8-K
Frp Holdings, Inc. (FRPH)
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to
Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November3, 2021
FRP HOLDINGS,
INC.
(Exact name of registrant as specified in its charter)
| florida<br><br> <br>(State or other jurisdiction of incorporation) | 001-36769<br><br> <br>(Commission File<br> Number) | 47-2449198<br><br> <br>(IRS Employer<br> Identification No.) |
|---|---|---|
| 200 W. FORSYTH STREET, 7TH FLOOR<br><br> <br>JACKSONVILLE, FL<br><br> <br>(Address of principal executive offices) | 32202<br><br> <br>(Zip Code) | |
| --- | --- |
(904) 858-9100
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | FRPH | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 3, 2021, FRP Holdings, Inc. issued a press release announcing results of operations for the third quarter ended September 30, 2021. A copy of the press release is furnished as Exhibit 99.1.
The information in this report (including the exhibit) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 FRP Holdings, Inc. Press Release dated November 3, 2021
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FRP HOLDINGS, INC. | ||
|---|---|---|
| Registrant | ||
| Date: November 3, 2021 | By: | /s/John D. Baker III |
| John D. Baker III | ||
| Chief Financial Officer |
FRP
HOLDINGS, INC./NEWS
Contact: John D. Baker III
Chief Financial Officer 904/858-9100
FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCESRESULTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2021
FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; November 3, 2021 –
Third Quarter Operational Highlights
| · | Dock<br>79 ended the reporting period with residential occupancy above 94% for the fourth straight quarter |
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| · | Leasing<br>efforts have begun at Riverside as well as the second building at Bryant Street, Chase 1B |
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| · | Average<br>residential occupancy above 95% for the quarter for both Dock 79 and The Maren |
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| · | Both<br>Dock 79 and The Maren are now 100% commercially leased |
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Third Quarter Consolidated Resultsof Operations
Net income attributable to the Company for the third quarter of 2021 was $352,000 or $.04 per share versus $5,455,000 or $.57 per share in the same period last year. The third quarter of 2021 was impacted by the following items:
| · | Interest income decreased $871,000<br>due to bond maturities and the repayment of the Company’s preferred interest in The Maren upon the building’s refinancing |
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| · | Interest expense increased $368,000<br>due to interest on The Maren’s debt, partially offset by a lower interest rate on the refinanced Dock 79 debt. |
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| · | Gain from sale of real estate<br>decreased $5,732,000 because of two property sales during the same period last year. The sale of our building at 1801 62nd Street and<br>87 acres at Ft. Myers resulted in a gain of $5,732,000 in the third quarter of 2020 and there were no such gains this quarter to offset<br>the decrease. |
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Third Quarter Segment OperatingResults
Asset Management Segment:
Total revenues in this segment were $619,000, down $102,000 or 14.1%, over the same period last year due to the sale of our warehouse 1801 62^nd^ Street in July 2020 which had $59,000 of revenues in the same quarter last year. Operating loss was $(11,000), down $46,000 from an operating profit of $35,000 in the same quarter last year primarily due to the sale of 1801 62^nd^ Street. Cranberry Run, which we purchased
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in the first quarter of 2019, is a five-building industrial park in Harford County, Maryland totaling 267,737 square feet of industrial/ flex space and at quarter end was 96.6% leased and 68.6% occupied compared to 78.6% leased and occupied 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 Vulcan’s former Jacksonville office (now a vacant lot), fully leased through March 2026.
Mining Royalty Lands Segment:
Total revenues in this segment were $2,249,000 versus $2,507,000 in the same period last year. Total operating profit in this segment was $1,968,000, a decrease of $270,000 versus $2,238,000 in the same period last year. This decrease is a result of Vulcan temporarily shifting operations off of our land in Manassas this quarter as part of their mining plan.
Development Segment:
With respect to developments in the quarter on ongoing projects:
| · | This quarter, we purchased 17<br>acres in Harford County, Maryland for $1.96 million for the purposes of industrial development. We are pursuing entitlements on the land,<br>and we anticipate beginning construction in the third quarter of 2022 on a 250,000 square foot, Class A warehouse which will comprise<br>the entirety of the developable space on the site. |
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| · | In the third quarter of 2020,<br>we received permit entitlements for two industrial buildings at Hollander Business Park. We have started construction and anticipate<br>shell completion in the fourth quarter of 2021. Of this project’s 145,750 square feet, 42,405 square feet are pre-leased. We have<br>started construction on a build-to-suit building totaling 101,750 square feet. We estimate shell completion and occupancy in the fourth<br>quarter of 2022. |
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| · | With respect to our joint venture<br>with St. John Properties, we are now in the process of leasing these four single-story buildings totaling 100,030 square feet of office<br>and retail space. At quarter end, Phase I was 48.1% leased and 46.8% occupied. |
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| · | We are the principal capital<br>source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” Of the<br>$18.5 million in committed capital to the project, $15.3 million in principal draws have taken place to date. Through the end of the third<br>quarter, 16 of the 187 units have been sold, and we have received $4,126,179 in preferred interest and principal to date. |
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| · | The Coda, the first of our four<br>buildings at Bryant Street joint venture, received a final certificate of occupancy on April 1, 2021, and leasing efforts are under way.<br>At quarter end, the Coda was 95.5% leased and 93.5% occupied. Leasing began in August on the second building at Bryant Street, known<br>as the Chase 1B. At quarter end, this building was 48.1% leased and 23.5% occupied. Leasing of the third building, the Chase 1A, should<br>begin in the fourth quarter. The fourth building which is purely a commercial space is 90% leased to Alamo Draft House. We expect it to<br>open in the fourth quarter of this year. In total, at quarter end, two of our four buildings have their certificate of occupancy, and<br>Bryant Street’s 488 residential units are 46.1% leased and 37.3% occupied. Its commercial space is 74.9% leased with no occupancy<br>currently. |
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| --- | | · | We began construction on our<br>1800 Half Street joint venture project at the end of August 2020 and expect the building to be complete in the third quarter of 2022.<br>As of the end of the third quarter, the project was 45.61% complete. | | --- | --- | | · | At quarter end, our Riverside<br>joint venture project in Greenville, South Carolina is 98% complete and awaiting its final certificate of occupancy. Leasing began this<br>quarter and the building is 35% leased and 23% occupied. | | --- | --- | | · | At quarter end, our .408 Jackson<br>joint venture project in Greenville, South Carolina is 70% complete. We expect to complete construction and begin leasing in third quarter<br>of 2022. | | --- | --- |
Stabilized Joint Venture Segment:
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 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, as of March 31, 2021, the Company consolidated the assets (at current fair value based on appraisal), liabilities and operating results of the joint venture. 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 are accounted for in the same manner as Dock 79 in the stabilized joint venture segment.
Total revenues in this segment were $5,204,000, an increase of $2,624,000 versus $2,580,000 in the same period last year. The Maren’s revenue was $2,428,000 and Dock 79 revenues increased $196,000. Total operating loss in this segment was $(495,000), a decrease of $843,000 versus a profit of $348,000 in the same period last year. The quarter includes $1,373,000 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 $3,113,000, up $1,479,000 or 90.51% compared to the same quarter last year due to The Maren’s consolidation into this segment.
At the end of September, The Maren was 93.56% leased and 95.45% occupied. Average residential occupancy for the quarter was 95.92%, and 71.91% of expiring leases renewed with no increase in rent due to the mandated rent freeze on renewals in DC. The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership.
Dock 79’s average residential occupancy for the quarter was 95.94%, and at the end of the quarter, Dock 79’s residential units were 93.11% leased and 94.75% occupied. This quarter, 57.75% of expiring leases renewed with no increase in rent due to the mandated rent freeze on renewals in DC. Dock 79 is a joint
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venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.
Third quarter distributions from our CS1031 Hickory Creek DST investment were $86,000.
Nine Months Operational Highlights
| · | Highest<br>mining royalty revenue total through the first nine months in segment’s history |
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| · | Three<br>straight quarters of mining revenue for the LTM higher than $9.5 million |
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Nine Months Consolidated Resultsof Operations
Net income attributable to the Company for the first nine months of 2021 was $28,807,000 or $3.07 per share versus $11,222,000 or $1.16 per share in the same period last year. The first nine months of 2021 was impacted by the following items:
| · | Gain of $51.1 million on the<br>remeasurement of investment in The Maren real estate partnership, which is included in Income before income taxes. This gain on remeasurement<br>is mitigated by a $10.1 million provision for taxes and $14.0 million attributable to noncontrolling interest. |
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| · | The period includes $3,241,000<br>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<br>the gain on remeasurement upon consolidation of this Joint Venture. |
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| · | Interest income decreased $2,549,000<br>due to bond maturities and the repayment of the Company’s preferred interest in The Maren upon the building’s refinancing |
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| · | Interest expense increased $1,643,000<br>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<br>rate on Dock 79. |
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| · | Gain from sale of real estate<br>decreased $8,524,000. The prior quarter included $805,000 for an easement and sale of excess land in the Mining Royalty Lands Segment.<br>The prior year included a gain of $9,329,000 from the sale of the three remaining lots at our Lakeside Business Park, 1801 62^nd^<br>Street, our inactive and depleted quarry land at Gulf Hammock, and 87 acres from our Ft. Myers property. |
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Nine Months Segment Operating Results
Asset Management Segment:
Total revenues in this segment were $1,919,000, down $170,000 or 8.1%, over the same period last year due to the sale of our warehouse 1801 62^nd^ Street in July 2020 which had $423,000 of revenues in the same period last year. Operating loss was ($154,000), down $116,000 from an operating loss of ($38,000) in the same period last year primarily due to the sale of 1801 62^nd^ Street.
Mining Royalty Lands Segment:
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Total revenues in this segment were $7,198,000 versus $7,094,000 in the same period last year. Total operating profit in this segment was $6,273,000, an increase of $21,000 versus $6,252,000 in the same period last year.
Stabilized Joint Venture Segment:
Total revenues in this segment were $12,535,000, an increase of $4,850,000 versus $7,685,000 in the same period last year. The Maren’s revenue was $4,591,000 and Dock 79 revenues increased $260,000. Total operating loss in this segment was ($1,636,000), a decrease of $2,847,000 versus a profit of $1,211,000 in the same period last year. The period includes $3,241,000 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 $7,684,000, up $2,584,000 or 50.67% compared to the same period last year due to The Maren’s consolidation into this segment.
Since The Maren achieved stabilization on the last day of March, average residential occupancy is 94.86% and 68.15% of expiring leases have renewed with no increase in rent due to the mandated rent freeze on renewals in DC. The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership.
Dock 79’s average residential occupancy for the first nine months of 2021 was 95.43%. Through the first nine months of the year, 59.33% 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 $257,000 for the first nine months of the year.
Impact of the COVID-19 Pandemic.
Though circumstances have improved, the COVID-19 pandemic continues to have an extraordinary impact on the world economy and the markets in which we operate. We have continued operations throughout the pandemic and have made every effort to act in accordance with national, state, and local regulations and guidelines. During 2020, Dock 79 and The Maren most directly suffered the impacts to our business from the pandemic 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. This year, because of the vaccine, herd immunity, and efforts to reopen the economy, our businesses were affected though not to the same extent as 2020. Some of the same conditions remain in place, and it is
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possible that they may impact our ability to lease retail spaces in Washington, D.C. and Greenville. We expect our business to be affected by the pandemic for at least the remainder of 2021.
Summary and Outlook
Although royalty revenue is down this quarter compared to the same quarter last year, royalty revenue for the first nine months was $7,198,000, an increase of 1.46% over the same period last year and the highest revenue total for the first nine months in the segment’s history. Revenue for the last twelve months was $9,581,000, an increase of 1.09% over calendar year 2020. This marks the third straight quarter where the last twelve months’ revenue exceeded $9.5 million.
For the fourth quarter in a row, Dock 79’s occupancy has been above 94% at quarter end. This is the very first time Dock 79 has ended the four straight quarters with an occupancy higher than 94%.
With The Maren’s stabilization at the end of March this year, we are now in our second 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 was 93.56% leased and 95.45% occupied at quarter end, 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 62^nd^ Street last year strengthened our commitment to industrial development. We have a build-to-suit and two spec buildings under construction at Hollander and 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 as well as this quarter’s purchase of 17 acres in Harford County, 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.
At the end of September, we held our very first Investor Day. We hope it was the first of many and the last one we hold virtually. The event afforded us an opportunity to take stock of where we are now and where we are headed. The first nine months have seen the stabilization, consolidation, and permanent financing of The Maren; the refinancing of Dock 79; leasing begin at Bryant St and Riverside in Greenville; a build-to-suit opportunity at Hollander as well as the mining royalties’ highest nine-month revenue performance. That is a lot to take stock of in a short period of time, but we are more excited about
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where we are headed. In the not-so-distant future, we will finish construction and start leasing Half Street and .408 Jackson; we will finish construction on three warehouses and begin work on allowing our landbank to accommodate our next generation of industrial development; and hopefully, we will not only see the passage but the practical effects of an infrastructure bill on our mining royalties income. We mentioned this at the Investor Day, but, assuming all goes according to plan, it is our belief that over the next few years, we will put all of our cash to use in new projects. 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.
Conference Call
The Company will also host a conference call on Thursday, November 4, 2021 at 12:30 p.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-877-271-1828 (passcode 47240873) within the United States. International callers may dial 1-334-323-9871 (passcode 47240873). Computer audio live streaming is available via the Internet through this link http://stream.conferenceamerica.com/frp110421. For the archived audio via the internet, click on the following link http://archive.conferenceamerica.com/archivestream/frp110421.mp3. 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 29813855. 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 statementsin this press release which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual resultsand events to differ materially from those indicated in such forward-looking statements. These include, but are not limited to: the impactof the COVID-19 Pandemic on our operations and financial results; the possibility that we may be unable to find appropriate investmentopportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilitiesin the Baltimore-Washington-Northern Virginia area; demand for apartments in Washington D.C., Richmond, Virginia, and Greenville, SouthCarolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditionson our liquidity; our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies inour properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renewleases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictionsimposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cybersecurityrisks; 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 ornew information. Readers are cautioned not to place undue reliance on such forward-looking statements.
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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.
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FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTSOF INCOME
(In thousands except per share amounts)
(Unaudited)
| NINE MONTHS ENDED | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| SEPTEMBER 30, | |||||||||||
| 2020 | 2021 | 2020 | |||||||||
| Revenues: | |||||||||||
| Lease revenue | 6,224 | 3,591 | 15,623 | 10,636 | |||||||
| Mining lands lease revenue | 2,249 | 2,507 | 7,198 | 7,094 | |||||||
| Total Revenues | 8,473 | 6,098 | 22,821 | 17,730 | |||||||
| Cost of operations: | |||||||||||
| Depreciation, depletion and amortization | 3,796 | 1,438 | 9,627 | 4,406 | |||||||
| Operating expenses | 1,557 | 892 | 3,792 | 2,598 | |||||||
| Property taxes | 986 | 706 | 2,764 | 2,089 | |||||||
| Management company indirect | 745 | 844 | 2,137 | 2,208 | |||||||
| Corporate expenses | 657 | 637 | 2,486 | 2,850 | |||||||
| Total cost of operations | 7,741 | 4,517 | 20,806 | 14,151 | |||||||
| Total operating profit | 732 | 1,581 | 2,015 | 3,579 | |||||||
| Net investment income, including realized gains of 0 55, 0 and 297, respectively | 943 | 1,814 | 3,366 | 5,915 | |||||||
| Interest expense | (414 | ) | (46 | ) | (1,785 | ) | (142 | ) | |||
| Equity in loss of joint ventures | (1,244 | ) | (1,788 | ) | (3,997 | ) | (3,773 | ) | |||
| Gain on remeasurement of investment in real estate partnership | — | — | 51,139 | — | |||||||
| Gain on sale of real estate | — | 5,732 | 805 | 9,329 | |||||||
| Income before income taxes | 17 | 7,293 | 51,543 | 14,908 | |||||||
| Provision for income taxes | 130 | 2,022 | 10,500 | 4,161 | |||||||
| Net income (loss) | (113 | ) | 5,271 | 41,043 | 10,747 | ||||||
| Gain (loss) attributable to noncontrolling interest | (465 | ) | (184 | ) | 12,236 | (475 | ) | ||||
| Net income attributable to the Company | 352 | 5,455 | 28,807 | 11,222 | |||||||
| Earnings per common share: | |||||||||||
| Net income attributable to the Company- | |||||||||||
| Basic | 0.04 | 0.57 | 3.08 | 1.16 | |||||||
| Diluted | 0.04 | 0.57 | 3.07 | 1.16 | |||||||
| Number of shares (in thousands) used in computing: | |||||||||||
| -basic earnings per common share | 9,363 | 9,517 | 9,352 | 9,646 | |||||||
| -diluted earnings per common share | 9,399 | 9,545 | 9,390 | 9,681 |
All values are in US Dollars.
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FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)
| December 31, 2020 | |||
|---|---|---|---|
| Assets: | |||
| Real estate investments at cost: | |||
| Land | 123,397 | 91,744 | |
| Buildings and improvements | 255,366 | 141,241 | |
| Projects under construction | 13,799 | 4,879 | |
| Total investments in properties | 392,562 | 237,864 | |
| Less accumulated depreciation and depletion | 44,266 | 34,724 | |
| Net investments in properties | 348,296 | 203,140 | |
| Real estate held for investment, at cost | 9,559 | 9,151 | |
| Investments in joint ventures | 145,975 | 167,071 | |
| Net real estate investments | 503,830 | 379,362 | |
| Cash and cash equivalents | 162,881 | 73,909 | |
| Cash held in escrow | 502 | 196 | |
| Accounts receivable, net | 991 | 923 | |
| Investments available for sale at fair value | 4,315 | 75,609 | |
| Federal and state income taxes receivable | 2,082 | 4,621 | |
| Unrealized rents | 580 | 531 | |
| Deferred costs | 3,047 | 707 | |
| Other assets | 525 | 502 | |
| Total assets | 678,753 | 536,360 | |
| Liabilities: | |||
| Secured notes payable | 178,371 | 89,964 | |
| Accounts payable and accrued liabilities | 3,706 | 3,635 | |
| Other liabilities | 1,886 | 1,886 | |
| Deferred revenue | 470 | 542 | |
| Deferred income taxes | 65,379 | 56,106 | |
| Deferred compensation | 1,247 | 1,242 | |
| Tenant security deposits | 764 | 332 | |
| Total liabilities | 251,823 | 153,707 | |
| Commitments and contingencies | |||
| Equity: | |||
| Common stock, .10 par value<br> 25,000,000 shares authorized,<br> 9,411,028 and 9,363,717 shares issued<br> and outstanding, respectively | 941 | 936 | |
| Capital in excess of par value | 57,512 | 56,279 | |
| Retained earnings | 338,344 | 309,764 | |
| Accumulated other comprehensive income, net | 193 | 675 | |
| Total shareholders’ equity | 396,990 | 367,654 | |
| Noncontrolling interest MRP | 29,940 | 14,999 | |
| Total equity | 426,930 | 382,653 | |
| Total liabilities and shareholders’ equity | 678,753 | 536,360 |
All values are in US Dollars.
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Asset Management Segment:
| Three months ended September 30 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | % | 2020 | % | Change | % | |||||||||||
| Lease revenue | $ | 619 | 100.0 | % | 721 | 100.0 | % | (102 | ) | -14.1 | % | ||||||
| Depreciation, depletion and amortization | 137 | 22.1 | % | 137 | 19.0 | % | — | 0.0 | % | ||||||||
| Operating expenses | 76 | 12.3 | % | 139 | 19.3 | % | (63 | ) | -45.3 | % | |||||||
| Property taxes | 37 | 6.0 | % | 43 | 5.9 | % | (6 | ) | -14.0 | % | |||||||
| Management company indirect | 200 | 32.3 | % | 202 | 28.0 | % | (2 | ) | -1.0 | % | |||||||
| Corporate expense | 180 | 29.1 | % | 165 | 22.9 | % | 15 | 9.1 | % | ||||||||
| Cost of operations | 630 | 101.8 | % | 686 | 95.1 | % | (56 | ) | -8.2 | % | |||||||
| Operating profit (loss) | $ | (11 | ) | -1.8 | % | 35 | 4.9 | % | (46 | ) | -131.4 | % |
Mining Royalty Lands Segment:
| Three months ended September 30 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | % | 2020 | % | Change | % | ||||||||||
| Mining lands lease revenue | $ | 2,249 | 100.0 | % | 2,507 | 100.0 | % | (258 | ) | -10.3 | % | |||||
| Depreciation, depletion and amortization | 38 | 1.7 | % | 60 | 2.4 | % | (22 | ) | -36.7 | % | ||||||
| Operating expenses | 11 | 0.5 | % | 16 | 0.6 | % | (5 | ) | -31.3 | % | ||||||
| Property taxes | 68 | 3.0 | % | 59 | 2.4 | % | 9 | 15.3 | % | |||||||
| Management company indirect | 95 | 4.2 | % | 81 | 3.2 | % | 14 | 17.3 | % | |||||||
| Corporate expense | 69 | 3.1 | % | 53 | 2.1 | % | 16 | 30.2 | % | |||||||
| Cost of operations | 281 | 12.5 | % | 269 | 10.7 | % | 12 | 4.5 | % | |||||||
| Operating profit | $ | 1,968 | 87.5 | % | 2,238 | 89.3 | % | (270 | ) | -12.1 | % |
Development Segment:
| Three months ended September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | 2020 | Change | ||||||
| Lease revenue | $ | 401 | 290 | 111 | |||||
| Depreciation, depletion and amortization | 53 | 53 | — | ||||||
| Operating expenses | 62 | 62 | — | ||||||
| Property taxes | 355 | 330 | 25 | ||||||
| Management company indirect | 335 | 504 | (169 | ) | |||||
| Corporate expense | 326 | 381 | (55 | ) | |||||
| Cost of operations | 1,131 | 1,330 | (199 | ) | |||||
| Operating loss | $ | (730 | ) | (1,040 | ) | 310 |
| 11 |
| --- |
Stabilized Joint Venture Segment:
| Three months ended September 30 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | % | 2020 | % | Change | % | |||||||||||
| Lease revenue | $ | 5,204 | 100.0 | % | 2,580 | 100.0 | % | 2,624 | 101.7 | % | |||||||
| Depreciation, depletion and amortization | 3,568 | 68.6 | % | 1,188 | 46.0 | % | 2,380 | 200.3 | % | ||||||||
| Operating expenses | 1,408 | 27.0 | % | 675 | 26.2 | % | 733 | 108.6 | % | ||||||||
| Property taxes | 526 | 10.1 | % | 274 | 10.6 | % | 252 | 92.0 | % | ||||||||
| Management company indirect | 115 | 2.2 | % | 57 | 2.2 | % | 58 | 101.8 | % | ||||||||
| Corporate expense | 82 | 1.6 | % | 38 | 1.5 | % | 44 | 115.8 | % | ||||||||
| Cost of operations | 5,699 | 109.5 | % | 2,232 | 86.5 | % | 3,467 | 155.3 | % | ||||||||
| Operating profit (loss) | $ | (495 | ) | -9.5 | % | 348 | 13.5 | % | (843 | ) | -242.2 | % |
Asset Management Segment:
| Nine months ended September 30 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | % | 2020 | % | Change | % | ||||||||||||
| Lease revenue | $ | 1,919 | 100.0 | % | 2,089 | 100.0 | % | (170 | ) | -8.1 | % | |||||||
| Depreciation, depletion and amortization | 408 | 21.3 | % | 529 | 25.3 | % | (121 | ) | -22.9 | % | ||||||||
| Operating expenses | 289 | 15.0 | % | 332 | 15.9 | % | (43 | ) | -13.0 | % | ||||||||
| Property taxes | 117 | 6.1 | % | 91 | 4.4 | % | 26 | 28.6 | % | |||||||||
| Management company indirect | 577 | 30.1 | % | 437 | 20.9 | % | 140 | 32.0 | % | |||||||||
| Corporate expense | 682 | 35.5 | % | 738 | 35.3 | % | (56 | ) | -7.6 | % | ||||||||
| Cost of operations | 2,073 | 108.0 | % | 2,127 | 101.8 | % | (54 | ) | -2.5 | % | ||||||||
| Operating loss | $ | (154 | ) | -8.0 | % | (38 | ) | -1.8 | % | (116 | ) | 305.3 | % |
Mining Royalty Lands Segment:
| Nine months ended September 30 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | % | 2020 | % | Change | % | ||||||||||
| Mining lands lease revenue | $ | 7,198 | 100.0 | % | 7,094 | 100.0 | % | 104 | 1.5 | % | ||||||
| Depreciation, depletion and amortization | 161 | 2.2 | % | 160 | 2.3 | % | 1 | 0.6 | % | |||||||
| Operating expenses | 34 | 0.5 | % | 43 | 0.6 | % | (9 | ) | -20.9 | % | ||||||
| Property taxes | 199 | 2.8 | % | 191 | 2.7 | % | 8 | 4.2 | % | |||||||
| Management company indirect | 273 | 3.8 | % | 214 | 3.0 | % | 59 | 27.6 | % | |||||||
| Corporate expense | 258 | 3.6 | % | 234 | 3.3 | % | 24 | 10.3 | % | |||||||
| Cost of operations | 925 | 12.9 | % | 842 | 11.9 | % | 83 | 9.9 | % | |||||||
| Operating profit | $ | 6,273 | 87.1 | % | 6,252 | 88.1 | % | 21 | 0.3 | % |
| 12 |
| --- |
Development Segment:
| Nine months ended September 30 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | 2020 | Change | ||||||
| Lease revenue | $ | 1,169 | 862 | 307 | |||||
| Depreciation, depletion and amortization | 159 | 160 | (1 | ) | |||||
| Operating expenses | 133 | 415 | (282 | ) | |||||
| Property taxes | 1,082 | 1,019 | 63 | ||||||
| Management company indirect | 996 | 1,404 | (408 | ) | |||||
| Corporate expense | 1,267 | 1,710 | (443 | ) | |||||
| Cost of operations | 3,637 | 4,708 | (1,071 | ) | |||||
| Operating loss | $ | (2,468 | ) | (3,846 | ) | 1,378 |
Stabilized Joint Venture Segment:
| Nine months ended September 30 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2021 | % | 2020 | % | Change | % | |||||||||||
| Lease revenue | $ | 12,535 | 100.0 | % | 7,685 | 100.0 | % | 4,850 | 63.1 | % | |||||||
| Depreciation, depletion and amortization | 8,899 | 71.0 | % | 3,557 | 46.3 | % | 5,342 | 150.2 | % | ||||||||
| Operating expenses | 3,336 | 26.6 | % | 1,808 | 23.5 | % | 1,528 | 84.5 | % | ||||||||
| Property taxes | 1,366 | 11.0 | % | 788 | 10.2 | % | 578 | 73.4 | % | ||||||||
| Management company indirect | 291 | 2.3 | % | 153 | 2.0 | % | 138 | 90.2 | % | ||||||||
| Corporate expense | 279 | 2.2 | % | 168 | 2.2 | % | 111 | 66.1 | % | ||||||||
| Cost of operations | 14,171 | 113.1 | % | 6,474 | 84.2 | % | 7,697 | 118.9 | % | ||||||||
| Operating profit (loss) | $ | (1,636 | ) | -13.1 | % | 1,211 | 15.8 | % | (2,847 | ) | -235.1 | % |
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 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 09/30/21 (in thousands) | ||||||||||||||
| Stabilized | ||||||||||||||
| Asset | Joint | Mining | Unallocated | FRP | ||||||||||
| Management | Development | Venture | Royalties | Corporate | Holdings | |||||||||
| Segment | Segment | Segment | Segment | Expenses | Totals | |||||||||
| Net Income (loss) | (130 | ) | (2,521 | ) | 37,874 | 5,159 | 661 | 41,043 | ||||||
| Income Tax Allocation | (50 | ) | (933 | ) | 9,506 | 1,913 | 64 | 10,500 | ||||||
| Income (loss) before income taxes | (180 | ) | (3,454 | ) | 47,380 | 7,072 | 725 | 51,543 | ||||||
| Less: | ||||||||||||||
| Gain on remeasurement of real estate investment | — | — | 51,139 | — | — | 51,139 | ||||||||
| Gain on investment land sold | — | — | — | 831 | — | 831 | ||||||||
| Unrealized rents | 49 | — | 149 | 166 | — | 364 | ||||||||
| Interest income | — | 2,608 | — | — | 758 | 3,366 | ||||||||
| Plus: | ||||||||||||||
| Loss on sale of land | 26 | — | — | — | — | 26 |
| 13 |
| --- | | Equity in loss of Joint Venture | — | 3,594 | | 371 | 32 | — | 3,997 | | --- | --- | --- | --- | --- | --- | --- | --- | | Interest Expense | — | — | | 1,752 | — | 33 | 1,785 | | Depreciation/Amortization | 408 | 159 | | 8,899 | 161 | — | 9,627 | | Management Co. Indirect | 577 | 996 | | 291 | 273 | — | 2,137 | | Allocated Corporate Expenses | 682 | 1,267 | | 279 | 258 | — | 2,486 | | Net Operating Income (loss) | 1,464 | (46 | ) | 7,684 | 6,799 | — | 15,901 | | Net Operating Income Reconciliation | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Nine months ended 09/30/20 (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 | | 2,745 | | (2,055 | ) | | 864 | | 7,200 | | 1,993 | | 10,747 | | Income Tax Allocation | | 1,018 | | (762 | ) | | 496 | | 2,670 | | 739 | | 4,161 | | Income (loss) from continuing operations before income taxes | | 3,763 | | (2,817 | ) | | 1,360 | | 9,870 | | 2,732 | | 14,908 | | Less: | | | | | | | | | | | | | | | Equity in profit of Joint Ventures | | — | | — | | | 254 | | — | | — | | 254 | | Gains on sale of buildings | | 3,801 | | 1,877 | | | — | | 3,651 | | — | | 9,329 | | Unrealized rents | | 147 | | — | | | — | | 178 | | — | | 325 | | Interest income | | — | | 3,146 | | | — | | — | | 2,769 | | 5,915 | | Plus: | | | | | | | | | | | | | | | Unrealized rents | | — | | — | | | 11 | | — | | — | | 11 | | Equity in loss of Joint Venture | | — | | 3,994 | | | — | | 33 | | — | | 4,027 | | Interest Expense | | — | | — | | | 105 | | — | | 37 | | 142 | | Depreciation/Amortization | | 529 | | 160 | | | 3,557 | | 160 | | — | | 4,406 | | Management Co. Indirect | | 437 | | 1,404 | | | 153 | | 214 | | — | | 2,208 | | Allocated Corporate Expenses | | 738 | | 1,710 | | | 168 | | 234 | | — | | 2,850 | | Net Operating Income (loss) | | 1,519 | | (572 | ) | | 5,100 | | 6,682 | | — | | 12,729 |