0001474506-17-000019.txt : 20170201 0001474506-17-000019.hdr.sgml : 20170201 20170201103456 ACCESSION NUMBER: 0001474506-17-000019 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20170201 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170201 DATE AS OF CHANGE: 20170201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRP HOLDINGS, INC. CENTRAL INDEX KEY: 0000844059 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 472449198 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36769 FILM NUMBER: 17563509 BUSINESS ADDRESS: STREET 1: 200 W. FORSYTH ST. STREET 2: 7TH FLOOR CITY: JACKSONVILLE STATE: FL ZIP: 32202 BUSINESS PHONE: 9043965733 MAIL ADDRESS: STREET 1: 200 W. FORSYTH ST. STREET 2: 7TH FLOOR CITY: JACKSONVILLE STATE: FL ZIP: 32202 FORMER COMPANY: FORMER CONFORMED NAME: PATRIOT TRANSPORTATION HOLDING INC DATE OF NAME CHANGE: 20010425 FORMER COMPANY: FORMER CONFORMED NAME: FRP PROPERTIES INC DATE OF NAME CHANGE: 19920703 8-K 1 frphform8k3motp2017.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 1, 2017 FRP HOLDINGS, INC. --------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA 001-36769 47-2449198 ---------------- ----------- ------------------- (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation 200 W. Forsyth Street, 7th Floor Jacksonville, Florida 32202 --------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (904) 858-9100 --------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) CURRENT REPORT ON FORM 8-K FRP HOLDINGS, INC. February 1, 2017 ITEM 2.02. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 1, 2017, FRP Holdings, Inc. (the "Company") issued a press release announcing results for the three month transition period ended December 31, 2016. A copy of the press release is furnished as Exhibit 99. The information in this report (including the exhibit) shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (d) Exhibits. 99 Press Release dated February 1, 2017. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed on its behalf by the undersigned thereunto duly authorized. FRP Holdings, Inc. Date: February 1, 2017 By: /s/ John D. Milton, Jr. ------------------------------------------- John D. Milton, Jr. Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit No. 99 Press Release dated February 1, 2017, issued by FRP Holdings, Inc. EX-99 2 frphpr20170201.txt PRESS RELEASE FRP HOLDINGS, INC./NEWS Contact: John D. Milton, Jr. Chief Financial Officer 904/858-9100 ------------------------------------------------------------------------------- FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCES RESULTS FOR THE THREE MONTH TRANSITION PERIOD ENDED DECEMBER 31, 2016. FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; February 1, 2017 -- Please note the Company recently changed its fiscal year from September 30 to December 31, and, as a result, throughout this press release, we refer to the three month period ended December 31, 2016 as the transition period. Potential REIT Conversion Whether through strategic acquisitions, organic growth, joint ventures, or putting our non-income producing land to work, our constant aim is to create and grow shareholder value. To that end, we have for some time explored the possibility of converting this company into a Real Estate Investment Trust (REIT), with the idea that this may be a more efficient structure given the nature of our business. Though no final decision has been made, in order to have the option to convert to a REIT in 2017, the board has elected to change from our previous fiscal year (ending September 30), to a fiscal year that follows the calendar year as is required of a REIT. This change went into effect January 1, 2017 and will require one-time additional auditing expenses of $120,000 which will be reflected in fiscal year 2017. Thus, the transition period ended December 31, 2016 will be known as just that and will not be a part of any fiscal year, not even retroactively. Finally, consistent with having the option to elect REIT status, we have contributed our mining reserves into a wholly owned subsidiary. Because the parent company still retains control of the land itself, the portion of the mining royalties income that is not attributable to the reserves, but instead more closely resembles ground rents, will be retained by the parent company and will qualify as "REIT-able" income. The subsidiary will receive only the income attributable to the reserves it now controls. This structure is intended to assure that we will meet the asset and income tests applicable to REITs. These preliminary steps will not have a material impact on our operations if FRP does not elect REIT status. Three month transition period ended December 31, 2016 Consolidated Results of Operations. Net income for the transition period ended December 31, 2016 was $1,560,000 or $.16 per share versus $7,473,000 or $.76 per share in the same period last year. The prior year benefited from a gain on land sale of $6,286,000 plus income of $3,000,000 from the settlement of environmental claims resulting in a positive impact of $.57 per share of income in the prior year. Total revenues were $9,512,000, up 7.8%, versus the same period last year. Excluding the positive impact of the environmental settlement in the same period last year, consolidated total operating profit was up 11.2%. Three month transition period ended December 31, 2016 Segment Operating Results. Asset Management Segment: ------------------------ Total revenues in this segment were $7,321,000, up $406,000 or 5.9%, over the same period last year. Net Operating Income in this segment for the transition period was $5,689,000, compared to $5,390,000 in the same period last year, an increase of 5.5%. The increase was mainly due to the acquisition of the Gilroy Road building in Hunt Valley, MD in July 2016 and a lease commencement at 7010 Dorsey Road in Hillside Business Park in August 2016. We ended the transition period with total occupied square feet of 3,488,995 versus 3,364,008 at the end of the same period last year, an increase of 3.7% or 124,947 square feet. Our overall occupancy rate was 89.9%. Depreciation and amortization expense increased primarily because of the aforementioned Gilroy building purchase and the completion of a 79,550 square foot warehouse at Hollander Business Park in April 2016. Corporate expense increased due to higher professional fees. Mining Royalty Lands Segment: ---------------------------- Total revenues in this segment were $1,880,000, an increase of 13.3%, versus $1,659,000 in the same period last year due to an increase in tons sold at locations over the minimum. Total operating profit in this segment was $1,708,000, an increase of $238,000 versus $1,470,000 in the same period last year. Land Development and Construction Segment: ----------------------------------------- The Land Development and Construction segment is responsible for (i) seeking out and identifying opportunistic purchases of income producing warehouse/ office buildings, and (ii) developing our non-income producing properties into income production. Of our ongoing projects, work continues on a spec building at Patriot Business Center which is now 82% pre-leased; we are fully engaged in the formal process of seeking (a) final design approval for Phase II of our RiverFront on the Anacostia project, and (b) Planned Unit Development entitlements for our 73 acre tract in Hampstead, Md.; and of further note, construction of the bulkhead at our 664E property on the Anacostia is on time and within budget. Finally, because of operating losses and depreciation during the lease up of Phase I (Dock 79) of RiverFront on the Anacostia this quarter, equity in loss of joint ventures (including a loss of $4,000 in the Brooksville Joint Venture) was $1,119,000. Phase I pre-leasing activity for the 305 residential units commenced in late May of 2016 and as of January 22, the residential units were 49.8% occupied and 59.9% leased, while retail units remain 80% leased with just one space remaining. The project is currently above pro forma in effective rents and leasing absorption with residential stabilization expected in the third quarter of 2017. Summary and Outlook We are focused on building shareholder value through our real estate holdings. We accomplish this through the opportunistic acquisition of income producing properties, and the conversion of our non-income producing assets into income production. We have done this by (i) selling land that is not conducive to warehouse/office development (e.g. Windlass Run Residential Phase 2 land) and using the proceeds to acquire existing income producing warehouse/office buildings typically in a Section 1031 exchange (e.g. the Port Capital building purchase) and (ii) the construction of new warehouse/office buildings on existing pad sites in our developed business parks (e.g. new spec building at Patriot). Over the past five years, we have used this approach to convert 172 acres of non-income producing land into 766,216 square feet of income producing properties (excluding the recently completed spec building). This past quarter those properties had Net Operating Income of $1,267,000, accounting for over 22% of Asset Management's Net Operating Income. For yet another quarter, mining royalties continue to improve as volumes increase at most of our locations. This marks the eleventh straight quarter that mining revenues increased over the same period the year before, and is a testament to our belief in the long-term growth potential of these assets. During the coming fiscal year, we expect to complete construction on the new 104,000 square foot spec building at Patriot Business Park, finish construction on the bulkhead at the Square 664E property in anticipation of future high-rise development, reach residential stabilization of Phase I (Dock 79) of RiverFront on the Anacostia, and continue pre-development activities for Phase II and the Hampstead property. Our biggest decision in the coming year will be whether or not to convert this company into a Real Estate Investment Trust. As mentioned previously, we have taken steps to, at the very least, have the option. Impacting that decision will be weighing the benefits of REIT status against how it will impact our capital structure and any future projects, as well as any changes in the federal tax code. Conference Call. The Company will host a conference call on Wednesday, February 1, 2017 at 2:00 p.m. (EST). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-877-804-1916 (pass code 62184) within the United States. International callers may dial 334-323-7224 (pass code 62184). Computer audio live streaming is available via the Internet through the Company's website at www.frpholdings.com. You may also click on this link for the live streaming http://stream.conferenceamerica.com/FRP020117. For the archived audio via the internet, click on the following link http://archive.conferenceamerica.com/archivestream/FRP020117.mp3. If using the Company's website, click on the Investor Relations tab, then select the earnings conference stream. An audio replay will be available for sixty days following the conference call. To listen to the audio replay, dial toll free 877-919-4059, international callers dial 334-323-0140. The passcode of the audio replay is 30678261. Replay options: "1" begins playback, "4" rewind 30 seconds, "5" pause, "6" fast forward 30 seconds, "0" instructions, and "9" exits recording. There may be a 30-40 minute delay until the archive is available following the conclusion of the conference call. FRP HOLDINGS, INC. AND SUBSIDIARIES ----------------------------------- CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share amounts) (Unaudited) THREE MONTHS ENDED DECEMBER 31, 2016 2015 -------- -------- Revenues: Rental revenue $ 6,328 6,027 Mining Royalty and rents 1,857 1,638 Revenue - reimbursements 1,327 1,158 -------- -------- Total Revenues 9,512 8,823 Cost of operations: Depreciation, depletion and amortization 2,095 1,896 Operating expenses 994 973 Environmental remediation expense (recovery) - (3,000) Property taxes 1,089 1,118 Management company indirect 475 504 Corporate expenses 855 732 -------- -------- Total cost of operations 5,508 2,223 Total operating profit 4,004 6,600 Interest income - 1 Interest expense (306) (481) Equity in loss of joint ventures (1,119) (54) Gain on investment land sold - 6,286 -------- -------- Income before income taxes 2,579 12,352 Provision for income taxes 1,019 4,879 -------- -------- Net income $ 1,560 7,473 ======== ======== Comprehensive net income $ 1,560 7,473 ======== ======== Earnings per common share: Basic $ 0.16 0.76 Diluted $ 0.16 0.76 Number of shares (in thousands) used in computing: -basic earnings per common share 9,879 9,802 -diluted earnings per common share 9,923 9,853 Asset Management Segment ------------------------
Three months ended December 31 --------------------------------------- (dollars in thousands) 2016 % 2015 % Change % -------- ------- -------- ------- -------- ------- Rental revenue $ 6,148 84.0% $ 5,908 85.4% $ 240 4.1% Revenue-reimbursements 1,173 16.0% 1,007 14.6% 166 16.5% -------- ------- -------- ------- -------- ------- Total revenue 7,321 100.0% 6,915 100.0% 406 5.9% Depreciation, depletion and amortization 2,005 27.4% 1,798 26.0% 207 11.5% Operating expenses 885 12.1% 839 12.1% 46 5.5% Property taxes 729 10.0% 659 9.5% 70 10.6% Management company indirect 193 2.6% 231 3.4% (38) -16.5% Corporate expense 485 6.6% 378 5.5% 107 28.3% -------- ------- -------- ------- -------- ------- Cost of operations 4,297 58.7% 3,905 56.5% 392 10.0% -------- ------- -------- ------- -------- ------- Operating profit $ 3,024 41.3% $ 3,010 43.5% $ 14 0.5% ======== ======= ======== ======= ======== ======= Mining Royalty Lands Segment: ---------------------------- Three months ended December 31 --------------------------------------- (dollars in thousands) 2016 % 2015 % -------- ------- -------- ------- Mining Royalty and rents $ 1,857 98.8% 1,638 98.7% Revenue-reimbursements 23 1.2% 21 1.3% -------- ------- -------- ------- Total revenue 1,880 100.0% 1,659 100.0% Depreciation, depletion and amortization 35 1.8% 34 2.0% Operating expenses 41 2.2% 41 2.5% Property taxes 54 2.9% 59 3.6% Corporate expense 42 2.2% 55 3.3% -------- ------- -------- ------- Cost of operations 172 9.1% 189 11.4% -------- ------- -------- ------- Operating profit $ 1,708 90.9% $ 1,470 88.6% ======== ======= ======== =======
Land Development and Construction Segment: -----------------------------------------
Three months ended December 31 -------------------------------------- (dollars in thousands) 2016 2015 Change -------- -------- -------- Rental revenue $ 180 119 61 Revenue-reimbursements 131 130 1 -------- -------- -------- Total revenue 311 249 62 Depreciation, depletion and amortization 55 64 (9) Operating expenses 68 93 (25) Environmental remediation recovery - (3,000) 3,000 Property taxes 306 400 (94) Management company indirect 282 273 9 Corporate expense 328 299 29 -------- -------- -------- Cost of operations 1,039 (1,871) 2,910 -------- -------- -------- Operating loss $ (728) 2,120 (2,848) ======== ======== ========
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. The non-GAAP financial measures included in this quarterly report are adjusted operating profit and net operating income (NOI). FRP uses these non-GAAP financial measures to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. These measures are not, and should not be viewed as, substitutes for GAAP financial measures. Adjusted Operating Profit Adjusted operating profit excludes the impact of the corporate expense not allocated to discontinued operations and the environmental remediation recovery. Adjusted operating profit is presented to provide additional perspective on underlying trends in FRP's core operating results. A reconciliation between operating profit and adjusted operating profit is as follows: Adjusted Operating Profit
Three months ended December 31, -------------------- 2016 2015 Change % -------- -------- -------- ------- Operating profit $ 4,004 6,600 (2,596) -39.3% Adjustments: Environmental remediation recovery - (3,000) -------- -------- Adjusted Operating profit $ 4,004 3,600 404 11.2%
Net Operating Income Reconciliation Three months ended 12/31/16 (in thousands)
Asset Land Mining FRP Management Development Royalties Holdings Segment Segment Segment Totals ---------- ---------- ---------- ---------- Income from continuing operations $ 1,644 (1,115) 1,031 1,560 Income Tax Allocation 1,074 (728) 673 1,019 ---------- ---------- ---------- ---------- Inc. from continuing operations before income taxes 2,718 (1,843) 1,704 2,579 Less: Lease intangible rents 4 - Unrealized rents 14 - Plus: Equity in loss of Joint Venture - 1,115 Interest Expense 306 - Depreciation/Amortization 2,005 55 Management Co. Indirect 193 282 Allocated Corporate Expenses 485 328 ---------- ---------- Net Operating Income (loss) 5,689 (63) Net Operating Income Reconciliation Three months ended 12/31/15 (in thousands) Asset Land Mining FRP Management Development Royalties Holdings Segment Segment Segment Totals ---------- ---------- ---------- ---------- Income from continuing operations $ 1,535 5,054 884 7,473 Income Tax Allocation 1,003 3,298 578 4,879 ---------- ---------- ---------- ---------- Inc. from continuing operations before income taxes 2,538 8,352 1,462 12,352 Less: Gains on investment land sold 9 6,277 Other income - 1 Unrealized rents 13 - Lease intangible rents 14 - Plus: Equity in loss of Joint Venture - 45 Interest Expense 481 - Depreciation/Amortization 1,798 64 Management Co. Indirect 231 273 Allocated Corporate Expenses 378 299 ---------- ---------- Net Operating Income 5,390 2,755