0001474506-19-000087.txt : 20190506 0001474506-19-000087.hdr.sgml : 20190506 20190506121450 ACCESSION NUMBER: 0001474506-19-000087 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20190506 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190506 DATE AS OF CHANGE: 20190506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRP HOLDINGS, INC. CENTRAL INDEX KEY: 0000844059 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 472449198 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36769 FILM NUMBER: 19798581 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 frphform8k1qfy2019.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): May 6, 2019 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)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (s. 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (s. 240.12b-2 of this chapter). Emerging growth company [_] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_] Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class Trading Symbol(s) on which registered --------------------- --------------------- --------------------- Common Stock FRPH NASDAQ Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. CURRENT REPORT ON FORM 8-K FRP HOLDINGS, INC. May 6, 2019 ITEM 2.02. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On May 6, 2019, FRP Holdings, Inc. (the "Company") issued a press release announcing results for the first quarter ended March 31, 2019. 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 (c) Exhibits. 99 Press Release dated May 6, 2019. 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 hereunto duly authorized. FRP HOLDINGS, INC. Date: May 6, 2019 By: /s/ John D. Milton, Jr. ------------------------------------------- John D. Milton, Jr. Chief Financial Officer EXHIBIT INDEX Exhibit No. 99 Press Release dated May 6, 2019, issued by FRP Holdings, Inc. EX-99 2 frphpr1Q2019.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 FIRST QUARTER ENDED MARCH 31, 2019 FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; May 6, 2019 - First Quarter Consolidated Results of Operations Net income for the first quarter of 2019 was $1,898,000 or $.19 per share versus $1,560,000 or $.15 per share in the same period last year. Income from discontinued operations for the first quarter of 2019 was $86,000 or $.01 per share versus $1,722,000 or $.17 per share in the same period last year. First Quarter Segment Operating Results Asset Management Segment: ------------------------ Most of the Asset Management Segment was reclassified to discontinued operations leaving only three commercial properties and one recent industrial acquisition, Cranberry Run, which we purchased this quarter for $6,411,000. Cranberry Run is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/flex space. The park is currently 26% leased and occupied, and it is our plan to make $1,455,000 in improvements in order to re-lease the property for a total investment of $29.35 per square foot. This past quarter, we entered into a Purchase and Sale Agreement to sell 7030 Dorsey Road in Anne Arundel County, one of the three commercial properties remaining from the asset sale last May, for $8,823,000. The study period for the purchaser expired April 15, 2019 and we expect to close in the second quarter of 2019. Total revenues in this segment were $641,000, up $60,000 or 10.3%, over the same period last year. Operating loss was ($66,000), down $322,000 compared to the same quarter last year due to higher allocation of corporate expenses and operating losses associated with the Cranberry Run acquisition. Mining Royalty Lands Segment: ---------------------------- Total revenues in this segment were $2,229,000 versus $1,772,000 in the same period last year. Total operating profit in this segment was $2,001,000, an increase of $460,000 versus $1,541,000 in the same period last year. Among the reasons for this increase in revenue and operating profit is the contribution from our Ft. Myers quarry, the revenue from which, now that mining has begun in earnest, was more than double the minimum royalty we have been receiving until recently. Development Segment: ------------------- The Development 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. With respect to ongoing projects: * We are fully engaged in the formal process of seeking PUD entitlements for our 118-acre tract in Hampstead, Maryland, now known as "Hampstead Overlook." This past quarter, Hampstead Overlook received non-appealable rezoning from industrial to residential. * We finished shell construction in December on the two office buildings in the first phase of our joint venture with St. John Properties. Shell construction of the two retail buildings was completed in January. We are now in the process of leasing these four single-story buildings totaling 100,030 square feet of office and retail space. Phase I is currently 44% leased. * We are the principal capital source of a residential development venture in Essexshire known as "Hyde Park." We have committed up to $9.2 million in exchange for an interest rate of 10% and a preferred return of 20% after which a "waterfall" determines the split of proceeds from sale. Hyde Park will hold 122 town homes and 4 single family lots and received a non-appealable Plan Approval this past quarter. We are now in the process of obtaining record plat and construction drawing approval as well as seeking proposals from residential home builders. * During the second quarter of 2018, we began construction on a 94,350-square foot spec building at Hollander Business Park. This Class "A" facility is our first building with a 32-foot clear. Shell construction was completed subsequent to the end of the quarter and we are now in the process of leasing up the building. * In April, we began construction on Phase II of our RiverFront on the Anacostia project, now known as "The Maren." We expect to deliver the building in the first half of 2020. * In December 2018, the Company entered into a joint venture agreement with MidAtlantic Realty Partners (MRP) for the development of the first phase of a multifamily, mixed-use development in northeast Washington, DC known as "Bryant Street." FRP contributed $32 million for common equity and another $23 million for preferred equity to the joint venture. Construction began in February 2019 and should be finished in 2021. Stabilized Joint Venture Segment: -------------------------------- Average occupancy for the quarter was 93.49%, and at the end of the quarter Dock 79 was 94.75% leased and 93.11% occupied. During the first quarter, 60.87% of expiring leases renewed with an average increase in rent of 2.58%. Net Operating Income for this segment was $1,630,679, up $145,282 or 9.78% compared to the same quarter last year. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership. Summary and Outlook We began this year a very different company than we were at the start of 2018. The asset sale of nearly a year ago has dramatically reshaped the landscape of our business and our direction forward. The disposition of over 40 buildings, the infrastructure required to support it, and the cash we retained from that disposition has shifted our focus towards development as the number of ongoing projects in our development segment demonstrates. Despite or maybe because of the lack of consensus regarding economic forecasts, indicators, and the volatility of markets, we believe we are in an enviable financial position given our current liquidity. Though we, like any other company, would stand to benefit from the rising tide of this nearly unprecedented stretch of economic growth, the cash and investments on our balance sheet allow us to play defense and protect our assets should a downturn present itself as our projects are coming online, while also allowing us to play offense should that same downturn create opportunities to grow our business segments via attractively priced acquisitions. It is because we prize this liquidity so much, that we remain steadfast in our commitment to redeploy these proceeds as carefully as we possibly can. The substantial amount of dry powder retained from the sale affords this company an amazing opportunity that we are loathe to squander. We have some of the best assets in the business segments in which we compete, as demonstrated by another amazing quarter from our mining royalties segment and the continued ability to grow rents at Dock 79, and we will not make any further investments unless they fall in line with the quality of assets and opportunities of your company as it is situated presently. To that end, we have been repurchasing shares of the Company when we believe it is underpriced. This past quarter we repurchased 35,932 shares at an average price of $47.71. Conference Call The Company will also host a conference call on Monday, May 6, 2019 at 2:00 p.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-800-311-9406 (passcode 939063) within the United States. International callers may dial 1-334-323-7224 (passcode 939063). 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/frp050619. For the archived audio via the internet, click on the following link http://archive.conferenceamerica.com/archivestream/frp050619.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 1-877-919-4059, international callers dial 1-334-323-0140. The passcode of the audio replay is 54972211. 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. 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 reinvestment opportunities for the proceeds from the Sale Transaction; 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.; 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; 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, (ii) real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office, (iv) leasing and management of a residential apartment building. FRP HOLDINGS, INC. AND SUBSIDIARIES ----------------------------------- CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share amounts) (Unaudited) THREE MONTHS ENDED MARCH 31, 2019 2018 -------- -------- Revenues: Lease revenue $ 3,485 3,303 Mining lands lease revenue 2,229 1,772 -------- ------- Total Revenues 5,714 5,075 Cost of operations: Depreciation, depletion and amortization 1,487 2,398 Operating expenses 882 865 Property taxes 753 675 Management company indirect 592 361 Corporate expenses (Note 4 Related Party) 645 679 -------- ------- Total cost of operations 4,359 4,978 Total operating profit 1,355 97 Net investment income, including realized gains of $119 and $0 1,810 5 Interest expense (588) (843) Equity in loss of joint ventures (264) (12) -------- ------- Income (loss) from continuing operations before income taxes 2,313 (753) Provision for (benefit from) income taxes 672 (60) -------- ------- Income (loss) from continuing operations 1,641 (693) Income from discontinued operations, net of tax 86 1,722 -------- ------- Net income 1,727 1,029 Income (loss) attributable to noncontrolling interest (171) (531) Net income attributable to the Company $ 1,898 1,560 ======== ======= Earnings per common share: Income (loss) from continuing operations- Basic $ 0.16 (0.07) Diluted $ 0.16 (0.07) Discontinued operations- Basic $ 0.01 0.17 Diluted $ 0.01 0.17 Net income attributable to the Company- Basic $ 0.19 0.16 Diluted $ 0.19 0.15 Number of shares (in thousands) used in computing: -basic earnings per common share 9,952 10,015 -diluted earnings per common share 9,996 10,085 FRP HOLDINGS, INC. AND SUBSIDIARIES ----------------------------------- CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands except share data) March 31, December 31, 2019 2018 -------------- -------------- Assets: Real estate investments at cost: Land $ 85,072 83,721 Buildings and improvements 149,505 144,543 Projects under construction 7,086 6,683 -------------- -------------- Total investments in properties 241,663 234,947 Less accumulated depreciation and depletion 29,847 28,394 -------------- -------------- Net investments in properties 211,816 206,553 Real estate held for investment, at cost 7,167 7,167 Investments in joint ventures 94,294 88,884 -------------- -------------- Net real estate investments 313,277 302,604 -------------- -------------- Cash and cash equivalents 29,641 22,547 Cash held in escrow 185 202 Accounts receivable, net 688 564 Investments available for sale at fair value 148,778 165,212 Federal and state income taxes receivable 8,349 9,854 Unrealized rents 665 53 Deferred costs 990 773 Other assets 459 455 Assets of discontinued operations 3,091 3,224 -------------- -------------- Total assets $ 506,123 505,488 ============== ============== Liabilities: Secured notes payable $ 88,823 88,789 Accounts payable and accrued liabilities 1,851 3,545 Environmental remediation liability 100 100 Deferred revenue 831 27 Deferred income taxes 27,981 27,981 Deferred compensation 1,448 1,450 Tenant security deposits 244 53 Liabilities of discontinued operations 243 288 -------------- -------------- Total liabilities 121,521 122,233 -------------- -------------- Commitments and contingencies Equity: Common stock, $.10 par value 25,000,000 shares authorized, 9,933,242 and 9,969,174 shares issued and outstanding, respectively 993 997 Capital in excess of par value 57,824 58,004 Retained earnings 306,704 306,307 Accumulated other comprehensive income, net 859 (701) -------------- -------------- Total shareholders' equity 366,380 364,607 Noncontrolling interest MRP 18,222 18,648 -------------- -------------- Total equity 384,602 383,255 -------------- -------------- Total liabilities and shareholders' equity $ 506,123 505,488 Asset Management Segment: ------------------------
Three months ended March 31 --------------------------------------- (dollars in thousands) 2019 % 2018 % Change % -------- ------- -------- ------- -------- ------- Lease revenue $ 641 100.0% 581 100.0% 60 10.3% Depreciation, depletion and amortization 177 27.6% 131 22.6% 46 35.1% Operating expenses 209 32.6% 128 22.0% 81 63.3% Property taxes 56 8.8% 39 6.7% 17 43.6% Management company indirect 102 15.9% 24 4.1% 78 325.0% Corporate expense 163 25.4% 3 0.5% 160 5333.3% -------- ------- -------- ------- -------- ------- Cost of operations 707 110.3% 325 55.9% 382 117.5% -------- ------- -------- ------- -------- ------- Operating profit $ (66) -10.3% 256 44.1% (322) -125.8% ======== ======= ======== ======= ======== ======= Mining Royalty Lands Segment: ---------------------------- Three months ended March 31 --------------------------------------- (dollars in thousands) 2019 % 2018 % Change % -------- ------- -------- ------- -------- ------- Mining lands lease revenue $ 2,229 100.0% 1,772 100.0% 457 25.8% Depreciation, depletion and amortization 52 2.3% 54 3.0% (2) -3.7% Operating expenses 16 0.7% 40 2.3% (24) -60.0% Property taxes 68 3.1% 60 3.4% 8 13.3% Management company indirect 49 2.2% - 0.0% 49 0.0% Corporate expense 43 1.9% 77 4.3% (34) -44.2% -------- ------- -------- ------- -------- ------- Cost of operations 228 10.2% 231 13.0% (3) -1.3% -------- ------- -------- ------- -------- ------- Operating profit $ 2,001 89.8% 1,541 87.0% 460 29.9% ======== ======= ======== ======= ======== ======= Development Segment: ------------------- Three months ended March 31 -------------------------------------- (dollars in thousands) 2019 2016 Change -------- -------- -------- Lease revenue $ 269 297 (28) Depreciation, depletion and amortization 58 57 1 Operating expenses 46 118 (72) Property taxes 323 268 55 Management company indirect 395 241 154 Corporate expense 399 419 (20) -------- -------- -------- Cost of operations 1,221 1,103 118 -------- -------- -------- Operating loss $ (952) (806) (146) ======== ======== ========
Stabilized Joint Venture Segment: --------------------------------
Three months ended March 31 --------------------------------------- (dollars in thousands) 2019 % 2018 % Change % -------- ------- -------- ------- -------- ------- Lease revenue $ 2,575 100.0% 2,425 100.0% 150 6.2% Depreciation, depletion and amortization 1,200 46.6% 2,156 88.9% (956) -44.3% Operating expenses 611 23.7% 579 23.9% 32 5.5% Property taxes 306 11.9% 308 12.7% (2) -0.6% Management company indirect 46 1.8% 96 3.9% (50) -52.1% Corporate expense 40 1.6% 142 5.9% (102) -71.8% -------- ------- -------- ------- -------- ------- Cost of operations 2,203 85.6% 3,281 135.3% (1,078) -32.9% -------- ------- -------- ------- -------- ------- Operating profit $ 372 14.4% (856) -35.3% 1,228 -143.5%
FRP HOLDINGS, INC. AND SUBSIDIARIES ----------------------------------- DISCONTINUED OPERATIONS (In thousands except per share amounts) (Unaudited) THREE MONTHS ENDED MARCH 31, 2019 2018 -------- -------- Lease revenue 238 7,547 Cost of operations: Depreciation, depletion and amortization 29 1,885 Operating expenses 95 1,178 Property taxes 20 798 Management company indirect - 178 Corporate expenses - 747 -------- ------- Total cost of operations 144 4,786 Total operating profit 94 2,761 Interest expense - (400) Gain on sale of buildings 23 - -------- ------- Income before income taxes 117 2,361 Provision for income taxes 31 639 -------- ------- Income from discontinued operations 86 1,722 ======== ======= Earnings per common share: Income from discontinued operations- Basic 0.01 0.17 Diluted 0.01 0.17 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 measure included in this quarterly report is net operating income (NOI). FRP uses this non-GAAP financial measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures. Net Operating Income Reconciliation Three months ended 03/31/19 (in thousands)
Stabilized Asset Joint Mining Unallocated FRP Management Development Venture Royalties Corporate Holdings Segment Segment Segment Segment Expenses Totals ---------- ----------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations (48) (716) (196) 1,452 1,149 1,641 Income Tax Allocation (18) (266) (9) 539 426 672 ---------- ----------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations before income taxes (66) (982) (205) 1,991 1,575 2,313 Less: Unrealized rents 3 - 28 - - 31 Interest income - 224 - - 1,586 1,810 Plus: Unrealized rents - - - 122 - 122 Equity in loss of Joint Venture - 254 - 10 - 264 Interest Expense - - 577 - 11 588 Depreciation/Amortization 177 58 1,200 52 - 1,487 Management Co. Indirect 102 395 46 49 - 592 Allocated Corporate Expenses 163 399 40 43 - 645 ---------- ----------- ---------- ---------- ---------- ---------- Net Operating Income 373 (100) 1,630 2,267 - 4,170 Net Operating Income Reconciliation Three months ended 03/31/18 (in thousands) Stabilized Asset Joint Mining Unallocated FRP Management Development Venture Royalties Corporate Holdings Segment Segment Segment Segment Expenses Totals ---------- ----------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations 187 (584) (1,383) 1,115 (28) (693) Income Tax Allocation 69 (217) (316) 414 (10) (60) ---------- ----------- ---------- ---------- ---------- ---------- Income (loss) from continuing operations before income taxes 256 (801) (1,699) 1,529 (38) (753) Less: Unrealized rents - - 52 - - 52 Other income - 5 - - - 5 Plus: Unrealized rents 20 - - 119 - 139 Equity in loss of Joint Venture - - - 12 - 12 Interest Expense - - 843 - - 843 Depreciation/Amortization 131 57 2,156 54 - 2,398 Management Co. Indirect 24 241 96 - - 361 Allocated Corporate Expenses 3 419 142 77 38 679 ---------- ----------- ---------- ---------- ---------- ---------- Net Operating Income 434 (89) 1,486 1,791 - 3,622