EX-99 5 frphjunq23_pr.htm FRPH EARNINGS RELEASE

FRP Logo-Black FRP HOLDINGS, INC./NEWS

 

Contact: John D. Baker III

             Chief Financial Officer                                                                                      904/858-9100

 

FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCES RESULTS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2023

 

FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; August 9, 2023 –

 

Second Quarter Operational Highlights

·16.3% increase in pro-rata NOI ($7.61 million vs $6.55 million) over second quarter 2022
·Mining royalties’ highest second quarter ever in terms of revenue; royalty revenue increased 13.2% over second quarter 2022; 9.9% increase in royalties per ton
·55.7% increase in Asset Management revenue versus same period last year; 23.8% increase in Asset Management NOI versus second quarter 2022

Second Quarter Consolidated Results of Operations

 

Net income for the second quarter of 2023 was $598,000 or $.06 per share versus $657,000 or $.07 per share in the same period last year. The second quarter of 2023 was impacted by the following items:

 

·Operating profit increased $701,000 compared to the same quarter last year due to improved revenues.
·Management company indirect increased $235,000 due to merit increases and new hires along with recruiting costs.
·Interest expense increased $390,000 compared to the same quarter last year due to less capitalized interest. We capitalized less interest because of fewer in-house and joint venture projects under development this quarter compared to last year.
·Interest income increased $2,005,000 due primarily to an increase in interest earned on cash equivalents and increased income from our lending ventures.
·Equity in loss of Joint Ventures increased $2,281,000 primarily due to losses during lease up at The Verge and .408 Jackson.

 

Second Quarter Segment Operating Results

 

Asset Management Segment:

 

Total revenues in this segment were $1,420,000, up $508,000 or 55.7%, over the same period last year. Operating profit was $410,000, up $216,000 from $194,000 in the same quarter last year. Revenues and operating profit are up because of full occupancy at 1841 and 1865 62nd Street (compared to 43.4% and 64.1% occupancy in the second quarter of 2022, respectively) and the addition of 1941 62nd Street to this

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segment in March 2023. 1941 62nd Street is a 101,750 square-foot build-to-suit, which is fully leased and occupied. We now have nine buildings in service at three different locations totaling 515,077 square feet of industrial and 33,708 square feet of office. At quarter end, we were 95.6% leased and 95.6% occupied. Net operating income in this segment was $843,000, up $162,000 or 23.8% compared to the same quarter last year.

 

Mining Royalty Lands Segment:

 

Total revenues in this segment were $3,264,000 versus $2,883,000 in the same period last year. Total operating profit in this segment was $2,732,000, an increase of $382,000 versus $2,350,000 in the same period last year. This increase is the result of increases in revenue at nearly every active location. Net Operating Income this quarter for this segment was $3,125,000, up $380,000 or 14% compared to the same quarter last year.

 

 

Development Segment:

 

With respect to ongoing projects:

 

·We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” Of the $18.5 million in committed capital to the project, $17.2 million in principal draws have taken place through quarter end. Through the end of June 30, 2023, 164 of the 187 units have been sold, and we have received $19.6 million in preferred interest and principal to date.
·Bryant Street is a mixed-use joint venture between the Company and MRP in Washington, DC consisting of four buildings: The Coda, The Chase 1A, The Chase 1B, and one commercial building which became fully leased this quarter, 90% of which is leased to an Alamo Draft House movie theater. At quarter end, the Coda was 95% leased and 94.8% occupied and the two buildings that comprise the Chase were 90.69% leased and 92.49% occupied. In total, at quarter end, Bryant Street’s 487 residential units were 92.2% leased and 93.2% occupied. Its commercial space was 95.9% leased and 79.1% occupied at quarter end.
·Lease-up is underway at The Verge, and at quarter end, the building was 68.6% leased and 43.3% occupied inclusive of 25 units licensed to Placemaker Management for a short-term corporate rental program. Retail at this location is 45.2% leased. This is our third mixed-use project in the Anacostia waterfront submarket in Washington, DC.
·.408 Jackson is our second joint venture project in Greenville. Leasing began in the fourth quarter of 2022 with residential units 85.9% leased and 76.2% occupied at quarter end. Retail at this location is 100% leased and currently under construction and expected to open during the fourth quarter of this year.
·Windlass Run, our suburban office and retail joint venture with St. John Properties, Inc. signed a new office lease for 12,126 square feet bringing the office portion of the project to 78.28% leased and 61.45% occupied. Additional retail space at this site is 22.86% leased and 13.46% occupied.
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Stabilized Joint Venture Segment:

 

Total revenues in this segment were $5,545,000, an increase of $120,000 versus $5,425,000 in the same period last year. The Maren’s revenue was $2,640,000 an increase of 7.4% and Dock 79 revenues decreased $62,000 to $2,906,000 or 2.1%. Total operating profit in this segment was $912,000, a decrease of $7,000 versus $919,000 in the same period last year. Pro-rata net operating income this quarter for this segment was $2,152,000, down $248,000 or 10.3% compared to the same quarter last year because of the sale of our 20% TIC interest in both properties to SIC, mitigated by $223,000 in pro rata NOI from our share of the Riverside joint venture in Greenville, SC.

 

At the end of June, The Maren was 92.42% leased and 94.32% occupied. Average residential occupancy for the quarter was 96.88%, and 39.62% of expiring leases renewed with an average rent increase on renewals of 5.66%. The Maren is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 56.3% ownership.

 

Dock 79’s average residential occupancy for the quarter was 94.75%, and at the end of the quarter, Dock 79’s residential units were 91.48% leased and 95.41% occupied. This quarter, 65.31% of expiring leases renewed with an average rent increase on renewals of 3.20%. Dock 79 is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 52.8% ownership.

 

During the third quarter of 2022, we achieved stabilization at our Riverside Joint Venture in Greenville, South Carolina. At quarter end, the building was 97.0% leased with 95.5% occupancy. Average occupancy for the quarter was 95.42% with 61.76% of expiring leases renewing with an average rental increase of 11.96%. Riverside is a joint venture with Woodfield Development and the Company owns 40% of the venture.

 

 

Six Months Operational Highlights (compared to the same period last year)

·24.5% increase in pro-rata NOI ($14.60 million vs $11.73 million)
·Mining Royalties increased 23.3%; 10.1% increase in royalties per ton
·42.2% increase in Asset Management revenue; 39.2% increase in Asset Management NOI

 

 

Six Months Consolidated Results of Operations

 

Net income for the first six months of 2023 was $1,163,000 or $.12 per share versus $1,329,000 or $.14 per share in the same period last year. The first six months of 2023 was impacted by the following items:

 

·Operating profit increased $2,191,000 compared to the same period last year due to improved revenues and profits in all four segments.
·Management company indirect increased $300,000 due to merit increases and new hires along with recruiting costs.
·Interest expense increased $658,000 compared to the same period last year due to less capitalized interest. We capitalized less interest because of fewer in-house and joint venture projects under development compared to last year.
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·Interest income increased $3,489,000 due primarily to an increase in interest earned on cash equivalents and increased income from our lending ventures.
·Equity in loss of Joint Ventures increased $4,302,000 primarily due to losses during lease up at The Verge and .408 Jackson.
·The first six months of 2022 included a $733,000 gain on sales of excess property at Brooksville.

 

 

Six Months Segment Operating Results

 

Asset Management Segment:

 

Total revenues in this segment were $2,490,000, up $739,000 or 42.2%, over the same period last year. Operating profit was $705,000, up $363,000 from $342,000 in the same period last year. Revenues and operating profit are up partly because of rent growth at Cranberry Run, but primarily because of full occupancy at 1865 and 1841 62nd Street and the addition of 1941 62nd Street to this segment in March 2023. Net operating income in this segment was $1,630,000, up $459,000 or 39.2% compared to the same period last year.

 

Mining Royalty Lands Segment:

 

Total revenues in this segment were $6,546,000 versus $5,308,000 in the same period last year. Total operating profit in this segment was $5,522,000, an increase of $1,083,000 versus $4,439,000 in the same period last year. This increase is the result of the additional royalties from the acquisition in Astatula, Florida, which we completed at the beginning of the second quarter 2022, as well as increases in revenue at nearly every active location. Net Operating Income in this segment was $6,273,000, up $1,236,000 or 25% compared to the same period last year.

 

Stabilized Joint Venture Segment:

 

In the fourth quarter of 2022, as part of our new partnership with Steuart Investment Company and MidAtlantic Realty Partners, we sold a 20% ownership interest in a tenancy-in-common (TIC) of Dock 79 and The Maren for $65.3 million, $44.5 million attributable to the Company, placing a combined valuation of the two buildings at $326.5 million.

 

Total revenues in this segment were $10,821,000, an increase of $336,000 versus $10,485,000 in the same period last year. The Maren’s revenue was $5,231,000 an increase of 7.5% and Dock 79 revenues decreased $29,000 to $5,591,000 or .5%. Total operating profit in this segment was $1,716,000, an increase of $431,000 versus $1,285,000 in the same period last year. Pro-rata net operating income for this segment was $4,174,000, down $364,000 or 8.0% compared to the same period last year because of the sale of our 20% TIC interest in both properties to SIC, mitigated by $445,000 in pro rata NOI from our share of the Riverside joint venture.

.

 

At the end of June, The Maren was 92.42% leased and 94.32% occupied. Average residential occupancy for the first six months of 2023 was 96.37%, and 43.53% of expiring leases renewed with an average rent

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increase on renewals of 6.64%. The Maren is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 56.3% ownership.

 

Dock 79’s average residential occupancy for the first six months of 2023 was 93.77%, and at the end of the quarter, Dock 79’s residential units were 91.48% leased and 95.41% occupied. Through the first six months of the year, 65.22% of expiring leases renewed with an average rent increase on renewals of 3.74%. Dock 79 is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 52.8% ownership.

 

During the third quarter of 2022, we achieved stabilization at our Riverside Joint Venture in Greenville, South Carolina. At end of June, the building was 97.0% leased with 95.5% occupancy. Average occupancy for the first six months of 2023 was 94.92% with 58.73% of expiring leases renewing with an average rental increase of 11.76%. Riverside is a joint venture with Woodfield Development and the Company owns 40% of the venture.

 

 

Summary and Outlook

 

Royalty revenue for this quarter was up 13% over the same period last year, and royalty revenue for the first six months is up 23%. The last three quarters have been the three highest revenue quarters in this segment’s history. Mining royalty revenue for the last twelve months is $11.92 million, a 21% increase over the same period last year, and the segment’s highest revenue total over any twelve-month period.

 

In the Stabilized Joint Venture segment, pro-rata NOI is down for the segment for both the quarter and the first six months, which is to be expected after selling 20% of our share of Dock 79 and The Maren to SIC. NOI for the two projects as a whole increased 2.56% ($6,841,000 vs $6,670,000) for the first six months compared to the same period last year. After taking a dip in the first quarter, average occupancy at Dock 79 is back where we expect it to be (94.75%). The effort to get it back to where it should be is largely responsible for the flattening in rental increases (3.20% in the second quarter vs 4.52% in the first quarter) as well as the 3% loss on trade-outs. The Maren maintained a strong average occupancy this quarter (96.88%), though renewal rates (39.62%), increases (5.66%), and trade outs (6.0%) were slightly below what we’ve achieved in the past. Riverside in Greenville (which was added to this segment in the third quarter of last year) has maintained strong occupancy (95.42% this quarter) post stabilization. The renewal rate for the first six months (58.73%) is good, but the average increase on renewals of 11.76% is exceptional. These metrics continue to reinforce our faith in this market as well as the quality of the asset. Our pro-rata share of NOI at Riverside this quarter was $223,000 and $445,000 for the first six months.

 

In our Asset Management Segment, occupancy and our overall square-footage have increased since the second quarter of 2022, leading to a 39.2% increase in NOI for the first six months compared to the same period last year. We are 95.6% leased and occupied on 548,785 square feet compared to 84.3% occupied on 447,035 square feet at the end of the second quarter of 2022.

 

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Inflation and the upward pressure on interest rates, while potentially softening, remain an obstacle for any developer. We have benefitted from the effect of these forces on rents and royalties, but the compression of future margins from hard costs and financing is a real problem for development. In (relatively) less capital-intensive projects like warehouse construction, this situation is potentially beneficial, because we can use our cash on hand to finance construction on an all equity basis and develop in-demand industrial product while the interest rates on construction loans keep most development on the sidelines. But in the instance of multi-family development, where a construction loan is an absolute necessity, we will in all likelihood sit tight for the time being. In regards to the first phase of our partnership with SIC and MRP, we will continue to pursue entitlements and all work required to prepare the project for development, but will delay vertical construction until the lending markets soften. As we mentioned last quarter, we have a long-term vision for the company, and we’re not going to rush into anything and take on additional development risk if market conditions prevent us from making a reasonable return. We still have the utmost confidence in our assets and the markets in which they thrive. To that end, this past quarter we repurchased 18,340 shares at average cost of $54.52 per share.

 

We would like to remind our investors that we are holding an Investor Day on October 11, 2023 in Washington D.C. Investor Day presentations will begin at 10:00 A.M. EDT at Dock 79 and will be followed by a Q&A session. The event will feature presentations from its executive management team. For information on the event and to RSVP, please email InvestorDay@frpdev.com. A live webcast and presentation materials will be available to all interested parties at https://www.frpdev.com/investor-relations/. For those unable to join the live webcast, a replay will be available on our website shortly after the event.

 

 

Conference Call

 

The Company will host a conference call on Thursday, August 10, 2023 at 9:30 a.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1- 800-274-8461 (passcode 40104) within the United States. International callers may dial 1-203-518-9814 (passcode 40104). Audio replay will be available until August 24, 2023 by dialing 1-888-562-2817 (no passcode required) within the United States. International callers may dial 1-402-220-7354. An audio replay will also be available on the Company’s investor relations page (https://www.frpdev.com/investor-relations/) following the call.

Investors are cautioned that any statements in this press release which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. These include, but are not limited to: the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilities in the Baltimore-Washington-Northern Virginia area; demand for apartments in Washington D.C. and Greenville, South Carolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity; our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others;

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competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cybersecurity risks; as well as other risks listed from time to time in our SEC filings; including but not limited to; our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

 

FRP Holdings, Inc. is a holding company engaged in the real estate business, namely (i) leasing and management of commercial properties owned by the Company, (ii) leasing and management of mining royalty land owned by the Company, (iii) real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office, (iv) leasing and management of a residential apartment building.

 

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FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share amounts)

(Unaudited)

 

    THREE MONTHS ENDED   SIX MONTHS ENDED
    JUNE 30,   JUNE 30,
    2023   2022   2023   2022
Revenues:                                
     Lease revenue   $ 7,432       6,745       14,264       13,027  
     Mining lands lease revenue     3,264       2,883       6,546       5,308  
 Total Revenues     10,696       9,628       20,810       18,335  
                                 
Cost of operations:                                
     Depreciation, depletion and amortization     2,819       2,868       5,599       5,766  
     Operating expenses     1,822       1,541       3,562       3,349  
     Property taxes     879       1,041       1,826       2,069  
     Management company indirect     1,040       805       1,879       1,579  
     Corporate expenses     1,369       1,307       2,323       2,142  
Total cost of operations     7,929       7,562       15,189       14,905  
                                 
Total operating profit     2,767       2,066       5,621       3,430  
                                 
Net investment income     3,125       1,120       5,507       2,018  
Interest expense     (1,129 )     (739 )     (2,135 )     (1,477 )
Equity in loss of joint ventures     (4,047 )     (1,766 )     (7,672 )     (3,370 )
Gain (loss) on sale of real estate     (2 )     —         8       733  
                                 
Income before income taxes     714       681       1,329       1,334  
Provision for (benefit from) income taxes     222       99       431       348  
                                 
Net income     492       582       898       986  
Loss attributable to noncontrolling interest     (106 )     (75 )     (265 )     (343 )
Net income attributable to the Company   $ 598       657       1,163       1,329  
                                 
Earnings per common share:                                
 Net income attributable to the Company-                                
    Basic   $ 0.06       0.07       0.12       0.14  
    Diluted   $ 0.06       0.07       0.12       0.14  
                                 
Number of shares (in thousands) used in computing:                      
    -basic earnings per common share     9,432       9,384       9,424       9,375  
    -diluted earnings per common share     9,466       9,424       9,463       9,416  
                                                       

 

 

 

 

 

 

 

 

 

 

 

 

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FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share data)

 

    June 30   December 31
Assets:   2023   2022
Real estate investments at cost:                
Land   $ 141,578       141,579  
Buildings and improvements     282,070       270,579  
Projects under construction     2,667       12,208  
     Total investments in properties     426,315       424,366  
Less accumulated depreciation and depletion     62,720       57,208  
     Net investments in properties     363,595       367,158  
                 
Real estate held for investment, at cost     10,392       10,182  
Investments in joint ventures     152,587       140,525  
     Net real estate investments     526,574       517,865  
                 
Cash and cash equivalents     166,537       177,497  
Cash held in escrow     823       797  
Accounts receivable, net     1,472       1,166  
Unrealized rents     1,299       856  
Deferred costs     2,620       2,343  
Other assets     571       560  
Total assets   $ 699,896       701,084  
                 
Liabilities:                
Secured notes payable   $ 178,631       178,557  
Accounts payable and accrued liabilities     3,153       5,971  
Other liabilities     1,886       1,886  
Federal and state income taxes payable     186       18  
Deferred revenue     891       259  
Deferred income taxes     67,903       67,960  
Deferred compensation     1,381       1,354  
Tenant security deposits     873       868  
    Total liabilities     254,904       256,873  
                 
Commitments and contingencies                 
                 
Equity:                

Common stock, $.10 par value

25,000,000 shares authorized,

9,495,673 and 9,459,686 shares issued

and outstanding, respectively

     950       946  
Capital in excess of par value     67,028       65,158  
Retained earnings     342,610       342,317  
Accumulated other comprehensive loss, net     (712 )     (1,276 )
     Total shareholders’ equity     409,876       407,145  
Noncontrolling interest     35,116       37,066  
     Total equity     444,992       444,211  
Total liabilities and equity   $ 699,896       701,084  

 

 

 

 

 

 

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Asset Management Segment:

    Three months ended June 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 1,420       100.0 %     912       100.0 %     508       55.7 %
                                                 
Depreciation, depletion and amortization     359       25.3 %     230       25.2 %     129       56.1 %
Operating expenses     176       12.4 %     111       12.2 %     65       58.6 %
Property taxes     63       4.4 %     52       5.7 %     11       21.2 %
Management company indirect     141       9.9 %     100       10.9 %     41       41.0 %
Corporate expense     271       19.1 %     225       24.7 %     46       20.4 %
                                                 
Cost of operations     1,010       71.1 %     718       78.7 %     292       40.7 %
                                                 
Operating profit   $ 410       28.9 %     194       21.3 %     216       111.3 %

 

 

 

Mining Royalty Lands Segment:

    Three months ended June 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Mining lands lease revenue   $ 3,264       100.0 %     2,883       100.0 %     381       13.2 %
                                                 
Depreciation, depletion and amortization     151       4.6 %     189       6.6 %     (38 )      -20.1 %
Operating expenses     16       0.5 %     17       0.6 %     (1 )      -5.9 %
Property taxes     74       2.3 %     69       2.4 %     5       7.2 %
Management company indirect     137       4.2 %     110       3.8 %     27       24.5 %
Corporate expense     154       4.7 %     148       5.1 %     6       4.1 %
                                                 
Cost of operations     532       16.3 %     533       18.5 %     (1 )      -0.2 %
                                                 
Operating profit   $ 2,732       83.7 %     2,350       81.5 %     382       16.3 %

 

 

 

Development Segment:

    Three months ended June 30  
(dollars in thousands)   2023   2022   Change  
               
Lease revenue   $  467       408       59    
                           
Depreciation, depletion and amortization     41       47       (6 )   
Operating expenses     73       80       (7 )   
Property taxes     179       356       (177 )  
Management company indirect     646       506       140    
Corporate expense     815       816       (1 )   
                           
Cost of operations     1,754       1,805       (51 )   
                           
Operating loss   $ (1,287 )     (1,397 )     110    

 

 

 

 

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Stabilized Joint Venture Segment:

    Three months ended June 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 5,545       100.0 %     5,425       100.0 %     120       2.2 %
                                                 
Depreciation, depletion and amortization     2,268       40.9 %     2,402       44.3 %     (134 )      -5.6 %
Operating expenses     1,557       28.1 %     1,333       24.6 %     224       16.8 %
Property taxes     563       10.2 %     564       10.4 %     (1 )      -0.2 %
Management company indirect     116       2.1 %     89       1.6 %     27       30.3 %
Corporate expense     129       2.3 %     118       2.2 %     11       9.3 %
                                                 
Cost of operations     4,633       83.6 %     4,506       83.1 %     127       2.8 %
                                                 
Operating profit   $ 912       16.4 %     919       16.9 %     (7 )      -0.8 %

 

 

 

 

Asset Management Segment:

    Six months ended June 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 2,490       100.0 %     1,751       100.0 %     739       42.2 %
                                                 
Depreciation, depletion and amortization     637       25.6 %     464       26.5 %     173       37.3 %
Operating expenses     317       12.7 %     279       15.9 %     38       13.6 %
Property taxes     123       4.9 %     105       6.0 %     18       17.1 %
Management company indirect     255       10.3 %     192       11.0 %     63       32.8 %
Corporate expense     453       18.2 %     369       21.1 %     84       22.8 %
                                                 
Cost of operations     1,785       71.7 %     1,409       80.5 %     376       26.7 %
                                                 
Operating profit   $ 705       28.3 %     342       19.5 %     363       106.1 %

 

 

 

Mining Royalty Lands Segment:

    Six months ended June 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Mining lands lease revenue   $ 6,546       100.0 %     5,308       100.0 %     1,238       23.3 %
                                                 
Depreciation, depletion and amortization     334       5.1 %     244       4.6 %     90       36.9 %
Operating expenses     33       0.5 %     32       0.6 %     1       3.1 %
Property taxes     143       2.2 %     134       2.5 %     9       6.7 %
Management company indirect     253       3.8 %     217       4.1 %     36       16.6 %
Corporate expense     261       4.0 %     242       4.6 %     19       7.9 %
                                                 
Cost of operations     1,024       15.6 %     869       16.4 %     155       17.8 %
                                                 
Operating profit   $ 5,522       84.4 %     4,439       83.6 %     1,083       24.4 %
11 
 

 

 

 

 

Development Segment:

    Six months ended June 30  
(dollars in thousands)   2023   2022   Change  
               
Lease revenue   $  953       791       162    
                           
Depreciation, depletion and amortization     96       92       4    
Operating expenses     167       291       (124 )   
Property taxes     466       711       (245 )  
Management company indirect     1,157       996       161    
Corporate expense     1,389       1,337       52    
                           
Cost of operations     3,275       3,427       (152 )   
                           
Operating loss   $ (2,322 )     (2,636 )     314    

 

 

 

Stabilized Joint Venture Segment:

    Six months ended June 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 10,821       100.0 %     10,485       100.0 %     336       3.2 %
                                                 
Depreciation, depletion and amortization     4,532       41.9 %     4,966       47.4 %     (434 )      -8.7 %
Operating expenses     3,045       28.1 %     2,747       26.2 %     298       10.8 %
Property taxes     1,094       10.1 %     1,119       10.7 %     (25 )      -2.2 %
Management company indirect     214       2.0 %     174       1.6 %     40       23.0 %
Corporate expense     220       2.0 %     194       1.8 %     26       13.4 %
                                                 
Cost of operations     9,105       84.1 %     9,200       87.7 %     (95 )      -1.0 %
                                                 
Operating profit   $ 1,716       15.9 %     1,285       12.3 %     431       33.5 %

 

 

 

 

 

Non-GAAP Financial Measures.

 

To supplement the financial results presented in accordance with GAAP, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata net operating income (NOI) because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

 

 

12 
 

 

Pro-rata Net Operating Income Reconciliation                      
Six months ended 06/30/23 (in thousands)                      
          Stabilized            
  Asset       Joint   Mining   Unallocated   FRP
  Management   Development   Venture   Royalties   Corporate   Holdings
  Segment   Segment   Segment   Segment   Expenses   Totals
Net Income (loss) $  513       (5,257 )     (509 )     4,018       2,133       898  
Income Tax Allocation   190       (1,950 )     (90 )     1,490       791       431  
Income (loss) before income taxes   703       (7,207 )     (599 )     5,508       2,924       1,329  
                                               
Less:                                              
 Unrealized rents   420       —         —         97       —         517  
 Gain on sale of real estate   —         —         —         10       —         10  
 Interest income   —         2,561       —         —         2,946       5,507  
Plus:                                              
 Unrealized rents   —         —         100       —         —         100  
 Loss on sale of real estate   2       —         —         —         —         2  
 Equity in loss of Joint Ventures   —         7,446       202       24       —         7,672  
 Professional fees - other   —         —         59       —         —         59  
 Interest Expense   —         —         2,113       —         22       2,135  
 Depreciation/Amortization   637       96       4,532       334       —         5,599  
 Management Co. Indirect   255       1,157       214       253       —         1,879  
 Allocated Corporate Expenses   453       1,389       220       261       —         2,323  
                                               
Net Operating Income (loss)   1,630       320       6,841       6,273       —         15,064  
                                               
NOI of noncontrolling interest   —         —         (3,112 )     —         —         (3,112 )
Pro-rata NOI from unconsolidated joint ventures   —         2,205       445       —         —         2,650  
                                               
Pro-rata net operating income $ 1,630       2,525       4,174       6,273       —         14,602  

 

 

 

 

Pro-rata Net Operating Income Reconciliation                      
Six months ended 06/30/22 (in thousands)                      
          Stabilized            
  Asset       Joint   Mining   Unallocated   FRP
  Management   Development   Venture   Royalties   Corporate   Holdings
  Segment   Segment   Segment   Segment   Expenses   Totals
Net Income (loss)   249       (3,351 )     (92 )     3,758       422       986  
Income Tax Allocation   93       (1,242 )     92       1,393       12       348  
Income (loss) before income taxes   342       (4,593 )     —         5,151       434       1,334  
                                               
Less:                                              
 Unrealized rents   196       —         —         105       —         301  
 Gain on sale of real estate   —         —         —         733       —         733  
 Equity in gain of Joint Ventures   —         —         171       —         —         171  
 Interest income   —         1,563       —         —         455       2,018  
Plus:                                              
 Unrealized rents   —         —         51       —         —         51  
 Equity in loss of Joint Ventures   —         3,520       —         21       —         3,541  
 Interest Expense   —         —         1,456       —         21       1,477  
 Depreciation/Amortization   464       92       4,966       244       —         5,766  
 Management Co. Indirect   192       996       174       217       —         1,579  
 Allocated Corporate Expenses   369       1,337       194       242       —         2,142  
                                               
Net Operating Income (loss)   1,171       (211 )     6,670       5,037       —         12,667  
                                               
NOI of noncontrolling interest   —         —         (2,132 )     —         —         (2,132 )
Pro-rata NOI from unconsolidated joint ventures   —         1,192       —         —         —         1,192  
                                               
Pro-rata net operating income $ 1,171       981       4,538       5,037       —         11,727