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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-17554
PATRIOT TRANSPORTATION HOLDING, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2924957
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
1801 Art Museum Drive, Jacksonville, Florida 32207
(Address of principal executive offices)
(Zip Code)
904/396-5733
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of August 2, 2002: 3,145,208 shares of
$.10 par value common stock.
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q
QUARTER ENDED JUNE 30, 2002
CONTENTS
Page No.
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risks 13
Part II. Other Information
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit 11. Computation of Earnings Per Share 19
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, September 30,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $ 108 440
Accounts receivable:
Affiliates 81 276
Other 7,454 9,361
Less allowance for doubtful accounts (522) (1,160)
Income taxes receivable - 1,002
Inventory of parts and supplies 895 570
Prepaid expenses and other 2,660 4,568
Assets held for sale - 1,191
Total current assets 10,676 16,248
Other assets:
Real estate held for investment, at cost 1,168 1,260
Goodwill 1,097 1,127
Other 3,367 2,954
Total other assets 5,632 5,341
Property, plant and equipment, at cost 205,466 197,257
Less accumulated depreciation and
depletion (71,706) (66,087)
Net property, plant and equipment 133,760 131,170
$150,068 152,759
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term note payable to bank $ - 7,800
Accounts payable:
Affiliates 357 114
Other 3,805 3,513
Federal and state income taxes 1,703 -
Accrued liabilities 4,352 4,324
Long-term debt due within one year 1,287 977
Total current liabilities 11,504 16,728
Long-term debt 45,208 47,097
Deferred income taxes 9,139 9,280
Accrued insurance reserves 5,260 5,268
Other liabilities 1,405 1,274
Shareholders' equity:
Preferred stock, no par value;
5,000,000 shares authorized - -
Common stock, $.10 par value;
25,000,000 shares authorized,
3,145,208 shares issued and outstanding
(3,140,066 at September 30, 2001) 315 314
Capital in excess of par value 11,448 11,357
Retained earnings 65,789 61,441
Total shareholders' equity 77,552 73,112
$150,068 152,759
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2002 2001 2002 2001
Revenues:
Affiliates $ 1,335 2,247 5,349 8,886
Non-affiliates 23,541 29,405 66,026 84,858
24,876 31,652 71,375 93,744
Cost of operations 19,418 26,414 55,884 75,946
Gross profit 5,458 5,238 15,491 17,798
Selling, general and
administrative expenses:
Affiliates 116 132 232 396
Non-affiliates 2,010 2,331 5,732 8,049
2,126 2,463 5,964 8,445
Recovery of non-recurring charges
related to closed subsidiary (100) - (100) -
Operating profit 3,432 2,775 9,627 9,353
Interest expense (803) (853) (2,403) (2,644)
Interest income and
other expense (net) - 7 21 18
Income before income taxes 2,629 1,929 7,245 6,727
Provision for income taxes 1,052 772 2,898 2,691
Net income $ 1,577 1,157 4,347 4,036
Basic earnings per
common share $ .50 .37 1.38 1.28
Diluted earnings per
common share $ .50 .37 1.37 1.28
Number of shares used in computing:
Basic earnings per share 3,145 3,140 3,141 3,163
Diluted earnings per share 3,178 3,145 3,166 3,164
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 2002 AND 2001
(In thousands)
(Unaudited)
2002 2001
Cash flows from operating activities:
Net income $4,347 4,036
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 8,182 8,699
Net changes in operating assets and liabilities:
Accounts receivable 2,465 (1,129)
Inventory of parts and supplies (325) (63)
Prepaid expenses and other 2,041 270
Assets held for sale 1,191 -
Accounts payable and accrued liabilities 2,266 (3,624)
Decrease in deferred income taxes (273) (76)
Accrued insurance reserves and other
liabilities 123 117
Gain on disposition of real estate, property,
plant and equipment (251) (2,927)
Other, net 31 809
Net cash provided by operating activities 19,797 6,112
Cash flows from investing activities:
Purchase of property, plant and equipment (10,678) (11,604)
Additions to other assets (726) (561)
Proceeds from sale of real estate held for investment,
property, plant and equipment, and other assets 562 4,631
Net cash used in investing activities (10,842) (7,534)
Cash flows from financing activities:
Proceeds from long-term debt 10,200 5,140
Net (decrease) increase in short-term debt (7,800) 100
Repayment of long-term debt (11,779) (661)
Repurchase of Company stock (31) (3,404)
Proceeds from exercised stock options 123 -
Net cash (used in) provided by financing activities (9,287) 1,175
Net decrease in cash and cash equivalents (332) (247)
Cash and cash equivalents at beginning of year 440 633
Cash and cash equivalents at end of the period $ 108 386
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest net of amount capitalized $2,448 2,671
Income taxes $ 467 3,197
See accompanying notes.
PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2002
(Unaudited)
(1) Basis of Presentation. The accompanying condensed
consolidated financial statements include the accounts of
Patriot Transportation Holding, Inc. and its subsidiaries (the
"Company"). These statements have been prepared in accordance
with accounting principles generally accepted in the United
States of America for interim financial information and the
instructions to Form 10-Q and do not include all the
information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of the results for
the interim periods have been included. Operating results for
the three months and nine months ended June 30, 2002 are not
necessarily indicative of the results that may be expected for
the fiscal year ending September 30, 2002. The accompanying
condensed consolidated financial statements and the information
included under the heading "Management's Discussion and
Analysis" should be read in conjunction with the Company's
consolidated financial statements and related notes included in
the Company's Form 10-K for the year ended September 30, 2001.
(2) Industry Segments. The Company has identified two business
segments each of which is managed separately along product
lines. All the Company's operations are in the United States.
The transportation segment hauls liquid and dry commodities by
motor carrier. The real estate segment owns real estate of
which a substantial portion is under mining royalty agreements
or leased. The real estate segment also holds certain other
real estate for investment and is developing commercial and
industrial properties.
Operating results and certain other financial data for the
Company's business segments are as follows (in thousands):
Three Months ended Nine Months ended
June 30, June 30,
2002 2001 2002 2001
Revenues:
Transportation (a) 21,280 26,579 60,239 79,228
Real estate (b) 3,596 5,073 11,136 14,516
24,876 31,652 71,375 93,744
Operating profit
Transportation (a) 1,748 222 4,293 1,284
Real estate (b) 2,036 2,976 6,392 9,306
Corporate expenses (352) (423) (1,058) (1,237)
Operating profit 3,432 2,775 9,627 9,353
Identifiable assets June 30, Sept 30,
2002 2001
Transportation $ 45,051 48,987
Real estate 103,130 101,274
Cash items 108 440
Unallocated corporate assets 1,779 2,058
$150,068 152,759
(a) The three months and nine months ended June 30, 2001 include
revenues of $6,470,000 and $18,302,000, respectively and
operating losses of $618,000 and $1,519,000, respectively,
attributed to Patriot Transportation, Inc. which ceased
operations in September 2001.
(b) The three months ended June 30, 2002 and 2001 and the nine
months ended June 30, 2002 and 2001 include revenues of
$199,000, $1,250,000, $219,000 and $3,978,000, respectively,
from the sale of real estate. Operating profit from the sale
or disposal of real estate was $153,000, $732,000, $110,000
and $2,886,000 for the three months ended June 30, 2002 and
2001 and the nine months ended June 30, 2002 and 2001,
respectively.
(3) Related Party Transactions. In November 2000, the Company
sold two parcels of land to Florida Rock Industries, Inc.
("FRI"), a related party, for $2,607,000 and recognized a pre-tax
gain of $2,034,000. The transactions, including the purchase
price, were reviewed and approved on behalf of the Company by a
committee of independent directors after obtaining independent
appraisals.
(4) Contingent Liabilities. Certain of the Company's
subsidiaries are involved in litigation on a number of matters
and are subject to certain claims that arise in the normal course
of business. The Company has retained certain self-insurance
risks with respect to losses for third party liability and
property damage. In the opinion of management, based upon the
advice of outside legal counsel, none of these matters are
expected to have a materially adverse effect on the Company's
consolidated financial statements.
(5) Recent Accounting Pronouncements. In July 2001, the FASB
issued two statements, Statement No. 141, "Business
Combinations," (SFAS 141) and Statement No. 142, "Goodwill and
Other Intangible Assets" (SFAS 142). The two statements modify
the method of accounting for business combinations entered into
after June 30, 2001 and address the accounting for intangible
assets.
The Company will adopt SFAS 142 effective October 1, 2002. Upon
adoption, the Company will no longer be required to amortize
goodwill but will be required to evaluate goodwill for impairment
annually or more frequently if certain indicators arise. The
Company is required to complete the initial step of a
transitional impairment test by March 31, 2003 and to complete
the final step by September 30, 2003. The Company has not
determined if it will be required to record a write down of its
goodwill.
As of June 30, 2002, the Company had goodwill, net of
amortization of $1,097,000, that will be subject to SFAS 142.
Goodwill amortization for the three and nine months ended June
30, 2002 and 2003 was $10,000 and $30,000, respectively.
(6) Agreement to Sell Real Estate. On February 6, 2002, a
subsidiary of the Company signed an Agreement to sell 108 acres
of land located in the northwest quadrant of I-395 and I-495 at
Edsall Road in Springfield, Virginia to FRI, a related party, for
$15,000,000. Closing is subject to a title search and surveys
and may occur within 45 days of either party giving notice to
close. If FRI fails to close by December 31, 2003, at no fault
of the Company, the Company may retain the binder deposit and be
under no further obligation to close. FRI has the right to
terminate this Agreement prior to receiving the Company's notice
to close if there shall exist or the consummation of the sale
would cause a default in the Credit Agreement among FRI, First
Union National Bank, et. al. The Agreement was approved by a
committee of independent directors of the Company after review of
a development feasibility study and other materials, consultation
with management and advice of independent counsel.
The Company intends to structure this transaction as a tax
deferred exchange under Section 1031 of the United States
Internal Revenue Code and the Treasury Regulations promulgated
thereunder. If the transaction closes, the Company will
recognize a gain on the sale of approximately $7,722,000 net of
income taxes, or $2.43 per diluted share. The tract has been
rented to a subsidiary of FRI and the Company received rental
income of approximately $650,000 for the 2001 fiscal year.
(7) Non-recurring charges related to closed subsidiary. In the
quarter ended September 30, 2001, the Company recorded
restructuring and other one-time charges of $3,435,000 from
continuing operations, resulting from the decision to shut down
its third-party agent/owner-operator subsidiary. By the end of
the quarter ended June 30, 2002, much of the closure activities
have been completed. For the nine months ended June 30, 2002,
the Company recorded a recovery of amounts previously expensed as
shown in the following table:
Quarter Ended
March 31 June 30,
2002 2002 Total
Recoveries included in
selling, general and
administrative expense $180,000 (3,000) 177,000
Recoveries included in
non-recurring charges $ - 100,000 100,000
Recoveries included in selling, general and administrative
expense consist primarily of better than expected collections of
accounts receivables. Recoveries included in non-recurring
charges consist primarily of better than expected recovery of
both owned and leased trailers, offset by additional severance
costs.
As of June 30, 2002, the Company has reserves of $252,000 for
remaining unresolved closure activities.
(8) Acquisition. On May 30, 2002, the Company acquired
substantially all of the operating assets of Infinger
Transportation Company, Inc., a regional tank truck carrier based
in Charleston, South Carolina. The acquisition was accounted for
as a purchase. The purchase price was approximately $3,698,000,
including costs associated with the acquisition. The purchase
price, which was financed through the revolving credit facility,
has been allocated to the assets acquired based on their
respective fair values. The purpose of the acquisition was to
enable the Company to expand into new markets and increase
capacity in existing markets. No goodwill was recorded in the
transaction.
(9) Revolving Credit Agreement. On January 9, 2002, the Company
and four banks closed on a new three-year $37,000,000 unsecured
revolving credit agreement (the Revolver) to replace and pay off
the existing revolver and short-term lines. The Revolver bears
interest at an initial margin rate of 1.50% over the selected
LIBOR and requires maintenance of certain ratios and contains
restrictive covenants, including a restriction on payment of
dividends. At June 30, 2002, $5,877,000 was available for
payment of dividends.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company's operations are influenced by a number of external
and internal factors. External factors include levels of
economic and industrial activity in the United States and the
Southeast, petroleum product usage in the Southeast which is
driven in part by tourism and commercial aviation, fuel costs,
driver availability and cost, construction activity, FRI's sales
from the Company's mining properties, interest rates and demand
for commercial warehouse space in the Baltimore/Washington area.
Internal factors include revenue mix, capacity utilization,
safety records, other revenue factors, administrative costs, and
construction costs of new projects.
Financial results of the Company for any individual quarter are
not necessarily indicative of results to be expected for the
year.
Third Quarter Operating Results.
For the third quarter of fiscal 2002, consolidated revenues
decreased $6,776,000 or 21.4% over the same period last year.
The transportation segment's revenues for the third quarter
decreased $5,299,000 or 19.9% primarily as a result of the
closing of the Company's third-party agent/owner-operator
subsidiary, Patriot Transportation, Inc., in September, 2001.
This subsidiary had revenues of $6,470,000 in the third quarter
of fiscal 2001. The revenues of the transportation segment's
continuing operations increased $1,171,000 in the third quarter
of 2002 as compared to the same quarter of 2001. Approximately
38% of this increase was due to additional miles hauled with the
balance due to modest price increases. This increase in miles
hauled was primarily a result of new business generated from the
May 30, 2002 acquisition of the operating assets of Infinger
Transportation, Inc. (Infinger), a small southeastern U.S. tank
truck company, partially offset by lower demand for petroleum
products and decreased tourism and air travel since the September
11 tragedy.
Real estate revenues decreased $1,477,000 or 29.1% for the third
quarter of 2002. During the third quarter of 2002, the Company
had $199,000 in property sales as compared to property sales of
$1,250,000 for the third quarter of 2001. Real estate revenues,
excluding property sales, decreased $426,000 primarily as a
result of lower royalties of $661,000 from mining properties,
partially offset by additional rental income from newly developed
commercial properties and rent increases. The lower mining
royalties resulted from completion of mining at two locations.
Consolidated gross profit increased $220,000 or 4.2% for the
third quarter as compared to the same period last year. Gross
profit in the transportation segment increased $1,165,000 or
51.6% as a result of the increase in miles hauled by the
continuing operations, improved margins resulting from modest
price increases, and the discontinuation of the third-party
subsidiary which had a negative gross profit of $394,000 in the
third quarter of last year. Gross profit in the real estate
segment decreased $945,000 or 31.7% for the third quarter of 2002
due to the decline in gross profit of $579,000 from lower
property sales and decreased royalties from mining operations,
partially offset by increased gross profits from newly developed
commercial properties and rent increases.
Selling, general and administrative expense decreased $337,000 or
13.7% for the third quarter compared to the same period last
year. This improvement is primarily due to the elimination of
expenses of the closed subsidiary which incurred selling, general
and administrative expenses of $158,000 in the third quarter of
last year. The balance of the decrease was due to elimination of
support costs for the closed subsidiary. Selling, general and
administrative expenses as a percent of consolidated revenues
excluding property sales was 8.6% as compared to 8.1% last year.
During the third quarter, the Company completed a substantial
portion of its activities related to the closure of the Patriot
Transportation, Inc. subsidiary. As a result, an adjustment to
the restructuring charges in the amount of $100,000 was recorded
in the third quarter. The adjustment was caused by better than
expected recovery of both owned and leased trailers, partially
offset by higher severance costs.
Interest expense, net of capitalized interest, decreased $50,000
for the third quarter due to a decrease in the average debt
outstanding and in the average interest rate. The provision for
income taxes increased $280,000 for the third quarter as a result
of an increase in income before income taxes. The provision for
income taxes is 40% of income before income taxes in both
periods.
Net income was $1,577,000 or $.50 per diluted share for the third
quarter of fiscal 2002 compared to $1,157,000 or $.37 per diluted
share for the same quarter last year.
Nine Months Operating Results.
For the first nine months of fiscal 2002, consolidated revenues
decreased $22,369,000 or 23.9% from the same period last year.
The transportation segment revenues for the first nine months
decreased $18,989,000 or 24.0%, primarily as a result of the
closing of the Company's third-party agent/owner-operator
subsidiary in September, 2001. This subsidiary had revenues of
$18,302,000 in the first nine months of fiscal 2001. The
revenues of the transportation segment's continuing operations
decreased $687,000 due to a 2.9% decline in miles hauled for the
first nine months of fiscal 2002 as compared to the same period
last year, partially offset by modest price increases. The
decline in miles hauled was primarily a result of lower demand
for petroleum products and decreased tourism and air travel since
the September 11 tragedy, partially offset by the new business
generated from the acquisition of the operating assets of
Infinger.
Real estate revenues decreased $3,380,000 or 23.3% for the first
nine months of 2002. For the first nine months of fiscal 2002,
the Company had revenues from property sales of $219,000 as
compared to $3,978,000 for the first nine months of 2001. Other
real estate revenues for the first nine months of 2002 increased
as a result of additional rental income from newly developed
commercial properties and rent increases, which were mostly
offset by lower royalties of $581,000 due to the completion of
mining at two locations.
Consolidated gross profit decreased $2,307,000 or 13.0% for the
first nine months as compared to the same period last year.
Gross profit in the transportation segment increased $620,000 or
7.3% for the first nine months of 2002 as a result of improved
margins due to price increases, improved equipment utilization
and reduced operating expenses, partially offset by a decrease in
miles hauled. Gross profit in the real estate segment decreased
$2,927,000 or 31.4% for the first nine months primarily due to
the decline in gross profit of $2,776,000 from property sales.
Real estate gross profit excluding property sales decreased
slightly due to lower mining royalties, mostly offset by
additional rental income from newly developed commercial
properties and rent increases.
Selling, general and administrative expenses decreased $2,481,000
or 29.4% for the first nine months compared to the same period
last year. This improvement is primarily due to the elimination
of expenses for the closed subsidiary which incurred selling,
general and administrative expenses of $1,405,000 in the first
nine months of last year. The decrease in selling, general and
administrative expenses for the first nine months of 2002 also
included a benefit of $177,000 primarily from the recovery of the
closed subsidiary's accounts receivable in excess of amounts
anticipated. The balance of the decrease was due to elimination
of support costs for the closed subsidiary and expenses incurred
last year related to a litigation settlement. Selling, general
and administrative expenses as a percent of consolidated revenues
excluding property sales was 8.3% for the first nine months as
compared to 9.0% last year.
Interest expense, net of capitalized interest, decreased $241,000
in the first nine months due to a decrease in the average debt
outstanding and a decrease in the average interest rate. The
provision for income taxes increased $207,000 in the first nine
months of this year as a result of an increase in income before
income taxes. The provision for income taxes is 40% of income
before income taxes in both periods.
Net income was $4,347,000 or $1.37 per diluted share for the
first nine months of fiscal 2002 compared to $4,036,000 or $1.28
per diluted share for the first nine months of 2001.
Summary and Outlook
The Company's real estate development business continues to
indicate encouraging progress. Demand appears to be continuing
for the Company's flexible office warehouse product. Completion
of mining at two locations will reduce royalty revenues and
related income.
The transportation segment needs to be viewed according to its two
operating components, tank truck and flatbed operations. Excluding
volume benefits from the Infinger acquisition, year-over-year
revenue miles for the Company's tank truck business remain modestly
lower. Changes in tourism and air travel activity and associated
decreased demand for petroleum products since the September 11
tragedy account for this continuing softness. Flatbed freight
demand, by contrast, has been slowly increasing.
Future national and regional economic behavior will govern growth
prospects for both real estate and transportation. Operating
margins for U.S. domestic trucking will also continue to be
challenged by escalating health and liability insurance expenses.
Liquidity and Capital Resources
For the first nine months of fiscal 2002, net cash flows from
operating activities funded the Company's purchase of additional
property, plant and equipment of $10,678,000 and reduced
outstanding debt by $9,379,000.
On January 9, 2002, the Company and four banks closed on a new
three-year $37,000,000 unsecured revolving credit agreement (the
Revolver) to replace and pay off the existing revolver and short-
term lines. The Revolver bears interest at an initial margin rate
of 1.50% over the selected LIBOR and requires maintenance of
certain ratios and contains restrictive covenants, including a
restriction on payment of dividends. At June 30, 2002,
$5,877,000 was available for payment of dividends.
At June 30, 2002, $26,900,000 was available under the Revolver.
The Company is committed to spend approximately $9,114,000 for
the purchase of tractors over the next four months and to spend
approximately $9,464,000 to develop a bulk warehouse for a tenant
over the next 13 months. These expenditures are expected to be
financed from cash flows from operating activities, funds
available under the Revolver and long-term non-recourse financing
as new real estate projects are completed and leased.
The Company continues to endeavor to maintain its sound financial
condition with sufficient resources to meet anticipated capital
expenditures and other operating requirements.
Other
While the Company is affected by environmental regulations, such
regulations are not expected to have a major effect on the
Company's capital expenditures or operating results.
A subsidiary of the Company signed an agreement to sell land to
FRI, a related party, for $15,000,000. If the sale occurs, the
Company will recognize a gain on the sale of approximately
$7,722,000 net of income taxes or $2.43 per diluted share.
Reinvestment of the proceeds from this transaction is expected to
facilitate the Company's long-term plan to build and own a
portfolio of successful rental properties. For additional
information see Note 6 of Notes to Condensed Consolidated
Financial Statements.
During fiscal year 2001, the continuing transportation segment's
ten largest customers accounted for approximately 44.5% of
transportation's revenue excluding the closed subsidiary. The
loss of one or more of these customers could have an adverse
effect on the Company's revenue and income.
The District of Columbia Zoning Commission on May 13, 2002 voted 3-
2 against extending until 2004 the Planned Unit Development ("PUD")
which would have authorized up to 1.5 million square feet of
commercial office space on the Company's 5.8 acre site along the
Anacostia River. As a condition to the PUD the Company was
required to proffer a nearby 2.1 acre site which would not have
been developable by the Company under the PUD. The Company will
ask the Commission to reconsider its decision.
There is also pending a proposed "overlay" of new zoning for a
substantial area of the Southwest and Southeast quadrants of the
District of Columbia west of the Anacostia River which includes the
5.8 acre site together with the nearby 2.1 acre site owned by the
Company also on the Anacostia River. Under this proposed "overlay"
the Company would be authorized to develop on the two sites
approximately 1.38 million square feet, divided roughly in half
between commercial office/retail space and residential (including
hotel) space. The proposed "overlay" would have lower height
restrictions than the PUD would have permitted.
The two sites are currently leased to FRI under leases expiring in
April 2006. The Company will continue to explore opportunities for
eventual development of this property.
Forward-Looking Statements. Certain matters discussed in this
report contain forward-looking statements that are subject to
risks and uncertainties that could cause actual results to differ
materially from these indicated by such forward-looking
statements. These forward-looking statements relate to, among
other things, capital expenditures, liquidity, capital resources
and competition and may be indicated by words or phrases such as
"anticipate", "estimate", "plans", "projects", "continuing",
"ongoing", "expects", "management believes", "the Company
believes", ?the Company intends? and similar words or phrases. The
following factors and others discussed in the Company's periodic
reports and filings with the Securities and Exchange Commission
are among the principal factors that could cause actual results
to differ materially from the forward-looking statements: driver
availability and cost; availability and terms of financing;
freight demand for petroleum products including recessionary and
terrorist impacts on travel in the Company's markets; freight
demand for building and construction materials in the Company's
markets; risk insurance markets; competition; general economic
conditions; demand for flexible warehouse/office facilities;
restructuring charges; interest rates; levels of construction
activity in FRI's markets; fuel costs; and inflation. However,
this list is not a complete statement of all potential risks or
uncertainties.
These forward-looking statements are made as of the date hereof
based on management's current expectations, and the Company does
not undertake an obligation to update such statements, whether as
a result of new information, future events or otherwise.
Additional information regarding these and other risk factors may
be found in the Company's other filings made from time to time
with the Securities and Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS
There are no material changes to the disclosures made in Form 10-
K for the fiscal year ended September 30, 2001 with respect to
this item.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
See Note 4 to the condensed consolidated financial statements
included in this Form 10-Q.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The response to this item is submitted as a
separate Section entitled "Exhibit Index", starting on
page 11.
(b) Reports on Form 8-K. During the three months ended
June 30, 2002, a report on Form 8-K dated May 1, 2002
and a report on Form 8K/A dated May 8, 2002, both
reporting under Item 4 the change in registrant's
certifying accountant, was filed by the Company.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
August 8, 2002 PATRIOT TRANSPORTATION HOLDING, INC.
John E. Anderson
John E. Anderson
President and Chief Executive
Officer
Ray M. Van Landingham_
Ray M. Van Landingham
Vice President Finance &
Administration and Chief
Financial Officer
CERTIFICATION UNDER SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of
the undersigned certifies that this periodic report fully complies
with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that information contained in this
periodic report fairly presents, in all material respects, the
financial condition and results of operations of Patriot
Transportation Holding, Inc.
August 8, 2002
John E. Anderson
John E. Anderson
President and Chief Executive
Officer
Ray M. Van Landingham_
Ray M. Van Landingham
Vice President Finance &
Administration and Chief
Financial Officer
PATRIOT TRANSPORTATION HOLDING, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2002
EXHIBIT INDEX
(3)(a)(1) Articles of Incorporation of Patriot
Transportation Holding Inc., incorporated by
reference to the corresponding exhibit filed
with Form S-4 dated December 13,1988. File No.
33-26115.
(3)(a)(2) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with
the Secretary of State of Florida on February
19, 1991 incorporated by reference to the
corresponding exhibit filed with Form 10-K for
the fiscal year ended September 30, 1993. File
No. 33-26115.
(3)(a)(3) Amendments to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with
the Secretary of State of Florida on February
7,1995, incorporated by reference to an appendix
to the Company's Proxy Statement dated December
15, 1994. File No. 33-26115.
(3)(a)(4) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc., filed with
the Florida Secretary of State on May 6, 1999
incorporated by reference to a form of such
amendment filed as Exhibit 4 to the Company's
Form 8-K dated May 5, 1999. File No. 33-26115.
(3)(a)(5) Amendment to the Articles of Incorporation of
Patriot Transportation Holding, Inc. filed with
the Secretary of State of Florida on February
21, 2000, incorporated by reference to the
corresponding exhibit filed with Form 10-Q for
the quarter ended March 31, 2000. File No. 33-
26115.
(3)(b)(1) Restated Bylaws of Patriot Transportation
Holding, Inc. adopted December 1, 1993,
incorporated by reference to the corresponding
exhibit filed with Form 10-K for the fiscal year
ended September 30, 1993. File No. 33-26115.
(3)(b)(2) Amendment to the Bylaws of Patriot
Transportation Holding, Inc. adopted August 3,
1994, incorporated by reference to the
corresponding exhibit filed with Form 10-K for
the fiscal year ended September 30, 1994.
File No. 33-26115.
(3)(b)(3) Amendment to the Bylaws of Patriot
Transportation Holding, Inc. adopted December 5,
2001, incorporated by reference to the
corresponding exhibit filed with Form 10-Q for
the quarter ended December 31, 2001. File No.
33-26115.
(4)(a) Articles III, VII and XII of the Articles of
Incorporation of Patriot Transportation Holding,
Inc., incorporated by reference to an exhibit
filed with Form S-4 dated December 13, 1988.
And amended Article III, incorporated by
reference to an exhibit filed with Form 10-K for
the fiscal year ended September 30, 1993. And
Articles XIII and XIV, incorporated by reference
to an appendix filed with the Company's Proxy
Statement dated December 15, 1994. File No. 33-
26115.
(4)(b) Specimen stock certificate of Patriot
Transportation Holding, Inc., incorporated by
reference to an exhibit filed with Form S-4
dated December 13, 1988. File No. 33-26115.
(4)(c) Revolving Credit Agreement dated as of January
9, 2002 among Patriot Transportation Holding,
Inc. as Borrower, the Lenders from time to time
party hereto and SunTrust Bank as Administrative
Agent, incorporated by reference to an exhibit
filed with Form 10-Q for the quarter ended
December 31, 2001. File No. 33-26115.
(4)(d) The Company and its consolidated subsidiaries
have other long-term debt agreements which do
not exceed 10% of the total consolidated assets
of the Company and its subsidiaries, and the
Company agrees to furnish copies of such
agreements and constituent documents to the
Commission upon request.
(4)(e) Rights Agreement, dated as May 5, 1999 between
the company and First Union National Bank,
incorporated by reference to Exhibit 4 to the
Company's Form 8-K dated May 5, 1999. File No.
33-26115.
(10)(a) Various lease backs and mining royalty
agreements with Florida Rock Industries, Inc.,
none of which are presently believed to be
material individually, except for the Mining
Lease Agreement dated September 1, 1986, between
Florida Rock Industries Inc. and Florida Rock
Properties, Inc., successor by merger to Grandin
Land, Inc. (see Exhibit (10)(c)), but all of
which may be material in the aggregate,
incorporated by reference to an exhibit filed
with Form S-4 dated December 13, 1988. File No.
33-26115.
(10)(b) License Agreement, dated June 30, 1986, from
Florida Rock Industries, Inc. to Florida Rock &
Tank Lines, Inc. to use "Florida Rock" in
corporate names, incorporated by reference to an
exhibit filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(c) Mining Lease Agreement, dated September 1, 1986,
between Florida Rock Industries, Inc. and
Florida Rock Properties, Inc., successor by
merger to Grandin Land, Inc., incorporated by
reference to an exhibit previously filed with
Form S-4 dated December 13, 1988. File No.
33-26115.
(10)(d) Summary of Medical Reimbursement Plan of Patriot
Transportation Holding, Inc., incorporated by
reference to an exhibit filed with Form 10-K for
the fiscal year ended September 30, 1993. File No.
33-26115.
(10)(e) Split Dollar Agreement dated October 3, 1984,
between Edward L. Baker and Florida Rock
Industries, Inc. and assignment of such agreement,
dated January 31, 1986 from Florida Rock
Industries, Inc. to Florida Rock & Tank Lines,
Inc., incorporated by reference to an exhibit filed
with Form S-4 dated December 13, 1988. File No.
33-26115.
(10)(f) Summary of Management Incentive Compensation Plans,
incorporated by reference to an exhibit filed with
Form 10-K for the fiscal year ended September 30,
1994. File No. 33-26115.
(10)(g) Management Security Agreements between the Company
and certain officers, incorporated by reference to
a form of agreement previously filed (as Exhibit
(10)(I)) with Form S-4 dated December 13, 1988.
File No. 33-26115.
(10)(h)(1) Patriot Transportation Holding, Inc. 1989 Employee
Stock Option Plan, incorporated by reference to an
exhibit filed with Form S-4 dated December 13,
1988. File No. 33-26115.
(10)(h)(2) Patriot Transportation Holding, Inc. 1995 Stock
Option Plan, incorporated by reference to an
appendix to the Company's Proxy Statement dated
December 15, 1994. File No. 33-26115.
(10)(h)(3) Patriot Transportation Holding, Inc. 2000 Stock
Option Plan, incorporated by reference to an
appendix to the Company's Proxy Statement dated
December 15, 1999. File No. 33-26115.
(10)(i) Purchase and Sale Agreement dated February 6, 2002
between Florida Rock Industries, Inc. and Florida
Rock Properties, Inc., incorporated by reference to
an exhibit filed with Form 10-Q for the quarter
ended December 31, 2001. File No. 33-26115.
(11) Computation of Earnings Per Common Share.
19