Attached files
FRP HOLDINGS, INC./NEWS
Contact: John D. Baker III
Chief Financial Officer 904/858-9100
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FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCES RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2019
FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; March 4, 2020 -
Fourth Quarter Consolidated Results of Operations
Net income for the fourth quarter of 2019 was $2,453,000 or $.25 per share
versus $706,000 or $.07 per share in the same period last year.
The fourth quarter of 2019 was impacted by the following items:
* Federal and state tax refunds of $26 million were received including
$302,000 of interest income. This refund impacted the balance sheet and
cash flow statement but, apart from the interest income, had no impact
on the income statement because the credit to current tax expense and
charge to deferred tax expense net out.
* Income tax expense was reduced $341,000 due to favorable state
apportionment.
* Operating expenses includes $463,000 professional fees for Anacostia
legal fees for environmental recovery efforts.
* We incurred $63,000 professional legal fees related to three new
opportunity zone joint ventures.
* Interest income includes $691,000 for Bryant Street and The Maren
preferred interest.
* Interest income includes $358,000 realized gain on bonds.
* Loss on joint ventures includes $473,000 for our share of Bryant Street
and The Maren preferred interest and $118,000 amortization of guarantee
liability related to the Bryant Street loan.
The fourth quarter of 2018 included a $905,000 realized loss on the sale of
bonds, $372,000 for the annual director stock grant and $100,000 for stock
options granted to employees, $218,000 in professional fees related to the
organization of the Bryant St. joint venture, $276,000 in due diligence costs
on a potential purchase of raw land in Baltimore, $81,000 preferred interest
on The Maren.
Fourth 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 in the first quarter of this year, and 1801 62nd Street which
joined this segment 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-height ceiling. We completed construction on
this building earlier this year and it is now 100% leased and occupied. Total
revenues in this segment were $457,000, down $135,000 or 22.8%, over the same
period last year. Operating loss was $213,000, down $474,000 from an
operating profit of $261,000 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
1801 62nd Street to Asset Management in the second quarter.
Mining Royalty Lands Segment:
----------------------------
Total revenues in this segment were $2,274,000 versus $2,187,000 in the same
period last year. Total operating profit in this segment was $2,039,000, an
increase of $89,000 versus $1,950,000 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.
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:
* PUD entitlements for our 118-acre tract in Hampstead, Maryland, now
known as "Hampstead Overlook" are ongoing. Earlier this year,
Hampstead Overlook received non-appealable rezoning from industrial
to residential.
* We finished shell building construction in December 2018 on the two
office buildings in the first phase of our joint venture with St. John
Properties. Shell building construction of the two retail buildings
was completed in January 2019. 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
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. Entitlements for the development of the
property are complete, a homebuilder is under contract to purchase all
of the 126 recorded building lots, and settlement is expected in the
second quarter of 2020.
* 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
190 town homes. We are currently pursuing entitlements and have two
homebuilders under contract to purchase all 190 units upon completion
of development infrastructure.
* 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 first units of the building in April 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 as of the end
of the year was 46% complete. The project is currently on time, within
budget, and expected to be complete in the fourth quarter of 2021.
This project is located in an opportunity zone and has allowed us to
defer $14.9 million in taxes associated with last year's asset sale.
* In December 2019, the Company entered into a joint venture agreement
with MRP for the development of a mixed-use project known as
"1800 Half Street." The development is located in the Buzzard Point
area of Washington, DC, less than half a mile downriver from Dock 79
and the Maren. It lies directly between our two acres on the Anacostia,
currently under lease by Vulcan, and Audi Field, the home stadium of
the DC United. The 10-story structure will have 344 apartments and
11,246 square feet of ground floor retail. FRP contributed
$37.3 million in common equity. The project is a qualified opportunity
zone investment and will defer just over $10 million in taxes
associated with last year's asset sale.
* In December 2019, the company entered into two joint ventures in
Greenville, SC with a new partner, Woodfield Development.
Woodfield specializes in Class-A multi-family, mixed use developments
primarily in the Carolinas and DC. Our first joint venture with them
is a 200-unit multifamily project known as "Riverside."
FRP contributed $6.2 million in common equity for a 40% ownership
interest. Construction is set to begin in the first quarter of 2020
and should be complete in the third quarter of 2021. The second joint
venture in Greenville with Woodfield is a 227-unit multifamily
development known as ".408 Jackson." It will have 4,700 square feet of
retail and is located across the street from Greenville's minor league
baseball stadium. FRP contributed $9.7 million in common equity for a
40% ownership interest. Construction is set to begin in the second
quarter of 2020 and should be complete in the second quarter of 2022.
Both projects are qualified opportunity investments and will defer a
combined $4.3 million in taxes.
Stabilized Joint Venture Segment:
--------------------------------
Dock 79's average occupancy for the quarter was 95.11%, and at the end of the
quarter, Dock 79 was 91.48% leased and 93.44% occupied. This quarter, 63.08%
of expiring leases renewed with an average increase in rent on those renewals
of 2.67%. Net Operating Income this quarter for this segment was $1,821,000,
up $130,000 or 7.69% 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.
Fourth quarter distributions were $83,000. The project is a qualified 1031
like-kind exchange investment and will defer $790,000 in taxes associated
with the sales of 7030 Dorsey Road and 1502 Quarry Drive
Calendar Year 2019 Consolidated Results of Operations
Net income for 2019 was $16,177,000 or $1.63 per share versus $124,472,000
or $12.32 per share in the same period last year. Income from discontinued
operations for 2019 was $6,856,000 or $.69 per share versus $122,129,000
or $12.09 per share in the same period last year. Income from continuing
operations was impacted by the following items:
* Federal and state tax refunds of $26 million were received including
$302,000 of interest income. This refund impacted the balance sheet
and cash flow statement but, apart from the interest income, had no
impact on the income statement because the credit to current tax
expense and charge to deferred tax expense net out.
* Income tax expense was reduced $341,000 due to favorable state
apportionment.
* Operating expenses includes $627,000 professional fees for Anacostia
legal fees for environmental recovery efforts.
* We incurred $142,000 professional legal fees related to three new
opportunity zone joint ventures.
* Interest income includes $1,709,000 for Bryant Street and The Maren
preferred interest.
* Interest income includes $949,000 realized gain on bonds.
* Loss on joint ventures includes $1,232,000 for our share of Bryant
Street and The Maren preferred interest and $373,000 amortization of
guarantee liability related to the Bryant Street loan.
Calendar year 2018 income from continuing operations of $959,000 included
$1,457,000 in stock compensation expense ($1,055,000 for the 2018 director
stock grant and $402,000 for vesting of option grants from 2016 and 2017 due
to the asset disposition).
Calendar Year 2019 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 during the first quarter of this year, 1801 62nd Street which
joined this business segment on April 1, and two commercial properties that
remained after the sale this year 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. We made substantial
progress in 2019 on our plan to implement approximately $2 million in
improvements in order to lease-up the property. An additional $1 million of
capital is projected for future leasing costs bringing the total investment
to approximately $9.5 million or $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-height ceiling. We completed construction of
this building earlier this year and it is 100% leased and occupied as of
December 31, 2019. Total revenues in this segment were $2,190,000,
down $119,000 or 5.2%, over the same period last year. Operating loss
was ($450,000), down $1,348,000 from an operating profit of $898,000 in the
same period last year due to higher allocation of corporate expenses,
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 $9,438,000 versus $8,139,000 in the same
period last year. Total operating profit in this segment was $8,521,000, an
increase of $1,231,000 versus $7,290,000 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 2019 at Dock 79 was 95.46%, and at the end of the year,
Dock 79 was 91.48% leased and 93.44% occupied. Through 2019, 60.68% of
expiring leases have renewed with an average increase in rent of 2.76%.
Net Operating Income for this segment was $7,167,000, up $629,000 or 9.62%
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. Distributions in 2019 were $123,000.
Summary and Outlook
With the second quarter dispositions of our assets at 1502 Quarry Drive and
7030 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 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 and from new raw land purchases, or rehabilitate
an existing industrial asset acquired at a discount with the aim of selling
the fully leased buildings individually or in groups when the market dictates
these actions.
This quarter marked the seventh consecutive quarter of increases in mining
royalty revenue compared to the same period the year before and represents
the segment's best year in terms of financial performance. Operating profit
this year was higher than last year's revenue, which until this year was the
highest revenue total in this segment's history. Had the year ended after the
first three quarters, which is to say, had we collected no royalties
whatsoever in the fourth quarter, this segment would still have experienced
its third highest revenue total.
Construction remains on schedule for The Maren and Bryant Street, with the
expectation of delivering the first units of The Maren in April 2020.
While construction should be complete at Bryant St in 2021, the first
residential units 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.
In the final days of 2019, we were able to put over $53 million to work in
opportunity zone investments in Washington, DC and Greenville, SC. Though
"Riverside" and ".408 Jackson" are a step outside of our traditional
geographic footprint, we were impressed with Greenville and felt the growth
potential of the market and the track record of our new partner warranted
the investment. As to "1800 Half Street," what really attracted us to this
deal, beyond investing in one of the best markets in the country, is the
ability to augment our footprint in an area where we already planned to
develop, with partners we know and trust, and the added benefit of investing
in an opportunity zone. We think this investment will only further enhance
and serve as a launching point for Square 664E when Vulcan's lease and option
to renew finally runs out in 2026.
2019 was the second full year of having Dock 79 consolidated on to the
Company's books, but the first in which we were fighting the headwinds of
both new supply in the market and disruptions to our tenants caused by the
construction of The Maren next door. That we renewed a higher percentage of
tenants than we did in 2018 (60.68% vs. 58.40%) with a comparable percentage
increase in rent (2.76% vs 3.29%), we believe is a powerful reminder of both
the quality of the asset and the demand for waterfront real estate.
In light of the performance of the Mining Royalties Segment or Dock 79 or
the transformation of our Asset Management Segment, one could look back at
the twelve months with some degree of satisfaction. This was an excellent
year for many of our assets-in some cases, the best year they've ever had.
And yet the asset that looms largest in the minds of management-our
substantial cash holdings-remains by and large unchanged and presents us
with the same challenges we faced a year ago. We are actively pursuing
different projects in which to put the money to use while remaining cautious
and perhaps conservative in terms of the standard of quality of any project
we consider. Our most recent opportunity zone investments in DC and South
Carolina speak to that. But the $160 million that remains deserves a better
home than fixed income, and so we are faced with a choice in investment
philosophy: do we find a home for the money today that can generate a better
return than investment-grade bonds, or do we sit pat and wait for something
extraordinary? We opted for the latter, and the shareholder patience required
to execute it has not gone unappreciated by management. Though our team is
anxious to return your money to you in the form of new investments, 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. In 2019, the Company repurchased 169,251 shares at an
average cost of $48.51 per share and had authorization to repurchase another
$10,939,000 in stock.
Conference Call
The Company will host a conference call on Thursday, March 5, 2020 at
9:00 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/frp030420. For the archived audio via
the internet, click on the following link
http://archive.conferenceamerica.com/archivestream/frp030420.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 36392907. 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31
2019 2018 2019 2018
---- ---- ---- ----
Revenues:
Lease revenue $ 3,522 3,465 14,318 13,883
Mining lands lease revenue 2,274 2,187 9,438 8,139
------ ------ ------ ------
Total Revenues 5,796 5,652 23,756 22,022
Cost of operations:
Depreciation, depletion
and amortization 1,465 1,548 5,855 7,898
Operating expenses 1,390 1,334 4,134 4,285
Environmental remediation - - - (465)
Property taxes 735 676 2,941 2,625
Management company indirect 642 399 2,514 1,765
Corporate expenses 628 1,042 2,556 3,952
------ ------ ------ ------
Total cost of operations 4,860 4,999 18,000 20,060
Total operating profit 936 653 5,756 1,962
Net investment income,
including realized gains
(losses) of $358, ($905),
$949 and ($1,195),
respectively 2,562 797 8,375 2,672
Interest expense (65) (685) (1,054) (3,103)
Equity in loss of joint ventures (672) (52) (1,954) (88)
Gain (loss) on real estate
investments (1) 43 661 40
------ ------ ------ ------
Income from continuing
operations before income
taxes 2,760 756 11,784 1,483
Provision for income taxes 433 255 2,962 524
------ ------ ------ ------
Income from continuing
operations 2,327 501 8,822 959
Income from discontinued
operations, net 7 20 6,856 122,129
Net income 2,334 521 15,678 123,088
Loss attributable to
noncontrolling interest (119) (185) (499) (1,384)
------ ------ ------ ------
Net income attributable to
the Company $ 2,453 706 16,177 124,472
====== ====== ====== ======
Earnings per common share:
Income from continuing
operations-
Basic $ 0.24 0.05 0.89 0.10
Diluted $ 0.24 0.05 0.89 0.09
Discontinued operations-
Basic $ 0.00 0.00 0.69 12.16
Diluted $ 0.00 0.00 0.69 12.09
Net income attributable
to the Company-
Basic $ 0.25 0.07 1.64 12.40
Diluted $ 0.25 0.07 1.63 12.32
Number of shares (in
thousands) used in computing:
-basic earnings per
common share 9,823 10,049 9,883 10,040
-diluted earnings per
common share 9,866 10,094 9,926 10,105
FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)
December 31 December 31
2019 2018
----------- -----------
Assets:
Real estate investments at cost:
Land $ 84,383 83,721
Buildings and improvements 147,019 144,543
Projects under construction 1,056 6,683
----------- -----------
Total investments in properties 232,458 234,947
Less accumulated depreciation and depletion 30,271 28,394
----------- -----------
Net investments in properties 202,187 206,553
----------- -----------
Real estate held for investment, at cost 8,380 7,167
Investments in joint ventures 160,452 88,884
----------- -----------
Net real estate investments 371,019 302,604
----------- -----------
Cash and cash equivalents 26,607 22,547
Cash held in escrow 186 202
Accounts receivable, net 546 564
Investments available for sale at fair value 137,867 165,212
Federal and state income taxes receivable - 9,854
Unrealized rents 554 53
Deferred costs 890 773
Other assets 479 455
Assets of discontinued operations - 3,224
----------- -----------
Total assets $ 538,148 505,488
=========== ===========
Liabilities:
Secured notes payable $ 88,925 88,789
Accounts payable and accrued liabilities 2,431 3,545
Other liabilities 1,978 100
Deferred revenue 790 27
Federal and state income taxes payable 504 -
Deferred income taxes 50,111 27,981
Deferred compensation 1,436 1,450
Tenant security deposits 328 53
Liabilities of discontinued operations - 288
----------- -----------
Total liabilities 146,503 122,233
----------- -----------
Commitments and contingencies
Equity:
Common stock, $.10 par value
25,000,000 shares authorized,
9,817,429 and 9,969,174 shares issued
and outstanding, respectively 982 997
Capital in excess of par value 57,705 58,004
Retained earnings 315,278 306,307
Accumulated other comprehensive income, net 923 (701)
---------- -----------
Total shareholders' equity 374,888 364,607
Noncontrolling interest MRP 16,757 18,648
----------- -----------
Total equity 391,645 383,255
----------- -----------
Total liabilities and shareholders' equity $ 538,148 505,488
=========== ===========
Asset Management Segment:
------------------------
Three Months Ended December 31
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 457 100.0% 592 100.0% (135) -22.8%
Depreciation, depletion and amortization 181 39.6% 135 22.8% 46 34.1%
Operating expenses 158 34.6% 117 19.8% 41 35.0%
Property taxes 70 15.3% 42 7.1% 28 66.7%
Management company indirect 85 18.6% 30 5.0% 55 183.3%
Corporate expense 176 38.5% 7 1.2% 169 2414.3%
-------- ------- -------- ------- -------- -------
Cost of operations 670 146.6% 331 55.9% 339 102.4%
-------- ------- -------- ------- -------- -------
Operating profit $ (213) -46.6% 261 44.1% (474) -181.6%
Mining Royalty Lands Segment:
----------------------------
Three Months Ended December 31
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Mining lands lease revenue $ 2,274 100.0% 2,187 100.0% 87 4.0%
Depreciation, depletion and amortization 47 2.1% 53 2.4% (6) -11.3%
Operating expenses 24 1.0% 40 1.8% (16) -40.0%
Property taxes 68 3.0% 87 4.0% (19) -21.8%
Management company indirect 50 2.2% - 0.0% 50 0.0%
Corporate expense 46 2.0% 57 2.6% (11) -19.3%
-------- ------- -------- ------- -------- -------
Cost of operations 235 10.3% 237 10.8% (2) -0.8%
-------- ------- -------- ------- -------- -------
Operating profit $ 2,039 89.7% 1,950 89.2% 89 4.6%
======== ======= ======== ======= ======== =======
Development Segment:
-------------------
Three Months Ended December 31
----------------------------------------
(dollars in thousands) 2019 2018 Change
----------- ----------- ------------
Lease revenue $ 272 262 10
Depreciation, depletion and amortization 53 57 (4)
Operating expenses 522 580 (58)
Property taxes 308 269 39
Management company indirect 459 314 145
Corporate expense 362 874 (512)
----------- ----------- ------------
Cost of operations 1,704 2,094 (390)
----------- ----------- ------------
Operating loss $ (1,432) (1,832) 400
=========== =========== ============
Stabilized Joint Venture Segment:
--------------------------------
Three Months Ended December 31
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 2,793 100.0% 2,611 100.0% 182 7.0%
Depreciation, depletion and amortization 1,184 42.4% 1,303 49.9% (119) -9.1%
Operating expenses 686 24.6% 597 22.9% 89 14.9%
Property taxes 289 10.3% 278 10.6% 11 4.0%
Management company indirect 48 1.7% 55 2.1% (7) -12.7%
Corporate expense 44 1.6% 104 4.0% (60) -57.7%
-------- ------- -------- ------- -------- -------
Cost of operations 2,251 80.6% 2,337 89.5% (86) -3.7%
-------- ------- -------- ------- -------- -------
Operating profit $ 542 19.4% 274 10.5% 268 97.8%
======== ======= ======== ======= ======== =======
Asset Management Segment:
------------------------
Twelve Months Ended December 31
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 2,190 100.0% 2,309 100.0% (119) -5.2%
Depreciation, depletion and amortization 708 32.3% 540 23.4% 168 31.1%
Operating expenses 650 29.7% 452 19.6% 198 43.8%
Property taxes 286 13.0% 164 7.1% 122 74.4%
Management company indirect 350 16.0% 102 4.4% 248 243.1%
Corporate expense 646 29.5% 153 6.6% 493 322.2%
-------- ------- -------- ------- -------- -------
Cost of operations 2,640 120.5% 1,411 61.1% 1,229 87.1%
-------- ------- -------- ------- -------- -------
Operating profit $ (450) -20.5% 898 38.9% (1,348) -150.1%
======== ======= ======== ======= ======== =======
Mining Royalty Lands Segment:
----------------------------
Twelve Months Ended December 31
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Mining lands lease revenue $ 9,438 100.0% 8,139 100.0% 1,299 16.0%
Depreciation, depletion and amortization 177 1.9% 198 2.4% (21) -10.6%
Operating expenses 99 1.0% 168 2.1% (69) -41.1%
Property taxes 271 2.9% 269 3.3% 2 0.7%
Management company indirect 201 2.1% - 0.0% 201 0.0%
Corporate expense 169 1.8% 214 2.6% (45) -21.0%
-------- ------- -------- ------- -------- -------
Cost of operations 917 9.7% 849 10.4% 68 8.0%
-------- ------- -------- ------- -------- -------
Operating profit $ 8,521 90.3% 7,290 89.6% 1,231 16.9%
======== ======= ======== ======= ======== =======
Development Segment:
-------------------
Twelve Months Ended
----------------------------------------
(dollars in thousands) 2019 2018 Change
----------- ----------- ------------
Lease revenue $ 1,164 1,206 (42)
Depreciation, depletion and amortization 214 228 (14)
Operating expenses 768 1,198 (430)
Environmental remediation - (465) 465
Property taxes 1,226 1,037 189
Management company indirect 1,773 1,312 461
Corporate expense 1,581 1,984 (403)
----------- ----------- ------------
Cost of operations 5,562 5,294 268
----------- ----------- ------------
Operating loss $ (4,398) (4,088) (310)
=========== =========== ============
Stabilized Joint Venture Segment:
--------------------------------
Twelve Months Ended December 31
---------------------------------------
(dollars in thousands) 2019 % 2018 % Change %
-------- ------- -------- ------- -------- -------
Lease revenue $ 10,964 100.0% 10,368 100.0% 596 5.7%
Depreciation, depletion and amortization 4,756 43.4% 6,932 66.9% (2,176) -31.4%
Operating expenses 2,617 23.9% 2,467 23.8% 150 6.1%
Property taxes 1,158 10.6% 1,155 11.1% 3 0.3%
Management company indirect 190 1.7% 351 3.4% (161) -45.9%
Corporate expense 160 1.4% 393 3.8% (233) -59.3%
-------- ------- -------- ------- -------- -------
Cost of operations 8,881 81.0% 11,298 109.0% (2,417) -21.4%
-------- ------- -------- ------- -------- -------
Operating profit $ 2,083 19.0% (930) -9.0% 3,013 -324.0%
======== ======= ======== ======= ======== =======
Discontinued Operations:
-----------------------
Three months ended Twelve months ended
December 31, December 31,
2019 2018 2019 2018
------ ------ ------ ------
Lease Revenue - 222 460 12,098
Cost of operations:
Depreciation, depletion
and amortization - 30 17 3,161
Operating expenses 2 48 248 1,742
Property taxes (5) 20 41 1,286
Management company indirect - - - 1,360
Corporate expenses - 4 - 1,462
--------- ------ ------- ------
Total cost of operations (3) 102 306 9,011
Total operating profit 3 120 154 3,087
Interest expense - - - (587)
Gain (loss) on sale of buildings 6 (92) 9,244 164,915
--------- ------ ------- ------
Income before income taxes 9 28 9,398 167,415
Provision for income taxes 2 8 2,542 45,286
--------- ------ ------- ------
Income (loss) from
discontinued operations $ 7 20 6,856 122,129
========= ====== ======= =======
Earnings per common share:
Income (loss) from
discontinued operations-
Basic 0.00 0.00 0.69 12.16
Diluted 0.00 0.00 0.69 12.09
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
Twelve months ended 12/31/19 (in thousands)
Stabilized
Asset Joint Mining Unallocated FRP
Management Development Venture Royalties Corporate Holdings
Segment Segment Segment Segment Expenses Totals
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations 63 (2,988) 736 6,277 4,734 8,822
Income Tax Allocation 23 (1,108) 458 2,327 1,262 2,962
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before income taxes 86 (4,096) 1,194 8,604 5,996 11,784
Less:
Gains on sale of buildings 536 - - 125 - 661
Unrealized rents 5 - 22 - - 27
Interest income - 2,337 - - 6,038 8,375
Equity in gain of Joint Venture - - 123 - - 123
Plus:
Unrealized rents - - - 123 - 123
Equity in loss of Joint Venture - 2,035 - 42 - 2,077
Interest Expense - - 1,012 - 42 1,054
Depreciation/Amortization 708 214 4,756 177 - 5,855
Management Co. Indirect 350 1,773 190 201 - 2,514
Allocated Corporate Expenses 646 1,581 160 169 - 2,556
---------- ---------- ---------- ---------- ---------- ----------
Net Operating Income (loss) 1,249 (830) 7,167 9,191 - 16,777
Net Operating Income Reconciliation
Twelve months ended 12/31/18 (in thousands)
Stabilized
Asset Joint Mining Unallocated FRP
Management Development Venture Royalties Corporate Holdings
Segment Segment Segment Segment Expenses Totals
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations 2,282 (2,844) (3,316) 5,305 (468) 959
Income Tax Allocation 847 (1,054) (717) 1,967 (519) 524
---------- ---------- ---------- ---------- ---------- ----------
Income(loss) from continuing
operations before income taxes 3,129 (3,898) (4,033) 7,272 (987) 1,483
Less:
Gains on investment land sold - - - 43 - 43
Unrealized rents - - 208 - - 208
Interest income 2,231 220 - - 221 2,672
Plus:
Unrealized rents 16 - - 494 - 510
Loss on investment land sold - 3 - - - 3
Equity in loss of Joint Venture - 27 - 61 - 88
Interest Expense - - 3,103 - - 3,103
Depreciation/Amortization 540 228 6,932 198 - 7,898
Management Co. Indirect 102 1,312 351 - - 1,765
Allocated Corporate Expenses 153 1,984 393 214 1,208 3,952
---------- ---------- ---------- ---------- ---------- ----------
Net Operating Income 1,709 (564) 6,538 8,196 - 15,879
