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FRPH FRP

Filed: 16 Aug 21, 12:36pm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 10-Q

_________________

(Mark One)  

 

[X ]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2021

 

or

 

[_]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________ to _________

 

 Commission File Number: 001-36769

_____________________

FRP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_____________________

Florida 47-2449198

(State or other jurisdiction of

incorporation or organization)

 (I.R.S. Employer Identification No.)
   

200 W. Forsyth St., 7th Floor,

Jacksonville, FL

 32202
(Address of principal executive offices) (Zip Code)

904-396-5733

(Registrant’s telephone number, including area code)

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $.10 par value FRPH NASDAQ 

 

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 by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  [x]    No  [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_] Accelerated  filer [_]
Non-accelerated filer [x]  Smaller reporting company [x]
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.  [_] 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  [_]    No  [x]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 Class   Outstanding at August 11, 2021 
 Common Stock, $.10 par value per share   9,411,028 shares 
       
 

 

 

 

 

FRP HOLDINGS, INC.

FORM 10-Q

QUARTER ENDED JUNE 30, 2021

 

 

 

CONTENTS

Page No.

 

Preliminary Note Regarding Forward-Looking Statements  3
      
  Part I.  Financial Information   
      
Item 1. Financial Statements   
  Consolidated Balance Sheets  4
  Consolidated Statements of Income  5
  Consolidated Statements of Comprehensive Income  6
  Consolidated Statements of Cash Flows  7
  Consolidated Statements of Shareholders’ Equity  8
  Condensed Notes to Consolidated Financial Statements  9
      
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations  20
      
Item 3. Quantitative and Qualitative Disclosures about Market Risks  35
      
Item 4. Controls and Procedures  35
      
  Part II.  Other Information   
      

 

Item 1A.

 Risk Factors  35
      
Item 2. Purchase of Equity Securities by the Issuer  36
      
Item 6. Exhibits  36
      
Signatures    37
      
Exhibit 31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  39
      
Exhibit 32 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  42

 

 

Preliminary Note Regarding Forward-Looking Statements.

 

This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by us, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words or phrases “anticipate,” “estimate,” ”believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions identify forward-looking statements. Such statements reflect management’s current views with respect to financial results related to future events and are based on assumptions and expectations that may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial or otherwise, may differ, perhaps materially, from the results discussed in the forward-looking statements. Risk factors discussed in Item 1A of this Form 10-K and other factors that might cause differences, some of which could be material, include, but are not limited to: the impact of the Covid-19 Pandemic on our operations and financial results; 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., Richmond, Virginia 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; 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; cyber security 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.

 

These forward-looking statements are made as of the date hereof based on management’s current expectations, and the Company does not undertake an obligation to update such statements, whether as a result of new information, future events or otherwise. Additional information regarding these and other risk factors may be found in the Company’s other filings made from time to time with the Securities and Exchange Commission.

 

PART I. FINANCIAL INFORMATION, ITEM 1. FINANCIAL STATEMENTS

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share data)

 

     
  June 30, 2021 December 31, 2020
Assets:    
Real estate investments at cost:        
Land $121,057   91,744 
Buildings and improvements  255,646   141,241 
Projects under construction  11,378   4,879 
     Total investments in properties  388,081   237,864 
Less accumulated depreciation and depletion  41,971   34,724 
     Net investments in properties  346,110   203,140 
         
Real estate held for investment, at cost  9,429   9,151 
Investments in joint ventures  144,938   167,071 
     Net real estate investments  500,477   379,362 
         
Cash and cash equivalents  138,154   73,909 
Cash held in escrow  684   196 
Accounts receivable, net  1,076   923 
Investments available for sale at fair value  32,129   75,609 
Federal and state income taxes receivable  3,681   4,621 
Unrealized rents  445   531 
Deferred costs  4,092   707 
Other assets  514   502 
Total assets $681,252   536,360 
         
Liabilities:        
Secured notes payable $178,334   89,964 
Accounts payable and accrued liabilities  4,976   3,635 
Other liabilities  1,886   1,886 
Deferred revenue  461   542 
Deferred income taxes  65,379   56,106 
Deferred compensation  1,245   1,242 
Tenant security deposits  686   332 
    Total liabilities  252,967   153,707 
         
Commitments and contingencies        
         
Equity:        
Common stock, $.10 par value
25,000,000 shares authorized,
9,411,028 and 9,363,717 shares issued
and outstanding, respectively
  941   936 
Capital in excess of par value  57,360   56,279 
Retained earnings  337,992   309,764 
Accumulated other comprehensive income, net  268   675 
     Total shareholders’ equity  396,561   367,654 
Noncontrolling interest MRP  31,724   14,999 
     Total equity  428,285   382,653 
Total liabilities and shareholders’ equity $681,252   536,360 

 

See accompanying notes.

 

 

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,
  2021 2020 2021 2020
Revenues:        
     Lease revenue $5,861   3,447   9,399   7,045 
     Mining lands lease revenue  2,634   2,402   4,949   4,587 
 Total Revenues  8,495   5,849   14,348   11,632 
                 
Cost of operations:                
     Depreciation, depletion and amortization  4,388   1,500   5,831   2,968 
     Operating expenses  1,394   781   2,235   1,706 
     Property taxes  1,000   646   1,778   1,383 
     Management company indirect  822   692   1,392   1,364 
     Corporate expenses  1,050   1,026   1,829   2,213 
Total cost of operations  8,654   4,645   13,065   9,634 
                 
Total operating profit (loss)  (159)  1,204   1,283   1,998 
                 
Net investment income, including realized gains of $0, $134, $0 and $242, respectively  1,048   2,110   2,423   4,101 
Interest expense  (446)  (45)  (1,371)  (96)
Equity in loss of joint ventures  (1,118)  (1,343)  (2,753)  (1,985)
Gain on remeasurement of investment in real estate partnership  0     0     51,139   0   
Gain on sale of real estate  805   3,589   805   3,597 
                 
Income before income taxes  130   5,515   51,526   7,615 
Provision for (benefit from) income taxes  (151)  1,538   10,370   2,139 
                 
Net income  281   3,977   41,156   5,476 
Gain (loss) attributable to noncontrolling interest  199   (172)  12,701   (291)
Net income attributable to the Company $82   4,149   28,455   5,767 
                 
Earnings per common share:                
 Net income attributable to the Company-                
    Basic $0.01   0.43   3.04   0.59 
    Diluted $0.01   0.43   3.03   0.59 
                 
Number of shares (in thousands) used in computing:                
    -basic earnings per common share  9,353   9,620   9,347   9,712 
    -diluted earnings per common share  9,390   9,649   9,385   9,744 
                 

 

 

 

See accompanying notes.

 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands except per share amounts)

(Unaudited)

 

 

 

 

         
  THREE MONTHS ENDED SIX MONTHS ENDED
  JUNE 30, JUNE 30,
  2021 2020 2021 2020
Net income $281   3,977   41,156   5,476 
Other comprehensive income net of tax:                
  Unrealized gain (loss) on investments sale, net of     income tax effect of $(61), $518, $(151) and $101  (165)  1,397   (407)  271 
                 
Comprehensive income $116   5,374   40,749   5,747 
                 
Less comp. income attributable to Noncontrolling    interest $199   (172)  12,701   (291)
                 
Comprehensive income attributable to the Company $(83)  5,546   28,048   6,038 

 

 

 

See accompanying notes

 

 

 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(In thousands) (Unaudited)

 

  2021 2020
Cash flows from operating activities:        
Net income $41,156   5,476 
 Adjustments to reconcile net income to net cash provided by continuing operating activities:        
 Depreciation, depletion and amortization  5,951   3,084 
 Deferred income taxes  9,273   101 
 Equity in loss of joint ventures  2,753   1,985 
 Gain on remeasurement of invest in real estate partnership  (51,139)  0   
 Gain on sale of equipment and property  (835)  (3,611)
 Stock-based compensation  854   1,171 
 Realized gain on available for sale investments  0     (242)
 Net changes in operating assets and liabilities:        
  Accounts receivable  554   (777)
  Deferred costs and other assets  280   28 
  Accounts payable and accrued liabilities  819   (439)
  Income taxes payable and receivable  940   2,147 
  Other long-term liabilities  357   187 
 Net cash provided by operating activities  10,963   9,110 
         
Cash flows from investing activities:        
 Investments in properties  (6,845)  (1,167)
 Investments in joint ventures  (4,768)  (2,107)
 Return of capital from investments in joint ventures  17,119   792 
 Purchases of investments available for sale  0     (24,748)
 Proceeds from sales of investments available for sale  42,502   32,703 
 Cash at consolidation of real estate partnership  3,704   0   
 Proceeds from the sale of assets  878   5,867 
 Cash held in escrow  (152)  (3,553)
Net cash provided by investing activities  52,438   7,787 
         
Cash flows from financing activities:        
 Proceeds from long-term debt  92,070   0   
 Repayment of long-term debt  (90,000)  0   
 Debt issue costs  (704)  0   
 Distribution to noncontrolling interest  (527)  (408)
 Repurchase of company stock  (264)  (12,354)
 Exercise of employee stock options  269   0   
Net cash provided by (used in) financing activities  844   (12,762)
         
Net increase in cash and cash equivalents  64,245   4,135 
Cash and cash equivalents at beginning of year  73,909   26,607 
Cash and cash equivalents at end of the period $138,154   30,742 

 

 

 

See accompanying notes.

 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(In thousands, except share amounts)

 

                 
          Accumulated Total    
      Capital in   Other Comp- Share Non-  
  Common Stock Excess of Retained rehensive holders’ Controlling Total
  Shares Amount Par Value Earnings Income, net Equity Interest Equity
                                 
                                 
Balance at March 31, 2021  9,387,823  $939  $56,474  $337,910  $433  $395,756  $31,879  $427,635 
                                 
 Stock option grant compensation  —     0     18   0     0     18   0     18 
 Restricted stock compensation  —     0     134   0     0     134   0     134 
 Shares granted to Directors  9,105   1   499   0     0     500   0     500 
 Exercise of stock options  14,100   1   235   0     0     236   0     236 
 Contributions from partners  —     0     0     0     0     0     3   3 
 Net income  —     0     0     82   0     82   199   281 
 Distributions to partners  —     0     0     0     0     0     (357)  (357)
 Unrealized loss on investment, net  —     0     0     0     (165)  (165)  0     (165)
Shares granted to employees, value                                
Shares granted to employees                                
Restricted stock award                                
Restricted stock award, shares                                
Shares purchased and cancelled                                
Shares purchased and calncelled, shares                                
Balance at June 30, 2021  9,411,028  $941  $57,360  $337,992  $268  $396,561  $31,724  $428,285 
                                 
Balance at December 31, 2020  9,363,717  $936  $56,279  $309,764  $675  $367,654  $14,999  $382,653 
                                 
 Stock option grant compensation  —     0     35   0     0     35   0     35 
 Restricted stock compensation  —     0     269   0     0     269   0     269 
 Shares granted to Employees  1,098   0     50   0     0     50   0     50 
 Restricted stock award  27,778   3   (3)  0     0     0     0     0   
 Shares granted to Directors  9,105   1   499   0     0     500   0     500 
 Exercise of stock options  15,334   1   268   0     0     269   0     269 
 Shares purchased and cancelled  (6,004)  0     (37)  (227)  0     (264)  0     (264)
 Contributions from partners  —     0     0     0     0     0     4,551   4,551 
 Net income  —     0     0     28,455   0     28,455   12,701   41,156 
 Distributions to partners

 

 

 —     0     0     0     0     0     (527)  (527)
 Unrealized loss on investment, net  —     0     0     0     (407)  (407)  0     (407)
Balance at June 30, 2021  9,411,028  $941  $57,360  $337,992  $268  $396,561  $31,724  $428,285 
                                 
Balance at March 31, 2020  9,766,906  $977  $57,818  $313,968  $(203) $372,560  $16,332  $388,892 
                                 
 Stock option grant compensation  —     0     23   0     0     23   0     23 
 Restricted stock compensation  —     0     47   0     0     47   0     47 
 Shares granted to Directors  12,050   1   499   0     0     500   0     500 
 Shares purchased and cancelled  (215,812)  (22)  (1,280)  (7,631)  0     (8,933)  0     (8,933)
 Net income  —     0     0     4,149   0     4,149   (172)  3,977 
 Distributions to partners  —     0     0     0     0     0     (102)  (102)
 Unrealized gain on investment, net  —     0     0     0     1,397   1,397   0     1,397 
Balance at June 30, 2020  9,563,144  $956  $57,107  $310,486  $1,194  $369,743  $16,058  $385,801 
                                 
Balance at December 31, 2019  9,817,429  $982  $57,705  $315,278  $923  $374,888  $16,757  $391,645 
                                 
 Stock option grant compensation  —     0     47   0     0     47   0     47 
 Restricted stock compensation  —     0     94   0     0     94   0     94 
 Shares granted to Employees  11,448   1   529   0     0     530   0     530 
 Shares granted to Directors  12,050   1   499   0     0     500   0     500 
 Restricted stock award  20,520   2   (2)  0     0     0     0     0   
 Shares purchased and cancelled  (298,303)  (30)  (1,765)  (10,559)  0     (12,354)  0     (12,354)
 Net income  —     0     0     5,767   0     5,767   (291)  5,476 
 Distributions to partners  —     0     0     0     0     0     (408)  (408)
 Unrealized gain on investment, net  —     0     0     0     271   271   0     271 
Balance at June 30, 2020  9,563,144  $956  $57,107  $310,486  $1,194  $369,743  $16,058  $385,801 
                                 
                                 
                                 
 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

(Unaudited)

 

 

(1) Description of Business and Basis of Presentation.

 

FRP Holdings, Inc. is a holding company engaged in various real estate businesses, namely (i) mining royalty land ownership and leasing, (ii) land acquisition, entitlement and development primarily for future warehouse/office or residential building construction, (iii) ownership, leasing, and management of residential apartment buildings, and (iv) warehouse/office building ownership, leasing and management.

 

The accompanying consolidated financial statements include the accounts of FRP Holdings, Inc. (the “Company” or “FRP”) inclusive of our operating real estate subsidiaries, FRP Development Corp. (“Development”) and Florida Rock Properties, Inc. (”Properties”), Riverfront Investment Partners I, LLC, and commencing March 31, 2021 also Riverfront Investment Partners II, LLC (See Note 12). Our investment in the Brooksville joint venture, BC FRP Realty joint venture, Riverfront Investment Partners II, LLC prior to March 31, 2021, Bryant Street Partnerships, 1800 Half Street and Greenville/Woodfield are accounted for under the equity method of accounting (See Note 11). Our ownership of Riverfront Investment Partners I, LLC and Riverfront Investment Partners II, LLC includes a non-controlling interest representing the ownership of our partner. The Company uses the cost method to account for its investment in DST Hickory Creek because it does not have significant influence over operating and financial policies.

 

These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (primarily consisting of normal recurring accruals) considered necessary for a fair statement of the results for the interim periods have been included. Operating results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The accompanying consolidated financial statements and the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the Company's consolidated financial statements and related notes included in the Company’s Form 10-K for the year ended December 31, 2020.

 

 

(2) Recently Issued Accounting Standards.

 

None.

 

 

(3) Business Segments.

 

The Company is reporting its financial performance based on 4 reportable segments, Asset Management, Mining Royalty Lands, Development and Stabilized Joint Venture, as described below.

 

The Asset Management segment owns, leases and manages commercial properties. The flex/office warehouses in the Asset Management Segment were sold and reclassified to discontinued operations leaving only 2 commercial properties and 1 recent industrial acquisition, Cranberry Run, which we purchased in 2019. In July 2020 we sold our property located at 1801 62nd Street, our most recent spec building in Hollander Business Park, which had joined Asset Management April 1, 2019.

 

Our Mining Royalty Lands segment owns several properties comprising approximately 15,000 acres currently under lease for mining rents or royalties (this does not include the 4,280 acres owned in our Brooksville joint venture with Vulcan Materials).  Other than one location in Virginia, all of these properties are located in Florida and Georgia.

 

 

Through our Development segment, we own and are continuously assessing for their highest and best use for several parcels of land that are in various stages of development.  Our overall strategy in this segment is to convert all of our non-income producing lands into income production through (i) an orderly process of constructing new buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will form joint ventures on new developments of land not previously owned by the Company.

 

The Stabilized Joint Venture segment includes joint ventures which own, lease and manage buildings that have met our initial lease up criteria. Two of our two joint ventures in the segment, Riverfront Investment Partners I, LLC (“Dock 79”) and Riverfront Investment Partners II, LLC (“The Maren”) are consolidated. The Maren was consolidated effective March 31, 2021 and prior periods are still reflected under the equity method. The ownership of Dock 79 and The Maren (commencing March 31, 2021) attributable to our partner MidAtlantic Realty Partners, LLC (MRP) is reflected on our consolidated balance sheet as a noncontrolling interest. Such noncontrolling interests are reported on the Consolidated Balance Sheets within equity but separately from shareholders' equity. On the Consolidated Statements of Income, all of the revenues and expenses from Dock 79 are reported in net income, including both the amounts attributable to the Company and the noncontrolling interest. The Maren is reflected in Equity in loss of joint ventures on the Consolidated Statements of Income but will be reflected like Dock 79 for periods commencing April 1, 2021. The amounts of consolidated net income attributable to the noncontrolling interest is clearly identified on the accompanying Consolidated Statements of Income.

 

Operating results and certain other financial data for the Company’s business segments are as follows (in thousands):

          
   Three Months ended Six Months ended
   June 30, June 30,
   2021 2020 2021 2020
 Revenues:        

Revenues 

 Asset management $588   716   1,300   1,368 
Revenues Mining royalty lands  2,634   2,402   4,949   4,587 
Revenues Development  451   279   768   572 
Revenues Stabilized Joint Venture  4,822   2,452   7,331   5,105 
Revenues   8,495   5,849   14,348   11,632 
                  
 Operating profit (loss):                
  Before corporate expenses:                
Operating profit before corporate expenses   Asset management $128   323   359   500 
Operating profit before corporate expenses   Mining royalty lands  2,400   2,194   4,494   4,195 
Operating profit before corporate expenses   Development  (411)  (703)  (797)  (1,477)
Operating profit before corporate expenses   Stabilized Joint Venture  (1,226)  416   (944)  993 
Operating profit before corporate expenses    Operating profit before corporate expenses  891   2,230   3,112   4,211 
  Corporate expenses:                
Corporate expenses  Allocated to asset management  (288)  (265)  (502)  (573)
Corporate expenses  Allocated to mining royalty lands  (108)  (84)  (189)  (181)
Corporate expenses  Allocated to development  (522)  (617)  (941)  (1,329)
Corporate expenses  Allocated to stabilized joint venture  (132)  (60)  (197)  (130)
Corporate expenses    Total corporate expenses  (1,050)  (1,026)  (1,829)  (2,213)
 Operating profit  $(159)  1,204   1,283   1,998 
                  
Interest expenseInterest expense $446   45   1,371   96 
                  
 Depreciation, depletion and amortization:                
Depreciation, depletion and amortization Asset management $134   200   271   392 
Depreciation, depletion and amortization Mining royalty lands  58   62   123   100 
Depreciation, depletion and amortization Development  53   53   106   107 
Depreciation, depletion and amortization Stabilized Joint Venture  4,143   1,185   5,331   2,369 
Depreciation, depletion and amortization  $4,388   1,500   5,831   2,968 
 Capital expenditures:                
Capital expenditures Asset management $139   341   218   554 
Capital expenditures Mining royalty lands  0     0     0     0   
Capital expenditures Development  2,907   320   6,206   617 
Capital expenditures Stabilized Joint Venture  412   19   421   (4)
Capital expenditures  $3,458   680   6,845   1,167 

 

 

10 
 

 

 

Identifiable net assets

   June 31, December 31,
 Identifiable net assets 2021 2020
      

Assets

Asset management $10,939   11,172 
AssetsMining royalty lands  37,338   37,387 
AssetsDevelopment  180,264   196,212 
AssetsStabilized Joint Venture  270,459   130,472 
Investments available for saleInvestments available for sale at fair value  32,129   75,609 
CashCash items  138,838   74,105 
AssetsUnallocated corporate assets  11,285   11,403 
Assets  $681,252   536,360 

 

(4) Related Party Transactions.

 

The Company is a party to a Transition Services Agreement which resulted from our January 30, 2015 spin-off of Patriot Transportation Holding, Inc. (Patriot). The Transition Services Agreement sets forth the terms on which Patriot will provide to FRP certain services that were shared prior to the Spin-off, including the services of certain shared executive officers. The boards of the respective companies amended and extended this agreement for one year effective April 1, 2021.

 

The consolidated statements of income reflect charges and/or allocation from Patriot for these services of $256,000 and $290,000 for the three months ended June 30, 2021 and 2020 and $512,000 and $580,000 for the six months ended June 30, 2021 and 2020, respectively. These charges are reflected as part of corporate expenses.

 

To determine these allocations between FRP and Patriot as set forth in the Transition Services Agreement, we employ an allocation method to allocate said expenses and thus we believe that the allocations to FRP are a reasonable approximation of the costs related to FRP’s operations, but any such related-party transactions cannot be presumed to be carried out on an arm’s-length basis.

 

 

(5) Long-Term Debt.

 

The Company’s Outstanding Debt, net of unamortized debt issuance costs, consisted of the following (in thousands):

  June 30, December 31,
  2021 2020
Fixed rate mortgage loans, 3.03% interest only, matures 4/1/2033 $178,334   89,964 
Credit agreement  0     0   
Long-term debt  $178,334   89,964 

 

On February 6, 2019, the Company entered into a First Amendment to the 2015 Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, N.A. (“Wells Fargo”), effective February 6, 2019. The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo dated January 30, 2015. The Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $20 million. The interest rate under the Credit Agreement will be a maximum of 1.50% over Daily 1-Month LIBOR, which may be reduced quarterly to 1.25% or 1.0% over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated debt to consolidated total capital, as defined which excludes FRP Riverfront. A commitment fee of 0.25% per annum is

11 
 

payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20% or 0.15% if the Company meets a specified ratio of consolidated total debt to consolidated total capital. The Credit Agreement contains certain conditions, affirmative financial covenants and negative covenants. As of June 30, 2021, there was 0 debt outstanding on this revolver, $506,000 outstanding under letters of credit and $19,494,000 available for borrowing. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development. Most of the letters of credit are irrevocable for a period of one year and typically are automatically extended for additional one-year periods. The letter of credit fee is 1% and applicable interest rate would have been 1.10025% on June 30, 2021. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of June 30, 2021, these covenants would have limited our ability to pay dividends to a maximum of $228 million combined.

 

On November 17, 2017, Dock 79 borrowed a principal sum of $90,000,000 pursuant to a Loan Agreement and Deed of Trust Note entered into with EagleBank. The loan was secured by the Dock 79 real property and improvements, bore a fixed interest rate of 4.125% per annum and had a term of 120 months. The loan was paid in full on March 19, 2021. A prepayment penalty of $900,000 was recorded into interest expense in the quarter ending March 31, 2021.

 

Effective March 31, 2021 the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (“The Maren”) which was previously accounted for under the equity method. As such the full amount of our mortgage loan was recorded in the consolidated financial statements.

 

On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033. Either loan may be prepaid subsequent to April 1, 2024 subject to yield maintenance premiums. Either loan may be transferred to a qualified buyer as part of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee.

 

Debt cost amortization of $38,000 and $76,000 was recorded during the three and six months ended June 30, 2021, respectively. During the three months ended June 30, 2021 and June 30, 2020 the Company capitalized interest costs of $966,000 and $940,000, respectively. During the six months ended June 30, 2021 and June 30, 2020 the Company capitalized interest costs of $1,894,000 and $1,875,000, respectively.

 

The Company was in compliance with all debt covenants as of June 30, 2021.

 

 

(6) Earnings per Share.

 

The following details the computations of the Basic and Diluted Earnings Per Common Share (in thousands, except per share amounts):

         
  Three Months ended Six Months ended
  June 30, June 30,
  2021 2020 2021 2020
Weighted average common shares outstanding   during the period – shares used for basic   earnings per common share  9,353   9,620   9,347   9,712 
                 
Common shares issuable under share based payment plans which are potentially dilutive  37   29   38   32 
                 
Common shares used for diluted earnings per common share  9,390   9,649   9,385   9,744 
                 
Net income attributable to the Company $82   4,149   28,455   5,767 
                 
Earnings per common share:                
 -basic $0.01   0.43   3.04   0.59 
 -diluted $0.01   0.43   3.03   0.59 

 

12 
 

 

 

For the three and six months ended June 30, 2021, 6,680 and 19,950 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For the three and six months ended June 30, 2020, 74,065 and 53,545 shares attributable to outstanding stock options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

 

During the first six months of 2021 the Company repurchased 6,004 shares at an average cost of $43.95. During the first six months of 2020 the Company repurchased 298,303 shares at an average cost of $41.41.

 

(7) Stock-Based Compensation Plans.

 

The Company has 2 Stock Option Plans (the 2006 Stock Incentive Plan and the 2016 Equity Incentive Option Plan) under which options for shares of common stock were granted to directors, officers and key employees. The 2016 plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, or stock awards. The options awarded under the plans have similar characteristics. All stock options are non-qualified and expire ten years from the date of grant. Stock based compensation awarded to directors, officers and employees are exercisable immediately or become exercisable in cumulative installments of 20% or 25% at the end of each year following the date of grant. When stock options are exercised, the Company issues new shares after receipt of exercise proceeds and taxes due, if any, from the grantee.

 

The Company utilizes the Black-Scholes valuation model for estimating fair value of stock compensation for options awarded to officers and employees. Each grant is evaluated based upon assumptions at the time of grant. The assumptions were 0 dividend yield, expected volatility between 29% and 41%, risk-free interest rate of 1.0% to 2.9% and expected life of 3.0 to 7.0 years.

 

The dividend yield of zero is based on the fact that the Company does not pay cash dividends and has no present intention to pay cash dividends. Expected volatility is estimated based on the Company’s historical experience over a period equivalent to the expected life in years. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate at the date of grant with a term consistent with the expected life of the options granted. The expected life calculation is based on the observed and expected time to exercise options by the employees.

 

In January 2021, 8,896 shares of restricted stock were granted to employees that will vest over the next four years. In January 2021, 18,882 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. In March 2020, 20,520 shares of restricted stock were granted to employees as part of a long-term incentive plan that will vest over the next five years. The number of common shares available for future issuance was 397,713 at June 30, 2021. In March 2021 and March 2020, 1,098 and 11,448 shares of stock, respectively, were granted to employees rather than stock options as in prior years.

 

The Company recorded the following Stock compensation expense in its consolidated statements of income (in thousands):

                 
  Three Months ended Six Months ended
  June 30, June 30,
  2021 2020 2021 2020
Stock option grants $18   23   35   47 
Restricted stock awards  134   47   269   94 
Employee stock grant  0     0     50   530 
Annual director stock award  500   500   500   500 
Stock-based compensation $652   570   854   1,171 

 

13 
 

 

 

A Summary of changes in outstanding options is presented below (in thousands, except share and per share amounts):

 

    Weighted Weighted Weighted
  Number Average Average Average
  Of Exercise Remaining Grant Date
Options Shares Price Term (yrs) Fair Value(000's)
         
Outstanding at December 31, 2020  120,089  $35.33  5.3 $1,531 
    Exercised  (15,334 $17.54    $(115)
Outstanding at June 30, 2021  104,755  $37.93  5.4 $1,416 
               
Exercisable at June 30, 2021  92,407  $36.87  5.1 $1,212 
               
Vested during six months ended              
  June 30, 2021  0          $0   

 

The aggregate intrinsic value of exercisable in-the-money options was $1,738,000 and the aggregate intrinsic value of outstanding in-the-money options was $1,859,000 based on the market closing price of $55.68 on June 30, 2021 less exercise prices.

 

The unrecognized compensation cost of options granted to FRP employees but not yet vested as of June 30, 2021 was $163,000, which is expected to be recognized over a weighted-average period of 2.4 years.

 

Gains of $602,000 were realized by option holders during the six months ended June 30, 2021.

 

A Summary of changes in restricted stock awards is presented below (in thousands, except share and per share amounts):

    Weighted Weighted Weighted
  Number Average Average Average
  Of Exercise Remaining Grant Date
Restricted stock Shares Price Term (yrs) Fair Value(000's)
         
Non-vested at December 31, 2020  20,520  $46.30  3.4 $950 
    Time-based awards granted  8,896   45.55     405 
    Performance-based awards granted  18,882   45.55     860 
Non-vested at June 30, 2021  48,298  $45.87  3.6 $2,215 
               

 

Total compensation cost of restricted stock granted but not yet vested as of June 30, 2021 was $1,696,000 which is expected to be recognized over a weighted-average period of 3.8 years.

 

 

 

(8) Contingent Liabilities.

 

The Company may be involved in litigation on a number of matters and is subject to certain claims which arise in the normal course of business. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage. In the opinion of management, none of these matters are expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

 

The Company is subject to numerous environmental laws and regulations. The Company believes that the ultimate disposition of currently known environmental matters will not have a material effect on its financial position, liquidity,

14 
 

or operations. The Company can give no assurance that previous environmental studies with respect to its properties have revealed all potential environmental contaminants; that any previous owner, occupant or tenant did not create any material environmental condition not known to the Company; that the current environmental condition of the properties will not be affected by tenants and occupants, by the condition of nearby properties, or by unrelated third parties; and that changes in applicable environmental laws and regulations or their interpretation will not result in additional environmental liability to the Company.

 

As of June 30, 2021 there was $506,000 outstanding under letters of credit. The letters of credit were issued to guarantee certain obligations to state agencies related to real estate development.

 

 

(9) Concentrations

 

The mining royalty lands segment has a total of 5 tenants currently leasing mining locations and one lessee that accounted for 26.3% of the Company’s consolidated revenues during the six months ended June 30, 2021 and $403,000 of accounts receivable at June 30, 2021.  The termination of these lessees’ underlying leases could have a material adverse effect on the Company. The Company places its cash and cash equivalents with Wells Fargo Bank and First Horizon Bank.  At times, such amounts may exceed FDIC limits.

 

 

(10) Fair Value Measurements.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. Level 1 means the use of quoted prices in active markets for identical assets or liabilities. Level 2 means the use of values that are derived principally from or corroborated by observable market data. Level 3 means the use of inputs are those that are unobservable and significant to the overall fair value measurement.

 

At June 30, 2021 the Company was invested in 12 corporate bonds with individual maturities over the next 7 months. The unrealized gain on these bonds of $118,000 was recorded as part of comprehensive income and was based on the estimated market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers who clear through NFS and/or other sources (Level 2). The amortized cost of the investments was $32,011,000 and the carrying amount and fair value of such bonds were $32,129,000 as of June 30, 2021.

 

At June 30, 2021 and 2020, the carrying amount reported in the consolidated balance sheets for cash and cash equivalents and revolving credit approximate their fair value based upon the short-term nature of these items.

 

The fair values of the Company’s other mortgage notes payable were estimated based on current rates available to the Company for debt of the same remaining maturities. At June 30, 2021, the carrying amount and fair value of such other long-term debt was $178,334,000 and $175,625,000, respectively. At June 30, 2020, the carrying amount and fair value of such other long-term debt was $88,993,000 and $95,606,000, respectively.

 

 

 

(11) Investments in Joint Ventures.

 

The Company has investments in joint ventures, primarily with other real estate developers. Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The assets of these joint ventures are restricted to use by the joint ventures and their obligations can only be settled by their assets or additional contributions by the partners.

 

The following table summarizes the Company’s Investments in Unconsolidated Joint Ventures (in thousands):

 

15 
 

 

              The 
              Company's 
              Share of  Profit 
   Common  Total  Total Assets of  Profit (Loss)   (Loss) of  the 
  Ownership  Investment  The Partnership  Of the Partnership   Partnership (1) 
                
As of June 30, 2021               
Brooksville Quarry, LLC 50.00% $7,474  14,340  (44) (22)
BC FRP Realty, LLC 50.00% 5,402  22,746  (166) (88)
Riverfront Holdings II, LLC (1)    0  0  (760) (628)
Bryant Street Partnerships (1) 61.36% 59,571  196,646  (2,410) (2,207)
Hyde Park    4  4     
DST Hickory Creek 26.65% 6,000  47,006  (209) 171 
Amber Ridge Loan    11,859  11,859     
1800 Half St. Owner, LLC 61.37% 38,220  66,454  19  25 
Greenville/Woodfield Partnerships 40.00% 16,409  67,661  (10) (4)
   Total    $144,939  426,716    (3,580)   (2,753)
                
              The 
              Company's 
              Share of  Profit 
   Common  Total  Total Assets of  Profit (Loss)   (Loss) of  the 
  Ownership  Investment  The Partnership  Of the Partnership   Partnership (1) 
                
As of December 31, 2020               
Brooksville Quarry, LLC 50.00% $7,499  14,347  (78) (39)
BC FRP Realty, LLC 50.00% 5,184  22,747  (411) (207)
Riverfront Holdings II, LLC 80.00% 23,533  108,538  (4,573) (3,907)
Bryant Street Partnerships (1) 61.36% 60,159  173,814  (836) (2,130)
Hyde Park    591  591     
DST Hickory Creek 26.65% 6,000  47,761  (367) 339 
Amber Ridge Loan    10,026  10,026     
1800 Half St. Owner, LLC 61.37% 37,875  54,275  158  164 
Greenville/Woodfield Partnerships 40.00% 16,204  46,457  182  90 
   Total    $167,071  478,556    (5,925)   (5,690)
                

 

(1)Riverfront Holdings II, LLC was consolidated on March 31, 2021. Bryant Street Partnerships includes $471,000 in 2021 and $1,146,000 in 2020 for the Company’s share of preferred interest and $236,000 in 2021 and $471,000 in 2020 for amortization of guarantee liability related to the Bryant Street loan.

 

The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of June 30, 2021 are summarized in the following two tables (in thousands): Investments in Apartment/Mixed Use as of June 30, 2021

 

            
 As of June 30, 2021 Total
 Riverfront Bryant Street DST Hickory 1800 Half St. Greenville/ Apartment/
 Holdings II, LLC Partnership Creek Partnership Woodfield Mixed Use
            
Investments in real estate, net0   195,806   44,579   56,555   67,337   $364,277 
Cash and cash equivalents 0   579   1,121   7,089   324   9,113 
Unrealized rents & receivables 0   233   935   0   0   1,168 
Deferred costs 0   28   371   2,810   0   3,209 
   Total Assets0   196,646   47,006   66,454   67,661  $377,767 
                       

 

 

Secured notes payable0   103,546   29,314   0   24,748  $157,608 
Other liabilities 0   16,441   179   9,827   3,005   29,452 
Capital - FRP 0   57,759   4,667   37,485   15,963   115,874 
Capital – Third Parties 0   18,900   12,846   19,142   23,945   74,833 
   Total Liabilities and Capital0   196,646   47,006   66,454   67,661  $377,767 

 

 

16 
 

Investments in Joint Ventures as of June 30, 2021

            
 As of June 30, 2021  
 Brooksville BC FRP   Amber Ridge Apartment/ Grand
 Quarry, LLC Realty, LLC Hyde Park Loan Mixed Use Total
            
Investments in real estate, net $14,284   21,754   4   11,859   364,277   $412,178 
Cash and cash equivalents 55   310   0   0   9,113   9,478 
Unrealized rents & receivables 0   444   0   0   1,168   1,612 
Deferred costs 1   238   0   0   3,209   3,448 
   Total Assets $14,340   22,746   4   11,859   377,767  $426,716 
                        
Secured notes payable $0   11,764   0   0   157,608  $169,372 
Other liabilities 68   126   0   0   29,452   29,646 
Capital - FRP 7,474   5,428   4   11,859   115,874   140,639 
Capital - Third Parties 6,798   5,428   0   0   74,833   87,059 
   Total Liabilities and Capital $14,340   22,746   4   11,859   377,767  $426,716 
                        

 

The Company’s capital recorded by the unconsolidated Joint Ventures is $4,300,000 less than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due primarily to capitalized interest.

 

 

The Company’s Investments in Joint Ventures as of December 31, 2020 are summarized in the following two tables (in thousands): Investments in Apartments/Mixed Use as of December 30, 2021

            
 As of December 31, 2020 Total
 Riverfront Bryant Street DST Hickory 1800 Half St. Greenville/ Apartment/
 Holdings II, LLC Partnership Creek Partnership Woodfield Mixed Use
            
Investments in real estate, net105,737   173,560   45,379   37,452   42,668   $404,796 
Cash and cash equivalents 2,626   111   1,202   14,011   3,554   21,504 
Unrealized rents & receivables 13   58   775   2   0   848 
Deferred costs 162   85   405   2,810   235   3,697 
   Total Assets108,538   173,814   47,761   54,275   46,457  $430,845 
                       

 

 

Secured notes payable64,982   72,471   29,291   0   1,776  $168,520 
Other liabilities 4,189   22,952   107   1,953   4,774   33,975 
Capital - FRP 34,667   58,559   4,894   37,466   15,963   151,549 
Capital - Third Parties 4,700   19,832   13,469   14,856   23,944   76,801 
   Total Liabilities and Capital108,538   173,814   47,761   54,275   46,457  $430,845 

 

Investments in Joint Ventures as of December 31, 2020

            
 As of December 31, 2020  
 Brooksville BC FRP   Amber Ridge Apartment/ Grand
 Quarry, LLC Realty, LLC Hyde Park Loan Mixed Use Total
            
Investments in real estate, net. $14,287   22,067   591   10,026   404,796   $451,767 
Cash and cash equivalents 55   90   0   0   21,504   21,649 
Unrealized rents & receivables 0   254   0   0   848   1,102 
Deferred costs 5   336   0   0   3,697   4,038 
   Total Assets $14,347   22,747   591   10,026   430,845  $478,556 
                        
Secured notes payable $0   12,370   0   0   168,520  $180,890 
Other liabilities 28   123   0   0   33,975   34,126 
Capital - FRP 7,499   5,127   591   10,026   151,549   174,792 
Capital - Third Parties 6,820   5,127   0   0   76,801   88,748 
   Total Liabilities and Capital $14,347   22,747   591   10,026   430,845  $478,556 
                        

 

The amount of consolidated retained earnings (accumulated deficit) for these joint ventures was $(6,752,000) and $(8,278,000) as of June 30, 2021 and December 31, 2020 respectively.

 

 

17 
 

 

The income statements of the Bryant Partnerships are as follows (in thousands):Bryant Partnerships income statements

 

     
  Bryant Street Bryant Street
  Partnerships Partnerships
  Total JV Company Share
  Six Months ended Six Months ended
  June 30, June 30,
  2021 2021
Revenues:        
    Rental Revenue $180  $111 
    Revenue – other  77   47 
Total Revenues  257   158 
         
Cost of operations:        
     Depreciation and amortization  776   476 
     Operating expenses  1,117   686 
     Property taxes  119   73 
Total cost of operations  2,012   1,235 
         
Total operating profit  (1,755)  (1,077)
Interest expense  (655)  (1,130)
         
Net loss before tax  (2,410)  (2,207)
         

 

 

 

(12) Consolidation of Riverfront Investment Partners II, LLC. Riverfront Holdings II, LLC.

 

On May 4, 2018 the Company and MRP Realty formed a Joint Venture to develop the second phase only of the four phase master development known as Riverfront on the Anacostia in Washington, D.C. The purpose of the Joint Venture is to develop and own a 250,000-square-foot mixed-use development which supports 264 residential units and 6,937 square feet of retail. The Company contributed land with an agreed to value of $16,300,000 (cost basis of $4.6 million) and $6.2 million of cash to the Joint Venture for an 80% stake in the venture. MRP contributed capital of $5.6 million to the joint venture including development costs paid prior to formation of the joint venture and a $725,000 development fee. The Company further agreed to fund $13.75 million preferred equity financing at 7.5% interest rate all of which was advanced and repaid with interest in March 2021. The Company’s equity interest in the joint venture was previously accounted for under the equity method of accounting as MRP acts as the administrative agent of the joint venture and oversees and controls the day to day operations of the project.

 

In March 2021, Phase II (The Maren) reached stabilization. Stabilization in this case means 90% of the individual apartments have been leased and are occupied by third party tenants. Upon reaching stabilization, the Company has, for a period of one year, the exclusive right to (i) cause the joint venture to sell the property or (ii) cause the Company’s and MRP’s percentage interests in the joint venture to be adjusted so as to take into account the contractual payouts assuming a sale at the value of the development at the time of this “Conversion election”.

 

Reaching stabilization results in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the Company became the primary beneficiary. As such, beginning March 31, 2021, the Company consolidated the assets (at fair value), liabilities and operating results of the joint venture. This consolidation resulted in a gain on remeasurement of investment in real estate partnership of $51,139,000 of which $13,965,000 was attributed to the noncontrolling interest. In accordance with the terms of the Joint Venture agreements, the Company used the fair value amount at date of conversion and calculated an adjusted ownership under the Conversion election. As such for financial reporting purposes effective March 31, 2021 the Company ownership is based upon this substantive profit sharing arrangement and is 70.41% on a prospective basis as agreed to by FRP and MRP.

 

 

18 
 

Maren consolidation at stabilization

         
  As of March 31, 2021
  Riverfront Gain on Remeasure-    
  Holdings II, LLC Ment  Revised 
         
Land $6,472  $22,858    $29,330 
Building and improvements, net  87,269   23,531     110,800 
Project under construction  258   0       258 
Value of leases in place     4,750     4,750 
Cash  3,704   0       3,704 
Cash held in escrow  336   0       336 
Accounts receivable  707   0       707 
Prepaid expenses  197   0       197 
   Total Assets $98,943  $51,139    $150,082 
               
Long-term Debt $88,000  $0      $88,000 
Amortizable debt costs  (1,072  0       (1,072
Other liabilities  441   0       441 
Equity – FRP  7,026   37,174     44,200 
Equity - MRP  4,548   13,965     18,513 
   Total Liabilities and Capital $98,943  $51,139    $150,082 
                 

 

 

 

 

 

 

 

19 
 

 

 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

 

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our annual report on Form 10-K. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including the risks and uncertainties described in “Forward-Looking Statements” below and “Risk Factors” on page 5 of our annual report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this quarterly report on Form 10-Q, unless required by law.

 

The following discussion includes a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission to supplement the financial results as reported in accordance with GAAP. The non-GAAP financial measure discussed is net operating income (NOI). The Company uses this metric 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. Refer to “Non-GAAP Financial Measure” below in this quarterly report for a more detailed discussion, including reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure.

 

 

Business Overview - FRP Holdings, Inc. is a real estate development, asset management and operating company businesses. Our properties are located in the Mid-Atlantic and southeastern United States and consist of:

 

Lands leased to mining companies, some of which will have second lives as development properties;

 

Residential apartments in Washington, D.C.;

 

Warehouse or office properties in the Mid-Atlantic states either existing or under development;

 

Mixed use properties under development in Washington, D.C. or Greenville, South Carolina; and

 

Properties held for sale.

 

We believe our present capital structure, liquidity and land provide us with years of opportunities to increase recurring revenue and long-term value for our shareholders. We intend to focus on our core business activity of real estate development, asset management and operations. We are developing a broad range of asset types that we believe will provide acceptable rates of return, grow recurring revenues and support future business. Capital commitments will be funded with cash proceeds from completed projects, existing cash, owned-land, partner capital and financing arrangements. We do not anticipate immediate benefits from investments. Timing of projects may be subject to delays caused by factors beyond our control.

 

 

Reportable Segments

 

We conduct primarily all of our business in the following four reportable segments: (1) asset management (2) mining royalty lands (3) development and (4) stabilized joint ventures. For more information regarding our reportable segments, see Note 3. Business Segments of our condensed consolidated financial statements included in this quarterly report.

20 
 

 

 

Asset Management Segment.

 

The Asset Management segment owns, leases and manages commercial properties.  These assets create revenue and cash flows through tenant rental payments, lease management fees and reimbursements for building operating costs. The major cash outlays incurred in this segment are for operating expenses, real estate taxes, building repairs, lease commissions and other lease closing costs, construction of tenant improvements, capital to acquire existing operating buildings and closing costs related thereto and personnel costs of our property management team.

 

As of June 30, 2021, the Asset Management Segment owned three commercial properties in fee simple as follows:

 

1) 34 Loveton Circle in suburban Baltimore County, Maryland consists of one office building totaling 33,708 square feet which is 95.1% occupied (16% of the space is occupied by the Company for use as our Baltimore headquarters). The property is subject to commercial leases with various tenants.

2) 155 E. 21st Street in Duval County, Florida was an office building property that remains under lease through March 2026. We permitted the tenant to demolish all structures on the property during 2018.

3) Cranberry Run Business Park in Hartford County, Maryland consists of five office buildings totaling 268,010 square feet which are 59.7% occupied and 77.6% leased. The property is subject to commercial leases with various tenants.

 

Management focuses on several factors to measure our success on a comparative basis in this segment. The major factors we focus on are (1) net operating income growth, (2) growth in occupancy, (3) average annual occupancy rate (defined as the occupied square feet at the end of each month during a fiscal year divided by the number of months to date in that fiscal year as a percentage of the average number of square feet in the portfolio over that same time period), (4) tenant retention success rate (as a percentage of total square feet to be renewed), (5) building and refurbishing assets to meet Class A and Class B institutional grade classifications, and (6) reducing complexities and deferred capital expenditures to maximize sale price.

 

 

Mining Royalty Lands Segment.

 

Our Mining Royalty Lands segment owns several properties comprising approximately 15,000 acres currently under lease for mining rents or royalties (excluding the 4,280 acres owned by our Brooksville joint venture with Vulcan Materials).  Other than one location in Virginia, all of these properties are located in Florida and Georgia.  The typical lease in this segment requires the tenant to pay us a royalty based on the number of tons of mined materials sold from our property during a given fiscal year multiplied by a percentage of the average annual sales price per ton sold. As a result of this royalty payment structure, we do not bear the cost risks associated with the mining operations, however, we are subject to the cyclical nature of the construction markets in these states as both volumes and prices tend to fluctuate through those cycles. In certain locations, typically where the reserves on our property have been depleted but the tenant still has a need for the leased land, we collect a minimum annual rental amount. We believe strongly in the potential for future growth in construction in Florida, Georgia, and Virginia which would positively benefit our profitability in this segment.  Our mining properties had estimated remaining reserves of 506 million tons as of December 31, 2020 after a total of 8.5 million tons were consumed in 2020.

 

The major expenses in this segment are comprised of collection and accounting for royalties, management’s oversight of the mining leases, land entitlement for post-mining uses and property taxes at our non-leased locations and at our Grandin location which, unlike our other leased mining locations, are not entirely paid by the tenant.  As such, our costs in this business are very low as a percentage of revenue, are relatively stable and are not affected by increases in production at our locations. Our current mining tenants include Vulcan Materials, Martin Marietta, Cemex, Argos and The Concrete Company. 

 

Additionally, these locations provide us with opportunities for valuable “second lives” for these assets through proper land planning and entitlement.

 

21 
 

 

 

Significant “2nd life” Mining Lands: 

 

LocationAcreageStatus
Brooksville, Fl4,280 +/-Development of Regional of Impact and County Land Use and Master Zoning in place for 5,800 residential unit, mixed-use development
Ft. Myers, FL1,907 +/-Approval in place for 105, 1 acre, waterfront residential lots after mining completed.
Total6,187 +/- 

 

 

Development Segment.

 

Through our Development segment, we own and are continuously monitoring for their “highest and best use” several parcels of land that are in various stages of development.  Our overall strategy in this segment is to convert all our non-income producing lands into income production through (i) an orderly process of constructing new commercial and residential buildings for us to own and operate or (ii) a sale to, or joint venture with, third parties. Additionally, our Development segment will purchase or form joint ventures on new developments of land not previously owned by the Company.

 

Revenues in this segment are generated predominately from land sales and interim property rents. The significant cash outlays incurred in this segment are for land acquisition costs, entitlement costs, property taxes, design and permitting, the personnel costs of our in-house management team and horizontal and vertical construction costs.

 

Development Segment – Warehouse/Office Land.

 

At June 30, 2021 this segment owned the following future development parcels:

1)25 acres of horizontally developed land capable of supporting 247,995 square feet of warehouse, office, and flex buildings at Hollander 95 Business Park in Baltimore City, Maryland.
2)55 acres of land that will be capable of supporting over 625,000 square feet of industrial product located at 1001 Old Philadelphia Road in Aberdeen, Maryland.

 

We also have three properties that were either spun-off to us from Florida Rock Industries in 1986 or acquired by us from unrelated third parties. These properties, as a result of our “highest and best use” studies, are being prepared for income generation through sale or joint venture with third parties, and in certain cases we are leasing these properties on an interim basis for an income stream while we wait for the development market to mature.

 

Development Segment - Significant Investment Lands Inventory:

 

LocationApprox. AcreageStatus

 

NBV

Riverfront on the Anacostia Phases III-IV2.5Conceptual design program ongoing.  $6,125,000
Hampstead Trade Center, MD73Residential zoning applied for in preparation for sale$9,415,000
Square 664E, on the Anacostia River in DC2Under lease to Vulcan Materials as a concrete batch plant through 2026$7,760,000
Total77.5 $23,300,000

 

 

Development Segment - Investments in Joint Ventures

 

The third leg of our Development Segment consists of investments in joint ventures for properties in development.

22 
 

The Company has investments in joint ventures, primarily with other real estate developers which are summarized below:

 

PropertyJV PartnerStatus

 

% Ownership

Brooksville Quarry, LLC near Brooksville, FloridaVulcan Materials CompanyFuture planned residential development of 3,500 acres which are currently subject to mining lease50%
BC FRP Realty, LLC for 35 acres in MarylandSt John PropertiesDevelopment of 329,000 square feet multi-building business park in progress50%
Bryant Street Partnerships for 5 acres of land in Washington, D.C.MRP RealtyMixed-use development with 487 residential units and 85,681 square feet of retail partially completed61.36%
Hyde Park residential development in Essexshire, MD Property sold, $3.5 million investment in exchange for an interest rate of 10% and a preferred return of 20%Financing
Amber Ridge residential development in Prince George’s County, Maryland $18.5 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from saleFinancing
1800 Half Street property in Buzzard Point area of Washington, D.C.MRP RealtyConstruction of ten-story structure with 344 apartments and 11,246 square feet of ground floor retail underway61.37%
.408 Jackson property in Greenville, SCWoodfield DevelopmentConstruction of mixed-use project with 227 multifamily units and 4,700 square feet of retail space began in May 202040%
Riverside property 1430 Hampton Avenue, Greenville, SCWoodfield DevelopmentConstruction of 200 unit apartment project began in February 202040%

 

 

 

Joint ventures where FRP is not the primary beneficiary are reflected in the line “Investment in joint ventures” on the balance sheet and “Equity in loss of joint ventures” on the income statement. The following table summarizes the Company’s investments in unconsolidated joint ventures (in thousands):

 

              The 
              Company's 
              Share of  Profit 
   Common  Total  Total Assets of  Profit (Loss)   (Loss) of  the 
  Ownership  Investment  The Partnership  Of the Partnership   Partnership (1) 
                
As of June 30, 2021               
Brooksville Quarry, LLC 50.00% $7,474  14,340  (44) (22)
BC FRP Realty, LLC 50.00% 5,402  22,746  (166) (88)
RiverFront Holdings II, LLC (1)        (760) (628)
Bryant Street Partnerships 61.36% 59,571  196,646  (2,410) (2,207)
Hyde Park    4  4  —   —  
DST Hickory Creek 26.65% 6,000  47,006  (209) 171 
Amber Ridge Loan    11,859  11,859  —   —  
1800 Half St. Owner, LLC 61.37% 38,220  66,454  19  25 
Greenville/Woodfield Partnerships 40.00% 16,409  67,661  (10) (4)
   Total    $144,939  426,716    (3,580)   (2,753)
                

(1) Riverfront Holdings II, LLC was consolidated on March 31, 2021, and reflected in Stabilized Joint Ventures.

23 
 

 

 

The major classes of assets, liabilities and equity of the Company’s Investments in Joint Ventures as of June 30, 2021, are summarized in the following two tables (in thousands):

 

 As of June 30, 2021 Total
 Riverfront Bryant Street DST Hickory 1800 Half St. Greenville/ Apartment/
 Holdings II, LLC Partnership Creek Partnership Woodfield Mixed Use
            
Investments in real estate, net0   195,806   44,579   56,555   67,337   $364,277 
Cash and cash equivalents 0   579   1,121   7,089   324   9,113 
Unrealized rents & receivables 0   233   935   0   0   1,168 
Deferred costs 0   28   371   2,810   0   3,209 
   Total Assets0   196,646   47,006   66,454   67,661  $377,767 
                       

 

 

Secured notes payable0   103,546   29,314   0   24,748  $157,608 
Other liabilities 0   16,441   179   9,827   3,005   29,452 
Capital - FRP 0   57,759   4,667   37,485   15,963   115,874 
Capital – Third Parties 0   18,900   12,846   19,142   23,945   74,833 
   Total Liabilities and Capital0   196,646   47,006   66,454   67,661  $377,767 

 

 

 As of June 30, 2021  
 Brooksville BC FRP   Amber Ridge Apartment/ Grand
 Quarry, LLC Realty, LLC Hyde Park Loan Mixed Use Total
            
Investments in real estate, net. $14,284   21,754   4   11,859   364,277   $412,178 
Cash and cash equivalents 55   310   0   0   9,113   9,478 
Unrealized rents & receivables 0   444   0   0   1,168   1,612 
Deferred costs 1   238   0   0   3,209   3,448 
   Total Assets $14,340   22,746   4   11,859   377,767  $426,716 
                        
Secured notes payable $0   11,764   0   0   157,608  $169,372 
Other liabilities 68   126   0   0   29,452   29,646 
Capital - FRP 7,474   5,428   4   11,859   115,874   140,639 
Capital - Third Parties 6,798   5,428   0   0   74,833   87,059 
   Total Liabilities and Capital $14,340   22,746   4   11,859   377,767  $426,716 
                        

 

Stabilized Joint Venture Segment.

 

Currently the segment includes three stabilized joint ventures which own, lease and manage buildings. These assets create revenue and cash flows through tenant rental payments, and reimbursements for building operating costs. The major cash outlays incurred in this segment are for property taxes, full service maintenance, property management, utilities and marketing. The three stabilized joint venture properties are as follows:

 

Property and OccupancyJV PartnerMethod of Accounting

 

% Ownership

Dock 79 apartments Washington, D.C.

305 apartment units and 18,000 square feet of retail

MRP RealtyConsolidated66%
The Maren apartments Washington, D.C. 264 residential units and 6,937 square feet of retailMRP RealtyConsolidated as of March 31, 202170.41%
DST Hickory Creek 294 apartment units in Henrico County, MDCapital SquareCost Method26.6%

 

24 
 

Second Quarter Operational Highlights

  • Highest mining royalty revenue total in any second quarter in segment’s history
  • Dock 79 residential occupancy above 94% for third straight quarter—first time that has happened since the fourth quarter of 2018

 

Comparative Results of Operations for the Three months ended June 30, 2021 and 2020

 

Consolidated Results

 

(dollars in thousands)  Three Months Ended June 30,
  2021 2020 Change %
Revenues:        
  Lease Revenue $5,861  $3,447  $2,414   70.0%
  Mining lands lease revenue  2,634   2,402   232   9.7%
 Total Revenues  8,495   5,849   2,646   45.2%
                 
Cost of operations:                
  Depreciation/Depletion/Amortization  4,388   1,500   2,888   192.5%
  Operating Expenses  1,394   781   613   78.5%
  Property Taxes  1,000   646   354   54.8%
  Management company indirect  822   692   130   18.8%
  Corporate Expense  1,050   1,026   24   2.3%
Total cost of operations  8,654   4,645   4,009   86.3%
                 
Total operating profit (loss)  (159)  1,204   (1,363)  -113.2%
                 
Net investment income, including realized gains                
 of $0 and $134  1,048   2,110   (1,062)  -50.3%
Interest Expense  (446)  (45)  (401)  891.1%
Equity in loss of joint ventures  (1,118)  (1,343)  225   -16.8%
Gain on sale of real estate  805   3,589   (2,784)  -77.6%
Income before income taxes  130   5,515   (5,385)  -97.6%
Provision for (benefit from) income taxes  (151)  1,538   (1,689)  -109.8%
                 
Net income  281   3,977   (3,696)  -92.9%
Gain (loss) attributable to noncontrolling interest  199   (172)  371   -215.7%
Net income attributable to the Company $82  $4,149  $(4,067)  -98.0%
                 
                 

 

Net income attributable to the Company for the second quarter of 2021 was $82,000 or $.01 per share versus $4,149,000 or $.43 per share in the same period last year. The second quarter of 2021 was impacted by the following items:

 

  • The quarter includes $1,868,000 amortization expense of the $4,750,000 fair value of the Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.
  • Interest income decreased $1,062,000 due to bond maturities and repayment of the Maren preferred equity financing.
  • Interest expense increased $401,000 due to interest on the Maren’s debt partially offset by a lower interest rate on the refinanced Dock 79 debt.
  • Gain from sale of real estate decreased $2,784,000. The current quarter included $805,000 for an easement and sale of excess land in the Mining Royalty Lands Segment. The prior year’s quarter included a gain of $3,589,000 from the sale of the three remaining lots at our Lakeside Business Park and Mining Royalty Lands Segment’s Gulf Hammock Property.
  • Gain attributable to non-controlling interest for the quarter includes a $953,000 adjustment to the $13.0 million gain on remeasurement attributed to MRP last quarter increasing it to $14.0 million. We finalized our agreement of the ownership split and revised last quarter’s estimate.

 

 

25 
 

Asset Management Segment Results

  Three months ended June 30    
(dollars in thousands) 2021 % 2020 % Change %
             
Lease revenue $588   100.0%  716   100.0%  (128)  -17.9%
                         
Depreciation, depletion and amortization  134   22.8%  200   27.9%  (66)  -33.0%
Operating expenses  74   12.6%  96   13.4%  (22)  -22.9%
Property taxes  42   7.1%  (24)  -3.3%  66   -275.0%
Management company indirect  210   35.7%  121   16.9%  89   73.6%
Corporate expense  288   49.0%  265   37.0%  23   8.7%
                         
Cost of operations  748   127.2%  658   91.9%  90   13.7%
                         
Operating profit (loss) $(160)  -27.2%  58   -8.1%  (218)  -375.9%

 

Total revenues in this segment were $588,000, down $128,000 or 17.9%, over the same period last year due to the sale of our warehouse 1801 62nd Street in July 2020 which had $163,000 of revenues in the same quarter last year. Operating loss was ($160,000), down $218,000 from an operating profit of $58,000 in the same quarter last year primarily due to the sale of 1801 62nd Street. Cranberry Run, which we purchased in the first quarter of 2019, is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/ flex space and at quarter end was 77.6% leased and 59.7% occupied compared to 71.9% leased at the end of the same quarter last year. Our other two properties remain substantially leased during both periods, with 34 Loveton 95.1% occupied and Square 664E fully leased through August 2026.

 

 

Mining Royalty Lands Segment Results

  Three months ended June 30    
(dollars in thousands) 2021 % 2020 % Change %
             
Mining lands lease revenue $2,634   100.0%  2,402   100.0%  232   9.7%
                         
Depreciation, depletion and amortization  58   2.2%  62   2.6%  (4)  -6.5%
Operating expenses  12   0.5%  14   0.6%  (2)  -14.3%
Property taxes  68   2.6%  65   2.7%  3   4.6%
Management company indirect  96   3.6%  67   2.8%  29   43.3%
Corporate expense  108   4.1%  84   3.5%  24   28.6%
                         
Cost of operations  342   13.0%  292   12.2%  50   17.1%
                         
Operating profit $2,292   87.0%  2,110   87.8%  182   8.6%

 

Total revenues in this segment were $2,634,000 versus $2,402,000 in the same period last year. Total operating profit in this segment was $2,292,000, an increase of $182,000 versus $2,110,000 in the same period last year.

 

 

Development Segment Results

  Three months ended June 30
(dollars in thousands) 2021 2020 Change
       
Lease revenue $451   279   172 
             
Depreciation, depletion and amortization  53   53   —   
26 
 

 

Operating expenses  45   144   (99)
Property taxes  364   330   34 
Management company indirect  400   455   (55)
Corporate expense  522   617   (95)
             
Cost of operations  1,384   1,599   (215)
             
Operating loss $(933)  (1,320)  387 

 

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 developments in the quarter on ongoing projects:

 

  • In the third quarter of 2020, we received permit entitlements for two industrial buildings at Hollander Business Park.  We have started construction and anticipate shell completion in the third quarter of 2021. Of this project’s 145,750 square feet, 26,000 square feet are pre-leased. We plan to start construction in the third quarter of 2021 on a build-to-suit building totaling 101,750 square feet. We estimate shell completion in the fourth quarter of 2022.
  • With respect to our joint venture with St. John Properties, we are now in the process of leasing these four single-story buildings totaling 100,030 square feet of office and retail space.  At quarter end, Phase I was 48.1% leased and 46.8% occupied.
  • We were the principal capital source of a residential development venture in Baltimore County, Maryland known as “Hyde Park.”  All obligations are complete, all principal repaid in full, and we have received $1,032,000 in preferred interest and profits.
  • The Coda, the first of our four buildings at Bryant Street joint venture, received a final certificate of occupancy on April 1, 2021, and leasing efforts are under way. At quarter end, the Coda was 88.31% leased and 67.53% occupied.  Leasing will begin on the second and third buildings at Bryant Street in the third quarter of this year.
  • We began construction on our 1800 Half Street, now known as The Verge joint venture project at the end of August 2020 and expect the building to be complete in the third quarter of 2022. As of the end of the second quarter, the project was 26.82% complete.
  • At quarter end, our Riverside and .408 Jackson joint venture projects in Greenville, South Carolina are 92.17% and 54.45% complete, respectively. Leasing will begin at Riverside in the third quarter of this year.

 

 

Stabilized Joint Venture Segment Results

 

  Three months ended June 30    
(dollars in thousands) 2021 % 2020 % Change %
             
Lease revenue $4,822   100.0%  2,452   100.0%  2,370   96.7%
                         
Depreciation, depletion and amortization  4,143   85.9%  1,185   48.3%  2,958   249.6%
Operating expenses  1,263   26.2%  527   21.5%  736   139.7%
Property taxes  526   10.9%  275   11.2%  251   91.3%
Management company indirect  116   2.4%  49   2.0%  67   136.7%
Corporate expense  132   2.8%  60   2.5%  72   120.0%
                         
Cost of operations  6,180   128.2%  2,096   85.5%  4,084   194.8%
                         
Operating profit (loss) $(1,358)  -28.2%  356   14.5%  (1,714)  -481.5%

 

In March 2021, we reached stabilization on Phase II (The Maren) of the development known as Riverfront on the Anacostia in Washington, D.C., a 250,000-square-foot mixed-use development which supports 264 residential units

27 
 

and 6,937 square feet of retail developed by a joint venture between the Company and MRP. Stabilization in this case means 90% of the individual apartments had been leased and occupied by third party tenants. Upon reaching stabilization, the Company has, for a period of one year, the exclusive right to (i) cause the joint venture to sell the property or (ii) cause the Company’s and MRP’s percentage interests in the joint venture to be adjusted so as to take into account the contractual payouts assuming a sale at the value of the development at the time of this “Conversion Election”. Reaching stabilization resulted in a change of control for accounting purposes as the veto rights of the minority shareholder lapsed and the Company became the primary beneficiary. As such, beginning March 31, 2021, the Company consolidated the assets (at current fair value based on appraisal), liabilities and operating results of the joint venture. At the end of June, The Maren was 94.70% leased and 93.93% occupied. Up through the first quarter of this year, accounting for The Maren was reflected in Equity in loss of joint ventures on the Consolidated Statements of Income. Starting April 1, 2021, all the revenue and expenses will be reflected like Dock 79 in the stabilized joint venture segment.

 

Total revenues in this segment were $4,822,000, an increase of $2,370,000 versus $2,452,000 in the same period last year. The Maren’s revenue was $2,162,000 and Dock 79 revenues increased $208,000. Total operating loss in this segment was ($1,358,000), a decrease of $1,714,000 versus a profit of $356,000 in the same period last year. The quarter includes $1,868,000 amortization expense of the $4,750,000 fair value of the Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture. Net Operating Income this quarter for this segment was $3,037,000, up $1,383,000 or 83.62% compared to the same quarter last year due to the Maren’s consolidation into this segment.

 

Dock 79’s average residential occupancy for the quarter was 95.69%, and at the end of the quarter, Dock 79’s residential units were 94.10% leased and 96.39% occupied. This quarter, 61.36% of expiring leases renewed with no increase in rent due to the mandated rent freeze on renewals in DC. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

 

Second quarter distributions from our CS1031 Hickory Creek DST investment were $87,000.

 

 

 

Six Months Operational Highlights

  • The Maren reached stabilization meaning 90% of the individual apartments had been leased and occupied by third party tenants. This event triggered a change in control and the Company consolidated the assets (at current fair value), liabilities and operating results of the joint venture.
  • Highest mining royalty revenue total through the first six months in segment’s history

 

Comparative Results of Operations for the Six months ended June 30, 2021 and 2020

 

Consolidated Results

(dollars in thousands)  Six Months Ended June 30,
  2021 2020 Change %
Revenues:        
  Lease Revenue $9,399  $7,045  $2,354   33.4%
  Mining lands lease revenue  4,949   4,587   362   7.9%
 Total Revenues  14,348   11,632   2,716   23.3%
                 
Cost of operations:                
  Depreciation/Depletion/Amortization  5,831   2,968   2,863   96.5%
  Operating Expenses  2,235   1,706   529   31.0%
  Property Taxes  1,778   1,383   395   28.6%
  Management company indirect  1,392   1,364   28   2.1%
  Corporate Expense  1,829   2,213   (384)  -17.4%
Total cost of operations  13,065   9,634   3,431   35.6%
                 
Total operating profit  1,283   1,998   (715)  -35.8%
                 
28 
 

 

         
Net investment income, including realized gains        
 of $0 and $242  2,423   4,101   (1,678)  -40.9%
Interest Expense  (1,371)  (96)  (1,275)  1328.1%
Equity in loss of joint ventures  (2,753)  (1,985)  (768)  38.7%
Gain on remeasurement of investment in real estate
partnership
  51,139   —     51,139   0.0%
Gain on sale of real estate  805   3,597   (2,792)  -77.6%
Income before income taxes  51,526   7,615   43,911   576.6%
Provision for income taxes  10,370   2,139   8,231   384.8%
                 
Net income  41,156   5,476   35,680   651.6%
Gain (loss) attributable to noncontrolling interest  12,701   (291)  12,992   -4464.6%
Net income attributable to the Company $28,455  $5,767  $22,688   393.4%
                 

 

Net income attributable to the Company for the first half of 2021 was $28,455,000 or $3.03 per share versus $5,767,000 or $.59 per share in the same period last year. The first half of 2021 was impacted by the following items:

 

  • Gain of $51.1 million on the remeasurement of investment in The Maren real estate partnership, which is included in Income before income taxes. This gain on remeasurement is mitigated by a $10.1 million provision for taxes and $14.0 million attributable to noncontrolling interest.
  • The period includes $1,868,000 amortization expense of the $4,750,000 fair value of the Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.
  • Interest income decreased $1,678,000 due to bond maturities and repayment of the Maren preferred equity financing.
  • Interest expense increased $1,275,000 due to a $900,000 prepayment penalty on the Dock 79 refinancing plus interest on the Maren’s debt partially offset by a lower interest rate on Dock 79.
  • Gain from sale of real estate decreased $2,792,000. The current quarter included $805,000 for an easement and sale of excess land in the Mining Royalty Lands Segment. The prior year’s quarter included a gain of $3,589,000 from the sale of the three remaining lots at our Lakeside Business Park and our prior Mining Royalty Lands Segment’s Gulf Hammock Property.

 

 

Asset Management Segment Results

  Six months ended June 30    
(dollars in thousands) 2021 % 2020 % Change %
             
Lease revenue $1,300   100.0%  1,368   100.0%  (68)  -5.0%
                         
Depreciation, depletion and amortization  271   20.8%  392   28.6%  (121)  -30.9%
Operating expenses  213   16.4%  193   14.1%  20   10.4%
Property taxes  80   6.2%  48   3.5%  32   66.7%
Management company indirect  377   29.0%  235   17.2%  142   60.4%
Corporate expense  502   38.6%  573   41.9%  (71)  -12.4%
                         
Cost of operations  1,443   111.0%  1,441   105.3%  2   0.1%
                         
Operating loss $(143)  -11.0%  (73)  -5.3%  (70)  95.9%

 

Total revenues in this segment were $1,300,000, down $68,000 or 5.0%, over the same period last year due to the sale of our warehouse 1801 62nd Street in July 2020 which had $364,000 of revenues in the same period last year. Operating loss was ($143,000), down $70,000 from an operating loss of ($73,000) in the same period last year primarily due to the sale of 1801 62nd Street. Cranberry Run, which we purchased in the first quarter of 2019, is a five-building industrial park in Harford County, MD totaling 268,010 square feet of industrial/ flex space and at

29 
 

quarter end was 77.6% leased and 59.7% occupied compared to 71.9% leased at the end of the same period last year. Our other two properties remain substantially leased during both periods, with 34 Loveton 95.1% occupied and Square 664E fully leased through August 2026.

 

 

Mining Royalty Lands Segment Results

  Six months ended June 30    
(dollars in thousands) 2021 % 2020 % Change %
             
Mining lands lease revenue $4,949   100.0%  4,587   100.0%  362   7.9%
                         
Depreciation, depletion and amortization  123   2.5%  100   2.2%  23   23.0%
Operating expenses  23   0.5%  27   0.6%  (4)  -14.8%
Property taxes  131   2.6%  132   2.9%  (1)  -0.8%
Management company indirect  178   3.6%  133   2.9%  45   33.8%
Corporate expense  189   3.8%  181   3.9%  8   4.4%
                         
Cost of operations  644   13.0%  573   12.5%  71   12.4%
                         
Operating profit $4,305   87.0%  4,014   87.5%  291   7.2%

 

Total revenues in this segment were $4,949,000 versus $4,587,000 in the same period last year. Total operating profit in this segment was $4,305,000, an increase of $291,000 versus $4,014,000 in the same period last year.

 

 

Development Segment Results

  Six months ended June 30
(dollars in thousands) 2021 2020 Change
       
Lease revenue $768   572   196 
             
Depreciation, depletion and amortization  106   107   (1)
Operating expenses  71   353   (282)
Property taxes  727   689   38 
Management company indirect  661   900   (239)
Corporate expense  941   1,329   (388)
             
Cost of operations  2,506   3,378   (872)
             
Operating loss $(1,738)  (2,806)  1,068 

 

 

Stabilized Joint Venture Segment Results

  Six months ended June 30    
(dollars in thousands) 2021 % 2020 % Change %
             
Lease revenue $7,331   100.0%  5,105   100.0%  2,226   43.6%
                         
Depreciation, depletion and amortization  5,331   72.7%  2,369   46.4%  2,962   125.0%
Operating expenses  1,928   26.3%  1,133   22.2%  795   70.2%
Property taxes  840   11.5%  514   10.1%  326   63.4%
Management company indirect  176   2.4%  96   1.9%  80   83.3%
Corporate expense  197   2.7%  130   2.5%  67   51.5%
                         
Cost of operations�� 8,472   115.6%  4,242   83.1%  4,230   99.7%
                         
Operating profit (loss) $(1,141)  -15.6%  863   16.9%  (2,004)  -232.2%
30 
 

 

Total revenues in this segment were $7,331,000, an increase of $2,226,000 versus $5,105,000 in the same period last year. The Maren’s revenue was $2,162,000 and Dock 79 revenues increased $64,000. Total operating loss in this segment was ($1,141,000), a decrease of $2,004,000 versus a profit of $863,000 in the same period last year. The quarter includes $1,868,000 amortization expense of the $4,750,000 fair value of the Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture. Net Operating Income for this segment was $4,571,000, up $1,105,000 or 31.88% compared to the same period last year due to the Maren’s consolidation into this segment.

 

Dock 79’s average residential occupancy for the first six months of 2021 was 95.18%. Through the first six months of the year, 60.76% of expiring leases renewed with no increase in rent due to the mandated rent freeze on renewals in DC. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

 

In March, we completed a refinancing of Dock 79 as well as securing permanent financing for the Maren. This $180 million loan ($92 million for Dock 79, $88 million for The Maren) lowers the interest rate at Dock 79 from 4.125% to 3.03%, defers any principal payments for 12 years for both properties, and repays the $13.75 million in preferred equity along with $2.3 million in accrued interest.

 

Distributions from our CS1031 Hickory Creek DST investment were $171,000 for the first six months of the year.

 

 

 

Liquidity and Capital Resources. The growth of the Company’s businesses requires significant cash needs to acquire and develop land or operating buildings and to construct new buildings and tenant improvements. As of June 30, 2021, we had $138,838,000 of cash and cash equivalents along with $32,129,000 of investments available for sale. As of June 30, 2021, we had no debt borrowed under our $20 million Wells Fargo revolver, $506,000 outstanding under letters of credit and $19,494,000 available to borrow under the revolver. On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing.

 

 

Cash Flows - The following table summarizes our cash flows from operating, investing and financing activities for each of the periods presented (in thousands of dollars):

 

  Six months
  Ended June 30,
  2021 2020
Total cash provided by (used for):        
Operating activities $10,963   9,110 
Investing activities  52,438   7,787 
Financing activities  844   (12,762)
Increase in cash and cash equivalents $64,245   4,135 
         
Outstanding debt at the beginning of the period  89,964   88,925 
Outstanding debt at the end of the period  178,334   88,993 

 

Operating Activities - Net cash provided by operating activities for the six months ended June 30, 2021 was $10,963,000 versus $9,110,000 in the same period last year. The Gain on remeasurement of investment in real estate partnership and related deferred income taxes were both non-cash adjustments to net income to arrive at net cash provided by operating activities.

 

Investing Activities - Net cash provided by investing activities for the six months ended June 30, 2021 was $52,438,000 versus $7,787,000 in the same period last year. The $45 million increase was primarily due to a return of

31 
 

our preferred equity financing with interest of $16.1 million from The Maren, $24.7 million decrease in purchases of corporate bonds due to lack of attractive investment opportunities, an $9.8 million increase on maturities and sales of our corporate bond portfolio, and $3.7 million for cash on the books of The Maren upon consolidation.

 

At June 30, 2021 the Company was invested in 12 corporate bonds with individual maturities over the next 7 months. The unrealized gain on these bonds of $118,000 was recorded as part of comprehensive income and was based on the estimated market value by National Financial Services, LLC (“NFS”) obtained from sources that may include pricing vendors, broker/dealers who clear through NFS and/or other sources (Level 2). The Company recorded no realized gains or losses on bonds that matured or were sold in 2021.

 

Financing Activities – Net cash provided by investing activities was $844,000 versus net cash used in financing activities of $12,762,000 in the same period last year due primarily due to the refinancing of Dock 79 for $1.4 million more net of debt issuance costs than the amount matured offset by $12.1 million lower repurchases of company stock.

 

Credit Facilities - On February 6, 2019 the Company entered into a First Amendment to the 2015 Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, N.A. (Wells Fargo”). The Credit Agreement modifies the Company’s prior Credit Agreement with Wells Fargo, dated January 30, 2015. The Credit Agreement establishes a five-year revolving credit facility with a maximum facility amount of $20 million. The interest rate under the Credit Agreement will be a maximum of 1.50% over Daily 1-Month LIBOR, which may be reduced quarterly to 1.25% or 1.0% over Daily 1-Month LIBOR if the Company meets a specified ratio of consolidated total debt to consolidated total capital. A commitment fee of 0.25% per annum is payable quarterly on the unused portion of the commitment but the amount may be reduced to 0.20% or 0.15% if the Company meets a specified ratio of consolidated total debt to consolidated total capital. The credit agreement contains certain conditions and financial covenants, including a minimum tangible net worth and dividend restriction. As of June 30, 2021, these covenants would have limited our ability to pay dividends to a maximum of $228 million combined.

 

On March 19, 2021, the Company refinanced Dock 79 and The Maren projects pursuant to separate Loan Agreements and Deed of Trust Notes entered into with Teachers Insurance and Annuity Association of America, LLC. Dock 79 and The Maren borrowed principal sums of $92,070,000 and $88,000,000 respectively, in connection with the refinancing. The loans are separately secured by the Dock 79 and The Maren real property and improvements, bear a fixed interest rate of 3.03% per annum, and require monthly payments of interest only with the principal in full due April 1, 2033. Either loan may be prepaid subsequent to April 1, 2024 subject to yield maintenance premiums. Either loan may be transferred to a qualified buyer as part of a one-time sale subject to a 60% loan to value, minimum of 7.5% debt yield and a 0.75% transfer fee. Effective March 31, 2021 the Company consolidated the assets (at current fair value), liabilities and operating results of our Riverfront Investment Partners II, LLC partnership (The Maren) which was previously accounted for under the equity method. As such the full amount of our mortgage loan was recorded in the consolidated financial statements.

 

Cash Requirements – The Company currently expects its capital expenditures for the remainder of 2021 to include approximately $26.8 million for real estate including investments in joint ventures, which will be funded mostly out of cash and investments on hand, cash generated from operations and property sales, or borrowings under our credit facilities.

 

Impact of the COVID-19 Pandemic. The COVID-19 pandemic is having an extraordinary impact on the world economy and the markets in which we operate. As an essential business, we have continued to operate throughout the pandemic in accordance with White House guidance and orders issued by state and local authorities. We have implemented social distancing and other measures to protect the health of our employees and customers. Our Dock 79 and The Maren properties in Washington, D.C. suffered the principal impacts to our business from the pandemic during 2020 due to our retail tenants being unable to operate at capacity, the lack of attendance at the Washington Nationals baseball park and the rent freeze imposed by the District. It is possible that some of these same conditions may impact our ability to lease retail spaces at Bryant Street. We anticipate that these impacts will continue for at least the remainder of 2021.

 

 

 

32 
 

Summary and Outlook. It is hard to reconcile where we were a year ago with the first six months of this year. The fear, angst, and malaise so prevalent at the height of the pandemic and quarantine have given way to a far more normal, new normal, where summer feels like summer, and Americans in every part of this country are back to doing what Americans have always done—work, consume, serve, enjoy. As exciting as this return to normalcy is, we are even more excited for what the future holds for both the assets we have in place and those in our development pipeline.

 

Royalty revenue this quarter was up 9.65% over the same period last year, and royalty revenue through the first two quarters was up 7.88%. Revenue for the last twelve months was $9,838,907, an increase of 7.37% over the same period last year and an increase of 3.81% over calendar year 2020. This is the first time this segment has surpassed $9.75 million in revenue in any twelve-month period and also happens to mark the best second quarter of revenue, the best first six months of revenue, and the best twelve months of revenue in the segment’s history.

 

For three straight quarters, Dock 79’s occupancy has been above 94% at the end of the quarter. The last time the building ended three straight quarters with occupancy above 94% was the fourth quarter of 2018. As you no doubt recall, the Maren achieved stabilization in the final month of the first quarter. As a result, this marks the first reporting period with the Maren consolidated on to our books. Because of the increased depreciation and amortization attributable to the Company as a result of consolidating the Maren’s results into our income statement, the impact on net income may in fact be negative for some time, but the positive impact on our NOI and cash flow will be significant. The Maren is 94.7% leased and 93.93% occupied and its retail space is 100% leased with occupancy expected in the fourth quarter of this year once build out is complete. It has been over a year since the District put in place the “emergency” measures which have prevented us from raising rents on renewals. This has obviously mitigated our ability to grow NOI at Dock 79. With the Maren now going through its first generation of renewals, it too is feeling the effect of these emergency measures. It is our understanding that these measures are set to expire but not prior to the end of the year. Because renewal negotiations take place several weeks in advance, if the emergency measures expire at year end, we will not see any practical effect to rent increases until February 2022.

 

We remain pleased with the current direction of our asset management segment, particularly the industrial assets. The speed with which we leased up and then sold our building at 1801 62nd Street last year strengthened our commitment to this shift in our approach to industrial development. We have a build-to-suit and two spec buildings under construction at Hollander and intend to follow a similar course of action. Those three buildings will complete any development at Hollander for the foreseeable future. Because of that, we have bolstered our land bank with the $10.5 million purchase of 55 acres in Aberdeen, Maryland. Once entitled, this property will be capable of supporting over 625,000 square feet of industrial product and will be essential for future industrial development as we finish developing our remaining inventory at Hollander Business Park.

 

With the consolidation of the Maren, refinancing both Riverfront projects, and the unprecedented performance of the mining royalties segment, it has been an exciting first six months, to say the least. And yet the second half should prove no less eventful as we look to complete construction on Bryant Street and the first of our two developments in Greenville. Riverside in Greenville begins lease-up in August. The Chase, which is the second building at Bryant Street begins leasing at the same time. The velocity with which the Coda has leased-up (88.31% at quarter end) has only served to heighten our enthusiasm. As the nation and our economy continue to open up, we have every reason to be optimistic regarding the long-term success of these projects. Our more than $170 million in liquidity allows us that luxury of that optimism. We will continue to be opportunistic in repurchasing stock. During 2021, the Company repurchased 6,004 shares at an average cost of $43.95 per share.

 

 

Non-GAAP Financial Measure.

 

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 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.

 

33 
 

 

Net Operating Income Reconciliation            
Six months ended 06/30/21 (in thousands)            
      Stabilized      
  Asset   Joint Mining Unallocated FRP
  Management Development Venture Royalties Corporate Holdings
  Segment Segment Segment Segment Expenses Totals
Net Income (loss)  (123)  (1,629)  38,591   3,731   586   41,156 
Income Tax Allocation  (46)  (604)  9,601   1,383   36   10,370 
Income (loss) before income taxes  (169)  (2,233)  48,192   5,114   622   51,526 
                         
Less:                        
 Gain on remeasurement of real estate investment  —     —     51,139   —     —     51,139 
 Gain on investment land sold  —     —     —     831   —     831 
 Unrealized rents  11   —     —     113   —     124 
 Interest income  —     1,779   —     —     644   2,423 
Plus:                        
 Unrealized rents  —     —     8   —     —     8 
 Loss on sale of land  26   —     —     —     —     26 
 Equity in loss of Joint Venture  —     2,274   457   22   —     2,753 
 Interest Expense  —     —     1,349   —     22   1,371 
 Depreciation/Amortization  271   106   5,331   123   —     5,831 
 Management Co. Indirect  377   661   176   178   —     1,392 
 Allocated Corporate Expenses  502   941   197   189   —     1,829 
                         
Net Operating Income (loss)  996   (30)  4,571   4,682   —     10,219 

 

Net Operating Income Reconciliation            
Six months ended 06/30/20 (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  (47)  (739)  622   4,162   1,478   5,476 
Income Tax Allocation  (18)  (274)  338   1,543   550   2,139 
Income (loss) from continuing operations before income taxes  (65)  (1,013)  960   5,705   2,028   7,615 
                         
Less:                        
 Equity in profit of Joint Ventures  —     —     168   —     —     168 
 Gains on sale of buildings  8   1,877   —     1,712   —     3,597 
 Unrealized rents  114   —     —     121   —     235 
 Interest income  —     2,048   —     —     2,053   4,101 
Plus:                        
 Unrealized rents  —     —     8   —     —     8 
 Equity in loss of Joint Venture  —     2,132   —     21   —     2,153 
 Interest Expense  —     —     71   —     25   96 
 Depreciation/Amortization  392   107   2,369   100   —     2,968 
 Management Co. Indirect  235   900   96   133   —     1,364 
 Allocated Corporate Expenses  573   1,329   130   181   —     2,213 
                         
Net Operating Income (loss)  1,013   (470)  3,466   4,307   —     8,316 

 

 

 

34 
 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

 

Interest Rate Risk - We are exposed to the impact of interest rate changes through our variable-rate borrowings under our Credit Agreement with Wells Fargo.

 

Under the Wells Fargo Credit Agreement, the applicable margin for borrowings at June 30, 2021 was Daily 1-Month LIBOR plus 1.0%. The applicable margin for such borrowings will be increased in the event that our debt to capitalization ratio as calculated under the Wells Fargo Credit Agreement Facility exceeds a target level.

 

The Company did not have any variable rate debt at June 30, 2021, so a sensitivity analysis was not performed to determine the impact of hypothetical changes in interest rates on the Company’s results of operations and cash flows.

 

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

 

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

 

The Company also maintains a system of internal accounting controls over financial reporting that are designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

 

All control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving the desired control objectives.

 

As of June 30, 2021, the Company, under the supervision and with the participation of the Company's management, including the CEO, CFO and CAO, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on this evaluation, the Company’s CEO, CFO and CAO concluded that the Company's disclosure controls and procedures are effective in alerting them in a timely manner to material information required to be included in periodic SEC filings.

 

There have been no changes in the Company’s internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

PART II. OTHER INFORMATION

 

 

Item 1A. RISK FACTORS

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

35 
 

 

The following risk factor set forth below is in addition to the risk factors discussed under Part I, Item 1A (Risk Factors) of the Company’s most recent annual report on Form 10-K.

 

A decline in the economic conditions or demand in our key markets could adversely affect our business.

 

A predominance of our commercial and residential/mixed use properties are located in Washington, D.C. and a select number of other geographic markets. We are, therefore, subject to increased exposure to economic demand and other competitive factors specific to these markets. While the Washington, D.C. market remains strong, there has been an uptick in crime in this metropolitan area. An economic downturn or reduction in demand in Washington or these other geographic markets could adversely affect our operation. We cannot be sure that these markets will continue to grow or demand this type of assets in our portfolio.

 

 

Item 2. PURCHASES OF EQUITY SECURITIES BY THE ISSUER

      (c)  
      Total  
      Number of  
      Shares (d)
      Purchased Approximate
  (a)   As Part of Dollar Value of
  Total (b) Publicly Shares that May
  Number of Average Announced Yet Be Purchased
  Shares Price Paid Plans or Under the Plans
Period Purchased per Share Programs or Programs (1)
 April 1 through April 30   —    $—     —    $9,363,000 
                   
 May 1 through May 31   —    $—     —    $9,363,000 
                   
 June 1 through June 30   —    $—     —    $9,363,000 
                   
 Total   —    $—     —       

 

 

 

(1)On February 4, 2015, the Board of Directors authorized management to expend up to $5,000,000 to repurchase shares of the Company’s common stock from time to time as opportunities arise. On December 5, 2018, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On August 5, 2019, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On May 6, 2020, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization. On August 26, 2020, the Board of Directors approved a $10,000,000 increase in the Company’s stock repurchase authorization.

 

 

 

Item 6. EXHIBITS

 

(a)Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", on page 38.

 

 

 

36 
 

 

 

 

 

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.

 

   FRP Holdings, Inc.
     
     
Date:  August 16, 2021 ByJOHN D. BAKER II 
   John D. Baker II 
   Chief Executive Officer
   (Principal Executive Officer)
     
     
  ByJOHN D. BAKER III 
   John D. Baker III. 
   Treasurer and Chief Financial Officer
   (Principal Financial Officer)
     
     
  ByJOHN D. KLOPFENSTEIN 
   John D. Klopfenstein 
   Controller and Chief Accounting
   Officer (Principal Accounting Officer)
37 
 

FRP HOLDINGS, INC.

FORM 10-Q FOR THE THREE MONTHS ENDED JUNE 30, 2021

EXHIBIT INDEX

 

 

(31)(a)Certification of John D. Baker II.
(31)(b)Certification of John D. Baker III.
(31)(c)Certification of John D. Klopfenstein.
(32)Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer under Section 906 of the Sarbanes-Oxley Act of 2002.
  
101.XSDXBRL Taxonomy Extension Schema 
101.CALXBRL Taxonomy Extension Calculation Linkbase
101.DEFXBRL Taxonomy Extension Definition Linkbase
101.LABXBRL Taxonomy Extension Label Linkbase
101.PREXBRL Taxonomy Extension Presentation Linkbase

 

38