FRP HOLDINGS, INC./NEWS
Contact: John D. Baker III
Chief Financial Officer 904/858-9100
------------------------------------------------------------------------------
FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCES RESULTS FOR THE THIRD QUARTER AND
NINE MONTHS ENDED SEPTEMBER 30, 2019
FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; November 6, 2019 -
Third Quarter Consolidated Results of Operations
Net income for the third quarter of 2019 was $2,001,000 or $.20 per share
versus $2,224,000 or $.22 per share in the same period last year. Loss from
discontinued operations for the third quarter of 2019 was ($13,000) or $.00
per share versus a loss from discontinued operations of ($78,000) or ($.01)
per share in the same period last year. Interest earned for the third quarter
includes $560,000 for Bryant Street and Maren preferred interest and $144,000
realized gain on bonds called early. Loss on Joint Venture includes $393,000
for the Company's ownership share of the Bryant Street and Maren preferred
interest and $255,000 amortization of the guarantee liability related to the
Bryant Street loan. In July 2019 land located in Yatesville, Georgia was sold
for $213,500 resulting in a gain of $124,000.
Third Quarter Segment Operating Results
Asset Management Segment:
------------------------
Most of the Asset Management Segment was reclassified to discontinued
operations leaving two commercial properties as well as Cranberry Run, which
we purchased first quarter, and 1801 62nd Street which joined Asset Management
on April 1. Cranberry Run is a five-building industrial park in Harford County,
MD totaling 268,010 square feet of industrial/flex space and at quarter end was
26.1% leased and occupied. 1801 62nd Street is our most recent spec building in
Hollander Business Park and is our first warehouse with a 32-foot clear. We
completed construction on this building earlier this year and it is now 100%
leased. We expect it to be fully occupied in the first quarter of 2020. Total
revenues in this segment were $430,000, down ($138,000) or (24.3%), over the
same period last year. Operating loss was ($160,000), down ($402,000) from an
operating profit of $242,000 in the same quarter last year due to higher
allocation of corporate expenses and increased operating expenses associated
with the Cranberry Run acquisition in the first quarter and the addition of
1901 62nd Street to Asset Management in the second quarter.
Mining Royalty Lands Segment:
----------------------------
Total revenues in this segment were $2,302,000 versus $2,125,000 in the same
period last year. Total operating profit in this segment was $2,059,000, an
increase of $126,000 versus $1,933,000 in the same period last year. Among the
reasons for this increase in revenue and operating profit is the contribution
from our Ft. Myers quarry, the revenue from which, now that mining has begun
in earnest, was nearly double the minimum royalty we have been receiving until
recently. Royalties were reduced by $115,000 due to a volumetric adjustment
from the Manassas quarry.
Development Segment:
-------------------
The Development segment is responsible for (i) seeking out and identifying
opportunistic purchases of income producing warehouse/office buildings, and
(ii) developing our non-income producing properties into income production.
With respect to ongoing projects:
* We are fully engaged in the formal process of seeking PUD entitlements
for our 118-acre tract in Hampstead, Maryland, now known as "Hampstead
Overlook." Hampstead Overlook received non-appealable rezoning from
industrial to residential during the first quarter this year.
* We finished shell construction in December 2018 on the two office
buildings in the first phase of our joint venture with St. John
Properties. Shell construction of the two retail buildings was
completed in January. We are now in the process of leasing these four
single-story buildings totaling 100,030 square feet of office and
retail space. At quarter end, Phase I was 44% leased and 8% occupied.
* We are the principal capital source of a residential development
venture in Baltimore County, Maryland known as "Hyde Park." We have
committed up to $3.5 million in exchange for an interest rate of 10%
and a preferred return of 20% after which a "waterfall" determines
the split of proceeds from sale. Hyde Park will hold 122 town homes
and four single-family lots and received a non-appealable Plan Approval
during the first quarter. We are currently pursuing entitlements and
have a home builder under contract to purchase the land upon government
approval to begin development.
* We are the principal capital source of a residential development
venture in Prince George's County, Maryland known as "Amber Ridge." We
have committed up to $18.5 million in exchange for an interest rate of
10% and a preferred return of 20% after which a "waterfall" determines
the split of proceeds from sale. Amber Ridge will hold approximately
200 town homes. We are currently pursuing entitlements and have a home
builder under contract to purchase 136 of the 200 units upon
completion of development.
* In April 2018, we began construction on Phase II of our RiverFront on
the Anacostia project, now known as "The Maren." We expect to deliver
the building in the first half of 2020.
* In December 2018, the Company entered into a joint venture agreement
with MidAtlantic Realty Partners (MRP) for the development of the first
phase of a multifamily, mixed-use development in northeast Washington,
DC known as "Bryant Street." FRP contributed $32 million for common
equity and another $23 million for preferred equity to the joint
venture. Construction began in February 2019 and should be finished in
2021. This project is located in an opportunity zone and could defer a
significant tax liability associated with last year's asset sale.
Stabilized Joint Venture Segment:
--------------------------------
Dock 79's average occupancy for the quarter was 97.02%, and at the end of the
quarter, Dock 79 was 93.44% leased and 96.72% occupied. This quarter, 63.51%
of expiring leases renewed with an average increase in rent on those renewals
of 3.19%. Net Operating Income this quarter for this segment was $1,849,000,
up $153,000 or 9.02% compared to the same quarter last year. Dock 79 is a
joint venture between the Company and MRP, in which FRP Holdings, Inc. is the
majority partner with 66% ownership.
In July 2019, the Company completed a like-kind exchange by reinvesting
$6,000,000 into a Delaware Statutory Trust (DST) known as CS1031 Hickory
Creek DST. The DST owns a 294-unit garden-style apartment community known as
Hickory Creek consisting of 19 three-story apartment buildings containing
273,940 rentable square feet. Hickory Creek was constructed in 1984 and
substantially renovated in 2016 and is located in Henrico County, Virginia.
The Company is 26.649% beneficial owner and receives monthly distributions.
Nine Months Consolidated Results of Operations.
Net income for first nine months of 2019 was $13,724,000 or $1.38 per share
versus $123,766,000 or $12.24 per share in the same period last year. Income
from discontinued operations for the first nine months of 2019 was $6,849,000
or $.69 per share versus $122,109,000 or $12.08 per share in the same period
last year. Interest earned for the first nine months of 2019 includes
$1,017,000 for Bryant Street and Maren preferred interest and $591,000
realized gain on bonds called early. Loss on Joint Venture includes $759,000
for the Company's ownership share of the Bryant Street and Maren preferred
interest and $255,000 amortization of the guarantee liability related to the
Bryant Street loan. In July 2019, the Company sold a parcel of vacant land
in Yatesville, GA for $213,500 resulting in a gain of $124,000. The first
nine months of 2018 income from continuing operations of $1,309,000 included
$1,085,000 in stock compensation expense ($682,800 for the 2018 director
stock grant and $402,000 for vesting of option grants from 2016 and 2017 due
to the asset disposition).
Nine Months Segment Operating Results
Asset Management Segment:
------------------------
Most of the Asset Management Segment was reclassified to discontinued
operations leaving one recent industrial acquisition, Cranberry Run, which we
purchased first quarter, 1801 62nd Street which joined Asset Management on
April 1, and two commercial properties after the sale this past quarter of
our office property at 7030 Dorsey Road. Cranberry Run is a five-building
industrial park in Harford County, MD totaling 268,010 square feet of
industrial/ flex space. It is our plan to make $1,455,000 in improvements in
order to re-lease the property for a total investment of $29.35 per square
foot. 1801 62nd Street is our most recent spec building in Hollander Business
Park and is our first warehouse with a 32-foot clear. We completed
construction on this building earlier this year and it is 100% leased as of
September 30, 2019. Total revenues in this segment were $1,733,000, up
$16,000 or .9%, over the same period last year. Operating loss was
($237,000), down $874,000 from an operating profit of $637,000 in the same
period last year due to higher allocation of corporate expenses and increased
operating expenses associated with the Cranberry Run acquisition in the first
quarter and the addition of 1801 62nd Street to Asset Management second
quarter.
Mining Royalty Lands Segment:
----------------------------
Total revenues in this segment were $7,164,000 versus $5,952,000 in the same
period last year. Total operating profit in this segment was $6,482,000, an
increase of $1,142,000 versus $5,340,000 in the same period last year. Among
the reasons for this increase in revenue and operating profit is the
contribution from our Ft. Myers quarry, the revenue from which, now that
mining has begun in earnest, was more than double the minimum royalty we have
been receiving until recently. Royalties were reduced by $115,000 due to a
volumetric adjustment from the Manassas quarry.
Stabilized Joint Venture Segment:
--------------------------------
Average occupancy for the first nine months at Dock 79 was 95.57%, and at the
end of the third quarter, Dock 79 was 93.44% leased and 96.72% occupied.
Through the first nine months of the year, 59.76% of expiring leases have
renewed with an average increase in rent of 2.80%. Net Operating Income for
this segment was $5,346,000, up $499,000 or 10.30% compared to the same period
last year, primarily due to substantial increases in NOI from our retail
tenants compared to this period last year. Dock 79 is a joint venture between
the Company and MRP, in which FRP Holdings, Inc. is the majority partner with
66% ownership.
In July 2019, the Company completed a like-kind exchange by reinvesting
$6,000,000 into a Delaware Statutory Trust (DST) known as CS1031 Hickory
Creek DST. The DST owns a 294-unit apartment community known as Hickory Creek
consisting of 19 three-story apartment buildings containing 273,940 rentable
square feet. Hickory Creek was constructed in 1984 and substantially renovated
in 2016. The property is eleven miles from downtown Richmond in Henrico
County, Virginia. The Company is 26.649% beneficial owner and receives monthly
distributions.
Summary and Outlook
With the second quarter dispositions of our assets at 1502 Quarry Drive and
7020 Dorsey Road for $11.7 million and $8.85 million respectively, the Company
continued and has nearly completed the liquidation of its "heritage"
properties. Of the 43 buildings owned and operated by the Company at the start
of 2018, all that remains is the Company's home office building in Sparks, MD
and the vacant lot in Jacksonville still under lease to Vulcan that used to
house Florida Rock Industries' home office. In the past year we have added
Cranberry Run and 1801 62nd Street to the Asset Management Segment. These
additions, the former a value-add, opportunistic acquisition and the latter,
an in-house development of one of the parcels remaining at Hollander Business
Park, are indicative of the types of assets we intend to add periodically to
this segment. But they should not be mistaken as the first steps on the road
to rebuilding the kind of Asset Management segment we operated prior to last
year's sale. We are no longer in the develop and hold business when it comes
to industrial assets. Rather, we will develop buildings from our existing
land bank or rehabilitate an existing industrial park acquired at a discount
with the aim of selling the rehabilitated parks and/or groups of two or three
new, fully leased warehouses into a market that puts a premium on a portfolio
of assets.
This quarter marked the sixth consecutive quarter of increases in mining
royalty revenue compared to the same period the year before and represents
the segment's best ever nine-month start to a fiscal year. The royalties
collected through the first nine months are more than what we collected in
any year prior to 2017.
Construction remains on schedule for The Maren and Bryant Street, with
delivery expected at The Maren in the first half of 2020. While construction
should be complete at Bryant St in 2021, the first residential unit should
be delivered by the end of 2020. These assets represent an investment of over
$80 million and will more than triple the number of residential units and
square feet of mixed use we have in our existing portfolio.
As mentioned previously, we renewed 63.51% of the leases at Dock 79 that were
set to expire this quarter. That number was helped by the fact that 20 of the
26 leases expiring in September renewed. Given the growing supply of
multi-family in that submarket, the fact that we continue to renew more than
half our tenants during the construction of The Maren next door, while also
growing rents is a testament to both the quality of the asset as well as the
premium this market places on a waterfront location.
We continue to explore different projects in which to reinvest the proceeds
of our recent asset sales. Though we are aggressive in terms of the scope of
our exploration, we remain cautious and perhaps conservative regarding the
quality of any project we consider. We do not expect that our investors will
have unlimited patience as to when this money is put to work, and no one is
more anxious than our management team to return the money to our shareholders
in the form of new investments. However, though we hear the clock ticking, we
are not going to let that factor unduly into any investment decision we make.
The redeployment of our cash will be based on the amount of return we can
generate rather than the amount of time that has passed since the asset sale.
To that end, we have been buying back shares of the Company when we believe
it is underpriced. As of September 30, the Company had repurchased 159,282
shares in 2019 at an average cost of $48.43 per share and had authorization
to repurchase another $11,436,000 in stock.
Conference Call
The Company will host a conference call on Thursday November 7 at 10:00 a.m.
(EST). Analysts, stockholders and other interested parties may access the
teleconference live by calling 1-800-311-9406 (passcode 939063) within the
United States. International callers may dial 1-334-323-7224 (passcode
939063). Computer audio live streaming is available via the Internet through
the Company's website at www.frpholdings.com. You may also click on this link
for the live streaming http://stream.conferenceamerica.com/frp110719.
For the archived audio via the internet, click on the following link
http://archive.conferenceamerica.com/archivestream/frp110719.mp3. If using
the Company's website, click on the Investor Relations tab, then select the
earnings conference stream. An audio replay will be available for sixty days
following the conference call. To listen to the audio replay, dial toll free
1-877-919-4059, international callers dial 1-334-323-0140. The passcode of
the audio replay is 98738767. Replay options: "1" begins playback, "4" rewind
30 seconds, "5" pause, "6" fast forward 30 seconds, "0" instructions, and
"9" exits recording. There may be a 30-40 minute delay until the archive is
available following the conclusion of the conference call.
Investors are cautioned that any statements in this press release which relate
to the future are, by their nature, subject to risks and uncertainties that
could cause actual results and events to differ materially from those
indicated in such forward-looking statements. These include, but are not
limited to: the possibility that we may be unable to find appropriate
reinvestment opportunities for the proceeds from the Sale Transaction; levels
of construction activity in the markets served by our mining properties;
demand for flexible warehouse/office facilities in the Baltimore-Washington-
Northern Virginia area demand for apartments in Washington D.C. and Richmond,
Virginia; our ability to obtain zoning and entitlements necessary for
property development; the impact of lending and capital market conditions on
our liquidity; our ability to finance projects or repay our debt; general real
estate investment and development risks; vacancies in our properties; risks
associated with developing and managing properties in partnership with others;
competition; our ability to renew leases or re-lease spaces as leases expire;
illiquidity of real estate investments; bankruptcy or defaults of tenants; the
impact of restrictions imposed by our credit facility; the level and
volatility of interest rates; environmental liabilities; inflation risks;
cybersecurity risks; as well as other risks listed from time to time in our
SEC filings; including but not limited to; our annual and quarterly reports.
We have no obligation to revise or update any forward-looking statements,
other than as imposed by law, as a result of future events or new information.
Readers are cautioned not to place undue reliance on such forward-looking
statements.
FRP Holdings, Inc. is a holding company engaged in the real estate business,
namely (i) leasing and management of commercial properties owned by the
Company, (ii) leasing and management of mining royalty land owned by the
Company, (iii) real property acquisition, entitlement, development and
construction primarily for apartment, retail, warehouse, and office,
(iv) leasing and management of a residential apartment building.
FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2019 2018 2019 2018
------ ------ ------ ------
Revenues:
Lease revenue $ 3,581 3,617 10,796 10,418
Mining lands lease revenue 2,302 2,125 7,164 5,952
--------- ------ ------- ------
Total Revenues 5,883 5,742 17,960 16,370
Cost of operations:
Depreciation, depletion
and amortization 1,431 1,821 4,390 6,350
Operating expenses 952 983 2,744 2,951
Environmental remediation - (465) - (465)
Property taxes 740 663 2,206 1,949
Management company indirect 670 550 1,872 1,366
Corporate expenses 732 522 1,928 2,910
--------- ------ ------- ------
Total cost of operations 4,525 4,074 13,140 15,061
Total operating profit 1,358 1,668 4,820 1,309
Net investment income, including
realized gains of $144, $0,
$591 and $0, respectively 2,019 1,654 5,813 1,875
Interest expense (129) (768) (989) (2,418)
Equity in loss of
joint ventures (746) (13) (1,282) (36)
Gain (loss) on real
estate investments 126 (3) 662 (3)
--------- ------ ------- ------
Income from continuing
operations before income
taxes 2,628 2,538 9,024 727
Provision for income taxes 726 508 2,529 269
--------- ------ ------- ------
Income from continuing
operations 1,902 2,030 6,495 458
Income (loss) from
discontinued operations, net (13) (78) 6,849 122,109
Net income 1,889 1,952 13,344 122,567
Loss attributable to
noncontrolling interest (112) (272) (380) (1,199)
--------- ------ ------- ------
Net income attributable to
the Company $ 2,001 2,224 13,724 123,766
========= ====== ======= ======
Earnings per common share:
Income from continuing
operations-
Basic $ 0.19 0.20 0.66 0.05
Diluted $ 0.19 0.20 0.65 0.05
Discontinued operations-
Basic $ 0.00 (0.01) 0.69 12.17
Diluted $ 0.00 (0.01) 0.69 12.08
Net income attributable
to the Company-
Basic $ 0.20 0.22 1.39 12.33
Diluted $ 0.20 0.22 1.38 12.24
Number of shares (in
thousands) used in computing:
-basic earnings
per common share 9,843 10,062 9,903 10,037
-diluted earnings
per common share 9,886 10,135 9,945 10,110
FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)
September 30 December 31
2019 2018
------------ ------------
Assets:
Real estate investments at cost:
Land $ 84,383 83,721
Buildings and improvements 145,690 144,543
Projects under construction 1,461 6,683
------------ ------------
Total investments in properties 231,534 234,947
Less accumulated depreciation and depletion 28,871 28,394
------------ ------------
Net investments in properties 202,663 206,553
------------ ------------
Real estate held for investment, at cost 8,283 7,167
Investments in joint ventures 103,822 88,884
------------ ------------
Net real estate investments 314,768 302,604
Cash and cash equivalents 69,246 22,547
Cash held in escrow 6,734 202
Accounts receivable, net 919 564
Investments available for sale at fair value 115,308 165,212
Federal and state income taxes receivable 27,189 9,854
Unrealized rents 548 53
Deferred costs 1,079 773
Other assets 474 455
Assets of discontinued operations 32 3,224
------------ ------------
Total assets $ 536,297 505,488
Liabilities:
Secured notes payable $ 88,891 88,789
Accounts payable and accrued liabilities 1,488 3,545
Other liabilities 1,978 100
Deferred revenue 831 27
Deferred income taxes 51,104 27,981
Deferred compensation 1,439 1,450
Tenant security deposits 334 53
Liabilities of discontinued operations 18 288
------------ ------------
Total liabilities 146,083 122,233
------------ ------------
Commitments and contingencies
Equity:
Common stock, $.10 par value
25,000,000 shares authorized,
9,823,668 and 9,969,174 shares issued
and outstanding, respectively 982 997
Capital in excess of par value 57,627 58,004
Retained earnings 313,262 306,307
Accumulated other comprehensive income, net 1,161 (701)
------------ ------------
Total shareholders' equity 373,032 364,607
Noncontrolling interest MRP 17,182 18,648
------------ ------------
Total equity 390,214 383,255
------------ ------------
Total liabilities and shareholders' equity $ 536,297 505,488
============ ============
PAGE>
Asset Management Segment:
------------------------
Three months ended September 30
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 430 100.0% 568 100.0% (138) -24.3%
Depreciation, depletion and amortization 154 35.8% 145 25.5% 9 6.2%
Operating expenses 108 25.1% 106 18.7% 2 1.9%
Property taxes 70 16.3% 43 7.6% 27 62.8%
Management company indirect 90 20.9% (2) -.4% 92 -4600.0%
Corporate expense 168 39.1% 34 6.0% 134 394.1%
-------- ------- -------- ------- -------- -------
Cost of operations 590 137.2% 326 57.4% 264 81.0%
-------- ------- -------- ------- -------- -------
Operating profit $ (160) -37.2% 242 42.6% (402) -166.1%
======== ======= ======== ======= ======== =======
Mining Royalty Lands Segment:
-----------------------------
Three months ended September 30
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Mining lands lease revenue $ 2,302 100.0% 2,125 100.0% 177 8.3%
Depreciation, depletion and amortization 36 1.6% 55 2.6% (19) -34.5%
Operating expenses 44 1.9% 48 2.2% (4) -8.3%
Property taxes 66 2.9% 61 2.9% 5 8.2%
Management company indirect 53 2.3% - 0.0% 53 0.0%
Corporate expense 44 1.9% 28 1.3% 16 57.1%
-------- ------- -------- ------- -------- -------
Cost of operations 243 10.6% 192 9.0% 51 26.6%
-------- ------- -------- ------- -------- -------
Operating profit $ 2,059 89.4% 1,933 91.0% 126 6.5%
======== ======= ======== ======= ======== =======
Development Segment:
-------------------
Three months ended September 30
--------------------------------------
(dollars in thousands) 2019 2018 Change
-------- -------- --------
Lease revenue $ 307 330 (23)
Depreciation, depletion and amortization 54 57 (3)
Operating expenses 105 143 (38)
Environmental remediation - (465) 465
Property taxes 300 269 31
Management company indirect 477 465 12
Corporate expense 479 408 71
-------- -------- --------
Cost of operations 1,415 877 538
-------- -------- --------
Operating loss $ (1,108) (547) (561)
======== ======== ========
Stabilized Joint Venture Segment:
--------------------------------
Three months ended September 30
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 2,844 100.0% 2,719 100.0% 125 4.6%
Depreciation, depletion and amortization 1,187 41.7% 1,564 57.5% (377) -24.1%
Operating expenses 695 24.4% 686 25.2% 9 1.3%
Property taxes 304 10.7% 290 10.7% 14 4.8%
Management company indirect 50 1.8% 87 3.2% (37) -42.5%
Corporate expense 41 1.5% 52 1.9% (11) -21.2%
-------- ------- -------- ------- -------- -------
Cost of operations 2,277 80.1% 2,679 98.5% (402) -15.0%
-------- ------- -------- ------- -------- -------
Operating profit $ 567 19.9% 40 1.5% 527 1317.5%
======== ======= ======== ======= ======== =======
Asset Management Segment:
------------------------
Nine months ended September 30
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 1,733 100.0% 1,717 100.0% 16 0.9%
Depreciation, depletion and amortization 527 30.4% 405 23.6% 122 30.1%
Operating expenses 492 28.4% 335 19.5% 157 46.9%
Property taxes 216 12.5% 122 7.1% 94 77.0%
Management company indirect 265 15.3% 72 4.2% 193 268.1%
Corporate expense 470 27.1% 146 8.5% 324 221.9%
-------- ------- -------- ------- -------- -------
Cost of operations 1,970 113.7% 1,080 62.9% 890 82.4%
-------- ------- -------- ------- -------- -------
Operating profit $ (237) -13.7% 637 37.1% (874) -137.2%
======== ======= ======== ======= ======== =======
Mining Royalty Lands Segment:
----------------------------
Nine months ended September 30
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Mining lands lease revenue $ 7,164 100.0% 5,952 100.0% 1,212 20.4%
Depreciation, depletion and amortization 130 1.8% 145 2.4% (15) -10.3%
Operating expenses 75 1.1% 128 2.2% (53) -41.4%
Property taxes 203 2.8% 182 3.1% 21 11.5%
Management company indirect 151 2.1% - 0.0% 151 0.0%
Corporate expense 123 1.7% 157 2.6% (34) -21.7%
-------- ------- -------- ------- -------- -------
Cost of operations 682 9.5% 612 10.3% 70 11.4%
-------- ------- -------- ------- -------- -------
Operating profit $ 6,482 90.5% 5,340 89.7% 1,142 21.4%
======== ======= ======== ======= ======== =======
Development Segment:
-----------------------------------------
Nine months ended September30
--------------------------------------
(dollars in thousands) 2019 2018 Change
-------- -------- --------
Lease revenue $ 892 944 (52)
Depreciation, depletion and amortization 161 171 (10)
Operating expenses 246 618 (372)
Environmental remediation - (465) 465
Property taxes 918 768 150
Management company indirect 1,314 998 316
Corporate expense 1,219 1,110 109
-------- -------- --------
Cost of operations 3,858 3,200 658
-------- -------- --------
Operating loss $ (2,966) (2,256) (710)
======== ======== ========
Stabilized Joint Venture Segment:
--------------------------------
Nine months ended September 30
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 8,171 100.0% 7,757 100.0% 414 5.3%
Depreciation, depletion and amortization 3,572 43.7% 5,629 72.6% (2,057) -36.5%
Operating expenses 1,931 23.6% 1,870 24.1% 61 3.3%
Property taxes 869 10.6% 877 11.3% (8) -0.9%
Management company indirect 142 1.8% 296 3.8% (154) -52.0%
Corporate expense 116 1.4% 289 3.7% (173) -59.9%
-------- ------- -------- ------- -------- -------
Cost of operations 6,630 81.1% 8,961 115.5% (2,331) -26.0%
-------- ------- -------- ------- -------- -------
Operating profit $ 1,541 18.9% (1,204) -15.5% 2,745 -228.00%
======== ======= ======== ======= ======== =======
Discontinued Operations:
-----------------------
Three months ended Nine months ended
September 30, September 30,
2019 2018 2019 2018
------ ------ ------ ------
Lease Revenue - 219 460 11,876
Cost of operations:
Depreciation, depletion
and amortization (24) 29 17 3,131
Operating expenses 12 52 246 1,694
Property taxes - 19 46 1,266
Management company indirect - 370 - 1,360
Corporate expenses - 56 - 1,458
--------- ------ ------- ------
Total cost of operations (12) 526 309 8,909
Total operating profit (loss) 12 (307) 151 2,967
Interest expense - - - (587)
Gain (loss) on sale of buildings (30) 200 9,238 165,007
--------- ------ ------- ------
Income (loss) before income taxes (18) (107) 9,389 167,387
Provision for (benefit from)
income taxes (5) (29) 2,540 45,278
--------- ------ ------- ------
Income (loss) from
discontinued operations $ (13) (78) 6,849 122,109
========= ====== ======= ======
Earnings per common share:
Income (loss) from
discontinued operations-
Basic 0.00 (0.01) 0.69 12.17
Diluted 0.00 (0.01) 0.69 12.08
Non-GAAP Financial Measures.
To supplement the financial results presented in accordance with GAAP, FRP
presents certain non-GAAP financial measures within the meaning of Regulation
G promulgated by the Securities and Exchange Commission. The non-GAAP
financial measure included in this quarterly report is net operating income
(NOI). FRP uses this non-GAAP financial measure to analyze its continuing
operations and to monitor, assess, and identify meaningful trends in its
operating and financial performance. This measure is not, and should not be
viewed as, a substitute for GAAP financial measures.
Net Operating Income Reconciliation
Nine months ended 09/30/19 (in thousands)
Stabilized
Asset Joint Mining Unallocated FRP
Management Development Venture Royalties Corporate Holdings
Segment Segment Segment Segment Expenses Totals
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations 218 (2,236) 304 4,796 3,413 6,495
Income Tax Allocation 81 (829) 253 1,778 1,246 2,529
---------- ---------- ---------- ---------- ---------- ----------
Income(loss) from continuing
operations before income taxes 299 (3,065) 557 6,574 4,659 9,024
Less:
Gains on sale of buildings 536 - - 126 - 662
Unrealized rents - - 25 - - 25
Interest income - 1,123 - - 4,690 5,813
Plus:
Unrealized rents 5 - - 184 - 189
Equity in loss of Joint Venture - 1,222 26 34 - 1,282
Interest Expense - - 958 - 31 989
Depreciation/Amortization 527 161 3,572 130 - 4,390
Management Co. Indirect 265 1,314 142 151 - 1,872
Allocated Corporate Expenses 470 1,219 116 123 - 1,928
---------- ---------- ---------- ---------- ---------- ----------
Net Operating Income (loss) 1,030 (272) 5,346 7,070 - 13,174
Net Operating Income Reconciliation
Nine months ended 09/30/18 (in thousands)
Stabilized
Asset Joint Mining Unallocated FRP
Management Development Venture Royalties Corporate Holdings
Segment Segment Segment Segment Expenses Totals
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations 1,648 (1,625) (2,967) 3,870 (468) 458
Income Tax Allocation 611 (603) (655) 1,435 (519) 269
---------- ---------- ---------- ---------- ---------- ----------
Income(loss) from continuing
operations before income taxes 2,259 (2,228) (3,622) 5,305 (987) 727
Less:
Unrealized rents - - 163 - - 163
Interest income 1,622 32 - - 221 1,875
Plus:
Unrealized rents 27 - - 369 - 396
Loss on investment land sold - 3 - - - 3
Equity in loss of Joint Venture - 1 - 35 - 36
Interest Expense - - 2,418 - - 2,418
Depreciation/Amortization 405 171 5,629 145 - 6,350
Management Co. Indirect 72 998 296 - - 1,366
Allocated Corporate Expenses 146 1,110 289 157 1,208 2,910
---------- ---------- ---------- ---------- ---------- ----------
Net Operating Income 1,287 23 4,847 6,011 - 12,168