-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MFTonTlecFsx93f8o8uAnWWndPasVz/+HgtQgD28NS44+AmoHuOnuf0qPmv7zHpY OhwBi9AAIIqabyAf4ZfmwA== 0000844059-98-000006.txt : 19980814 0000844059-98-000006.hdr.sgml : 19980814 ACCESSION NUMBER: 0000844059-98-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRP PROPERTIES INC CENTRAL INDEX KEY: 0000844059 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 592924957 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-26115 FILM NUMBER: 98684606 BUSINESS ADDRESS: STREET 1: 155 EAST 21ST STREET CITY: JACKSONVILLE STATE: FL ZIP: 32206 BUSINESS PHONE: 9043551781 MAIL ADDRESS: STREET 1: 155 E 21ST ST CITY: JACKSONVILLE STATE: FL ZIP: 32206 10-Q 1 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 June 30, 1998. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-17554 FRP PROPERTIES, INC. (Exact name of registrant as specified in its charter) Florida 59-2924957 (State or other jurisdiction of (I.R.S. Employer) incorporation or organization) Identification No.) 155 East 21st Street, Jacksonville, Florida 32206 (Address of principal executive offices) (Zip Code) 904/355-1781 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of August 3, 1998: 3,468,225 shares of $.10 par value common stock. FRP PROPERTIES, INC. CONSOLIDATED CONDENSED BALANCE SHEET (In thousands) (Unaudited) June 30, September 30, 1998 1997 ASSETS Current assets: Cash and cash equivalents $ 321 $ 429 Accounts receivable: Affiliates 273 283 Other 6,437 5,506 Less allowance for doubtful accounts (270) (258) Inventory of parts and supplies 420 469 Prepaid expenses and other 1,834 2,120 Total current assets 9,015 8,549 Other assets: Real estate held for investment, at cost 5,771 5,771 Goodwill 1,258 1,288 Other 2,011 5,956 Total other assets 9,040 13,015 Property, plant and equipment, at cost 155,120 142,671 Less accumulated depreciation and depletion (51,796) (47,653) Net property, plant and equipment 103,324 95,018 $121,379 $116,582 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term note payable to bank $ 5,400 $ 4,000 Accounts payable: Affiliates 69 77 Other 2,277 2,350 Federal and state income taxes 482 779 Accrued liabilities 3,156 3,439 Long-term debt due within one year 431 418 Total current liabilities 11,815 11,063 Long-term debt 30,320 30,647 Deferred income taxes 7,797 7,243 Other liabilities 3,998 3,895 Stockholders' equity: Preferred stock, no par value; 5,000,000 shares authorized - - Common stock, $.10 par value; 25,000,000 shares authorized, 3,461,230 shares issued (3,439,235 at September 30, 1997) 346 344 Capital in excess of par value 17,756 17,333 Retained earnings 49,347 46,057 Total stockholders' equity 67,449 63,734 $121,379 $116,582 See accompanying notes. FRP PROPERTIES, INC. CONSOLIDATED CONDENSED STATEMENT OF INCOME (In thousands except per share amounts) (Unaudited) THREE MONTHS NINE MONTHS ENDED JUNE 30, ENDED JUNE 30, 1998 1997 1998 1997 Revenues: Affiliates $ 1,616 672 4,552 3,609 Non-affiliates 17,386 16,861 49,952 46,543 19,002 17,533 54,504 50,152 Cost of operations 14,665 13,456 42,417 39,468 Gross profit 4,337 4,077 12,087 10,684 Selling, general and administrative expense: Affiliates 384 355 1,152 1,087 Non-affiliates 1,441 1,149 3,861 3,446 1,825 1,504 5,013 4,533 Operating profit 2,512 2,573 7,074 6,151 Interest expense (574) (543) (1,694) (1,499) Interest income 2 8 10 29 Other income, net 3 - 2 - Income before income taxes 1,943 2,038 5,392 4,681 Provision for income taxes 758 795 2,103 1,826 Net income $ 1,185 $1,243 3,289 2,855 Basic earnings per common share $ .34 .36 .95 .81 Diluted earnings per common share $ .34 .35 .94 .80 Cash dividends NONE NONE NONE NONE Number of shares used in computing: Basic earnings per share 3,460 3,483 3,447 3,507 Diluted earnings per share 3,502 3,521 3,494 3,547 See accompanying notes. FRP PROPERTIES, INC. CONSOLIDATED STATEMENT OF CASH FLOWS NINE MONTHS ENDED JUNE 30, 1998 AND 1997 (In thousands) (Unaudited) 1998 1997 Cash flows from operating activities: Net income $3,289 2,855 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation, depletion and amortization 6,771 6,123 Net changes in operating assets and liabilities: Accounts receivable (919) (303) Inventory of parts and supplies 49 (15) Prepaid expenses 286 100 Accounts payable and accrued liabilities (536) 1,175 Increase in deferred income taxes 430 724 Net change in insurance reserve and other liabilities 102 74 (Gain) loss on disposition of real estate, plant and equipment (404) 61 Other, net 7 (26) Net cash provided from operating activities 9,075 10,768 Cash flows from investing activities: Purchase of property, plant and equipment (11,238) (10,700) Additions to other assets (452) (404) Proceeds from sale of real estate held for investment, property, plant and equipment, and other assets 995 30 Net cash used in investing activities (10,695) (11,074) Cash flows from financing activities: Net increase in short-term debt 1,400 2,600 Repayment of debt (314) (218) Repurchase of Company stock (34) (3,031) Exercise of stock options 460 879 Net cash provided from financing activities 1,512 230 Net increase (decrease) in cash and cash equivalents (108) (76) Cash and cash equivalents at beginning of year 429 313 Cash and cash equivalents at end of the period $ 321 237 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest expense, net of amount capitalized $1,706 1,485 Income taxes $1,648 784 Non cash investing activities: Additions to property, plant and equipment from exchanges 621 391 Escrow cash included in other assets used to purchase property, plant and equipment $3,811 - See accompanying notes. FRP PROPERTIES, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited) (1) Basis of Presentation. The accompanying consolidated condensed financial statements include the accounts of the Company and its subsidiaries. These statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included. Operating results for the nine months ended June 30, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 1998. The accompanying consolidated financial statements and the information included under the heading "Management's Discussion and Analysis" should be read in conjunction with the consolidated financial statements and related notes of FRP Properties, Inc. for the year ended September 30, 1997. (2) Earnings Per Share. Effective December 31, 1997, the Company adopted Statement of Financial Accounting Standard No. 128, "Earnings per Share" ("SFAS 128"). SFAS 128 replaced the presentation of primary earnings per share (EPS) and fully diluted EPS with a presentation of basic and diluted EPS. Basic earnings per share are based on the weighted average number of common shares outstanding during the periods. Diluted earnings per share are based on the weighted average number of common shares and potential dilution of securities that could share in earnings. Earnings per share for all prior periods have been restated. (3) Contingent Liabilities. The Company and its subsidiaries are subject to legal proceedings and claims arising out of their businesses that cover a wide range of matters. Additional information concerning these matters is presented in Note 10 to the consolidated financial statements included in the Company's 1997 Annual Report to stockholders. Such information is incorporated herein by reference. MANAGEMENT'S DISCUSSION AND ANALYSIS Operating Results The following table summarizes the Company's revenues, cost of operations, and gross profit by its business segments (in thousands): Three Months Nine Months Ended June 30, Ended June 30, 1998 1997 1998 1997 Revenues: Transportation $16,699 15,364 47,700 44,064 Real estate 2,303 2,169 6,804 6,088 $19,002 17,533 54,504 50,152 Cost of operations: Transportation $13,796 12,641 39,788 36,905 Real estate 869 815 2,629 2,563 $14,665 13,456 42,417 39,468 Gross profit: Transportation $ 2,903 2,723 7,912 7,159 Real estate 1,434 1,354 4,175 3,525 $ 4,337 4,077 12,087 10,684 For the third quarter and first nine months of fiscal 1998, ended June 30, 1998, consolidated revenues increased 8.4% and 8.7%, respectively, over the same periods last year. The Transportation segment revenues for the third quarter and first nine months increased 8.7% and 8.3%, respectively, due an increase in miles hauled. Real Estate revenues increased 6.2% for the third quarter and 11.8% for the first nine months from the same period last year. The real estate revenue increase for the third quarter was due to higher royalties and rental income. For the first nine months the increase in revenues was primarily due to $195,000 of timber sales in fiscal 1998, lease up from a warehouse/office building that was under construction in the first nine months of 1997, and increased mining royalties. Gross profit in Transportation increased $180,000 for the third quarter and $753,000 for the first nine months from the same periods last year. The increase for the third quarter was primarily due to higher revenues. The increase for the first nine months was due primarily to increased gains on the sale of equipment and increased revenues. Increase in drivers wages and benefits continue to negatively impact gross profit. Equipment sales increased $323,000 for the nine months. Gross profit in the Real Estate segment increased $80,000 for the third quarter and $650,000 for the first nine months. The improvement for the third quarter was primarily higher occupancy and income producing space under management. For the first nine months the increase was primarily due to gross profit of $188,000 on the sales of timber in the first nine months of 1998, the first nine months of 1997 included a write off of $134,000 in prior tenant improvement resulting from leasing existing space to a new tenant and higher rental income due to leasing this space and lease up of project under construction last year. The selling, general and administrative expense increased $321,000 for the third quarter and $480,000 for the first nine months from the same periods last year. Selling, general and administrative expense as a percent of sales was 9.6% for the third quarter as compared to 8.6% last year, and for the first nine months was 9.2% compared to 9.0% last year. The increase was primarily attributable to costs incurred for various special projects and business development opportunities related to transportation. Interest expense increased $31,000 for the third quarter, and $195,000 for the first nine months due primarily to an increase in the average debt outstanding and, to a lesser extent, an increase in the average interest rate. These increases were partially offset by a greater capitalization of interest in fiscal 1998. Year 2000 Conversion The Company, like most entities relying on automated data processing is faced with the task of modifying systems to become Year 2000 compliant. The Company has analyzed its Year 2000 exposure and developed plans for addressing the Year 2000 exposure as well as reengineering selective systems to enhance their functionality. As a result, the Company has purchased new state of the art software and hardware for its tank truck dispatching and maintenance system that is represented to be Year 2000 compliant to replace its existing systems. The Company purchases from an affiliate, Florida Rock Industries, Inc.(FRI) certain administrative services including automated data processing(Purchased Services). FRI is in the process of updating its systems to be Year 2000 compliant. The Company has reviewed FRI's plan and is monitoring the progress of this plan as it relates to the Purchased Services. The costs associated with the purchase and installation of the tank truck dispatching and maintenance software and hardware will be capitalized and amortized over the estimated useful life of the software or equipment. Other costs associated such as selection, training and reengineering of the existing processing are being expensed as incurred. Based on current information, the expected costs of the systems are not expected to be material to the financial condition or results of operations of the Company. The Company presently feels it is addressing in a timely manner the major issues related to the Year 2000 and any significant disruptive problems in its ability to conduct its business as a result are unlikely. However, despite efforts and initiatives undertaken by the Company, total assurances can not be given that absolute compliance can be achieved. There can be no guarantees that the computer systems of other entities on which the Company relies will be converted in a timely manner or that their failure to convert, or a conversion that is incompatible with the Company's system, will not have an adverse effect on the Company's business, financial condition and results of operations. The Company is considering other steps to reduce these risks, including requests for assurances from third parties concerning their Year 2000 compliance. 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 June 30, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. August 12, 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 JUNE 30, 1998 EXHIBIT INDEX Page No. in Sequential Numbering (3)(a)(1) Articles of Incorporation of FRP Properties, Inc. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (3)(a)(2) Amendment to the Articles of Incorporation of FRP Properties, Inc. filed with the Secretary of State of Florida on February 19, 1991. Previously filed with Form 10-K for the fiscal year ended September 30, 1993. file No. 33-26115. (3)(a)(3) Amendments to the Articles of Incorporation of FRP Properties, Inc. filed with the Secretary of State of Florida on February 7, 1995. Previously filed as appendix to the Company's Proxy Statement dated December 15, 1994. (3)(b)(1) Restated Bylaws of FRP Properties, Inc. adopted December 1, 1993. Previously filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115. (3)(b)(2) Amendment to the Bylaws of FRP Properties, Inc. adopted August 3, 1994. Previously filed with Form 10-K for the fiscal year ended September 30, 1994. File No. 33-26115. (4)(a) Articles III, VII and XII of the Articles of Incorporation of FRP Properties, Inc. Previously filed with Form S-4 dated December 13, 1988. And amended Article III filed with Form 10-K for the fiscal year ended September 30, 1993. And Articles XIII and XIV previously filed as appendix to the Company's Proxy Statement dated December 15, 1994. File No. 33-026115. (4)(b) Specimen stock certificate of FRP Properties, Inc. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. Page No. in Sequential Numbering (4)(c) Credit Agreement dated as of November 15, 1995 among FRP Properties, Inc.; SunTrust Bank, Central Florida, National Association; Bank of America Illinois; Barnett Bank of Jacksonville, N.A.; and First Union National Bank of Florida. Previously filed with Form 10-Q for the quarter ended December 31, 1995. File No. 33-26115. (4)(d) The Company and its consolidated subsidiaries have other long-term debt agreements which do not exceed 10% of the total consolidated assets of the Company and its subsidiaries, and the Company agrees to furnish copies of such agreements and constituent documents to the Commission upon request. (10)(a) Post Distribution Agreement, dated May 7, 1986, by and between Florida Rock Industries, Inc. and Florida Rock & Tank Lines, Inc. and amendments thereto dated July 1, 1987 and September 27, 1988. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(b) Tax Sharing Agreement, dated May 7,1986, between Florida Rock Industries, Inc. and Florida Rock & Tank Lines, Inc. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(c) Various leasebacks and mining royalty agreements with Florida Rock Industries, Inc., none of which are presently believed to be material individually, except for the Mining Lease Agreement dated September 1, 1986, between Florida Rock Industries Inc. and Florida Rock Properties, Inc., successor by merger to Grandin Land, Inc. (see Exhibit (10)(e)), but all of which maybe material in the aggregate. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(d) License Agreement, dated June 30, 1986, from Florida Rock Industries, Inc. to Florida Rock & Tank Lines, Inc. to use "Florida Rock" in corporate names. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. Page No. in Sequential Numbering (10)(e) Mining Lease Agreement, dated September 1, 1986, between Florida Rock Industries, Inc. and Florida Rock Properties, Inc., successor by merger to Grandin Land, Inc. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(f) Summary of Medical Reimbursement Plan of FRP Properties, Inc. Previously filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115. (10)(g) Split Dollar Agreement dated October 3, 1984, between Edward L. Baker and Florida Rock Industries, Inc. and assignment of such agreement, dated January 31, 1986 from Florida Rock Industries, Inc. to Florida Rock & Tank Lines, Inc. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(h) Summary of Management Incentive Compensation Plans. Previously filed with Form 10-K for the fiscal year ended September 30, 1994. File No. 33-26115. (10)(i) Management Security Agreements between the Company and certain officers. Form of agreement previously filed as Exhibit (10)(I) with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(i)(1) FRP Properties, Inc. 1989 Employee Stock Option Plan. Previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(j)(2) FRP Properties, Inc. 1995 Stock Option Plan. Previously filed as an appendix to the Company's Proxy Statement dated December 15, 1994. (11) Computation of Earnings Per Common Share. (27) Financial Data Schedule EX-11 2 EPS Exhibit (11) FRP PROPERTIES, INC. COMPUTATION OF EARNINGS PER COMMON SHARE THREE MONTHS NINE MONTHS ENDED JUNE 30, ENDED JUNE 30, 1998 1997 1998 1997 Net income $1,185,000 1,243,000 3,289,000 2,855,000 Common shares: Weighted average shares outstanding during the period - shares used for basic earnings per share 3,459,768 3,483,347 3,446,699 3,507,311 Shares issuable under stock options which are poten- tially dilutive 42,254 37,422 47,655 39,534 Shares used for diluted earnings per share 3,502,022 3,520,769 3,494,354 3,546,845 Basic earnings per common share $.34 .36 .95 .81 Diluted earnings per common share $.34 .35 .94 .80 EX-27 3 FDS
5 1000 9-MOS SEP-30-1998 OCT-01-1997 JUN-30-1998 321 0 6,710 270 420 9,015 155,120 51,796 121,379 11,815 30,320 0 0 346 67,103 121,379 54,504 54,504 42,417 42,417 0 0 (1,694) 5,392 2,103 3,289 0 0 0 3,289 .95 .94
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