74%. The
loan is secured by seven developed properties with a net book value
of $31,074,000 at June 30, 2007. A portion of the proceeds were
used to repay balances outstanding under the Company's Revolver and
the remaining proceeds will be used to fund new construction and to
purchase land for future development.
The Company had $18,070,000 of irrevocable letters of credit
outstanding as of June 30, 2007. Most of the letters of credit are
irrevocable for a period of one year and are automatically extended
for additional one-year periods unless notified by the issuing bank
not less than thirty days before the expiration date. Substantially
all of these are issued for workers' compensation and liability
insurance retentions. If these letters of credit are not extended,
the Company will have to find alternative methods of collateralizing
or funding these obligations.
The Board of Directors has authorized Management to repurchase shares
of the Company's common stock from time to time as opportunities
arise. As of June 30, 2007, $3,490,000 was authorized to repurchase
the Company's common stock. No shares were repurchased during the
first nine months of fiscal 2007. The Company does not currently pay
any dividends on common stock.
The Company has committed to make additional capital contributions of
up to $1,650,000 to Brooksville Quarry, LLC in connection with a joint
venture with FRI (see Related Party Transactions).
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.
Recent Accounting Pronouncements. In May 2005, the FASB issued
Statement No. 154, Accounting Changes and Error Corrections ("SFAS
154"). This Statement requires retrospective application for voluntary
changes in accounting principles unless it is impracticable to do so.
SFAS 154's retrospective application requirement replaces APB Opinion
No. 20's, Accounting Changes, requirement to recognize most voluntary
changes in accounting principle by including in net income of the
period of the change the cumulative effect of changing to the new
accounting principle. SFAS 154 is effective for accounting changes and
corrections of errors made in fiscal years beginning after December
15, 2005. The adoption of Statement 154 did not have a material impact
on our financial statements.
In July 2006, the FASB issued FASB Interpretation No. 48 (FIN 48)
"Accounting for Uncertainty in Income Taxes" which prescribes a
recognition threshold and measurement process for recording in the
financial statements uncertain tax positions taken or expected to be
taken in a tax return. Additionally, FIN 48 provides guidance on
derecognition, classification, accounting in interim periods and
disclosure requirements for uncertain tax positions. In May 2007, the
FASB issued Staff Position FIN No. 48-1, "Definition of 'Settlement'
in FASB Interpretation No. 48" (FSP FIN 48-1). FSP FIN 48-1 provides
guidance on how a company should determine whether a tax position is
effectively settled for the purpose of recognizing previously
unrecognized tax benefits. The accounting provisions of FIN 48 and
FSP FIN 48-1 will be effective for the Company beginning October 1,
2007. The Company is in the process of determining the effect, if any,
the adoption of FIN 48 and FSP FIN 48-1 will have on its financial
statements.
In September 2006, the FASB issued Statement No. 157, Fair Value
Measurement (SFAS 157). The Statement defines fair value, establishes
a framework for measuring fair value in generally accepted accounting
principles (GAAP), and expands disclosures about fair value
measurements. This Statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. Management believes that the
adoption of SFAS 157 will not have a material impact on the
consolidated financial results of the Company.
In September 2006, the FASB issued Statement No. 158, Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans
(SFAS 158). The statement requires employers to recognize on their
balance sheets the funded status of pension and other postretirement
benefit plans. In addition, employers will recognize actuarial gains
and losses, prior service cost and unrecognized transition amounts as
a component of accumulated other comprehensive income. Furthermore,
SFAS 158 will also require fiscal year end measurements of plan assets
and benefit obligations, eliminating the use of earlier measurement
dates currently permissible. The disclosure requirements for SFAS 158
are effective as of the end of the fiscal year ending after December
15, 2006. The requirement to measure plan assets and benefit
obligations as of the date of the fiscal year end statement of
financial position is effective for fiscal years ending after December
15, 2008. The Company is currently evaluating the impact of SFAS 158,
but the adoption of SFAS 158 is not expected to have a material effect
on the Company's consolidated financial statements.
Related Party Transactions. The Company, through its transportation
subsidiaries, hauls commodities by tank and flatbed trucks for Florida
Rock Industries, Inc. (FRI). Charges for these services are based on
prevailing market prices. The real estate subsidiaries lease certain
construction aggregates mining and other properties to FRI. The
Company also outsources certain administrative functions to FRI. The
cost of these administrative functions was $143,000 and $143,000 for
the nine months ended June 30, 2007 and 2006, respectively.
On October 4, 2006, a subsidiary of the Company (FRP) entered into a
Joint Venture Agreement with Florida Rock Industries, Inc. (FRI) to
form Brooksville Quarry, LLC, a real estate joint venture to develop
approximately 4,300 acres of land near Brooksville, Florida. Under
the terms of the joint venture, FRP has contributed its fee interest
in approximately 3,443 acres formerly leased to FRI under a long-term
mining lease which had a net book value of $2,548,000. FRI is
entitled to mine the property and pay royalties for the benefit of FRP
for as long as mining does not interfere with the development of the
property. Real estate revenues included $110,000 of such royalties in
the first nine months of fiscal 2007. Allocated depletion expense of
$4,000 was included in real estate cost of operations for the first
nine months of fiscal 2007.
FRP also reimbursed FRI $3,018,000 for one-half of the acquisition
costs of a 288-acre contiguous parcel acquired by FRI in 2006 and
contributed by FRI to the joint venture. FRI also contributed 553
acres that it owns as well as its leasehold interest in the 3,443
acres that it leased from FRP. The joint venture is jointly
controlled by FRI and FRP, and they each have a mandatory obligation
to fund additional capital contributions of up to $2 million. Capital
contributions of $350,000 were made during the first nine months of
fiscal 2007. Distributions will be made on a 50-50 basis except for
royalties and depletion specifically allocated to FRP. Other income
for the nine months ended June 30, 2007 includes a loss of $128,000
representing the Company's equity in the loss of the joint venture.
The property does not yet have the necessary entitlements for real
estate development. Approval to develop real property in Florida
entails an extensive entitlements process involving multiple and
overlapping regulatory jurisdictions and the outcome is inherently
uncertain. The Company currently expects that the entitlement process
may take several years to complete.
Florida Rock has announced its pending merger with Vulcan Materials
Company. The Company does not expect the merger to have a material
adverse effect on the Company.
Summary and Outlook. The Company's results for the first three
quarters of fiscal 2007 were assisted by lower expense for
transportation insurance reserves and losses of $1,043,000 ($636,000
net of income taxes) and $1,055,000 ($649,000 net of income taxes) for
vacation expense recorded in fiscal 2006 that was not previously
accrued. The flatbed portion of the transportation segment continues
to face negative industry trends and significant profitability
challenges due to poor freight demand, utilization disruption and
pricing softness resulting from the housing downturn. This downturn
may continue throughout calendar 2007 and into 2008. Florida Rock &
Tank Lines, Inc. acquired another transport company's Atlanta Georgia
business in July 2007. This included the purchase of 12 tractors and
trailers, the hiring of drivers and support staff along with
assumption of all the customers. Total additional annual revenue from
this acquisition is estimated to be $2.5 million.
The Company's real estate development business has benefited from
active inquiry from prospective tenants for its warehouse-office
product and corresponding favorable occupancy rates. The Company also
continues to explore opportunities for development of various
properties. The Company expects to continue expanding its portfolio of
warehouse-office products.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
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 with variable interest rates, changes in interest rates
affect the amount of interest expense incurred. The Company prepared a
sensitivity analysis of its variable rate borrowings to determine the
impact of hypothetical changes in interest rates on the Company's
results of operations and cash flows. The interest-rate analysis
assumed a 50 basis point adverse change in interest rates on all
borrowings under the credit agreement. However, the interest-rate
analysis did not consider the effects of the reduced level of economic
activity that could exist in such an environment. Based on this
analysis, management has concluded that a 50 basis point adverse move
in interest rates on the Company's outstanding borrowings under the
credit agreement would have an immaterial impact on the Company's
results of operations and cash flows.
ITEM 4. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the
Company's reports under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and
forms, and that such information is accumulated and communicated to
management, including the Company's Chief Executive Officer ("CEO"),
Chief Financial Officer ("CFO"), and Chief Accounting Officer ("CAO"),
as appropriate, to allow timely decisions regarding required
disclosure.
The Company also maintains a system of internal accounting controls
over financial reporting that are designed to provide reasonable
assurance to the Company's management and Board of Directors regarding
the preparation and fair presentation of published financial
statements.
All control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance of achieving the desired control
objectives.
As of June 30, 2007, the Company, under the supervision and with the
participation of the Company's management, including the CEO, CFO and
CAO, carried out an evaluation of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based
on this evaluation, the Company's CEO, CFO and CAO concluded that the
Company's disclosure controls and procedures are effective in alerting
them in a timely manner to material information required to be
included in periodic SEC filings.
There have been no changes in the Company's internal controls over
financial reporting during the third quarter that have materially
affected, or are reasonably likely to materially affect, the Company's
internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1A. RISK FACTORS
In addition to the other information set forth in this report, you
should carefully consider the factors discussed in Part I, "Item 1A.
Risk Factors" in our Annual Report on Form 10-K for the year ended
September 30, 2006, which could materially affect our business,
financial condition or future results. The risks described in our
Annual Report on Form 10-K are not the only risks facing our
Company. Additional risks and uncertainties not currently known to
us or that we currently deem to be immaterial also may materially
adversely affect our business, financial condition and/or operating
results.
Item 6. EXHIBITS
(a) Exhibits. The response to this item is submitted as a
separate Section entitled "Exhibit Index", starting on page
26.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
August 1, 2007 PATRIOT TRANSPORTATION HOLDING, INC.
John E. Anderson
John E. Anderson
President and Chief Executive
Officer
Ray M. Van Landingham
Ray M. Van Landingham
Vice President, Treasurer,
Secretary and Chief
Financial Officer
John D. Klopfenstein
John D. Klopfenstein
Controller and Chief
Accounting Officer
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2007
EXHIBIT INDEX
(10)(k) Joint Venture Agreement between Florida Rock
Industries, Inc. and Florida Rock Properties,
incorporated by reference to an exhibit filed
with Form 10-K for the fiscal year ended
September 30, 2006. File No. 33-26115.
(14) Financial Code of Ethical Conduct between the
Company, Chief Executive Officers and Financial
Managers, adopted December 4, 2002, incorporated
by reference to an exhibit filed with Form 10-K
for the year ended September 30, 2003. File No.
33-26115.
(31)(a) Certification of John E. Anderson.
(31)(b) Certification of Ray M. Van Landingham.
(31)(c) Certification of John D. Klopfenstein.
(32) Certification of Chief Executive Officer, Chief
Financial Officer, and Chief Accounting Officer
under Section 906 of the Sarbanes-Oxley Act of
2002.