FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1997.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-17554
FRP PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2924957
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
155 East 21st Street, Jacksonville, Florida 32206
(Address of principal executive offices)
(Zip Code)
904/355-1781
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 2, 1998: 3,438,235 shares of $.10 par value
common stock.
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)
December 31, September 30,
1997 1997
ASSETS
Current assets:
Cash and cash equivalents $ 235 $ 429
Accounts receivable:
Affiliates 241 283
Other 5,833 5,506
Less allowance for doubtful accounts (264) (258)
Inventory of parts and supplies 514 469
Prepaid expenses and other 2,246 2,120
Total current assets 8,805 8,549
Other assets:
Real estate held for investment, at cost 5,771 5,771
Goodwill 1,278 1,288
Other 1,721 5,956
Total other assets 8,770 13,015
Property, plant and equipment, at cost 148,685 142,671
Less accumulated depreciation and
depletion (49,186) (47,653)
Net property, plant and equipment 99,499 95,018
$117,074 $116,582
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ 4,100 $ 4,000
Accounts payable:
Affiliates 75 77
Other 1,837 2,350
Federal and state income taxes 968 779
Accrued liabilities 3,114 3,439
Long-term debt due within one year 423 418
Total current liabilities 10,517 11,063
Long-term debt 30,543 30,647
Deferred income taxes 7,243 7,243
Other liabilities 3,916 3,895
Stockholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,438,235 shares issued
(3,439,235 at September 30, 1997) 344 344
Capital in excess of par value 17,298 17,333
Retained earnings 47,213 46,057
Total stockholders' equity 64,855 63,734
$117,074 $116,582
See accompanying notes.
FRP PROPERTIES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS
ENDED DECEMBER 31,
1997 1996
Revenues:
Affiliates $ 1,462 1,528
Non-affiliates 16,209 14,870
17,671 16,398
Cost of operations 13,697 13,035
Gross profit 3,974 3,363
Selling, general and
administrative expense:
Affiliates 384 366
Non-affiliates 1,132 1,153
1,516 1,519
Operating profit 2,458 1,844
Interest expense (569) (483)
Interest income 5 7
Other income, net - 1
Income before income taxes 1,894 1,369
Provision for income taxes 739 534
Net income $ 1,155 835
Basic earnings per common share $.34 .24
Diluted earnings per common share $.33 .23
Cash dividends NONE NONE
Number of shares used in computing:
Basic earnings per common share 3,439 3,522
Diluted earnings per share 3,491 3,564
See accompanying notes.
FRP PROPERTIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996
(In thousands)
(Unaudited)
1997 1996
Cash flows from operating activities:
Net income $1,155 835
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization 2,214 1,983
Net changes in operating assets and liabilities:
Accounts receivable (283) 239
Inventory of parts and supplies (45) (2)
Prepaid expenses (126) (228)
Accounts payable and accrued liabilities (777) (1,397)
Increase in deferred income taxes 0 64
Net change in insurance reserve and other
liabilities 20 26
(Gain) loss on disposition of real estate, plant
and equipment (360) 134
Other, net (9) (5)
Net cash provided from operating activities 1,789 1,649
Cash flows from investing activities:
Purchase of property, plant and equipment (2,905) (1,991)
Additions to other assets - (38)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets 954 -
Net cash used in investing activities (1,951) (2,029)
Cash flows from financing activities:
Net increase in short-term debt 100 100
Repayment of debt (99) (68)
Repurchase of Company stock (33) (481)
Exercise of stock options - 879
Net cash provided from financing activities (32) 430
Net increase (decrease) in cash and cash equivalents (194) 50
Cash and cash equivalents at beginning of year 429 313
Cash and cash equivalents at end of the period $ 235 363
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest expense, net of amount capitalized $ 233 475
Income taxes $ 550 340
Escrow cash included in other assets used to purchase
property, plant and equipment $3,777 -
See accompanying notes.
FRP PROPERTIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1997
(Unaudited)
(1) Basis of Presentation. The accompanying consolidated
condensed financial statements include the accounts of the
Company and its subsidiaries. These statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and the instructions
to Form 10-Q and do not include all the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation of the results for the interim
periods have been included. Operating results for the three
months ended December 31, 1997, are not necessarily indicative of
the results that may be expected for the fiscal year ended
September 30, 1998. The accompanying consolidated financial
statements and the information included under the heading
"Management's Discussion and Analysis" should be read in
conjunction with the consolidated financial statements and
related notes of FRP Properties, Inc. for the year ended
September 30, 1997.
(2) Earnings Per Share. Effective December 31, 1997, the Company
adopted Statement of Financial Accounting Standard No. 128,
"Earnings per Share" ("SFAS 128"). SFAS 128 replaced the
presentation of primary earnings per share (EPS) and fully
diluted EPS with a presentation of basic and diluted EPS. Basic
earnings per share are based on the weighted average number of
common shares outstanding during the periods. Diluted earnings
per share are based on the weighted average number of common
shares and potential dilution of securities that could share in
earnings. Earnings per share for all prior periods have been
restated.
(3) Contingent Liabilities. The Company and its subsidiaries
are subject to legal proceedings and claims arising out of their
businesses that cover a wide range of matters. Additional
information concerning these matters is presented in Note 10 to
the consolidated financial statements included in the Company's
1997 Annual Report to stockholders. Such information is
incorporated herein by reference.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
The following table summarizes the Company's revenues, cost of operations,
and gross profit by its business segments (in thousands):
Three Months
Ended December 31,
1997 1996
Revenues:
Transportation $15,328 14,382
Real estate 2,343 2,016
$17,671 16,398
Cost of operations:
Transportation $12,851 12,117
Real estate 846 918
$13,697 13,035
Gross profit:
Transportation $ 2,477 2,265
Real estate 1,497 1,098
$ 3,974 3,363
For the first quarter of fiscal 1998, ended December 31, 1997, consolidated
revenues increased 8% over the same periods last year. The Transportation
segment revenues increased 7% due principally to a 6% increase in miles
hauled coupled with a slight increase in the average hauling price. Real
Estate revenues increased 16% over last year. Real Estate increase in
revenues was primarily due to $195,000 of timber sales in fiscal 1998 and
lease up from a warehouse/office building that was under construction in
the first quarter of 1997.
Gross profit in Transportation increased $212,000 from the first quarter
last year. The increase was due primarily to an increase of $172,000 in
gains on the sale of equipment and reduced fuel costs.
Gross profit in the Real Estate segment increased $399,000. This increase
was primarily due to gross profit of $188,000 on the sales of timber in the
first quarter of 1998, the first quarter of 1997 included a write off of
$134,000 in prior tenant improvement resulting from leasing existing space
to a new tenant and higher rental income due to leasing this space and
lease up of project under construction last year.
The selling, general and administrative expense remained stable. Selling,
general and administrative expense as a percent of sales was 8.6% in the
current quarter, down from 9.3% in the same quarter last year.
Interest expense increased $86,000 due primarily to an increase in the
average debt outstanding and, to a lesser extent, an increase in the
average interest rate. These increases were partially offset by a greater
capitalization of interest in fiscal 1998.
Financial Condition
The Company continues to maintain its sound financial condition with
sufficient resources to meet anticipated capital expenditures and other
operating requirements.
Other.
During fiscal 1997, the transportation segment's ten largest customers
accounted for approximately 31% of transportation's revenue. The loss of
any one of these customers could have an adverse effect on the Company's
revenue and income.
While the Company is affected by environmental regulations, such
regulations are not expected to have a major effect on the Company's
capital expenditures or operating results. Additional information
concerning environmental matters is presented in Note 10 to the
consolidated financial statements included in the Company's 1997 Annual
Report to stockholders. Such information is incorporated herein by
reference.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Note 10 to the consolidated financial statements included in the Company's
1997 Annual Report to stockholders is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a separate
Section entitled "Exhibit Index", starting on page 8.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed
during the three months ended December 31, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
February 4, 1998 FRP PROPERTIES, INC.
JAMES J. GILSTRAP
James J. Gilstrap
Treasurer and Chief Financial
Officer
WALLACE A. PATZKE, JR.
Wallace A. Patzke, Jr.
Controller and Chief Accounting
Officer
FRP PROPERTIES, INC.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1997
EXHIBIT INDEX
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Numbering
(3)(a)(1) Articles of Incorporation of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(3)(a)(2) Amendment to the Articles of Incorporation of FRP
Properties, Inc. filed with the Secretary of State of
Florida on February 19, 1991. Previously filed with
Form 10-K for the fiscal year ended September 30,
1993. file No. 33-26115.
(3)(a)(3) Amendments to the Articles of Incorporation of FRP
Properties, Inc. filed with the Secretary of State of
Florida on February 7, 1995. Previously filed as
appendix to the Company's Proxy Statement dated
December 15, 1994.
(3)(b)(1) Restated Bylaws of FRP Properties, Inc. adopted
December 1, 1993. Previously filed with Form 10-K for
the fiscal year ended September 30, 1993. File No.
33-26115.
(3)(b)(2) Amendment to the Bylaws of FRP Properties, Inc.
adopted August 3, 1994. Previously filed with Form
10-K for the fiscal year ended September 30, 1994.
File No. 33-26115.
(4)(a) Articles III, VII and XII of the Articles of
Incorporation of FRP Properties, Inc. Previously
filed with Form S-4 dated December 13, 1988. And
amended Article III filed with Form 10-K for the
fiscal year ended September 30, 1993. And Articles
XIII and XIV previously filed as appendix to the
Company's Proxy Statement dated December 15, 1994.
File No. 33-026115.
(4)(b) Specimen stock certificate of FRP Properties, Inc.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
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(4)(c) Credit Agreement dated as of November 15, 1995 among
FRP Properties, Inc.; SunTrust Bank, Central Florida,
National Association; Bank of America Illinois;
Barnett Bank of Jacksonville, N.A.; and First Union
National Bank of Florida. Previously filed with Form
10-Q for the quarter ended December 31, 1995. File
No. 33-26115.
(4)(d) The Company and its consolidated subsidiaries have
other long-term debt agreements which do not exceed
10% of the total consolidated assets of the Company
and its subsidiaries, and the Company agrees to
furnish copies of such agreements and constituent
documents to the Commission upon request.
(10)(a) Post Distribution Agreement, dated May 7, 1986, by and
between Florida Rock Industries, Inc. and Florida Rock
& Tank Lines, Inc. and amendments thereto dated July
1, 1987 and September 27, 1988. Previously filed with
Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(b) Tax Sharing Agreement, dated May 7,1986, between
Florida Rock Industries, Inc. and Florida Rock & Tank
Lines, Inc. Previously filed with Form S-4 dated
December 13, 1988. File No. 33-26115.
(10)(c) Various leasebacks and mining royalty agreements with
Florida Rock Industries, Inc., none of which are
presently believed to be material individually, except
for the Mining Lease Agreement dated September 1,
1986, between Florida Rock Industries Inc. and Florida
Rock Properties, Inc., successor by merger to Grandin
Land, Inc. (see Exhibit (10)(e)), but all of which
maybe material in the aggregate. Previously filed
with Form S-4 dated December 13, 1988. File No. 33-26115.
(10)(d) License Agreement, dated June 30, 1986, from Florida
Rock Industries, Inc. to Florida Rock & Tank Lines,
Inc. to use "Florida Rock" in corporate names.
Previously filed with Form S-4 dated December 13,
1988. File No. 33-26115.
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Numbering
(10)(e) Mining Lease Agreement, dated September 1, 1986,
between Florida Rock Industries, Inc. and Florida Rock
Properties, Inc., successor by merger to Grandin Land,
Inc. Previously filed with Form S-4 dated December
13, 1988. File No. 33-26115.
(10)(f) Summary of Medical Reimbursement Plan of FRP
Properties, Inc. Previously filed with Form 10-K for
the fiscal year ended September 30, 1993. File No.
33-26115.
(10)(g) Split Dollar Agreement dated October 3, 1984, between
Edward L. Baker and Florida Rock Industries, Inc. and
assignment of such agreement, dated January 31, 1986
from Florida Rock Industries, Inc. to Florida Rock &
Tank Lines, Inc. Previously filed with Form S-4
dated December 13, 1988. File No. 33-26115.
(10)(h) Summary of Management Incentive Compensation Plans.
Previously filed with Form 10-K for the fiscal year
ended September 30, 1994. File No. 33-26115.
(10)(i) Management Security Agreements between the Company and
certain officers. Form of agreement previously filed
as Exhibit (10)(I) with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(i)(1) FRP Properties, Inc. 1989 Employee Stock Option Plan.
Previously filed with Form S-4 dated December
13, 1988. File No. 33-26115.
(10)(j)(2) FRP Properties, Inc. 1995 Stock Option Plan.
Previously filed as an appendix to the Company's Proxy
Statement dated December 15, 1994.
(11) Computation of Earnings Per Common Share.
(27) Financial Data Schedule